of New South Wales
IN THE LAND AND No. 10501 of 1987
ENVIRONMENT COURT 10502 of 1987
OF NEW SOUTH WALES Coram: Stein J.
4 May 1989
COLLIN C. DONGES & ASSOCIATES PTY. LTD.
v.
BAULKHAM HILLS SHIRE COUNCIL
JUDGMENT
HIS HONOUR: The applicant is a planning consultant acting on behalf of P.F. Formation Pty. Ltd., an extractive industry operator. He made application to the Council on 22 December 1986 and 31 July 1987 respectively, for development consent for sand extraction in respect of two adjoining portions of land on the eastern side of Old Northern Road, Maroota, about 60km north-west of the Sydney CBD.
Portion 117 has an area of 24.08h and Portion 196 an area of 28.33h. Both portions are zoned Non-Urban 'B' under Interim Development Order No. 118 (gazetted on 13 May 1977) and a deemed environmental planning instrument under the Environmental Planning and Assessment Act. Within this zone extractive industries are permissible with consent. Portion 117 fronts Old Northern Road and is owned by Mr. & Mrs. Accurso. Portion 196 lies behind it and has access to Old Northern Road via a 600m unnamed reserved road. This portion is owned by Monaldo Pty. Ltd. Both properties are also within the area and subject to the provisions of the Sydney Regional Environmental Plan No. 9 (Extractive Industry), gazetted 17 October 1986 (REP 9).
The Council did not determine the applications, and on 1 October 1987 the applicant lodged Class 1 appeals in respect of the Respondent's deemed refusal of each application. However, on 16 February 1988 the Council granted consent to each application subject to a number of conditions including Condition No. 20 (in each consent) which required payment of a contribution under s.94 of the Environmental Planning and Assessment Act of $1.00 per tonne on material extracted from each portion in respect of road maintenance and repair of the Old Northern Road and Wisemans Ferry Road. The appeals before the Court are concerned only with Condition 20 in each consent.
Portion 117 has a history of sand extraction going back to 1981 when the Council gave permission for the removal of sand from a dam extension to assist in agricultural production. In 1983, after inspections of the site by Council officers, the Council informed the then operator (a Mr. Daniel) that he should cease operations and make a development application. In February 1984 an application was made accompanied by an Environmental Impact Statement prepared by Collin C. Donges & Associates. On 22 April 1986 Council refused the application and directed that extraction and removal of material from the site cease forthwith. The contractor then proposed a plan to complete the works by 30 June 1986, (including a restoration programme), and Council agreed.
The owner, Mr. Accurso, agreed not to carry out any further extraction and removal of material without the approval of Council. However, it appears that P.F. Formation Pty. Ltd. (the current operator), which was removing sand from the adjoining Portion 196, then commenced to remove material from Portion 117. In the meantime (on 11 July 1986) an appeal was lodged by the applicant, Collin C. Donges & Associates, against the Council's refusal of consent on 22 April 1986. On the application of the Council on 1 August 1986 I granted an interlocutory injunction restraining the owners and P.F. Formation Pty. Ltd.from carrying out any extractive industry on Portion 117 without development consent. On 29 September 1986 the Class 1 appeal was dismissed and the interim injunction made permanent. On 17 October 1986 REP 9 was gazetted and Portion 117 (and also 196) were included in the instrument. Indeed, Portion 196 was specifically referred to by cl.14 thereof. As I have said the applicant lodged a fresh development application in December 1986.
Extraction of sand from Portion 196 by P.F. Formation Pty. Ltd. commenced sometime in 1983. Council directed that it cease. The operator asked for work to continue pending a development application. In February 1984 P.F. Formation Pty. Ltd. lodged a development application for the construction of a dam and removal of spoils from the site. This application was refused in April 1986. In June 1986 a Class 1 appeal was lodged against the refusal. This appeal was dismissed in October 1986. Portion 196 was included in REP 9 which "permitted" the site be used for extraction without development consent for one year until October 1987 (clause 14). On 31 July 1987 the applicant lodged a development application with Council and on 1 October 1987 lodged an appeal against Council's deemed refusal. The REP also provided for the payment of $60,000 by the occupier to Council by 4 instalments of $15,000 to be "held in trust by the Council for road safety and community facility improvements in the Maroota, Glenorie and Dural areas".
It may therefore be deduced from the above dissertation that extractive industry has been pursued by P.F. Formation Pty. Ltd. on Portion 196 since 1983 and on Portion 117 from some time in 1986.
Condition 20 in each consent is in the following terms:-
"In respect of Portion 117 (and Portion 196) the applicant shall pay to Council a contribution under Section 94 of the Environmental Planning and Assessment Act at the rate of $1.00 per tonne (indexed to inflation) of material extracted. The method of payment shall be in accordance with the procedures laid down by Council upon the adoption of the Management Plan."
