Michell Hodgetts and Associates Pty Ltd v Resource Management and Planning Appeal Tribunal

[2011] TASFC 2

[2011] TASFC 2

COURT:  SUPREME COURT OF TASMANIA (FULL COURT)

CITATION:Michell Hodgetts & Associates Pty Ltd v Resource Management and Planning Appeal Tribunal [2011] TASFC 2

PARTIES:  MICHELL HODGETTS & ASSOCIATES PTY LTD
  v

RESOURCE MANAGEMENT AND PLANNING APPEAL TRIBUNAL

and

TASMANIAN WATER AND SEWERAGE CORPORATION (NORTH WEST REGION) PTY LTD TRADING AS CRADLE MOUNTAIN WATER

and

CENTRAL COAST COUNCIL

FILE NO/S:  1079/2010
JUDGMENT

APPEALED FROM:                  Michell Hodgetts & Associates Pty Ltd v Resource Management and Planning Appeal Tribunal [2010] TASSC 61

DELIVERED ON:  4 July 2011
DELIVERED AT:  Hobart
HEARING DATE:  23 May 2011
JUDGMENT OF:  Tennent, Porter and Wood JJ

CATCHWORDS:

Environment and Planning – Environmental planning – Development control – Consents, approvals and permits – Conditions – Power to impose.

Water and Sewerage Industry Act 2008 (Tas), ss56O, 56P, 56Q, 56R, 64, 66, 88.
Land Use Planning and Approvals Act 1993 (Tas), ss51(3A), 57, 61, 62.
Resource Management and Planning Appeal Tribunal Act 1993 (Tas), ss23, 25.
Western Australian Planning Commission v Temwood Holdings Pty Ltd  (2004) 79 ALJR 414; DOMA Pty Ltd v The City of Hobart [1983] Tas R 132, referred to.
Aust Dig Environment and Planning [217]

REPRESENTATION:

Counsel:
          Appellant:  W A Ayliffe
          First Respondent:      No appearance
          Second Respondent:  S B McElwaine
          Third Respondent:     S B McElwaine
Solicitors:
          Appellant:  Walsh Day James Mihal Pty
          First Respondent:      No appearance
          Second Respondent:  Shaun McElwaine & Associates
          Third Respondent:     Shaun McElwaine & Associates

Judgment Number:  [2011] TASFC 2
Number of paragraphs:  29

Serial No 2/2011
File No 1079/2010

MICHELL HODGETTS & ASSOCIATES PTY LTD v RESOURCE MANAGEMENT AND PLANNING APPEAL TRIBUNAL and TASMANIAN WATER AND SEWERAGE CORPORATION (NORTH WEST REGION) PTY LTD TRADING AS CRADLE MOUNTAIN WATER and CENTRAL COAST COUNCIL

REASONS FOR JUDGMENT  FULL COURT

TENNENT J
PORTER J
WOOD J
4 July 2011

Order of the Court

1. The appeal is dismissed.

   Serial No 2/2011
   File No 1079/2010

MICHELL HODGETTS & ASSOCIATES PTY LTD v RESOURCE MANAGEMENT AND PLANNING APPEAL TRIBUNAL and TASMANIAN WATER AND SEWERAGE CORPORATION (NORTH WEST REGION) PTY LTD TRADING AS CRADLE MOUNTAIN WATER and CENTRAL COAST COUNCIL

REASONS FOR JUDGMENT  FULL COURT

TENNENT J
4 July 2011

1. On 30 July 2009, an application was made to the Central Coast Council ("the Council") for the approval of a 71 lot subdivision in the Ulvertsone area. Because the application related to a subdivision, the Council had a discretion as to whether to grant or refuse the permit (see Land Use Planning and Approvals Act 1993 ("LUPA"), s57). If granted, such a permit could be subject to such conditions or restrictions as the Council might impose (LUPA, s51(3A)). The Council was required, by reference to the Water Sewerage Industry Act 2008 ("WSIA"), s56O, to give notice of the application to the relevant regulated entity, which in this case was Cradle Mountain Water ("CMW"). It did so.

