Montrose Creek Pty Ltd and Manningtree (Qld) Pty Ltd v Brisbane City Council; Brisbane City Council v Manningtree (Qld) Pty Ltd and Montrose Creek Pty Ltd

[2012] QPEC 65

PLANNING & ENVIRONMENT COURT
OF QUEENSLAND

CITATION:

Montrose Creek Pty Ltd and Manningtree (Qld) Pty Ltd v Brisbane City Council; Brisbane City Council v Manningtree (Qld) Pty Ltd and Montrose Creek Pty Ltd [2012] QPEC 65

PARTIES:

1.   Montrose Creek Pty Ltd (ACN 132 882 761)

(Appellant)

v

Brisbane City Council
(Respondent)

2.   Manningtree (Qld) Pty Ltd (ACN 132 882 789)

(Appellant)

v

Brisbane City Council
(Respondent)

3.   Brisbane City Council

(Applicant)

v

      Manningtree (Qld) Pty Ltd (ACN 132 882 789)

 (Respondent)

4.   Brisbane City Council

(Applicant)

v

      Montrose Creek Pty Ltd (ACN 132 882 761)

 (Respondent)

FILE NO/S:

1.   No 4223/11

2.   No 4224/11

3.   No 5122/11

4.   No 5123/11

DIVISION:

Planning & Environment

PROCEEDING:

Joint hearing of two appeals and two Originating Applications

ORIGINATING COURT:

Planning and Environment Court, Brisbane

DELIVERED ON:

03 October 2012

DELIVERED AT:

Townsville

HEARING DATE:

14 May 2012

JUDGE:

Durward SC DCJ

ORDERS:

1    Declaration that Conditions 7 and 8 of the Development Permit (A001618880) dated 24 October 2005 in relation to infrastructure contributions for sewerage and water supply at 3/161 and 4/161 Dawson Parade, Keperra in the State of Queensland, formally respectively described as Lots 3 and 4 on SP 197357, Parish of Enoggera, and formerly described as Lot 3 on GTP 2481, Parish of Enoggera (“the land”) have not been paid in accordance with the Development Permit for Material Change of Use – Modification (Retail, Restaurant and Child Care Facility) and Preliminary Approval for Carrying Out Building Work dated 24 October 2005 (“the Permit”).

2 Declaration that the Respondent’s contravention of the Permit, including any conditions or approved plans of the Permit, constitutes a development offence pursuant to s 580 of the Sustainable Planning Act 2009.

3 Order under s 605 of the Sustainable Planning Act 2009 that the Respondents comply with the Permit including any condition of the Permit, namely by payment of the outstanding infrastructure contributions for sewerage in full and the balance of water supply, at the rate prevailing at the time of making the Order (current financial year).

4    Order under s 605 of the Sustainable Planning Act 2009 that the Respondent be restrained from using the premises for the purpose of Retail, Restaurant and Child Care Facility or any other unlawful use as defined in the Applicant’s planning scheme, Brisbane City Plan 2000.

LEGISLATION:

Sustainable Planning Act 2009 (Qld) sections 244, 245, 580, 588, 590, 737 and 738.

CASES:

Cases applied/followed:

Sunshine Coast Regional Council v Recora Pty Ltd & Anor [2010] QPEC 8.

Cases cited:

Brisville Pty Ltd v Brisbane City Council [2007] QPELR 637; Hawkins & Izzard v Permarig Pty Ltd & Brisbane City Council (No 1) [2001] QPELR 414; Matikesevic v Logan City Council [1984] 1 Qd R 599; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335; House of Peace Pty Ltd v  Bankstown City Council [2000] NSWCA 44; Environmental Protection Authorityv Alkem Drums Pty Ltd (2000) 113 LGERA 130; Maple Holdings Limited v State of Queensland and Cairns City Council [2002] QPELR 196.

CATCHWORDS:

ENVIRONMENT & PLANNING – ENFORCEMENT NOTICES – DECLARATIONS – Conditions in development permit and preliminary approval for payment of infrastructure charges – Whether development offence – Where limited planning and development certificate obtained by purchaser of land – Where approval and conditions attach to land.

