Maroondah City Council v Fletcher

SUPREME COURT OF VICTORIA
COURT OF APPEAL

No 3702 of 2007

MAROONDAH CITY COUNCIL

Appellant

GRAHAM C FLETCHER

and

MINISTER FOR PLANNING

Respondent

Intervener

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JUDGES:	WARREN CJ, REDLICH JA, OSBORN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26 August 2008
DATE OF JUDGMENT:	23 October 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 250
JUDGMENT APPEALED FROM:	[2006] VCAT 2205 (Morris J)

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LOCAL GOVERNMENT – Town planning - Subdivision – Public open space contribution – Whether specification of public open space in planning scheme subject to limitation of Subdivision Act 1988, s 18(1A) – Power of council to make public open space contribution a condition of subdivision - Exceptions to requirement for public open space contribution – Whether specification of public open space in planning scheme invalid as a tax - Characterisation of subdivision as a single staged subdivision or discrete subdivisions – Disjunction between the form of subdivision applied for and that approved by the council – Requirement for a nexus between subdivision and purpose for which public open space contribution provided - Subdivision Act 1988, s 18 - Planning and Environment Act 1987 - Maroondah Planning Scheme, cl. 52.01.

STATUTORY INTERPRETATION – Purposive approach – Construction of Subdivision Act 1988, ss 18(1), 18(1A) – Overall scheme for the treatment of subdivisions - Interaction between Planning and Environment Act 1987, Subdivision Act 1988 and Maroondah Planning Scheme - Subdivision Act 1988, ss 18, 19, 20, 21.

APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr A J Finanzio	Maddocks
For the Respondent	Mr H H Jackson	Russell Kennedy
For the Minister (intervening)	Mr H McM Wright QC with Ms J E Forsyth	Victorian Government Solicitor

WARREN CJ
OSBORN AJA:

Introduction

This appeal is concerned with the power of a municipal council acting as a responsible authority under the Planning and Environment Act 1987 (‘P&E Act’) to require a contribution of public open space (‘POS’) as a condition of approval of subdivision, whether by way of a percentage of the land subdivided or as a percentage of its value.

By s 13 of the P&E Act, the relevant municipal council is the responsible authority for land within a municipality unless the planning scheme specifies otherwise.

One of the obligations of the responsible authority is to efficiently administer and enforce the relevant planning scheme.[1] In the present case the Maroondah Planning Scheme made provision requiring a POS contribution of 5% in the event of the subdivision of residential land.
[1]Planning and Environment Act s 14.

The respondent landowner (‘owner’) has obtained a planning permit for the subdivision of two existing lots of residential land, by way first of the realignment of the boundary between them and secondly by the creation of two further lots within the larger lot first created by the realignment. The owner seeks to avoid a POS contribution by contending that:

(a) the first stage of subdivision contemplated which effects a boundary re‑alignment, is exempt from the requirement because it does not create an additional separately disposable parcel of land;

(b) alternatively the first stage of the proposed subdivision is exempt because it does not create a need for more open space; and

(c) the second stage of the subdivision which proposed to further subdivide into two the larger lot created by the first stage, would occur in circumstances where council would be bound to consider it unlikely each lot would be further subdivided and hence would also be exempt.

Each of these contentions seeks to invoke exceptions to the power to require POS contributions pursuant to provisions of the Subdivision Act 1988 (‘Subdivision Act’). The last mentioned exception also finds parallel expression in the terms of the planning scheme provision itself.

The owner’s contentions raise the fundamental question of what, on its proper construction, is the effect of cl 52.01 of the Maroondah Planning Scheme in the light of the provisions of s 18 and following of the Subdivision Act. Because this clause of the planning scheme is in large part a standard provision adopted generally in planning schemes throughout the State, this question is of general importance and both the appellant (‘Council’) and the Minister for Planning, who appears as an intervener, join issue with the owner’s contentions.

The matter comes by way of appeal, on questions of law, to this Court following a decision of the Victorian Civil and Administrative Tribunal (‘Tribunal’) constituted by the President. The Tribunal relevantly concluded:

[t]here is no lawful basis for a planning scheme requirement for an open space contribution in respect of a subdivision which does not increase the number of lots.[2]
For a requirement to contribute open space to be a lawful requirement, a subdivision needs to be of a character that is likely to generate a need for more open space; otherwise, the requirement would be a mere tax. [3]
Thus, in my opinion, the effect of the opening words in clause 52.01 of the planning scheme is to fix the percentage (in this case case at 5%, but which may be greater than 5%) of any contribution for open space, but to otherwise leave in place the provisions of the Subdivision Act as to the circumstances in which a contribution is required, the method of calculating the requirement and the trust in which the funds or land the subject of a contribution must be used.[4]

[2]Fletcher v Maroondah CC [2006] VCAT 2205, [31].

[3]Ibid, [31].

[4]Ibid, [36].

The Council now challenges this decision. The fundamental question raised by the notice of appeal is as follows:

Did the Tribunal err in law in reaching the conclusion that the subdivision authorised by Permit No. M/205/921 was not a subdivision to which the requirement in the schedule to clause 52.01 of the Maroondah Planning Scheme … applies?[5]

[5]Question 2.

The Council contends that each of the Tribunal’s principal conclusions is wrong in law. It argues that the Tribunal erred in law in concluding that the subdivision was not a subdivision to which the requirements of the planning scheme applies. It further contends the Tribunal erred in characterising the proposed staged subdivision of the land as involving two separate two lot subdivisions, falling respectively within successive exemptions under ss 18(1) and (8) of the Subdivision Act.[6]
[6]Question of Law No.1 identified in the Notice of Appeal is:
Did the Tribunal err in law in characterising the subdivision authorised by Permit No. M/205/921 as two two lot subdivisions?

Before turning to these questions in greater detail, it is desirable to say something more about the background facts.

Background facts

The owner owns two adjoining residential lots at Croydon; one lot at 17 Woodland Avenue and the other at 21 Penhyrn Avenue. Both lots share a common rear boundary and have a sideage to Ryland Avenue. The Woodland Avenue lot has an area of 1,521 square metres with a single storey weatherboard house located at the western end. The Penhyrn Avenue lot has an area of 1,495 square metres with a split level weatherboard house located at the eastern end. Both are subject to a separate restrictive covenant limiting their use to a single dwelling.

On 26 September 2005, the owner lodged an application for a planning permit with the Council. The owner sought permission to subdivide the allotments in two stages. The first stage would involve the variation of an existing easement at the rear of the Penhyrn Avenue lot and realignment of the existing rear common boundary of the two lots so as to transfer 438 square metres from the Penhyrn Avenue lot to the Woodland Avenue lot. The second stage would vary the restrictive covenant so as to permit two dwellings to be constructed on the enlarged Woodland Avenue lot, then subdivide this lot into two lots of 1,023 square metres and 936 square metres respectively. Effectively, the application sought to create a third lot from part of the backyard of each of the two existing lots, with a frontage on Ryland Avenue.

On 13 June 2006, the Council issued a planning permit[7] which authorised the variation of the easement and variation of the covenants to enable subdivision of the two existing lots into three lots by way of two stages. Condition 6 of the permit provided:

The applicant or owner must pay to the Council a sum equivalent to 5% of the site value of all land in the subdivision or a particular lot or lots. This payment shall be made prior to the issue of a Statement of Compliance and may be adjusted in accordance with Section 19 of the Subdivision Act.

[7]Permit no. M/2005/921

The purported basis for this condition was cl 52.01 of the planning scheme which provides:

A person who proposes to subdivide land must make a contribution to the council for public open space in an amount specified in the schedule to this clause (being a percentage of the land intended to be used for residential, industrial or commercial purposes, or a percentage of the site value of such land, or a combination of both). If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988.
A public open space contribution may be made only once for any of the land to be subdivided. This does not apply to the subdivision of a building if a public open space requirement was not made under Section 569H of the Local Government Act 1958 or Section 21A of the Building Control Act 1981 when the building was constructed.
A subdivision is exempt from a public open space requirement, in accordance with Section 18(8) of the Subdivision Act 1988, if
§ It is one of the following classes of subdivision:
o Class 1: The subdivision of a building used for residential purposes provided each lot contains part of the building. The building must have been constructed or used for residential purposes immediately before 30 October 1989 or a planning permit must have been issued for the building to be constructed or used for residential purposes immediately before that date.
o Class 2: The subdivision of a commercial or industrial building provided each lot contains part of the building.

§ It is for the purpose of excising land to be transferred to a public authority, council or a Minister for a utility installation.
§ It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided.[8]
[8]Emphasis added.

The decision below

On 3 July 2006, the owner applied to the Tribunal for an order requiring the Council to remove condition 6 from the planning permit. The owner contended that the proposed subdivision was exempt from the POS requirement contained in cl 52.01 of the planning scheme on the basis that the proposal effectively comprised two sequential subdivisions of two lots each, and that each fell within relevant exceptions to the requirement that would otherwise apply.

The Council submitted to the Tribunal that, for the purposes of the permit application, the ‘land’ was comprised of both allotments and it was these two allotments as a whole that were proposed to be subdivided into three allotments pursuant to the permit. Consequently, the exemption under cl 52.01 did not apply. Further, the Council contended that, even if the Tribunal accepted that the proposal was for two, two lot subdivisions, one of the lots created as part of the proposed stage one was likely to be further subdivided at stage two. It could not, therefore, be said at the time of approving stage one, that it was unlikely that each lot would be further subdivided.

On 8 December 2006, the Tribunal made an order requiring the appellant to remove condition 6 from the permit and declared that the subdivisions authorised by the permit were not subdivisions to which the requirements in the schedule to cl 52.01 of the planning scheme applied.

That conclusion was founded upon a view of the effect of the provisions of the Subdivision Act with respect to POS contributions. It is accordingly necessary to analyse those provisions.

It is common ground that in the absence of ss 18 to 20 of the Subdivision Act, s 6 and other relevant provisions of the P&E Act are sufficiently broad to empower the inclusion within the planning scheme of requirements for the provision of POS as a condition for the approval of a subdivision (subject to limitations such as those expressed on the power to impose analogous permit conditions in Rockdale Municipal Council v Tandel[9]). The owner submits however, that ss 18‑20 of the Subdivision Act limit the power to make such requirements and that the Tribunal was correct in its principal conclusions.
[9](1975) 34 LGRA 196, 204-6.

Part III of the Subdivision Act

Sections 18 to 20 of the Subdivision Act are contained in Part III of that Act. Part III provides for the implementation of requirements for public facilities in conjunction with the subdivision of land.

Section 15 first provides that a council or a referral authority may require an applicant seeking approval under the Subdivision Act of an application for subdivision to submit an engineering plan for works required under the planning scheme or permit governing the subdivision.

