Court of Appeal confirms a landowner is liable for unpaid infrastructure charges resulting from a development approval obtained by a third party

In brief

The case of Trevorrow v Council of the City of the Gold Coast [2018] QCA 19 concerned an appeal to the Queensland Court of Appeal against a decision of the Queensland Supreme Court in respect of proceedings disputing infrastructure charges levied by the Gold Coast City Council (Council).

A tenant of the subject land made a development application for a material change of use after obtaining the written consent of the landowner. The Council approved the development application and levied infrastructure charges on the land in accordance with its then Priority Infrastructure Plan. The tenant did not pay the infrastructure charges levied by the Council.

The issue was whether a landowner is liable to pay outstanding infrastructure charges for a development approval where the application was made by a third party with the landowner's consent.

The Court of Appeal upheld the Queensland Supreme Court's decision that a landowner who consents to a development application for their land can be held liable for unpaid infrastructure charges, even if they did not make the development application. The Court held that infrastructure charges are to be taken as rates payable to the Council, thereby making a landowner liable for any unpaid infrastructure charges for their land.

This decision acts as an important reminder for landowners to be cautious when consenting to a development application made on their land by a third party. Landowners should be prepared to accept the liability for infrastructure charges levied on their land as a result of a third party's development application.

Council issued a notice requiring the landowner to pay the unpaid infrastructure charges

The Council approved a development application made by the tenant and issued an infrastructure charges notice in December 2008 under the then Integrated Planning Act 1997 (IPA) as required by section 833 of the then Sustainable Planning Act 2009 (SPA). The tenant appealed the notice and the Council subsequently issued a negotiated notice in November 2009 under the SPA after the IPA was repealed. After the tenant failed to pay the infrastructure charges, the Council included the unpaid infrastructure charges in a rates notice issued to the landowner for payment.

Appellant argued that the infrastructure charges notice could not be given to the landowner

The Appellant is the administrator for the registered owner of the subject land. The Appellant submitted that the Queensland Supreme Court at first instance had failed to acknowledge that an infrastructure charges notice could only be given to the applicant of a development application and not the landowner. To support its submission, the Appellant argued that "applicant" and "owner" are distinct concepts under the relevant provisions of the IPA and SPA. The Appellant contended that section 639 of the SPA requires the applicant to be the focus of attention for recovering infrastructure charges and not the owner. The Appellant cited section 637(1)(d) of the SPA to reiterate this distinction.

The Court of Appeal rejected the Appellant's submission and held that the Queensland Supreme Court was fully aware of the differences between "applicant" and "owner" under the SPA. The Court of Appeal accepted that there was a lack of evidence to support the restricted operation of section 639 of the SPA. In fact, the Court of Appeal found that section 637(1)(d) of the SPA expressly refers to a case where the relevant infrastructure is land owned by the applicant. The Court of Appeal acknowledged that the context was different, but highlighted that the legislature had relevantly referred to an example where an applicant owned land that was relevant to the operation and interpretation of the provision.

Appellant argued that the primary judge incorrectly interpreted section 639 of the SPA

The Appellant argued that the Queensland Supreme Court had made an error in finding that infrastructure charges are to be taken as rates under section 639 of the SPA. The Appellant accepted that unpaid rates can be recoverable from the landowner under the Local Government Act 2009, however, the Appellant contended that section 639 of the SPA only permitted recovery of infrastructure charges in respect of land owned by the applicant. The foundation of the Appellant's argument was that section 639 of the SPA did not create a fresh obligation for a non-applicant landowner and the primary judge's construction of the provision was "double deeming" the provision.

The Court of Appeal did not accept the Appellant's argument and found that the Appellant had failed to comprehend the actual intent of section 639 of the SPA. The Court held that section 639 of the SPA characterises infrastructure charges as rates irrespective of the entity which made the development application. The provision operates for a specified purpose and that is to ensure that infrastructure charges are recoverable by a local government.

The Court of Appeal referred to the High Court decision in Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49 to find that there is nothing untoward about using the deeming provision in the way it was used by the Queensland Supreme Court. By providing that unpaid infrastructure charges are to be taken as rates under section 639 of the SPA, the Court of Appeal held that the infrastructure charges are deemed to be a charge payable by the landowner from time to time provided that the rights under the development approval were exercised.

Appellant argued that whether infrastructure charges are levied should be controlled by the landowner

The Appellant contended that, because a third party development application requires the landowner's consent, infrastructure charges should be in the control of the landowner at least to some extent. The Appellant argued that it is unfair that a landowner must consent to a development application before it is known whether infrastructure charges will be levied and how much it would cost. The Appellant adopted this reasoning to also strengthen its argument that section 639 of the SPA attaches liability for infrastructure charges to non-applicant landowners.

The Court of Appeal replied upon Sushames v Pine Rivers Shire Council [2007] 1 Qd R 382 to support its finding that a development approval attaches to the land and binds the landowner as a result. The Court noted that an approval does not attach to the applicant personally.

The Court of Appeal clarified that a landowner's consent is required for a third party development application to enable the assessment of a development application to proceed. Therefore, the landowner is consenting to the Council undertaking a statutory assessment of the development application. As a result, the landowner must accept that providing consent can result in new rights and obligations arising from the assessment which must be performed by persons taking the benefit of any development approval, including a non-applicant landowner.

Court of Appeal held that infrastructure charges are not payable until the development begins

The Court of Appeal stated that an owner controls the use of their land and that infrastructure charges for a material change of use are not payable until the change of use begins. Given the extent of this control, the Court of Appeal held that the owner is also placed in a position of responsibility to ensure its interests are protected through appropriate avenues so as to recover any unpaid infrastructure charges.

The Court of Appeal confirmed that the Queensland Supreme Court's interpretation of section 639 of the SPA was entirely harmonious and reflected the statutory scheme used for assessing a development application.

The Court of Appeal dismissed the appeal and the Appellant was ordered to pay the costs of the proceedings.