A recent warning about bearing the risk of DCP Infrastructure Projects

John Cicero
28 October 2018

In a judgment of His Honour Greg Garde, the Supreme Court has considered the treatment of works in kind in circumstances where there is a Precinct Structure Plan and a Development Contributions Plan (DCP).

1. Konann Pty Ltd (Konann) obtained a planning permit in 2014 for a multi lot residential subdivision. A condition of the permit required the construction of the intersection of Glasscocks Road and Wheelers Park Drive (the intersection).
2. The intersection was Project RD-18 in the DCP planned with a centralised rectangular area and a northern approach. The estimated cost was approximately $2.12 million.
3. The intersection completed by Konann included the rectangular area but not the northern approach, and Konann also completed works to the western, southern and eastern approaches which were not DCP funded works. The intersection works cost Konann $3.66 million and it sought to be credited this amount against its DCP liability.
4. Under Section 46P(2) of the Planning and Environment Act, the Council as the relevant collecting agency has power to accept land works, services or facilities in lieu of a levy. The Council had not made a decision under that provision despite the fact that it had issued a statement of compliance and accepted the vesting of the land that formed part of the intersection works.
5. The Supreme Court found that it did not have the power to exercise the discretion that was given to the Council as the collecting agency under Section 46P(2). It had only jurisdiction if the Council exercised that power, without applying proper legal principles. In other words, the Court did not have the power to review the merits of a decision by the Council.
6. The Court found the decision of the collecting agency under Section 46P(2) can in fact be made after the development has been carried out. It said that the completion of a funded DCP infrastructure item by a subdivider does not bring with it any implication that the Council or collecting agency is obliged to accept land or works in part or full satisfaction for a payment of a levy.
7. The Court found that if an application is made by a developer to a collecting agency to exercise its discretion under Section 46P(2), the collecting agency is under a duty to consider and determine the application but in determining the request again, the Court emphasised that there is no merits review and the jurisdiction of the Court is limited to ensuring that the decision was lawfully made.
8. What this decision highlights is the importance of having an agreement with the Council before any works in kind are carried out. Despite a hearing that went for seven days, Konann was no closer as result of the Supreme Court decision as to credit that will be given by the Council.