‘Works’ in this context is defined by s 17 as works required by or for the council or a referral authority to provide roads or public utilities services to the land, and which are to become the responsibility of the council or the referral authority after the completion of their construction.

Sections 18 to 20, to which we will shortly return in detail, then make the provisions with respect to requirements for POS which lie at the heart of this appeal.

Section 20A provides for land to be marked out.

Section 21 provides for the issue of a statement of compliance by the council with respect to statutory requirements. Most significantly for present purposes s 21(1) provides:

(1)Subject to subsection (2C), a Council must issue a statement of compliance to the applicant in the prescribed form as soon as possible after—
(a) the applicant has given it the prescribed information; and
(b) it is satisfied that—
(i)all requirements of and under this Part and the Planning and Environment Act 1987 that relate to public works have been met; or
(ii)there is an agreement to secure compliance with those requirements.

Section 18 thus falls to be considered in the context of a series of provisions governing what the council may require by way of particular types of public infrastructure in conjunction with approval of the subdivision of land. Sight should not be lost of the historical context of the subject legislation. As we will observe later, the sequence of enactment evinces an awareness, indeed, an intent by the Parliament that the Subdivision Act would apply to subdivisions to which planning schemes apply.

As observed by Gleeson CJ in Singh v Commonwealth, context, including the historical context, assists with the ascertainment of meaning:

Meaning is always influenced, and sometimes controlled, by context. The context might include time, place, and any other circumstance that could rationally assist understanding of meaning. [10]

[10](2004) 222 CLR 322, 332; see also 335-6.

On first blush it might be thought that the words in s 18(1) and (1A) are clear and free of ambiguity such that resort to the context of the legislation is unnecessary. However, this is not, for example, a Stingel v Clark[11] type case. For the reasons we explain the sections lie within a scheme concerned with the subdivision of land and which scheme calls for scrutiny so that the meaning of the relevant provisions may be properly discerned.
[11](2006) 226 CLR 442.

The definition of subdivision

It was at one point contended by the owner, on appeal to this Court, that the re‑alignment of property boundaries proposed in the first stage of the subdivision, did not amount to a ‘subdivision’ in terms of the provisions of the planning scheme.

This contention was rightly withdrawn. The definition of subdivision pursuant to both the P&E Act and the Subdivision Act is the same:

Subdivision means the division of land into two or more parts which can be disposed of separately.

The result of stage 1 was to divide the land into two new parts which could be disposed of separately.

Clause 71 of the planning scheme provides in part that a term used in the planning scheme has its ordinary meaning unless a term is defined in the P&E Act, in which case the term has the meaning given to it in that Act unless it is defined differently in the scheme. In the present case the term is not defined differently in the scheme.

Section 18 of the Subdivision Act

Section 18 of the Subdivision Act provides as follows:

18Council may require public open space
(1)If a requirement for public open space is not specified in the planning scheme, a Council, acting as a responsible authority or a referral authority under the Planning and Environment Act 1987 may require the applicant who proposes to create any additional separately disposable parcel of land by a plan of subdivision to—
(a)set aside on the plan, for public open space, in a location satisfactory to the Council, a percentage of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 per cent; or
(b)pay or agree to pay to the Council a percentage of the site value of all of the land in the subdivision intended to be used for residential, industrial or commercial purposes, being a percentage set by the Council not exceeding 5 per cent; or
(c)do a combination of (a) and (b) so that the total of the percentages required under (a) and (b) does not exceed 5 per cent of the site value of all the land in the subdivision.

(1A)The Council may only make a public open space requirement if it considers that, as a result of the subdivision, there will be a need for more open space, having regard to—
(a)the existing and proposed use or development of the land;
(b)any likelihood that existing open space will be more intensively used after than before the subdivision;
(c)any existing or likely population density in the area of the subdivision and the effect of the subdivision on this;
(d)whether there are existing places of public resort or recreation in the neighbourhood of the subdivision, and the adequacy of these;
(e)how much of the land in the subdivision is likely to be used for places of resort and recreation for lot owners;
(f)any policies of the Council concerning the provision of places of public resort and recreation.

(1B)If a Council requires an applicant to pay or agree to pay an amount under subsection (1)—
(a)the amount must be paid before the Council issues its statement of compliance; and
(b)subject to paragraph (a), the time for payment of the amount is at the applicant's discretion; and
(c)despite paragraph (a), the whole or any part of the amount may be paid after the Council issues its statement of compliance if the applicant and the Council so agree under section 21(1)(b)(ii).

(2)In the case of a staged subdivision using the procedure under section 37—
(a)if an open space requirement is to be made, it must be made for the master plan, but may be expressed to apply to any particular stage or stages; and
(b)if the requirement applies to the second or a subsequent stage, the location of the open space need not be defined except on the plan for that stage; and

(c)if the requirement applies to the second or a subsequent stage and is a requirement to pay money, the total amount to be paid may be apportioned between particular stages, and the proportion need not be specified except for the plans of the appropriate stages.

(3)Land intended to be used for residential, industrial or commercial purposes includes land set aside on the plan of subdivision for roads or other reserves incidental or ancillary to the use of the land for residential, industrial or commercial purposes.
(4)The applicant may agree with the Council to set aside or pay a percentage other than the set percentage.
(5)A public open space requirement may be made only once in respect of any of the land to be subdivided whether the requirement was made before or after the commencement of this section, unless subsection (6) applies.
(6)A further open space requirement may only be made when a building is subdivided and a public open space requirement was not made under section 569H of the Local Government Act 1958 or section 21A of the Building Control Act 1981 when the building was constructed.
(7)If any amount is paid to the Council under this section and the Council is satisfied that it is no longer intended to subdivide the land to create any additional lot, the Council may refund the amount paid to it.
(8)A public open space requirement is not required if—
(a)the subdivision is of a class of subdivision that is exempted from the public open space requirement by the planning scheme; or
(b)the subdivision is for the purpose of excising land to be transferred to a public authority, Council or a Minister for a utility installation; or
(c)the subdivision subdivides land into two lots and the Council considers it unlikely that each lot will be further subdivided.

The owner contends:

(a) the planning scheme provision requiring a POS contribution is to be read as subject to the limitation referred to in s 18(1), namely as being restricted to the situation where an applicant proposes to create an additional separately disposable parcel of land by a plan of subdivision;

(b) the planning scheme provision is subject to the limitation stated in s 18(1A), namely that the Council may only make a POS requirement if it considers that as a result of the subdivision there will be a need for more open space; and

(c) the planning scheme repeats the exemption contained in s 18(8)(c).

The Council and the Minister contend:

(a) the planning scheme provision imposes a valid requirement for the provision of POS entirely independently of the Subdivision Act;

(b) section 18(1) is not to the point, because the present case is not one where the pre-condition stated in the opening words obtains, namely ‘if a requirement for POS is not specified in the planning scheme …’;

(c) section 18(1A) relates only to requirements imposed by council under the Subdivision Act and more particularly s 18(1);

(d) neither s 18(8)(c) nor the parallel provision contained in the planning scheme apply on the facts of the present case.

Starting from s 35(a) of the Interpretation of Legislation Act 1984 (Vic),[12] these questions fall to be resolved in accordance with the principles stated by the High Court. First, by Brennan CJ, Dawson J, Toohey J and Gummow J in CIC Insurance Ltd v. Bankstown Football Club Ltd[13]:
[12]“In the interpretation of a provision of an Act or subordinate instrument—
(a)a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object …”
[13](1995) 187 CLR 384, 408 (‘CIC Insurance’).

It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses “context” in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent. (footnotes omitted)

Secondly, by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority[14].

[69]The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.
[70]A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
[71]Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”.

[14](1998) 194 CLR 355, [381] - [382].

In our opinion the terms of s 18 read as a whole, distinguish between and govern differently both POS requirements fixed pursuant to s 18(1) on the one hand, and those fixed under the planning scheme on the other. In our view s 18 makes provision with respect to both classes of requirement which a council may make as a responsible authority and differentiates the provisions governing site specific s 18(1) requirements from general provisions governing both classes of requirements. In our view so much is evident from a construction seeking the legislative intent, consistency, and whole statutory purpose, policy and harmony.

Thus, s 18(1B) refers expressly to a requirement made by a council ‘under subsection (1)’. Sections 18(1A), (2), (5) and (6) however, speak simply of the making of a requirement. Unlike s 18(1B) they do not contain a limitation expressed by reference to sub‑s (1).[15] Likewise the opening words of s 18(8) provide that a planning scheme contribution ‘is not required’ in three situations. These words are again words of general import. The subsection does not say 'pursuant to section 18(1)’.
[15]Section 18(7) refers to an amount paid ‘under this section’.

The better view is that s 18(1A) and the subsequent provisions, unless expressed to relate only to a requirement pursuant to s 18(1), govern both the situations contemplated by s 18(1), namely the making of a requirement by a council acting as a responsible authority or referral authority under the P&E Act either in respect of a requirement for POS specified in the planning scheme or a requirement in the absence of such specification pursuant to the provisions of s 18(1).

This view accords with a construction that conforms to the legislative intent of s 18(1A): ‘The council may only make a public open space requirement …’ in the circumstances specified. This language should not be read down by implication that is contrary to the legislative intent.

Section 18(1A) should not be read as applicable only to the form of requirement provided for in s 18(1), rather it is intended to apply to both forms of requirement which are contemplated by s 18(1) as requirements a council may make as a responsible authority or referral authority. Thus it is applicable to the making of requirements specified in the planning scheme.

So read s 18(1A) does apply to the present case, although for reasons we shall explain below that is not in our view necessarily fatal to the Council’s case, having regard to the facts of the present matter.

Section 18(1)

Conversely the construction we favour does not lead to the conclusion for which the owner contends, that the particular provisions of s 18(1) for specific requirement of POS in the absence of a planning scheme provision, have application to the present case.

Section 18(1) contemplates two classes of requirements with respect to POS. Those categories are created by the opening words, ‘If a requirement for public open space is not specified in the planning scheme…’. The sub‑section contemplates that a POS requirement may or may not be specified in a planning scheme. In the present case a requirement is specified in the planning scheme and the subsequent power to make a site specific requirement is in our view inapplicable. In turn, the limitation of that power to any applicant who proposes to create any additional separately disposable parcel of land, is also inapplicable. It is not to the point whether the applicant proposed to create any additional separately disposable parcel of land by plan of subdivision or not. That is a proviso attending the site specific power provided for in the s 18(1).

It is accordingly unnecessary to decide whether on the facts of the present case the applicant did propose to create an additional separate disposable parcel of land by the staged plan of subdivision which was submitted.

