Defining Matters A wrap of major legal matters for Victorian councils - Maddocks
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Defining
Matters
A wrap of major legal matters
for Victorian councils
Contents Foreward 2 Governance 3 Victoria’s recycling crisis: some lessons 3 Understanding the Office of the Victorian Information Commissioner’s Freedom of Information obligations 5 An abundance of difficult complainants: a common sense legal approach to imposing restrictions 6 Property 9 Affordable Housing project, Darebin 9 Transform Maroondah project 10 Planning & Environment 11 New environment protection laws: be prepared! 11 Challenges to the preparation and processing of a planning scheme amendment 12 Donnybrook Woodstock Precinct Structure, Whittlesea City Council and Mitchell Shire Council 13 Construction & Projects 15 Bundled recreation reserves for Casey City Council 15 ‘Work-in-kind’ agreement – Morris Road Bridge (Westbrook Estate) 17 Employment & Industrial Relations 19 Bargaining 19 Transfer of business 20 WorkSafe prosecution of Colac Otway Shire Council 21 Commercial 23 Joint procurement by Alpine, Towong and Indigo Shire Council 23 1 DEFINING MATTERS 2020 MADDOCKS.COM.AU
Foreward
We are pleased each year to work alongside Victorian
councils in assisting you to deliver better services for your
communities. Working with local government has been a
cornerstone of our firm since we were founded in 1885 and
it continues to be a focal point for us.
With this wealth of experience comes Maddocks is deeply committed to
an enormous library of knowledge. serving the ongoing needs of our local
We are regularly asked by council government clients in Victoria and
officers how helpful it would be hope that the information contained in
if we could share some of these this publication is informative, relevant
experiences with our other clients for and helpful.
their benefit of learning, managing or
pre-empting similar issues within their
Sector leaders
own municipalities.
Victorian Local Government
With that in mind, we are proud
to present to you our inaugural Mark Hayes
‘Defining Matters’, a wrap of major Partner | Public Law
61 3 9258 3533
legal matters for Victorian councils. mark.hayes@maddocks.com.au
This publication highlights some of
the more significant issues and work Guy O’Connor
Partner | Property
our legal teams have delivered to our 61 3 9258 3522
Victorian local government clients guy.oconnor@maddocks.com.au
over the past 12 months.
We would like to thank those clients
who kindly granted permission for
their matters to be featured, and we
are grateful for the opportunity to be
able to share these insights with you.
‘Maddocks is deeply committed to serving the
ongoing needs of our local government clients
in Victoria’
MADDOCKS.COM.AU DEFINING MATTERS 2020 2
Governance
Victoria’s recycling crisis: some lessons
Few Victorians were left untouched by last year’s ‘recycling Author
crisis’. The crisis – which had its origins in a 2017 decision by Mark Hayes
Partner | Public Law
the People’s Republic of China to impose heavy restrictions on 61 3 9258 3533
the import of recyclable materials – has led to a fundamental mark.hayes@maddocks.com.au
reappraisal of recycling policies. For Victorian councils, it has
also led to some harsh lessons about the commercial reality
of contracts for the receipt and processing of recyclables.
Parties will not always honour Right (and the law) was usually on the Importance of bank guarantees
their contracts side of the council. The problem was The collapse of SKM Industries
‘Honourable people honour their that the lack of alternative suppliers Pty Ltd (SKM) (and the companies
contracts’, Justice Teague once said. meant that the end of the contract was associated with it) left many Victorian
‘Honourable councils are expected to tantamount to sending recyclables to councils desperate for alternatives.
do the same’, he added. landfill. Reluctantly, councils paid the When, finally, alternatives presented
higher price. themselves, councils looked to try
Unfortunately, some councils assumed
that the law of contract would protect Those councils which ‘rolled over’ and salvage something through the
them if a recyclables processer quickly secured the continuity of service liquidation process.
threatened to walk away from a but at a much higher price. Those Frequently the costs incurred by
contract. Those councils discovered which negotiated with the processing those councils in making alternative
that the protection has its limits. contractor and took the contractor to arrangements exceeded the amounts
the brink invariably did better. owed to SKM prior to its cessation
Those receiving and processing
recyclables in Victoria are few in Contracts are only as good as the of services. Unsurprisingly, councils
number. This has enabled them to take willingness of the other party to looked to recover their net loss by
advantage of council vulnerabilities. perform its obligations. If that other making a claim against SKM.
party knows that abandonment of Once a company goes into liquidation
Typically, councils found a processing
the contract has its risks for the legal proceedings against it can only
contractor arguing that a higher
innocent party, then it may often be issued with the leave of the Court.
fee was warranted because what
be willing to forego some short- Leave is difficult to obtain – Courts
occurred in China amounted to a
term reputational damage in return generally take the view that the ‘proof
‘change in law’ entitling the contractor
for a more advantageous bargain. of debt’ process is the fairest and
to charge more. Frequently councils
Councils should appreciate this but most efficient means of resolving
resisted this, at least for a period. They
not be shy to threaten legal action and competing creditor claims.
were then met with a threat by the
be seen to be exploring alternatives.
contractor to terminate the contract, When a company in liquidation has
At the very least it will likely lead to
on the grounds that the council’s few (if any) assets to satisfy unsecured
a contract variation that, although
refusal to pay more amounted to a creditors the proof of debt process is
legally unnecessary, is commercially
fundamental breach of contract. unlikely to yield much joy. So, many
better than what was first demanded
by the contractor. Victorian councils have effectively
chosen to write off their losses.
