Clift and Anor v Gold Coast City Council [2005] QPEC 106

PLANNING & ENVIRONMENT COURT OF QUEENSLAND CITATION: Clift and Anor v Gold Coast City Council [2005] QPEC 106 PARTIES: JOHN LAWRENCE CLIFT and LINDA RAIMONDA CLIFT Appellants v GOLD COAST CITY COUNCIL Respondent FILE NO/S: BD 3937 of 2004 DIVISION: Appellate PROCEEDING: Applicant’s conditions appeal ORIGINATING COURT: Planning and Environment Court, Brisbane DELIVERED ON: 31 October 2005 DELIVERED AT: Southport HEARING DATE: 02/10/05, 03/10/05, 05/10/05 JUDGE: Robin DCJ ORDER: Appeal allowed, conditions to be varied CATCHWORDS: Integrated Planning Act 1997 s 3.5.30 – developer’s “conditions” appeal – whether infrastructure contributions required of developers under Council’s Planning Scheme Policies about water supply, sewerage network and recreation facilities were irrelevant to or an unreasonable imposition on the actual development proposed – contributions calculated on basis of maximum potential development, alleged by Council to be 57 bedrooms – developer proposed 12 bedrooms (over 9 storeys) – the only element in the calculations susceptible of variation was “yield factor” – whether yield factor should be reduced below 1 (representing maximum development) – appellants’ contention that it should be reduced to the “planned yield factor” rejected – Council’s contention that maximum potential development was achievable in practice rejected – maximum practicable found to be 9 x 3 bedroom units on the evidence before the court. COUNSEL: Mr S Ure – Appellants Mr M Hinson SC – Respondents -- 1 of 30 -- 2 with him Mr S Fynes-Clinton SOLICITORS: Phillips Fox – Appellants Corrs Chambers Westgarth – Respondents [1] This is a developer’s “conditions” appeal under s 4.1.27 (1)(b) of the Integrated Planning Act 1997 (IPA), the Council having approved: - “subject to conditions, a development application for a development permit for a material change of use and preliminary approval for building work for a nine storey apartment building over land described as Lot 1 on RP 21845, Country of Ward, Parish of Gilston and located at 79 Garfield Terrace, Surfers Paradise (the land)” What is sought from the court, should the appeal succeed, is approval of the application “subject to conditions that are relevant to, but not an unreasonable imposition on the development or are reasonably required in respect of the development.” The notice of appeal identifies the conditions complained of: - “ 9 Conditions 2,3,4,5 and 6 of the decision notice state: 2 Contributions toward Recreation Facilities Network Infrastructure shall be paid to the Council in accordance with Planning Scheme Policy 16 prior to the endorsement of the plan of survey, the issue of a Certificate for Building Works or the carrying out of final Plumbing inspection whichever occurs first. The amount of the contribution shall be as follows: Recreation Facilities – Surfers Account: 74648 RDPU03 29.0000 Equivalent Tenements @ $6,085.00 = 176,465.00 TOTAL $176,465.00 Contributions shall be calculated at rates current at due date for payment. 3 Contributions toward Sewerage Network Infrastructure shall be paid to the Council in accordance with Planning Scheme Policy 3B prior to the endorsement of the plan of survey, the issue of a Certificate for Building Works or the -- 2 of 30 -- 3 carrying out of final Plumbing inspection whichever occurs first. The amount of the contribution shall be as follows: Sewer 2 Infrastructure – Coombabah Account: 74648 S2COOMB 20.0000 Equivalent Tenements @ $1679.00 = 33,580.00 Sewer 1 Infrastructure – Coombabah Account: 74648 S1COOMB 20.0000 Equivalent Tenements @ $2,382.00 = 47,640.00 TOTAL $81,220.00 Contributions shall be calculated at rates current at due date for payment. 4 Contributions toward Transport Network Infrastructure shall be paid to the Council in accordance with Planning Scheme Policy 19 prior to the endorsement of the plan of survey, the issue of a Certificate for Building Works or the carrying out of final Plumbing inspection whichever occurs first. The amount of the contribution shall be as follows. Transport Infrastructure – Surfers Account: 74648 TRANSPORT 17.500 Vehicle Trips @ $295.00 = 5,162.50 TOTAL $5,162.50 Contributions shall be calculated at rates current at due date for payment. 5 Contributions toward Water Supply Network Infrastructure shall be paid to the Council in accordance with Planning Scheme Policy 3A prior to the endorsement of the plan of survey, the issue of a Certificate for Building Works or the carrying out of final plumbing inspection whichever occurs first. The amount of the contribution shall be as follows: Water 2 Infrastructure – Molendinar Account: 74648 W2MOLEND 20.0000 Equivalent Tenements @ $1,741.00 = 34,820.00 TOTAL $55,940.00 Contributions shall be calculated at rates current at due date of payment. -- 3 of 30 -- 4 6 A contribution of fourteen thousand three hundred dollars ($14,300) is to be made to the proposed beachfront footpath/cycleway (Account Bikediv(7) 74648). The Contribution is to be made to Council prior to the commencement of the use the subject of this approval.” The Council has abandoned condition 6; the appellants are not any longer contesting condition 4, which is calculated on the basis of the increased demand their proposed development will place on the Council’s transport infrastructure. The contributions required under the Planning Scheme Policies mentioned in the other three conditions are based on a notional development on the site much more intensive than what is proposed. Section 6.1.31 of the IPA is relied on to support the still contentious conditions. [2] Section 3.5.30 of the IPA is: - “3.5.30 Conditions must be relevant or reasonable (1) A condition must— (a) be relevant to, but not an unreasonable imposition on, the development or use of premises as a consequence of the development; (b) be reasonably required in respect of the development or use of premises as a consequence of the development. (2) Subsection (1) applies despite the laws that are administered by, and the policies that are reasonably identifiable as policies applied by, an assessment manager or concurrence agency.” The appellants say that none of the contentious conditions can be supported under section 3.5.30(1) (a) or (b). I thought this section applicable to conditions imposed under s 6.1.31(2)(c) in Hickey Lawyers (a firm) v Gold Coast City Council [2005] QPEC 22. Leave to appeal was applied for, but I am given to understand the matter has been resolved. The appellants contend that, contrary to another view I took, the three Policies identified are “policies” within s 3.5.30(2). [3] Unusually, the Council regards the proposal as underdevelopment. It contains only four three-bedroom apartments; each will occupy two whole floors, the uppermost -- 4 of 30 -- 5 including a roof area to be partly roofed itself. There is presently an old three- bedroom dwelling of two storeys on the 792m2 site, whose northern frontage is to Enderley Avenue; technically, there is an eastern frontage to a gazetted Esplanade which has never been constructed on the dunes. There is thus direct pedestrian access to the beach. [4] The site is in Precinct 2 High Rise Accommodation in the Surfers Paradise Local Area Plan for purposes of the Gold Coast Planning Scheme 2003. The Intent is unusual in “encouraging” high rise development, as opposed to permitting it: - “5.2 Precinct 