Posted on December 6, 2020 by Frances Tse and Lindsay Taylor 14

Can a VPA be entered into for the conservation of a privately owned heritage building?

In a recent Land and Environment Court case, IPM Holdings Pty Limited v The Council of the City of Sydney [2020] NSWLEC 1593, the Court considered whether it could impose a condition of consent requiring a voluntary planning agreement (‘VPA‘) under s7.4 of the Environmental Planning and Assessment Act 1979 (‘EPA Act‘) to be entered into requiring monetary contributions to be applied towards conservation works for a privately owned heritage building and where the Council was not willing to enter into the proposed VPA.

Background

In December 2015, The Council of the City of Sydney granted conditional development consent for the construction of 33 new residential apartments.

Condition 9 of the consent required conservation works to be carried out on a heritage item situated on the development site, ‘Telford Lodge’, to the satisfaction of the Council prior to the issue of an occupation certificate for part of the approved development.

The land the subject of the development consent was subsequently strata subdivided into several parts. One part contained the approved apartments and another contained Telford Lodge. The various parts became owned by different owners. Apparently, due to a commercial dispute, the applicant was unable to access the Telford Lodge land in order to comply with condition 9 of the consent.

As a result, the applicant lodged a new DA for the occupation and use of the part of the development to which condition 9 of the consent related and also offered to enter into a VPA with the Council under which it would provide the Council with monetary contributions for the carrying out of the conservation works to Telford Lodge.

The proceedings before the Court were an appeal against a deemed refusal by the Council of the new DA.

Legislation

Section 7.4(1) of the EPA Act defines a VPA to be a ‘voluntary agreement or other arrangement‘ between a planning authority and a developer under which the benefits provided by a developer are ‘to be used for or applied towards a public purpose‘.

Section 7.4(2)(a)-(f) enumerates, without limitation, a number of public purposes.

Issue

The issue for the Court was whether it had power to impose a condition of consent requiring the applicant to enter into a VPA with the Council having regard to the fact that the Council was not willing to enter into the VPA and that the proposed monetary contributions were for conservation works to be carried out on a privately owned heritage item.

Decision

In dismissing the appeal, the Court held that it had no power to impose a condition of consent requiring entry into the VPA because the agreement was not voluntary and was not for a public purpose.

Whether the conservation of a privately owned heritage building is a ‘public purpose’

The Senior Commissioner accepted the arguments of the Council and said:

‘122.   The meaning of “public purpose” within s 7.4 (1) is one of statutory construction. As the Council points out “although “public purpose” is defined inclusively in s 7.4(2), the purposes enumerated in s 7.4(2) all share two key characteristics. The first is that they have a dimension of public utility through the provision of a service or infrastructure which can be used by the public or a portion of the public. The second is that they pertain to matters over which the Council can exercise control”.

…

124.   …The works funded by the proposed VPA do not have the two key features of public purpose, identified by the Council. The villa is owned by the Third Respondent and is approved as a private dwelling and therefore will not be used by the public or a portion of the public. Instead, as the Council submits it is the owner who will benefit from the conservation works to the private dwelling. While I accept that some privately- owned residences that are local heritage items under the LEP have historical and cultural value, their maintenance does not fall within the ambit of “public purpose” within s 7.4. Additionally, the Council does not exercise control over the Telford Lodge land without the agreement of the owner or by application to the Court for an order for such access.’

The Court also had regard to the fact that the Council could not access the Telford Lodge land without the agreement of the landowner and that there was no certainty that monetary contributions paid to the Council under the VPA could be applied for the purpose for which they were required.

Unwillingness of the Council to enter into the VPA 

The Senior Commissioner also held that a VPA or other arrangement under s7.4 of the EPA Act must be voluntary, and as the Council was not willing to enter into the proposed VPA, the Court had no power to order the parties to enter into the VPA or to impose a condition of consent requiring entry into the VPA under s7.7(3) of the EPA Act.

Heritage conservation as a public purpose

Although not referred to in the judgment, the approach taken by the Senior Commissioner is consistent with the case of SJ Connelly CPP Pty Ltd v Byron Shire Council [2014] NSWLEC 2 where the Court held that the retention of a privately owned heritage building required by the applicable planning controls was not a ‘material public benefit‘ that could be taken into consideration in reducing the amount of monetary contributions payable by the developer for the purposes of s94(6) (now s7.11(6)) of the EPA Act.

The Court in that case held that a material public benefit must be a public benefit of an enduring nature, which is is assured by the vesting of the item in the control of the Council or other entity independent of the owner of the land. We have previously published a blog on that case here.

You can read the case here: IPM Holdings Pty Limited v The Council of the City of Sydney [2020] NSWLEC 1593.

If you’d like to discuss the issues raised in this post, please contact Frances Tse on 8235 9711 or Dr Lindsay Taylor on 8235 9701.