David Nicholls - Partner
Olivia Williamson - Solicitor
The very recent decision of Stockland Developments Pty Ltd v Gold Coast City Council & Anor1 considers the imposition of infrastructure contributions under planning scheme policies not in force at the time when a development application is made. The following is a brief analysis of the law regarding an assessment manager's ability to impose such conditions.
The Integrated Planning Act 1997 (IPA)2 authorises the making of planning scheme policies which require or allow the imposition of contributions for infrastructure. The scope of a local council's power to impose a condition on development approvals requiring payment of infrastructure contributions is governed by the IPA3.
Case Law Overview
In recent years the Court has had occasion to consider the ability of a council to rely on policies in imposing development conditions for infrastructure contributions. It has done so most recently in the Stockland judgment.
In this case the developer, Stockland, sought immunity from charges in the council's infrastructure charging regime in reliance upon conditions contained in an earlier preliminary approval which was the source of subsequent development permits for a residential development. Stockland argued that its obligations should be determined on the basis of the earlier preliminary approval which was granted by judgment of the Planning and Environment Court and had a currency period of 15 years. Robin QC DCJ held that the IPA4 did not prevent the council from imposing lawful conditions about infrastructure contributions which were attached to a development permit issued for a new development application. The IPA3 states that new planning instruments cannot affect existing development approvals. The meaning of 'affect' in the context of the IPA3 was determined by the Court not to constrain the power of a council to impose conditions which it otherwise is lawfully empowered to impose, where an earlier development approval did not contemplate those conditions. Further, such conditions were not seen by the IPA5 to be unlawful or unreasonable. In this case it was crucial that the preliminary approval was for a material change of use whereas the development to which the impugned conditions were attached related to a different form of development, a reconfiguring a lot.
The conclusion that conditions imposed by a council, in addition to those imposed on a preliminary approval, may be attached to a development permit subsequently applied for and obtained in respect of different development on the same site was also approved by the Court in the earlier case of Evans Harch Pty Ltd v Brisbane City Council6.
In Hickey Lawyers v Gold Coast City Council7, the appellants, did not challenge the relevant policies8. Instead, they contended that the contributions required by calculations made in accordance with policies led to a contravention of the IPA9. The Court noted that in principle, such policies, although adopted subsequent to the making of the development application, may be turned to as the source of a development approval condition.
The primary issue in the dispute became whether s3.5.30(1) of the IPA applied to a condition imposed under s6.1.31(2)(c) and if so, whether the contributions imposed under the policies (and set out in the condition attached to the approval) were in accordance with s3.5.30. Judge Robin QC examined the relationship between s6.1.31(2)(c) and s3.5.30 at length and acknowledged that it was open, but not necessarily an easy task, to persuade the Court that conditions complying with s6.1.31(2)(c) flowing from planning scheme policies duly adopted are unreasonable or irrelevant.
The later decision of Clift & Anor v Gold Coast City Council10 also considers the necessary 'nexus' between the development and the infrastructure for which charges are sought. In this case the contributions required by the Council under the planning scheme policy were based on a 'yield factor' of the site which was much more intensive than the proposed development.
The Court found that the yield factor, as provided for in the planning scheme policy could not be achieved due to other planning scheme constraints on the site. Further, the Court found that underdevelopment of the site would not generate the demands on infrastructure to the extent envisaged in the contribution calculations.
Accordingly, it was considered proper that the contributions be calculated according to the realistic demand of the site. His Honour was not satisfied that it was irrelevant to, or an unreasonable imposition on, the development to actually require a contribution whose calculation was based on a number of equivalent tenements greater than that actually proposed. The yield factor was taken as supplying the mechanisms whereby requirements of relevant and reasonableness, whatever their origins, may be satisfied.
The implication of this case is that a council must be flexible when determining contributions under each planning scheme policy to ensure that contributions exacted are relevant and reasonable "to meet the demand created by the development".
The appeal in Australand Holding Ltd v Gold Coast City Council & Anor11 also considered the Gold Coast City Council Policies for Infrastructure which, in this case, came into effect before the application was lodged, but were amended after a deemed refusal appeal was lodged. Endorsing the literal construction of s6.1.31 adopted by Judge Robin QC in Hickey Lawyers, Judge Wilson SC held that the language of s6.1.31 suggested the Policy which will be relevant for the purposes of this section, is the one which applies at the time Council is making its decision. This conclusion was also founded by virtue of s6.1.31 not excluding the operation of s3.5.3, which enacts that a reference to a code, planning instrument law or policy is a reference to something in effect "when the application was made".
Whether a council can impose a condition in reliance on a policy coming into effect after the commencement of the decision stage was considered by the Court in the decision of BGM Projects Pty Ltd v Hervey Bay City Council12 and on appeal in Hervey Bay City Council v BGM Projects Pty Ltd13. Both hearings turned upon the central issue of the interrelationship between s3.5.6(2) and s6.1.31 of the IPA. The Council approved a reconfiguration of three lots into 203; the applicant appealed to the Planning and Environment Court against a condition requiring a monetary contribution for transport infrastructure in accordance with a planning scheme policy14. The policy did not commence, in terms of s3.5.6(2) "before the day the decision stage for the application started" but was in force when the decision to approve was made.
At first instance Judge Wilson SC declared that the council was not entitled to impose such a condition in reliance upon the respondent's transitional planning scheme policy, as it did not come into force until after the application was lodged. His Honour was satisfied that s6.1.31(2) requires a decision to be based on assessments made under s3.5.6. Consequently, s3.5.6(2) had the effect that the council could not rely on the planning scheme policy to impose the condition, despite s6.1.31. It was considered that section 6.1.31, when read in conjunction with Chapter 3, authorises the imposition of a condition under a policy coming into effect before the start of the decision stage, but not after.