2: Intent for High Rise Accommodation This precinct incorporates land south and north of the Entertainment Precinct, shown on LAP Map 25.2. This area is already extensively developed, providing, a range of residential and resort accommodation. Retailing is confined largely to the Gold Coast Highway and Ferny Avenue. The intent for this precinct is to encourage further high rise accommodation, both for permanent residents and tourists in appropriate locations. Buildings should be of high quality, both in terms of design and finishes, and sited amidst lush sub-tropical grounds with minimal hard stand areas. In encouraging further high rise development, the precinct seeks to minimise those uses which adversely impact upon the residential amenity of these areas. As a result, high impact non-residential uses should be confined to arterial roads. The amenity of the beach must be preserved. In this regard, it is essential that development along the beachfront complements the existing built form of this area, to enhance the iconic value of towers along the beach. The proximity of this precinct to the beach front and associated pedestrian and open space areas also provides an opportunity to develop a small scale cosmopolitan dining strip along The Esplanade, with an emphasis on al fresco dining be incorporated in the future development of this precinct.” In Precincts 3, 4 and 6 the Intent is to “retain the low key residential nature”; in Precinct 5 it is “to encourage” further low to medium rise accommodation. The Precinct 2 height limit is 30 storeys, which will doubtless be achieved on sufficiently large sites, if it is not being achieved already. Plot ratio has recently been increased to 4:1. Site coverage is 40 per cent. The Surfers Paradise maximum -- 5 of 30 -- 6 residential density map prescribes “one bedroom per 13m2 of net site area (up to 769 bedrooms per net hectare)”, allocating the site to RD 8. [5] The approved plans, as noted, provide for four apartments only. There is no suggestion that the appellants intend (or that the plans allow any scope for) converting them to or using them as a greater number of separate dwelling-units. They are apparently intended for occupation by permanent residents. The proposal has been given the unusual name Eau on Enderley, explicable not only by the ocean frontage but by a 20 metre “waterfall” proposed for the Garfield Terrace frontage, and four balustrades along Enderley Avenue which will be see-through lap pools. Mr and Mrs Clift have been the owners for a long time. It is a commentary on our times that they have felt compelled to defend their chosen development as the highest and best use – unsuccessfully as it turns out, in the view of Mr Murphy, an experienced valuer who became a last-minute expert witness for them, called to rebut the Council’s contention that the site could feasibly be developed with 57 bedrooms. The 57 represents a concession necessary to recognise that it is the “net” site area of 747m2 (what will remain after a dedication for the widening of Garfield Terrace) that is taken into account, rather than the area of the time of the application. [6] Oddly, the proposal has had to confront an issue of being too bulky. At the time of the application, the maximum allowable plot ratio was 1.692:1, producing a total GFA of 926m2 – grossly exceeded by the 1770.8m2 proposed, which represents a plot ratio of 2.23:1. Relaxation was sought, indeed, a two-stage relaxation: (a) Initially, 21.7:1, based on additional landscaping; and (b) then to the ratio required, based on “outstanding urban design quality” outstripping the merit “normally demonstrated by a complying development” -- 6 of 30 -- 7 and was recommended by the Council’s planning officers in their assessment report. The allowable plot ratio has now been increased to 4:1. An inference is easily drawn that this change is part of a number adopted to boost, in a practical way, the “encouragement” mentioned in the Intent. The Surfers Paradise local area plan in 8.3 Development Requirements set out performance criteria and acceptable solutions, PC28 being: - “LOT SIZE PC28 All allotments are to be sufficient area and dimensions to accommodate buildings designed to the criteria in this LAP AS28.1 The minimum lot size for each precinct is as follows PRECINCT MINIMUM ALLOTMENT SIZE NOT LESS THAN 1,2,5 and 7 1,000m 2 3,4 and 6 400m 2 AS28.2 In all precincts, the minimum frontage of land proposed to be used for non-residential or commercial purposes in this LAP is fifteen metres.” this going on top of provisions in 6.0, Table of Development, in G: reconfiguring a lot whereby impact assessment (as opposed to code assessment) was required if the reconfiguration resulted in one or more lot(s) with an area less than 1000m2 . One can speculate that the market has not worked as expected to produce lots of 1000m2 , by amalgamation if necessary, resulting in developments being proposed for lots (like the site) that are smaller. Rather than hold out to force amalgamations, the Council has changed the Gold Coast Planning Scheme so that PC28 as quoted from version 1.0 is now, in version 1.1, PC26, under the new heading “LOT SIZE (FOR SUBDIVISION ONLY)”. The Council’s approach of facilitating more intensive development makes sense when related to the Planning Policies involved in this appeal. -- 7 of 30 -- 8 GOLD COAST PLANNING SCHEME POLICIES The reasons in the Hickey Lawyers appeal contain some description of the Council’s changing approach to charging for infrastructure necessitated by a development. It has been attempted to avoid case by case calculations of appropriate charges in respect of particular developments by mapping the local government area with a view to treating all properties within geographical areas delineated alike, in the sense that contributions will be worked out by calculations based on inputs about which there should be no argument. I think it is notorious that, understandably, there are political pressures to ensure, if possible, that developers (or those who purchase or use what they create) pay for provision of infrastructure required by new development, in relief of the general body of rate payers and/or those who bear the burden of rates indirectly. Representative of the Policies is Planning Policy 3B which commences: “1.0 PURPOSE The purpose of this Policy is to present the developer contributions for the Gold Coast City Council sewerage network. The contributions will only be used to held fund the provision of the infrastructure needed to serve new development and redevelopment. This is Planning Scheme Policy No. 3B, Policy for Infrastructure (Sewerage Network Developer Contributions), which has been prepared in accordance with the Integrated Planning Act 1997(IPA). The provisions of this Policy shall apply to every development application for development, which is situated in a part of the City and which, in the opinion of Council, may be connected to the sewerage network immediately or in the future. The Policy is supported by the infrastructure planning reports detailed in Section 14. 