Levadetes v The Council of the Shire of Hawkesbury

[1988] NSWLEC 10

Land and Environment Court

of New South Wales

CITATION:

Levadetes & Anor v The Council of the Shire of Hawkesbury [1988] NSWLEC 10

PARTIES:

FIRST APPLICANT
Dimitrios Levadetes

SECOND APPLICANT
Levadetes Pty. Limited

RESPONDENT
The Council of the Shire of Hawkesbury

FILE NUMBER(S):

40240 of 1987

CORAM:

Holland J

KEY ISSUES:

:-

LEGISLATION CITED:

Environmental Planning and Assessment Act, 1979,

CASES CITED:

Smith Family v. Willoughby Municipal Council (1981)

DATES OF HEARING:

DATE OF JUDGMENT:

07/27/1988

LEGAL REPRESENTATIVES:

JUDGMENT:

HIS HONOUR: The Applicants claim that the respondent Council is in breach of the Environmental Planning and Assessment Act, 1979, for failing to perform the obligations imposed on the Council by s.94(3) of that Act in respect of a monetary contribution paid in accordance with a condition imposed by the Council under s.94(l) in granting a development consent. They ask the Court to make certain orders to remedy the alleged breach.

The first Applicant and his wife own the subject land. The second Applicant paid the money. They rely on s.123 of the Act for the right to bring the proceedings and this is not challenged by the Council.

The land is at No. 499 George Street, Windsor. It is one of a block of allotments with frontage to George Street, an unnamed lane at the rear, Campbell Street at one end and Argyle Street at the other. The whole block is zoned 3(a) Business General under the Hawkesbury Local Environmental Plan, 1984 and is one of three such zones in the South Windsor commercial area.

Development consent was granted by the Council on 2l June 1984 for the construction of a single storey shopping arcade of 10 shops subject to conditions which included condition 6 as follows:-

"The payment of an amount of $5l,800 being a contribution in lieu of car parking not provided on site based on $3,700 per space."

On the ground of unreasonableness an appeal against the condition was made to the Court under s.97 of the Act and came before an Assessor. The Applicant complained that the amount was excessive and claimed that a time limit of twelve months for expenditure of the money and a requirement that it be spent on car parking in the vicinity of the subject land should be provisos to the condition if it were to be upheld.

The Assessor upheld the condition, declined to specify a time for expenditure but concluded that the circumstances were such that the money contributed should be expended in the South Windsor area. He ordered that the condition be varied by adding the words:-

"such contribution is to be held in trust by the Council and applied towards the provision or embellishment of off-street car parking facilities in the South Windsor commercial area."

On 9 October 1984 the second Applicant paid $5l,800 to the Council in satisfaction of the condition.

The development was carried out and completed in March 1985 and the first shop was let on 1 April 1985.

The relevant provisions of s.94 for present purposes are as follows:-

"(l) Subject to subsection (2), where a consent authority is satisfied that a development, the subject of a development application, will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant consent to that application subject to a condition requiring -

(a) the dedication of land free of cost; or

(b) the payment of a monetary contribution,

or both.

(2) A condition referred to in sub-section (l) shall be imposed only -

... (b)to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.

(3) The consent authority shall hold any monetary contribution paid in accordance with a condition referred to in subsection (l) in trust for the purpose for which the payment was required and apply the money towards providing public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services or both."

These proceedings were commenced on 20 November 1987 and heard on 20 July 1988. At neither date had the Council provided any car parking facilities pursuant to its obligations under s.94(3) and condition 6 of the development consent as varied by the Court's order. The Applicants contend that the reasonable time for doing so allowed by s.94(3) had long since expired before the proceedings were commenced with the consequence that the Council was and still is in breach of the Act within the meaning of s.123 and liable to orders by the Court under s.124 to remedy the breach.

The precise form of orders which the Applicants ask the Court to make raise questions which are related to the facts of the case and are better left till after the facts have been stated, they being virtually not in dispute.

In the period of about eighteen months from the date the payment was made and twelve months from the date the development was completed the Council appears by the evidence to have done nothing at all. It did not attempt to prove otherwise.

