Posted on February 11, 2014 by Stuart Simington
Two challenges to the reasonableness of a s94 condition dismissed
In a recent s94 case, Pepper J addressed the following questions:
- Proposed retention of a heritage item – Whether there is a material public benefit involved that should be taken into account under s94(6) of the Environmental Planning and Assessment Act 1979 (EPA Act) when determining a s94 development contribution?
- Carrying forward of works in a contributions plan – Whether works in a former contributions plan proposed to address the demand of a former population may nevertheless be carried forward when a contributions plan is reviewed, so as to be funded, in appropriate degree, by the new population?
Material public benefit of the retention of a heritage item
Section 94(6) of the EPAct requires a consent authority considering the imposition of a s94 condition to take into consideration any land, money or other material public benefit that the applicant has elsewhere dedicated or provided free of cost within the area (or any adjoining area) or previously paid to the consent authority, other than:
(a) a benefit provided as a condition of the grant of development consent under the EPAAct, or
(b) a benefit excluded from consideration under section 93F (6) [ie by a planning agreement].
Facts – SJ Connelly CPP Pty Ltd v Byron Shire Council  NSWLEC 2
The site contained a building which was, until 1996, owned and occupied by and used as the Byron Shire Council’s chambers and administrative centre.
The Council disposed of the property and shortly thereafter granted development consent to the new owner to operate a 90 bed hostel from the existing building known as the ‘Main Beach Backpackers’.
The heritage significance of the former council building was initially recognised by a 2004 interim heritage order and subsequently, in 2005, by its inclusion as a heritage item Byron Local Environmental Plan 1988 (LEP).
In 2004, the owner sought sought consent to demolish the building but the application was withdrawn and a new DA lodged. In 2007, development consent was granted for the mixed use commercial development, including the backpackers hostel, to be conducted in the building and a s94 condition was imposed.
The owner argued that the circumstance that the Council had sold the land and improvements to the applicant and then caused the building to be listed as a heritage item under the LEP was a fact, matter and circumstance that was legally open for the Commissioner to have regard to under s94(6) in assessing the reasonableness of the s94 contribution imposed.
The Court did not disturb the Commissioner’s reasoning as to why there was no relevant material public benefit that should be taken into account vis a vis s94(6).
- By not vesting or placing the council building in the control of the council, the owner retained the private use of the heritage item and hence there was no ‘public benefit of an enduring nature‘.
- The reason that the heritage item was retained or kept was because of the planning controls requiring it to be retained and not because of anything done by the owner.
- Specifically, in terms of the language of s94(6) of the EPA Act, the retention of the heritage listed council building was not a public benefit that had been ‘provided free of cost‘ or ‘previously paid‘ ‘to the consent authority‘. Accordingly, s94(6) was not engaged.
Carrying forward of works in a contributions plan
It is a common practice for council when reviewing contributions plans to bring forward works that have not been completed into the new plan. If this practice is unlawful or unreasonable, the validity of many s94 conditions would be subject to challenge on grounds of unreasonableness.
The Council’s 1991 contributions plan identified population growth (that had been met by 2001) which gave rise to the need for a bicycle route network. The network was not carried out, but rather the work carried forward in CP 2005.
The owner argued that the population growth that was expected to generate the demand for the works had already occurred, and hence the council was effectively imposing on the new population an obligation to pay for works which were not actually carried out for the existing population.
Adopting conventional reasoning, Pepper J upheld the Commissioner’s decision that the works could be carried forward provided (as the Commissioner had found) there was still a relevant nexus to the new population. Her Honour applied principles flowing from the conclusions of the Court of Appeal in Frevcourt Pty Limited v Wingecarribee Shire Council  NSWCA 107 and said
 It … follows that just as funds can be carried over, so too can works be transported from one contributions plan to another provided the relevant nexus between the works and the proposed development exists. As was stated in Frevcourt, “there is no restriction in the Act or regulations as to the type or extent of amendments that may be made” (at ).
Of course, in carrying works forward, but in order to arrive at a reasonable contribution by the new development, it will still be necessary for the contribution for works carried-over to be calculated based on a proper apportionment of the demand between the existing and new populations for that work. In a circumstance such as this, the apportioned contribution to new development would be expected to be considerably reduced by the demand of the existing population.