Montrose Creek Pty Ltd and Manningtree (Qld) Pty Ltd v Brisbane City Council; Brisbane City Council v Manningtree (Qld) Pty Ltd and Montrose Creek Pty Ltd [2012] QPEC 65

Background

This matter concerned the proper construction of infrastructure contribution conditions imposed in a Development Permit (“the permit”). Four separate proceedings were dealt with in this matter:

  • Two appeals by each of Manningtree Pty Ltd and Montrose Creek Pty Ltd (“the appellants”) against enforcement notices issued by the Brisbane City Council (“the Council”) with respect to non-payment of the infrastructure contributions.
  • Two originating applications for declarations made by the Council against each of the appellants alleging that a development offence has been committed and seeking enforcement orders against each of them for payment of the infrastructure contributions.

The permit was granted, subject to conditions, in October 2005 by the Council in favour of Opal Wing Pty Ltd (“Opal Wing”), which was then the owner of the subject property.

These conditions included the following infrastructure contributions: Parks Contributions, Water Supply Distribution Headworks and Sewerage Treatment Headworks. Opal Wing paid the Parks contributions in full, as well as some of each of the other contributions for the 2006 financial year. However, no further payments were made by Opal Wing. In December 2008, the appellants entered into contracts for the purchase of the land from Opal Wing. In the period prior to settlement of the contract, due diligence reports were prepared by the Appellant’s lawyers. In March 2009, the appellants became the registered proprietors of the respective lots comprising the land. Nearly two years later it was discovered by the Council that some infrastructure contributions had not been paid in relation to the land.1 On 31 August 2011, the Council issued a Show Cause Notice pursuant to s 588 of the Sustainable Planning Act 2009 (“the Act”) to each of the appellants.2

On 6 October 2011, the Council issued an Enforcement Notice pursuant to s 590 of the Act, requiring the appellants to pay the following infrastructure contributions: $304,665.90 towards the cost of sewerage headworks and $119,058.84 towards the cost of water supply headworks. The balance of the infrastructure contributions remains unpaid.

Issues

The key issue in this hearing was whether a development offence was committed by the appellants as a consequence of their failure to pay the relevant infrastructure contributions as set out in the conditions of the development approval.

It was submitted by the appellants that no development offence was committed because there was no contravention of any condition in the development approval because. They noted that, despite the infrastructure contributions being unpaid and therefore there being a prima facie breach of the condition, such a breach was a ‘once and for all’ breach, as opposed to a ‘continuing breach’. It was argued that this was due to the ‘timing’ specified in the condition by which the compliance was to occur.3 Once either of the events specified in the condition occurred, the breach could not be remedied. As subsequent owners, the appellants were not liable to pay the contribution, because the Council had endorsed a Community Management Statement in 2008, prior to the appellants purchasing the property. Hence, the breach occurred ‘once and for all’ when the property was owned by Opal Wing.

It was submitted by the Council that the offence is a continuing offence. The requirement to pay the infrastructure contribution was a continuing obligation and, given that the appellants are each continuing the use of the land under the approval, they were obliged to acquit the requirement associated with the use. It was argued that the “timing” specified in the condition simply crystallised the date from which an offence had been committed: to construe the condition otherwise would permit a use that contravened the conditions of the permit.

Facts

It was submitted by the appellants that they had no knowledge of any requirement to pay an infrastructure contribution prior to purchasing the land. However, as noted by the Council, the appellants were aware that there was a development approval which conferred an advantage or benefit on them and thus they should have been prepared to pay their share of the demand on infrastructure created by the development. Had the appellants obtained a full Planning and Development Certificate, it would have informed them that the approval had been activated by the commencement of the conditions and that the infrastructure contributions were payable.

It was also argued by the appellants that the Council had been aware that infrastructure contributions were outstanding as early as 2008, but took no action to recover them until the audit was conducted in about September 2010. The appellants also raised the point that, if they were required to pay the outstanding infrastructure contributions, they would face considerable financial hardship. However, neither of these issues was considered to be a relevant consideration in construing the development approval conditions.4

Decision

The Court found that the failure by the appellants to pay the infrastructure charges constituted a continuing development offence. His Honour noted that, “to find otherwise would result in an unsustainable situation when the person benefiting from a development approval would not pay its share of the demand on infrastructure created by the development. That it is a continuing offence is a logical consequence of the attachment of the obligation to the land.”

Durward SC DCJ noted that the appellants “had the opportunity to discover the outstanding charges prior to purchasing the land.” However, they elected to obtain a limited planning and development certificate only. Whilst the appellants maintained that the additional information that a full certificate would have provided was not explained to them, His Honour concluded that, “the due diligence report by their lawyers, in the manner in which it is relevantly expressed, should have put them on notice to enquire if they were in doubt as to the meaning of the document. Any lack of knowledge by the appellants is therefore not a relevant consideration and is entirely a product of an informed due diligence decision made by them to obtain a limited certificate.”

Insofar as delay is concerned, any impact has simply deferred the day when the charges are required to be paid. A more diligent Council may well have pursued payment when the Community Management Statement was endorsed. However, this is not the direct or substantial cause of any financial hardship. That hardship has arisen from the decision made by the appellants at the time that they completed the purchase of the land.

Accordingly, in an exercise of discretion His Honour concluded that the appeals should be dismissed and that the applications should be granted.