1. WSIA, s56P(1) and (2), provided for the manner in which CMW could deal with the application once it had notice of it. They provide:

"(1) The relevant regulated entity may make submissions to the planning authority on an application that is the subject of a notice under section 56O(1) and the relevant regulated entity is taken to be a person who has made representations under section 43F(5) or 57(5) of the Land Use Planning and Approvals Act 1993 if it has made any such submissions.

(2) A submission made under subsection (1) by a regulated entity to a planning authority may include a submission that –

(a)  the regulated entity does not object to the granting of the permit; or

(b)  the regulated entity does not object if the permit is subject to conditions specified by the regulated entity; or

(c)  in the case of a discretionary development permit or combined permit, the regulated entity objects to the granting of the permit on any specified ground."

1. CMW did not object to the granting of the permit but sought that a particular condition be imposed on any permit granted. The condition sought was in the following terms:

"The Developer is required to pay CMW [Cradle Mountain Water] a water and sewerage headwork's [sic] in accordance with the [Cradle Mountain Water] water and sewerage headworks policy in effect on the date the final survey plan is lodged with [the] Council. Payment is to be made under [Cradle Mountain Water] prior to [the] Council sealing the final plan of survey."

1. The Council in due course issued a planning permit to the developer. The permit contained a number of conditions which included the above. The developer's representative ("the appellant") appealed, inter alia, against the Council's decision to impose that condition to the Resource Management Planning and Appeal Tribunal ("the Tribunal") created under the Resource Management and Planning Appeal Tribunal Act 1993 ("the RMPAT Act"). The Tribunal determined that the condition was void and severable from the permit. It however imposed an alternative condition which was in the following terms:

"The Developer is to pay a Cradle Mountain Water Headworks charge in the sum of $4018.00 indexed in accordance with the Consumer Price Index (All Groups – Hobart) for each Equivalent Tenement. Payment is to be made to the Tasmanian Water and Sewerage Corporation (North West Region) Pty Ltd trading as Cradle Mountain Water immediately prior to the sealing of the final plan of survey."

1. The appellant thereafter appealed that decision pursuant to the RMPAT Act, s25, to a single judge of this Court. That appeal could only relate to a question of law. On 17 December 2010, Evans J dismissed that appeal. This is an appeal from his decision. The grounds of appeal pursued by the appellant are in the following terms:

"1That the learned Judge erred in law in holding the Council had power to impose the headworks charge referred to in the Decision of the Tribunal at paragraph 27 ('the Headworks Charge') for existing infrastructure belonging to and administered by Cradle Mountain Water ('CMW') when CMW did not have power to impose or seek such a charge.

2That the learned Judge erred in law to the extent that His Honour's finding in paragraph 21 and paragraph 24 of the Decision that a Council retains a general planning power to impose conditions referrable to water and sewerage amounted to an implied holding at law that Council and therefore the Tribunal could impose the Headworks Charge.

3That the learned Judge erred in law in upholding the Headworks Charge requiring payment for headworks to CMW when CMW did not have power to levy the Headworks Charge or seek it as a condition of the subdivision permit.

…..

7That the learned Judge erred in law failing to uphold the Appellant's Submission that the Headworks Charge was objectively unreasonable because it was based on a policy decision taken by CMW without recourse to the regulator and in contravention of the Statutory Scheme."

Relevant parts of the decision appealed from

1. Evans J succinctly dealt with the appeal before him in pars[20] to [24] of his decision. He said:

"20              It is beyond question that the provision of water and sewerage services is of fundamental importance to many aspects of the responsibilities of a planning authority.  This State is divided into municipal areas, Local Government Act 1993, s16(1). Each municipality has a council, Local Government Act, s18(1). A council is a planning authority, LUPA, s3. A planning authority is responsible for land use and planning within its municipal area, and a planning scheme for an area must, amongst other things, further the objectives set out in LUPA, Sch1, Local Government Act, s20(1)(a) and LUPA, s51(2)(a). Those objectives include providing for: the fair, orderly and sustainable use and development of land and water; sustaining the potential natural and physical resources to meet the reasonably foreseeable needs of future generations; protecting public infrastructure and other assets; and enabling the orderly provision and co-ordination of public utilities and other facilities for the benefit of the community. Consistent with these objectives, planning authorities must have power in relation to water and sewerage services and it is inevitable that planning schemes must, as the Scheme in this case does, contain numerous provisions referable to these services. As already mentioned, the Scheme's objectives in relation to subdivisions in the residential zone include ensuring that each lot has appropriate sewerage and water services. The acceptable standard for these services in the residential zone is connection to a reticulated sewerage system and connection to a reticulated water supply of a specified pressure; see the Scheme cl 6.3.1, (2) and (3), and P2. The Scheme contains broadly similar provisions referable to sewerage and water services in at least eight zones besides the residential zone.

