Sodexo Remote Sites Australia Pty Ltd v Sirrom Corporation Holdings Pty Ltd
[2021] QDC 308
•17 November 2021 (ex tempore)
DISTRICT COURT OF QUEENSLAND
CITATION:
Sodexo Remote Sites Australia Pty Ltd v Sirrom Corporation Holdings Pty Ltd & Ors [2021] QDC 308
PARTIES:
SODEXO REMOTE SITES AUSTRALIA PTY LTD ACN 009 105 980
(Plaintiff)v
SIRROM CORPORATION HOLDINGS PTY LTD ACN 074 683 631
(First Defendant)
AND
SIRROM CORPORATION GROUP PTY LTD ACN 154 271 780
(Second Defendant)
AND
SIRROM CORPORATION (NT) PTY LTD ACN 097 376 871
(Third Defendant)
AND
SIRROM CORPORATION (WA) PTY LTD ACN 093 760 902
(Fourth Defendant)
AND
SIRROM CORPORATION (AUST.) PTY LTD ACN 074 914 560
(Fifth Defendant)
AND
SIRROM CATERING (AUST) PTY LTD ACN 089 429 292
(Sixth Defendant)
AND
ACN 154 568 046 PTY LTD
ACN 154 568 046
(Seventh Defendant)FILE NO:
89/21
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
Brisbane District Court
DELIVERED ON:
17 November 2021 (ex tempore)
DELIVERED AT:
Brisbane
HEARING DATE:
17 November 2021
JUDGE:
Porter QC DCJ
ORDER:
1. The Defendants pay the Plaintiff’s claim of $720,000.00
2. The Defendants pay the Plaintiff interest of $34,990.93.
3. The Defendants pay the Plaintiff’s costs of the whole proceeding on an indemnity basis to be agreed or otherwise assessed.
CATCHWORDS:
PLANNING AND ENVIRONMENT – RECOVERY OF CHARGE – GENERAL RULES OF CONSTRUCTION OF INSTRUMENTS – where the plaintiff, as buyer, and each of the defendants, as sellers, were parties to a business purchase contract – where the plaintiff acquired a property under the contract used as temporary accommodation for mining and construction workers – where the local authority imposed an infrastructure charge as a condition on development approval granted to the defendants for expansion of the accommodation when the defendants were owners of the property – where the defendants expanded the accommodation in accordance with the approval but did not pay the infrastructure charge – where the local authority demanded payment of the infrastructure charge from the plaintiff as registered owner after completion of the contract – where the plaintiff paid the charge but sought to recover it pursuant to the contract from the defendants – whether the infrastructure condition was void for failure to comply with the requirements of the Act under which it was imposed – whether, assuming the condition was valid, the infrastructure charge was a liability in respect of the Business under the Contract
LEGISLATION:
Planning Act 2016 (Qld), ss. 119, 164
Sustainable Planning Act 2009 (Qld), ss. 308, 344-347, 436, 440, 461, 495-496, 498-500, and 650
CASES:
Butler v Johnston (1984) 4 FCR 83
Gold Coast City Council v Sunland Group [2019] QCA 118
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Queensland Newsagents Federation Limited v Trade Practices Commission (1993) 46 FCR 38
Sunland Group Limited v Gold Coast City Council [2021] HCA 35
COUNSEL:
D. Savage QC and L. Copley for the Plaintiff
M. Martin QC and S. Spottiswood for the Defendants
SOLICITORS:
Sparke Helmore Lawyers for the Plaintiff
Mills Oakley for the Defendants
Background
The plaintiff (Sodexo) seeks to recover a charge levied by the Whitsunday Regional Council (Council) and paid by Sodexo, from the defendants (Sirrom), pursuant to clause 10.6, or alternatively clause 11.4, of a business purchase agreement between Sodexo and Sirrom, dated 28 June 2017 (the BPA).
There were ultimately no questions of fact in dispute at the trial. The uncontentious factual context is this.
On 22 May 2012, the Council provided a decision notice to Sirrom[1] on a development permit for a material change of use. The development application related to a piece of land at 8296 Collinsville Mt Douglas Road, otherwise known as Lot 2 on MPH 30801 (the Property). It is uncontentious that at the time of that decision notice, the Property had 208 temporary accommodation units already built and being used.
[1] One of the defendants described by that compendious word anyway.
The purpose of the development application was to obtain approval or to obtain a development permit to change that use by increasing the number of accommodation units by 192 and to obtain approval for various ancillary uses, being an administrative building, a communal open space, a gym and an extension of the carpark. Given that, I assume, the Property was near Collinsville, it is not surprising that it was being used to provide accommodation for workers in Bowen Basin Mines.
The decision notice approved the application in full but with conditions, which were set out in attachment 1 to the approval in 2012 (the 22 May approval). Only condition 18 is relevant:
18.0 INFRASTRUCTURE CHARGES
18.1 The development results in increased demand on Council’s existing water supply network, including water pumps, treatment plans [sic] and reservoirs, Council’s existing sewer reticulation network, including sewer pump stations and treatment plants, an increased demand on Council’s existing road network, an increased demand on Council’s public parks and community facilities.
To facilitate this increased demand the adopted infrastructure charge from Table 2 “Whitsunday Regional Council Adopted Infrastructure Charges Resolution No2 of 2011” Accomodation (Short term) is $3,750 per dwelling unit.
The applicant is required to make full payment of $720,000 prior to commencement of use.
There was an application for a request to change the development approval, which also appears to have been met with substantial, if not perhaps entire, success. The decision on the request to change the 22 May approval was given by the Council on 4 April 2013 (the 4 April approval). It is self-evident from tab 4 that the decision relates to the 22 May approval. The only matter of relevance in the amended approval is that it restated condition 18 from the 22 May approval in identical terms as condition 17.
The temporary accommodation area was known as Collinsville Village. The Property was developed in compliance with the 4 April approval by Sirrom, and the use approved by that approval commenced some years before Sodexo acquired the Property as part of the business purchase agreement.
Strangely, the sum of $720,000 remained unpaid and there is no evidence that the Council adverted to the oversight, much less raised it with anyone for some years, as will be seen. I infer Collinsville Village was a profitable business because a further development application for a development permit for material change of use of premises was lodged, again by a member of one of the defendants in the case seeking to expand Collinsville Village by another 102 accommodation units (Stage 3). That was approved on 12 November 2014 (the 2014 approval). Again, the only relevance, other than the approval of the expansion, is the identification of an infrastructure charge, this time in condition 14. It is in similar, but not identical, terms to the previous infrastructure charge provisions. It provides:
14.0 INFRASTRUCTURE CHARGES
14.1 The development results in increased demand on Council’s existing parks and community facilities, road network, water supply and storm water which are not designed to accommodate the expected loads. The applicant must make a monetary payment prior to the commencement of use at the rate applicable at the time of payment. The total current rate is $1,632,000.
The subsequent correspondence involving a dispute between Sodexo and the Council does not seem to be able to be reconciled in terms of the figures discussed there, with that $1,632,000 figure in the 2014 approval. No one can explain how that might happen, but neither party thought it mattered. The 2014 approval was provided in terms that, if the development was not started within four years, the approval would lapse. I note that, despite attention presumably being given by the Council to this site at that time, it still does not seem like anyone twigged to the fact that the $720,000 had not been paid.