2.0 PHILOSOPHY An applicant shall pay relevant and reasonable contributions towards the capital cost of the provision of the sewerage network to meet the demand placed on the network by the development. -- 8 of 30 -- 9 Contributions are based on the methodology outlined in the subsequent sections of this Policy. The application of this policy and determination of contributions for all developments will be carried out by the Chief Executive Officer or authorised delegate. Contributions shall include financing costs required for funding the construction of infrastructure and administrative costs. Such contributions are held by Council and used for the administration, planning and construction of works or the payment of loans to provide a reliable sewerage network as outlines in the Policy.” The other Policies presently relevant deal with the water supply network and the recreation facilities network. The following sections in the Policies include much material by way of explanation, justification and history. Setting aside for the moment the question whether the “philosophy” is operative as a control, rather than an assertion of what is being (or sought to be) achieved, the crux of each Policy is set out in a flowchart which offers step by step instructions for calculation of contributions, in a “pick a path” format. [7] The instructions (taken from Policy 16) begin: - “FLOWCHART TO DETERMINE DEVELOPER CONTRIBUTION FOR THE RECREATION FACILITIES NETWORK Start Determine both the Assessable impact (ET) and the Developer Contribution Rate ($/ET) to determine the developer contribution Identify proposed development location -- 9 of 30 -- 10 One is then directed to the paths headed “Developer Contribution Rate” and “Assessable ET”; they lead to identification of components to go into the final calculations. A glossary of terms helps explain the latter: - “equivalent tenement (ET)” is a property based unit of measurement used to indicate infrastructure demand for the property. The demand from each property is related to the type of development allowed on the property with a detached dwelling on a standard residential lot being 1 ET. Other residential developments such as flats/units/villas are usually rated lower ET per dwelling.” There is a direction:- “Calculate Assessable “ET” for the development = gross area x yield factor x maximum ET/Ha” Another provision of the glossary should be noted: - “yield factor” represents the percentage of developable land within a specific lot. It accounts for future roads, transport corridors, floodplain areas, open space and other constraints to development.” Yield Factor is taken from the mapping in Appendix B; here it is one (1) - which is typical of all areas east of the Gold Coast Highway, indeed, east of Bermuda Street. [8] Attention is then directed away from a theoretical maximum development to the specifics of the development application:- “Calculate proposed ET = proposed number of dwellings or bedrooms or lots x density conversion, Appendix A” Then comes the question whether the proposed ET falls short of, equals or exceeds Assessable ET. In the first case (encountered in this appeal), the flow chart provides: -- 10 of 30 -- 11 “If developer believes the yield factor to be unreasonable, then the developer may apply to Council for a relaxation of the yield factor at the developer’s cost. CEO or delegated officer is to determine if policy yield factor is to be used or revised” [9] The appellant’s case is that this stage introduces the necessary flexibility to ensure that contributions exacted are relevant and reasonable “to meet the demand created by the development” – which means the development actually proposed. The Council says that the definition of “yield factor” indicates that only loss of part of the land by dedication for some public purpose can lead to a reduction in yield factor. Further, the Council argues, it is relevant and reasonable to charge contributions on the basis of the most intensive development possible, even if that is not applied for. The reason is that infrastructure must be in place before private development occurs, if development is to be orderly and efficient. Water and sewerage infrastructure in particular must be provided to serve the maximum demand anticipated (equivalent to the maximum development permitted to be achieved). Not only works near development sites are to be considered, but remote head works: reservoirs, sewerage treatment works, etc. The undoubted vice of charging more modest developments by reference to actual demand created by them is that, should more intensive development occur later, within the limits of what is allowed, servicing that may require works to replace mains, etc, which will not only be extremely costly, but also extremely disruptive to the citizenry, who may be subjected to months or more of inconvenience while roads are dug up and so on. On this basis, it can be seen as antisocial for a developer to resist paying contributions as if the maximum development were proposed and constructed. From the standpoint that, for present purposes, development for further high-rise -- 11 of 30 -- 12 accommodation is encouraged, it might be seen as antisocial to refrain from developing to the maximum. Either approach represents something of a revolution and sits oddly with the right owners of potential development sites presumably continue to enjoy, of not developing at all. What is happening is the attempted charging of the equivalent of “key money” if any (at least, most kinds of) development should be undertaken. [10] In Hickey Lawyers v Gold Coast City Council [2005] QPEC 022, the general approach of the Policies met a sympathetic response from the court, indeed from the appellants there; they did not challenge the relevant policies which were Policy 16 (recreation facilities) and Policy 19 (transport network), but, rather, contended that the contributions required by calculations made in accordance with Policies led to conditions offending s 3.5.30. Those appellants proposed to develop their site intensively, by a mixed development incorporating more than 100 new apartments in a 34-storey tower. The following appears at [49]: - “Whether or not there is an effective presumption of relevance and reasonableness having regard to the way in which planning scheme policies come about, compliance with IPA authorised guidelines, albeit strictly for a different purpose (a closely related one) is in my view an indicator that a planning scheme policy very likely satisfies s3.5.30(1)(a); there arises a new factor which a dissatisfied developer must overcome in order to succeed in the task it faces of showing that a resulting condition is irrelevant to or an unreasonable imposition on the proposed development. It may not be an easy task to persuade the court that conditions complying with s 6.1.31(2)(c) flowing from planning scheme policies duly adopted are unreasonable or irrelevant. The possibility is nevertheless open, in my opinion.” followed in [50] by: “In 6.1.31 sub-s (1) formerly did not refer to planning scheme policies (merely to the local government not having an infrastructure charges plan); sub-s (2) formerly did not authorize imposition of a condition under a planning scheme policy. Where the circumstances now contemplated by it are encountered, satisfying IPA in that regard, it would ordinarily be a curious outcome to discover s 3.5.30 -- 12 of 30 -- 13 rendered the condition unlawful. One would think that what IPA mandates or permits is by definition both relevant and reasonable for IPA purposes. The possibility cannot be excluded that something may be incorporated in a planning scheme policy that results in a condition being proposed that is clearly offensive