The recent Planning & Environment Court decision of
Montrose Creek Pty Ltd and Manningtree v BCC serves as a
valuable reminder why skimping on due diligence is not worth the
The matter concerned a mixed use development located in Keperra
that Brisbane City Council approved for Opal Wing Pty Ltd. The
approved use commenced and the site was subsequently purchased by
Manningtree and Montrose. The Development Permit included a
standard condition requiring the payment of infrastructure
contributions prior to the use commencing. In September 2010,
Council discovered that an amount of over $400,000 in
infrastructure contributions remained outstanding for the site.
Council initially pursued Opal Wing but it entered into voluntary
liquidation. Council then pursued Manningtree and Montrose for the
outstanding infrastructure contributions. A Show Cause Notice was
issued, followed by an Enforcement Notice served on the basis that
the failure to pay the outstanding infrastructure contributions was
a breach of a condition of an approval and therefore a development
offence. The Enforcement Notice was appealed.
In their defence, Manningtree and Montrose asserted that:
the standard planning and development certificate obtained
during due diligence did not reveal the outstanding infrastructure
they had no knowledge of the outstanding infrastructure
contributions until receipt of the Show Cause Notice;
the development approval conditions required that
infrastructure contributions be paid "prior to the
commencement of use or prior to endorsement of a Community
Management Statement, whichever is sooner";
failure to pay the outstanding infrastructure contributions
before Council endorsed the Community Management Statement and
before the use commenced was a breach committed when the site was
owned by Opal Wing and the breach should be actionable only against
they would suffer considerable financial hardship if required
to pay the outstanding infrastructure contributions.
The Court determined that that timing requirement in the
approval conditions (the words 'prior to') was the
crystallisation of the date from which the offence had been
committed, not the date of cessation of a liability. It further
determined that an obligation to pay the infrastructure charges
attaches to the land and binds the owner and any successors in
title. Manningtree and Montrose's failure to pay the
infrastructure charges was a development offence and a continuing
offence. To find otherwise would result in an unsustainable
situation when the person benefiting from a development approval
would not pay its share of the demand on infrastructure created by
The Court was unsympathetic to Manningtree and Montrose's
arguments that they did not know the charges were outstanding. The
Court considered that they could have discovered the contributions
existed by obtaining a full development certificate but they
elected to obtain a standard planning and development certificate
instead. The Court found for the Council and ordered that
Manningtree and Montrose pay the outstanding charges and be
restrained from using the premises for the approved purpose.
The difference between obtaining a full development certificate
and a standard development certificate is roughly $3,000 (costs for
development certificates vary between Councils and the complexity
of the approvals) plus an additional 20 business days. The
additional time and costs incurred provides the recipient with a
statement from Council about the fulfilment or non-fulfilment of
each condition of a development approval in force (including
details concerning any infrastructure agreements in place and
advice concerning any prosecutions for a development offence in
relation to the premises of which the local government is aware of
outstanding fees and charges payable). The certificate can be used
as evidence of the information it contains in a proceeding.
The additional cost of conducting thorough due diligence is
insignificant when compared to the crippling outcome above, which
unfortunately in not an isolated event.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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