3 DEFINING MATTERS 2020 MADDOCKS.COM.AU
Insisting upon a substantial bank the bank guarantee is significant. Even reluctantly) accepted the processing
guarantee when a contract is formed less is to be gained if the contractual contractor’s demand for change.
goes some way to avoiding significant obligation to lodge the bank guarantee
Just as market conditions can
losses when a contractor becomes isn’t monitored and enforced.
deteriorate they can improve. There
insolvent. Some councils entered into
Councils that had been more attentive is no reason why councils should not
contracts with SKM that provided for
to trying to secure their contractual be the beneficiaries of an uplift in the
the lodgement of bank guarantees.
positions may still have suffered market for recyclables.
Frequently these bank guarantees
losses as a result of SKM’s demise.
were modest in quantum. And then So, a number of councils have
It is just that those losses would have
there were some councils that insisted on mutuality – where if market
been more modest.
had contracts providing for a bank conditions decline the contractor can
guarantee but which failed to make Changes in market conditions charge more but if market conditions
sure that the bank guarantee was, in Renegotiation of contracts at the pick up then the contractor should
fact, lodged. behest of the processing contractor charge less. For the most part,
has often led to the inclusion of ‘Change processing contractors have accepted
A bank guarantee can be seen
In Market Conditions’ clauses. These the mutuality principle, whether out
as insurance against another
clauses are the contractor’s insurance of a recognition of fairness or a belief
party’s future inability to perform
against a further deterioration in the that the market will not improve (or not
its obligations. It amounts to an
market for recyclables. A decline improve to a point where a council
irrevocable promise by a bank to pay
in market conditions will entitle the will be able to insist upon a lesser
an amount on demand. If a contractor
contractor to pass on any additional payment).
defaults in performance, a council
will usually be entitled to draw on costs or seek compensation for a These clauses are barren unless a
the bank guarantee without giving reduction in revenue. mechanism is introduced for market
the contractor prior notice. The bank The commercial vulnerability of councils reviews. Councils must insist upon
must pay immediately, and the council has meant that these clauses are now a process whereby the state of the
accesses the proceeds. almost ‘standard’. Again, however, market can be analysed. Even then,
those councils which have adopted councils need to equip themselves
In the context of a contract for the
stronger stances in the renegotiation with access to information about the
receipt and processing of recyclables,
have often gained an advantage over state of the market and the particular
little is to be gained by insisting upon
those councils which meekly (but contractor’s costs and revenue.
a bank guarantee unless the amount of
MADDOCKS.COM.AU DEFINING MATTERS 2020 4
Understanding the Office of the Victorian
Information Commissioner’s Freedom of
Information obligations
The Office of the Victorian Information Commissioner (OVIC) Author
is an independent regulator with combined oversight of Melanie Olynyk
Public Law
information access, information privacy and data protection 61 3 9258 3691
by the Victorian public sector. As such, OVIC has oversight melanie.olynyk@maddocks.com.au
over information held by Victorian councils.
Maddocks conducted a series A significant learning from the FOI
of workshops late last year on Professional Standards workshop
OVIC Freedom of Information was the immediate steps that are
(FOI) Decisions and Professional needed to be taken in order to
Standards (Standards) for councils. comply with the Standards. This is
The aim of these workshops, which particularly important with respect
I facilitated, was to give councils a to the new timeframes and record
better understanding of how OVIC keeping requirements, and the need
works and how to better manage their for council CEOs to be briefed on
relationship with OVIC. the Standards as they have particular
responsibilities under them.
The sessions allowed for in-depth
discussion and enabled councils to More information on OVIC’s FOI
better understand the review process requirements can be found at
and likely outcomes, as well as www.ovic.vic.gov.au/freedom-of-
assist councils with their compliance information/
obligations.
Maddocks will be presenting
A key takeaway from the OVIC further FOI workshops in 2020.
decisions workshop was an To receive an invitation, contact me
understanding of the approach OVIC at melanie.olynyk@maddocks.com.au
takes to the disclosure of council staff
names and what councils need to do
in order to persuade OVIC that their
staff names should not be disclosed.
5 DEFINING MATTERS 2020 MADDOCKS.COM.AU
An abundance of difficult complainants: a
common sense legal approach to imposing
restrictions
When people want to complain about matters within their Author
local community, their council is often their first port of call. Kate Oliver
Public Law
61 3 9258 3333
kate.oliver@maddocks.com.au
Speaking at a recent meeting of the Identifying the difficult
Local Government Association of complainant
Tasmania, the Federal Minister for Difficult complainants come in many the council and to other oversight
Regional Services, Decentralisation shapes and sizes. They will often bodies, like the Ombudsman or the
and Local Government, Mark Coulton, demand to be heard in respect of any Local Government Inspectorate,
said of local government: and every issue that arises within their demanding action.
vicinity. These difficult complainants
‘Local government is at In many cases, the behaviour of
tend to bombard the council with
the coalface; when people difficult complainants will pose a risk
copious amounts of correspondence
want action and to see to the health and safety of staff of the
and telephone calls, and attend
projects implemented in their council and visitors to the council’s
every meeting of the council, often
premises. In almost all cases, difficult
community, councils are often becoming aggressive or at least
complainants will demand what
the first door people knock on.’ disruptive.
seems to be more than their fair
2019 saw a sharp increase in the number Other difficult complainants will share of the council’s increasingly
of councils seeking advice about how identify one issue and will refuse limited resources. Often, difficult
to manage difficult complainants – both to accept that the issue has been complainants will suffer from some
specifically and generally. appropriately dealt with by the council form of mental illness.