to s 3.5.30(1) when examined. That examination must be conducted, not on the basis of the statute and case law as they formerly existed, but on the new basis created by IPOLA.” (Integrated Planning and Other Legislation Amendment Act 2003.) [11] The present circumstances are different in that Mr and Mrs Clift are not proposing the most intensive development permitted under the planning scheme, but (if they determine to implement the approval they have) will be charged with contributions towards some infrastructure as if they were. There is no way that their proposal will generate demands on infrastructure to the extent envisaged in the contribution calculations. [12] In planning law, there appears to have developed something like a common law about conditions, against which the provisions of legislation and planning documents are interpreted. Thus in Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 211 ALR 472, where the Town Planning Act of Western Australia gave “a broad discretion to impose conditions” (483) both McHugh J, who formed part of the majority (at 487) and Callinan J, who dissented (at 513), were referring to House of Lords and other English authority in relation to what are “planning purposes”. Their Honours formulated a test that a condition “must reasonably and fairly relate to the permitted development to be valid” (491), “must fairly and reasonably relate to the proposed development” (513). There has, I think, always been a notion that there ought to be some proportionality between any condition and what the developer proposes. In special circumstances, a condition apparently disproportionately onerous might be permissible. I took that view in Hammercall Pty Ltd v Gold Coast City Council [2004] QPELR 122 in respect of a condition requiring a very large dedication of land for road purposes (which I found -- 13 of 30 -- 14 had earlier been agreed to) in relation to minor development proposals (which related to land forming part of a larger tract being developed in stages). For reasons explained by Jerrard JA, that view was pronounced erroneous. See [2005] QPELR 498 (see also [2005] QCA 029; his Honour said at [89] – [91]: “…the problem for the respondent is that the conditions do not achieve the goal … imposition of those conditions does not go far enough to achieve the provision of the preferred and planned for access to the Pacific Highway. … [The evidence did not show it] … would result in the foreseeable future in any identifiable improvement or change in the standard of the road system in the area … Further, … Hammercall could simply elect not to proceed … Imposing dedication requirements alone, without conditions requiring construction of the relevant works, does not sufficiently achieve the goal … the Council need not reproach itself for having asked now for too little; requiring the dedication and construction of the Bermuda Street extension, the future service road, the interchange, and widening Old Coast Road, would now be too onerous and accordingly an unreasonable imposition …” [13] (The possibility exists that infrastructure planned and to be funded under the Policies will never be built. The Council would be condemned if it failed to keep the list of projected works under review, and make changes to accommodate emerging needs not planned for, or the unexpected redundancy of works already scheduled. I do not think there is cause for the concern analogous to that in Hammercall that an onerous dedication might not lead to any new road. Hammercall had nothing to do with contributions required under the Policies, or anything equivalent. IPA authorises the Policies (speaking generally); it is inherent that there is no link required between a particular development proposal and the actual construction of some specific infrastructure item. It is clear that contributions charged are impressed with a trust to ensure they are used for the provision of infrastructure of the relevant kind: Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566.) -- 14 of 30 -- 15 [14] The appellants contend that the contributions required of them are too onerous. As the written submissions of their counsel, Mr Ure summarise it, the proposed development produces “an actual impact of 3 ET with respect to Policy 16 (i.e. – four proposed ET minus one existing ET) and 3.2 ETs with respect to Policies 3A and 3B (i.e. – 4.2 proposed ET minus one existing ET).” They relied on the report (Exhibit 5) and evidence of Mr Sutherland, an environmental scientist. The report reproduces parts of the Council’s “Guidelines” for its infrastructure policies of March 2005. Point 2 notes the development of “a yield factor layer that is aimed at providing a benchmark for infrastructure planning. The yield factor map converts the gross developable area to the net developable area… Planning Scheme residential densities are then applied to give the yield expected for the lot.” Scenarios are then identified in which proposed densities match those of the yield factor, exceed it or fall short of it. As to the last, the Guidelines say: “(c) The proposed densities to be developed are lower than those of the yield factor; Where this scenario occurs, there are conflicts between infrastructure planning and development density proposals. The applicant is encouraged to review the densities proposed from the development and increase the densities to those of the yield factor. The standard contribution will be calculated by Council’s Headworks Section, and should be applied without further negotiation in the majority of cases. The applicant can submit written grounds to support their argument that a lower yield factor should be applied to their site if the development cannot yield the densities planned. If the applicant chooses not to develop the planned density, and Council’s Strategic Planning Branch determines the planned yields are reasonable, then the applicant is to pay developer contributions for the planned yield. Any resulting developer contribution reductions may only occur on a case-by-case basis if the infrastructure planning review supports reduction of developer contributions. -- 15 of 30 -- 16 Note: Only the yield factor is subject to challenge in this way. The other aspects of calculating the contribution will not be reviewed as part of the assessment of the application.” [15] Mr Sutherland went on to set out the history after the Council’s initial calculations based on 29 ETs with respect to Condition 2 (Policy 16) and 20 ETs with respect to Conditions 3 and 5 (Policies 3P and 3A respectively): “These calculations were later revised to consider net site area after road widening, resulting in ET values in relation to Conditions 2, 3 and 5 of 27.5, 18.95 and 18.95 respectively. In determining these final ET figures, Council found that the theoretical maximum density of the site was 57 bedrooms. In then calculating contributions under Conditions 3 and 5, their theoretical maximum density was conceived exclusively on the 57 bedrooms figure, regardless of how many dwellings that might constitute.” [16] This last observation is pertinent, because, in respect of Policy 16, at p 41 of 43, in respect of Density Conversion ET/Dwelling, the allocation for high-rise accommodation in the Surfers Paradise Local Area Plan is 0.5 ET/bedroom to a maximum of one. A one-bedroom apartment equates to 0.5 ET, a two-bedroom apartment, or larger, to the maximum