Stream Focus Pty Ltd v City of Armadale
[2018] WASCA 196
•5 NOVEMBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: STREAM FOCUS PTY LTD -v- CITY OF ARMADALE [2018] WASCA 196
CORAM: BUSS P
MITCHELL JA
ALLANSON J
HEARD: 2 OCTOBER 2018
DELIVERED : 5 NOVEMBER 2018
FILE NO/S: CACV 17 of 2018
BETWEEN: STREAM FOCUS PTY LTD
Appellant
AND
CITY OF ARMADALE
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: SMITH J
Citation: STREAM FOCUS PTY LTD -v- CITY OF ARMADALE [2018] WASC 13
File Number : GDA 5 of 2017
Catchwords:
Planning and Development - Subdivisional development pursuant to conditional approval requiring construction and drainage of subdivisional roads - Power of responsible authority to impose further conditions in respect of proposed roads for the purpose of ensuring that the construction and drainage of the roads is consistent with the approval of the Western Australian Planning Commission - Whether conditions providing for defects liability period, performance bond and certificate of compliance were made for the authorised purpose
Legislation:
Planning and Development Act 2005 (WA), s170(3)
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | Mr M C Hotchkin |
| Respondent | : | Mr C A Slarke |
Solicitors:
| Appellant | : | Hotchkin Hanly |
| Respondent | : | McLeods |
Case(s) referred to in decision(s):
Minister for Immigration v Li [2013] HCA 18; (2013) 249 CLR 332
Minister for Immigration v SZVFW [2018] HCA 30; (2018) 92 ALJR 713
JUDGMENT OF THE COURT:
Summary
The appellant is undertaking a subdivisional development in Brookdale. The Western Australian Planning Commission granted subdivisional approval subject to conditions. One condition required that subdivisional roads be constructed and drained at the appellant's cost.
Further conditions were imposed by the State Administrative Tribunal, standing in the shoes of the respondent, on a review application. The conditions were purportedly imposed in the exercise of the respondent's power under s 170(3)(b) of the Planning and Development Act 2005 (WA) (Act). Section 170(3)(b) of the Act empowered the respondent to require the appellant to comply with such further conditions as the respondent thought fit to impose in respect of the proposed roads. By s 170(3)(b), that power was conferred for the purpose of ensuring that the construction and drainage of the roads is consistent with the Commission's approval.
The further conditions require the appellant to provide a bond on which the respondent may call for the purpose of repairing defects appearing in the roads over the 12 months after practical completion. The conditions also require the appellant to give the respondent a certificate of compliance in respect of the road works. In imposing these conditions, the Tribunal said it was satisfied that they were imposed for the authorised purpose. The Tribunal published written reasons for its decision.[1]
[1] Stream Focus Pty Ltd and City of Armadale [2017] WASAT 64 (Tribunal Decision).
The appellant appealed to the General Division of the Supreme Court. The relevant question of law raised by that appeal was whether the further conditions were beyond power on the basis that they were not imposed for the authorised purpose. The primary judge found that the Tribunal was clearly empowered to impose the further conditions. Her Honour refused leave to appeal and dismissed the appeal. The primary judge published written reasons for that decision.[2]
[2] Stream Focus Pty Ltd v City of Armadale [2018] WASC 13 (Primary Decision).
The appellant now appeals to this court against the primary judge's decision. The appeal to this court must be dismissed for the following reasons.
Statutory context
In Western Australia, there are three stages to the creation of new lots, which new lots can be the subject of dealings without further approval from the Commission.[3]
[3] See s 135 and s 136 of the Act.
At the first stage, the Commission may give its approval to the subdivision of lots 'subject to conditions which are to be carried out before the approval becomes effective'.[4] The Commission ordinarily does so by endorsing its approval on a plan of subdivision subject to conditions specified in a written approval. Subdivisional conditions are conditions precedent.
[4] Section 138(1) of the Act.
At the second stage, the developer complies with the subdivisional conditions. In doing so, the developer is generally taken to have approval under a relevant planning scheme for the carrying out of necessary works required by the conditions.[5]
[5] Section 157 of the Act.
At the third stage, the Commission endorses its approval on a diagram or plan of survey.[6] Before doing so the Commission must generally be satisfied that the subdivisional conditions have been complied with, or will be complied with at the time a certificate of title is created or registered.[7] As a matter of practice, the Commission generally relies on the advice of public authorities specified in the conditions confirming that the requirements of the subdivisional conditions have been fulfilled. Once the Commission has endorsed its approval on a diagram or plan of survey, the Registrar of Titles may create or register a new title for the new lots.[8]
[6] Section 145 of the Act.