It is not surprising that the power granted by s 18(1) is limited by special conditions. It is limited in another respect also, namely by a five per cent ceiling. It is a residual provision governing that remnant of cases where no provision is made pursuant to the equivalent of cl 52.01 of the relevant planning scheme. That provision is currently a standard provision included in all planning schemes in Victoria, by way of the Victoria Planning Provisions. [16]
[16]Planning and Environment Act 1987 s 4A.

Section 18(1) will have no effect whenever the schedule is contained in the planning scheme of a particular municipality, in order to make a substantive requirement. Section 18(1) thus operates in conjunction with a state‑wide regime of planning scheme provisions, which envisage that requirements for POS will be specified in the planning scheme, in that s 18(1) will cover subdivisions where no planning scheme provision has been enacted.

It follows from the above analysis that the first of the Tribunal’s principal conclusions cannot be founded upon s 18(1):

[t]here is no lawful basis for a planning scheme requirement for an open space contribution in respect of a subdivision which does not increase the number of lots … [17]

[17]Fletcher v Maroondah CC [2006] VCAT 2205, [31].

There is no other basis on which this conclusion could be sustained and hence it should be set aside.

Further the third of the Tribunal’s principal conclusions is too broad:

[t]he effect of … cl 52.01 of the planning scheme is to fix the percentage … of any contribution for open space, but to otherwise leave in place the provisions of the Subdivision Act as to the circumstances in which a contribution is required, the method of calculating the requirement and … the [terms on] which the funds … obtained by way of contribution must be used.[18]

[18]Ibid, [36].

The relevant provisions of the Subdivision Act do not include s 18(1).

Section 18(1A)

We return then to the construction of s 18(1A) and the other general provisions of s 18. There are three factors which further support the view that s 18(1A) should be construed consistently with the legislative purpose to derive its meaning and that, together with the other general provisions of s 18, it is intended to govern the actions of a council enforcing a requirement pursuant to a planning scheme.

First, the construction results in a harmonious, practical, consistent and reasonable scheme pursuant to the Subdivision Act.

Secondly, the terms of the planning scheme provisions themselves are generally consistent with this interpretation and demonstrate the practicality of that regime.

Thirdly, the contrary interpretation would result in a situation where a council acting as a responsible authority or referral authority could impose a POS requirement when no nexus exists between the subdivision and the requirement.

We will deal with each of these matters in turn.

The scheme of the Subdivision Act

The Subdivision Act contains a series of provisions which are sensibly and desirably applicable to POS contributions whether imposed by a council as a responsible authority pursuant to a planning scheme (as here) or pursuant to a site specific requirement under s 18(1).

They may be summarised as follows:

· the staged subdivision provision contained in s 18(2);

· the definition of land intended to be used for residential, industrial or commercial purposes contained in s 18(3);

· the power to agree to set aside or pay a percentage other than the set percentage contained in s 18(4);

· the limitations on the power to impose successive POS requirements upon successive subdivisions contained in ss 18(5) and (6);

· the power to refund contained in s 18(7);

· the provisions of s 18(8) which state that the POS requirement is not required:

(b) if the subdivision is required for the purpose of excising land for transfer for a public purpose use, or

(c) the subdivision subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided;

· the valuation provisions detailed in s 19;[19]

· the requirements as to what council must do when land is set aside for POS contained in s 20;[20]

· the provisions relating to statements of compliance with statutory regulation pursuant to s 21(1)[21] which relevantly require council to issue a statement of compliance if it is satisfied ‘all requirements of and under this Part and the P&E Act that relate to public works have been met’.[22]

[19]Section 19 provides:

19Valuation of land for public open space

(1)The Council may obtain a valuation of the land from a person who holds the qualifications or experience specified under section 13DA(1A) of the Valuation of Land Act 1960 if the value is not agreed.

(2)The land is to be valued on a day not more than 12 months before the date for payment of the public open space contribution.

(3)The Council must give the applicant a copy of the valuation.

(4)Part III of the Valuation of Land Act 1960 (except Division 2) applies to the valuation as if the valuation had been made under Part 8 of the Local Government Act 1989.

(5)If a public open space contribution is not paid within 12 months after it is required, the Council may obtain a revaluation at each anniversary of the making of the requirement, and vary the amount of the payment accordingly.

[20]Section 20 provides:

20What must the Council do with public open space?

(1)A Council must set aside for public open space any land which is vested in the Council for that purpose.

(2)The Council must use any payment towards public open space it receives under this Act or has received under section 569B(8A) of the Local Government Act 1958 but has not applied under subsection (8C) of that section or the proceeds of any sale of public open space to—

(a)buy land for use for public recreation or public resort, as parklands or for similar purposes; or

(b)improve land already set aside, zoned or reserved (by the Council, the Crown, a planning scheme or otherwise) for use for public recreation or public resort, as parklands or for similar purposes; or

(c)with the approval of the Minister administering the Local Government Act 1989, improve land (whether set aside on a plan or not) used for public recreation or public resort, as parklands or for similar purposes.

** * * *

(4)Public open space can be used for municipal purposes in accordance with the planning scheme, or sold only if the Council has provided for replacement public open space.

[21]Section 21(1) provides:

(1)Subject to subsection (2C), a Council must issue a statement of compliance to the applicant in the prescribed form as soon as possible after—

(a) the applicant has given it the prescribed information; and

(b) it is satisfied that—

(i)all requirements of and under this Part and the Planning and Environment Act 1987 that relate to public works have been met; or

(ii)there is an agreement to secure compliance with those requirements.

[22]Public works is defined to include the provision of open spaces within a subdivision or public open space related to a subdivision. Public open space is defined as follows:

“…land set aside in a plan or land in a plan zoned or reserved under a planning scheme –

(a) for public recreation or public resort; or

(b) as parklands; or

(c) or similar purposes;”

We would emphasise further, the obvious practical difficulty to those within and engaged with local government – landowners, developers, valuers and the like - if the provisions relating to staging, agreement to pay other than the set percentage, power to refund and the statutory regime for the valuation of land were not regarded as applicable to POS requirements imposed by a council as a responsible authority pursuant to a planning scheme, on the basis that a planning scheme requirement is independent of and not embraced by the Subdivision Act provisions. The P&E Act has no equivalent provisions.

We would also emphasise first that if the view were taken that the general provisions of the Subdivision Act did not apply to planning scheme requirements for POS, there would be no statutory bar to repeat requirements for POS contribution upon repeat subdivisions. The current planning scheme provision in this regard does not have the force of ongoing statutory protection. Likewise neither of the exemptions contained in ss 18(8)(b) and (c) would have any statutory force with respect to planning scheme provisions. Further, and arguably of more significance, the requirements pursuant to s 20 as to what a council must do with POS contributions would be inapplicable and there is no comparable regime pursuant to the P&E Act. These difficulties demonstrate the perversity that would arise if a different construction is applied.[23] We do not accept that the Parliament would intend such an outcome.
[23]See CIC Insurance (1995) 187 CLR 384, 408; Cooper Brookes (Wollongong) Pty LTd v Federal Commissioner of Taxation (1981) 147 CLR 297,320.

In our view each of the consequences which we have identified based on a contrary interpretation would, on their face, give rise to an improbable and anomalous outcome. We are led to prefer a construction we consider open and as more closely adhering to the legislative intent.

Looked at broadly and fairly, it would be a surprising outcome if a carefully considered general statutory scheme, which as the Tribunal explained is the product of a long history,[24] had no application to requirements imposed by a responsible authority pursuant to the planning scheme. Conversely there is obvious utility in giving the provisions a meaning that is consistent with the legislative purpose as gleaned from the provisions in their surrounding context.
[24]Fletcher v Maroondah CC [2006] VCAT 2205, [11] – [20].

Planning scheme provisions

Although it is impermissible to construe the Subdivision Act by reference to a subordinate instrument, nevertheless applying a contextual and purposive approach, the planning scheme provisions generally mirror the concepts and language of the Subdivision Act because they form part of an overall scheme for the treatment of subdivisions. In turn this tends to confirm the view that the planning scheme provisions can and were intended to be read as subject to the general provisions of the Subdivision Act. It is a legitimate part of the general interpretative exercise to look at the planning scheme and its role notwithstanding its status as a subordinate instrument[25] although the subordinate instrument cannot control the meaning that is construed.[26]
[25]Brayson Motors Pty Ltd (in liq) v Federal Commissioner for Taxation (1985) 156 CLR 651, 652.
[26]See [76] below.

First, both the P&E Act and the Subdivision Act adopt the same definition of ‘subdivide’.

Secondly, cl 52.01 uses the concepts and phraseology of a ‘contribution for public open space’ as having the equivalent meaning both under the planning scheme and s 18.

Thirdly, the contribution is required to be to the ‘council’, and not to the responsible authority or a referral authority. It is these latter entities to which the P&E Act and the planning scheme generally grant discretionary power.[27] Indeed the term ‘the council’ used in cl 52.01 is not defined under the P&E Act. Conversely the Subdivision Act is expressed by reference to the ‘council’ and such term is defined pursuant to it.
[27]See for example, Planning and Environment Act ss 61 - 62.

Fourthly, the basis of the amount specified in the schedule to cl 52.01 (being a percentage of the land intended to be used for residential, industrial or commercial purposes, or a percentage of the site value of such land, or a combination of both) mirrors the scheme of ss 18(1)(a), (b), and (c) and s 18(3).

Fifthly, the second paragraph of cl 52.01 mirrors the provisions of ss 18(5) and 18(6) of the Subdivision Act.

Sixthly, the third paragraph is expressly stated to set out exemptions ‘in accordance with s 18(8) of the Subdivision Act.’ Those exemptions comprise in the first instance, classes of subdivision elaborated by the planning scheme as envisaged by s 18(8)(a). Secondly, they reiterate the provisions of ss 18(8)(b) and (c). The language used in the planning scheme directly reflects the view which we prefer, namely that the planning scheme operates subject to relevant provisions of the Subdivision Act and not independently of it.

Seventh, the sequence of the legislation is also relevant given the conjunctive operation of the Subdivision Act and the P & E Act as we have explained. The P & E

Act came into operation first; [28] next, the Subdivision Act came into operation[29] and, later again, quite relevantly, s 18(1A) of the Subdivision Act commenced.[30] Section 7 of the P & E Act providing for standard provisions such as cl 52.01, was introduced in 1996. In our view, the fact that the Parliament enacted these provisions dealing with POS in each instance and in the particular sequence it did, evinces an intention that s 18(1A) would apply to subdivisions to which planning schemes apply. We consider this construction is self evident from the plain words of each statute and, significantly, the fact that the Parliament did not insert the words ‘if a requirement for public open space is not specified in the planning scheme’ at the commencement of ss (1A) or take the opportunity to insert an entirely separate section dealing with planning scheme subdivisions. Whilst this approach might be argued for the contrary position, we consider the better view to be one that achieves the purpose of the legislation and avoids the perversity we have identified.[31]

[28]S 6 of the P&E Act commenced on 17 February 1988.