ET of one. It is difficult to see any justification for disadvantaging a developer (like the Clifts) for making the choice of three-bedroom apartments. [17] The submission made on their behalf is that it must have been contemplated (and that the proper interpretation is) that to arrive at “relevant and reasonable contributions” to satisfy the Philosophy or contribution that “fairly and reasonable relate to the proposed development” (to quote Callinan J) the yield factor may be adjusted downwards from one. The “glossary” definition acknowledges “constraints”, which might be seen as of general application. The natural reading of the definition of yield factor is that what matters is actual loss of land from the -- 16 of 30 -- 17 development, and that it does not invite adjustment where particular areas remain with the developer, although they cannot be made use of because of setback or site cover requirements, and the like. A particular consideration here concerns the rules about shadow, which operate as a de facto setback requirement on the southern side. One suspects that the definition was formulated very much with greenfield developments and broad acres in mind. The centrality of the flowchart in the Policies is such that I entertain considerable misgivings about regarding the philosophy provision as a source of rights or obligations. The extent to which the “philosophy” of the Uniform Civil Procedure Rules in r 5 may have such an effect is still being worked out. It has been used to support decisions about costs. [18] Accepting that it may be seen as straining things to an extent, I have concluded that the appropriate element of flexibility or discretion is conferred by reference to yield factor, that in circumstances such as the present where (relevantly) no land is lost, because reference is to net area after the road dedication, that constraints may nevertheless be considered, and that expression interpreted widely. I am concerned that such an approach may sabotage the effort culminating in the Policies to avoid the need for case-specific determination about contributions in development applications generally. However, the Guidelines contemplate it and, further, it may well be that instances of arguable underdevelopment as stark as the present are not common. [19] Callinan J said in Temwood at 512 it was “highly unlikely that the legislature of Western Australia would have intended to confer upon any planning authority in that State a power to impose conditions that were not reasonably required by the subdivision.” In similar vein, I would not impute to the Council an intention to impose conditions not reasonably required by a particular development. The clear -- 17 of 30 -- 18 statement of philosophy confirms that approach. Adopting a practical, commonsense and broad interpretation, as the court is expected to do in respect of local governments’ planning schemes, the yield factor has to be construed as supplying the mechanism whereby requirements of relevance and reasonableness, whatever their genesis, may be satisfied. There are two features inviting a flexible approach to yield factor over and above the Guidelines’ contemplation that “planned yields are reasonable”: terms may not be explained in a “glossary” with the same rigidity as in a “definition” or a dictionary of the kind found in modern legislation; further, some looseness may be imported by the use of “represents”, rather than “means” or “is”. In similar vein, I would not read the Guidelines as limiting what the Council may deem “reasonable” to either “policy yield factor” or “planned yield factor”. A suitable outcome may come somewhere in between. [20] The appellants, who bear the onus, under s 4.1.50(1) of the IPA, have not satisfied me that it is irrelevant to or an unreasonable imposition on the development actually proposed to require a contribution whose calculation is based on a number of ETs greater than that actually proposed. It is not necessary to repeat what was said in Hickey Lawyers regarding the imprimatur given to the Policies by the IPA in its current form, which I think is a factor in assessing reasonableness issues, as is the methodology followed in devising the Policies. It is made clear elsewhere that this does not mean the outcome in respect of a particular proposed development will pass muster 1 . The Full Court in Sabdoran Pty Limited v Hervey Bay Town Council [1983] 2 Qd R 172 accepted that financial contributions for infrastructure disproportionate to the demand created by a particular proposal may be reasonable. Connolly J said at 180-81: 1 Instances of conditions that might reasonably be seen as disproportionate to actual development proposed can be found in the cases mentioned in Hickey Lawyers in par [10] -- 18 of 30 -- 19 “A more difficult question arises in relation to the quantum of the charge. It is obviously questionable whether a condition which requires the subdividers of the first 400 blocks to pay four times the cost, assuming that cost to be distributed over 2,600 allotments, can be described as so unreasonable that no reasonable planning authority could have imposed it. As I have already said, it is not for this Court to determine what would be a reasonable charge. The answer to that question obviously goes beyond matters of law. We cannot interfere unless persuaded that the charge is wholly unreasonable. Now the way in which I have posed the question may seem to lead to an affirmative answer but it must be remembered that there is in truth no prospect of 2,600 allotments being opened and provided with water at much the same time. On the contrary, the implementation of Stage I is expected to take 15 to 18 years. Over that period the respondent must put the Stage I works into operation and maintain them, bearing holding costs and getting a return in terms of rates which in the early years will be small. Of the nature of things, local authorities operate on borrowed funds for capital works. Commercial subdivision must always face local authorities with demands for various services the funding of which, if they are to be provided at all, must be within feasible limits. Moreover there is no real certainly that 2,600 allotments will ultimately be served by the Stage I works. Bearing all these considerations in mind, I am not prepared to conclude that no reasonable planning authority could require of the first developers that they pay very much more than their theoretical share of the cost of the development.” [21] The bulk of Mr Ure’s submissions, reflecting the evidence and arguments in the appeal generally, went to the “appellants’ alternative submission” which the court endorses, that the yield factor is capable of and should be subjected to reduction to produce an appropriate outcome in a special case. This poses the question, what is the realistic maximum development potential of the site? A contrast is made with the theoretical maximum development on which the calculation methodology set out in the flowcharts is based. [22] Annexure B to Mr Venn’s report, Exhibit 8, is a record of a conclave which he, as the Council’s consultant planner attended with the appellants’ planner and which, as he said, produced no agreement on any particular points in dispute: “31 May 2005 RECORD OF CONCLAVE POINTS OF AGREEMENT -- 19 of 30 -- 20 • Site address 79 Garfield Terrace, Surfers Paradise; • Site within Precinct 2 of Surfers Paradise