ENVIRONMENT & PLANNING – APPEALS – ENFORCEMENT NOTICES – Whether enforcement notices should be set aside – Whether current owner of land liable for infrastructure charges – Whether ‘once and for all’ or continuing liability.

COUNSEL:

Mr D. O’Brien for the Appellants/Respondents Montrose Creek Pty Ltd and Manningtree (Qld) Pty Ltd

Ms N F Kefford for the Respondent/Applicant Brisbane City Council.

SOLICITORS:

McInnes Wilson Lawyers for the Appellants/Respondents Montrose Creek Pty Ltd and Manningtree (Qld) Pty Ltd

Brisbane City Council Legal Practice for Respondent/Applicant

1. The issue in these proceedings is about the proper construction of infrastructure contribution (sewerage and water supply distribution headworks) conditions imposed in a Development Permit for Material Change of Use – Modification (Retail, Restaurant and Child Care facility) and Preliminary Approval for Carrying Out Building Work (“the permit”) made by the Brisbane City Council (“the Council”) on 24 October 2005 in favour of Opal Wing Pty Ltd (“Opal Wing”), which was then the owner of the subject property situated at Dawson Parade, Keperra (previously GTP2481 and now Lots 3 and 4 on SP197357 (“the land”).

The proceedings

1. The four separate proceedings were dealt with together. Two are appeals by each of Manningtree (Qld) Pty Ltd (“Manningtree”) and Montrose Creek Pty Ltd (“Montrose”) against enforcement notices issued by the Council with respect to non-payment of the infrastructure contributions. Two are Originating Applications for declarations made by the Council against each of Manningtree and Montrose alleging that a development offence has been committed and seeking enforcement orders against each of them for payment of the infrastructure contributions.

Factual circumstances

1. The factual circumstances are largely not controversial. The permit was subject to conditions that included Parks Contributions (fully acquitted by Opal Wing), Water Supply Distribution Headworks and Sewerage Treatment Headworks. Opal Wing paid the Parks Contributions – in full it appears – and some of each of the other contributions for the 2005-2006 financial year. However, no further payments were made by Opal Wing.

1. The building work was carried out and the use of the buildings was commenced in accordance with the plans approved by the permit. As at 16 May 2012 (and at least since 08 October 2010) there were several active retail outlets and restaurants established on Lot 3 and a child care centre established on Lot 4.

1. On or about 07 February 2008, a Community Management Statement was endorsed by the Council. Mr O’Brien submitted that the use of the approval commenced around this time.

1. On 19 December 2008, Manningtree and Montrose entered into contracts for the purchase of the land from Opal Wing. In the period prior to settlement of the contract, due diligence reports were prepared by their lawyers. In March 2009, Manningtree and Montrose became the registered proprietors of the respective lots comprising the land.

1. In about September 2010 the Council, through a non-specific file audit review process, discovered that some infrastructure contributions had not been paid in relation to the land. It pursued Opal Wing for payment. However, Opal Wing entered into voluntary liquidation.   

1. On 31 August 2011, the Council issued a Show Cause Notice pursuant to s 588 of the Sustainable Planning Act 2009 (Qld) (“the Act”) to each of Manningtree and Montrose asserting that it reasonably believed Manningtree and Montrose to have committed development offences contrary to s 580 of the Act. This Notice, of course, is in effect an invitation to the recipient to demonstrate why the next step – the giving of an Enforcement Notice – should not ensue.

1. On 06 October 2011, the Council issued an Enforcement Notice pursuant to s 590 of the Act, requiring Manningtree and Montrose to pay to it within 20 business days, infrastructure contributions: $304,665.90 towards the cost of sewerage headworks and $119,058.84 towards the cost of water supply headworks, a total of $423,724.74.

1. The use of the premises appears to have been in accordance with the approved plans of the permit at all material times; that much is apparent from inspections made of the premises by Council investigator, Ms Butcher on 08 October 2010 and 16 May 2012.

1. The balance of the infrastructure contributions have not been paid and remain unpaid. 

Requirement to pay infrastructure contributions

1. Was a development offence committed by Manningtree and Montrose as a consequence of their failure to pay the relevant infrastructure contributions as set out in Conditions 7 and 8 of the development approval?