[29]S 18 of the Subdivision Act came into operation on 30 October 1989.

[30]S 18(1A) commenced on 25 June 1991.

[31]See above [59] - [60].

We further observe that the construction exercise here is also informed by our examination of the sequence of the legislation involving a consideration of prior legislation,[32] similar legislation[33] and legislation that forms part of an overall scheme.
[32]see for example, Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355, 366-8; Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249, 255-60, 262-3.
[33]see for example the discussion in Pearce, DC and Geddes, RS, Statutory Interpretation in Australia (6^th ed, 2006) [3.36] – [3.37].

The concepts and terminology of cl 52.01 are thus generally consistent with an expectation it will be read as subject to the general provisions of ss 18, 19 and 20 of the Subdivision Act.

The Council and the Minister submit however that there is a material inconsistency between the language of cl 52.01 and the scheme of the general provisions of s 18. This inconsistency is the use of the word ‘must’ in the opening words of cl 52.01. The construction of the Subdivision Act we favour, results in requiring the words of cl 52.01 to be read as ‘a person who proposes to subdivide land must make a contribution to the council for open space in accordance with the Subdivision Act …’

It may be observed that the drafting of this provision is in any event somewhat unsatisfactory. It would have been desirable for the draftsperson to have made appropriate cross-references to the other Act (the P&E Act in the Subdivision Act and vice versa) upon enactment or amendment as the case may have been. Nevertheless, there is nothing in or absent from the ostensibly unsatisfactory drafting to constrain or inhibit the contextual approach we apply. In avoiding the mischief we have earlier articulated we note as the Tribunal observed:

A provision that requires a person who proposes to subdivide land to make a contribution to a council for public open space must be interpreted in the light of the nature of the power to make a planning scheme. Clearly it is not a requirement to be taken literally: in order to trigger the requirement it must be necessary to do more than propose a subdivision. It would be unconscionable if a person was required to make a contribution in respect of a proposed subdivision for which a permit was ultimately refused. How, then, should clause 52.01 be interpreted?

In our view there is much to be said for this analysis.[34]
[34]If it be incorrect, however, it reinforces the strength of the proposition, that it is both sensible and desirable for s 18(7) providing for refunds, together with the other general provisions of s 18 to apply both to requirements under s 18(1) and requirements made under the planning scheme.

This said, we accept that the bald use of the word ‘must’ in the terms used at the commencement of cl 52.01 does not corroborate the construction of s 18 which we favour. Nevertheless the general form of cl 52.01 demonstrates that it fits comfortably with the construction of the Subdivision Act we prefer, and that it was plainly intended to operate in conjunction with and by reference to the provisions of that Act.

Moreover the use of the word ‘must’ in the subordinate instrument cannot control the meaning of the Subdivision Act on its proper construction, nor displace its effect.[35] Conversely the planning scheme provision is readily capable of being read within the framework contemplated by the Subdivision Act and should be so read in accordance with accepted principles of statutory construction.[36]
[35]Hunter Resources Ltd v Melville (1988) 164 CLR 234, 244.
[36]Cf Airservices Australia v Canadian Airlines (1999) 202 CLR 133, 216 (McHugh J); see also [34] above.

In our view no assistance is gained from the second reading speeches when the legislation was introduced and amended.[37]
[37]Victoria, Parliamentary Debates, House of Assembly, 13 October 1987, 1438 (the Hon. Frank Wilkes, Minister for Housing); 13 April 1989, 794 (the Hon. Tom Roper, Minister for Planning and Environment); 5 June 1991, 3038 (the Hon. Andrew McCutcheon, Minister for Planning and Housing); 4 May 1993, 1505 (the Hon. Robert Maclellan, Minister for Planning); 22 April 1994, 1111 (the Hon. Robert Maclellan, Minister for Planning).

Reasonable nexus

Section 18(1A) requires a nexus between the subdivision and the purpose for which a POS contribution is provided. It requires a need consequential upon the subdivision to be established having regard to a number of factors including relevant characteristics of the area and policies of the council.

It is difficult to conclude otherwise than that nexus is entirely reasonable, and that the removal of the requirement for it by way of a general provision within a planning scheme has the obvious potential for inequitable outcomes in particular cases. Conversely, the construction which we favour constrains the council to limit the making of POS requirements to circumstances where it would be equitable to do so because the subdivision generates a need for more open space.

This consideration gains further weight from the fact that the P&E Act also contemplates that land may in any event be reserved for POS pursuant to a planning scheme. Such reservation may in turn lead to its acquisition in the public interest. In other words, the provision of POS in the public interest is not wholly dependent upon the mechanisms with which we are concerned.

Other considerations

It was incidentally submitted on behalf of the Council that s 18(1A) should not be construed as having effect apart from and in a broader context than ss 18(1) and (1B). We reject this submission. There is an explicit distinction between s 18(1B) and s 18(1A). Section 18(1B) refers in terms back to s 18(1) but s 18(1A) does not. It is expressed in general terms as are the remaining sub-sections of s 18 (save for s 18(8)(a) which necessarily by its terms assumes the imposition of a planning scheme requirement).

The contrary view implies that the phrase ‘under subsection 1’ contained in the introductory words to s 18(1B) is to be implied in s 18(1A) although it is not found there. The fact sub-s (1A) follows sub-s (1) is insufficient basis for this implication. By parallel reasoning the phrase would be surplusage in sub-s (1B) because this in turn follows sub-ss (1) and (1A). The proper approach is to give effect to all the language Parliament has employed and to recognise the distinction between the terms of s 18(1B) and s 18(1A). Section 18(1A) is one of a series of general provisions contained in s 18, which are not limited in application to requirements made ‘under subsection 1’ but extend to requirements of both the types contemplated by sub‑s 1 namely planning scheme requirements and site specific requirements. In this respect we also observe that the history and sequence of the enactment and amendment to the Subdivision and P&E Acts and the Victorian Planning Provisions reveal an intention by the Parliament that the provision operate in a conjunctive manner.

It was further submitted on behalf of the Council that s 18(1A) does not qualify the power to make planning schemes contained in s 6(1) of the P&E Act. We accept that this is so but what it does qualify is the power of a council acting as a responsible authority or a referral authority to actually require a POS contribution as a condition of subdivision.

Where construction of separate but related legislation is simultaneously required, the object is to arrive at a construction of the provisions which assumes that Parliament intended its legislation to operate harmoniously or, in other words, rationally, efficiently and justly together. [38] In the present case we are ultimately concerned with the construction of a planning scheme made pursuant to the P&E Act, in the context of related legislation comprised by the Subdivision Act. We are strengthened in our view by the observation of Gleeson CJ in Trust Co of Australia Ltd v Commissioner of State Revenue,[39]:

I generally favour a purposive construction of legislation. It is the approach that represents the contemporary doctrine of this Court. Indeed, I go further and consider that it is emerging as a common mode of solving problems not only in words contained in written laws made by, or under the authority of, a legislature but also in disputed language in contracts and other legal instruments. Revenue legislation is not in a category immune from the general principles of statutory interpretation. The purposive approach applies to the ascertainment of the meaning of such legislation as to that of other written laws.

[38]Commissioner of Stamp Duties v Permanent Trustee Company Limited (1987) 9 NSWLR 719, 724 (Kirby P).

[39](2003) 197 ALR 297, [63].

The effect of the construction we prefer of the Subdivision Act is that cl 52.01 has the effect of specifying a POS requirement as contemplated by s 18(1). The requirement so specified then falls to be implemented in accordance with the balance of the Subdivision Act provisions other than those relating expressly to a requirement made pursuant to the residual power granted by s 18(1).

In turn, the requirement made under cl 52.01 cannot be enforced pursuant to the P&E Act in a manner contrary to the provisions of the Subdivision Act. It must be construed as subject to implied limitations to ensure validity.[40]
[40]Davies & Jones v Western Australia (1904) 2 CLR 29, esp. Griffiths CJ at [43]; Air Services Australia v Canadian Airlines (1999) 202 CLR 133, 216 (McHugh J).

The general power to make planning scheme provisions regulating the use of land which is contained in the P&E Act,[41] does not enable a council to impose a requirement for POS as a condition of subdivision in a particular case, other than in accordance with the specific regime governing the imposition of such requirements pursuant to the Subdivision Act.
[41]Section 6 of the P&E Act provides in part:
(1)a planning scheme for an area - …
(b)may make any provision which relates to the use, development, protection or conservation of any land in the area.
(2)without limiting sub-section (1), a planning scheme may - …
(b)regulate or prohibit the use or development of any land;
In turn s 3 of the P&E Act defines development to include the subdivision of land.

The plain meaning of the provisions setting out this regime is that they apply to requirements made pursuant to planning scheme provisions, save where they are expressed to relate to site specific requirements made pursuant to s 18(1) only.

Thus a planning scheme cannot enable a council to make a requirement in breach of s 18(1A). It cannot preclude a council from agreeing a percentage other than the set percentage in accordance with s 18(4). It cannot enable a council to make repeat requirements for POS in breach of s 18(5) and (6). It cannot remove the discretion to refund provided for by s 18(7). It cannot do away with either of the exceptions provided for in s 18(8)(b) and (c). It cannot provide for the valuation of land for the purposes of POS contributions other than in accordance with s 19. It cannot purport to provide for dealing with land obtained by way of contribution of POS other than in accordance with s 20.

In each of these respects, although the general powers to make planning schemes contained in the P&E Act might otherwise theoretically enable some other scheme of POS contribution to be created pursuant to a planning scheme, Parliament has specifically regulated the terms on which a council may make a requirement when acting as a responsible authority or referral authority pursuant to the P&E Act, as a condition of approval of subdivision.

It follows in the present case that the specific provisions of s 18(1A) constrained the capacity of the council to make a POS requirement as a condition of subdivision and general words of the planning scheme must be understood and read as subject to that statutory constraint.

Section 18(1A) conclusions

In consequence we accept the central premise of the Tribunal’s second principal conclusion, although not for the reason identified by it, but simply because s 18(1A) so provides.

For a requirement to contribute open space to be a lawful requirement, a subdivision needs to be of a character that is likely to generate a need for more open space; otherwise, the requirement would be a mere tax …[42]

[42]Fletcher v Maroondah CC [2006] VCAT 2205, [31].

The relevant test is that stated with precision in s 18(1A) which requires the question of need to be assessed by reference to a series of stipulated considerations.

The relevant test is not a general rule derived by implication from principles of interpretation concerning the power to impose taxes and it is unnecessary to consider those principles. We would wish to state however that we accept the threshold submission of the Minister and the Council that these principles are not of easy application to conditions imposed incidentally to permission to subdivide.

