We have recently seen many councils impose development consent conditions requiring ownership of portions of private land to be handed over to the council for free. At times, councils may rely on a development control plan (DCP) that shows the relevant land as being designated for future roads or open space. However, development proponents should know their legal rights when confronted with this situation.
A consent authority may want to impose a development consent condition requiring (a) the payment of money and / or (b) the dedication of land free of cost. However, it cannot do this without complying with a strict set of requirements that is more onerous than the requirements that apply to other types of consent conditions, such as requirements to carry out works.
This is because the Court of Appeal has ruled that section 94 is the only provision of the Environmental Planning and Assessment Act 1979 (the Act) that can authorise a consent condition requiring the dedication of land (Fairfield City Council v N & S Olivieri Pty Ltd ) or the payment of money.
This means that there are several critical requirements that must be met before a condition may be satisfied.
For example, if a condition requires the dedication of land for a public reserve, the development must (or must be likely to) require the provision of a reserve or increase the demand for reserves in the area. The development must also benefit from the particular dedication of land, and the requirement to dedicate must be reasonable.
However, often the most critical (and clear-cut) requirement is imposed under section 94B(1) of the Act. This provision says that a council (including a joint regional planning panel) may only impose a condition under section 94 if it is ‘allowed by, and is determined in accordance with, a contributions plan’ (subject to any direction of the Minister).
The Court of Appeal (in Maitland City Council v Anambah Homes Pty Limited ) has said that the purpose of this requirement is to increase transparency and make councils “far more accountable”. A condition requiring the dedication of land can only be imposed when it is publicly explained and justified in a contributions plan. According to the Court of Appeal, this enables owners of land to “plan accordingly without being … hijacked by a council without notice”.
A good illustration of what this means is provided by the Land and Environment Court’s recent decision in Australian International Academy of Education v Hills Shire Council .
In that case, the applicant was granted development consent for a school. A condition was imposed requiring it to dedicate land within the site to the council as a public road at no cost. The road in question was depicted in the development control plan (DCP) as part of a future street network and road hierarchy. However, the dedication of the land was not proposed or volunteered by the applicant as part of its development application.
The applicant applied to modify the consent by deleting the condition, but the modification application was refused by the council. On appeal, the Court deleted the condition because the required dedication of land was not expressly authorised by section 94, as required by section 94B(1).
The Court said that it did not matter that the road was depicted as part of a future street network in the DCP. It also would not have mattered if the DCP had gone as far as expressly requiring the dedication of roads free of cost. The section 94 regime cannot be overridden by the provisions of a DCP. As a consequence, if the council wanted to acquire the land for the future road, it would have to do so under the ‘just terms’ process, requiring the Council to pay for the land at its full market value.
Voluntary dedication of land
It is sometimes said that a dedication of land may be volunteered by an applicant. However, even if this has happened, the Land and Environment Court has made it clear that this still will not justify the imposition of a condition requiring the dedication of that land when such a condition is not authorised under section 94/section 94B(1).
Applicants are free to propose that various areas of a proposed development site be dedicated to council as public roads, public reserves and drainage reserves. If a consent is granted (and acted upon) a proponent will be obliged to dedicate the land as proposed. However the obligation arises from the inclusion of the dedication of land as an element of the development application that resulted in the consent, rather than any condition of the consent.
This does not mean that conditions of consent must be silent on the ancillary matters relating to land proposed for dedication. Conditions of consent may deal with practical matters that flow from the proposal, such as the timing of the dedication and the completion of embellishment works.
If an applicant wants to volunteer that land be dedicated after a development application has been lodged, the applicant can amend its development application or offer to enter into a voluntary planning agreement (VPA).
Why offer to dedicate land at all?
Of course, all of this prompts the question, if the consent authority is unable to impose a condition of consent requiring the dedication of land, why would an applicant want to propose the dedication of land in its development application?
This issue is discussed by the Land and Environment Court in Conquest Constructions (NSW) v Sutherland Shire Council . A council may have plans (for example in a DCP) that set out its notion of ‘good’ development and outline desired improvements to the public domain. Such plans may confer some benefit on an applicant who prepares a proposal in compliance with them (ie the council may be more minded to approve the DA). However, if:
- an applicant chooses not to do this; and
- the requirement to dedicate land is not part of a contributions plan (or is otherwise not authorised by section 94),
a council cannot force the issue by requiring the dedication as a condition of consent.
A note of caution
Proponents should be careful though. Councils are entitled to refuse consent for a development that would lack merit if there is no dedication of land. This might happen, for example, if a proposed subdivision would lack merit without the provision of a publicly-owned drainage reserve.
Proponents who do not wish to dedicate land as part of their development application might need to consider other strategies to address possible merit issues while retaining land in private ownership (such as easements for drainage, rights of way and community title).
What to do?
If you presently have a development consent that requires you to dedicate land to a public authority, you may want to consider whether the condition is unlawful as set out above.
You may make a modification application to have the condition removed even after the development is underway or is nearing completion (although it’s generally a good idea to act as quickly as possible.) If the council refuses to agree to the modification, the matter can be pursued through a ‘class 1’ appeal in the Land and Environment Court (there are time limits for the filing of an appeal, after you lodge the s.96 application).
You can contact us if you would like assistance in preparing a modification application and/or commencing an appeal.
We would generally recommend that you take action prior to any actual dedication of land. However, we can also advise you on your options if the land has already been dedicated.