Sodexo and Sirrom entered into the BPA on 28 June 2017. It is not in dispute that the approved work under the 2014 approval had not commenced at the time of the settlement of the BPA, which occurred on 31 October 2017. Sodexo, after completion, began the construction of Stage 3, but that work was not going to be completed within the four-year period of validity of the 2014 approval. On 9 March 2020, seemingly well outside the four-year period, Sodexo lodged an extension application with the Council in respect of the 2014 approval.
Before dealing with the consequences of that process, I should return to the BPA which relevantly provided:
Parties
1 Each person listed in Schedule 2 (each a Seller and together the Sellers)
2 Each person listed in Schedule 3 (each a Covenator and together the Covenators)
3Sodexo Remote Sites Australia Pty. Limited ACN 009 105 980 of Level 8, 607 St Kilda Road, Melbourne Victoria 3004 (Buyer)
Background
AThe Sellers are the current owner of the Business and the Business Assets.
BThe Buyer agrees to buy, and the Seller agrees to sell, the Business and the Business Assets on the terms and conditions set out in this agreement.
CThe Covenators are certain shareholders of the Sellers (or otherwise have an indirect proprietary or beneficial interest in the Sellers) and give the covenants in clause 13 in consideration of the benefit that they receive by virtue of that relationship and in consideration of the mutual covenants and obligations under this agreement.
1Defined terms and interpretation
1.1Definitions in the Dictionary
A term or expression starting with a capital letter:
(a)which is defined in the Dictionary in Schedule 1, has the meaning given to it in the Dictionary;
(b)which is defined in the Corporations Act, but is not defined in the Dictionary, has the meaning given to it in the Corporations Act; and
(c)which is defined in the GST Law, but is not defined in the Dictionary or the Corporations Act, has the meaning given to it in the GST Law.
1.2Interpretation
The interpretation clause in Schedule 1 sets out rules of interpretation for this agreement.
2Sale and price
2.1 Sale of Business
The Sellers agree to sell the Business and the Business Assets to the Buyer and the Buyer agrees to buy the Business and the Business Assets:
(a)for the Purchase Price;
(b)with effect from the Effective Time;
(c)free from any Security Interests (other than a Permitted Security Interest); and
(d)on the terms and conditions of this agreement.
…
5Completion
5.1Date and place for Completion
Subject to clause 3 (Conditions precedent), Completion must take place at the office of Gilbert + Tobin, L 35, Tower Two, International Towers, Sydney, 200 Barangaroo Avenue, Barangaroo NSW 2000 on or before 11am on the last Business Day of the month after satisfaction or waiver of the last of the Conditions, or any other time and date that the Buyer and the Sellers’ Representative agree in writing.
5.2Sellers’ obligations at Completion
At Completion, the Sellers must:
(a)give the Buyer:
(i)operating control of the Business and the Business Assets;
(ii)exclusive possession of the Business Assets, free of any Security Interests (other than a Permitted Security Interest);
(iii)a clearance certificate from the Commissioner of Taxation certifying that all Sellers except Morris Corporation PNG Ltd are Australian residents for the purposes of Australian Tax Law. The clearance certificate must be in a form which accords with the requirements of Subdivision 14-D of the Taxation Administration Act 1953 (Cth); and
(b)comply with the obligations set out in clauses 5.3 (Vacant possession of Properties) to 5.11 (Escrow Deed) (inclusive).
5.3Vacant possession of Properties
At completion, the Seller must give the Buyer, subject to Landlord consent, vacant possession of each Property.
…
10Receivables and other payments
…
10.6Payments for supplies relating to periods before the Effective Time
If, after the Effective Time, the Buyer makes any payments for goods or services which have been supplied to or received by the Business and other outgoings and similar amounts paid in arrears in respect of the Business, including without limitation any rates, taxes, charges and other outgoings in relation to Collinsville Village, before the Effective Time, the Sellers’ Representative must reimburse the Buyer for any such payments within 5 Business Days after receiving evidence from the Buyer of the relevant payment.
…
11Excluded Liabilities and Assumed Liabilities
11.1Excluded Liabilities
(a) The Sellers remain liable for all Excluded Liabilities.
(b) The Sellers indemnify the Buyer from and against any Excluded Liability.
11.2Assumed Liabilities
If Completion occurs:
(a) the Buyer becomes liable for the Assumed Liabilities;
(b) the Buyer must satisfy the Assumed Liabilities as and when they fall due; and
(c) the Buyer indemnifies each Seller from and against any Assumed Liability.
11.3Reimbursement to Seller
The Buyer must reimburse each Seller for amounts paid by or on behalf of that Seller for an Assumed Liability within 5 Business Days of receiving evidence of payment.
11.4Reimbursement to Buyer
The Sellers must reimburse the Buyer for amounts paid by or on behalf of the Buyer for any Excluded Liabilities within 5 Business Days of receiving evidence of payment.
The Dictionary relevantly provided:
Assumed Liabilities means:
(a) the Transferring Employees’ accrued entitlements to annual leave, sick leave, long service leave and other personal leave (including applicable loadings) and, subject to clause 12.3(c), bonuses, in each case as at the Effective Time; and
(b) all debts, Liabilities and obligations in respect of the Business and the Business Assets arising from the Effective Time.
Business means:
(a) the ‘Contracts Business’ of the Sellers of providing catering, cleaning, asset management and facilities management services and associated services for clients in the remote resources, defence and construction industries; and
(b) the portion of the ‘Commercial Business’ of the Sellers of providing third party accommodation facilities in remote areas which is operated from the Collinsville Village,
in each case as conducted by the Sellers at Completion using the Business Assets, but to avoid doubt excluding the portion of the ‘Commercial Business’ which is operated from any of the Retained Properties.
Business Assets means the following assets used in, forming part of or produced by, the Business, whether tangible or intangible and whether owned, leased or used by the Seller under some other arrangement:
(a)the Asset Leases;
(b)the Property Leases;
(c)the Collinsville Village;
(d)the Material Contracts;
(e)any Contracts other than those set out in paragraph (a), (b) and (d);
(f)Cash at Site;
(g)Plant and Equipment;
(h)Motor Vehicles;
(i)Stock;
(j)Business Intellectual Property;
(k)Goodwill;
(l)the benefit of any Authorisations;
(m)Marketing Material;
(n)Business Records;
(o)each Product Warranty; and
(p)the right to the proceeds payable under any policy of insurance maintained by a Seller to the extent that:
(i)such proceeds relate to damages or Loss which is related to the business assets acquired by the Buyer under this agreement or the Property Transfer Form in the period up to and including Completion; and
(ii)such assets have been damaged prior to Completion and the Sellers have not already remedied the damage to any assets acquired by the Buyer under this agreement or the Property Transfer Form;
but, for the avoidance of doubt, excludes the Excluded Assets.
Collinsville Village is the freehold property described in Part A of Schedule 7 (Properties).
Completion means completion of the Sale under clause 5 (Completion) and Complete has a corresponding meaning.