Realistically, what are your obligations and that there is no further action to
and rights in these circumstances? take. These difficult complainants
write endlessly about the issue to
MADDOCKS.COM.AU DEFINING MATTERS 2020 6
Suffering the difficult complainant complainant will be found to be invalid
Difficult complainants are often because it was discriminatory – that
endured for a period but, eventually, is, because a substantial reason
wear out their welcome. for denying access to the council’s
services was the behaviour caused by
It is at this point that councils look to a protected attribute, such as mental
take steps to limit the extent of the illness.
difficult complainant’s contact with,
and access to, the council and its So, what can councils do in these
staff. circumstances?
Generally, it will be possible for Permissible restrictions on the
councils to point to their obligations difficult complainant
under the Occupational Health While a council’s options in managing
and Safety Act 2004 as justifying difficult complainants might be limited,
decisions to impose those limits. they are certainly not non-existent.
Put simply, the behaviour of difficult
If a council is considering imposing
complainants gives rise to a risk to the
restrictions on the manner in which a
health and safety of staff and visitors
difficult complainant communicates
– both physically and mentally. As
with it and its staff, it should have
such, they should be prohibited from
regard to the:
having any contact.
• presence or otherwise of a risk to
However, while it is often tempting to the health and safety of the council’s
simply ban a difficult complainant from staff and visitors
communicating with, or attending at,
• presence or otherwise of a protected
the council altogether, the matter is attribute of the difficult complainant,
not so straightforward. such as mental illness
It must be recalled that councils • engagement of rights protected by
provide vital services to their residents the Charter of Human Rights and
and access to these services cannot Responsibilities Act 2006
simply be terminated without cause. • reasonableness and proportionality
of the restrictions to be imposed
In deciding what action to take with on the difficult complainant in the
respect to a difficult complainant, context of the above matters.
the council must also comply with
its obligations under the Equal There are some authorities in this
Opportunity Act 2010 and the Charter space (see, for example, Slattery v
of Human Rights and Responsibilities Manningham City Council [2013]
Act 2006. VCAT 1869 and Richardson v City
of Casey [2014] VCAT 1294), and
The decision of Senior Member Nihill guidance material published by public
in Slattery v Manningham City Council bodies (see, for example, the Victorian
[2013] VCAT 1869 makes it clear that, Ombudsman’s ‘Good Practice
when a council bans a person from Guide to Dealing with Challenging
accessing the council’s premises, it Behaviour’ and the New South Wales
will also be prohibiting that person from Ombudsman’s manual for ‘Managing
accessing a service that it provides. unreasonable complainant conduct
In those circumstances, the council – 2nd Edition’), that assist with
might be found to have discriminated identifying an acceptable approach to
against the difficult complainant. the imposition of restrictions.
This, in turn, gives rise to a risk that
the council’s decision to ban a difficult
7 DEFINING MATTERS 2020 MADDOCKS.COM.AU
In particular, it is clear that any restrictions imposed on a difficult
complainant by a council should:
Be for a finite period Provide for lifting in certain
A restriction which does not have circumstances
an end date will almost certainly be For example, a difficult complainant
unlawful. might want to attend, and be justified
in attending, a particular event.
Be directly related to the
behaviour sought to be managed Provide for review at certain
For example, if a difficult complainant intervals
is observed littering in the library, A difficult complainant should be given
they should not be prohibited from the opportunity to redeem themselves
attending the aquatic centre. and have restrictions eased or lifted if
they have been compliant.
Be proportionate to, and not go
beyond, what is necessary to Provide for notification of the
address that behaviour difficult complainant at different
intervals
For example, if a difficult complainant
Review and end dates should be
has sent a number of offensive emails,
diarised to ensure that the difficult
they should not be prohibited from
complainant is advised of the status
accessing the council’s online services
of the restrictions at the promised
altogether.
intervals.
By following these basic principles More importantly, the likelihood of
when considering the imposition of criticism by a public oversight body
restrictions on difficult complainants, like the Ombudsman will be minimal.
councils will significantly reduce
the exposure of those restrictions to
challenge.
MADDOCKS.COM.AU DEFINING MATTERS 2020 8
Property
Affordable Housing project, Darebin
Our team
Guy O’Connor
Partner | Property
Matter Affordable Housing Project, Townhall Avenue, Preston. 61 3 9258 3522
guy.oconnor@maddocks.com.au
Tim McHugh
Strategic advice on funding agreement, EOI and RFP Senior Associate | Property
61 3 9258 3644
Our role documentation, procurement and lease of air space. tim.mchugh@maddocks.com.au
While yet to be finalised, this is an exemplar project as it will
demonstrate how councils can utilise operational land to
facilitate affordable housing outcomes without transferring
Key outcome
freehold title to the land.