As the High Court stated in Lloyd v Robinson:[43]

If approval is obtained for the subdivision of one area of land by complying with a condition which requires the giving up of another area of land for purposes relevant to the subdivision of the first, it is a misuse of terms to say that there has been a confiscation of the second. For the giving up of the second a quid pro quo is received, namely the restored right to subdivide the first. It may be that the quid pro quo is inadequate, and that the landowner, though under no legal compulsion to give up the second area of land if he chooses to forego the idea of subdividing the first, is nevertheless under some real compulsion, in a practical sense, to submit to the loss of it because of the importance to him of obtaining the approval. But there is no room for reading the Act down in some fashion by appealing to a principle of construction that has to do with confiscation. If the Board has performed its statutory duty by giving approval to the subdivision subject only to conditions imposed in good faith and not with a view of achieving ends or objects extraneous to the purposes for which the discretion exists, the inescapable effect of the Act is that the landowner must decide for himself whether the right to subdivide will be bought too dearly at the price of complying with the conditions.

[43](1962) 107 CLR 142, 154.

The factors we have set out above, support the construction of the Subdivision Act by reference to the linguistic distinctions clearly contained within it.

Nevertheless in the present case the view that s 18(1A) was applicable to the imposition of a requirement by council, does not necessarily resolve the matter against it.

The first stage of the subdivision contemplated, was intended to create a larger lot with the manifest potential for further subdivision and in turn further residential development. Indeed at the time the Council was asked to approve its creation, it was simultaneously requested to approve its further division into two. The plain object of the proposed first stage of the subdivision was to facilitate the construction of a dwelling or dwellings additional to those already existing. Such construction in turn, would on the face of it have the capacity to generate a need for POS.

Ultimately however the application of s 18(1A) is a question of fact. That question of fact was not decided by the Tribunal and should be decided by it. The role of this Court is restricted to that of supervision with respect to errors of law. It is not for this Court to decide whether it considers that, as a result of the proposed subdivision, there will be a need for more open space, having regard to the factors set out in s 18(1A). That question must be remitted for determination.

Section 18(8)(c) of the Subdivision Act

It is convenient to repeat the terms of s 18(8)(c):

(8) A public open space requirement is not required if—…
(c)the subdivision subdivides land into two lots and the Council considers it unlikely that each lot will be further subdivided.

In the present case at the time of the proposed grant of the permit for the first stage of the subdivision involving boundary realignment, no council could have reached the view that it considered it unlikely the larger lot thereby created, would be further subdivided. The Council was simultaneously requested to and did (in terms to which we will shortly return) permit precisely such a further subdivision. Accordingly, s 18(8)(c) does not assist the owner.

It is true that the potential benefit of further subdivision by way of stage 2 to create three lots from what had originally been two lots, was logically dependent upon the removal of a restrictive covenant limiting to two, the number of dwellings upon the land comprised in the original lots. But Council was requested to consider and permit by way of stage 2 the removal of such covenant at the very time it permitted stage 2.

The reality is that the role of the stage 1 subdivision was to alter the balance between two existing lots, enabling in turn the larger lot thereby created, to be further subdivided by way of stage 2.

Conversely (as it appears the Council accepted) the stage 2 subdivision viewed in isolation did not create lots likely to be further subdivided.

The construction of the permit application

There is an additional complication arising on the facts of this matter which it is necessary to address.

The owner in the first instance applied for permission to subdivide in two stages.

The permit application form stated:

Stage 1: Variation of existing easement & restructure of existing lots (2)
Stage 2: Variation of existing covenants, to allow two lot subdivision.
All in accordance with the attached plan.

The attached plan of subdivision showed three lots but was annotated as following:

STAGE 1
1. VARIATION OF EXISTING 1.83m WIDE DRAINAGE EASEMENT.
2.RESTRUCTURE EXISTING LOTS (CREATING LOTS 1 AND BALANCE LOT (2 & 3) ).
STAGE 2
1VARIATION OF RESTRICTIVE COVENANTS AFFECTING EACH OF THE LOTS.
2SUBDIVISION OF RESTRUCTURED LOT (CREATING LOTS 2 & 3).

The Council however granted a permit not for a staged subdivision, but for a simple three lot subdivision. The permit allowed:

Variation of the easement and variation of the covenant to enable subdivision of the two existing lots into three lots

In turn condition 6 of the permit imposed a requirement for POS without differentiation between any stages.

6.The applicant or owner must pay to the Council a sum equivalent to 5% of the site value of all land in the subdivision or a particular lot or lots. This payment shall be made prior to the issue of a Statement of Compliance and may be adjusted in accordance with Section 19 of the Subdivision Act.

The owner appealed condition 6, to the Tribunal and the grounds of application for review were essentially predicated on the proposition that the application was for a two stage development of two two lot subdivisions.

It is submitted that condition 6 on Permit No. M/2005/921 is beyond power.
This application was for a two staged development of two two lot subdivisions.
Clause 52.01 of the Maroondah Planning Scheme provides that a subdivision is exempt from a public open space requirement if:
·“It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided.”

In this case the first stage is a two lot subdivision restructuring two existing titles both of which contain a dwelling. The single dwelling covenant remains, and this precludes any logical subdivision potential. The second stage is also a two lot subdivision, creating the additional lot, and it includes a modification to the covenant to limit development to one extra lot.
As this proposal is for two two lot subdivisions, which create lots which cannot be further subdivided, it is submitted that condition 6 is beyond power and should be deleted.

The Tribunal dealt with the matter on the following basis:

5…
It is lawful for one permit application to seek permission for more than one development (or one development in two stages); and, in such an instance, the permit application should be disaggregated for the purpose of deciding the matter.[44] The fact that the permit in this case was not so expressed is not decisive; it is the proper characterisation of the application that counts.[45]
6The application was thought by the surveyor for the permit application to only involve two lot subdivisions; and, by reason of the timing of the variation of the restrictive covenant, to only involve two lot subdivisions where (in each case) a reasonable council would consider it unlikely that each lot would be further subdivided.
[44]Sweetvale Pty Ltd v VCAT [2003] VSCA 83.
[45]City of Springvale v Heda Nominees Pty Ltd (1982) 57 LGRA 298; 1 PABR 287.

Contentions
7The council submitted that there was a flaw in the approach taken by the permit holder, namely that on the first subdivision a reasonable council would not consider it unlikely that the enlarged Woodland Avenue lot (then of 1,959 square metres) would be further subdivided. (There would appear to be no issue about this in relation to the second subdivision.) The permit holder answered this by characterising the first stage as a “re‑subdivision”; and, more particularly, as a type of subdivision that was not intended to be subject to the public open space requirement.

The first question of law stated in the notice of appeal is:

Did the Tribunal err in law in characterising the subdivision authorised by Permit No. M/2005/921 as two two lot subdivisions?

It can be seen that in a sense this question agitates the disjunction between the form of the permit application and the terms of the permit granted. The Council’s position is that it did not permit two subdivisions, although as we have observed, this is what the owner sought permission for. This disjunction was not squarely addressed and resolved by the Tribunal.

Section 37(2) of the Subdivision Act requires that if a permit authorises a staged subdivision, that subdivision may be effected either as a series of separate subdivisions each in accordance with the provisions of the Act, or by way of the procedure set out in s 37(3)-(10). The latter procedure envisages the creation of sequential plans of subdivision within the framework of a master plan.

In the present case no staged subdivision of the latter sort was ever contemplated. What the owner sought was a permit for two separate sequential subdivisions. What was permitted was one single three lot subdivision. The procedure referred to in s 18(2) and s 37(3)-(10) of the Subdivision Act was not in issue.

It seems to us that the dispute with respect to the nature of the primary permission and its consequences for the application of s 18 should also be remitted to the Tribunal. The question of whether a single three lot subdivision should be permitted or whether two separate staged subdivisions should be permitted, is a question which may involve issues of planning discretion. If the view be taken that the staged subdivision is appropriate then that view could only be reached on the basis that the permit would create a situation where potentially only the first stage of the subdivision occurred and there was a period (currently intended to be only intermediate) in which the original lots were saleable and usable in their initial restructured layout. This stage would allow the smaller lot to be sold off before stage 2 was proceeded with.

If the Tribunal takes the view the Council was correct to permit only a three lot subdivision, then s 18(1A) will fall to be applied to the proposal as a whole. If it takes the view that Council should (responsively to the application) have granted a permit for sequential subdivision of the land in two separate stages, then s 18(1A) will fall to be applied to each of those stages. Section 18(8)(c) of the Subdivision Act will also fall to be applied to each stage. It may be objected procedurally by the Council that the application for review lodged with the Tribunal did not in terms take issue with the language of the permit permission to subdivide. As we have said however the grounds of application were centrally founded on the proposition that the application for permit was for a two stage development of two, two lot subdivisions. The procedural complications in these circumstances also seem to us to be matters which the Tribunal not this Court should resolve.

Conclusion

It follows that the appellant has succeeded in making out the following grounds of appeal:

6.The Tribunal erred in law in interpreting clause 52.01 of the Scheme as not applying to a subdivision which does not create an additional separately disposable lot.
7.The Tribunal should have interpreted clause 52.01 of the Scheme more broadly by reference to its language rather than in the confined manner adopted by the Tribunal by reference to a historical review and section 18(1) of the Subdivision Act 1998.
It has also succeeded in part in making out the following ground:
3.The Tribunal erred in law in concluding (for the reasons it did) that the subdivision authorised by Permit No. M/205/921 was not a subdivision to which the requirement in the schedule to clause 52.01 of the Scheme applies.

Finally, we would not consider the taxation question. It was not raised until the appeal and raised questions of fact which in all likelihood would have been the subject of evidence before the Tribunal if raised then.

In summary:

(a) The limitations upon the power to fix a POS contribution pursuant to s 18(1) had no application to the proposed subdivision before the Tribunal, because it was concerned with a case in which the planning scheme fixed the level of such contributions.

(b) Section 18(1A) did however apply to the proposed subdivision, because it (together with other provisions not expressed to relate to requirements made pursuant to s 18(1)) are of general application to requirements for POS made by municipal councils upon subdivision pursuant to the P&E Act.[46]
[46]Requiring satisfaction pursuant to s 21 as a pre‑condition to the issue of a statement of compliance pursuant to the Subdivision Act.

(c) In the present case it remains for the Tribunal to determine whether in the terms of s 18(1A) the result of the proposed subdivision would ‘be a need for more open space’.

(d) The exemption contained in s 18(8)(c) and repeated in the planning scheme provision also applied, but considered as a staged subdivision this was a case in which the Council was bound to consider at the time of approving stage 1, that one of the lots would be further subdivided.

(e) There is a disjunction between the form of subdivision applied for and that permitted by the Council. This disjunction is a matter for the Tribunal to resolve.

The appeal should be allowed. The application for review should be remitted for re‑hearing in accordance with law and by a differently constituted Tribunal.