Local Area Plan • Site designation ‘highrise accommodation’; • Desirable maximum height (LAP Map 2.3) 30 storeys; • Applicable Planning Scheme Code – ‘High Rise Residential and Tourist Accommodation Code’; • Gross site area of 792 sq.m. affected by road dedication of 45 sq.m. resulting in net site area of 749 sq.m.; • Provision of Yield Factor not exploited; • Setback from seawall suggested by the Acceptable Solutions does not affect the land as the offset of it to the Esplanade boundary exceeds the 8.1m setback; POINTS MADE BY MR. RANSOM WERE • All recent developments on beachfront sites of a similar nature have been in a ‘one unit per level’ format due to the fact that the economies of the exercise dictate that large units be provided to meet market expectations; • The proposal to amend the Planning Scheme to allow plot ratio of 4:1 was known at the time of the Pre-Lodgement Meetings but it was not possible to achieve, due to the interaction with other planning parameters that act to provide a building envelope that is acceptable to Council, i.e. beach shadow requirements, southern shadow requirements, car parking requirements, landscaped area requirements, etc.; • 13/14 storeys had been achieved across Enderley Street owing to the luxury of being able to allow shadow to cross the street – which was not possible on the subject site; • While it was the case that the beach shadow criterion had not been reached, height was controlled instead by the shadow to the southern boundary which Council had not shown a history of relaxing, but if Council were to agree in this instance then advantage would be taken of it; • The Yield Factor incorporated into the Policies had not been raised at the pre-lodgement meetings. The Yield Factor concept is acceptable if Council were to change infrastructure contributions at a rate relative to the theoretical maximum potential of the site; • It is absolutely impossible to achieve the maximum permitted residential density on the site in a manner that would result in the development being approved by Gold Coast City Council. It may be possible to increase the -- 20 of 30 -- 21 number of dwellings within the development scheme as it is, but again, it would be impossible to achieve the maximum; • Irrespective of the fact that smaller units could be configured, the market demand has been met and the Policy should be based on that. It would be impossible to develop single and double bedroom units on the site in a manner that would be economically viable. There is no point charging infrastructure against the development in relation to a design that would never actually be developed. The market will always provide larger residential units on beachfront sites such that the potential yield will not be achieved in the vast majority of instances. If Council plan their infrastructure on the basis that beachfront sites will be maximized in terms of residential density, there will be significant over capacity in the infrastructure system; • In regard to Mr Venn’s proposition that the site could be maximised through the use of 20 or so 3 bedroom units, not 2 bedroom units, 45m2 of landscaped area would be required for each 3 bedroom unit in accordance with Council code requirements, meaning that the total landscape area requirement would be approximately 900m2 or significantly larger than the area of the site. Mr Ransom then made the point that the Council would rigidly adhere to this requirement, and that this will regulate the number of units on the site; • The car parking configuration required to service 20 units was impractical. He indicated that he was not aware of any similar situation anywhere where such a basement arrangement has been constructed and that the high construction costs would prevent this from occurring, (20 x 3 bedroom units would require approximately 46 spaces to be provided within the proposed basement); • The Infrastructure Charges Scheme consists of 4 components, three of which are charged on a theoretical maximum development scenario, while the fourth (Transport) is based on the actual demands created by the development. The Transport method is a more equitable method of measuring the Impacts associated with the development; and • Not every site in Surfers Paradise will be developed to an RD8 density, as a very large site area and usable site shape and location will be required to overcome the other applicable development parameters. Half of the sites in the locality (including the majority of site located on the beachfront) would fall into this category. If Council -- 21 of 30 -- 22 construct their infrastructure on this basis, there will be a significant oversupply in the system. POINTS MADE BY MR. VENN WERE • The Planning Scheme need not take cognisance of the particular market preference of the day; The Planning Scheme need only consider practically feasible, and not market driven, unit sizes and configurations; • Irrespective of number of units desired and practicality of car parking, a consideration of development attainable required one to take into account that which was physically possible; • The development parameters offered by the Council-desired Solutions were generally achievable given the view that Council has exhibited in the past to relaxation of parameters; • It is a valid planning outcome to consider that shadow may climb up an 1800 boundary fence but not exceed it – thus permitting 10 instead of 8 storeys; • The currently proposed building envelope could be configured for 24 small units comprising 48 bedrooms; • The Planning Scheme maximization of a development containing 60 bedrooms was achievable within a building of 10 storeys occupying 40% site cover at less than 4:1 plot ratio; • The car parking configuration is practical and engineeringly feasible; • Infrastructure provision cannot respond to individual site constraints or market preferences, it must be funded and instituted prior to the construction of the majority of development that it is to serve, or even be applied for; • The answer to ‘attainable yield’ is not to be derived from what is normal practice by Council’s assessment managers in interpreting discretions to relax various Acceptable Solutions of the Codes but what features of a proposal offer realistic and sustainable planning options in pursuit of a Performance Criterion based solution that will satisfy the particular Purpose of the relevant Code.” -- 22 of 30 -- 23 [23] Mr Ransom’s report is Exhibit 1. Both planners gave evidence. Mr Venn’s point was to show that the maximum theoretical yield was actually achievable, making in passing a criticism of the appellants at 4.12.1: “It is also noted from the application documentation for the subject matter, that the applicant (Clift) discarded the notion of amalgamation although no valid reasoning was offered. The fact that applicants on both sides seek similar development must signal a willingness to curtail the existing use and a desire to realise an advantage from redevelopment. This, of course, does not, of itself, signify any probability of amalgamating the properties but it does signify a potential.” The information Mr Venn thought he had about an application from the site’s southern neighbour proved to be inaccurate. His report went on to note: “4.12.2 Both the Planning Scheme and the SEQRP (South-East Queensland Regional Plan) encourage amalgamation in the interests of a more efficient land use pattern, consolidation of the urban footprint, efficiency of infrastructure provision and, in the case of the Planning Scheme, through the plot ratio bonus policy. 