[7] Section 145(4)(b) of the Act.
[8] Section 146 of the Act and s 166 of the Transfer of Land Act 1893 (WA).
A common form of subdivisional condition requires that the developer construct and drain roads connecting the new lots to the local road system. A developer may comply with such a condition by carrying out the construction and drainage 'at his or her own expense'.[9] If it does so, the developer must make a payment of either 1.5% or 3% of the estimated cost of the construction and drainage of the road. This is to cover the reasonable costs of the local government in supervising construction and drainage.[10] Alternatively, the developer may arrange for the local government to carry out the work on behalf of the developer, and at the cost and expense of the developer.[11]
[9] Section 158(1)(a) of the Act.
[10] Section 158(2) and s 158(3) of the Act.
[11] Section 158(1)(b) of the Act.
The local government may also require the developer to employ a consulting engineer and clerk of works to design and supervise the construction and drainage.[12]
[12] Section 158(4) of the Act.
The Commission is authorised to publish minimum standards of construction with respect to roads to be constructed on a proposed subdivision.[13] No such standards have been published.
[13] Section 169 of the Act.
Roads shown on a diagram or plan of survey deposited with the Western Australian Land Information Authority (Landgate) are dedicated as roads when the new certificates of title have been registered.[14] From that time, the local government within the district in which the dedicated roads are situated has the care, control and management of the roads.[15]
[14] Section 168(1) and s 168(4) of the Act.
[15] Section 168(2) and s 168(4) of the Act.
Section 170 of the Act
Under s 170 of the Act, before a developer of land subject to a local planning scheme commences to construct and drain a road shown on a diagram or plan of survey, it must give the local government:[16]
(a)drawings showing longitudinal and cross sections of the proposed road …; and
(b)specifications of the proposed road …; and
(c)such other information including information relating to levels, drainage, nature of soil, and physical features as the local government requires.
Failure to comply with this requirement is an offence.[17]
[16] Section 170(1) of the Act.
[17] Section 170(2) of the Act.
Section 170(3) of the Act provides:
The [local government] may by written notice require the person subdividing the land -
(a)to amend the drawings or specifications or both; and
(b)to comply with such further conditions as the [local government] thinks fit to impose in respect of the proposed road …,
for the purpose of ensuring that the construction and drainage of the road … is consistent with the approval of the Commission.
Failure to comply with a requirement of such a notice is an offence.[18]
[18] Section 170(6) of the Act.
The Act also makes provision for the local government to give a notice in relation to standards published by the Commission. That power is expressed not to limit the powers conferred by s 170(3) of the Act.[19]
[19] Section 170(4) of the Act.
A person who is aggrieved by a requirement made under s 170(3) may apply to the Tribunal for review of the local government's decision.[20]
[20] Section 170(5) of the Act.
This appeal concerns the scope of the power conferred by s 170(3)(b) of the Act to require the developer to comply with 'further conditions'. Counsel for the appellant correctly accepted that further conditions may be imposed under s 170(3)(b) even if no amendment is required to drawings or specifications under s 170(3)(a) of the Act.[21]
[21] Appeal ts 4.
The exercise of the power conferred by s 170(3)(b) of the Act is subject to three express requirements. First, any condition must be one which the local government 'thinks fit to impose'. Secondly, the condition must be 'in respect of the proposed road'. Thirdly, the condition must be imposed for the only authorised purpose 'of ensuring that the construction and drainage of the road … is consistent with the approval of the Commission'. The critical issue raised by this appeal is whether the further conditions to which the appellant objects were imposed for the authorised purpose.
The Tribunal's decision
The appellant had obtained subdivisional approval in respect of land in Brookdale, subject to the following relevant condition (subdivisional condition 1):
Engineering drawings and specifications are to be submitted, approved, and subdivisional works undertaken in accordance with the approved plan of subdivision, engineering drawings and specifications, to ensure that those lots not fronting an existing road are provided with frontage to a constructed road(s) connected by a constructed road(s) to the local road system and such road(s) are constructed and drained at the landowner/applicant's cost.
The respondent was identified as the public authority responsible for providing written advice confirming that the Commission's requirements in subdivisional condition 1 had been fulfilled.
The Tribunal construed this condition as requiring that the roads be constructed and drained to an adequate standard at the appellant's cost.[22] The appellant's grounds and submissions do not challenge the Tribunal's construction of subdivisional condition 1.[23]
[22] Tribunal Decision [57] - [58], [65].
[23] Appeal ts 2 - 3.