In May of 1986 the first Applicant, Mr. Levadetes, made inquiries of the Shire Planner that led him to write a letter dated l6 May l986 referring to the Court's order and informing the Council that he had located a suitable property as to which he proposed that the Council purchase it and develop it for car parking or refund the money for him to purchase and develop it, providing a minimum of l4 car spaces for public use. The Shire Clerk replied on 29 May 1986 that the matter was being investigated and Mr. Levadetes would be further advised. Mr. Levadetes was to hear nothing more till he made further inquiries in March 1987, about 9 months later.

In that period of 9 months the Council's officers took some spasmodic action that achieved very little. In May l986 the Shire Planner ascertained from the Treasurer that $5l,800 was being held by the Council and in July l986 he requested the Deputy Shire Planner to peruse the real estate "for sale" advertisements for a suitable property at that price.

In November l986 consideration was given to a property owned by Mrs. Coulton at 52 Church Street, the rear of which abutted the unnamed lane behind the subject property to which I have already referred. In 1975 the Council had reconstructed that lane between Campbell and Argyle Streets to provide angle parking for vehicles at the rear of the block of allotments within which the subject land is located. Mrs. Coulton's property could provide additional parking spaces with access from that lane. She lived on the property in a 30 year old run down fibro cottage, was old, a widow and a pensioner. The Council had her property valued at $54,000 and inquired if she would sell. She was not unwilling but would want to be able to acquire other accommodation in another area the cost of which would be about $80,000. The Shire Clerk wrote to her on 26 November l986 assuring her that acquisition of her property would be only by mutual consent and a satisfactory purchase price and the Council "in no way will be forcing you t

o leave the area". On the same date the Shire Treasurer asked the Shire Planner to look at an alternative plan, one being to obtain for parking spaces a strip of land adjoining the lane by acquiring the rear section of five lots owned by the Department of Housing that abutted the lane.

The Shire Planner had a plan prepared and obtained a valuation that assessed the value at $3,000 per lot, a total of $l5,000, for the Housing Department land. That was done by January l987 but there it rested when Mr. Levadetes made his next approach to the Council in March l987.

After that there ensured 5 months of leisurely contact between the Council and the Housing Department. On 20 March l987 the Shire Clerk put a proposal to the Housing Department for the acquisition by the Council of a section of the rear of the lots adjoining the lane for parking purposes and sought the Department's comments. He received no reply. On 15 May 1987 the Shire Planner talked to an officer of the Department and was promised a reply. None came. About two months later, on 2l July 1987, the Shire Clerk wrote again requesting a reply. On 5 August l987 the Department wrote but not by way of reply to the Council's proposal, saying the delay is regretted, the matter is under investigation, a formal reply will be given in the near future. On 11 August 1987, the Acting Shire Clerk pressed the Shire Planner for a response to a request made in the previous December to look into the question of acquisition of the rear of the Housing Department's lots.

The Housing Department still had not replied nor had any steps towards acquisition been taken by the Council's officers when Mr. Levadetes approached the Council for the third time in September l988. He waited another couple of months and then, having received no satisfactory answers to his inquiries and representations, he commenced these proceedings on 20 November 1987, it being at that time over 3 years since the money had been paid.

It took another three weeks before the Council acted. On 14 December 1987 the Shire Clerk wrote requesting a decision from the Housing Department as a matter of urgency because legal proceedings had been served against it for failing to expend money for car parking pursuant to s.94 funding for the area. He wrote:-

"You will appreciate that part of Council's defence, should it ultimately proceed to a hearing, is that it had been endeavouring to negotiate with the Department for some time, to no avail."

A further two months passed before the Department of Housing responded. On 24 February 1988, the Department wrote that the site had been examined with a view to redevelopment of the existing cottages for pensioner units but feasibility and planning studies to determine the nature and layout had not yet been undertaken and the Department was unwilling to sell any of the land to the Council for car parking purposes until detailed plans were completed. The letter went on to say that the Department was willing to consider the Council's need to expand the car parking area in its redevelopment proposal and asked if the Council was prepared to consider a variation of the Council's design. The letter ended by saying that while appreciating the urgency from the Council's viewpoint, the Department "cannot take any action at this time which may prejudice the future development of its land".