4.12.3 That being the case, it is legitimate for a planning policy to maintain a level of charging commensurate with that potential, but as yet unfulfilled, development intensity facilitated by the Planning Scheme. However, there appears little point on theorising on site amalgamation as the development yield possible, as calculated in the above sections, fulfils the intent of the Planning Scheme instruments in any event.” Mr Venn reached that conclusion on the basis of a hypothetical exercise, which attracted a response in terms of the difficulties the Planning Scheme placed in the way of this theoretical development. Mr Ransom had the advantage of intimate association with the appellants’ proposal, which has been fully designed, to the stage of approved plans. Notwithstanding Mr Venn’s apparent confidence that answers could be found to the criticisms raised, I did not find this persuasive. His proposal of a 10-storey building would necessitate a second lift, reducing the space available per floor to accommodate units, which is limited by the 40 per cent site -- 23 of 30 -- 24 cover requirements. Compliance with the requirements for on-site parking would dictate that there be four or more basement levels, something unprecedented for such a small site, likely to encounter problems with the water table, even if it were economical to construct. The provision of ramps to allow movement between levels would lead to an inefficient design, with much “waste” space. Mr Venn knew of parking basements of such depth elsewhere on the Gold Coast, in commercial developments. There was mention of possible use of a lift to transport vehicles to and from basement levels, but that was not gone in to in any detail. [24] Perhaps most significant is the difficulty the southern shadow of Mr Venn’s theoretical 10-storey building would cast. The ordinary standards (acceptable solutions) require that the shadow to true south of a building be confined to its own site. Relaxation is possible, but comes at the cost of the amenity of the southern neighbour. The only instances of relaxation actually being obtained which the court heard of arose in exceptional circumstances, such as the southern neighbour’s being a commercial development where there already existed a large blank wall. I am not persuaded by Mr Venn’s assertion (vital to the maintainability of a project of 10 storeys) of the acceptability of a southern shadow touching the top of a standard 1.8 metre fence along the boundary – on a theory that such a fence, if solid, would cast its own shadow. The High Rise Residential and Tourist Accommodation Code provides: PERFORMANCE CRITERIA ACCEPTABLE SOLUTIONS PC19 The building must be located on the site so as to minimise the period of shadow intrusion onto surrounding sites or other buildings on the same site. AS19 The shadow cast by the building in a true south direction has a length of 0.25 times the height of the building, as measured from ground level adjacent to the southern side of the subject building to the top of the topmost storey, and does not intrude onto any other site, or does not cast shadow onto any other building on the -- 24 of 30 -- 25 same site. [25] On analysis, the gesture made towards limiting shadow is fairly paltry. It is only the true south shadow which is considered, a phenomenon which would be encountered only momentarily each day. Common experience is that, in winter, shadow cast by structures to the north at the other moments of the day may be very substantial. Mr Ransom’s assertion is credible (and one would hope) that the Council would not contemplate any significant relaxation in the absence of consent from the southern neighbour or equivalent circumstances. [26] Mr Venn’s proposed building appeared to require 42 per cent site cover, again something unprecedented (according to Mr Ransom and the Council’s supervising planner for material change of use “city wide”, Mr Sharpe) for any building above 5 storeys in height. See PC3. [27] It is worth setting out Mr Ure’s submission regarding PC22, which: “requires that the development must provide sufficient communal open space which provides adequate and useable recreational areas required to service the needs of residents or guests of the development and aesthetically complements the buildings and enhances the attractiveness of the development. The acceptable solution suggests, and Mr Venn agrees, that it would be appropriate to provide for a three-bedroomed scenario 900 sq.m of communal open space for recreation and landscaping purposes. The acceptable solutions also provide that at least 10% of the site area compromise deep planting. It is unlikely that this could be achieved as Mr Venn’s basement car park occupies almost the entirety of the site. Mr Venn suggests that 316 sq.m could be provided on a roof terrace. This exceeds the 40 per cent site coverage (298.8 sq.m) and does not take into account roof services such as lift plant, stairwells, etc. -- 25 of 30 -- 26 Further, it is difficult to see how landscaping on a roof terrace could be said to ‘aesthetically complement the buildings and enhance the attractiveness of the development’. Mr Venn was driven to suggest that there could be a basement gymnasium in the order of some 200 sq.m. Such a facility could not be considered communal open space. In Ritek Building Systems (NQ) Pty Ltd v Cairns City Council [2005] QCA 347 McPherson JA said: ‘It is not easy to see that an area enclosed by a floor, four walls and a ceiling is an open space according to any ordinary meaning of those words.’” [28] It is unnecessary in the circumstances to descend to any detail regarding the points raised against Mr Venn’s hypothetical in relation to PC1 (site setbacks), PC11 (landscaped areas adjoining frontages which enhance the streetscape), PC7 (articulation of walls) and PC16 (which would require 66 car parking spaces, and maybe five or six levels of parking on top of the gymnasium, “for the Council’s 57 one-bedroom scenario”). In those instances, Mr Venn’s hypothetical building may well be susceptible of redesign. Otherwise, I think the difficulties raised by the appellants are pretty well insurmountable, that the proposal is one which, realistically, could never be built, unless the Council abandons any regard for the amenity of neighbours. It seems to me fundamentally unsound to rely on “relaxations” in a context like the present, to postulate a maximum potential development having nothing to do with the development actually proposed, for the purpose of exacting contributions. In my opinion, the exercise of calculating contributions should ordinarily be conducted on the basis of a development which complies with the ordinary development standards set out in acceptable solutions. I think it is reasonable to regard the acceptable solutions as “constraints”, and to avoid contemplating that a developer has to beg for some indulgence. -- 26 of 30 -- 27 [29] Mr Murphy was called to establish that the market was such that in this location, no more than one unit per floor on a site of this size would be expected. Mr Venn was postulating combinations of units, ranging in size from one bedroom to three. Applying the formula of one bedroom per 13m2 of net site area, to indicate 57 