Contracts means the agreements relating to the Business or the Business Assets to which the Seller is a party and which have not been fully performed as at the Completion Date, including:
(a)the Asset Leases;
(b)the Property Leases;
(c)the Material Contracts;
(d)all outstanding tenders, bids or other offers by or to a Seller relating to the Business which are capable of acceptance,
but excluding each of the following:
(e)any agreements that relate to Excluded Liabilities or Excluded Assets;
(f)any contracts of insurance; and
(g)the Shareholders’ Agreement dated 7 December 2011 between Morris Corporation Group Pty Ltd, Catalyst Buyout Fund 2A Pty Ltd and certain other parties.
Effective Time means the end of the day on which Completion occurs.
Excluded Liabilities means all debts, liabilities and obligations owed by the Sellers in respect of the Business as at the Effective Time, in whatever capacity and whether actual, prospective or contingent or otherwise and whether or not ascertained, and whether or not owing or incurred by or on account of the Sellers alone or jointly or severally with any other person including all liabilities of the Sellers relating to or arising in connection with:
(a)any breach of contract, breach of duty or which are attributable to any act, neglect, omission, or default of the Sellers or any Related Body Corporate or the Sellers before the Effective Time; or
(b)any product delivered by the Sellers or any Related Body Corporate of the Sellers or any service performed by the Sellers or any Related Body Corporate of the Seller before Completion;
(c)any industrial dispute or workers compensation claim arising out of an Employee’s employment with the Seller in respect of the period before the Effective Time,
but excludes the Assumed Liabilities.
For the plaintiff, it was submitted that the detailed provisions of the contract showed objectively a professionally prepared business sale contract with very extensive provision for adjustments of amounts of the kind which you would normally see in such a document. I will not set out the many provisions which indicate that to be so, and I did not understand that point to be cavilled with as a general observation. It also contained, in Schedule 7, the properties referred to, including Part A Freehold Properties, which identified Collinsville Village by reference to its address and real property description.
After Sodexo acquired the Business, it lodged an extension application in respect of the 2014 approval. That extension application is not in the material, but in Mr Murray’s witness statement. He said that it was lodged on 9 March 2020. It cannot be a coincidence that on 26 March 2020, Mr Twomey of the Council wrote to an agent of Sodexo, stating:
I’m hoping you can check your files on your end to confirm the payment of the infrastructure charge for 20110541 has not been made. The amount is $720,000.00.
We are reviewing all the charges for the Collinsville workers camp and the file for this application appears patchy post approval.
That letter was the genesis of the dispute that is now before the Court. Between March and July 2020, the Council and Sodexo, through their solicitors, exchanged correspondence in relation to infrastructure charges issues. There were two issues which arose. The first relates to the 2014 approval. Notwithstanding the inexplicable or unexplained reference to the $1.6 million in the 2014 approval, the circumstances asserted by the Council in respect of that appear to be as follows:
…
Reference is made to your request to enter into an Infrastructure Agreement with Sodexo Remote Sites Australia Pty Ltd (the Applicant) dated 29 April 2020.
On 27 May 2020 a resolution of Council was passed authorising Council Officers to undertake negotiations with the Applicant.
The following site history is relevant:
1. Per Court Order dated 9 March 2016, Condition 12.1 required the applicant to make payment of $561,000.00 prior to the commencement of the use.
2. Prior to completion of the work, the relevant period expired.
3. An extension of time request for an additional twelve (12) months to development permit 20130972 was lodged on 9 March 2020 and approved on 13 May 2020.
4. Section 119 of the Planning Act 2016 required Council to issue an Infrastructure Charges Notice calculated at current applicable rates.
Council’s position is as follows:
5. An infrastructure charge has been levied in accordance with Council’s Adopted Infrastructure Charges Resolution on 13 May 2020 in the amount of $1,068,796.80.
6.An amount of $561,000.00 was paid on 18 March 2020, leaving a balance payable on infrastructure charge reference 20130972 of $507,796.80.
7.In addition, an infrastructure charge, reference 20110541, levied on 22 May 2012 in the amount of $720,000.00, remains outstanding. (On 26 March 2020 Council wrote to the Applicant, via it’s [sic] representative, requesting confirmation of payment of the infrastructure charge. To date a formal response has not been received by Council).
8. Per section 119 of the Planning Act, 2016, Infrastructure charges are a rate on the land and bind successors in title. This information would have been provided in a Planning and Development Certificate had one been applied for.
9.Council calculates the total outstanding unpaid infrastructure charge for the site to be $1,227,796.80.
10.An initial settlement offer made by the applicant’s representative on 29 April 2020 based on an equivalent amount to a CPI increase on $561,000.00 is not acceptable to Council.
Council is aware that the applicant wished to settle this matter quickly, and in good faith offers the following:
11.Council will not entertain any technical arguments which are no longer supported under current legislation. This will save unnecessary work.
12.If the owner acknowledges the total outstanding debt of $1,227,796.80 Council will entertain settlement terms over an agreed period.
…
Three comments can be made about this letter:
(a)First, read with Mr Murray’s statement, it explains the difference between the amount of $561,000, which was to be paid prior to the commencement of the use referred to in the Council’s letter, and the much larger amount in the 2014 approval. It is evident that there were Planning and Environment Court proceedings, which were resolved on 9 March 2016, that set the amount of the infrastructure payment prior to the commencement of use at $561,000.
(b)Second, it identifies that the Council asserted a right under the Planning Act 2016 (Qld) to make a condition on the extension application, increasing the amount of the infrastructure contribution as a condition of the use to $1,068,796.80. It appears that the $561,000 was paid about a week after the extension application was lodged, but that Sodexo was disputing the Council’s right to impose an additional amount by way of infrastructure charge as a condition of the extension.
(c)Third, the Council asserted that the $720,000 had not been paid and that, pursuant to s. 119 of the Planning Act 2016 (Qld), infrastructure charges were a rate on the land and bound successors in title, with the consequence that it was Sodexo, as the registered owner, which was obliged to pay that sum.
The response to that letter was sent by Emanate Legal on 16 June 2020 on behalf of Sodexo. The summary of its position is as follows:
…
Executive Summary
By letter dated 29 May 2020, Council advises, despite representations made by GHD to the contrary, Sodexo is required to pay further infrastructure charges for Stage 3 of the development over the Land in the amount of $507,796.80 in reliance upon section 119 of the Planning Act 2016 (Planning Act).
Sodexo rejects this position in its entirety based on representations already made by GHD in the period 13 May 2020 to 29 May 2020 and enunciates:
·IC have been paid by Sodexo in the amount of $561,000 in accordance with Condition 12.1 of the Negotiated Decision Notice, attached to the Final Court Order of Planning and Environment Proceeding 175 of 2015 (Final Orders) for Development Application 20130972 for Stage 3.
·Council’s IC Notice in the levied amount of $1,068,796.80 is an unreasonable imposition on the development and is not reasonably required in respect of the development.
·Council have not provided evidence, justification or reason of how the IC are distributed across the infrastructure networks to warrant and [sic] additional $507,796.80 above that already paid by Sodexo for Stage 3.
·The outstanding amount of $720,000 associated with Stage 2 of the development (approved by way of Negotiated Decision Notice on 22nd May 2012) is rejected in totality.
The IC Notice for payment of $1,068,796.80 attached to the Decision Notice is erroneous, without foundation or merit and significantly more than the network establishments costs that can be reasonably apportioned to Stage 3 of the development on the Land.
