Recent Infrastructure Charges Appeal Illustrates Legal Concept Of 'Unreasonableness'

A local government may only levy infrastructure charges for ‘additional demand placed upon trunk infrastructure’ generated by development.[1] Aside from alleging that a levied charge has not been properly calculated, [2] a developer may also challenge an infrastructure charges notice, by way of appeal to the Planning and Environment Court, where the charge ‘is so unreasonable that no reasonable local government could have imposed it’.[3] The recent decision of Wagner Investments Pty Ltd & Anor v Toowoomba Regional Council [2019] QPEC 24 (‘Wagner’) illustrates the application of the legal test of unreasonableness.

Wagner concerned a number of different appeals (10) against different infrastructure charges notices which all broadly related to development of the Brisbane West Wellcamp Airport and Wellcamp Business Park. In the interests of brevity, this case note will consider just some of the issues raised by the decision and those issues which are considered will necessarily be considered at a high level of generality.

The Legal Concept of Unreasonableness

It was uncontested that there would be additional demand placed on transport trunk infrastructure as a result of the development. What was in dispute was the method in which the charges had been calculated. The developer’s argument centred on an allegation that the levied charges had no rational or reasonable basis and, on that basis, the Court was invited to make a declaration that the charges were unlawful on the grounds of unreasonableness (and remit the matter back to Council for re-calculation).

The courts have historically set very high bar for overturning a levied charge on the ground of unreasonableness. To that end, the parties drew the Court’s attention to a number of principles to be applied in considering a case of this nature:

• Unreasonableness is a conclusion which may be applied to a decision which lacks an evident intelligible justification;[4]
• A decision which falls outside a range of possible acceptable outcomes which are defensible in respect of the facts and the law is unreasonable;[5]
• The concept of unreasonableness involves the Court evaluating the decision with a view to determining whether, having regard to the terms, scope and purpose of the relevant statutory power, the decision possesses one or more of the sorts of qualities that would place it outside the reigns of lawful outcomes;[6]
• It is not sufficient to establish that, as a matter of merit, a different decision ought to have been preferred. What must be established is that no decision maker, acting reasonably, could have made that decision. In applying that standard, a court must proceed with caution, lest it exceed its supervisory role, by viewing a decision on the merits;[7] and
• Where the matter of which the Council is required to be satisfied is a matter of opinion, policy or taste it may be very difficult to establish that the Council has erred in that the decision could not reasonably have been reached.[8]

Application of the Unreasonableness Test

Calculation by Reference to Gross Floor Area

The court began its inquiry by considering how, and on what basis, the levied charges were calculated. The traffic engineers retained by both parties disagreed with respect to the reasonableness of the method of calculation applied by Council.

The relevant charges were calculated by reference to the gross floor area (GFA). Supported by evidence of an expert witness on traffic issues, the developer successfully argued that a blind application of a GFA formula was unreasonable as it precluded consideration of a range of very relevant matters. For example:

• It ignored the volume of traffic that would, in reality, be likely to be generated from the development;
• While it is the case that GFA is commonly used to estimate the volume of traffic generated by land uses, here there was an insufficient correlation between GFA and the volume of traffic actually generated; and
• The approach adopted by Council did not involve matters of opinion or taste, but it did involve consideration of policy. Be that as it may, the Court was satisfied that the Council failed to properly consider its own policies concerning the determination of appropriate infrastructure charges.

Charges Imposed on Reconfiguration Approval

Also likely to be of interest are the Court’s comments with respect to a charge levied on a development permit for reconfiguration of a lot. The developer argued that it was the use made of the land rather than the creation of a separate parcel of land that is relevant to the assessment of transport infrastructure impacts.

The presiding Judge commented:

The reconfiguration of a lot of itself does not involve the carrying out of work on the land, nor does it involve a material change of use in the premises. Instead it is concerned with the re-arrangement of boundaries of premises rather than the use to which those premises may be put…the evidence, such as it is, is sufficient to satisfy me that there is no rational link between the reconfiguration of the land to create the subject lot and the estimated additional demand the Council considers will be placed on the transport trunk infrastructure network.[9]

Summary

While the Court of Appeal may ultimately consider these legal issues in more detail, the decision serves as a timely reminder to Councils to carefully consider the methodology used in the calculation and imposition of infrastructure charges.

If you would like to know more about appeals against infrastructure charge notices, or other town planning issues, please do not hesitate to contact Dan Morton or William McKenzie.

[1] Planning Act 2016 (Qld) s 636(1).

[2] Planning Act 2016 (Qld) s 478(2)(b).

[3] Planning Act 2016 (Qld) s 478(2)(a).

[4] Minister for Immigration and Citizenship v Li & Anor (2013) CLR 332, 367.

[5] Minister for Immigration and Border Protection v Singh & Anor (2014) 231 FCR 437, 446.

[6] Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158, 171-172.

[7] Bon Accord v Brisbane City Council & Ors [2010] QPELR 23, 48.

[8] Buck v Bovone (1976) 135 CLR 110, 118-119.

[9] [2019] QPEC 24, [98].