bedrooms, many combinations would be possible. The Council’s approach was that there could be two three-bedroom units on a floor, three two-bedroom units. Mr Venn identified other developments (not on the beach) where apartments of the modest proportions involved were being provided. The evidence about it persuades me that, for prime sites on the beach, where land is extremely expensive, there is no shortage of willing buyers for large “one per floor” apartments. There would be no shortage of buyers for the multi-floor apartments proposed by the Clifts, presumably. The buildings identified by Mr Venn and Mr Sharpe as containing one-bedroom units and two-bedroom units are not comparable, as their sites are not comparable with the Clifts’. I am in no doubt that, if they chose to develop one or two-bedroom units, there would be buyers available for them, too. I do not consider that there is anything requiring the court to say that the Planning Scheme or the Policies require a developer to opt for a greater number of units, as opposed to a lesser number, on pain of being subjected to penal contributions. (It has to be remembered that we are dealing with a planning area where heights of 30 storeys are encouraged, something totally unachievable on this site.) [30] Assuming that the court has become charged with working out, on the basis of the evidence, what is the “yield factor”, there may be a range, all the way from Mr Ransom’s First Class Development of 12 bedrooms to something within striking distance of Mr Venn’s Economy 57. The obstacles faced by the latter, outlined above, are such that it is difficult to know how far to scale back. I am not persuaded -- 27 of 30 -- 28 that a building over nine storeys is feasible. There remains the issue of “how many units per floor?” The principal constraints here relate to on-site parking and the feasibility of multi-level basements, also communal open space. It is not clear that, in practice, the requirements under acceptable solutions for even two units per floor could be provided. Those were the difficulties identified by Mr Ransom in his evidence at p 61 where he expressed the opinion that “the greatest density you could realistically achieve on this site would be one unit per floor. It would be a three- bedroom unit…” He went on to note that no investigation or detailed design had been done “and that it may well be that there are still planning parameters that might even prevent that occurring”. I am not persuaded that the reservations mentioned make it inappropriate to find that nine three-bedroom units could realistically be constructed, one per floor. It might be that, unusually, the highest would be the smallest, depending on what facilities were to be provided on top of the building and shadow considerations. It would be regrettable if it were necessary to embark on detailed theoretical design exercises just for the purpose of calculating contributions under the Policies. [31] The cross-examination of Mr Ransom was directed towards getting him to accept that Mr Venn’s approach was reasonable, that the relaxations needed could be expected. Mr Ransom gave nothing away. He was not really challenged about his own opinion about maximum realistic development. In the circumstances, I propose to act on it, and eschew the exercise of selecting some number of three- bedroom units between nine and 17 or so. I will leave to the parties what is presumably a simple mechanical exercise of working out where the flowcharts lead on that basis. -- 28 of 30 -- 29 [32] Some time was spent dealing with the assertion made in the appellants’ case that they or their successors in title would be overcharged for infrastructure upon future redevelopment of the site. Exhibit 5A was a table prepared by Mr Sutherland to demonstrate this phenomenon, which Mr Ransom said concerned him: he “wouldn't put it past them (the Council)” (142). The concern is based on the theory that, although a developer has made relevant infrastructure contributions for a site in reference to some theoretical ET or number of bedrooms, when contributions come to be assessed for a future redevelopment, credit will not be given against future contributions towards the same type of infrastructure for what was actually paid in the past, but only for the (lower) level of contributions which would have been attracted by the constructed development on the site. It is said that a literal reading of flowchart provisions indicates the approach of reference to existing use of the site, rather than contributions paid. The new infrastructure charging regime embodied in the Policies necessarily focuses on existing use and development, because there will have been no contributions in the past. It seems to me the appellants’ fears are groundless and that the court should not be troubled by suggestions that, if credits are allowed for actual contributions, they may be lost because records go astray. Assuming the Policies endure, I do not think they can be construed to permit overcharging of the kind allegedly feared. The point was made with a view to persuading the court to limit contributions now strictly to the development actually proposed, the dimensions of which can readily be discovered on an inspection. [33] On the Council’s side, the inconvenience flowing from some future redevelopment of greater intensity (leading to more contributions being collected) was alluded to. It was suggested the Council would be happy if the appellants and their successors -- 29 of 30 -- 30 in title could, in some binding way, be precluded from developing more intensively – which would give the Council some certainty about the long-term demands of the site on the services it has to provide. There is probably no opportunity remaining in this appeal to explore it, but a possibility might be for the Council (which takes many other easements) to take a volumetric easement over the space above the building, so as to preclude any taller future development without the Council’s consent. That would presumably have some impact on the site’s market value. [34] There is no perfect solution in a situation like this. From the planner’s perspective, (like others) the site is too small: the Council suffers the disadvantage of many governmental institutions in a free society that if the people are left to make their own decisions, the result will not necessarily match what the instrumentality expects or desires. Long-term infrastructure planning is going to be a difficult exercise – under-provision will be costly to remedy; over-provision will waste resources. Only by “fluke” will the Policies work perfectly, (especially in “brownfields” where unpredictable redevelopment is under way on a site by site basis). In my opinion it has to be acknowledged that they cannot reasonably be made to work perfectly. It is not acceptable, if s 3.5.30 (or the philosophy) applies, to adopt what I dubbed the “key money” concept. The position seems to be that the Council must make its best judgment about what infrastructure should physically be constructed when the time for actual construction arrives and, if contributions collected under the Policies are insufficient, fund the shortfall from other resources. It may turn out that future redevelopment brings in some reimbursement. Either way, we are dealing with one of the burdens of governmental responsibility. [35] The appeal succeeds. -- 30 of 30 --