…
After the above, the Emanate Legal letter went on to complain about the higher amount and to articulate, at length, reasons why the imposition of the additional sum of infrastructure contribution for the extension could not be justified. At page 14 of the letter, the only mention of the $720,000 appears as follows:
…
Stage 2
Council states that there is an outstanding amount of $720,000 associated with Stage 2 of the development (approved by way of Negotiated Decision Notice on 22nd May 2012).
Sodexo rejects this position in its entirety.
Furthermore, in response to the comment by Council in its 29 May 2020 correspondence wherein Sodexo is advised:
“…Infrastructure charges are a rate on the land and bind successors in title. This information would have been provided in a Planning and Development Certificate had one been applied for.”
Sodexo did obtain a Town Planning Certificate which did not show any outstanding rates or charges over the Land. A copy of same is attached at Schedule Six.
We request Council deliver a copy of all communications to/from Morris Corporation and/or Sodexo requesting Stage 2 Infrastructure Charges be paid.
…
In response to that letter, McCullough Robertson wrote on behalf of the Council. The contents of that letter also primarily dealt with the increase in the infrastructure charges. At page 5 of the letter, it stated:
…
The outstanding $720,000 point
39On 4 April 2013, Council approved the development application for material change of use to authorise the expansion of the existing facility on the Site to add 192 accomodation units and ancillary uses (Stage 2 Approval).
40The Stage 2 Approval required, under condition 17.1, payment of $720,000 prior to the commencement of the use. Reference is made in that condition to Table 2 of the Whitsunday Regional Council Adopted Infrastructure Charges Resolution No 2 of 2011. However, that resolution did not apply to the Site. The Bowen Shire Council Adopted Charges Resolution No 2 of 2011 did apply to the former Bowen Shire Council local government area but no adopted charge applied to the Site as it was outside of the PIA boundary under Map 1 of that resolution. Condition 17.1 of the Stage 2 Approval, at law, was an additional payment condition under section 650(1)(a)(iii) and (b) of SPA.
41We are instructed that the material change of use authorised by the Stage 2 Approval has commenced but the payment required under that condition has not been made.
42Based on this fact, Your Client has committed a development offence under section 164 of the PA which is a continuing offence while that payment remains outstanding.
43In this respect, we wish to clarify a statement made in Council’s 29 May 2020 letter. Council is not saying that the figure of $720,000 is a rate on the Site. That could only potentially apply to a ‘levied charge’ under an infrastructure charges notice. However, this is not the case for a condition under the Stage 2 Approval.
44What Council is saying is that while the infrastructure charge of $720,000 under the Stage 2 Approval remains outstanding, Your Client is committing a development offence under the PA.
45Your Letter purportedly provides an excuse that this amount did not show up in a rates search undertaken by Your Client. That is not surprising for the reasons we have noted above because the amount is not a rate.
46A further excuse is provided in Your Letter that this amount did not show up in a Town Planning Certificate. Again, that is not surprising because only a limited planning and development certificate was sought under section 738 of SPA.
…
In paragraphs 47 to 49, the Council made clear, through its solicitors, that the Council was investigating the commission of the development offence by Sodexo and reserved its rights. McCullough Robertson put forward, in Attachment A, a settlement proposal. It is not necessary to set it out here. In the course of argument, I suggested it was not much of a settlement. I adhere to that view. It required Sodexo to pay the $720,000 promptly. It proposed that the Council and Sodexo enter into an infrastructure agreement, but the effect of that agreement was to vindicate the Council’s demand for an additional $507,000 for the infrastructure charges for Stage 2 and, if those things happened at the times the Council specified, it would permit occupation of the Stage 2 and Stage 3 units.
I note that, of course, the Council could have sought an injunction if amounts due were not paid, which were a condition of the use to prevent the premises being used. Although, I am not saying such an injunction would have succeeded.
Reading that material as a whole, I am not able to identify any credible basis that could have been advanced by Sodexo as to why it was not required to pay the $720,000. That is not to say there might not have been one, and I will deal with that soon.
In any event, on 14 July 2020, Sodexo, through its solicitors, obtained advice from counsel. Like the correspondence with the Council, it was mostly concerned with the validity of the purported increase in the Stage 3 charges. The barrister opined, however, that assuming clause 17.1 was in the terms he assumed (which it was), the obligation did attach to the land and successors in title and Sodexo was liable for the payment and that, so long as Sodexo used the Stage 2 works without having paid it, it was in breach of s. 164 of the Planning Act 2016 (Qld) and liable to be prosecuted. Counsel advised Sodexo to pay the money as soon as possible.
There was thereafter some correspondence promptly exchanged, which resulted in a settlement largely on the terms originally proposed by McCullough Robertson, but with a little bit more breathing space in terms of the time for payment of the $720,000. Mr Murray, general counsel for Sodexo, gave evidence that he negotiated the longer period so that he had time to further investigate whether Sirrom had paid the amount. He said in cross-examination that he dealt with Counsel first, because he had received detailed books and records and had been unable to locate any evidence of the payment. But he bought himself or his company some time, he thought, to try and extract the money from Sirrom.
On 30 July 2020, Mr Murray wrote to a representative of Sirrom, setting out what had passed with the Council, asking Sirrom to look into their books and records to see if they could find evidence of proof of payment, notifying Sirrom that Sodexo intended to pay the charge if evidence of payment was not received by 7 August 2020, and stating that that was going to be done because of the consequences of breaching clause 17.1 of the 4 April approval. Mr Murray also sought, on behalf of Sodexo, reimbursement of funds if required to be paid under clause 10.6 of the BPA.
Mills Oakley responded on 3 August 2020, asserting that Sirrom was confident in its view that the infrastructure charge was not due and payable at all and that, on the proper construction of clause 10.6, the charge was not an amount that could be recovered under clause 10.6, in any event. It is uncontentious that ultimately no evidence of payment was located, that Sodexo paid the $720,000 in accordance with the arrangement with the Council and that demands from Sirrom for its reimbursement under the BPA were rejected.
THE ISSUES AT TRIAL
On 12 January 2021, these proceedings were commenced. An amended defence was filed on 28 June 2021. A reply was filed on 16 July 2021. Not long after that, it was placed on this list and set down for trial. I do not have to concern myself with the pleadings as the issues were effectively articulated in the outlines and in oral argument and there are no factual issues in dispute. As I have said, only one witness was called: Mr Murray. He was cross-examined on the evolution of the settlement agreement. An agreed bundle was tendered, supplemented in one respect by a document exhibited to an affidavit of the plaintiff’s solicitors, the relevance of which I will come to.
The ultimate issue is whether the relevant defendant of Sirrom is obliged to reimburse Sodexo for the infrastructure sum. Thus, the real action in the case is driven by the defendants. The plaintiff says that there is an obligation on Sirrom under the BPA to pay this sum under either clause 10.6 or clause 11.4, read with clause 11.1 and the relevant definitions set out above.
For the sake of convenience, clause 10.6 provides:
10.6 Payments for supplies relating to periods before the Effective Time
If, after the Effective Time, the Buyer makes any payments for goods or services which have been supplied to or received by the Business and other outgoings and similar amounts paid in arrears in respect of the Business, including without limitation any rates, taxes, charges and other outgoings in relation to Collinsville Village, before the Effective Time, the Sellers’ Representative must reimburse the Buyer for any such payments within 5 Business Days after receiving evidence from the Buyer of the relevant payment.