Council is strongly committed
to increasing the amount of
affordable housing in Darebin,
The City of Darebin’s Affordable Our team has provided advice on
and to using its own assets
Housing project in Preston is a various aspects of this project,
and land for this purpose.
significant development for affordable including:
housing in Melbourne. The project
This project sought to not only
• the funding agreement between deliver affordable housing, but
involves the use of air space above Council and the Lord Mayor’s
operational Council land, in this Charitable Foundation to test whether a leasehold
case a car park, to create affordable • reviewing the Invitation for
model would be a viable tenure
housing without Council transferring Expressions of Interest and Request option for a housing association.
freehold title to the land. for Proposals documentation We have progressed through
The project also involves the Council • advising on procurement of a project multiple council decisions and
partnering with the Lord Mayor’s partner are at the point of selecting
Charitable Foundation to partly fund • drafting the lease of air space an organisation to build and
the project. above Council’s car park to facilitate manage the development. While
construction of the affordable the process is still underway,
Our team led by Property partner housing development.
Guy O’Connor and senior associate we have learned a great deal
Tim McHugh, is working closely The project is ongoing, with final that we are able to share with
with Council’s Principal Strategic documentation yet to be executed by the sector and use to inform our
Planner, Sophie Jordan in all aspects the parties at the time of publication.
future work. It has helped us
of this project. to work through the challenges
and issues associated with
using Council assets for
affordable housing.
Sophie Jordan
Principal Strategic Planner
City of Darebin
9 DEFINING MATTERS 2020 MADDOCKS.COM.AUTransform Maroondah project
Our team
Development of a precinct within the Ringwood Metropolitan
Marine Nincevic
Activity Centre (MAC), incorporating an administrative hub for
Partner | Property
Matter Council. 61 3 9258 3583
marine.nincevic@maddocks.com.au
Property advice on all aspects of the project, including drafting Mike Steel
and negotiating all project agreements and contracts of sale Special Counsel | Property
Our role including the development agreement. 61 3 9258 3380
mike.steel@maddocks.com.au
This is considered an exemplar project for local government Jonathon Meehan
as it demonstrates a council’s ability to leverage a real estate Senior Associate | Property
outcome for its civic offices within an activity centre, by offering 61 3 9258 3015
Key outcome jonathan.meehan@maddocks.com.au
to trade its strategic landholdings and provide increased foot
traffic to the Eastland Shopping Centre.
Members of Maddocks Property Andrew Fuaux, Director Development The project will provide Council
Team, including partner Marine and Amenity. with a 5 Star Green Star facility
Nincevic, special counsel Mike that complements its existing
The final documentation has been
Steell and senior associate Jonathon
executed by the parties. The project modern civic infrastructure in
Meehan advised Maroondah City
Council, in particular Steve Kozlowski,
is ongoing and is currently in the the heart of Ringwood while
construction phase. also facilitating further private
Chief Executive Officer, Phil Turner,
Director Strategy and Community and and public sector development
consistent with the overall plans
for the Ringwood MAC.
Steve Kozlowski
Chief Executive Officer
Maroondah City Council
MADDOCKS.COM.AU DEFINING MATTERS 2020 10Planning & Environment
New environment protection laws: be prepared!
Few Victorians would not be aware of the biggest overhaul Authors
of the environmental regulatory regime in Victoria. This Maria Marshall
Partner | Planning & Environment
followed the 2015 State-initiated inquiry into the role of 61 3 9258 3551
the Environment Protection Authority (EPA) which has maria.marshall@maddocks.com.au
culminated with a reform to the environmental legislation Thy Nguyen
Associate | Planning & Environment
in Victoria. 61 3 9258 3503
thy.nguyen@maddocks.com.au
The State is working towards a commencement date of 1 July 2020 (yes — less than 3 months away) for the new
Environment Protection Act 2017 (EP Act). Below is a high level snapshot of some of the key changes.
Current EP Act New EP Act
Reactive approach Proactive, preventative approach (particularly the General
Environmental Duty)
Prescribed industrial waste regime Replaced by a ‘priority waste’ system, with new duties
imposed
No stand-alone obligation to notify or manage New obligations (duty to manage and duty to notify)
contamination imposed in relation to contaminated sites. EPA can issue
site management orders (which become a charge on the
land and bind future owners and occupiers)
One-size-fits all approach to environmental audits Two-stage environmental audit process introduced:
preliminary risk screen and scaled audit
Offence to pollute, but no positive obligation to notify New duties imposed requiring remediation and
EPA of an incident (unless a licence breach – typically a notification of a pollution incident
licence condition requirement)
Noticeably, there will now be a duty to notify for pollution incidents. Non-compliance with this duty can attract civil
penalties and is an offence provision. In the preparation for the commencement of the new Act, councils who conduct
an environmentally relevant activity should be in the process of developing a pollution incident response protocol /
procedure, ahead of the commencement of the new Act.
For more information about the new Act, please see Maddocks Planning & Environment e-Alerts:
The Environment Protection Amendment Bill Devil in the detail: Draft Environment Protection
2018 – The nuts and bolts Regulations
The new General Environmental Duty: what is
required and what is reasonably practicable?