However, the Court of Appeal considered that s6.1.31(2)(c) should not be read down by imposing the limitations in s3.5.6(2). The view was taken that it was the legislature's intention that s6.1.31 be applied even if the local planning policy came into effect after the day the decision stage for the application started, that is, irrespective of s3.5.3 and s3.5.6. The decision of Wilson SC DCJ was reversed by the Court of Appeal and the local government was therefore entitled to rely on a transitional planning scheme policy that came into effect after the start of the decision stage.
The following points are now settled:
- Imposed conditions15 are still subject to the general test for validity set out in the IPA9,16, however, it will not be easy to persuade the Court that conditions flowing from duly adopted planning scheme policies about infrastructure are unreasonable or irrelevant17.
- The imposition of infrastructure contribution conditions based on a theoretical maximum development do not offend the IPA9 per se, however it must be possible to demonstrate that such a development is achievable without resorting to relaxations.
- The council's power to impose infrastructure contribution conditions15 is interpreted as the power to impose such conditions under the policy in force when the council decides the development application. This means that they may have reference to an infrastructure planning scheme policy about infrastructure taking effect after the making of a development application.
The above cases indicate that consideration is given to the timing of the policy, but at what date the relevant 'law' is identified remains unsettled. Uncertainty still surrounds the following:
1. the circumstances in which the policy itself might be regarded as unlawful and therefore incapable of supporting a development condition;
2. whether despite authorisations under a policy, a development condition might be regarded as an unreasonable imposition on the development;
3. whether the council can lawfully impose additional charges when a policy is amended or replaced after the decision imposing the condition is made; and
4. whether the council can lawfully impose conditions which reference existing policies and "any amended or replacement policies".
Conditions must be reasonably required by the development or be relevant to the development and must not be an unreasonable imposition upon it18. The critical issue will be whether the contribution based upon the policy, although 'relevant' (by virtue of being expressly authorised by s6.1.31 of the IPA) is an 'unreasonable' imposition on the development. This requires an examination of the planning scheme policy to see whether it operates in respect of the subject development in a way which is in effect, manifestly unreasonable. Such unreasonableness arose in the Clift case, in which the Court reconciled the requirement for some proportionality between a condition of approval and what the developer proposed to achieve an appropriate outcome.
It was intimated in Australand that other provisions of the IPA may restrict the operation of s6.1.31 in circumstances when the policy in consideration came into effect after the commencement of the decision. Relevantly, the other cases outlined above did not comment on the effect of a policy adopted after the decision stage has commenced.19
The doubts raised by issues 3 and 4 ought to be resolved to the effect that reference to a council's policy in conditions imposed on a development approval, must be read in the context of the power under which they are imposed, that is with reference to the IPA planning scheme policy as it stood at the date the conditions were imposed. This construction is consistent with the decision of the Court of Appeal in BGM Projects, is favoured by the natural reading and approach to the interpretation of conditions in development permits as endorsed by the Court20 and is the most logical and reasonable exposition particularly when one examines the consequences of the alternative interpretation.
If conditions are expressed and refer to a policy in force at any future point of time, or construed as being affected by future policies, the basis on which the contributions are to be calculated is left open to future determination. In turn, this attracts questions as to whether such a condition lacks finality and certainty, is within power and therefore valid.
Significant increases in development contributions can create difficulties for developers because of their impact on the financial feasibility of a project. Consequently, Hopgood Ganim is often asked to provide advice about the legality of such increases. Based upon the above analysis of the current law, the following practical points are offered:
1. In the case of a very significant increase involving large amounts of money, it may be worth closely examining the methodology for apportioning network costs under the policy. If it is seriously flawed, it may be possible to attack the validity of the policy, but a very high threshold must be overcome.
2. The application of the policy to particular development may operate in an inherently unreasonable way, thus allowing scope for the condition to be declared unlawful.
3. Try to avoid changes to development approvals which are more than minor and would require a fresh application. Even though the changes may not increase demand on services, the application will enliven the assessment manager's powers to apply additional or increased charges under new or amended policies.
4. Monitor proposed annual increase in charge rates under policies and be in a position to prepay the charges before the rates increase.
5. Read the conditions carefully and seek advice about appealing against conditions which purport to apply charges according to "amended or replacement policies".
1  QPEC 18
2 Section 6.1.20
3 Section 6.1.31
4 Section 1.4.4
5 Sections 3.5.30(1) and 3.5.32(1)(a)
6  QPELR 253
7  QPEC 022
8 The Gold Coast City Council Policy for Infrastructure No 16 (recreation facilities) and No 19 (transport network)
9 Section 3.5.30
10  QPEC 106
11  QPEC 088
12  QPEC 108
13  QCA 298
14 Pursuant to s6.1.31(2)(c)
15 Pursuant to s6.1.31
16 The cases of Clift and Hickey Lawyers both indicate that the reasonableness/ relevance test under s3.5.30(1)(a) or (b) apply despite the provisions of s6.1.31.
17 See Hickey Lawyers para 
18 3 Section 6.5.30 of the IPA
19 See Mt Marrow Blue Metal Quarries Pty Ltd v Moreton SC  1 Qd R 347; McBain v Clifton Shire
Council  2 Qd R 493; Mitchell Oglivie v Brisbane City Council & Anor  QPEC 055
20 Mariner Construction Pty Ltd v Maroochy Shire Council (2000) QPELR 334; Maxen Development Pty Ltd v Burnett Shire Council  QPELR 559
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