REDLICH JA:

This is an appeal from a decision of the Victorian Civil and Administrative Tribunal (the Tribunal) sitting in the Planning and Environment List. The President of the Tribunal found that cl 52.01 of the Maroondah Planning Scheme (the Scheme) which required the making of a contribution for public open space (POS) did not apply to the subdivision being undertaken by the respondent (the landowner).

I have had the advantage of reading in draft the joint reasons of Warren CJ and Osborn AJA in which they have conveniently set out the relevant facts. I agree for the reasons they give, that cl 52.01 applied to the first stage of the subdivision and that the Tribunal erred in construing it as not applying to a subdivision which does not create additional disposable lots.[47] I also agree that the second stage would fall within the exception specified in cl 52.01 as the appellant (the Council) would be bound to consider it unlikely that each lot would be further subdivided. But the Council was also bound to conclude, at the time of stage 1, that one of the lots would be further subdivided. I further agree that there is a disjunction between the form of subdivision applied for and that permitted by the Council. I would therefore remit the matter for further hearing by the Tribunal on that limited issue.
[47]This is a qualification in s 18(1) of the Subdivision Act that does not apply to a POS requirement under the Scheme.

The Tribunal also concluded that the specification in cl 52.01 of a POS contribution under the Scheme should be construed as subject to those parts of s 18 of the Subdivision Act 1988 (the Subdivision Act) which would have the effect of confining the circumstances in which such a POS contribution should be made. I agree with Warren CJ and Osborne AJA that the provisions of s 18 (1)[48] do not apply

to POS specified under a planning scheme and the Tribunal was in error to conclude otherwise.

[48]The tribunal rested its decision upon the likely invalidity of clause 52.01 if it was not read subject to s18(1A).

The primary issue on the appeal was whether s 18(1A) of the Subdivision Act applied to the POS specification in clause 52.01 of the Scheme. For reasons substantially different from those of the Tribunal, Warren CJ and Osborn AJA reached the same conclusion as the Tribunal that clause 52.01 must be read as subject to the limitations contained in s18(1A). I am unable to agree. In my view the operation of this clause is not to be so confined.

The joint reasons also conclude that save for s18(1) and s18(1B), the other parts of s18 which are not mirrored in clause 52.01 also apply to a POS contribution specified in a planning scheme. I do not find it necessary or appropriate to reach a concluded view on these questions. They did not assume any prominence in the appeal and were not the subject of separate and full argument[49].
[49]The Minister and the Council argued that they may not apply

Finally, I would reject the landowner’s further submission that if s18 (1A) did not apply to the POS contribution specified under the Scheme, clause 52.01 was so broad as to be an invalid exercise of power.

The intent of Parliament in introducing the relevant provisions of the P&E Act and the Subdivision Act and the meaning of clause 52.01 must be determined in their respective contexts. That includes anything that ‘according to reason and logic can inform an understanding of their texts.’[50] In the course of my reasons I have dealt with these contextual matters. I consider that the context and language reveals a very clear Parliamentary intention that the POS specified in planning schemes should apply without limitation to all subdivisions to which the planning scheme relates. The Subdivision Act confers a residual power upon a council to make a requirement for a POS contribution. The making of the requirement is subject to two preconditions. First, that no POS has been specified in the planning scheme.[51] Secondly, that the council is of the state of mind that, as a result of the particular subdivision, there will be a need for more open space, when regard is had to the matters set out in s 18(1A). It is only where no specification of POS is made for the area covered by a planning scheme that Parliament requires the nexus set out in s 18(1A) be established between a site specific subdivision and the purpose for which POS is required.
[50]‘Legal Interpretation - The bounds of legitimacy’-Sydney Law School – Murray Gleeson- 16^th September 2009, 14.
[51]Section 18(1).

As the clause applies in common form in planning schemes across Victoria, and its ambit is a matter of general significance, the Minister for Planning was permitted to intervene. He supported the validity of the clause and contended that s 18(1A) has no application to POS specified in a planning scheme.

Relevant Legislation
(1) Clause 52.01 of the Maroondah Planning Scheme

The obligation to make a POS contribution contained within cl 52 is in these terms:

A person who proposes to subdivide land must make a contribution to the council for public open space in an amount specified in the schedule to this clause (being a percentage of the land intended to be used for residential, industrial or commercial purposes, or a percentage of the site value of such land, or a combination of both). If no amount is specified, a contribution for public open space may still be required under Section 18 of the Subdivision Act 1988.
A public open space contribution may be made only once for any of the land to be subdivided. This does not apply to the subdivision of a building if a public open space requirement was not made under Section 569H of the Local Government Act 1958 or Section 21A of the Building Control Act 1981 when the building was constructed.
A subdivision is exempt from a public open space requirement, in accordance with Section 18(8) of the Subdivision Act 1988 if:
…
It subdivides land into two lots and the council considers it unlikely that each lot will be further subdivided.

The clause is broad in its application. The schedule annexed to it specifies a percentage contribution of five per cent. On its face the clause thus creates an obligation to make a five per cent contribution in any case where approval for a subdivision is given. It provides for no discretion on the part of the responsible authority and is imposed without consideration of any aspects of the individual subdivision.

(2) Planning and Environment Act 1987 (P&E Act)

All municipal councils are required to prepare a planning scheme for the area for which they are the ‘planning authority.’[52] The power to create a planning scheme is contained in the P&E Act. Section 6 provides:
[52]Planning and Environment (Planning Schemes) Act 1996, s 18.

6. What can aplanningscheme provide for?
(1) A planning scheme for an area-
(a)must seek to further the objectives of planning in Victoria within the area covered by the scheme; and
(aa) must contain a municipal strategic statement, if the scheme applies to the whole or part of a municipal district; and
(b)may make any provision which relates to the use, development, protection or conservation of any land in the area.

(2) Without limiting subsection (1), a planning scheme may-
(a)set out policies and specific objectives;
(b)regulate or prohibit the use or development of any land;
(c)designate land as being reserved for public purposes;
(d)include strategic plans, policy statements, codes or guidelines relating to the use or development of land;
…
(g)subject to section 6A, regulate or provide for the creation, variation or removal of easements or restrictions under section 23 of the Subdivision Act 1988;
(h)require specified things to be done to the satisfaction of the responsible authority a Minister, public authority, municipal council or referral authority;

The approach to the construction of separate but related legislation, which the joint reasons draws upon is found in a passage from the judgment of Kirby P in Commissioner of Stamp Duties v Permanent Trustee Company Limited[110] in which his Honour spoke of the assumption that should be made that Parliament intended its legislation to operate rationally, efficiently and justly together. The context in which Kirby P made these observations illustrates that the court does not have an unfettered right to search for an ‘efficient and just operation’ of inter-reliant legislation. Kirby P resorted to such an approach in order to give meaning to all of the words because he considered there to be ‘competing or conflicting’ provisions which did not ‘submit to neat reconciliation.’ Priestly JA, with whom Samuels JA agreed, considered the words of the each of the four relevant statutes to have a fairly obvious meaning which they should be given.[111]
[110](1987) 9 NSWLR 719, 724.
[111]Ibid 729.

It is a strong thing to read words into a statute and in the absence of a clear necessity it should not be done.[112] There must be a clear indication of Parliament’s intention that words should be read into a statutory provision to render it subordinate to another piece of legislation even where the two Acts are in some respects inter-related. That principle is also apposite where it is said that the provisions of one statute should be read into delegated legislation made pursuant to a different enabling Act. Even where the conditions do exist which warrant a search for a rational, efficient and just operation of the integrated legislation, the outcome should be one which accords with Parliament’s intention.
[112]French v Queensland Premier Mines Pty Ltd [2006] VSCA 287 ; DPP v Ali [2009] VSCA 162, [47].

I do not consider that to construe s 18 and cl 52.01 according to their ordinary and plain meaning gives rise to any inconsistency or ambiguity between the two pieces of legislation. An examination of the P&E Act shows that Parliament considered the circumstances in which the two Acts should operate ‘conjunctively’ and has made numerous specific references to when that is to occur.[113] Consideration of their context does not give rise to any ‘improbable or inconvenient’ outcome. There is no conflict of purpose between the provisions which would require their meaning to be adjusted to achieve their reconciliation.[114] In my view an examination of the cognate legislation does not provide any support for the contention that an alternative construction to the plain meaning of the subject provisions should be preferred.[115] To pursue what some may consider to be the most rational, desirable and equitable regime, over-reaches the permissible boundaries of statutory construction.
[113]Cross references to the Subdivisions Act in the P&E Act occur in the definition of ‘registered restrictive covenant’ (s 3); in the list of things which a planning scheme may do (s 6(2)(g), (ga), (gb) and (kb)); in relation to easements and restrictions and specific links to the Subdivisions Act in all of the sub-sections of s 6A.
[114]No basis exists for the application of the rule of construction discussed in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, [381]-[382].
[115]Singh v Commonwealth (2004) 222 CLR 322, 332, 335-6; CIC Insurance Ltd v Bankstown Football club Ltd (1997) 187 CLR 384, 408.

Conclusion

I would also allow the appeal on the ground that the scope of cl 52 is not to be confined by s 18(1A) of the Subdivision Act. That purpose has been reflected in the clear and unambiguous language employed. Such a construction conforms with the objects and purpose of the P&E Act and the Subdivision Act and the planning framework. Every relevant aspect of context is consistent with that purpose. Giving effect to the plain meaning of the words achieves Parliament’s intended outcome that a planning scheme may impose a mandatory and fixed rate POS contribution on all subdivisions of land that are regulated by the planning schemes.

Is clause 52.01 invalid as beyond power or as constituting a tax?

If cl 52 is not confined, is it consequentially invalid on the basis that it constitutes a tax or is otherwise outside the power?

The validity of cl 52.01 of the planning scheme was not raised by the landowner before the Tribunal although the Tribunal adverted to it. It was the subject of extensive argument on appeal, the landowner submitting that if the appellant’s and the Minister’s construction prevailed, clause 52.01 would be invalid. It was not disputed that this court may consider the validity of delegated legislation, even where the parties involved did not raise issues as to its validity at first instance.[116]
[116]Anisimoff v Fraser (No 2) (1983) 33 SASR 458; Saif Ali v Sydney Mitchell & Co (1980) AC 198; and Accident Towing and Advisory Committee v Combined Motor Industries Pty Ltd (1987) VR 529.

On appeal, the landowner maintained that if cl 52 was to operate without the limitations expressed in ss 18(1) or 18(1A), the consequence is that cl 52 would be unenforceable because it would encompass circumstances where the relevant subdivision would create no additional need for public open space. The clause would be invalid as ultra-vires the powers given to a ‘responsible authority’ under the P&E Act. It was further submitted, that such a general requirement would be unenforceable as a ‘mere tax’. This was the conclusion reached by the Tribunal which held that a requirement in a planning scheme for an open space contribution in respect of a subdivision which does not increase the number of lots was unlawful as such a requirement would be a mere tax.