Clauses 11.1 and 11.4 provide:
11.1 Excluded Liabilities
(a) The Sellers remain liable for all Excluded Liabilities.
(b) The Sellers indemnify the Buyer from and against any Excluded Liability.
11.4 Reimbursement to Buyer
The Sellers must reimburse the Buyer for amounts paid by or on behalf of the Buyer for any Excluded Liabilities within 5 Business Days of receiving evidence of payment.
The onus lies on the plaintiff to demonstrate that the sum is payable under the BPA. However, the defendants allege that the infrastructure sum is not payable under the contract on its proper construction in respect of clause 10.6, because it does not fall within the scope of that section properly construed, and in respect of clause 11.1, read with clause 11.4, for the same reason.
The defendants also allege, by way of a matter of true defence in respect of which the onus lies on the defendants, that the infrastructure charge, whether it was payable under the contract or not, is not reimbursable because conditions 17.1 and 18.1 were void, and accordingly gave rise to no legal obligation on Sodexo to pay it. That was said to arise for two reasons:
(a)Because the condition failed to comply with requirements of s. 650(2) Sustainable Planning Act 2009 (Qld) (SPA) in a manner which rendered the condition absolutely void and of no effect and, therefore, incapable of imposing any legal obligation to pay (the void condition issue); and
(b)Because the charge was imposed by reference to, and in reliance on, an instrument of the Council, which was not applicable to the Collinsville Property (the inapplicable instrument issue).
The most difficult of the issues that arise in the case is the void condition issue. I will leave that issue until last.
THE INAPPLICABLE INSTRUMENT ISSUE
I want to start with the argument that the charge was invalid because it was imposed by reference to an inapplicable instrument of the Council in respect of the infrastructure charges. This point could be a complex one if it was necessary for me fully to understand the character of the adopted infrastructure charges resolution. Fortunately, it is not.
In broad terms, a local authority in Queensland can, by resolution, adopt certain State infrastructure provisions in respect of particular kinds of development in particular areas. There is, in evidence, two of these relevant to this case. One is attached to the affidavit of Ms Hsieh, who exhibits Adopted Infrastructure Charges Resolution (No. 2 of 2011), Bowen Shire Planning Scheme, adopted by the Council, which had effect on and from 10 August 2011. Relevantly, it adopts infrastructure charges for short-term accommodation in the amount of $3750 per dwelling unit. About 18 months later, the Council adopted another such instrument, which had effect from 1 January 2013, and provided for a higher amount of its infrastructure contribution for this kind of accommodation, or a potentially higher amount. It provided for an adopted infrastructure charge for this kind of accommodation of $7201.90.[2]
[2] See page 7 of tab 1 of the bundle.
What is clear is that both instruments only applied to a priority infrastructure area, which did not include the area where Collinsville Village was located. The argument advanced by Mr Martin QC, who appeared with Ms Spottiswood for the defendants, was that the second instrument of 1 January 2013 not only did not apply to the Property, but also never provided for the amount identified, and therefore, the condition was invalid or ineffective. (The latter submission was answered by Ms Hsieh’s affidavit, which the defendants were unaware of when they made that submission in writing.)
I do not think that submission is correct, because of the role of the instrument in the infrastructure charge clause. Each of conditions 17.1 and 18.1 read:
To facilitate this increased demand the adopted Infrastructure charge from Table 2 “Whitsunday Regional Council Adopted Infrastructure Charges Resolution No2 of 2011” Accomodation (Short term) is $3,750 per dwelling unit.
The first thing to note is that $3,750 is the amount in the earlier instrument for this kind of dwelling unit. Secondly, I do not think it makes any difference that the instruments did not apply to this location. What the infrastructure charge condition is saying is that Council is adopting the infrastructure charge in that instrument in calculating the infrastructure charge to be imposed under s. 650 SPA in this case. I do not think it matters what the subjective reasoning process of Council officers might have been in using that phrasing. To me, that is objectively what it means and, frankly, the instrument provides some rational basis for settling on the figure. So, I do not think that argument by the defendants is correct.
THE CONSTRUCTION ARGUMENTS
The next matter to be resolved is, assuming the conditions were valid, whether there was an obligation under the BPA for Sirrom to reimburse Sodexo for the payment.
Clause 10.6 does not apply to the infrastructure liability
Sodexo first relies on clause 10.6. At first blush, one might think that clause does respond to this cost. The statute makes the infrastructure payment a rate and it is the case that, at the time payment was called for, it was literally in arrears (as in overdue). However, on balance, I am not persuaded that this particular sum is caught by clause 10.6.
Relevantly to this case, the clause provides that if, after the Effective Time, the buyer makes any payments for outgoings paid in arrears in respect of the Business, the seller has to reimburse the buyer. There is not much doubt that this is an amount in respect of the Business. And I will come to that other point in a minute. There is not much doubt that it falls within the description of a rate, because it is defined by the statute to be a rate or to be treated as a rate.
The difficulty I have is that the phrase “outgoings and similar amounts paid in arrears” seems to me to contemplate periodic amounts payable in respect of the business which are chargeable in arrears, that is, after the expiry of the period. That construction, I think, gives meaning to the words “outgoings…paid in arrears” and it is consistent with the context of the clause, which is concerned with payments for goods or services which have been received or supplied to the Business, and other outgoings and similar amounts paid in arrears in respect of the Business.
It seems to me that the clause is concerned with amounts which relate to specific supplies of goods and services to the Business, which, as I said, are due and payable in arrears. I do not think that the inclusive phrase after that changes that construction. Indeed, rates, as we all know, are payable in respect of identified periods, as are taxes, and so on. It does not seem to me, for those reasons, that this amount (which is a one-off amount unrelated to any ongoing business activities and not payable in arrears in the sense used in that clause, but just wrongly unpaid) falls within clause 10.6. This is a convenient point to deal with another argument advanced by the defendants.
The infrastructure liability is “in respect of the Business”
In respect of both clauses, the defendants contended that the infrastructure obligation was not an amount “in respect of the Business” and therefore not within either clause.
The argument began by focussing on the exclusive definition of the Business to mean the Contracts Business of providing catering and ongoing services for, effectively, board and lodgings for resources, defence and construction workers, and the portion of the Commercial Business of the sellers of providing third party accommodation facilities in remote areas operated from Collinsville Village. The definition of Business Assets expressly includes Collinsville Village, which is defined as the Property.
The defendants’ submission is that the infrastructure cost was a cost relating to the Collinsville Village Property, not the Commercial Business of providing third party accommodation facilities from the village built on that Property. My immediate response to that proposition was: how can the Business be something different from the Business Assets, especially where the definition of Business is the Contracts Business and the Commercial Business as conducted using the Business Assets. Further, one might wonder what the Business could comprise apart from the Business Assets, especially given the plenary definition of that phrase.
Mr Martin QC bravely contended that the Business Assets were different from the Business because the contract, in various places, distinguished between the Business and the Business Assets. I reject that submission for three reasons.
First, I do not think that it is a commercial construction of the contract. I think commercial people would be very surprised by the notion that a business, which is expressly defined as meaning certain activities conducted using certain assets, does not include those assets as part of the business. The use of the phrase “Business and Business Assets” in some parts of the BPA does not objectively communicate, in my view, that the Business Assets are somehow something different from, and not included, in the Business.