Both consents contain a condition that the total number of truck movements due to the combined operations on the Portions shall not exceed 100 per day, i.e., 50 laden vehicles, and this condition is not challenged. The consent in respect of Portion 117 is for a period limited to 12 months and Portion 196 to a period of 5 years. These conditions are also unchallenged. It is also conceded by the Council that any condition requiring a contribution under s.94 should relate to material carried by trucks from the sites rather than to "material extracted". Late in the case the Council handed up a new proposed form of condition which it seeks to be imposed in lieu of the challenged condition. This is in the following terms:-
"20. In respect of Portion 117 the Applicant shall pay or procure payment to the Council of a contribution under section 94 of the Environmental Planning and Assessment Act 1979 at the rate of one dollar ($1) per tonne of all extracted material transported therefrom and in respect of the said contribution the following provisions shall apply:
(i) The said contribution will be calculated and paid monthly from the date on which the within development consent became effective i.e. 15 March 1988.
(ii) The said contribution will be indexed and adjusted annually as from the said 15 March 1988 in accordance with the New South Wales Department of Main Roads cost rise index applicable to each year ending 30 June, commencing 30 June 1988, for the duration of the within development consent and the said adjustment to the contribution shall take effect from and including July each year, commencing 30 June 1988 for the duration of the consent.
(iii) On or before the fourteenth day of each month for the duration of the consent the Applicant shall deliver or procure delivery to the Council of true certified copy weighbridge or other returns or records showing the true quantities of extracted material transported from Portion 117 during the immediately preceding month and the Council will then as soon as it can conveniently do so issue to the Applicant or its consenting assignee an invoice for the contribution payment payable for that month, which payment the Applicant or its consenting assignee will pay to the Council within fourteen days of the date thereof.
(iv) The Council has the right to inspect and have the original records relating to any of the extracted material, including numbers and types of laden trucks and trailers and load quantities, transported from Portion 117 audited by any person nominated by its internal accountant at any time as and when he may by written request so require.
(v) The Council will pay all of the said contribution payments into a specially identified trust account for payment towards the rehabilitation, restoration, repair and/or maintenance of Old Northern Road, between New Line Road and the Crown road immediately adjacent to the northern boundary of Portion 117, and Wiseman's Ferry Road, between its intersection with Old Northern Road and the Baulkham Hills Shire boundary at Cattai creek.
(Similarly for Portion 196)"
The principal truck routes from the subject lands are and will be south via Old Northern Road or south via Wisemans Ferry Road. Both roads are public roads and ownership is vested in the Baulkham Hills and Hornsby Shire Councils. Additionally, both are classified Main Roads under the State Roads Act. Old Northern Road (MR 160) is a major link for local residents between Wisemans Ferry and Maroota to Castle Hill. Wisemans Ferry Road (MR 181) provides access from those areas to Windsor. It also provided an historic link as the first northern crossing of the Hawkesbury River at Wisemans Ferry. Old Northern Road is quite old and was apparently originally constructed as a farm access road. Its original construction is clearly not suited to modern vehicle loads. It is common ground that substantial lengths of its pavement are inadequate for existing traffic which includes heavy trucks. The road is marked by evidence of pavement failure and shoulder deterioration. Generally the width of Old Northern Road and the width of its shoulders are inadequate for large and heavy vehicles including those from the subject development. Wisemans Ferry Road is of a similar poor standard to Old Northern Road.
Up until 1984 the Council was responsible for maintenance, repair and minor improvements to both roads utilising grants from the Department of Main Roads (DMR), now the Roads and Traffic Authority (RTA). The boundary between Baulkham Hills Shire and Hornsby Shire is along Old Northern Road. Wisemans Ferry Road is wholly within Baulkham Hills Shire. Up until mid 1984 Baulkham Hills Shire had carried out maintenance work to Old Northern Road on both sides of the Shire boundary (with the agreement of Hornsby Shire and the Department of Main Roads). From 1984 the DMR, at the request of the Council, took over responsibility for maintenance and improvements to Old Northern Road from New Line Road (in the south) to Wisemans Ferry Road (in the north), as well as the Wisemans Ferry Road (within Baulkham Hills Shire). Council did this because it considered that the annual allocation by the DMR was insufficient to maintain the roads in a safe and trafficable condition.
The Council seeks a contribution under s.94 of the Environmental Planning and Assessment Act for a 31.9km length of Old Northern Road from the subject extractive site at Maroota to the intersection with New Line Road at Dural and an 18.7km length of Wisemans Ferry Road from Maroota to the Shire boundary in the south-west.
The effect of heavy truck traffic, and in particular extractive industry trucks, on roads within the Shire, has been a moot topic in Baulkham Hills for many years, and particularly since the early 1980's. In August 1986 the Council resolved to prepare a plan of management for extractive industries throughout the Shire. In 1987 Cameron McNamara were appointed consultants to prepare the plan. The final draft of the plan was presented to Council in December 1987 and, after being placed on public exhibition, was adopted on 7 March 1989. The Plan of Management did not purport to be the Plan of Management referred to in cl.10 of the REP, (which was concerned solely with the Maroota sand deposit), but a broader framework for planning and development control for extractive industry in the Shire. The Council Planner's report recommending the adoption of the Plan of Management contains the following observations on roads within the Shire:-
"It is quite clear that a number of roads, particularly those directly servicing extractive industry development, do not meet engineering design standards, community expectations or industry requirements for such roads. It is also noted in the Regional Environmental Study for Sydney's Extractive Industries prepared by the Department of Planning that when discussing the Maroota sand deposit "Road access.... is unsuited to large volumes of heavy transport".
