Radici and City Of Gosnells
[2009] WASAT 54
•26 MARCH 2009
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: DEVELOPMENT & RESOURCES
ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)
CITATION: RADICI and CITY OF GOSNELLS [2009] WASAT 54
MEMBER: MR D R PARRY (SENIOR MEMBER)
HEARD: 19 MARCH 2009
DELIVERED : 26 MARCH 2009
FILE NO/S: DR 166 of 2008
BETWEEN: LEONE RADICI
Applicant
AND
CITY OF GOSNELLS
Respondent
Catchwords:
Town planning Developer contributions Public open space Scheme costs Condition of 1997 development approval required payment of scheme costs and 5.63% of unimproved value of lot as cashinlieu for public open space prior to issue of building licence Building licence issued but developer contributions not paid Part of approved development constructed Subsequent development application for different part of lot Council imposed condition of development approval that developer must pay developer contributions Substantial increase in value of lot Whether condition is lawful Whether condition is reasonable
Legislation:
City of Gosnells Town Planning Scheme No 15, cl 11, cl 11.1, cl 11.2, cl 11.3, cl 11.4, cl 11,.5, cl 15.1, cl 15.4
Planning and Development Act 2005 (WA), s 252(1)
Result:
Condition requiring developer contributions affirmed
Category: B
Representation:
Counsel:
Applicant: Mr S Bain (Acting as Agent)
Respondent: Mr D McLeod
Solicitors:
Applicant: SJB Town Planning & Urban Design (Town Planners)
Respondent: McLeods
Case(s) referred to in decision(s):
Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
A local planning scheme, which applied to 60 properties comprising an industrial area, required the landowner of a lot the subject of subdivision or development to agree with the local government to pay Scheme costs and to transfer 5.63% of the area of the lot, or a cash equivalent, to the local government, to enable the local government to acquire reserved land constituting 5.63% of the area as public open space.
When development approval was granted for a lot in the area in 1997, a condition was imposed requiring payment of Scheme costs and 5.63% of the unimproved value of the lot prior to the issue of a building licence. The building licence was subsequently issued, but the developer contributions were never paid. Part of the approved development was constructed.
Between 1998 and 2008, the unimproved value of the lot increased by 781%. In 2008, the landowner applied for development approval to construct a building in a different part of the lot. The local government imposed a condition requiring payment of developer contributions. The landowner sought review, arguing that the condition could not be lawfully imposed on a second planning approval for the lot, and that the condition was, in any case, unreasonable in the circumstances of the case.
The Tribunal determined that, properly interpreted, the local planning scheme authorised the imposition of a condition on a second or subsequent planning approval where a condition of a previous approval was not complied with at a time when the contribution for public open space represented the actual value of land in the area. The condition was for a planning purpose and fairly and reasonably related to the proposed development.
The Tribunal also determined that the condition was reasonable from a town planning perspective. While the requirement in the earlier development approval for the payment of developer contributions to be made prior to the issue of the building licence provided a 'safety mechanism' that appears to have failed, the obligation was on the landowner to pay the developer contributions, not upon the local government to enforce payment. The landowner retained the benefit of the money and had the opportunity to invest it in real estate in the area. Conversely, the local government did not have the benefit of the money and could not, therefore, put it towards the achievement of the local planning scheme's objective to enable public acquisition of the reserved land.
The Tribunal therefore confirmed the condition requiring the payment of the developer contributions.
Introduction
Lot 202 on Deposited Plan 30716, located at No 91 Kelvin Road, Maddington (site), is one of approximately 60 properties that comprise the Maddington Industrial Area within the local government area of the City of Gosnells (City or Council). The Maddington Industrial Area is subject to the City of Gosnells Town Planning Scheme No 15 Maddington Industrial Area (TPS 15 or Scheme). The general objectives of the Scheme include:
(a)To facilitate subdivision and development of land within the Scheme Area.
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(c)To make provision for Public Open Space.
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The Scheme Report in relation to TPS 15 states in relation to public open space as follows:
Public Open Space (POS) for the Scheme Area is represented physically by the Bickley Brook Reserve which represents in the order of 5.63% of the Scheme Area and an extension to an existing neighbourhood park in Avelia Place, Kenwick.
A provision of the Scheme is therefore that all landowners provide 5.63% POS to ensure the establishment of the linear open space along the Bickley Brook. A further provision of the Scheme enables Council to acquire such land as and when funds are available.
It should be noted that the acquisition of the Bickley Brook Reserve (or the 5.63% POS requirement) will be a widely fluctuating figure and may require determination by a licensed valuer at the developer/subdivider expense at the time of development [or] subdivision.
