No compensation for the developer after Court refuses application to convert non-trunk infrastructure to trunk infrastructure – Insights for developers and infrastructure providers

In brief –The Planning and Environment Court has for the first time decided an application by a developer to convert non-trunk infrastructure to trunk infrastructure. In a decision that has significant financial implications for developers and infrastructure providers, the Court refused the application and provided guidance on the determination of future conversion applications.

Implications

• Under the former Sustainable Planning Act 2009, new Planning Act 2016 and South-East Queensland Water (Distribution and Retail Restructuring) Act 2009, a developer can apply to convert non-trunk infrastructure to trunk infrastructure. If successful and a necessary trunk infrastructure condition is imposed, a developer may recover the cost of providing the infrastructure as an offset or refund from a local government or distributor-retailer.
• A local government or distributor-retailer should keep in mind the broad discretion and flexibility it has when deciding a conversion application. It has the ultimate say on the infrastructure to be provided and may decide to condition the works or carry out the works itself, having considered the cost of the works and the potential offset or refund entitlement.
• A developer should not commence construction of the infrastructure while the conversion application is still being decided. However, if the commencement of the construction is necessary, the developer should assess how it may affect the exercise of the discretion by the decision-maker.
• Even though the case was determined under the Sustainable Planning Act 2009, since the infrastructure planning and charging framework under the Sustainable Planning Act 2009 is generally consistent with the framework under the Planning Act 2016, the key take outs from the case are relevant for the current framework.

Key take outs

• In deciding a conversion application, non-compliance with the conversion criteria is not necessarily fatal.
• A local government or distributor-retailer has no obligation to impose a necessary trunk infrastructure condition if non-trunk infrastructure is converted to trunk infrastructure.
• A local government or distributor-retailer could change the design and requirements of the infrastructure when imposing a necessary trunk infrastructure condition after the conversion.
• There is no invalidation of a properly made conversion application or deprivation of the Court’s jurisdiction to hear and determine an appeal just because construction of the infrastructure has commenced.
• Commencement of construction can however militate against the exercise of the discretion in favour of the developer.

Decision

The Planning and Environment Court delivered the first decision concerning an application to convert non-trunk infrastructure to trunk infrastructure under the Sustainable Planning Act 2009, since it was introduced as part of the State Government’s reform of the Queensland infrastructure planning and charging framework in 2014.

A conversion application was made to Toowoomba Regional Council with respect to stormwater drainage infrastructure and roadworks associated with Cronin Road and Barracks Road required under conditions of a development approval. Council approved the application in relation to stormwater drainage infrastructure but refused the application in relation to roadworks.

The Court found no support from Council’s local government infrastructure plan or its road hierarchy planning which indicated that both roads were planned to become trunk roads (major distributor roads).

The conditioned roadworks did not meet the conversion criteria in Council’s charges resolution since:

• the primary function of both upgraded roads was for local access purposes, servicing the proposed development;
• the conditioned works were not for a major distributor road nor would they result in the creation of a major distributor road;
• the construction of the roadworks had already commenced.

Whilst noting that a failure to meet the conversion criteria was not necessarily fatal, given the primary purpose and function of both upgraded roads, the Court was not persuaded that the conversion application should be approved.