1. Conditions 7 and 8 are as follows:

General/Planning Requirements

Timing

7)   Pay to Council a monetary contribution towards the cost of sewerage headworks, as outlined below, at the rate prevailing when the contribution is paid.

The contribution is calculated on 15.26 ETs (Equivalent Tenement), based on ‘retail’, ‘restaurant’, and ‘child care’ uses, at the current rate of $5,165.00 per ET, for Sewerage Scheme Charge Area – S1, NKBW3.

The amount payable is currently assessed at $78,818.00 and comprises of the following:

·     Treatment Headworks component:           $10,606.00

·     System Headworks component:              $68,212.00

·     Total contribution:  $78,818.00

This headwork charge is the current rate for the 2005/2006 financial year.

GUIDELINE

This condition is imposed to require the payment of a proportional contribution towards a satisfactory sewerage treatment system within the locality of the site. For any enquiries about this condition, please contact the Engineering Delegate, Development and Regulatory Services.

Prior to the commencement of the use or prior to endorsement of a community management statement, whichever is sooner

8) Pay to Council a monetary contribution towards the cost of water supply headworks, as outlined below, at the rate prevailing when the contribution is paid.

The contribution is calculated on 15.26 ETs (Equivalent Tenement), based on ‘retail’, ‘restaurant’, and ‘child care’ uses, at the current rate of $6,082.00 per ET, for Water System Infrastructure Charges Plan Area – Ferny Grove, W4.

The amount payable is currently assessed at $92,811.00 and comprises of the following:

·     Treatment Headworks component:          $13,246.00

·     Distribution Headworks component:        $79,565.00

·     Total contribution:  $92,811.00

The headwork charge is the current rate for the 2005/2006 financial year.

GUIDELINE

This condition is imposed to require the payment of a proportional contribution towards a satisfactory water supply treatment system to the site. For any enquiries about this condition, please contact the Engineering Delegate, Development and Regulatory Services.”

Prior to the commencement of the use or prior to endorsement of a community management statement, whichever is sooner

offence Development

1. A development offence is defined as an offence, inter alia, against s 580 of the Act. The section provides that a person must not contravene a development approval, including any condition in the approval.

Evidence

1. Mr Zander, the director of Manningtree and Montrose, deposed in an affidavit that when the properties were purchased he understood that all outstanding rates and charges, including infrastructure contributions, had been paid and that there was no consideration given in the purchase price of the properties to the outstanding infrastructure charges now being sought by the Council. 

1. He first became aware of the outstanding infrastructure charges when he received the Show Cause Notices.

1. There were two contracts of sale and a due diligence assessment made by lawyers retained by Mr Zander. The contracts, expressed in similar terms, refer to the balance of the purchase price being payable on finance (approval) and “due diligence” and each makes specific reference to the “special conditions” including the following:

“4.      This contract is subject to and conditioned upon the Buyer conducting such searches and enquiries by way of due diligence … as the Buyer in his absolute discretion shall think fit …”

1. In correspondence from his lawyers, Mr Zander was informed, so far as is relevant, of the following:

“5.      SECTION 5 – PLANNING ISSUES

5.1      The purpose of this part of the Due Diligence

The purpose of this part of the due diligence is to identify planning and development and associated controls and approvals which apply to the Property so as to allow an assessment to be made as to whether relevant planning development and associated approvals are in place or whether further enquiries are required. 

5.2      Scope of Review

(a)       The primary source of information in relation to this part of the due diligence has been obtained from a Standard Planning and Development Certificate.  Our instructions were not to obtain a Full Planning and Development Certificate.  We also obtained a letter from Brisbane City Council outlining a history of building applications being granted for the Property. 

……

(d)       There may be other matters relevant to the use and development of the Property that may not be disclosed in the Standard Planning and Development Certificate.  For this reason, where it is proposed that the Property be re-developed, the advice of an architect or town planner should be obtained and used in conjunction with this report.”

and in one of the contracts:

“5.5     Planning Approvals

(a)       Approval for the construction of shops, restaurant and child care centre was given on 21 July 2005.  The negotiated decision was then provided on 24 October 2005. 