After the appellant provided working drawings to the respondent, the respondent gave notice under s 170(3) of the Act. The notice included two contentious conditions (4 and 5). The appellant sought a review of the conditions. Before the Tribunal, it was common ground that conditions 4 and 5, as purportedly imposed by the respondent, were beyond power. This was on the basis that the conditions were not confined to road and drainage works. On review, the Tribunal imposed the following two substituted conditions:
Condition 4: A defects liability period of 12 months shall apply to all works in the subdivision relating to the construction of roads and artificial waterways. A defects liability bond, equal to 5% of the final contract cost for the construction of roads and drainage, shall be paid to the City prior to the issue of practical completion. The City may call on the bond after practical completion of those works for the purpose of repairing any defects in those works.
Condition 5: A Certificate of Compliance for all civil works relating to the construction and drainage of roads and artificial waterways in the subdivision is to be completed and returned to the City of Armadale at Practical Completion Inspection.
The Tribunal's reasons explained that the defects liability period in condition 4 imposes a 12 month period after practical completion during which the appellant remains responsible for rectification of defects arising from construction and drainage of the roads. The defects liability bond provides security to the respondent that such obligations will be met by the appellant.[24]
[24] Tribunal Decision [64]. There appears to be a typographical error in the last reference to 'the respondent' in the second sentence of [64]. In context, it appears that the reference is intended to be to the applicant.
The Tribunal indicated that the purpose of its conditions was to ensure compliance with the requirement that subdivisional roads are constructed and drained to an adequate standard at the appellant's cost. That is, the Tribunal was satisfied that its conditions served the purpose of ensuring compliance with subdivisional condition 1.[25]
[25] Tribunal Decision [65], [75], [76].
The Tribunal was satisfied that the purpose of condition 4 was to provide the respondent with a mechanism to ensure that, in circumstances where:
(1)the respondent has not had the daytoday supervision and control over the works;
(2)aspects of the works may not be visible during site inspections; and
(3)defects may not yet be apparent because the roads are not yet in regular use;
the roads are constructed and drained to an adequate standard wholly at the appellant's cost.[26]
[26] Tribunal Decision [72].
The Tribunal was satisfied that the purpose of condition 5 was to ensure that the respondent had sufficient evidence to be reasonably satisfied that the construction and drainage of the roads are consistent with the approval of the Commission in circumstances where it did not have the daytoday supervision and control over the works, and where aspects of the works may not be visible during site inspections. The Tribunal said that condition 5 provides evidence that the works are not only complete, but also that they are in accordance with the approved drawings and specifications.[27]
[27] Tribunal Decision [75].
Primary judge's decision
The appellant appealed to the primary judge against the Tribunal's decision. The appellant had a right to appeal on a question of law, subject to the grant of leave to appeal, under s 105 of the State Administrative Tribunal Act 2004 (WA). Relevantly, the question of law raised by that appeal was whether conditions 4 and 5 were beyond power on the basis that they were not imposed for the authorised purpose.[28]
[28] See the grounds of appeal 3 and 4 at Primary Decision [22].
The primary judge expressed her conclusion that the conditions were within power, and imposed for the authorised purpose. The primary judge referred to the Tribunal's finding that latent defects in the works may only emerge after the works are completed and the roads are in use. She also referred to the Tribunal's construction of subdivisional condition 1. Her Honour concluded that the respondent had power to impose further conditions pursuant to s 170(3)(b) that met the objective of ensuring that the appellant, rather than the respondent, bears the cost of the roads being constructed and drained to an adequate standard.[29] The primary judge continued:[30]
Thus, the Tribunal correctly found that part of that proper interest is an interest in ensuring that any latent defects, in the roads that the [respondent] will be responsible for in the future, that emerge within a reasonable period after the construction of the road is complete, are rectified at the cost of the subdivider.
It cannot be said that the terms of [conditions 4 or 5] are incompatible with ensuring that the construction and drainage of the roads and artificial waterways are consistent with the terms and conditions of the approval of the Commission.
To the contrary, it is patently clear that the Tribunal did not err in finding that [conditions 4 and 5] can properly be characterised as further conditions for the purpose of ensuring the construction and drainage of the roads and artificial waterways are consistent with the approval of the Commission.
[Conditions 4 and 5] require legitimate steps to be taken to ensure the road works are completed to an adequate standard and in accordance with the approved drawings and specifications.
[29] Primary decision [58].
[30] Primary Decision [59] - [62].
The primary judge held that, because the Tribunal was clearly correct in its decision to vary conditions 4 and 5, leave to appeal should be refused and the appeal to the primary judge dismissed.[31]
[31] Primary Decision [63].