21 Whilst a regulated entity may make submissions to a planning authority about an application for a permit, it is not obliged to do so, s56P(1). A planning authority may assume that a regulated entity has no submissions to make if submissions are not received within the time specified, s56P(3). If a regulated entity does not make submissions on an application for a permit, but the planning authority considers that conditions referable to water and sewerage services should apply to the grant of the permit, plainly, the authority should impose those conditions. That a planning authority retains the power to impose conditions referable to water and sewerage services is recognised by s56Q(2)(b) which requires that a condition imposed by a planning authority must not conflict with a condition required by a regulated entity. So, contrary to the appellant's contention that the effect of the provisions of WSIA is to deprive planning authorities of the power to impose conditions referable to water and sewerage, that Act implicitly recognises that planning authorities retain such a power. I accordingly agree with the Tribunal that the Council retains a general planning power to impose conditions of the nature in question.

22               For the above reasons, I reject the first and third grounds of appeal set out in par[4] of these reasons.  Whilst this disposes of the proposition that the Tribunal did not have the power to impose the condition in contention, I will address the second ground of appeal, which challenges the Tribunal's conclusion that it was also authorised by WSIA and the IPO to impose the condition in contention.  The Tribunal did not hold that the IPO authorised the imposition of the condition.  However, in pars[9] – [12] of its decision, the Tribunal did conclude that WSIA was one of two sources for its power to impose a condition containing the charge in question.  In the condition the Tribunal characterises the charge as a 'Headworks charge'.  In par[11] of its decision, the Tribunal said that the terms 'developer charges' and 'headworks charges' are interchangeable.  The term 'developer charges' is not defined in WSIA.  In par[11] of its decision the Tribunal said that this term means a charge that is levied in relation to infrastructure provision. 

23 Amongst the powers WSIA gives to the Regulator is a power to regulate prices for 'regulated services', a regulated service being 'the provision of a water service or a sewerage service by a regulated entity', s3. The same section defines 'price' as including the price 'for developer charges for water infrastructure and sewerage infrastructure'. In making a price determination, the Regulator must determine prices 'including developer charges, for water services and sewerage services', s66(2)(b). The Treasurer is empowered to make an interim order in relation to the provision of a regulated service, s88(1). Whilst these provisions empower the Regulator and the Treasurer to determine the price for matters including developer charges, they are not the source of the power of a regulated entity to require the imposition of conditions of the nature of a developer charge. The source of that power is to be found in s56O(1), s56P(2)(b), and s56Q(2)(a). These provisions empower a regulated entity to require the imposition of such a condition, and oblige a planning authority to impose it when so required. These provisions do not authorise a planning authority to impose such a condition, save where required to do so by a regulated entity.

24 In this case, as the regulated entity, Cradle Mountain Water, required the Council to impose condition 29, the Council was obliged to do so by s56Q(2)(a). However, condition 29 was quashed by the Tribunal which required the Council to impose the condition in contention. As the condition in contention is not a condition that Cradle Mountain Water required the Council to impose, it is not imposed pursuant to s56Q(2)(a). That being so, it is not correct to say, as the Tribunal did, that WSIA provides a head of power for its imposition. Whilst the Tribunal erred in this regard, this does not mean that the appeal should succeed. As already explained, planning authorities retain general planning powers referrable to water and sewerage. Consistent with that power, subject to WSIA s56Q(2)(b), the Council was entitled to impose conditions referrable to water and sewerage, LUPA, s51(3A), and the Scheme cl 4.11.2. As the Council had these powers, so did the Tribunal; the Resource Management and Planning Appeal Tribunal Act 1993, s23(1), supplemented by LUPA, s62(1)(c)(ii)."