Given that the majority of roads being used for transport of extractive material were originally intended to service a rural area, it is not surprising that they are inadequate to service large amounts of heavy truck traffic.
It is apparent that existing roads will deteriorate further unless measures are undertaken to improve and upgrade roads currently used by extractive industry operations. In this respect the Consultants have identified a programme of road upgrading in the area as follows:
- Old Northern Road; pavement strengthening, shoulder sealing, and eventual shape correction.
- Wisemans Ferry Road; pavement strengthening, shoulder sealing and shape correction.
- Pitt Town and Kenthurst Roads; pavement strengthening, shoulder sealing and shape correction.
- Proposed widening for the above roads on the basis of lane width 3.4 metres and sealed shoulder width 1.2 metres giving total width of sealed carriageway 9.2 metres.
- Cattai Ridge Road; enforcement of existing load limits.
The Department of Main Roads in their submission have advised that budgetary constraints do not permit a major upgrading programme for the two critically affected main roads, namely Old Northern Road and Wisemans Ferry Road. Similarly, Council should not be required to divert resources to upgrade local roads to accommodate extractive industry traffic."
In the draft Plan of Management Cameron McNamara suggested that Council adopt its recommendation that each extractor pay a s.94 contribution by way of a $1.00 levy per tonne of material produced. It also recommended that Council approach the Roads and Traffic Authority to at least match the s.94 contributions for Old Northern Road and Wisemans Ferry Road. It further recommended that should finance not be forthcoming for the roads, then extractive industry should not proceed. As I have said Council recently adopted the draft Plan of Management.
It is in the context of the above very brief reference to some of the salient facts that a number of issues arise. These include:-
(a) Is there any power in a Council to levy a contribution for road maintenance and repair under s.94 of the Environmental Planning and Assessment Act in respect of a classified Main Road under the State Roads Act, especially when the RTA has accepted the responsibility for maintenance and repair?
(b) Is it 'reasonable' for the Council to levy a contribution for road maintenance and repair under s.94 when a road is a classified Main Road, especially when the road provides a regional facility and the RTA has assumed responsibility for its maintenance?
(c) Does "within the area" in s.94 mean within the local government area? This is relevant to most of the Old Northern Road which straddles the boundary between Hornsby and Baulkham Hills Shires. If it does mean the local government area, how does this affect any contribution under the section?
(d) If a levy cannot be made under s.94, can it be made under s.91?
(e) If a levy may be made under s.94 how should it be calculated?
(f) If a levy may be made under s.94 is it reasonable to include a factor for maintenance as opposed to reconstruction?
(g) Can a contribution under s.94 be levied retrospectively?
(h) Merit questions relating to the two roads in question.
It is convenient to set out the relevant portions of s.94. In doing so I have formed the opinion that the construction of s.94(1) and (2) is not aided by the provisions in s.94(2A) and (2B) inserted by amendments in 1985:-
94(1) Subject to subsection (2), where a consent authority is satisfied that a development, the subject of a development application, will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant consent to that application subject to a condition requiring -
(a) the dedication of land free of cost; or
(b) the payment of a monetary contribution,
or both.
(2) A condition referred to in subsection (1) shall be imposed only -
(a) * * * * * * * * *
(b) to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection."
The Court has dealt with some of the above issues on earlier occasions. For example, s.94 contributions have been imposed on extractive industry for road repairs and maintenance in McInerney v. Hawkesbury Shire Council ((1980-1) 1 APAD 460) in respect of a local rural road and also in Schuster v. Gunning Shire Council (Unreported 2 July 1985). In Kittler v. Baulkham Hills Shire Council (Unreported 16 April 1985) the Court refused consent because of damage to the road system from heavy trucks. More recently the Court has considered the issue of road damage by reason of extractive industry trucks and the applicability of s.94 contributions in Capital Quarries Pty. Ltd. v. Gunning and Yass Shire Councils (Unreported 14 August 1987) and E.H. & P.H. Clifford Pty. Ltd. v. Scone Shire Council ((1988) 65 LGRA 391).
The Capital Quarries case squarely raised the issue of likely damage to the road system by heavy vehicles from a sand extraction site on the Yass and Gundaroo Rivers. The roads included 22km of a Main Road travelling through 3 shires. Two of the shires were respondents to the appeals since the development extended on both sides of the Council boundary. However, Yarrowlumla Shire (where part of the main road passed) was not a party to the proceeding. Both Gunning and Yass Shires sought the imposition of a s.94 contribution in respect of the Main Road and also a Shire Road. The combined contribution sought was in the order of $2M. The application was refused on the merits on the ground, amongst others, of potential road damage.
However, the issue of the power of Councils to levy a contribution under s.94 for a Main Road was disputed by the applicant. The submission that maintenance, repair and reconstruction of a Main Road is an exclusive State government responsibility was made by the developer, as has Mr. McClellan, Q.C., on behalf of the applicant in this case. I held that the State Roads Act, 1986 did not confer an exclusive power on the Commissioner for Main Roads with respect to the repair, maintenance and construction of classified Main Roads. Council's powers and shared responsibilities remain including those to be found in Part IX of the Local Government Act, unless there is an agreement to the contrary under s.13(4) of the State Roads Act.