( b)      Copies of the Decision Notice by a Delegate of Brisbane City Council and Approvals Conditions dated 21 July 2005 and the Negotiated Decision Notice dated 24 October 2005 are included in the Standard Planning and Development Certificate.  Some approval conditions are ongoing.  These include obligations to:

(Several inclusive conditions are then set out)

We can advise further on these and other conditions of approval if requested.”

Submissions

1. Mr O’Brien submitted that no development offence was committed because there was no contravention of any condition in the development approval, including Condition 7 and 8, because despite the infrastructure contributions being unpaid and therefore there being a prima facie breach of the condition, such a breach was a ‘once and for all’ breach, as opposed to a ‘continuing breach’. Hence, the breach occurred ‘once and for all’ when the property was owned by another entity, that is, Opal Wing. He submitted that the only avenue available to the respondent was to pursue payments of the contributions against Opal Wing.  

1. Mr O’Brien submitted that a breach of the conditions is ‘once and for all’ because of the ‘timing’ specified in the condition by which compliance was to occur.  This provides as follows:

“Prior to the commencement of the use or prior to endorsement of a community management statement, whichever is sooner.”

1. Thus, it was submitted that once one or other of those events occurred, the breach could not be remedied. Manningtree and Montrose, as subsequent owners, were not liable to pay the contribution, because the respondent had endorsed the Community Management Statement in 2008.

1. Ms Kefford submitted that the offence is a continuing offence. The requirement to pay the infrastructure contribution was a continuing obligation and, given that Manningtree and Montrose are each continuing the use of the land under the approval, they were obliged to acquit the requirement associated with the use.

1. She submitted that the ‘timing’ specified in the condition simply crystallised the date from which an offence had been committed: to construe the condition otherwise would permit a use that contravened the conditions of the Development Approval.

Discussion

1. A Development Approval, including any conditions, attaches to the land: ss 244 and 245(1)(a) of the Act. This was conceded by counsel for Manningtree and Montrose.

1. Section 245 of the Act provides:

“245 Development approval attaches to land

(1) A development approval—

(a) attaches to the land the subject of the application to which the approval relates; and

(b) binds the owner, the owner’s successors in title and any occupier of the land.

(2) To remove any doubt, it is declared that subsection (1) applies even if later development, including reconfiguring a lot, is approved for the land or the land as reconfigured.”

1. In Sunshine Coast Regional Council v Recora P/L & Anor [2012] QPEC 8 (“Recora”) Robertson DCJ wrote:

“[10] In my opinion the Respondents’ approach tends to isolate the relevant words in Conditions 6 to 10 from the remaining important terms and the whole approval in a highly technical way, and ignores the principle that those who take the benefit of an approval should pay their share of demand on infrastructure created by development: Serenity Lakes Noosa Pty Ltd v Noosa Shire Council [2007] QPELR 334; MC Property Investments Pty Ltd v Sunshine Coast Regional Council (No 2) [2011] QPEC 133 at [39].

[11] The conditions are straightforward and in conventional terms. Each condition imposes an obligation on the applicant (and as a matter of law on their successor in title; in this case Recora), to pay an amount calculated by reference to the Planning Scheme Policy applicable at the time of payment. The condition sets a deadline to pay which had passed by the time Recora assumed the benefit of the approval. The failure to pay in a timely way does not discharge the responsibility to pay the contributions nor does it sever the condition from the approval. To be fair to Mr Loos, he does not suggest this but rather he submits that because of the failure to pay in a timely way, the condition was incapable of performance by his client once it became the beneficiary of the approval (with all its conditions). The condition still binds Recora and is one that was, and still is, breached by non-performance.” (my emphasis)

1. In Brisville Pty Ltd v Brisbane City Council [2007] QPELR 637 Rackemann DCJ wrote at [7]:

“The development approval is a public document, which constitutes the decision of the local authority, expressed in a formal manner and is required to operate in accordance with its terms. It is not personal to the applicant. It runs with the land and may be relied upon by many persons dealing with the grantee (or others exercising the rights conferred by it). A breach of its terms may, under the Integrated Planning Act 1997 (Qld), result in proceedings not only at the instance of the local authority, but by any person. In construing an approval, the search is not for what the Council may have intended or the applicant understood. Each approval must speak according to its written terms, construed in context, but having regard to its enduring function.”