Second, both clauses 10.6 and 11.1 (which read in the definition of Excluded Liabilities) refer not just to “liabilities of the Business”, but to liabilities “in respect of the Business”. So clause 10.6 refers to “outgoings and similar amounts paid in arrears in respect of the Business”. And as we will see, the definition of Excluded Liabilities, which is read into clause 11.1, refers to an obligation owed by the sellers “in respect of the Business”. “In respect of” is a phrase well-known to the law. It denotes a connection. The precise scope and the nature of the connection is to be determined from the circumstances in which the words are used, although ordinarily, they are construed as broadening the scope of the connection between two matters.[3]
[3] Butler v Johnston & Others (1984) 4 FCR 83 at 87.
Here, it seems to me that by saying, for example, that an “Excluded Liability means all debts … in respect of the Business”, it is an orthodox construction to read that more widely than just as debts of the Business. And given the place that the Business Assets have in the very existence of the Business, a liability in respect of the Business Assets would, on the proper construction of the contract, be a liability in respect of the Business for clauses 6.1 and 11.1.
Third, Mr Savage QC submitted that, whatever view one might take of the distinction between Business and Business Assets contended for in the construction of the contract, the liability here related to the use of the premises for providing third party accommodation, which was the defined character of the Commercial Business and, therefore, it was in respect of that Business. I agree with that submission.
For those reasons, I reject the argument that the liability, assuming it existed, was one which was not in respect of the Business, where that phrase is used in clauses 10.6 and 11.1 (reading in the definition of Excluded Liabilities). The consequence of that conclusion does not change my view that, on balance, clause 10.6 is not applicable to this infrastructure obligation. But that is a pyrrhic victory for the defendants because the next question is whether this liability falls within clause 11.1, and it does.
Clause 11.1 applies to the infrastructure liability
Clause 11.1 makes the defendants liable for Excluded Liabilities, defined to mean “all debts, liabilities and obligations owed by the Sellers in respect of the Business as at the Effective Time”. The only argument which was ultimately advanced as to why, if valid, the infrastructure liability did not fall within clause 11.1 was the proposition that the liability was not in respect of the Business. I have already rejected that proposition.
Given that conclusion, Sodexo is entitled to reimbursement under clause 11.1 in respect of the $720,000 it paid. In particular, that is an entitlement to being reimbursed for that amount within five business days of receiving evidence of payment. It is not disputed that five business days have long passed since evidence of payment was provided.
The only remaining issue is Sirrom’s contention that the infrastructure condition was void and therefore gave rise to no liability of any kind upon which clause 11.1 could fasten.
IS THE INFRASTRUCTURE CONDITION VOID?
It is unfortunately necessary to first set out some provisions of the SPA. The starting point is Chapter 6, titled “Integrated Development Assessment System”, which regulates the application for development permits and their assessment and approval. It deals with different stages of the process. Part 5 of Chapter 6 deals with the decision stage of the process, beginning at s. 308. Amongst other things, it provides, in respect of conditions in Division 6 of Part 5, as follows:
Division 6 Conditions
344 Application of div 6
This division applies to each condition in a development approval whether the condition is a condition–
(a)a concurrence agency directs an assessment manager to impose; or
(b)decide by an assessment manager; or
(c)attached to the approval under the direction of the Minister.
345 Conditions must be relevant or reasonable
(1) A condition must–
(a) be relevant to, but not an unreasonable imposition on, the development or use of premises as a consequence of the development; or
(b) be reasonably required in relation to the development or use of premises as a consequence of the development.
(2) Subsection (1) appies despite the laws that are administered by, and the policies that are reasonably identifiable as policies applied by, an assessment manager or concurrence agency.
346 Conditions generally
(1)A condition may–
(a)place a limit on how long a lawful use may continue or works may remain in place; or
(b)state a development may not start until other development permits or compliance permits, for development on the same premises, have been given or other development on the same premises, including development not covered by the development application, has been substantially started or completed; or
(c)require compliance with an infrastructure agreement relating to the land; or
(d)require a document or work to be subject to compliance assessment; or
(e)require development, or an aspect of development, to be completed within a particular time; or
(f)require the payment of security under an agreement under section 348 to support a condition mentioned in paragraph (e).
(2)A condition imposed under subsection (1)(c) is taken to comply with section 345.
Note–
See chapter 8, part 1 for other conitions that may be imposed on a development approval.
347 Conditions that can not be imposed
(1)A condition must not–
(a)be inconsistent with a condition of an earlier development approval or compliance permit still in effect for the development; or
(b)for infrastructure to which chapter 8, part 1 applies, require (other than under chapter 8, part 1)–
(i)a monetary payment for the establishment, operating and maintenance costs of the infrastructure; or
(ii)works to be carried out for the infrastructure; or
…
As far as I can determine, these are the statutory provisions that regulate conditions in a development approval of the kind here, which is decided by an assessment manager. Section 347(1)(b) provides in effect that a condition under that section cannot impose a charge for infrastructure dealt with specifically by the SPA in the part identified. Turning to Chapter 8 Part 1, it contains extensive provision for the imposition of infrastructure charges in respect of development applications.
Fortunately, again, it does not seem necessary fully to analyse its elegant structure. It provides different statutory schemes for seeking to recover trunk infrastructure costs.
Division 4 deals with trunk infrastructure funding under an infrastructure charges schedule. Division 5 contains provisions for trunk infrastructure funding under a regulated infrastructure charges schedule. Division 5A contains a scheme for trunk infrastructure funding and related matters which provides for adopted infrastructure charges. Each of these provides that an infrastructure charge levied under them is taken to be a rate for the purpose of recovery.
A further scheme for recovering infrastructure costs is Division 6, which deals with conditions which may be imposed for necessary trunk infrastructure, and finally, Division 7 deals with conditions local governments may impose for additional trunk infrastructure costs. It is common ground that this Division is the only one which can sustain the infrastructure charge imposed as a condition on the approvals in this case. It is worth noting, before I go to that, that trunk infrastructure is, relevantly for this case, development infrastructure, defined in Schedule 3, as being:
Development infrastructure means–
(a)land or works, or both land and works, for–
(i)urban and rural residential water cycle management infrastructure, including infrastructure for water supply, sewerage, collecting water, treating water, stream managing, disposing of waters and flood migration, but not urban and rural residential water cycle management infrastructure that is State infrastructure; or
(ii)transport infrastructure, including roads, vehicle lay-bys, traffic control devices, dedicated public transport corridors, public parking facilities predominantly serving a local area, cycle ways, pathways, ferry terminals and the local function, but not any other function, of State-controlled roads; or
Note–
The chief executive administering the Transport Infrastructure Act may make guidelines defining the local function of State-controlled roads.
(iii)public parks infrastructure supplied by a local government, including playground equipment, playing fields, courts and picnic facilities; or
(b)land, and works that ensure the land is suitable for development, for local community facilities, including, for example–
(i)community halls or centres; or
(ii)public recreation centres; or
(iii)public libraries.
That definition is broad and is apt to include land or works which might be located on the property the subject of a development approval at the more basic level, but might also include substantial public utilities located far from the relevant property. That has some relevance to Sirrom’s construction argument: see paragraph [70] below.