The appeal to this court
The appellant now appeals against the primary judge's decision. The sole ground of appeal is that the primary judge erred in law in failing to conclude that, on the proper construction of s 170(3) of the Act, the Tribunal exceeded its power to impose conditions 4 and 5. The appellant contends that an order should have been made setting aside those conditions.
The appellant submits that the purpose of conditions 4 and 5 was to ensure compliance with the drawings and specifications approved by the respondent. The appellant contends that this is not an authorised purpose, which the appellant says is only to ensure that the drawings and specifications approved by the respondent are consistent with the Commission's approval.[32]
[32] Appellant's Submissions, par 9.
The appellant contends that it is incumbent on the respondent to:
(1)identify the nature of the roads from the approved plan or subdivisional conditions;
(2)identify in what respect the submitted drawings and specifications are inconsistent with the identified nature of the roads; and
(3)require amendments to the drawings and specifications, and the imposition of further conditions, if necessary, to remove the relevant inconsistency.[33]
[33] Appellant's Submissions, par 10.
The appellant contends that the Tribunal's approach elides the objective of ensuring consistency with the Commission's approval with the purpose of ensuring compliance with the drawings and specifications approved by the respondent.[34]
[34] Appellant's Submissions, par 11.
The appellant submits that the 'consistency scheme' subjects a developer to a criminal penalty if it fails to submit drawings, specifications and information before starting work. The local government is to review the drawings and specifications against the Commission's approval and require changes to them, if needed, and add such conditions as shall ensure consistency of the proposed works with the Commission's approval.[35]
[35] Appellant's Submissions, par 18.
The appellant submits that the 'compliance scheme' requires the developer to pay a supervision fee to ensure that its works comply with the requirements of s 170(3) of the Act. Failure to comply with the requirements of a supervisor may lead the local government to refuse to clear the subdivisional condition.[36]
[36] Appellant's submissions, par 19. In this paragraph, the appellant also contends that failure to comply with the direction of a supervisor is an offence. Counsel for the appellant was unable to point to any provision having this effect, and the contention was not pursued in oral submissions: see appeal ts 8 - 9.
The appellant characterises the respondent's position as asserting an implied power to add to the above sanctions, just in case the supervision is inadequate or the developer refuses to implement a recommendation or requirement of a supervisor. The appellant says that there is no basis for implying such a power.[37] The appellant says that the purpose of the conditions is to improve the respondent's 'risk profile', and provide a mechanism for the respondent to avoid for itself the inconvenience and costs of dealing with defects if they arise.[38]
[37] Appellant's Submissions, pars 21 - 26.
[38] Appeal ts 12 - 15.
By these submissions, the appellant accepts that consistency with the 'approval of the Commission' includes consistency with the subdivisional conditions which the Commission has imposed.[39] In this case, consistency is with subdivisional condition 1, which required both that the roads be constructed and drained to an adequate standard, and that the roads be constructed and drained to that standard at the appellant's cost.
[39] Appeal ts 5 - 6.
Disposition
The appellant's ground of appeal and submissions are without merit. The primary judge was correct to conclude that conditions 4 and 5 were imposed for the authorised purpose, for the reasons which her Honour gave.
Contrary to the appellant's submissions, the respondent does not rely on an implied power. The only question in the present case is whether conditions 4 and 5 were imposed in the exercise of the express power conferred by s 170(3)(b) of the Act. The answer to that question turns on whether the conditions were imposed for the authorised purpose of ensuring that the construction and drainage of the roads is consistent with the approval of the Commission.
The appellant accepts that the authorised purpose encompasses ensuring that the construction and drainage of the road is consistent with the Commission's subdivisional conditions. The appellant does not challenge the construction of subdivisional condition 1 as requiring that the roads be constructed and drained to an adequate standard at the appellant's cost. Therefore, as the appellant's counsel ultimately accepted,[40] the question is whether the conditions were imposed for the purpose of ensuring that the construction and drainage of the roads is to an adequate standard and at the appellant's cost. Counsel for the appellant correctly accepted that the court's primary task was to look to the Tribunal's reasons for decision to see what the Tribunal's purpose was in imposing the conditions.[41] Conditions 4 and 5 were expressly imposed by the Tribunal for the purpose of ensuring that roads were constructed and drained to an adequate standard at the appellant's cost.[42] They were therefore imposed for the authorised purpose. The appellant failed to establish that the conditions were not imposed for that purpose, but were imposed merely to ensure compliance with approved drawings and specifications.
[40] Appeal ts 6.
[41] Appeal ts 18 - 19.
[42] See [24] - [26] above.