On 10 March the Shire Clerk replied that the Council was prepared to consider an alternative design and asked for an indication of the land suggested to enable preliminary designs to be completed. In another 3 months there was no answer from the Department and on l5 June l988 the Shire Clerk wrote again for an urgent reply as the case before the Court was for hearing on 20 July l988. The Council's plea was in vain as the next 5 weeks to the hearing appears to have borne no response since none was tendered by the Council when the case came on.

The Applicants, after this history of desultory fruitless action, fear that the trust of the money may never be performed unless the Court intervenes and contend that, in the circumstances, the appropriate form of remedy would be orders as follows:-

l. A declaration that the Respondent in failing, between April 1985 and June 1988 to provide off street car parking in the South Windsor commercial area to meet the demand therefore generated by the development of 10 shops and an arcade on land known as 499 George Street, Sth. Windsor, and following payment to it by the secondnamed Applicant of the sum of $5l,800 on 9 October 1984 pursuant to Condition 6 of Development Consent No. 197/84 has breached section 94(3) of the Environmental Planning and Assessment Act, 1979.

2. A declaration that in acting in breach of the said Act as aforesaid the Respondent has breached the trust reposed in it pursuant to section 94(3).

3. An order that the Respondent within 6 months of the date hereof, perform the trust reposed in it pursuant to section 94(3) of the said Act by expending the sum of $5l,800 on the provision of 14 off street car spaces in the South Windsor commercial area.

4. An order that in the event the Respondent fails to perform the trust as aforesaid in order 3 hereof, that the Respondent repay to the secondnamed Applicant the sum of $5l,800 together with interest thereon calculated from 9 October 1984.

5. An order that the Respondent pay the cost of these proceedings.

The first question is whether the applicants have established a breach of the Act, having in mind that, by s.122, this may include a contravention of or failure to comply with a provision of the Act or of a consent or a condition of a consent granted under the Act and a contravention or failure that is only threatened or apprehended.

S.94(3) is mandatory and imposes on the consent authority a duty under which there are four elements in the obligations to be performed. The first is to hold the money in trust for the purpose for which the payment was required. The second is to apply the money towards providing the relevant public amenities or services. The third is to do so within a reasonable time. The fourth is to apply the moneys in such a manner as will meet the increased demand for those amenities or services.

The reference in subsection (3) to subsection (l) imports into the definition of the obligations imposed by subsection (3) the basis upon which the payment of the monetary contribution was required as a condition of the consent that was given, namely, that the subject development would or was likely to require the provision of or increase the demand for public amenities and public services within the Council's area and that, in conformity with subsection (2)(b), the contribution was required in contemplation of provision, extension or augmentation of such amenities and services. S.94(3) thus presupposes that the nature of the amenities or services has become identified in the determination of the application for consent and this makes the terms of the determination itself relevant to a consideration of the nature and extent of the obligations imposed by the legislation.

In the present case the material terms of the determination are those of condition 6 as varied by the Order of the Court. They contain some specifics of which the Applicants seek to take advantage, i.e., the number of car parking spaces on which the sum of $5l,800 was calculated and the designation of the area in which the car parking facilities were to be provided. They contend that the Council's obligation here is to use the money towards providing a minimum of 14 spaces for off-street parking in close proximity to the property for consent to the development of which the money was paid. This is the basis of their claims for relief in the form of the first two orders set out above.

The Council resists any suggestion that it is in breach of its obligations. First, it argues that, while the word "trust" appears in s.94(3) and the Court's proviso to condition 6 of the consent, the duties imposed are public, not private as between a trustee and beneficiaries of a trust inter partes, therefore, the Applicants' claim for expenditure of the money directly to benefit the subject property is misconceived. Secondly, it points out that its endeavours have been directed to satisfying the terms of the condition requiring parking facilities to be provided in the South Windsor commercial area, indeed close to the applicants' property, and in that respect, i.e., locality, there is no evidence of actual or threatened breach. Thirdly, the Council argues that, far from demonstrating breach or threat of breach of the Act, the evidence shows an appreciation by the Council of its obligations and the taking of logical and appropriate steps towards fulfilling them.