As I have said, it is agreed that this rate or this infrastructure charge was levied under Division 7 and in particular s. 650 SPA which relevantly provides:
650 Conditions local governments may impose for additional trunk infrastructure costs
(1)A local government may impose a condition requiring the payment of additional trunk infrastructure costs only if the development–
(a)is–
(i)inconsistent with the assumptions about the type, scale, location or timing of future development stated in the priority infrastructure plan; or
(ii)for premises completely or partly outside the priority infrastructure area; and
(b)would impose additional trunk infrastructure costs on the infrastructure provider after taking into account either or both of the following–
(i)infrastructure charges, regulated infrastructure charges or adopted infrastructure charges levied for the development;
(ii)trunk infrastructure supplied, or to be supplied by the applicant or person who requested compliance assessment under divisions 4 to 6.
(2)A condition mentioned in subsection (1) must state each of the following–
(a)why the condition is required;
(b)the amount of the payment required;
(c)details of the infrastructure for which the payment is required;
(d)when the payment must be made;
(e)the person to whom the payment must be made;
(f)the applicant or person who requested compliance assessment may elect to supply all or part of the infrastructure instead of making payment for the infrastructure to be supplied;
(g)if the applicant or person who requested compliance assessment makes an election under paragraoh (f)–
(i)any requirements for supplying the infrastructure; and
(ii)when the infrastructure must be supplied.
(3)Unless the applicant, or person who requested compliance assessment, and the infrastructure provider otherwise agree in writing, for subsection (2)(d), the payment must be made–
(a)if the trunk infrastructure is necessary to service the premises–by the day the development, or work associated with the development, starts; or
(b)if the trunk infrastructure is not necessary to service the premises–
(i)for reconfiguring a lot–before the local governmemt approves the plan of subdivision for the reconfiguration; or
(ii)for other development–before the use commences.
(4)Subsection (5) applies if–
(a)a development approval or compliance permit no longer has effect; and
(b)a payment for the additional trunk infrastructure costs has been made; and
(c)construction of the infrastructure has not substantially commenced before the approval or permit ceased having effect.
(5)The local government must repay to the person who made the payment any part of the payment the locaql government has not spent, or contracted to spend, on the design and construction of the infrastructure.
(6)A condition imposed under this division complies with section 345 or 406, to the extent the trunk infrastructrure is necessary, but not yet available, to service development, even if the infrastructure is also intended to service other development.
(7)A local goevrnemnt may not impose a condition under this division for a supplier of State infrastructure.
(8)Nothing in this division stops a local government from–
(a)levying a charge for the establishment cost of the component of the trunk infrastructure network included in an infrastructure charges schedule or adopted infrastructure charges resolution; or
(b)imposing a condition for non-trunk infrastructure; or
(c)imposing a condition for necessary trunk infrastructure.
Sirrom’s argument arises from the failure of the condition to include a statement of the matters in (f) and possibly (g). Comparing s. 650(2) to condition 17.1 above, it can be seen that the condition addresses the requirements in s. 650(2)(a) to (e) as follows. It states:
(a)Why the condition is required: the condition states that the development results in increased demand on councils, and so on.
(b)The amount of the payment: $720,000.
(c)The details of the infrastructure for which the payment is required: again, see the first paragraph of the condition.
(d)When the payment must be paid: that is identified not by a date, but by an event being prior to the commencement of the use.
(e)The person to whom it must be paid: although that is not expressly stated in condition 17, the defendants do not contend there is any doubt about that.
What is uncontentiously admitted is that condition 17.1 does not contain anything stating the applicant may elect to supply all or part of the infrastructure instead of making payment for the infrastructure as required by s. 650(g).
The defendants contend that the failure to include a statement of that matter makes condition 17.1 void, with the consequence that there was no legal obligation on Sodexo to pay it and, therefore, no entitlement under the BPA for Sodexo to recover it. The arguments advanced for that proposition start, not surprisingly, with the statement in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 388-391 [91]-[93]:
[91]An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.
[92]Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority. Cases falling within the first category are regarded as going to the jurisdiction of the person or body exercising the power or authority. Compliance with the condition is regarded as mandatory, and failure to comply with the condition will result in the invalidity of an act done in breach of the condition. Cases falling within the second category are traditionally classified as directory rather than mandatory. In Pearse v Morrice, Taunton J said' 'a clause is directory where the provisions contain mere matter of direction and nothing more". In R v Loxdale, Lord Mansfield CJ said "[t]here is a known distinction between circumstances which are of the essence of a thing required to be done by an Act of Parliament, and clauses merely directory". As a result, if the statutory condition is regarded as directory, an act done in breach of it does not result in invalidity. However, statements can be found in the cases to support the proposition that, even if the condition is classified as directory, invalidity will result from non-compliance unless there has been "substantial compliance" with the provisions governing the exercise of the power. But it is impossible to reconcile these statements with the many cases which have held an act valid where there has been no substantial compliance with the provision authorising the act in question. Indeed in many of these cases, substantial compliance was not an issue simply because, as Dawson J pointed out in Hunter Resources Ltd v Melville when discussing the statutory provision in that case: "substantial compliance with the relevant statutory requirement was not possible. Either there was compliance or there was not."
[93]In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood in criticising the continued use of the "elusive distinction between directory and mandatory requirements" and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute".
The gravamen of that decision is that whether an act done in breach of a condition regulating the exercise of a statutory power is invalid depends on whether, read objectively, one can discern a legislative intention to invalidate any act that fails to comply with that statutory condition. In determining that, regard must be had not just to the language of the provision, but the language, scope, and objective of the whole statute. Sirrom’s submissions on this issue are set out at paragraphs 23 to 33 of its submissions. Those submissions focus on the specific language of the provision, which includes the word “must” in s. 650(2) SPA, introducing what must be stated, and the importance of the right identified in s. 650(2)(f) to an applicant receiving such a notice. Sirrom also relies on Gold Coast City Council v Sunland Group Ltd [2019] QCA 118, which Sirrom submits supports that construction.
To my mind, those submissions do not sustain the conclusion, on their own or in the context of the Act as a whole, that this condition was invalid. The reasons for that are as follows.
First, it is true that the requirements of s. 650(2) are introduced with the word “must”. I think that, by itself, is a modest indication of an intention of Parliament to make such a condition invalid if it does not state all of the matters identified there.
Second, the requirement that the condition must state each of those matters must be considered in the context of s. 650(1), which gives the local government a discretion about whether to impose a condition at all. Again, a modest indication, I think, that the mandatory terms of s. 650(2) do not lead to invalidity. I think both matters are minor in the scheme of things. It is true that, as they contend, the Parliament intends to permit a person to elect to supply all or part of the infrastructure, and it seems the obligation to notify of that right to so elect seems to be the only place in the Act where any such right exists. I find it peculiar that the statute would deal with such a matter in that way. But no one can point me to another provision which states the substantive right which, in turn, councils are supposed to notify a person about. It does not, however, strike me that that right is particularly fundamental to the operation of the statutory scheme in the context of the statutory scheme, although that is a consideration.