It is necessary to consider whether cl 52, in its unfettered form, constitutes a valid exercise of the power to make a requirement for POS in a planning scheme.

The test for validity- the purposive approach

It is accepted by all parties that in determining the question of validity of the clause, it is necessary to take ‘a purposive approach’ to construing the legislation.[117] The joint judgment of the High Court in Bathurst City Council v PWC Properties Pty Ltd[118] referred to the following passage from the judgment of Walsh J in Allen Commercial Pty Ltd v North Sydney Municipal Council[119] in which he identified the characteristics which attended the exercise of a council power, the purpose of which was to implement planning policy:

not as giving an unlimited discretion as to the conditions which may be imposed, but as conferring a power to impose conditions which are reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised as ascertained from a consideration of the Scheme and of the Act under which it is made. This purpose may be conveniently described in accordance with the expression used by Lord Jenkins in Fawcett Properties Ltd v Buckingham County Council [1961] AC 636 at 684 as being ‘the implementation of planning policy’, provided that it is borne in mind that it is from the Act and from any relevant provisions of the Ordinance, and not from some preconceived general notation of that constitutes planning, that the scope of planning policy is to be ascertained.

[117]Western Australian Planning Commission v Temwood Holdings P/L [2004] 221 CLR 30.

[118](1998) 195 CLR 566.

[119](1970) 123 CLR 490, 499-500.

In Bathurst the High Court referred with approval to the passage from the judgment of Glass JA in Rockdale Municipal Council v Tandel,[120] in which he stated that the purpose, namely the ‘implementation of planning policy’ is to be gleaned from the Act and the scheme and ‘not from some preconceived general notion of what constitutes planning.’
[120](1975) 34 LGRA 196, 204.

Accepting that the power must be exercised for a planning purpose of the P&E Act, the Council, and the Minister’s submission that cl 52.01 constitutes a valid exercise of the power contained in s 6(1) of the P&E Act was not challenged. The phrase ‘regulate or prohibit the use or development of any land’ in s 6(2)(b) of the P&E Act, as the landowner rightly acknowledges, is broad enough to encompass POS requirements in a planning scheme.[121] ‘Development’ is defined by the P&E Act to include subdivision. There must be a direct and substantial connection between the likely operation of the clause and the statutory object which it serves.[122] The provision for POS is consistent with the planning purposes of the P&E Act as there is a clear connection between subdivision of land and the need for POS. The provision of POS sounds against each of the objectives in s 4 which I have earlier set out and in particular ss 4(a), (c) and (g). Clause 52.01 serves these planning purposes. The Subdivision Act proceeds upon the legislative understanding that cl 52.01 is a valid exercise of statutory power. Unsurprisingly it has been repeatedly held in planning cases that the requirement for POS serves a planning purpose.[123]
[121]Rockdale MC v Tandel Corporation Pty Ltd (1975) 34 LGRA 196.
[122]South Australia v Tanner (1989) 166 CLR 161, 178-9 (Brennan J).
[123]See for example Maroondah City Council v Scott [2008] VSC 42, [26]-[27].

The Council acknowledged that the P&E Act does not authorise the inclusion of a requirement in a planning scheme to pay money for the general purpose of raising revenue. The Scheme, as delegated legislation under that Act, is subject to the same principle and in the absence of clear authority to do so, a body exercising delegated legislative authority has no right to impose a charge. It would be lawful for the subordinate legislation to require the payment of a fee for a service, provided that the fee is not disproportionate and is referable to the purpose for which the fee is collected.

Proportionality

The validity of a clause in a Planning Scheme is to be determined by reference to the ‘planning purpose’. To be valid, a clause must be capable of being considered ‘reasonably proportionate to the pursuit of the enabling purpose’.[124] The landowner contends that cl 52.01 is not reasonably proportionate to the purpose it purports to serve, as the imposition of a flat rate lacks a sufficient nexus with the need for public open space. While the landowner eschewed any challenge to the reasonableness of the figure of five per cent, he submitted that the clause was too broad to be valid because it applies to each subdivision, irrespective of whether that subdivision increases the demand for POS.
[124]South Australia v Tanner (1989) 166 CLR 161.

The Minister submits that provision for a broad inflexible charge is justifiable. He contended that there was a legitimate connection between the five per cent figure for contribution and the POS needs generated by subdivisions across the municipality. He conceded that it will not always be possible at the planning stage of a subdivision to determine whether or not that subdivision will create a need for POS but that any resulting inequities arising from a flat rate must be suffered in favour of the benefits of certainty.

The landowner submitted in response that this would only justify an arbitrary rule in relation to those subdivisions where it would be difficult to determine whether it is possible that the subdivision will create a need for POS. He submitted that there was nothing in the legislative text or extrinsic aids to interpretation that permitted a conclusion to be reached that Parliament intended that certainty should be favoured over equity. This submission cannot be accepted. It is the very nature of a planning scheme that policy decisions be made and that these decisions be of general application. The principle behind cl 52.01 was to adopt a policy of general effect. The Tribunal helpfully referred to the policy underlying the mandatory POS requirement in planning scheme expressed in these terms in Tucker v Mornington Peninsula Shire Council:[125]

I think it is true that greater flexibility and more discretion enables what might be described as a more fine grained degree of equity than if the relevant statutory provisions allow less flexibility. Of course, the ultimate in mathematical equity, or a descent to the finest distinctions, may lose reasonableness under layers of complication. It is not for me to decide that the law is wrong in the balance it strikes between flexibility on the one hand and clarity and certainty on the other. It is clear that cl.52.01 strikes a different balance to s 18 SD Act. The removal of s 18 discretions means a simpler and clearer regime with no scope for arguments, for example, as to whether a requirement should be imposed at all, and if so, as to how great the requirement should be up to a limit of 5%. I think that is the intention of the new provisions in the planning scheme made under the PE Act. Section 18 SD Act defers to them, and only supplies a default where they have not been implemented.[126]

[125][2006] VCAT 1780.

[126]Ibid [64].

The Subdivision Act expressly contemplates in s 18(1) that a planning scheme made under the P&E Act may contain a POS requirement containing a fixed percentage contribution - an obligation that will be applicable broadly across the municipality in the case of all subdivisions. The VPPs and the Direction which have statutory force contemplate a fixed percentage contribution requirement within planning schemes. The planning policy which Parliament has adopted is one in favour of general certainty for POS, rather than a flexible, case by case, approach.

The Minister submits that the POS contribution is proportionate as it will generally be the case that a subdivision of land will enable the more efficient use of the land, usually, but not always by the creation of additional lots, and will therefore create a higher demand for public open space. The Minister concedes that there are possible exceptions where the land in the subdivision may not be taken up for a residential purpose, where it may comprise smaller households leading to an overall population decline in the relevant planning unit, where it may be taken up by a demographic with less open space needs, or where a larger building on one block may be used for an intensive institutional use, whereas a subdivision of that land may lead to a less intense use. Any potential inequity arising from the mandatory requirement for POS must, the Minister submitted, be balanced against the fact that such a requirement achieves the objective of enabling the planning authority to provide for POS that is generally commensurate with the growth in the municipality. The power will not offend the requirement of proportionality because its exercise may infrequently produce inequities. It must be ‘so lacking in reasonable proportionality as not to be a real exercise of the power.’[127]
[127]South Australia v Tanner (1989) 166 CLR 161, [12].

In most cases subdivisions create additional lots and thereby the potential for more intensive development and a need for additional public space. It is the capacity for more intensive development that engages the requirement for more POS. The fact that in some instances the capacity may not be utilised, is not something that can necessarily be assessed at the time a subdivision is approved. Critically, once a subdivision is approved, it is generally beyond the capacity of the responsible authority to obtain a POS contribution. A person subdividing the relevant land will, of course, take the benefit of any increase in value that flows from the increased capacity to develop that land. By directing itself to that capacity, cl 52.01 is proportionate to the legitimate planning purpose of providing for POS in the municipality.

The validity of a subordinate instrument is not to be determined according to extreme examples.[128] Even if a requirement to make a POS contribution would be disproportionate if imposed upon an individual subdivision where it could be established that the relevant subdivision did not create a need for additional public open space, I agree with Warren CJ and Osborn AJA that the present subdivision does prima facie create such a need.
[128]Pearce and Argument, 117-118.

As the facts disclose, the landowner applied for a staged subdivision whereby the first stage has the effect of enlarging one of the lots. Subsequently, the second stage provided for a variation of the restricted covenant to allow two dwellings to be constructed on that enlarged lot and to divide that lot into two lots to house those dwellings. Given these facts, the premise of the landowner cannot be accepted, that the first subdivision did not create the capacity for an additional need for POS space. The expansion of the lot created the capacity for more intensive use of that lot in exactly the manner undertaken by the landowner. It is not to the point to say that this subdivision did not, immediately, create an additional lot. The facts of this case demonstrate how more intensive use of the land may arise in a subdivision that does not create an additional lot. More intensive use would potentially occur in the event that the restrictive covenant was removed. That this removal was, at all times, planned by the landowner, serves to underline the appropriateness of imposing the POS contribution requirement at the first stage.

The landowner also placed some reliance on the decision in Rockdale Municipal Council v Tandel Corporation Pty Ltd.[129] There, a clause of the relevant planning scheme provided that the responsible authority in respect of any application for consent to erect a building, could attach conditions to any grant of consent. A condition was imposed requiring the developer to make a contribution for POS. On appeal, it was said that while it was not open to require a payment merely for the purpose of augmenting its revenue, the council was entitled to a contribution towards the cost of open space in circumstances where the money was impressed with a trust which would prevent its expenditure for any other purpose, and where the space was so proximate to the development site as to present a reasonable connexion with the needs generated by it. As was observed by Glass JA (with whom Samuels JA agreed):

The test of validity having been expressed in such wide terms it is not possible in my opinion to state a priori that all conditions involving a money payment lack validity. It will no doubt be impossible to justify the collection of money with which the Council intends merely to augment its revenue or which it proposes to spend on certain purposes without any obligation to do so. But I consider that council may arguably claim that it has imposed a valid condition in circumstances where residential development in a given area will create a need for additional open space if the amenities for the neighbourhood are to be preserved, the provision of open space on the development site is not commercially feasible, money collected from each developer is to be expended on the provision of such open space, the money is impressed with a trust which would prevent its expenditure for any other purpose and the space to be provided is proximate enough to the site to present a reasonable connexion with the needs generated by development on it. It goes without saying that the relationship between the proposed development and the proposed facility raises questions of degree and therefore of fact which the trial judge will determine by applying to his findings on the evidence and appropriate measure of validity expressed, as it may be in the general language adopted by the High Court. [130]

[129](1975) 34 LGRA 196.

