Just Another Brick In The School Wall

In the recent State Administrative Tribunal (SAT) decision H & H Developments (WA) No 2 Pty Ltd and Western Australian Planning Commission [2024] WASAT 117, the SAT upheld the Western Australian Planning Commission’s (WAPC) decision to impose a condition requiring the Applicant to make a financial contribution toward a future land acquisition for a new primary school.

The dispute centred on a proposed subdivision of a parcel of land in Helena Valley, where the WAPC approved the creation of 13 residential lots and imposed a condition requiring the Applicant to make a “pro-rata cash contribution to the Department of Education towards the provision of land for a primary school site(s) to serve the area, in accordance with the contribution methodology outlined in the [WAPC's] Operational Policy 2.4”.

The Applicant contested this condition, ultimately arguing that the condition was invalid as it does not satisfy the three limbs of the well accepted legal test for validity of conditions of development approval (set out in Newbury District Council v Secretary of State for the Environment [1981] AC578 and approved by the High Court of Australia in WAPC v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at [57]), namely that, to be valid, a condition must be:

• for a proper planning purpose;
• one that reasonably and fairly relates to the development; and
• not unreasonable.

The Applicant’s case

In short, the Applicant argued that:

1. it should not be required to contribute to the purchase of land for any new primary school in the locality, unless the existing schools within the locality lacked the capacity to take additional students who will live on the lots created by the subdivision;
2. it is only if the local primary school lacks sufficient capacity and a new primary school site has been identified under the applicable local planning framework, that decision makers should look to subdividers of land within the locality for financial contribution; and
3. even if a site was earmarked under the applicable local planning framework, the site must have been valued and timing for its acquisition known prior to requiring payment from a developer, proportionate to the demand created by the subdivision.

The WAPC’s case

The WAPC argued in response, that:

1. all new lots will, at some stage, create demand for one or more places in local primary schools;
2. experience in WA shows that appropriate educational outcomes require one (4ha) school per 1500 lots; and
3. the formula provided by the WAPC’s Operational Policy 2.4 reflects those matters, whilst also providing for relevant exceptions, and there is no sound planning reason to depart from the provisions of the policy.

Tribunal’s Decision

After thorough analysis, the SAT dismissed the Applicant’s argument, affirming the validity of the condition.

In respect of the first limb of the test for validity, the SAT found that all residential subdivisions generate increased demand for local infrastructure, including schools.  The extensive and coordinated policy support for the provision of development contributions from subdividers towards the purchase of land for public primary schools demonstrates there is a proper planning purpose for the contested condition.  Further, the WAPC’s contribution calculation methodology, based on the value of subdivided land, was deemed fair and consistent with well understood planning principles.

In relation to the second limb, the SAT considered the capacity of local primary schools in the locality; whether any land in the locality had been identified as a future school site, and if not, the cost and timing associated with acquiring a site; as well as the proportional demand to be attributed to the proposed subdivision.  Ultimately, the SAT found that the evidence showed that existing local schools were already over capacity, relying on temporary classrooms, justifying the need for long-term solutions.  Further, whilst a future school site had not been identified, it was not necessary that the increase in demand generated by the subdivision be immediate or precisely defined, rather, it is appropriate for the WAPC to take a long-term view and not be limited in their planning to the immediate consequences of a subdivision.

Finally, in respect of limb three, the SAT found that the Applicant was under no compulsion to pay the contribution in that, at all times, the Applicant retained a real choice as to whether to proceed with the subdivision.  This notwithstanding, on the basis that there is a clear relationship between the obligation imposed by the condition to provide a contribution towards the cost of providing a primary school and the right to subdivide, the condition was found not to be unreasonable.

Lavan comment

The Tribunal’s decision sets a strong precedent in support of policy considerations requiring contributions to school site planning (including cash contributions), the consequence of which may be problematic for land owners and developers who have not accounted for this additional expenditure in their feasibility calculations.

The decision underscores the importance of maintaining a watching brief on and being proactive in understanding and providing comment on the development of planning policy throughout the development lifecycle, in order to ensure there are no surprises at the stage of seeking approval.

If you have any questions in relation to how the WAPC’s Operational Policy 2.4 affects your property or project, please feel free to contact the Lavan Planning & Environment team.

Thank you to Isabel Bartle, solicitor, for her valuable research and assistance with this article.