Australia: State Administrative Tribunal (SAT) determines validity of developer contribution

The State Administrative Tribunal (SAT) has recently considered the validity of the imposition of a Developer Contribution imposed as a condition of planning approval.

The Deputy President, Judge Parry, considered the operation of development contribution plans which are dealt with in regulations 71, 72 and 73 of the Planning and Development (Local Planning Schemes) Regulations 2015 (WA) (the Regulations).

Judge Parry also outlined, considered and applied the "Newbury tests" in reaching his decision.


The Applicant, Mr Prosser, initiated review proceedings in SAT with regard to a condition of planning approval imposed by the City of Bunbury (the City) as follows:

"Before the development commences, the developer shall contribute $6,240 towards the upgrading of the Spencer street footpath located adjacent to the Boundary of the lot/development site."

The development was for the construction of a showroom building and 43 car parking bays. The condition of planning approval sought half the cost of upgrading the footpath adjacent to the development site.

Development Contribution Plans

The Applicant argued that the condition was a breach of regulation 73 (1) of the Regulations which states as follows:

"A local government must not levy a contribution for the provision of infrastructure or facilities for an area unless there is a development contribution plan in place for the area."

Well, there was no development contribution plan in place, and the parties were in agreement that the footpath was "infrastructure' within the meaning of this regulation. So at first glance it would appear the argument was pretty straight forward.

However, Judge Parry found that the meaning of "area" as used in regulation 71 meant a "development contribution area" and not an area generally. Consequently, as the area in question was not a "development contribution area" there could be no breach of regulation 73 (1).

The Newbury Tests

The Applicant also argued that that the condition could not lawfully be imposed as it breached the second of the so-called "Newbury tests".

Judge Parry set out the background and content of the "Newbury tests" as follows.

The "Newbury tests" having derived their name from a House of Lords decision were subsequently stated by the High Court in Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30 in the following terms [57]:

... A condition attaching to a grant of planning permission will not be valid therefore unless:

  1. The condition is for a planning purpose and not for any ulterior purpose. A planning purpose is one that implements a planning policy whose scope is ascertained by reference to legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning.
  2. The condition reasonably and fairly relates to the development permitted.
  3. The condition is not so unreasonable that no reasonable planning authority could have imposed it.

Judge Parry further noted that the Western Australian Supreme Court had endorsed the High Court's statement of the "Newbury tests" in Reid v Western Australian Planning Commission[2016] WASCA 181.

Application of the Newbury Tests

The parties agreed that the first Newbury test was satisfied as there was clearly a planning purpose of facilitating safe and convenient pedestrian movement. Judge Parry also noted that it was not in serious dispute that the condition was not manifestly unreasonable in the sense that no reasonable planning authority could have imposed it, thus satisfying the third test.

This left the question in dispute in relation to the Newbury tests as to whether the condition fairly and reasonably related to the proposed development.

Some considerable evidence was adduced by both parties as to whether the development would in fact cause increased pedestrian activity on the footpath in question. On this point Judge Parry was not satisfied that the proposed development would in fact involve any greater use of the footpath by pedestrians generated by the proposed development.

Consequently the Judge found that there was not a sufficient nexus between the proposed development and the condition or that the condition fairly and reasonably related to the proposed development.

Judge Parry also stated that even if he was wrong on whether there was a sufficient nexus he remained satisfied that it would be inappropriate and unreasonable to impose the condition.

Key points to remember

A condition of development approval requiring a developer contribution is not invalid in the absence of a development contribution plan unless the area in which the proposed development is located is a development contribution area.

SAT and the Supreme Court will apply the Newbury tests to developer contributions as set out in the High Court decision of WAPC v Termwood Holdings Pty Ltd.

Read the decision: Prosser and City of Bunbury [2018] WASAT 41 published 7 June 2018.

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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