1. The first and third grounds of appeal referred to by Evans J in par[22] of his reasons were described by him as having been summarised by counsel in the following terms:

"1.challenging the over arching conclusion of the Tribunal that the imposition of the developer charge condition in the circumstances of this case was within the power and jurisdiction of the Tribunal;

3.challenging the conclusion of the Tribunal that the developer charge condition would also be validated on the basis that it represented a valid use by the Tribunal of the general planning power conferred on the Council (and hence the Tribunal) by section 51(3A) of the Land Use Planning and Approvals Act 1993,".

Submissions and discussion

1. Counsel for the appellant submitted that his Honour's error was in finding that there was power in the Tribunal, independent of WSIA, to impose a developer charge of this nature. He submitted that a regulated entity could only seek a developer charge referable to the provision of water and sewerage services "within the provisions and the scheme of" WSIA, and that the Council and the Tribunal had no power to impose such a condition dealing with such a charge unless in compliance with a request from a regulated entity. He also submitted that any discretion which vested in the Council and the Tribunal by virtue of LUPA, s51(3A), was, since the enactment of WSIA, no longer at large. It was not to be exercised by reference to what the Tribunal determined were notions of good planning, but by reference to the applicable legislative scheme in respect of which the discretion was to be exercised. The discretion in particular to impose a developer charge was significantly restricted.

1. Counsel for the appellant further submitted that, given that the Council was no longer permitted (because it was not a licensed regulated entity pursuant to WSIA) to provide water and sewerage services or maintain infrastructure for that purpose, it had no power of its own to impose a developer charge related to such services. It followed that neither did the Tribunal.

1. Counsel for the appellant also submitted that, if he was wrong as to that and the Council and the Tribunal did retain a discretion to impose a developer charge referrable to the provision of water and sewerage services, they could not do so unless the particular developer charge had first been approved by the regulator under WSIA, or was the subject of an interim price order made by the Treasurer. Counsel suggested that were the Council and Tribunal permitted to impose a condition such as that in this case, it would be illegal for CMW to receive any funds pursuant to the condition. He also suggested that, permitting such a condition to be imposed by the Council or the Tribunal, would effectively circumvent the powers of the regulator in that it would remove the capacity of stakeholders, that is developers, to have input into price determinations.

1. The office of regulator was created by WSIA. The functions of the regulator, inter alia, were to administer the licensing system established under the Act, to regulate prices, terms and conditions for regulated services, and to make price determinations and determinations generally. WSIA, s64, provided that the regulator may regulate prices, terms and conditions for the provision of a regulated service by a regulated entity. If the regulator made a price determination that applied to a regulated entity in relation to a regulated service, the regulated entity was bound by that price determination (WSIA, s67). WSIA also made provision for how pricing determinations were to be made and for the review of any pricing determination by application to the Magistrates Court (Administrative Appeals Division).

1. It was common ground in this case that at all relevant times, the regulator had not made any price determination binding on CMW which might impact on the development under consideration.

1. WSIA, s88, also provided for the Treasurer of the State to make an interim order in relation to the prices, terms and conditions for the provision of a regulated service. Such an interim order, if made, was binding on a regulated entity. In the present case, an Interim Price Order was made and published in the Tasmanian Government Gazette on 1 July 2009. In that order the term "developer charges" was relevantly defined as "the full or partial cost of any extension of water or sewerage infrastructure, or expansion of its capacity, required as a result of new development;". The developer charge in the present case was not for the purpose identified in that order. In the present case, the proposed development would not result in any need for an extension of water or sewerage infrastructure or the expansion of its capacity. The consequence therefore was that at the relevant time, there was no relevant interim price order.

1. Had a price determination been made by the regulator relating to a developer charge such as that now imposed, or an interim price order been made by the Treasurer which dealt with developer charges in the circumstances which applied in this case, there is no doubt that CMW as a regulated entity would have been bound by any such determination or order, and would have been required to conduct its business within the confines of any such determination or order.