When considering the relevant s.90(1) heads (particularly (j) and (r)) and whether the development is likely to require increased demand for public amenities and services, I held that it was within power for a Council to impose conditions on a consent requiring a monetary contribution from a developer towards the cost of maintenance, repair and reconstruction of Main Roads within its boundaries. I did, however, conclude that in so far as a contribution was sought for the road within Yarrowlumla Shire the Court had no power to impose such a condition.
In Clifford's case Cripps J. held that a condition of a consent requiring a monetary contribution on a royalty basis for road repair and maintenance arising out of use of a local road by heavy trucks from a hard rock quarry was lawful and reasonable. The levy was 35c per cubic metre and the evidence of the actual cost of repair was 54.3c per cubic metre.
At p.394 the Chief Judge said:-
"In my opinion, it is within the power of the court to impose a condition requiring the developer to contribute by the payment of money to the repair and maintenance of Rouchel Road. The subject development will result in a substantial number of heavy trucks using Rouchel Road. As I have said, the quarry vehicles account for between 45 per cent and 50 per cent of heavy vehicular usage (calculated by reference to ESA) and that it is the use of the road by heavy vehicles which damages the road structure. One truck movement does approximately the same damage as 10,000 car movements. The circumstance that the development has replaced another development which was able to continue without any contribution for the damage it occasioned to the road does not gainsay the consequence of the implementation of the present application. The quarry vehicles hauling crushed aggregate from Bowcock to Aberdeen will result in road damage and that damage is not the less because the same developer was able to cause similar, or even identical, damage by another development since abandoned. It may be, of course, that in determining what is a fair and reasonable contribution, regard can be had to the abandonment of the previous development."
In Parramatta City Council v. Peterson ((1987) 61 LGRA 286) I had occasion to consider the meaning of 'within the area' in s.94(1). At p.293 I said:-
"Mr. McAlary and Mr. Tamberlin have made competing submissions as to the meaning of "the area" in subs (1). "Area" is defined in s.4 of the Environmental Planning and Assessment Act by reference to the definition in the Local Government Act 1919, viz, "city, municipality or shire". Mr. Tamberlin submits that this definition assists in a broad view of the section. On the other hand Mr. McAlary argues that the Local Government Act definition does not apply because "the context or subject matter" indicates or requires otherwise. The context, he submits, is not the local government area but the area proximate to the development site.
In my opinion "area" in s.94(1) means the local government area. The council is to consider whether the development "will or is likely to require the provision of or increase the demand for public amenities and public services" within the council area. This interpretation was adopted by Assessor Domicelj and Senior Assessor Bignold, as he then was, in Revay and Scott v Leichhardt Municipal Council (Land and Environment Court, 20 March 1981, unreported). They said (at 27):-
'....the proposed development is likely to require the provisions of or increase the demand for public reserves within the municipality as a whole and within the immediate vicinity of the subject site in particular.' (My emphasis)
Additionally, and by contrast to the reference to "the area" in s.94(1), I note that a number of the s.90 heads of consideration refer to the "locality" of a development."
On behalf of the applicant Mr. McClellan, Q.C., submits that there is no power in s.94 to impose a monetary contribution for maintenance and repair of a classified Main Road because it is a State and not a local government responsibility. The responsibility is not shared as in the Capital Quarries case since the Council returned responsibility to the State in 1984. Additionally, should the power to levy a contribution in respect of a Main Road exist, Mr. McClellan submits that it would not be reasonable to do so since the roads in question (and particularly the Old Northern Road) provide a regional facility and responsibility for the roads has been accepted by the State.
On behalf of the Council Mr. Naughton, Q.C., submits that there is power in the Council to levy a contribution in respect of classified Main Roads such as these. Whilst the State has a responsibility for the roads under the State Roads Act, 1986, so does the Council. It is still a joint responsibility nowithstanding that, as a matter of administration, the Council returned the burden of carrying out the maintenance work to the DMR. Mr. Naughton also points to the evidence that the two roads function as local roads as well as providing a regional facility. His submission emphasises the importance of the 'trust' which clearly arises under s.94. Any contribution paid under s.94 is subject to the trusts set out in the section, see Levadetes v. Hawkesbury Shire Council (Land and Environment Court 23 July 1988, unreported). He emphasises that s.94 does not expressly require that a contribution be spent by the Council itself. For example, it could be actually expended by Council or by the RTA on behalf of the Council. In his submission it is simply a matter of mechanics and the 'trust' protects the developer.
Pursuant to s.64 of the Land and Environment Court Act the Minister for Planning and Local Government intervened by counsel. Mr. Ayling did not seek to adduce any evidence or examine witnesses but rather to address the Court on non-merit issues. In his address Mr. Ayling supported the Council, submitting that it has the power to levy a contribution under s.94 and the Court should follow its earlier decision in Capital Quarries which is, for all intents and purposes, a similar situation. Mr. Ayling also stresses the importance of the trust expressed in s.94. A contribution must be spent on the roads but, in his submission, does not necessarily have to be spent directly by the Council.