The Scheme Report also identifies the estimated Scheme costs as at August 1989 and states that the Scheme cost per hectare of $7,575 'will be payable prior to subdivision or development of the land'.
On 29 August 1997, the Council granted conditional development approval to Mr Andrew Watts, a part‑owner of the site, for the construction of five factory/showroom/warehouse units on the northern half of the site (1997 development approval). Condition 10 of the 1997 development approval states as follows:
Payment of outstanding Town Planning Scheme No. 15 contribution prior to issue of a building licence, calculated at $10,882.20 (October 1997 Qtr) plus 5.63% of the unimproved value of the total lot area as cash-in-lieu for Public Open Space.
Mr Watts gave evidence that, on 17 March 1998, the owners of the site sent their builder, Mr Charlie Coci, to the City's office with an 'open cheque' with which to pay all outstanding amounts in order to obtain the issue of the building licence for the approved development. Mr Coci apparently paid $4,000 to the Council in building, engineering and supervision fees, but did not pay the developer contributions required by condition 10 of the 1997 development approval. Nevertheless, the Council issued Mr Coci with the building licence.
The parties agreed that compliance with conditions requiring developer contributions is normally checked by Council prior to the issue of a building licence. However, that did not occur in this case.
Two of the five approved factory/showroom/warehouse units were subsequently constructed on the site. The developer contributions required by condition 10 of the 1997 development approval have never been paid.
On 18 January 2008, Ms Leone Radici, another part‑owner of the site, lodged a development application with the City for approval for the construction of an industrial shed building on the southern half of the site. On 25 March 2008, the Council granted conditional development approval for this development (2008 development approval). Condition 5 of the 2008 development approval states as follows:
Before commencing any development or use authorised by this approval, an arrangement is to be made with the City to satisfy the requisite developer cost contribution applicable to the land under Town Planning Scheme No. 15.
Ms Radici obtained valuations of the site as at 31 January 1998 and 25 June 2008. The valuations were not contested by the City for the purposes of these proceedings. The valuations show that the unimproved value of the site increased by about 681% between 31 January 1998 and 25 June 2008, from $530,000 to $4,140,000. In consequence, 5.63% of the unimproved value of the site increased from $29,839 to $233,082 over this period. Whereas the total developer contributions that were payable prior to the issue of the building licence for the 1997 development approval under condition 10 of that approval were $40,721, the developer contributions that would be payable under condition 5 of the 2008 development approval would be $246,242.
Ms Radici sought review by the Tribunal of the City's decision to impose condition 5 of the 2008 development approval under s 252(1) of the Planning and Development Act 2005 (WA). In particular, Ms Radici sought the deletion of condition 5 of the 2008 development approval or, alternatively, its replacement by a condition requiring the landowners to pay the current amount of Scheme costs attributable to the site ($13,160) and 5.63% of the unimproved value of the site as at 31 January 1998 ($29,859) plus interest to date.
Ms Radici argued that condition 5 of the 2008 development approval cannot be lawfully imposed in the circumstances of this case. She also argued that, even if the condition could be imposed, its imposition would be unreasonable in the circumstances of the case and it should therefore not be imposed by the Tribunal in the exercise of planning discretion. The City contested both of these arguments.
Relevant Scheme provisions
Clause 11.1 of TPS 15 states that the land shown as 'Bickley Brook Drain Reserve' on the Scheme Map is to be reserved for Public Recreation and Drainage. Clause 11.2 of TPS 15 authorises the Council to acquire this land, or any parts of it, by purchase or resumption.
Clause 11.3, cl 11.4 and cl 11.5 of the Scheme state as follows:
11.3Each owner of land within the Scheme Area, when subdividing or developing his land and subject hereinafter provided, shall vest in the Crown or, with approval of the Department of Planning and Urban Development, transfer to the Council all the land shown as Public Open Space within the parcel(s) of land being subdivided or developed by him.
11.4If the owner or a previous owner of a parcel or parcels of land the subject of subdivision or development has as a condition of a previous subdivision or development transferred to Council land for public open space, then the area of land required to be transferred to the Council under Clause 11.3 shall be reduced to the extent that the total contribution does not exceed 5.63% of the original gross area.
11.5If, within a parcel of land the subject of subdivision or development, the Scheme requires either no public open space or requires a lesser amount than the normal 5.63% provision, the Council and the owner shall agree on a land transfer or a cash equivalent, or a combination of land and cash, so that the owner's contribution equals 5.63% of the value of the land the subject of the subdivision or development.