1. However, that was not the case here. The situation in the present case was that there was a hiatus, that is circumstances in which there was neither a regulator's price determination nor a Treasurer's interim price order. What therefore were the powers of CMW, the Council and the Tribunal to seek or to impose a condition on a planning permit referrable to the provision of water and sewerage services in the circumstances of the present case?

1. The power of CMW to seek such a condition was not a question which was directly the subject of this appeal. However, it is relevant because counsel for the appellant argued that CMW had no power to seek a condition in those circumstances, and therefore, neither the Council nor the Tribunal could impose one. With respect, the submission was made in a vacuum. Nowhere in WSIA is there a provision by which a regulated entity is prohibited from seeking that a council impose such a condition where there is no pre-existing price determination or interim price order. Parliament, had it intended such a result, could have provided for it. It did not. Further there is no provision in WSIA from which it could reasonably be inferred that was Parliament's intention. I am not persuaded this argument has any merit.

1. However, as I have already said, the issue on this appeal is not whether CMW acted beyond power. It is the power of the Tribunal independently to impose the relevant condition which is to be considered. Was the Tribunal prevented by anything in WSIA from acting as it did in the hiatus identified? Counsel for the appellant submitted the Council, and as a consequence the Tribunal, could not impose a condition absent a request from the regulated entity. There is nothing in WSIA which imposes this restriction on either the Council or the Tribunal. Parliament, had it intended that to be the case, could easily have specifically provided for that framework. It did not.

1. Another argument mounted by counsel for the appellant was that because the Council could no longer supply water and sewerage services, it could not impose any condition on a planning permit referable to them. No part of the WSIA framework was identified as supporting this proposition. Indeed, it would seem to be contrary to the Act itself. WSIA, s56Q(2), provides that where a regulated entity requires a council to include any condition on a permit, the council must do so and must not impose a condition which conflicts with the condition sought. The clear inference is that a council might seek to impose a condition referable to the same topic as a condition sought by a regulated entity. A council is not prevented from so doing. It is simply prevented from imposing a condition which is in conflict with that sought by the regulated entity.

1. Moving to the position of the Tribunal, in the present case, the Tribunal was dealing with an appeal pursuant to LUPA, s61. The Tribunal, by reference to LUPA, s62 and the RMPAT Act, s23, could direct the planning authority to grant the permit and direct that the permit contain specified conditions. LUPA, s62(4) also provided that the Tribunal had the same obligations as a planning authority at the time the planning authority determined the application for a permit. The Tribunal, in exercising its powers, also of course had to have regard to LUPA, s51(3A). There is nothing in the provisions to which I have referred which expressly limits the power of the Tribunal in what it may do in respect of imposing conditions on permits referable to the provision of water and sewerage services.

1. Some reference ought also be made to WSIA, s56R. It deals with the role of a regulated entity in the case of an appeal to the Tribunal with respect to a permit where the regulated entity was given notice of the application for it. The entity is to be given notice of such an appeal and is taken to be a party to that appeal where it relates wholly or partly to the imposition of conditions on a permit by a planning authority, as required by a relevant regulated entity, under s56Q(2). The legislation clearly contemplates that the Tribunal will deal with appeals from permits which include conditions referable to the provision of water and sewerage services. There is no legislative constraint on the Tribunal in WSIA as to the manner in which it should deal with such appeals. For example there is no provision which prevents it from imposing or altering a condition such that it is not in conformity with a regulator's price determination. There is certainly no legislative constraint on the manner in which it might deal with such an appeal where there is neither a regulator's determination nor a Treasurer's price order.

1. Evans J identified various sources of general powers which might have been available to the Tribunal for the purpose of imposing the condition that it did. Counsel for the appellant submitted that all of the powers identified were non-specific and pre-dated the introduction of WSIA.  He submitted that none of the powers authorised the Council or the Tribunal to supply water and sewerage services, to impose a developer charge not authorised by the regulator, to obligate a developer to pay a developer charge to CMW not imposed pursuant to WSIA, or impose a developer charge which could not have been sought by CMW pursuant to WSIA. There is no argument that, they not being licensed regulated entities, neither the Council nor the Tribunal could supply water and sewerage services.   As to the remaining three matters, there was no suggestion any of the sources of general planning powers referred to by his Honour expressly gave the Tribunal the power to do any of these things.