I am not convinced that I should depart from the conclusions I expressed in the Capital Quarries case. It is not proposed to repeat what I then said, suffice to say that I adhere to the finding that it is within power for a Council to impose conditions under s.94 requiring a monetary contribution towards the cost of maintenance, repair and reconstruction of classified Main Roads. Notwithstanding the fact that in 1984 the Council asked the DMR to take back responsibility for the actual carrying out of maintenance and repair work on the roads in question, there still remains a joint responsibility between the state and local government. There is no evidence of any agreement to the contrary under s.13(4) of the State Roads Act. I do not accept that the mechanical change of responsibility in 1984 as to who should actually carry out the work on the roads alters the shared responsibility which continues to obtain. There is in fact nothing to stop the Council expending funds obtained from s.94 contributions on work on the roads or to ask the RTA to carry out the work on Council's behalf.
I accept that the trust created by s.94 protects the developer who makes the contribution. The moneys must be held in trust for the required purpose and applied to that end within a reasonable time. I accept the submissions of Mr. Naughton and the Minister in this regard. I do not accept that it would be unreasonable to levy a contribution simply because the roads provide a regional facility. Even if the only function of the roads was regional, I would not on that account, necessarily find a levy to be unreasonable. However, in this case the roads clearly provide a significant local, in addition to a regional, facility. The roads are, as I have said, not the sole responsibility of the State.
I have earlier set out an extract from Parramatta City Council v. Peterson. Consideration of this case arises because the boundary between the two shires runs more or less along the mid line of Old Northern Road. The Council submits that I should reconsider Peterson. Its facts are said to be distinguishable because it was not concerned with a boundary dispute. Mr. Naughton submits that the context and subject matter indicate otherwise than to adopt the Local Government Act definition of "area" by reference to s.4(1) of the Environmental Planning and Assessment Act. In Council's submission "within the area" in s.94 means geographical area, and not within 'its' local government area. Mr. Naughton points to other sections of the Environmental Planning and Assessment Act which refer to council 'areas' - s.54(1) and (2), 149 and 154. It would have been a simple matter for the Parliament to have said its area if that is what was intended. Mr. Naughton also stresses the indivisibility of use of Old Northern Road.
On behalf of the Minister, Mr. Ayling submits that s.94 requires only that the "demand for public amenities and public services" arises within the area.
Mr. McClellan, on behalf of the applicant, submits that Peterson was correctly decided and should be followed. The section contemplates only a contribution to a council for expenditure by that authority of moneys within its local government area and not beyond. The section is directed towards the provision of local facilities and not to regional or state responsibilities.
I adhere to what I said in Peterson's case (set out earlier). In my opinion the words in s.94(1) are clear and unambiguous. The subsection provides that where a council (as consent authority) is satisfied that a development will or is likely to require the provision of (or increase the demand for) public amenities and public services "within the area" it may impose a condition requiring the payment of a monetary contribution. To my thinking the context or subject matter does not indicate or require otherwise than to adopt the definition of "area" in s.4 by reference to the meaning ascribed in the Local Government Act.
In my opinion the context is not capable of bearing a different meaning. This may be thought to be an inconvenient approach in this case or in the case of other developments which adversely impact on public amenities and services in an immediately adjacent council area. There may also be some doubt as to the application of 'the area' if the consent authority is not a council but a statutory authority or the Minister. However, be that as it may, it seems to me that the words are plain on their face and in the context of the section do not lead to any manifest absurdity or unreasonableness. That there may be problems where local government boundaries are concerned or when the consent authority is not a local council, points rather to the need for amendment to the section, than a forced construction incompatible with the context and subject matter.
In confirming my finding in Peterson I reject the submission of Mr. Ayling that 'within the area' merely explains where the demand (for public amenities and services) is to arise for the section to operate. I also reject the alternative submission of the Council that if some part of the object of the expenditure is within the Council area, then the Council can augment it beyond its boundary. Section 94 may not specifically say where the money is to be spent but, in my opinion, it is implied that it is to be spent in its area only and not beyond it.
I also note that I held in the Capital Quarries case that the power of a Council to levy a monetary contribution towards the cost of road works was confined to roads within its boundaries. In doing so I stated that the Court (on appeal) had no power to levy a contribution in respect of that part of a road which passed through a neighbouring shire.
Further, I also reject the respondent's submission that Part XXIV of the Local Government Act, in particular ss.521A and 522, extends the concept and definition of local government area so as to assist the Council's case. It seems to me that Division 4 of Part XXIV of the Act provides specific ancilliary powers to councils to undertake joint action between themselves where appropriate and joint undertakings with the Crown. Section 522 calls upon councils who share a common boundary of a public road to unite in repairing and maintaining the road. The Division does not and cannot extend the definition of area or local government area in s.4 of the Local Government Act.
Applying the Local Government Act definition of "area", and in the event of an ultimate finding that a contribution is reasonable and justified, it seems to me that I should calculate the levy for the subject length of Old Northern Road and apportion it between the council areas. If I come to this situation Mr. McClellan has indicated that one-half of the levy would be an acceptable approach. In that circumstance it will of course be open to Hornsby Shire, when considering applications for development approval, to levy extractive industry trucks using Old Northern Road in a similar fashion, if it sees fit and it is appropriate. In this respect I note that Hornsby Shire has indicated that it intends to prepare a complementary plan of management (to Baulkham Hills) for extractive industry carried out in the Shire. According to the planner's report to Baulkham Hills Shire Council recommending the adoption of the draft Plan of Management, Hornsby Shire has recently granted consent to a sand extraction proposal within the Maroota area subject to the payment of a s.94 contribution based upon the outcome of the current case before the Court. It follows that Hornsby Shire Council may be able to require a contribution towards that portion of Old Northern Road within its boundaries and used by extractive industry operators originating within the Shire.