1. See also House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498.

1. The words of a Development Approval should not be scrutinised in the same way as words used by the parliamentary drafts-persons: Hawkins & Izzard v Permarig Pty Ltd and Brisbane City Council (No 1) [2001] QPELR 414 at 416; Recora (supra).

1. Nevertheless, where development approvals are ambiguous, they should be construed in a way which places the least burden on the land owner: Matikesevic v Logan City Council [1984] 1 Qd R 599 at 605.

1. In this case, it is unclear when the use commenced. However, it is clear that the Community Management Statement was endorsed on 07 February 2008. The due diligence report made reference to those conditions that were ongoing and therefore would impact the applicants. No reference was made to the contribution in the report. However, the list was not stated to be exclusive.

1. Insofar as the issue of whether an offence was a continuing offence, in Environment Protection Authority v Alkem Drums Pty Ltd (2000) 113 LGERA 130 at 140 (“Alkem”), Smart JA wrote:

“As a matter of general principle it can be accepted that the absence of a valid provision for a daily penalty does not mean that the offence is not a continuing one. Nor does it prevent a court reflecting in the penalty imposed that the offending was continuous.”

1. If the applicants have committed a development offence, the enforcement notice seeking the applicants to remedy the commission of the offence issued by the respondent was valid: s 590 of the Act.

1. Mr O’Brien relied on Alkem in a different context than referred to by me, in the sense that the obligation in that case was the performance of an act by a specific date. In that circumstance the offence was not a ‘continuing offence’. It was complete on the date specified. That is not a construction that applies to the development conditions here. The obligation is quite different and the imposition of the infrastructure charges are a corollary of the benefit conferred by the development permit and preliminary approval. The words used in the conditions do not equate to a ‘specific date’ or for a completion or acquittal of an obligation.

Discretionary considerations

1. The Court’s power to grant declaratory relief and enforcement orders is discretionary: Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339 per Kirby P (as he then was). The Court exercises its discretion as would the Council insofar as the Enforcement Notices are concerned, balancing as appropriate any competing private and public interests: Maple Holdings Limited v State of Queensland and Cairns City Council [2002] QPELR 196.

A          Lack of knowledge

1. It was submitted for Manningtree and Montrose that they had no knowledge of any requirement to pay an infrastructure contribution prior to purchasing the land. However, they were aware that there was a development approval which conferred an advantage or benefit on them and prima facie they should pay their share of the demand on infrastructure created by the development: Recora (supra).

1. The Act makes appropriate provision for potential purchasers of land to apply to local governments for the purposes of obtaining information about infrastructure charges by way of a Planning and Development Certificate: s 737(1) of the Act.

1. In particular, s 738 of the Act provides that a limited Planning and Development Certificate must include:

“738 Limited planning and development certificates

A limited planning and development certificate must contain the following information for premises–

(a) a summary of the provisions of any planning scheme, including any infrastructure charges schedule or regulated infrastructure charges schedule, applying specifically to the premises;

(b) if any of the State planning regulatory provisions apply to the premises – a description of the provisions that apply;

(c) a description of any designations applying to the premises.”

1. Manningtree and Montrose had not obtained a full Planning and Development Certificate. Had they done so, it would have informed them that the approval had been activated by the commencement of the conditions and that the infrastructure contributions were payable. However, they elected not to obtain a full Planning and Development Certificate.

B          Delay

1. Mr O’Brien had submitted that the Council had been aware that infrastructure contributions were outstanding as early as 2008, but took no action to recover them until the audit was conducted in about September 2010. The Council does not take issue with that assertion. However, I do not consider it to be relevant to the issue for my determination. It may become relevant as between the parties per se, at some point in the future.

C          Financial hardship

1. The respondent in the Originating Applications seeks payment of the full amount of the contributions.

1. Mr Zander, deposed in evidence that if Manningtree and Montrose “are required to pay the outstanding infrastructure contributions, whether the amount applicable at the time payment was required or the amount the Council now say is due … the companies will face considerable financial hardship.”  He admitted in cross-examination that he had not made inquiries as to what amount the company’s might be able to pay, particularly by instalments under a payment plan.  However, I accept that Mr Zander was called to give evidence on short notice and without sufficient time to make such inquiries and did not have the benefit, prior to being cross-examined, of being able to consider the utility of a payment plan.

