Posted on December 3, 2019 by Lindsay Taylor 4

Court reduces monetary contribution for material public benefit required by works condition of consent

In the recent case of Beaini Projects Pty Ltd v Cumberland Council [2019] NSWLEC 1547, the Land and Environment Court used its power under s 7.13(3) of the Environmental Planning and Assessment Act 1979 (‘EPA Act’) to amend a condition of development consent imposed under s 7.11 of the EPA Act in accordance with the Council’s contributions plan that was held by the Court to be unreasonable in the particular circumstances of the case.

The unreasonableness arose because of the Council’s failure to apply its contributions plan to reduce the amount of the relevant monetary contribution to take into account a material public benefit provided to the Council because of works required to be undertaken by another condition of the same consent.

The development consent

Cumberland Council granted consent to a development application for the construction of a 12-storey mixed use development subject to conditions (‘Consent‘). These conditions relevantly included the developer:

1. to construct, at its own cost, a public lane way over land required to be dedicated to the Council under a voluntary planning agreement (‘Works Condition’), and
2. to pay a monetary contribution in the amount of $1,075,187 pursuant to s 7.11 of the EPA Act (‘Contribution Condition’).

The voluntary planning agreement required the developer to dedicate to the Council a 6.6m strip of land for a future public lane way.

The Works Condition required the construction of the lane way to the standard of a public road rather than the appropriate class of access driveway.

The Contribution Condition was calculated in accordance with the relevant contributions plan (as required by s 7.13(1) of the EPA Act), being the Holroyd Section 94 Contributions Plan 2013 (‘CP’).

The Land and Environment Court proceedings

The proceedings were brought by Beaini Projects Pty Ltd to modify the Contribution Condition to take into account the value of the material public benefit provided to the Council under the Works Condition involving the construction of the lane way to the standard of a public road rather than the appropriate class of access driveway.

The CP 

Relevantly, the CP provided for material public benefits in lieu of the making of development contributions under s 7.11 of the EPA Act.

Clause 2.17 of the CP provided:

‘2.17 Offers of land, works or other material public benefits

A person may make an offer to the Council to carry out works or provide another kind of material public benefit or dedicate land, in lieu of making a contribution in accordance with a condition imposed under this Plan.

…

In considering such a request, Council will give consideration to the following matters:

(a) the value of the land to be dedicated, or the works to be undertaken, is at least equal to the value of the contribution that would otherwise be required under this Plan; and

(b) the standard of the land or works is to council’s full satisfaction; and

(c) the provision of the material public benefit will not prejudice the timing or the manner of the provision of public amenities and services included in this Plan’s works program.

In accepting a material public benefit that is not an item identified in this Plan’s works schedule, Council must be satisfied that the offer provides a substantial benefit to the community and that this benefit warrants Council accepting responsibility in fulfilling the intent of the Plan notwithstanding a reduction in expected cash contributions.

…

The value of any works, land or material public benefit offered by the applicant may, at Council’s discretion, be used to offset monetary contributions applicable to the development under this Plan. Also, where the Council or another Consent Authority requires as a condition of Development Consent an applicant to carry out works in relation to that development, and those works are listed in this Plan’s works schedule, the Council may use the value of those works to offset the monetary contributions applicable to the development.

…’

It was agreed between the parties that the construction of the lane way to public road standard provided a material public benefit.

The scope of the Court’s power to disallow or amend s7.11 conditions

Section 7.13(3) of the EPA Act gives the Court the power to disallow or amend a s 7.11 condition that is of a kind allowed by a contributions plan because it is unreasonable in the particular circumstances of that case, even if the condition was determined in accordance with the relevant contributions plan.

Although the proceedings involved an appeal concerning an application to modify the Consent, Gray C considered that the Court’s power under s 7.13(3) extends to any proceedings relating to the merits of a condition imposed in accordance with s 7.11 of the EPA Act (citing Talbot J in Arkibuilt Pty Ltd v Ku-Ring-gai Council (2006) 67 NSWLRC 529).

Citing Moore J in Colonial Credits Pty Ltd v Pittwater Council [2015] NSWLEC 188 at [47], Gray C confirmed that the Court’s power to disallow or amend a s 7.11 condition power is only available where the unreasonableness of the condition arises from the application of the relevant contributions plan, and not where it is arises for a reason not founded in the contributions plan.

The parties’ arguments

The Council argued that the basis of the unreasonableness in this case was not the application of the CP, but rather the financial burden of constructing the lane way in accordance with the Works Condition.

Beaini argued that the unreasonableness was caused by the Council’s failure to correctly apply the CP by not utilizing clause 2.17 to reduce the contribution required by the Contribution Condition in circumstances where the parties agreed that the construction of the works required by the Works Condition provided a material public benefit.

The consequence of this failure, Beaini argued, was that the Council was to some extent double-dipping in relation to the cost of the construction of the lane way.

The Court’s decision

Gray C agreed with Beaini. In distinguishing the facts from Colonial Credits, the Commissioner held:

“I am satisfied that, in circumstances where the Council agrees that there is a material public benefit that is provided by the construction of the laneway to the standard of a public road at the cost of the developer, condition 16 is unreasonable as the quantum of contributions therein was not reduced through the mechanism available in clause 2.17 of the CP 2013.”

Accordingly, the Court exercised its power under s 7.13(3) to amend the Contribution Condition to require the payment of a monetary  contribution to the Council under s 7.11 of the EPA Act calculated by identifying the difference in the cost of constructing the lane way to the standard of a public road rather than the appropriate class of access driveway and subtracting that amount from the amount required to be paid by the Contribution Condition as originally imposed by the Consent.

This case can be viewed here.

If you have any questions about this article, please contact Dr. Lindsay Taylor on 8235 9701 or Brigitte Elvy on 8235 9707.