Since I have held that it is within power for the Council to levy a s.94 contribution, and further that it is 'reasonable' to levy a contribution for the subject Main Roads, although they provide a regional (as well as local) facility, it is unnecessary to determine the alternative submission concerned with the question of power to impose a levy under the condition making power in s.91 of the Environmental Planning and Assessment Act. However, I note my answers to questions of law referred in Fitch v. Shoalhaven City Council (Unreported 15 May 1987) wherein I held that s.94 comprises the exclusive source of power under the Environmental Planning and Assessment Act for a council to impose a condition requiring the dedication of land free of cost.
I therefore need to address the issue of how the levy should be calculated and its amount. Before proceeding to the evidence I think it reasonable to make two observations. Firstly, the object of the exercise should be to arrive at a reasonable "contribution for the provision, extension or augmentation of the public amenities and public services". As Cripps J. said in Clifford, the Court should determine "what is a fair and reasonable contribution". The second observation is that the case occupied 8 hearing days and 11 witnesses were called, most giving evidence of expert opinion. I find myself in the position of the Chief Judge in Bignall v. Greater Taree City Council (Cripps J. Unreported 6 July 1987). As he said, there would be little point in canvassing every aspect of the arguments between the experts. To address with particularity every matter raised by the evidence and every argument canvassed would lead to a Judgment of unreasonable, and I believe unnecessary, length.
In addressing the merits one may commence with the finding that the condition of both roads is presently very poor, Old Northern Road being in a marginally worse state than Wisemans Ferry Road. There is, in the Council's case, ample evidence to support this finding. There is also support for the conclusion in the applicant's evidence. I accept the evidence of Mr. Haynes, consulting engineer, who made careful visual assessments of the surfaces. He described the condition of Old Northern Road thus:-
"The pavement is generally narrow (approximately 5.5 to 6.0m sealed), irregular in shape, patchy, with gravel shoulders and fretted bitumen edges."
He described Wisemans Ferry Road in similar terms.
I also accept the opinions of Mr. Haynes, Mr. Barker (the Shire Engineer) and Mr. McGrath (a Supervising Engineer with the RTA), that the pavement deterioration has been caused mainly by the passage of heavy vehicles. Additionally, extractive industry trucks form a very high proportion of heavy vehicles using the subject roads. In other words the poor condition of the roads is largely due to heavy vehicles, mostly from extractive industry. Putting it another way - in the main it is extractive industry which is causing and exacerbating the deterioration of the road surfaces and engendering the need for considerable expenditure to maintain, repair and, where necessary, reconstruct the roads.
It is acknowledged by most of the experts, (including some called by the applicant), that damage to road surfaces is caused by heavy vehicles and is to be measured by equivalent standard axels (ESA's). It is widely accepted that the damaging effect of a vehicle on road pavement is non-linear. The 104th power rule expresses the situation with reasonable accuracy. Double the load causes 2x2x2x2 (equals 16) times the damage. For the purposes of designing roads the use by an average car or other light vehicle may be ignored. According to Mr. Haynes one ESA is 8.2 tonnes and has the same damaging effect on road pavement as 558,000 car axles (of 0.3 tonnes), or 4,500 car axles transmitting 1.0 tonne. Assuming an average car to weigh 1,300kg (500kg on one axle and 800kg on the other), one ESA is the equivalent in pavement damage of 9,400 average cars. The ESA of a 4 axle articulated truck is 3.6 or 4.2 for a spread tandem. The ESA of a 5 axle articulated truck is 4.0 or 4.4 for a spread tandem. The approximate number of cars needed to do the same road damage as, for example, a 5 axle articulated truck is 37,600 or 41,400 for a spread tandem. It is also the opinion of Mr. Haynes, which I generally accept, that around 75% of the heavy vehicle traffic using the roads in question is extractive industry traffic.
It is plain that the present pavement width (5.5 to 6.00m) is inadequate for heavy vehicles such as those which the applicant uses to transport sand from the subject portions. There is an obvious need, in terms of safety and maintenance, to widen the pavement and strengthen and seal the shoulders of both roads. Indeed, it was the evidence of Mr. McGrath that given a continuation of the current level of maintenance over the next 5 years, and a projected increase in heavy vehicle use, sections of the roads are likely to become dangerous and require reconstruction rather than maintenance.
How then should one approach the question of determining a fair and reasonable contribution? The experts disagree about traffic counts and the number of ESA's referable to heavy trucks and extractive industry. They disagree in some respects about what should be done to repair and reconstruct the roads. They disagree on the costs of the work and on what proportion should be borne by extractive industry. They also disagree on the tonnage from extractive industry presently (and in the future) being hauled down the roads. As a matter of principle they disagree on the approach to calculating a reasonable contribution.