[130]Ibid.

In the landowner’s supplementary submissions it was said that as cl 52.01 made no provision that any POS payment be impressed with a trust which would prevent its expenditure for any other purpose, nor did it provide that any POS to be acquired would be sufficiently proximate to the development site so as to present a reasonable connexion with the needs generated by it, the conditions that had been found necessary in Rockdale were absent and the requirement was invalid. That submission cannot be sustained. The conditions attaching to the payment of money in Rockdale concerned conditions on a particular development. Clause 52.01, by contrast, is within a planning scheme of universal application, which requires a contribution to public open space on all applicable subdivisions. A clear distinction has consistently been recognised between a condition on a permit requiring a POS contribution and a requirement for POS in a planning scheme.[131]
[131]H Pearce and Ors v Shire of Kilmore (1990) 41 APA 64; Eddie Baron Construction Pty Ltd v Shire Pakenham(1991) 6 AATR 10, 23.

The Minister has suggested that the requirements in Rockdale are impractical in the context of a mandatory general requirement for POS in planning scheme. In view of the limited oral argument that addressed these issues, I do not consider it necessary to consider whether there are circumstances in which such conditions would need to be imposed. As I have already said, the provisions of s 19, s 20(1) and s 21 of the Subdivision Act would apply to a responsible authority under the planning scheme. The responsible authority also has the incidental powers to which I have referred. If it were concluded in a particular case that the responsible authority should administer the contribution in the manner suggested, it has ample power to do so.

I should make some brief observations about what the landowner contended was a different submission, that cl 52.01 fails the requirement that there should be some relationship between the contribution required and the value of the right to subdivide which has been acquired. Whether the contribution has that discernable relationship is essentially another way of stating the proportionality test. It is not in issue that as a matter of principle the requirement to pay a five per cent POS contribution in accordance with cl 52.01 could constitute an unenforceable tax, if that amount was disproportionate to the value of what is being acquired.[132] But the contribution specified in the schedule to cl 52.01 does have a relationship to the value of the right acquired, namely to subdivide the land.
[132]Air Caledonie International v The Commonwealth (1988) 165 CLR 462

The value of the right was discussed in Lloyd v Robinson where the High Court said:

The Act at its commencement took away the proprietary right to sub-divide without approval and gave no compensation for the loss. But it enabled landowners to obtain approval by complying with any conditions which might be imposed, that is to say which might be imposed bona fide within limits which, though not specified in the Act, were indicated by the nature of the purposes for which the Board was entrusted with the relevant discretion. If approval is obtained for the subdivision of one area of land by complying with a condition which requires the giving up of another area of land for purposes relevant to the subdivision of the first, it is a misuse of terms to say that there has been a confiscation of the second. For the giving up of the second a quid pro quo is received, namely the restored right to subdivide the first. It may be that the quid pro quo is inadequate, and that the landowner, though under no legal compulsion to give up the second area of land if he chooses to forego the idea of subdividing the first, is nevertheless under some real compulsion, in a practical sense, to submit to the loss of it because of the importance to him of obtaining the approval. But there is no room for reading the Act down in some fashion by appealing to a principle of construction that has to do with confiscation. If the Board has performed its statutory duty by giving approval to the subdivision subject only to conditions imposed in good faith and not with a view to achieving ends or objects extraneous to the purposes for which the discretion exists, the inescapable effect of the Act is that the landowner must decide for himself whether the right to subdivide will be bought too dearly at the price of complying with the conditions.[133]

[133](1962) 107 CLR 142, 154.

The right to subdivide land is a valuable right, that may provide for more intensive and lucrative use of land. I have already referred to the conventional view that five per cent is a reasonably proportionate requirement. The cost of acquiring land for POS will be higher in areas of higher site values. The POS will be provided in the municipal district to which the Scheme relates. Clause 52.01 exempts a two-lot subdivision if it is unlikely that there would be further subdivision.

The contention that the obligation to contribute amounts to a ‘mere tax’ is closely allied to the submission that the clause is not reasonably proportionate to the end to be achieved. It was submitted that the imposition of a flat fee without reference to the POS need created by the particular subdivision gave the five per cent fee the character of a tax as it was simply a ‘compulsory extraction’ of money for a public purpose, and that it was disproportionate to the value of what is being required.

A provision of a statute that imposes a tax will be invalid if it is not a ‘taxing statute’.[134] While not an exhaustive definition, an obligation to pay money may be a tax where it involves a compulsory extraction of money for public purposes not being a fee for services rendered or to be rendered to the person making the payment.[135] The principles and relevant authorities which bear upon whether cl 52.01 can be successful challenged as constituting a tax are usefully set out in the judgment of Cowdroy J in Meriton Apartments Pty Ltd v Minister for Urban Affairs and Planning.[136]
[134]A-G v Wilts United Dairies (1922) 91 LJKB 897; Air Caledonie International v Commonwealth (1988) 165 CLR 462.
[135]Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263, 267 (Latham CJ); Browns Transport Pty Ltd v Kropp (1958) 100 CLR 117, 129; Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59, 63.
[136](2000) 107 LGERA 363 [45]-[53].

A charge ‘for the acquisition or use of property’ is an example of an exaction which may not be a tax even though the positive characteristics of a tax are otherwise present.[137] But a charge levied on the right to use property in a particular way may still be a tax where there is no choice about whether or not the service should be acquired and where there is no discernible relationship between the value of what is acquired and the amount of the payment. In those circumstances the exaction may, to the extent that it exceeds that value, properly to be seen as a tax.[138] Hence there must be a sufficient relationship between the charge imposed and the value of the service provided or right or privilege granted.[139] If a charge has a close relationship to the cost or value of the service provided or the right or privilege granted, the relationship may be indicative of the fact that the charge is not a tax.[140]
[137]Air Caledonie International v The Commonwealth (1988) 165 CLR 462, 466-7
[138]Ibid 466-7.
[139]Ibid; Northern Suburbs General Cemetery Reserve Trust v Commonwealth (1993) 176 CLR 555.
[140]Qureshi v Minister for Immigration and Indigenous Affairs (2005) 214 ALR 525, [69]–[71](Kenny J); Queanbeyan City Council v ACTEW Corp Ltd (2008) 253 ALR 121, [29] (Stone J).

It was the contention of the Minister, that an analysis of the proportionality of the five per cent contribution would require consideration of the cost and effect of all subdivisions within the municipality and not merely the particular subdivision in issue. While the Council and the Minister did not challenge the right of the landowner to raise the validity of the legislation for the first time on appeal, they challenged his right to rely upon potential invalidity where the argument raised questions of fact which were likely to have been the subject of evidence had they been raised at first instance.[141] The Minister submitted with some apparent force that that the proportionality of the five per cent contribution requirement, would have to be tested by asking whether, at a level of generality which went beyond the particular land the subject of the present subdivision, it had a discernable relationship with the POS needs generated by the subdivisional potential of the whole municipality.
[141]Minister for Aboriginal Affairs v Peko –Wallsend Ltd (1986) 162 CLR 24.

In 271 William St. v City of Melbourne[142] Harris J, adopted such an approach in concluding that the restrictions or regulations to be included in a planning scheme relating to the use or development of land in an area where land was to be used for a specific purpose, did not have to relate specifically to that land so long as they were designed to implement a planning objective for the whole area. In Eddie Baron Constructions Pty Ltd v Shire of Pakenham[143] the tribunal drew attention to the importance of looking beyond the subdivision in isolation to the ‘wider planning framework’ of which the subdivision forms a part, so that where need arises within the broader planning framework, a sufficient nexus will be established.
[142][1975] VR 156, 163-4.
[143](1991) 6 AATR 10, 30, 32.

The requirement of a discernible relationship between a particular impost and the value of a particular service provided on a particular occasion discussed in Air Caledonie and in Northern Suburbs General Cemetery Reserve Trust v Commonwealth[144] was not regarded as determinative by the High Court in the circumstances which fell for consideration in Airservices Australia v Canadian International Airlines Ltd.[145] The relationship between the impost and the value or cost of the service provided was examined at a broader level of generality than a consideration of the charge and the value of a service provided on a particular occasion.[146] This is not an appropriate case for inquiry into whether the mandatory contribution of five per cent is proportionate to the POS needs of the entire municipality where a subdivision did not as an individual development increase the capacity for more intensive land use. It was not the subject of evidence or argument at first instance nor was it the subject of specific submission on appeal.
[144](1993) 176 CLR 555.
[145](1999) 202 CLR 133, [79]-[83] (Gleeson CJ and Kirby), [300], [305]-[307] (McHugh J), [457] (Gummow J).
[146]Douglas Shire Council v Queensland Ombudsman [2005] QSC 207 [36] (Moynihan J).

Significantly, the landowner does not seek to challenge the reasonableness of the five per cent fee but focussed on whether an increased capacity for POS had been demonstrated. He accepted that the principles upon which he relies will not be enlivened unless the subdivision does not generate any potential additional need for POS. As has already been shown, the subdivision will create the capacity for more intensive use of the land. It is consistent with the purposes of the P&E Act that a requirement for POS be included in a scheme to allow for more intensive land use. In the present case, the subdivision was the first step in a staged subdivision giving rise to a more intensive use of the land. There is nothing capricious or arbitrary about imposing the POS contribution at that stage. The imposition of the fee will not be for an improper purpose where the increased capacity for more intensive land use has been approved.

The Minister referred to a number of features of the Scheme, which denied the requirement the character of a mere tax. Attention was drawn to the limitations in the clause itself. The clause in fact exempts a two lot subdivision it if is unlikely that the lots would be further subdivided. It was observed that POS may only be provided in the municipal district and consequentially benefit the subdivision in question. As the purpose of the requirement is specific and the funds are not being sought merely to augment the municipality’s revenue, the planning system has recognised that the requirement to make a contribution does not constitute a tax. Section 18 anticipates that a POS requirement may be included within a planning scheme, so demonstrating a legislative view that under a planning scheme, a POS contribution of general application is appropriate.

No evidence has been adduced that the contribution of five per cent was disproportionate to the value of the landowner’s right to subdivide in the present case. The landowner abstained from challenging the amount of five per cent as unreasonable and did not seek to advance an argument that the quid pro quo was inadequate. In the present circumstances the claim that the amount of five per cent should be characterised as disproportionate and a tax cannot be sustained.

Conclusion

Each of the orders of the Tribunal dated 8 December 2006 should be quashed. The condition of the permit requiring the landowner to make the public open space contribution should be re-instated. The matter should be remitted for hearing on the limited issue of the disjunction between the form of subdivision applied for and the terms of the permit approved by the Council.

[2009] VSCA 250

23 October 2009