The appellant's characterisation of the authorised purpose as being only to ensure that the drawings and specifications approved by the respondent are consistent with the Commission's approval is inconsistent with the statutory text. Section 170 of the Act does not refer to the respondent approving drawings and specifications. Rather, the respondent was empowered by s 170(3)(a) to require the appellant to amend the submitted drawings or specifications or both. Section 170(3)(b) gave the respondent power to require the appellant to comply with further conditions in respect of the proposed roads. These powers are not conferred for the purpose of ensuring that the drawings and specifications are consistent with the Commission's approval. Rather, the powers are conferred for the purpose of ensuring that the construction and drainage of the roads are consistent with the approval of the Commission. This aspect of the statutory text directs attention to the Commission's approval rather than the drawings and specifications submitted by the developer.
In any event, subdivisional condition 1 requires that subdivisional works be undertaken in accordance with approved engineering drawings and specifications. So a condition directed to ensuring that construction and drainage of the roads complies with the approved engineering drawings and specifications is directed to ensuring that the construction and drainage of the roads is consistent with that aspect of the Commission's approval. The terms of subdivisional condition 1 do not support, and are inconsistent with, the distinction which the appellant seeks to draw by its submissions summarised at [31] and [33] - [35] above.
Provision for supervision by a representative of the respondent does not deny the prospect of undetected defects in the construction or drainage of the roads. In the absence of any mechanism for the respondent to require the appellant to remedy any defects, the construction and drainage of the roads would not be consistent with the approval of the Commission. Either lots would be serviced by an inadequately constructed and drained roads or, if the respondent took remedial action without right of recompense, the roads would not be constructed and drained at the appellant's cost. By seeking to avoid that outcome, conditions 4 and 5 are imposed for the purpose of ensuring that the construction and drainage of the roads are consistent with the approval of the Commission. Ensuring that the construction and drainage of the roads are carried out at the appellant's expense is also consistent with the operation of s 158(1) of the Act in respect of subdivisional condition 1.
Counsel for the appellant points out that the conditions may require the appellant to cover the cost of repairing defects which are not its fault.[43] It seeks to characterise the conditions as an attempt to alter the 'risk profile' between the appellant and respondent for liability for the cost of repairs. However, placing responsibility for the cost on the appellant is entirely consistent with subdivisional condition 1. That condition requires the appellant to provide roads which are constructed and drained to an adequate standard, rather than merely to take reasonable steps to achieve that outcome. Irrespective of where the fault lies, if roads are not adequately constructed and drained they will not be consistent with the Commission's approval. A condition which ensures that the appellant bears the financial cost of rectifying any defects gives effect to that aspect of subdivisional condition 1 which requires that the roads be constructed and drained at the appellant's cost.
[43] Appeal ts 12 - 15.
The appellant also points to the prospect that a longer defects liability period or a larger performance bond might be required in other cases if condition 4 is valid.[44] However, the power of the respondent to impose a condition of this kind is not unconstrained. It is ordinarily implicit in the conferral of a discretionary power that the power be exercised reasonably.[45] Nothing in the Act rebuts the ordinary presumption that the exercise of the discretionary power conferred by s 170(3)(b) of the Act is so confined. Within the limits of reasonableness and the express requirements of the provision, it will be for the repository of the power to determine the appropriate length of a defects liability period and the amount and terms of a performance bond which is reasonably required to ensure that the construction and drainage of a subdivisional road is consistent with the approval of the Commission. Further, any decision of a local government as to these matters is subject to merits review by the Tribunal under s 170(5) of the Act. The appellant does not contend that the length of the defects liability period or amount of the bond required in this case are unreasonable.
[44] Appellant's submissions, par 25, appeal ts 12 - 13.
[45] Minister for Immigration v Li [2013] HCA 18; (2013) 249 CLR 332 [63], [88] - [90]; Minister for Immigration v SZVFW [2018] HCA 30; (2018) 92 ALJR 713 [4], [53], [80], [131], [134].
Counsel for the appellant sought to make an in terrorem submission as to the potential consequences under other legislation if this court concluded that condition 4 was valid.[46] The legislation to which counsel referred concerned different subject matters and was cast in terms dissimilar to s 170 of the Act. It is difficult to see how any conclusion reached by this court as to whether condition 4 was authorised by s 170(3)(b) of the Act would determine whether that other legislation conferred a power to require performance bonds.
[46] Appeal ts 19 - 22.
Orders
For the above reasons, the primary judge was correct to hold that s 170(3)(b) of the Act authorised the imposition of conditions 4 and 5. The appeal must be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CR
ASSOCIATE TO THE HONOURABLE JUSTICE MITCHELL5 NOVEMBER 2018
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