On the one hand Mr. Haynes (and the Council) prefer an averaging approach as more equitable than the incremental approach adopted by the applicant's experts. Mr. Haynes says the only sensible approach is to establish a programme of works over 15-20 years based on the present road condition and expected traffic conditions. This is done for the totality of extractive industry operations and other anticipated traffic. The figures produced are then used to determine the present day cost of roadworks and a cost per tonne of extractive industry material hauled along the roads.
The applicant's witnesses (Mr. Prince, Mr. Marshall and Dr. Yandell) prefer an incremental approach calculating the cost difference between the assumption of no further extractive operations and on the basis of continuing extractive operations. The cost difference should be borne by extractive industry because it more accurately reflects the road damage caused by heavy vehicles from such industry. In Mr. Haynes' opinion this approach is inequitable because it fails to take account of the fact (and it almost certainly is the fact) that extractive industry, (especially since the early 1980's), has been largely responsible for the present poor state of the roads.
Whilst I accept this proposition it is difficult to turn back the clock and it seems to me that an incremental approach carries with it a certain logic. Nonetheless, I think that there is some merit in Mr. Naughton's submission that a degree of semantics is involved in categorising the differing approaches. At the end of the day what is required is a reasonable approach. However, it seems to me that an incremental approach is generally to be preferred because it is likely to lead to a reasonable levy.
That is not to say that I necessarily accept the whole of the opinion evidence of Mr. Prince or Mr. Marshall, the principal experts called in the applicant's case. For example, in many respects I prefer the Council evidence on the condition of the roads and the works required to be performed upon them. In some respects I accept their costs over the applicant's. Also, to some extent I prefer the Council's evidence of extractive vehicle numbers and weights (ESA's). However, it has to be said that many of the hypotheses on both sides are merely that. They are projections, estimations and educated guesses based on variable and often inconclusive data. But ultimately, in assessing all of the evidence, I am endeavouring to arrive at a result which is fair and reasonable. Certainty of result is obviously impracticable but one must attempt to arrive at an answer which is reasonable within s.94(2).
Applying the averaging approach the Council's experts, on the basis of the works they see as required, (based on both a visual analysis and Dynatest PMS*), arrive at a levy for Old Northern Road of $3.49 per
* Dynatest PMS carried out a structural evaluation of the pavement using a falling weight deflectometer. tonne for 200,000 tonnes p.a; $2.79 for 250,000 tonnes p.a. and $2.33 per tonne for 300,000 tonnes. The corresponding figures for Wisemans Ferry Road are $3.36 per tonne (100,000 tonnes); $2.24 per tonne (150,000 tonnes) and $1.68 for 200,000 tonnes. These costs are for the full cost of road damage. In Council's submission $1 per tonne (which was recommended in the draft Plan of Management) is therefore a fair minimum contribution to require of extractive industry on the basis that the RTA would be expected to make up the difference. No greater definition of the figure of $1 per tonne was proffered by the Council. It was, in all the circumstances, seen to be "a fair thing". Mr. McClellan is probably not far off the mark in describing it as "plucked from the air".
Mr. Prince, the applicant's consulting engineer, made estimations of the rate per tonne based on (a) Mr. Haynes' cost estimates (which I largely accept); (b) Mr. Marshall's cost estimates (with which I express some reservations); and (c) an incremental analysis based on Mr. Marshall's costs. These calculations produce the following result for Old Northern Road:-
* On a growth basis (a) $1.04, (b) 0.86c and (c) 0.46c respectively.
* On a no-growth basis (a) $1.08, (b) 0.89c and (c) 0.53c respectively.
(These include maintenance costs).
For Wisemans Ferry Road his estimates are:-
* On a growth basis (a) 0.43c, (b) 0.31c and (c) 0.17c respectively.
* On a no-growth basis (a) 0.53c, (b) 0.39c and (c) 0.19c respectively.
However, in my opinion, if Mr. Haynes' costs, work requirements and tonnage etc. were calculated on an incremental basis, higher figures would be produced.
In arriving at a reasonable rate of contribution I must also take account of the fact that some of the present condition of the roads is due to heavy vehicles other than extractive industry, to the age and original likely specification and design of the roads, to wear, tear and weather conditions, to extractive industry which has existing use or existing consent rights and to illegal users (who are not inconsequential). It is also my opinion that extractive industry, bearing in mind the status of the road classification, should not bear more than a reasonable proportion of the likely costs of maintenance and reconstruction. The levy must not be discriminatory. In this respect I take account of the role of the RTA and the regional facility which the roads provide as well as the various forms of taxation of heavy vehicles. Nonetheless, it is my opinion that s.94 justifies the imposition of a reasonable contribution for the provision, extension or augmentation of the public amenities or public services which the development "will or is likely to require".
I accept that in the circumstances of the current applications it is more equitable to levy a contribution by an amount per tonne hauled on the roads rather than to attempt to translate or transpose this into a contribution of actual dollars and cents per annum during the life of the consents. The imposition of such a condition could result in unfairness in the event of unforeseen fluctuations in demand. A fixed rate per tonne is obviously a much fairer approach.
