Posted on March 16, 2011 by Lindsay Taylor

S94 Contributions Plans – Departmental Requirements, Circulars & Practice Notes

Increasingly, it seems, the NSW Department of Planning requires councils to submit draft contributions plans to the Department or IPART for approval before being made.

However, no such requirements are imposed on councils by the EPA Act or the EPA Regulation.

It is true that the Minister may, under s94EAA of the EPA Act, direct a council, in writing, to approve, amend or repeal a contributions plan, but this relates to a plan once made and not a draft plan.

It is also the case that the Minister may influence the contents of a contributions plan and therefore a draft plan by means of a direction under s94E. The Minister’s s94E direction dated 4 March 2011, for example, requires a council or planning panel to obtain the Minister’s written approval before imposing a s94 condition that exceeds the maximum permissible amount relating to development authorising the erection of dwellings or the creation of residential lots.

However, there is no general requirement that a s94 contributions plan must be submitted to the Minister or the Department or IPART as a draft before being publicly exhibited or made. Further, the Minister’s s94E direction dated 4 March 2011 cannot be construed as a requirement that a contributions plan authorising the imposition of a condition exceeding the maximum permissible amount must be approved by the Minister or IPART in draft before it is publicly exhibited or made.

All of this raises the issue of the status of Departmental requirements that are imposed on councils from time to time.

Neither the Minister nor the Department have a general power to supervise what councils do in relation to planning or how they do things. On the contrary, the EPA Act distributes planning responsibilities between the different levels of government and only allows the Minister or Department to impose requirements on councils or intervene in the exercise of their planning functions in specified circumstances authorised by the Act or Regulation.

As a general proposition of law, Departmental requirements, including, for example, requirements contained in planning circulars issued to councils by the Department, have no bearing on a council’s legal obligations unless sourced in a statutory obligation imposed on the council or a power for the Minister or Director-General to issue a direction to the council.

The same kind of comment can be made in relation to the Department’s interpretation of statutory requirements as set out in planning circulars or otherwise (in this regard, see the comments of Biscoe J in Stannic Securities Pty Limited v Wyong SC [2010] NSWLEC 249 at par.20).

Things are somewhat different in relation to practice notes published by the Director-General of the Department in relation to the preparation of s94 contributions plans, and planning agreements.

Clause 26(1) of the EPA Regulation requires a contributions plan to be prepared having regard to any relevant practice notes adopted for the time being by the Director-General. This provides some legal status to practice notes of this kind. The Local Development Contributions Practice Note For the Assessment of Local Contributions Plans by IPART dated November 2010 published by the Department is such a practice note. It identifies the particular s94 contributions plans that “require” review by IPART. These include “new” plans which propose a contribution level above the maximum permissible amount set by the Minister’s s94E direction and plans “otherwise determined by the Minister”. New plans are to be submitted in draft prior to public exhibition.

Despite the mandatory language in the Practice Note, the requirement in the EPA Regulation is that a contributions plan must be prepared “having regard” to the Practice Note. Therefore, clause 26 does not impose an enforceable legal requirement to do anything more than “have regard” to the requirement that a plan must be submitted for review by IPART in draft before it is publicly exhibited.

If a contributions plan is prepared contrary to the Practice Note, the Minister’s powers under s94E and s94EA are available to remedy the situation.

In relation to planning agreements, clause 25B(1) of the Regulation merely provides that the Director-General may from time to time issue practice notes to assist parties in the preparation of planning agreements. This gives practice notes of this kind a somewhat lesser legal status than those relating to contributions plans.