Posted on January 28, 2022 by Stuart Simington and Lachlan Penninkilampi

Court Confirms Position on Dedication of Land Free of Cost

The NSW Land and Environment Court has recently confirmed that there is no power for a consent authority to require dedication of land free of cost, even if the developer volunteers to do so, absent a voluntary planning agreement (‘VPA‘) or such land being identified in a contributions plan (‘CP‘).

The confirmation comes from a decision of Justice Duggan to refuse an appeal by L & G Management Pty Ltd (‘L & G‘) in relation to a development application (‘DA‘) to the Council of the City of Sydney (‘Council‘), which was determined by way of deemed refusal and subject to an appeal to Commissioner Horton in late 2020.

The DA was for the demolition of the two-storey portion of an existing part two-storey, part eight-storey building, remediation, construction of a five-storey building for commercial and retail uses, minor alterations to the retained eight-storey building, subdivision and dedication of land at 191–195 Botany Road, Waterloo (‘Proposed Development‘).

L & G took issue with the way the Commissioner satisfied himself about the Court’s power to give effect to a voluntary dedication to the Council of a 2.4 metre strip of land along the frontage of the site to Botany Road as part of the DA (‘Proposed Dedication‘).

Justice Duggan refused the appeal and ordered L & G to pay the Council’s costs.

Relevant background

The Proposed Development was to be a part of the Green Square neighbourhood, a high-density area in the inner-east of Sydney which has been rapidly developing over the last 10–20 years.

The Council has incentivised developers in this neighbourhood to provide valuable and reasonably necessary infrastructure to the community under clause 6.14 of the Sydney Local Environmental Plan 2012 (‘LEP‘). This provision allows a consent authority to consent to a development with additional floor space (i.e. over and above what is typically allowed under the LEP) if the development includes ‘Green Square community infrastructure‘.

As part of its DA, L & G sought 322.43 square metres of additional floor space for the Proposed Development and offered the Proposed Dedication for the purpose of footpath widening as ‘Green Square community infrastructure‘ in accordance with the clause 6.14 of the LEP. It said that clause gave the consent authority the power it needed to accept the volunteered dedication as part of the DA.

Issues on appeal

Commissioner Horton dismissed the appeal against the Council’s deemed refusal: see L & G Management Pty Ltd v Council of the City of Sydney [2021] NSWLEC 1084.

L & G argued that in doing so, the Commissioner made two legal errors:

  1. He asked the wrong question as to whether the Court had the power to give effect to the Proposed Dedication pursuant to a local infrastructure contribution condition under s 7.11 of the Environmental Planning and Assessment Act 1979 (‘EP&A Act‘).
  2. He concluded that there was no power to accept the Proposed Dedication.

Findings

Ground 1

Justice Duggan understood this ground to be that the Commissioner should not have found that he had no power to approve the DA: at [36].

Her Honour affirmed the long-standing position that the only ways that a consent authority can require land to be dedicated free of cost as a development contribution are by entering into a VPA requiring same (s 7.4) or by imposing a s 7.11 condition: at [37]ff, citing Fitch v Shoalhaven City Council (1987) 67 LGRA 165, Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41, Lake Macquarie City Council v Hammersmith Management Pty Ltd (2003) 132 LGERA 225, and Maitland City Council v Anambah Homes Pty Ltd (2005) 64 NSWLR 695.

L & G’s DA did not engage either section 7.4 (relating to VPAs) or section 7.11 (relating to contribution conditions allowed by and determined in accordance with a CP) of the EP&A Act. Consequently, there was no way the Council or the Commissioner on appeal could impose a condition reliant upon cl 6.14 of the LEP to require the Proposed Dedication: at [40].

L & G submitted that the Proposed Dedication could be effected by granting consent to the DA without a condition relating to that dedication. Her Honour said that there was ‘no substance‘ to this submission because consent cannot be granted to a proposed development if the the DA is formulated in a way which exceeds the power to grant consent: at [41]. In this instance, the DA asked the consent authority to approve the dedication of land absent a VPA and the relevant land being identified in a CP. Therefore, the DA was incapable of being approved.

L & G also submitted, alternatively, that the voluntary dedication of land in a DA is outside the scope of Part 7 of the EP&A Act and is merely required to be considered as part of determination under s 4.15. If a power must be found, then in this case it is in s 4.15 together with cl 6.14 of the LEP. Duggan J rejected the alternative submission as a mischaracterisation of both the DA and the LEP: at [43]–[46].

Ground 2

Justice Duggan understood this ground to be as follows (at [48]):

… even if there were no power to grant consent to the development application without a VPA the Commissioner should have granted such consent. By refusing to grant the consent he was acting contrary to law, or that he could have imposed a condition requiring the Applicant and Council to enter into a VPA.’

Her Honour rejected this ground because it ‘does not disclose any error or identify any relevant question of law‘: at [71].

In particular, her Honour said:

  1. To the extent that Ground 2 contends that cl 6.14 of the LEP was a source of power to permit the grant of development consent, it must fail for the same reasons as Ground 1: at [60].
  2. The Commissioner did not actually refuse to grant consent. Rather, he was unable to be satisfied of a necessary precondition of the consent, namely that in the absence of the Proposed Dedication the Proposed Development enables the development of infrastructure, other facilities and public domain areas associated with existing and future public transport as he was required to be per cl 10(2) of the State Environmental Planning Policy (Urban Renewal) 2010: at [61]–[62].
  3. L & G did not identify any error of law in the Commissioner’s exercise of discretion declining to impose a condition requiring entry into a VPA (that the Council opposed).

Implications

This decision re-iterates the point that a consent authority must find power in either section 7.4 of section 7.11 of the EP&A Act to be able to require the dedication of land free of cost as a condition of development consent. There is no way to get around that, even if a developer volunteers the dedication.

You can read the judgment here: L & G Management Pty Ltd v Council of the City of Sydney [2021] NSWLEC 149.

If you have any questions about this blog post, please contact Lachlan Penninkilampi on 02 8235 9719 or Stuart Simington on 02 8235 9704.