The Council seeks to justify its course of action so far on this basis: l. The land proposed by the Applicant was unsuitable because it was on the opposite side of George Street, a main road, and posed the problem of pedestrians having to cross a busy road from cars parked on that land to get to the shopping area. 2. The Coulton land was suitable and well placed for parking but ought not be acquired at present for humanitarian reasons having regard to Mrs. Coulton's age and circumstances. 3. The best available alternative was the proposal to acquire the rear of the Housing Department's lots and, unresponsive and resistant as that Department may have been, it was a reasonable approach to continue to endeavour to negotiate with them for that or alternative land of the Department adjacent to the lane before considering resumption thereof or the acquisition of land elsewhere. 4. As to land elsewhere, Council could not reasonably be expected to acquire at the ratepayers' expense commercial land or other land costi

ng much in excess of the amount held in trust for the purpose of condition 6 in order to provide parking facilities to benefit this shopping centre.

As to the lapse of time, the Council does not concede that a reasonable time has yet elapsed having regard to the difficulties inherent in having to expend the money within the narrow confines laid down by the terms of the condition and the pace at which it is possible to obtain decisive action from government departments having a multitude of public duties to perform. Its counsel submitted that, at worst, it might be said that the pace at which the Council had moved might be described as "stately"; but not so as to be called unreasonable in the circumstances.

What is a "reasonable time" for the purposes of s.94(3) will obviously vary enormously with the circumstances of each case; but, in my opinion, it has been well exceeded in the present. The action that has been taken by the Council would have been "stately" if it had occupied a period of 9 months, but it is now 3 years and 9 months since the payment was made and there is yet nothing to show for it and no present prospects of action to achieve the purposes of the "trust". As to the Council's present intentions, the Shire Planner who gave evidence said that he had been advised by the Shire Clerk to wait until the case had been decided. One may fairly wonder whether the Council would have taken any initiative in the matter had it not been prodded into action by Mr. Levadetes' proposal in May 1986. Eighteen months had already passed by then and this initial period of delay is not sought to be excused at all. Even if the time is counted from completion of the development, there is an unexcused and unexplained twel

ve months of no action and no sign of concern by the Council about the performance of its duty with respect to the contribution it had required.

In the present context, time was not of no consequence. The contribution was required because of an increase in the demand for parking expected to flow from completion of the development which, incidentally, does not imply that there was no need to start to do anything to provide for it before the development was completed. The evidence establishes that a demand for additional parking facilities in the area existed already at the time the money was paid, has increased ever since and that there is presently insufficient car parking space provided for this particular shopping centre. Delay in applying the funds runs the risk that inflation in the value of land to be acquired and increases in construction costs will render the funds inadequate for the purpose for which the Council required them to be paid. Failure to investigate the possibilities of performing the trust until after a long delay ran the risk that there might be insurmountable difficulties by the time they came to be considered. The very fact that

the possibilities were limited by the restrictive terms of the trust was a reason for early attention to the problem.

It is my conclusion, in the particular circumstances of the present case, that the Council has failed to perform the duty imposed upon it in respect of this fund by s.94(3), in that it has failed to do what was required of it within a reasonable time.

In reaching this conclusion I would emphasise that the facts of the trust that arose in respect of the contribution required for this particular development distinguish it from the general run of cases where a contribution for parking facilities provided or to be provided by councils is required as a condition of consent to development. Usually the Council has a general fund for the provision of parking at strategic places in its area from which developers of individual sites benefit by being relieved of the need to use part of their own sites to provide parking and the Council may reasonably expect to be free to apply contributions to the fund over a period of time in accordance with appropriate planning. In such case a reasonable time for applying the funds may be quite long and difficult to postulate. However, here the locality in question is very small and particular, the nature of the task to be performed very simple and uncomplicated and the range of possibilities to achieve the objects of the trust ver

y limited. Consequently, a relatively short time for setting about and completing the task may fairly be regarded as reasonable. As I have said, I think the time that passed up to the commencement of the proceedings far exceeds what may fairly be regarded as reasonable in the present case.

