Australia: Local governments can change the form of infrastructure after approving a conversion application

Last Updated: 4 June 2018
Article by Ian Wright, Nadia Czachor and Russell Buckley

In brief

The case of The Avenues Highfields Pty Ltd v Toowoomba Regional Council [2017] QPEC 48 concerned the following two proceedings and corresponding issues:

  • Originating Application – where a decision is made to convert non-trunk infrastructure to trunk infrastructure, does section 662(3) of the Sustainable Planning Act 2009 (SPA) give the Council the discretion to impose a necessary infrastructure condition that changes the form of the development infrastructure?
  • Appeal – do the circumstances warrant approving the conversion of the non-trunk infrastructure to trunk infrastructure?

The Court ultimately found as follows:

  • in respect of section 662(3) of the SPA, there is no requirement that the Council impose a necessary infrastructure condition on the same, or substantially the same, terms as the original condition requiring non-trunk infrastructure; and
  • in respect of the subject non-trunk infrastructure, it was not appropriate to convert it to trunk infrastructure because it failed to meet the relevant criteria for trunk infrastructure.

The Council refused to convert roadworks infrastructure

The Appellant intended to develop land located on the corner of the New England Highway and Cronin Road, Toowoomba into a master-planned residential community known as "The Avenues Highfields." Certain conditions of the development approval required the Appellant to undertake external roadworks to upgrade Cronin Street, Barracks Road and Kuhls Road. The Appellant applied to the Council to convert non-trunk stormwater drainage and roadworks infrastructure required by the conditions to trunk infrastructure. The Council approved the conversion of the stormwater infrastructure but refused to convert the roadworks infrastructure.

The parties disputed the proper construction of section 662(3) of the SPA

Section 662(3) of the SPA requires that "[w]ithin 20 business days of making the decision [to convert non-trunk infrastructure to trunk infrastructure] the local government may amend the development approval by imposing a necessary infrastructure condition for trunk infrastructure."

The Appellant submitted that the following were all reasons in support of its argument:

  • "May" should be read as "must" and the Council did not have the discretion to not impose a necessary infrastructure condition.
  • Section 662(2) of the SPA operates such that a condition requiring the provision of non-trunk infrastructure no longer has effect, and as a consequence the developer is no longer obliged to provide reasonable and relevant infrastructure.
  • The primary intention of a necessary infrastructure condition is to convert non-trunk infrastructure to trunk infrastructure, otherwise the development approval is shorn of a reasonable and relevant condition, leaving it potentially of no effect.
  • It could not have been the legislative intention that an applicant, having successfully applied to convert non-trunk infrastructure to trunk infrastructure, is then faced with the risk of a different and potentially more onerous infrastructure requirement.
  • If it was intended that the Council be given fresh discretion to impose infrastructure conditions on the development it would flow that it would be accompanied by fresh appeal rights. However, the SPA contains no such appeal rights.
  • Section 661 of the SPA presupposes that the outcome of approving a conversion application is that an offset or refund for trunk infrastructure will be available. There would be no utility in this if the Council had the discretion to not impose a fresh condition requiring trunk infrastructure.

On the other hand, the Council submitted that section 662(3) of the SPA gave it the opportunity to exercise a discretion to impose a necessary infrastructure condition requiring changed infrastructure.

The Court found that section 662(3) of the SPA did confer discretion on the Council to change the form of the development infrastructure

In short, the Court found that section 662(3) of the SPA did confer discretion on the Council to impose a necessary infrastructure condition that changed the form of the infrastructure.

Whilst the Court opined that the Appellant's arguments were compelling, it relevantly held as follows:

  • The Court rejected the Appellant's argument that "may" in section 662(3) of the SPA is to be read as "must", citing relevant case law and legislation about the applicable principles of statutory construction.
  • Interpreted literally, section 662(3) of the SPA permits the Council to impose a necessary infrastructure condition or to not impose a necessary infrastructure condition. This is reinforced by section 662(4) of the SPA which starts with the word "if".
  • Section 649 of the SPA applies in the event a necessary infrastructure condition is imposed and requires an offset or refund. Section 649 operates to neutralise adverse consequences for an applicant by compensating it for the difference between the establishment cost of the infrastructure and the amount for which it is responsible. The Council therefore bears the financial burden of more onerous infrastructure, which reinforces the interpretation that the Council may elect to condition the infrastructure works or undertake the infrastructure works itself.
  • Had the legislature intended to limit the Council's power such that the condition to be imposed after a successful conversion application was to be on identical terms as the original condition, it would have been a simple matter to legislate.
  • Whilst there are no express appeal rights with respect to a necessary infrastructure condition imposed under section 662(3) of the SPA, there are protections afforded to an applicant in the SPA which includes the requirement that a conversion application be made before construction commences. This ensures that there are no wasted costs associated with any change required to the ultimate form of the infrastructure.

The Court determined that the requirement to "have regard to" the conversion criteria does not require the Council to adhere to the criteria

Section 660 of the SPA requires that the Council, in determining the Appellant's conversion application, "have regard to" the criteria in the Council's charges resolution. Relevantly, section 7(a) of the Council's Charges Resolution No.2 provided as follows:

"(ii) construction of the infrastructure has not yet started;

(iii) the infrastructure is inconsistent with the requirements for non-trunk infrastructure stated in section 665 of the SPA;

(vii) the type, size and function of the infrastructure is:

  1. consistent with the trunk infrastructure identified in the Council's LGIP; or
  2. consistent with the examples of trunk infrastructure stated for a network in Table 4."

The Court determined that the words "have regard to" required the Council to only give "proper, genuine and realistic consideration" to the criteria in section 7. The Council was not required to adhere to the criteria and had a broad discretion, such that it was not bound to decide the application in compliance with section 7 of the Charges Resolution No.2.

The Court found the Appellant's non-compliance with section 7(a)(ii) of the Charges Resolution No.2 was significant

Construction of Cronin Road had started.

The Court found that section 658(b) of the SPA supported section 7(a)(ii) of the Charges Resolution No.2 by manifesting a clear intention that the commencement of construction of the non-trunk infrastructure was inconsistent with a conversion application. The Court found no good reason to overlook the accepted fact that the Appellant had commenced construction.

The Court found that the Appellant had failed to justify non-compliance with section 7(a)(iii) of the Charges Resolution No.2

The Court found that the infrastructure was consistent with the requirements for non-trunk infrastructure as it would protect and maintain the safety and efficiency of the infrastructure network, being a criterion for a non-trunk infrastructure condition in section 665(2)(c) of the SPA .

The Court held that the Appellant had failed to establish firstly why the relevant conditions were erroneous and secondly that the roadworks already undertaken were more than required to protect and maintain the efficiency of the infrastructure network. Further, the Court did not accept the Appellant's argument that the non-compliance with section 7(a)(iii) of the Charges Resolution No.2 is to be given little weight on the basis that protecting or maintaining the efficiency of the infrastructure network applies to all roads and, as such, section 665(2)(c) of the SPA does not help to distinguish between trunk and non-trunk infrastructure.

The Court found that the Appellant's conversion application failed to comply with section 7(a)(vii) of the Charges Resolution No.2

The infrastructure was not identified in the Council's LGIP and the Court held that it was not consistent with the examples of trunk infrastructure in Table 4 in the Charges Resolution No.2.

The relevant example in Table 4 of the Charges Resolution No.2 was for land or works for major distributor roads having a minimum capacity of 5,000 vehicles per day and servicing a minimum of 500 residential lots. The Court was satisfied that both roads would not carry traffic volumes to support classification as distributor roads. Whilst there was a theoretical capacity for both roads to carry 5,000 vehicles per day, it was not the likely reality. Lastly, the Court was not satisfied that the roads would service 500 residential lots.

The Court dismissed the appeal following the Appellant's failure to satisfy the relevant criteria

The Court held that the Appellant's failure to satisfy the criteria in section 7(a)(ii), (iii) and (vii) of the Charges Resolution No.2 was not fatal as section 660 of the SPA does not mandate refusal.

Despite this, the Court dismissed the appeal on the basis that the Appellant had commenced works and that it was inappropriate to convert infrastructure which fails to meet the criteria for trunk infrastructure and thereby potentially entitles the applicant to an offset and refund.

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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