11 DEFINING MATTERS 2020 MADDOCKS.COM.AUChallenges to the preparation and processing
of a planning scheme amendment
Over recent years, Maddocks Planning & Environment Authors
Team has seen an increase in the number of appeals Terry Montebello
Partner | Planning & Environment
lodged at the Victorian Civil and Administrative Tribunal 61 3 9258 3698
(VCAT) pursuant to section 39 of the Planning and terry.montebello@maddocks.com.au
Environment Act 1987 (Act). Briana Eastaugh
Special Counsel | Planning & Environment
61 3 9258 3372
briana.eastaugh@maddocks.com.au
Section 39 relates to ‘defects have arisen in these cases relate to:
in procedure’ in respect of the • The way in which notice of an
preparation and processing of a amendment is given. – a description of and the reasons
planning scheme amendment. for any changes made to the
• The council’s consideration of
The power under s 39 is about submissions under s 23 of the Act, amendment before adoption
process and not substance, and namely which ‘option’ council elects (regulation 9(g)).
yet, it can result in a strategic under s 23 (i.e. whether to change the If a council does not accept the
project being significantly delayed amendment, refer the submissions to recommendations of the panel, it is
a panel or abandon the amendment
or overturned due to alleged defects important to clearly articulate the
or part of the amendment). On this
in the procedural steps taken in the reasons for this. It is also important
point, the Tribunal has been clear
amendment process. that the options under s 23 are that the ‘changes’ identified to the
In essence, the power under s 39 alternatives and mutually exclusive. amendment relate to the exhibited
gives VCAT the ability to make • T h e c o n s e q u e n c e s o f ‘ l a te’ amendment, rather than later (often
orders to ensure that the procedures submissions to an amendment and ‘panel hearing’) versions of the
in relation to planning scheme how these submitters are brought amendment.
amendments are complied with or ‘roll into the panel hearing process. Due to our specialised experience
back’ the process to the point where • The wording of council resolutions in strategic planning, Maddocks has
the failure occurred, and to continue and the language used. It is clear that assisted several municipal councils
the process from there (per Deputy the wording of a council resolution is regarding these appeals and in
President Dwyer in Lend Lease critical and must be referable to the reviewing processes to ensure the
power being exercised under the Act.
Apartments (Armadale) Pty Ltd v proper procedural steps are taken to
Stonnington CC [2013] VCAT 1663). • The information provided to the avoid falling into error.
Minister with an amendment adopted
Importantly, s 39 applies to the by the council. Under Regulation It is apparent that there is an increasing
life cycle of a planning scheme 9 of the Planning and Environment ‘appetite’ for these types of appeals
amendment. In other words, it Regulations 2015 the adopted to be lodged with VCAT. Ensuring that
captures everything from exhibition amendment must be provided procedural practices are in order will
and notice of an amendment to together with the ‘prescribed assist in resisting or defending them
adoption and approval of the information’ under Regulation and facilitate the efficient processing
amendment. Section 39 also relates 9. Several cases have identified of strategic projects.
errors in the information provided,
to the conduct of Planning Panel
specifically relating to:
hearings.
– the reasons why any
Maddocks has advised and recommendations of a panel were
represented various council clients not adopted (regulation 9(e))
on this matter and the key issues that
MADDOCKS.COM.AU DEFINING MATTERS 2020 12Donnybrook Woodstock Precinct Structure,
Whittlesea City Council and Mitchell Shire
Council
Our team
Terry Montebello
Partner | Planning & Environment
Matter Donnybrook Woodstock Precinct Structure. 61 3 9258 3698
terry.montebello@maddocks.com.au
Providing advice to both councils on infrastructure funding via Briana Eastaugh
development contribution plans and infrastructure contribution Special Counsel | Planning & Environment
61 3 9258 3372
Our role plans. briana.eastaugh@maddocks.com.au
The bespoke infrastructure project was designed to meet the
required standards and the councils saved millions of dollars costed met an appropriate design
Key outcome in funding shortfalls. standard so that ‘basic’ did not
mean poor design and urban design
outcomes.
The imperatives of the councils were to:
In 2019, the Maddocks Planning & Environment Team
• Ensure that bespoke infrastructure
provided advice to Whittlesea City Council and Mitchell projects were all properly costed
Shire Council on transitioning the development contribution • Ensure that infrastructure projects
plans for the Donnybrook Woodstock Precinct Structure. were properly designed for the
purpose of arriving at a bespoke
costing
The transition from development part of the panel hearing. In addition, • Minimise potential funding shortfalls.
contribution plans to infrastructure key principles arose in relation to
The statutory framework for
contribution plans is being overseen by the design of road infrastructure
development contributions plans and
the Victorian Planning Authority (VPA). and whether basic infrastructure
infrastructure contributions plans is
The Donnybrook Woodstock Precinct included certain design standards
complex. The statutory framework
Structure Plan was approved with an that the councils were aiming for.
for infrastructure contributions plans
early form of Infrastructure Contributions The bespoke nature of infrastructure
is also in its infancy with a relatively
Plan. That plan was always intended also required specific costings based
basic level of learning to build upon.
to transition to an infrastructure on an agreed set of principles. The
Maddocks was able to assist by
contributions plan in accordance with significant discrepancy between
bringing years of experience to the
the current provisions of Part 3AB of various costs consultants required a
table with an acute understanding of
the Planning and Environment Act forensic assessment of each project
the law on development contributions
1987, including the provision of inner to understand cost differences.
and the evolution of the new
public purpose land together with
For the two councils, this was an infrastructure contributions system.
full identification of Land Credits and
opportunity to minimise the likely Coupled with our advocacy skills we
Land Equalisation. In addition, the
revenue shortfall when the plan was were able to make forceful arguments
finalised Infrastructure Contributions
implemented over time as a result of for the councils that were in large part
Plan required a Supplementary Levy for
poor cost estimates or cost estimates accepted by the panel.
excess road works.
that failed to include elements of a
The councils were able to ensure
As one of the first infrastructure project that were necessary. The
that bespoke infrastructure was
contributions plans prepared by the panel hearing also presented the
designed to appropriate standards.