The question then is what relief should be granted and that is not easy to answer.

As the Council views the matter its options now are:-

l. Take steps to acquire, including, possibly, by resumption, some suitable part of the Department of Housing's land.

2. Negotiate the purchase of, or possibly resume, Mrs. Coulton's land (an option not preferred).

3. Acquire by purchase or resumption other suitable land in the vicinity (likely to be too expensive).

4. Acquire the vacant lot in George Street opposite the site (an option not favoured because of the need of pedestrians to cross the road).

5. In some way obtain relief from the trust and submit to the Court's directions as to its disposal.

The Council asks that if directions were to be given to acquire any land, no time limit be presently stipulated because that would put the Council at the mercy of a vendor.

At this stage I am not disposed to make orders giving the Council any specific directions as I believe the primary duties and discretions to be exercised should remain the province of the Council so long as it is willing and conscientiously desires to perform its obligations.

As to option No. 4, I should record that the evidence showed that, notwithstanding that it was across the street from the site, it was being used by the public as a de facto car parking facility and appeared otherwise suitable. People do have to cross the roads, including busy roads, from where they park their cars but would rather enjoy the safety and security of off-street parking than park in the street. This may have to be given higher priority than the Shire Planner was disposed to give it as one of the Council's options.

I agree that the most desirable alternative appears to be in use of part of the Department of Housing's land but that Department seems so reluctant to commit itself that the Council may be driven to consider action to resume. If the Council is reluctant to commence the machinery of resumption, the Court may need to direct it to do so in an endeavour to ensure compliance by the Council with its duty. I note the order made by Cripps J. in Smith Family v. Willoughby Municipal Council (1981) 46 L.G.R.A. 380 at p.386.

The Council's reluctance to pursue the second option, Mrs. Coulton's land, is admirable on the principle that people are more to be valued than motor cars when it comes to the use of space in our towns; but, in view of the evidence as to the condition of the house on the land, the problem may turn out to be price rather than people. As the Council has allowed so much time to run away, it may be proper to expect it to fund the difference if its delay has made the performance of its obligations more expensive. The same observation is applicable to the third option.

The fifth option could raise important and difficult questions upon which I would not embark until it was necessary to do so. The possibility that the Court might have power to relieve the Council by expunging condition 6 under an application under s.102 of the Act to "modify the consent" was canvassed by counsel for the respondent Council even though such an application would, if it were to be tested, need to be made by the Applicants, not the Council. I say nothing of the issues that such an application would give rise to. As at present advised, the question of relieving a consent authority from the duties arising from s.94(3) has not been considered by the Court and does not seem to be provided for in the legislation. It will be soon enough to deal with it when and if an application under s.102 is made. The Council asked that the option to seek relief from the trust be left open to it in case all attempts to perform it failed or were not reasonably practicable.

I accept the caution about fixing time in such a way as to tie the Council's hands in negotiations with a vendor.

I propose to stand these proceedings over to a date to be fixed by the Registrar, about three months hence or at such earlier date as the Court may appoint upon the application of either side on notice to the other. In that time I expect the Council to have explored thoroughly and expeditiously the first four options listed above and generally otherwise the ways and means of giving effect to the trust and to have seized and taken any reasonable, practicable and appropriate opportunities and steps to acquit itself of its duty in respect of the fund in question.

It is not necessary at present to consider further the forms of relief sought by the Applicants but I would say that I am disinclined to make the declarations that are asked in the amended Application filed on 25 July 1988 after leave was given at the end of the hearing. They do not declare any rights, only findings preliminary to the granting of relief and serve no other purpose that I can see. It is appropriate to state in a judgment a finding or conclusion on which a remedy depends but generally not to enshrine it in a declaration unless of itself the declaration operates to effect or give effect to rights.

Order that these proceedings be adjourned for further hearing to a date approximately three months hence to be fixed by the Registrar.

Leave is reserved to both sides to apply to the Court on reasonable notice to the other side for an earlier date to be fixed for the further hearing.

Costs to date are reserved.

Exhibits may be returned on the condition that they be preserved and returned to the Court for the further hearing or otherwise as directed by the Registrar.