The Planning and Environment Court has recently delivered an important judgment relating to infrastructure charges. In Wagner Investments Pty Ltd & Anor v Toowoomba Regional Council  QPEC 24, his Honour Judge Jones decided a dispute relating to Infrastructure Charges Notices (ICNs) issued for a range of development approvals at the Brisbane West Wellcamp Airport and Wellcamp Business Park - a site located approximately 15km west of Toowoomba’s central business district.
The judgment is a timely reminder of the prerequisites to, and limits on, levying infrastructure charges.
- First, there must be relevant trunk infrastructure
- Trunk infrastructure must be clearly identified in a Local Government Infrastructure Plan (LGIP). This reflects section 119 of the Planning Act, which requires a link between the adopted charge and the trunk infrastructure for the development. If there is no trunk infrastructure for the development, there is no reasonable basis for the charge.
- Second, there must be additional demand placed on that trunk infrastructure
- A charge may only be for the “additional demand” (or “extra demand” using the terminology from section 120 of the Planning Act 2016) placed on trunk infrastructure that the development will generate. This control should not be forgotten when levying infrastructure charges.
The Wagner Group challenged a number of ICNs, which levied charges on a range of uses, as well as an approval for reconfiguring a lot.
The first challenge related to stormwater network charges. The allegations were that:
- the charges were unreasonable;
- there were errors in working out the additional demand placed on the stormwater network; and
- there was a failure to identify the relevant trunk infrastructure impacted by the development.
The second tranche of allegations related to transport network charges. Again, the allegations were that:
- the charges were unreasonable; and
- there were errors in working out the additional demand placed on the transport network.
In particular, the Appellants attacked Council’s decision to adopt GFA as the basis for working out additional demand generated by the developments.
The appeals were run under the (now repealed) Sustainable Planning Act 2009 (SPA), where appeals about ICNs were limited to whether:
- the charge in the notice is so unreasonable that no reasonable relevant local government could have imposed it;
- errors in the calculation of the charge (i.e. errors relating to the application of the charge, working out of additional demand or the availability of an offset or refund);
- the failure to make a decision about an offset or refund; or
- the timing of a refund.
Those limited appeal rights carried through to the Planning Act 2016.
Key Findings - Stormwater Network Charges
The central issue in the stormwater charge dispute was whether or not any trunk stormwater infrastructure was affected by the development. Council’s position was that Westbrook Creek (a natural waterway which ran along the southern boundary of the site) was an item of trunk stormwater management infrastructure. However, while some trunk stormwater infrastructure was situated in Westbrook Creek, it was uncontroversial that none of that infrastructure was located downstream of the subject development. More importantly, Westbrook Creek was not specifically identified in Council’s Priority Infrastructure Plan (PIP) or LGIP as trunk infrastructure.
The judge concluded that Westbrook Creek was not identified as relevant trunk infrastructure for the development, and that no trunk stormwater infrastructure was provided or planned for, the subject development. On that basis, the challenge to the stormwater charges was upheld, and the stormwater charges were set aside.
The judge also dealt with The Wagner Group's alternative argument regarding additional demand. The parties’ experts had noted the conditions for approval required the preparation of a Site-Based Stormwater Management Plan to demonstrate that the development would not increase peak flow rates or flood levels external to the site, and would meet the relevant water quality objectives for stormwater runoff from the site. It was also relevant that no trunk infrastructure was located downstream of the development. In that context, Council was unable to substantiate allegations that the development would generate additional demand on the network. Indeed, it was accepted that potential impacts would be adequately managed. The judge recorded he was satisfied, in those circumstances, that there was no additional demand generated by the development.
Key Findings - Transport Network Charges
The challenge to the transport network charges was whether the charges were unreasonable in the sense that no reasonable Council could have imposed them.