VPA, the issue of how to design and councils an opportunity to insist that
Furthermore, those bespoke
cost bespoke infrastructure was a key the infrastructure standards that were
13 DEFINING MATTERS 2020 MADDOCKS.COM.AUinfrastructure items were then costed The preparation of contribution plans carry a number of inherent
based on robust cost methods. The financial risks for Council’s in both their role as collecting and
Supplementary Levy was significantly delivery agencies. It was critical for Council in this instance to
increased from the exhibited base,
minimise these financial risks as a submitter to the Amendment
saving the councils many millions of
and Panel process along with ensuring that the infrastructure
dollars in funding shortfalls.
identified in the plan is fit for purpose and is able to be delivered
The panel’s report will undoubtedly in a timely manner.
be used as a precedent in future
infrastructure contributions plan Whilst not all submissions of Council were ultimately supported
hearings. The findings of the panel by the Panel, the final plan is far more reflective of the actual
however, also leave hope for some costs of delivering the transport projects in the precinct and
debate about the proper approach therefore is overall a good outcome for Council. Further, it was
to the use of infrastructure levies pleasing to see the Panel, acknowledge the significant issues
when a council has more than one raised in submissions by Council in respect to the shortfalls
development contributions plan or
associated with community and recreation projects and its
infrastructure contributions plan. The
key need for councils is to ensure robust
encouragement for this issue to be further monitored across
and detailed costings by experienced growth areas’.
cost assessors. All infrastructure
Liam Wilkinson
must be provided consistent with the
Ministerial Direction for infrastructure Coordinator Strategic Planning & Economic Development
contributions plans. City of Whittlesea
MADDOCKS.COM.AU DEFINING MATTERS 2020 14Construction & Projects
Bundled recreation reserves for Casey
City Council
Our team
Paul Woods
Casey City Council’s program of community infrastructure Partner | Construction & Projects
work included the design, construction and delivery to 61 3 9258 3874
paul.woods@maddocks.com.au
the community of 4 recreation reserves spanning a wide
Shane Ridley
geographical area within the municipality, with the potential Consultant | Construction & Projects
of further reserves to be added to this program as community 61 3 9258 3519
shane.ridley@maddocks.com.au
consultation and designs are finalised.
Council and external consultants Our role Key outcome
carried out the design of the initial Our team came on board early in the Council has now received and
four reserves. It had an aggressive process and worked with Council assessed tenders for all 4 recreation
timetable for delivery of the works to officers and its external project reserves and appointed 2 contractors,
ensure that local communities and managers to identify its priorities and who will each deliver 2 of the initial
stakeholders received the benefit of imperatives. We recommended and 4 reserves each, on programs that
these new recreational reserves and prepared an innovative and flexible will meet Council’s aspiration for
sporting facilities by early 2021. form of construction contract and late-2020 completion. The tender
Council’s imperatives were to: Request for Tender under which process allowed Council to ensure
tenderers were invited to submit competitive and transparent pricing
• identify and implement a tendering
proposals for one or more recreational was received from the market, and to
and procurement method that
reserves. Council has the right to be satisfied that the earliest possible
achieved value for money;
appoint a single tenderer to all 4 of completion times will be achieved
• deliver the recreation reserves by
the initial recreational reserves or to for the community. Council has the
mid-2020;
split the reserves amongst multiple benefit of the certainty that comes
• have the flexibility to appoint a single tenderers, depending on capability, with rates and prices that are ‘locked
contractor or numerous contractors
price and program. in’ for its appointed contractors over
to deliver the work;
the medium term, if new reserves are
• add scope to any contract, or The contract includes a regime under
to be brought on line. The construction
b r i ng ad di ti o na l re c re ati o na l which Council had the ability to issue
period, initially expected to be around
reserves into this program of work, requests to the contractor from time
2 years, is now expected to be around
with administrative ease where to time for the contractor to submit
appropriate to do so; 10 months.
a proposal (based on pre-agreed
• provide for the staged handover margin and rates) to undertake new Councils in growth corridors with
of the reserves and associated recreation reserves. If the proposal aggressive timetables for the delivery
clubrooms / facilities with is accepted, the new reserve may of new public open spaces can use
appropriate defects liability periods be added to the contractor’s existing this model where they choose to
(including prolonged maintenance scope of work as an agreed, new design and deliver works themselves
/ monitoring / replacement regimes separable portion. (rather than by way of ‘work-in-kind’
for newly turfed areas); and
agreements with land developers).
• c omply with its procurement Councils will have the ability to add
guidelines and Local Government new works mid-stream at pre-agreed,
Act procurement obligations.
fixed rates should the need arise.