Clause 15.1 and cl 15.4 of TPS 15 state as follows:
15.1Subject to the provisions of this Scheme each owner shall, prior to the endorsement of a plan or diagram of survey by the Department of Planning and Urban Development to the subdivision of his land or prior to the issue by Council of a Building Licence for development of his land, pay to the Council an amount which bears the same proportion to the total Scheme Costs as the area of the owner's land being subdivided or developed bears to the whole of the land that is privately owned within the Scheme Area …
15.4The owner of every lot within the Scheme Area shall pay his portion of Scheme Costs at such time as he subdivides or develops his land for industrial purposes, except where payment relevant to the portion of the land has previously been made.
Can the condition be lawfully imposed?
In Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30, McHugh J held at [57] as follows:
A condition attached to a grant of planning permission will not be valid therefore unless:
1.The condition is for a planning purpose and not for any ulterior purpose …
2.The condition reasonably and fairly relates to the development permitted.
3.The condition is not so unreasonable that no reasonable planning authority could have imposed it.
Ms Radici argued that, on their proper interpretation, cl 11.5 and cl 15.4 of TPS 15 do not authorise the Council to impose a developer contributions condition on a second or subsequent planning approval issued in relation to land subject to the Scheme. Ms Radici also argued that condition 5 is not for a planning purpose, because payment of the outstanding developer contributions is an administrative issue, and that the condition does not fairly or reasonably relate to the proposed development, because it is being used as a means to recover a debt due under condition 10 of the 1997 development approval.
In contrast, the City argued that the Scheme does not, expressly or by implication, prohibit a requirement for the payment of developer contributions at the time of a subsequent subdivision or development of land in the Scheme Area if the developer contributions payable under a previous planning approval were not paid. The City argued that condition 5 is for a planning purpose, and fairly and reasonably relates to the proposed development, because it is a means of implementing a requirement of the Scheme that applies to the site which has not been previously complied with.
The Tribunal considers that the Scheme authorises the imposition of condition 5 of the 2008 development approval.
Clause 11.5 of TPS 15 does not, expressly or by implication, limit the imposition of a condition requiring the owner's contribution of 5.63% of the value of the land the subject of subdivision or development to the first subdivision or development approval granted under the Scheme. However, given that the evident purpose of cl 11 of TPS 15 is to enable the Bickley Brook Reserve, which constitutes 5.63% of the Scheme Area, to be brought into public ownership, it is implicit in cl 11.5 of the Scheme that a condition cannot be imposed on a second or subsequent planning approval where a condition was imposed under the clause on a previous approval in relation to the same lot which was complied with at the time the subdivision or development the subject of the previous approval was first carried out. Compliance with a condition the subject of a previous approval at that time would have achieved the purpose of cl 11.5, because it would have enabled the City to purchase, at the land value applicable at the time, a part of the Bickley Brook Reserve proportional to the area of the lot being subdivided or developed relative to all land in the Maddington Industrial Area. Properly interpreted, the clause does not allow the City to 'double dip'.
There is textual support for the interpretation of cl 11.5 of TPS 15 that enables the imposition of condition 5 of the 2008 development approval. While cl 11.4 of TPS 15 does not apply to the present case, because the site does not include any part of the Bickley Brook Reserve, cl 11.4 of TPS 15 clearly contemplates that subsequent planning approvals can require developer contributions for public open space. Given that the Scheme intends that each property in the Scheme Area should make a proportionate contribution of land or land value to ensure the achievement of the purpose of cl 11 of TPS 15, to achieve public ownership of the Bickley Brook Reserve, it would be contrary to this intent for land that does not include any part of the Bickley Brook Reserve to be treated differently to land that includes part of the Bickley Brook Reserve.
Furthermore, a purposive interpretation requires the result articulated earlier. As the circumstances of this case show, unless cl 11.5 authorised the imposition of a condition on a second or subsequent planning approval, the City would not receive sufficient land or equivalent value to be able to acquire the whole of the Bickley Brook Reserve. In particular, if the City were restricted to receiving 5.63% of the value of the site as at 31 January 1998, plus interest to date, it would not have sufficient funds to achieve the purpose of cl 11 of TPS 15, as interest would not compensate for the 781% increase in land value in the area. The purpose of cl 11 of TPS 15 could only be achieved if it authorises the imposition of a condition on a subsequent planning approval in circumstances where a condition of an earlier approval was not complied with at a time when the contribution represented the actual value of land in the area.