The relevant development approvals covered a range of uses - warehouses, hangars, a fuel storage facility, an airport terminal and services, a transport depot and medium impact industry depot, mixed use industry, warehouses and a container park. In applying infrastructure charges, Council had allocated those uses into either the “industry” or “essential services” development category under its Charges Resolution. As a consequence, the infrastructure charges for the development were calculated by reference to their gross floor area (GFA).
The Wagner Group argued the uses fell with the “specialised use” development category - a category that included “air services”. In that respect, it was relevant that Council’s Charges Resolutions at the time did not include a particular charge rate for the “specialised use” development category. Rather, it provided that a charge would be applied “based on an assessment of use and demand”.
The Judge agreed that the warehouses (which were linked to dispersing goods from aircraft), fuel storage facility, airport terminal and airport terminal services were properly categorised as “specialised uses” for the purposes of assessing infrastructure charges. That meant Council’s own policies (i.e. its Charges Resolutions) required a meaningful attempt to calculate or estimate the demand on transport infrastructure generated by each of the uses.
His Honour Judge Jones considered that the GFA approach adopted by the Council was too “broad brush” and meant there was a gross overestimation of the likely traffic generation outcomes. It should be borne in mind that the uses under consideration were quite specialised. For instance, the hangars, airport terminal and fuel storage facility all had large GFAs but that did not correlate with the volume of traffic actually generated by those uses. The accepted evidence of The Wagner Group's traffic engineer was that there was “a disconnect between the level of demand which is inferred by the charge as opposed to the actual level of demand”.
In other words, there was no meaningful correlation between the GFA and likely traffic outcomes.
On that basis, His Honour Judge Jones held that the approach adopted by Council was not a lawfully reasonable approach in the sense that it would result in outcomes that would be “unlikely to bear any legitimate relationship between (the) developments and any additional demand placed upon trunk infrastructure”. The finding of unreasonableness stemmed from Council’s Charges Resolution, which required infrastructure charges for “specialised uses” to be based on an assessment of use and demand generated by the development. The challenge to the transport network charge for the warehouses, fuel storage facility, airport terminal and airport terminal services uses was upheld, with the judge remitting the matter to Council for reconsideration (noting that the assessment of transport network charges had to be based on the “specialised use” development category).
The judge upheld Council’s GFA approach in respect of the transport depot and medium impact industry depot, mixed-use industry and container park uses. He concluded those uses had been properly allocated to the “industry” development category under the Charges Resolution, which justified a GFA-based infrastructure charge.
A final point of note is that the Judge also upheld the challenge to transport network charges for the reconfiguring a lot approval. Council had levied an infrastructure charge at both the reconfiguration stage and for the use (the container park). The judge found that the evidence was sufficient to satisfy him that there was no rational link between the reconfiguration of the land, and the estimated additional demand Council considered would be placed on its trunk transport infrastructure network.
The Wagner judgment is an important one , with points worthy of consideration for Councils and developers alike.
- The first lesson is that there must be some relevant trunk infrastructure for the development identified in an LGIP, to support the application of a charge. Absent any infrastructure, there is no reasonable basis for imposing an infrastructure charge. Section 119(b) of the Planning Act indicates that a charge may only be levied and recovered where an “adopted charge applies to providing trunk infrastructure for the development.”
- Second, without relevant trunk infrastructure for the development, there can be no additional or extra demand. That is, a failure to identify impacts on trunk infrastructure tends to support allegations that there is no additional demand placed upon trunk infrastructure. That triggers the control in section 120 of the Planning Act, which states that “a levied charge may be only for extra demand placed on trunk infrastructure that the development will generate.”
- Third, allegations relating to unreasonableness must be founded in Council’s decision-making process. The Wagner’s appeal was successful largely because use and demand was made a relevant part of the decision making process by virtue of Council’s own Charges Resolution which, for “specialised uses”, deferred the setting of the appropriate charge until after that assessment process was complete. While the limitation regarding extra demand applies universally (by virtue of the Planning Act), attacks on charges based on GFA will not arise in all circumstances.