15 DEFINING MATTERS 2020 MADDOCKS.COM.AUConstruction started in December 2019 for the delivery of 4 new recreation reserves, of total value $45M approx. The facility at each recreation reserve comprises new multiple sports fields, pavilions, sports lighting, car park, playground, landscaping, paths. A single contract was let so that two contractors are building the 4 reserves – (2 each by separable portions). The contract is also structured so that prices are locked in to construct a further similar reserves without the requirement to again go to market. The two contractors are effectively competing against each other, by their performance, to win this additional work. The contract scope and size has brought about an uplift in contractor and Council capacity to deliver new recreation reserves concurrently. Completion of the initial four recreation reserves is expected in October/November 2020. This is approximately 5 months earlier than contractually required and 1 to 2 years earlier than the traditional construction model used where a separate contract was let at each reserve for the civil, building and landscape components. The head contractor is therefore responsible for integration between the different types of sub-contractors working on the same site. Trevor Griffin Manager City Design and Construction City of Casey MADDOCKS.COM.AU DEFINING MATTERS 2020 16
‘Work-in-kind’ agreement – Morris
Road Bridge (Westbrook Estate)
Author
Paul Woods
A development area within the municipality of Wyndham Partner | Construction & Projects
City Council is divided by a major rail corridor, part of the 61 3 9258 3874
paul.woods@maddocks.com.au
Regional Rail Link network. Council’s capital works plan
requires the design and construction of a traffic bridge
linking a suburban road on either side of the rail alignment.
Council was seeking an outcome Our role Key outcome
where the bridge is delivered
We are working with Council and the Council has been able to ensure
concurrently with the subdivision of
developer to prepare a ‘work-in-kind’ that this bridge, linking 2 new
residential lots on the land, whilst
agreement which Council entered communities will be delivered and
minimising Council’s financial
into under s. 173 of the Planning & operational concurrently with the
commitment to the capital expenditure
Environment Act and under which: development of the residential lots in
for the road/bridge works.
• construction costs are paid by way those communities. Upon the transfer
Council agreed with a private of a credit against the developer’s of title in the bridge to Council, the
developer that the developer would infrastructure levy so as to minimise risk of defects has been appropriately
assume responsibility for the design the need for Council to fund the managed by giving Council oversight
and construction of the bridge on works from revenue of the design process, and extensive,
a ‘work-in-kind’ basis. The value of • Council can ensure value-for-money binding warranties from the developer
work (agreed up front) is applied as by seeking independent advice as to as to quality and fitness for purpose.
a credit against the development the quality of the design of the works The capital cost to Council has been
infrastructure levy that the developer and the total capital works cost greatly reduced by procuring the
is otherwise required to pay to Council bridge on a ‘work-in-kind’ basis.
• the developer assumes ‘design
upon development of the land. The
and construct’ responsibility for Councils in growth areas who wish to
work is to be carried out at the same
the procurement and delivery of the fast-track the delivery of community
time as the developer’s subdivision
bridge, and gives warranties as to infrastructure (whether roads, bridges,
activities on the land.
standards and quality social infrastructure or public open
• Council retains oversight and control spaces) can utilise this ‘work-in-kind’
of the design development process, model and achieve outcomes months
with the ability to check, comment or years earlier than would otherwise
on and require amendments to be the case by putting funds from
the design during the design development infrastructure levies
development phase to work. This model utilises ‘design
and construct’ principles and risk
• the bridge will now be procured
allocation in a s. 173 Agreement to
and delivered concurrently with the
ensure that Councils have oversight
subdivision of the land, with the
during the design process and retain
developer absorbing both the long-
long-term warranties from developers
term design risk for these work, as
if there are defects.
well as the up-front capital cost of
procurement.
17 DEFINING MATTERS 2020 MADDOCKS.COM.AUCouncil had never constructed a bridge over a rail line so it was critical that the project was de-risked not only from a delivery perspective but also financially. Most important was connecting the two growing communities on either side of this bridge and so having it delivered on time was a positive outcome for Council and the community. Joseph Patamisi Senior Strategic Planner – Development Contributions Wyndham City Council MADDOCKS.COM.AU DEFINING MATTERS 2020 18
Employment & Industrial Relations
During 2019, Maddocks Employment, Safety & People Authors
team saw some significant themes emerge in our work Ross Jackson
Partner | Employment, Safety & People
with various councils. Some of these are outlined below. 61 3 9258 3526
ross.jackson@maddocks.com.au
Bargaining Lindy Richardson
Partner | Employment, Safety & People
61 3 9258 3721
During the year, bargaining was again a vexed issue lindy.richardson@maddocks.com.au
for some councils. With the introduction of legislation
in late December 2018, which allowed the Fair Work
Commission to approve enterprise agreements despite
‘minor procedural or technical errors’ made in relation to
pre-approval requirements such as the notice of employee
18
Victorian local
17
Victorian local
representational rights and the requirement to give copies government enterprise government enterprise
of (or access to) relevant documents, our clients have agreements approved agreements approved
found it easier to navigate the complex procedural barriers in 2019 in 2018
to getting an agreement approved.
However, relaxing the rules in one area has seen complexity
arise in another. All enterprise agreements are being
Some councils Average
meticulously compared with modern awards to ensure that we assisted with annualised wage
the Commission is satisfied every employee is better off bargaining increases for
overall under the agreement. in 2019 agreements
Councils are finding themselves needing to seek advice approved in June
2019 quarter:
about, and draft effective, undertakings to satisfy the
2.8%
Commission. It is imperative that councils carefully analyse
concerns raised by the Commission to determine the issues:
• that they will address with further submissions to seek to Private Sector
reverse the Commission’s preliminary decision; or
• where undertakings will be offered (ensuring the wording
does not create more problems than it solves or which
might be fundamental to the bargaining deal reached).