Condition 5 of the 2008 development approval is for a planning purpose, namely, the purpose of enabling Bickley Brook Reserve to be brought into public ownership as public open space. Condition 5 of the 2008 development approval fairly and reasonably relates to the proposed development, because it is industrial development proposed upon land in the Scheme Area in respect of which the owner has not transferred land or made a cash equivalent, or a combination, so that the owner's contribution equals 5.63% of the value of the land the subject of subdivision or development at the time of payment.
Clause 15.4 of TPS 15 also contemplates that developer contributions can be imposed in relation to Scheme costs in second and subsequent planning approvals in relation to land within the Scheme Area.
It follows that condition 5 of the 2008 development approval can be lawfully imposed.
Is the condition reasonable?
Ms Radici argued that, even if valid, condition 5 of the 2008 development approval should not be imposed in the exercise of planning discretion, because it is unreasonable in the circumstances of this case, for several reasons.
First, Ms Radici emphasised that condition 10 of the 1997 development approval required the payment of developer contributions 'prior to issue of a building licence'. Mr Simon Bain, a town planner who represented Ms Radici as her agent, described the reference to the building licence as a 'safety mechanism'. As noted earlier, the parties agreed that, while compliance with developer contribution conditions is normally checked prior to issuing a building licence, that did not occur in this case. Mr Watts gave evidence that the landowners 'are not experienced developers and have been relying on help from other parties to point us in the right direction'. Mr Bain submitted that, in these circumstances, it is 'unreasonable for the [landowners] to be penalised due to the administrative error of the [City]'.
However, as a matter of planning law, condition 10 of the 1997 development approval required the developer to pay the developer contributions prior to the issue of the building licence; it did not require the City to enforce payment. The fact that the 'safety mechanism' appears to have failed does not obviate or alter the developer's obligation under the condition.
While the landowners may not be experienced developers, and while they sent their builder to the Council with a 'blank cheque' to pay all amounts outstanding in order to obtain the building licence, they would have seen the bank statement recording a payment of $4,000, whereas condition 10 of the 1997 development approval required a payment of $10,882.20 plus 5.63% of the unimproved value of the site. Even an inexperienced developer would appreciate the difference, in 1998, between $4,000 and $40,721.
Finally, the landowners have not been 'penalised' due to their failure to pay required developer contributions in 1998. They have had the benefit of that money and the opportunity to invest it in real estate which, as the evidence in this case shows, increased in value by 781% in the area over the relevant period. Conversely, the City did not have the benefit of the required developer contributions and could not, therefore, put that money towards the fulfilment of the Scheme's objective to bring the Bickley Brook Reserve into public ownership. Furthermore, payment now of the developer contributions due under condition 10 of the 1997 development approval plus interest to date would only enable the City to purchase a small fraction of the area of Bickley Brook Reserve which the Scheme envisages should be funded by the owners of the site.
Second, Ms Radici argued that condition 5 of the 2008 development approval is unreasonable, because the City could seek to enforce condition 10 of the 1997 development approval as an alternative to seeking to impose condition 5 of the 2008 development approval on the subject approval. However, for reasons discussed earlier, even if the Council successfully obtained enforcement of condition 10 of the 1997 development approval, the substantial increase in land values in the area would not be compensated for by interest.
Finally, Ms Radici argued that condition 5 of the 2008 development approval is unreasonable because the cost of compliance will make further development of the site unviable. Mr Bain submitted that it is not reasonable for the landowners to be 'penalised' by not being able to develop their land owing to the cost of complying with condition 5 of the 2008 development approval.
However, as noted earlier, the landowners have had the benefit of the developer contributions and the opportunity to invest that money. Conversely, if the developer contributions in relation to the land are not based on the current land value, the City would not have sufficient funds from developer contributions in relation to the site to purchase the proportion of Bickley Brook Reserve attributable to the site as a proportion of the Scheme Area.
It follows that condition 5 of the 2008 development approval is reasonable from a town planning perspective. The condition will facilitate the achievement of the Scheme's objective in relation to public open space. The landowners failed in their obligation to pay the developer contributions in 1998 and have retained the benefit of that money since that time.
Conclusion
Condition 5 of the 2008 development approval imposed by the Council is both lawful and reasonable. The application for review should be dismissed and the conditions of approval should be confirmed.
Orders
The Tribunal makes the following orders:
1.The application for review is dismissed.
2.The decision of the respondent made on 25 March 2008 to grant conditional development approval for the construction of an industrial shed building at No 91 (Lot 202) Kelvin Road, Maddington is affirmed and the conditions imposed by the respondent are confirmed.
I certify that this and the preceding [41] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR D R PARRY, SENIOR MEMBER
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