1. However, financial hardship of itself is not a relevant consideration in construing the development approval conditions. It may, of course, be a matter that the parties can discuss further, particularly in respect of an instalment payment plan.

Conclusion

1. Mr O’Brien referred to a number of other cases. With respect, I do not consider that they assist me in determining the issue in this case. I accept that principles of statutory construction may require more explicit language in some circumstances than appears in the development approval conditions here. I acknowledge the principles in the cases referred to by Mr O’Brien about construction in development permits and approvals. However, in this case the conditions are clear. I do not agree that words such as “this is a continuing offence” were necessary to convey an unambiguous meaning.

1. I agree with Ms Kefford that the timing issue (the words ‘prior to’ in the conditions) is the crystallisation of the date from which an offence has been committed. It is not the date of the cessation of a liability. To contend otherwise would lead to potentially absurd outcomes and is contrary to the intent of the Act, which in the context of the issue in this case is to achieve a balance between the conferral of a benefit and the imposition of an obligation or, expressed in another way, a balance between private and public interest. The words in the conditions are plain and simple and convey the meaning to which I have referred.

1. The obligation to pay the infrastructure charges attaches to the land. It binds the owner and any successor in title. I agree with the views expressed by his Honour Judge Robertson in Recora on this point.

1. The failure by Montrose and by Manningtree to pay the infrastructure charges in my view constitutes a development offence and it is a continuing offence. To find otherwise would result in an unsustainable situation when the person benefiting from a development approval would not pay its share of the demand on infrastructure created by the development. That it is a continuing offence is a logical consequence of the attachment of the obligation to the land.

1. Mr Zander had the opportunity to discover the outstanding charges prior to purchasing the land. However, he elected to obtain a limited planning and development certificate only. Whilst he maintained that the additional information that a full certificate would have provided was not explained to him, the due diligence report by his lawyers, in the manner in which it is relevantly expressed, should have put him on notice to enquire if he was in doubt as to the meaning of the document. Any lack of knowledge by Montrose or by Manningtree is therefore not a relevant consideration and is entirely a product of an informed due diligence decision made by Mr Zander to obtain a limited certificate.

1. Insofar as delay is concerned, any impact has simply deferred the day when the charges are required to be paid. A more diligent Council may well have pursued payment when the Community Management Statement was endorsed. However, this is not the direct or substantial cause of any financial hardship. That hardship has arisen from the decision made by Mr Zander at the time that Montrose and Manningtree completed the purchase of the land.

1. Accordingly, in an exercise of discretion I have concluded that the appeals by Montrose and Manningtree should be dismissed and that the applications by the Council should be granted. I will make the declarations and orders sought by the Council.

Orders:

1. Declaration that Conditions 7 and 8 of the Development Permit (A001618880) dated 24 October 2005 in relation to infrastructure contributions for sewerage and water supply at 3/161 and 4/161 Dawson Parade, Keperra in the State of Queensland, formally respectively described as Lots 3 and 4 on SP 197357, Parish of Enoggera, and formerly described as Lot 3 on GTP 2481, Parish of Enoggera (“the land”) have not been paid in accordance with the Development Permit for Material Change of Use – Modification (Retail, Restaurant and Child Care Facility) and Preliminary Approval for Carrying Out Building Work dated 24 October 2005 (“the Permit”).

2. Declaration that the Respondent’s contravention of the Permit, including any conditions or approved plans of the Permit, constitutes a development offence pursuant to s 580 of the Sustainable Planning Act 2009.

3. Order under s 605 of the Sustainable Planning Act 2009 that the Respondents comply with the Permit including any condition of the Permit, namely by payment of the outstanding infrastructure contributions for sewerage in full and the balance of water supply, at the rate prevailing at the time of making the Order (current financial year).

4. Order under s 605 of the Sustainable Planning Act 2009 that the Respondent be restrained from using the premises for the purpose of Retail, Restaurant and Child Care Facility or any other unlawful use as defined in the Applicant’s planning scheme, Brisbane City Plan 2000.