1. Counsel's submission appeared to be predicated upon a premise that unless a power identified by his Honour expressly gave the Tribunal the capacity to do one or all of the things counsel identified, then the Tribunal had no power to impose the condition that it did. It also appeared to assume that as a matter of fact no developer charge could be imposed in any circumstances unless authorised by the regulator, that no developer could be obligated to pay such a developer charge unless it was imposed pursuant to WSIA and no developer charge could be imposed which could not have been sought by CMW in the first place.  While the assumptions were ones counsel for the appellant urged were correct, they were in dispute and clearly not a secure basis for this submission.

1. This was not a case where his Honour said that the powers he identified expressly gave the Tribunal the power to impose the condition it did. What he determined was that the Tribunal retained a discretion to impose the condition by reference to its general planning powers derived from a number of sources.

1. Counsel for the respondent submitted that it is LUPA, s51(3A), which provides the powers of the Council and the Tribunal to impose conditions on a planning permit. He accepted that while that section was not subject to express limitations, any power exercised pursuant to it must comply with the tests laid down in cases such as DOMA Pty Ltd v The City of Hobart [1983] Tas R 132 and Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 79 ALJR 414. Evans J made a finding of fact that the particular condition did comply with what he described as the "Temwood Holdings test", a finding which the appellant cannot challenge on this appeal.

1. With respect, I agree with the submission of counsel for the respondent. To succeed on this appeal, the appellant must establish that Parliament, either expressly or by implication, intended that the powers of a council and the Tribunal as provided for in LUPA, s51(3A), would be circumscribed insofar as their capacity to deal with developer charges referable to the provision of water and sewerage services were concerned. The appellant has not pointed to any express provision in WSIA which might achieve this, nor has he pointed to any provision from which it could clearly be inferred that was Parliament's intention. Indeed the scheme provided for in WSIA appears to actually leave in place the capacity of the Tribunal to deal with such a condition at large (subject of course to the tests referred to above). The idea of the scheme provided for in WSIA was no doubt to provide a framework within which prices would be regulated, and developers would have input into the regulation. That remains in place. However WSIA does not deal with the circumstances which exist in this case, and it is impossible to find any parliamentary intention that it does so such as to render his Honour's decision wrong.

Conclusion

1. For the reasons I have set out, grounds 1, 2 and 3 of the appeal must fail. The appellant has not demonstrated any error on the part of Evans J.  As to ground 7, counsel for the appellant confined it to an argument that his Honour erred when he made a legal finding that the condition imposed by the Tribunal did not involve a contravention of a statutory scheme. It is apparent from my reasons that I am not satisfied any statutory scheme was contravened, and in the circumstances his Honour has made no error.

1. I would dismiss the appeal.

   File No 1079/2010

MICHELL HODGETTS & ASSOCIATES PTY LTD v RESOURCE MANAGEMENT AND PLANNING APPEAL TRIBUNAL and TASMANIAN WATER AND SEWERAGE CORPORATION (NORTH WEST REGION) PTY LTD TRADING AS CRADLE MOUNTAIN WATER and CENTRAL COAST COUNCIL

REASONS FOR JUDGMENT  FULL COURT

PORTER J

4 July 2011

1. I agree with Tennent J.  I would dismiss the appeal.

   File No 1079/2010

MICHELL HODGETTS & ASSOCIATES PTY LTD v RESOURCE MANAGEMENT AND PLANNING APPEAL TRIBUNAL and TASMANIAN WATER AND SEWERAGE CORPORATION (NORTH WEST REGION) PTY LTD TRADING AS CRADLE MOUNTAIN WATER and CENTRAL COAST COUNCIL

REASONS FOR JUDGMENT  FULL COURT

WOOD J

4 July 2011

1. I agree with the reasons for judgment of Tennent J and would also dismiss the appeal.