One of the difficulties in seeing s. 650(2)(f) as mandatory, such that failure to comply gives rise to invalidity, is that the application of s. 650(2)(f) has some practical difficulty in many cases. If the infrastructure charges were in respect of broad infrastructure pressure or costs relating to external water supply networks, sewerage treatment plants and reticulation, and so on, it is impossible to see how an applicant could elect to supply all or part of that infrastructure. Looking at the details of the infrastructure, for which payment is required in this particular case, none of the identified infrastructure would likely be located on the Collinsville Village site. And none of it seems to me, necessarily, to identify specific work that an applicant could elect to carry out.
The application then of s. 650(2)(f) seems to be a little bit different from (2)(a) to (e). Subsections 2(a) to (e) are obviously essential for someone to be able to work out what they are required to do and why. If there was a mandatory character to the obligations under s. 650(2), such that if they were not complied with, they would be invalid, the argument would be much stronger for subsections (a) to (e) than for (f). And I see no particular reason why, depending on the circumstances, all of the conditions for the exercise of a power must be essential if some of them are.
Third, the matters I have been speaking about so far, however, seem to me to be quite secondary compared with the broader statutory context in which this question of validity falls to be assessed.
In summary, the provision in the SPA for, effectively, de novo review of any decision and any condition in a development approval and express recognition of the power of the Court to deal with non-compliance with provisions of the Act, seem to me to compel the conclusion that none of the conditions in s. 650(2) are so essential as to go to validity. Now, of course, if a condition does not identify an amount to be paid, when it is to be paid, or who it is to be paid to, then it could be argued that no condition has been imposed at all that identifies any specific obligation. This is not dissimilar to the way Sunland turned out in the High Court.[4] However, where sufficient particulars are included in a condition to identify an obligation, I think the provisions of Chapter 7 of the SPA (and, in particular, Chapter 7, Part 1, through to Division 8) compel a conclusion that non-compliance with all the conditions in s. 650(2) does not render the condition invalid. Chapter 7 deals with appeals, offences, and enforcement. It relevantly provides, by s. 436:
[4] Sunland Group Limited v Gold Coast City Council [2021] HCA 35, at least in the sense that the infrastructure conditions in that case were construed as not imposing any liability to pay infrastructure costs.
436 Jurisdiction of court
(1)The court has the jurisdiction given to it under any Act, including the jurisdiction to hear and decide every appeal made under this Act for the review of a decision of a building and development committee.
(2)Subject to section 508, the jurisdiction given to the court under this Act is exclusive.
(3)Subject to division 14, every decision of the court is final and conclusive and is not to be impeached for any informality or want of form or be appealed against, reviewed, quashed or in any way called into question in any court.
(4)If a proceeding comes before the court under another Act, subsection 3 applies subject to the other Act.
Importantly, by s 440:
440 How court may deal with matters involving noncompliance
(1)Subsection (2) applies if the court finds a provision of this Act, or another Act in its application to this Act, has not been complied with, or has not been fully complied with.
(2)The court may deal with the matter in the way the court considers appropriate.
(3)To remove any doubt, it is declared that this section applies in relation to a development application that has lapsed or is not a properly made application.
And in respect of appeals to the Court relating to development applications and approvals:
461 Appeals by applicants
(1)An applicant for a development application may appeal to the court against any of the following–
(a)the refusal, or the refusal in part, of the development application;
(b)any condition of a development approval, another matter stated in a development approval and the identification or inclusion of a code under section 242;
(c)the decision to give a preliminary approval when a development permit was applied for;
(d)the length of a period mentioned in section 341;
(e)a deemed refusal of the development application.
(2)An appeal under subsection 1(a), (b), (c) or (d) must be started within 20 business days (the applicant’s appeal period) after–
(a)if a decision notice or negotiated decision notice is given–the day the decision notice or negotiated decision notice is given to the applicant; or
(b)otherwise–the day a decision notice was required to be given to the applicant.
(3)An appeal under subsection (1)(e) may be started at any time after the last day a decision on the matter should have been made.
And by Division 13, the Court process for appeals:
495 Appeal by way of hearing anew
(1)An appeal is by way of hearing anew.
…
496Appeal decision
(1)In deciding an appeal the court may make the orders and directions it considers appropriate.
(2)Without limiting subsection (1), the court may–
(a)confirm the decision appealed against; or
(b)change the decision appealed against; or
(c)set aside the decision appealed against and make a decision replacing the decision set aside.
(3)If the court acts under subsection (2)(b) or (c), the court’s decision is taken, for this Act, other than this division, to be the decision of the entity making the appealed decision.
(4)If the appeal is an appeal against the decision of a building and development committee, the court may return the matter to the committee with a direction that the committee make its decision according to law.
The powers of the Planning and Environment Court, and the nature of the appeal created by the statute, are to be contrasted with the more confined basis of appeal from that Court to the Court of Appeal as set out in ss. 498 to 500. It seems to me the effect of those provisions is as follows.
Section 440 seems directly to engage the circumstance identified in this case, as Sirrom articulates it, in that s. 650(2) has not been fully complied with. If that happens, there is an express power in the Court (no matter how a matter gets before it, it seems) to deal with the matter in the way the Court considers appropriate. That could permit the Court to vary or set aside the condition, require the Council to provide further information, or anything else for that matter. To my mind, that provision is the death knell of the argument advanced by Sirrom.
I am fortified in that view by the observations of Morrison JA in Sunland in the Court of Appeal, particularly at [151] to [156], where his Honour relies on s. 440 SPA, to concludes that the defective information notices in that case were not void.
Equally problematic is that every person remotely connected to a development approval or a decision on a development application can appeal to the Planning and Environment Court. And that appeal is a hearing by way of hearing anew. That would mean that the Court would be able to exercise its own judgment about whether a condition, purporting to comply with s. 650(2) but not doing so comprehensively, should be confirmed, varied, set aside or dealt with in some other way or not imposed at all. It is well-known in the field of administrative law that breaches of natural justice are irrelevant where there is a full rehearing.[5] To my mind, this situation has some analogy to it. Breaches of the statutory preconditions for a condition under s. 650(2) are, it seems to me, not such as to make that condition invalid in circumstances where, if it is defective, inadequate or incomplete by reference to the statutory conditions, there is a rehearing available about that in the Planning and Environment Court which, when made, becomes the decision of the Council.
[5] Queensland Newsagents Federation Limited v Trade Practices Commission (1993) 46 FCR 38 per Spender J at 51 to 53.2, although I add to my ex tempore reasons the observation that the word “irrelevant” is not apt precisely to articulate the principle.
Fourth, I am not persuaded that failure to comply strictly with s. 650(2)(f) and possibly (g) makes the condition invalid because if it did, the potential is that there are numerous development approvals, not appealed by anyone involved, containing provisions about infrastructure charges (and, indeed, one would imagine many other matters), which are said to be void for non-compliance with statutory preconditions to the exercise of a power. If, in the world created by the SPA, such a thing was possible, one would imagine there must be some case where that proposition has been established. And neither party was able to put such a case before me, despite their searches. That sounds right, respectfully, in circumstances where development approvals have a somewhat public element to them. They permit changes of use of property, which can then be relied upon through chains of sale and licence, and lease by numerous people.
It seems to me, in that context, looking at the provisions in the statute overall for challenging conditions said to be invalid, and the express provisions of s. 440, that I am not persuaded by Sirrom’s arguments that failure to comply with s. 650(2) in an infrastructure condition makes that condition void.
For those reasons, I order judgment be entered for the plaintiff in the amount of $720,000.
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