In searching for a reasonable figure I have had regard to all of the relevant evidence and weighed it as best I can. Balancing the evidence up I have concluded that 90c per tonne is a fair and reasonable rate of contribution for extractive industry in respect of Old Northern Road. With respect to Wisemans Ferry Road I find that 40c per tonne to be a reasonable contribution. I concede that the figures involve an element of compromise between the positions of the parties but I believe that this is warranted in seeking to establish a reasonable contribution. Nevertheless, these figures should not be assumed to be necessarily referable to other extractive industry in the Shire or elsewhere. Each case must depend on its own particular facts and circumstances.
Having arrived at the above figures it nonetheless seems to me that it would be a mistake to levy the two roads at different rates. It would pose unreasonable administrative difficulties for the Council and would also detract from the necessary certainty and consistency of application which I see as required. I also believe that it would lead to many trucks electing to take the cheapest route which may lead to greater damage to Wisemans Ferry Road. The most acceptable and reasonable approach in my view is to average the levy out over the two roads taking into account their different lengths (31.9km Old Northern Road and 18.7km Wisemans Ferry Road). This produces a figure of a little above 70c per tonne for each road which I conclude is reasonable within s.94(2). However, because one-half of Old Northern Road is within Hornsby Shire, and outside the local government area of Baulkham Hills, it is appropriate that 70c should be discounted to a round figure of 50c per tonne in respect of both roads. (Again, this is arrived at by a process of simple arithmetic).
It may be thought that these results are somewhat arbitrary but they are an attempt to determine a reasonable figure, taking into account the large number of imponderables and discrepancies in the expert evidence and my assessment of these differences. I am firmly convinced that 50c per tonne achieves the desired goal of arriving at a reasonable result. It also reflects the fact that one-half of Old Northern Road is outside the Shire. If s.94 had permitted the levying of a contribution for the part of the road in Hornsby Shire I would have imposed a contribution with respect to that part. However, in the light of the evidence of intention of Hornsby, it may well be that it will levy a similar contribution on consents for extractive industry using Old Northern Road as a truck route for extractive vehicles, where such a condition is appropriate.
The applicant also raises the question of the reasonableness of including maintenance costs in the levy. Mr. McClellan submits that as a matter of fact (but not law) it would be unreasonable to do so. He submits that the pavements when reconstructed will provide better roads for all users and extractive industry ought not thereafter have to contribute to their maintenance. He also relies upon the fact that the consents are limited as to time. However, I fail to see, as a matter of logic, why the costs of repair and maintenance as opposed to reconstruction should be split and it be concluded that a levy for one is reasonable and the other unreasonable. Reconstruction of the lengths of both roads will take many years. Extractive industry will also derive considerable benefits from the reconstructed roads. Further, there may be a real possibility of fresh consents in respect of the portions (or either of them), especially in relation to the extraction of sandstone material. In my opinion s.94 does not contemplate any real distinction between capital works and maintenance.
The Council seeks that the levy be imposed retrospectively to the date upon which Council's consent became effective, viz., 15 March 1988. This is on the basis that the industry was then operating, and indeed had been for some considerable time beforehand. However, it seems to me that there is no consent pending the determination of the appeal. Further, I would not regard it as appropriate to impose retrospective levies under s.94 as a condition of consent.
Consent is granted to the extension of existing sand extraction operations in respect of each development application subject to the conditions set forth in Council's consents determined on 16 February 1988 with the exception that the following condition will be substituted for Condition 20 appearing in each consent document:-
20. In respect of Portion 117 the Applicant shall pay or procure payment to the Council of a contribution under section 94 of the Environmental Planning and Assessment Act 1979 at the rate of fifty cents (50c) per tonne of all extracted material transported therefrom and in respect of the said contribution the following provisions shall apply:
(i) The said contribution will be calculated and paid monthly from the date on which the within development consent became effective i.e. 4 May 1989.
(ii) The said contribution will be indexed and adjusted annually as from the said 4 May 1989 in accordance with the New South Wales Department of Main Roads cost rise index applicable to each year ending 30 June, commencing 30 June 1989, for the duration of the within development consent and the said adjustment to the contribution shall take effect from and including July each year, commencing 30 June 1989 for the duration of the consent.
(iii) On or before the fourteenth day of each month for the duration of the consent the Applicant shall deliver or procure delivery to the Council of true certified copy weighbridge or other returns or records showing the true quantities of extracted material transported from Portion 117 during the immediately preceding month and the Council will then as soon as it can conveniently do so issue to the Applicant or its consenting assignee an invoice for the contribution payment payable for that month, which payment the Applicant or its consenting assignee will pay to the Council within fourteen days of the date thereof.
(iv) The Council has the right to inspect and have the original records relating to any of the extracted material, including numbers and types of laden trucks and trailers and load quantities, transported from Portion 117 audited by any person nominated by its internal accountant at any time as and when he may by written request so require.
(v) The Council will pay all of the said contribution payments into a specially identified trust account for payment towards the rehabilitation, restoration, repair and/or maintenance of Old Northern Road, between New Line Road and the Crown road immediately adjacent to the northern boundary of Portion 117, and Wisemans Ferry Road, between its intersection with Old Northern Road and the Baulkham Hills Shire boundary at Cattai Creek.
(Similarly for Portion 196)
Each party is to pay its own costs. The exhibits may be returned.
I HEREBY CERTIFY THAT THIS AND THE PRECEDING 22 PAGES ARE A TRUE AND ACCURATE COPY OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE PAUL L. STEIN.
Associate
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