2.6%
Public Sector
This process is complex, nuanced and is assisted by an
Source:
understanding of relevant case law (such as the Mondelez Trends in Federal Enterprise
Bargaining Report - June
decision, where the Commission has been seeking quarter 2019
undertakings about the accrual of leave whilst the law is
not settled in this area) and sound drafting techniques.
We also saw a number of councils seeking to consolidate
their enterprise agreements to remove the complex Part A/
Part B architecture that has prevailed over the last decade.
Following the Maribyrnong City Council v ASU [2019]
FCA 773 decision, the interpretation of agreements which
attach superseded awards has increased in complexity.
This has introduced another layer of sophistication when
drafting clauses (on topics such as transfer of business
and redundancy) for enterprise agreements that have
retained the Part A/Part B structure.
19 DEFINING MATTERS 2020 MADDOCKS.COM.AUTransfer of business
With a rate-capping environment now firmly entrenched in
Victoria, in 2019 councils continued to be under pressure
to ensure costs and services are managed efficiently.
We saw a number of councils continue to conduct
service reviews, with the resultant outcomes being either
business as usual; process improvement/ enhancement;
or alternative service models (such as ceasing the service,
outsourcing, returning the service to government etc).
It is essential that councils consider their industrial
arrangements – often and early – during such processes.
An enterprise agreement will often create consultation
and other obligations on councils at the service review,
proposal, decision and implementation stages. Navigating
those requirements and importantly, knowing the
strategic options open to Council – can assist not only
with mitigating industrial risks, but also providing better
commercial outcomes for Council.
Case study
We have assisted a regional council with its review of
a particular service. This has involved:
• advice about consultation requirements in the
enterprise agreement
• advice about compliance with the Local Government
Act 1989
• assisting to project manage the process
• drafting EOIs and tender documentation and
reviewing FAQs
• providing advice to Council about legal implications
and options
• advice about transfer of business and redundancy/
severance in the enterprise agreement and the Fair
Work Act 2009.
MADDOCKS.COM.AU DEFINING MATTERS 2020 20WorkSafe prosecution of Colac Otway Shire
Council
Our team
Catherine Dunlop
WorkSafe prosecution of Colac Otway Shire Council Partner | Employment, Safety & People
Matter (workplace fatality). 61 3 9258 3633
catherine.dunlop@maddocks.com.au
Dale McQualter | Senior Associate
Advised Council in the immediate aftermath of the incident Employment, Safety & People
61 3 9258 3674
Our role and in defending WorkSafe charges. dale.mcqualter@maddocks.com.au
investigations and councils should
Key outcome Council was acquitted of all charges. ensure they understand their rights (and
those of employees) when responding
to regulator investigations from the time
of the incident, including important
In September 2016, a Council employee fell from the back of decisions about confidentiality and
a truck at Council’s depot and subsequently died of serious client legal privilege. In this case, the
head injuries. early engagement of the Maddocks
team enabled Council to:
Maddocks advised in the immediate Maddocks and Counsel elected to • have all available information
aftermath of the incident, including the defend the charges through committal necessary to properly consider its
options and respond appropriately
investigations undertaken by Victoria hearing and then to trial before a jury in
at all times
Police, WorkSafe and the Coroner. the County Court at Geelong in August
Given the high likelihood of WorkSafe and September 2019. After a 2-week • ensure the workplace was safe
filing criminal charges against Council trial, a jury acquitted Council of all • have a thorough understanding of
alleging contravention of occupational charges. the cause of the incident and take
health and safety laws, Maddocks immediate measures to improve safety
The key take-away from this experience • attend to the welfare of all staff and
ensured Council took immediate steps
is that councils should always seek others involved without impeding
to conduct its own investigation and put
immediate advice from their trusted investigations`
measures in place to enable it to be in
legal advisors at the time of any • understand its rights, obligations
the best possible position to respond
significant workplace safety incident and options when responding to
to any charges that may arise from the
that will be subject to safety regulator or investigation by the safety regulator.
incident.
police investigation.
In 2018, WorkSafe charged Equally important, the early and ongoing
Councils faced with serious workplace assistance provided by Maddocks
Council with 3 contraventions of the
safety incidents need to understand with a constant contact point during
Occupational Health and Safety Act
the potential long-term consequences a drawn-out matter ensured Council
2004, claiming Council had failed
from the outset, and that time spent understood the consequences of
to provide a safe system of work
getting advice from trusted legal choosing to defend or not defend the
at the depot. Maddocks, together
advisors in the immediate aftermath charges and the potential implications
with experienced Counsel, advised
of a workplace safety incident can be for individual employees involved in
Council that it had good prospects of
invaluable in the long-term. Missteps the matters relating to the incident
successfully defending the charges.
at the time of an incident can limit that would flow from that decision or a
Council felt strongly that it had done
options during drawn out regulator decision to plead guilty.
nothing wrong and on advice from
21 DEFINING MATTERS 2020 MADDOCKS.COM.AUMADDOCKS.COM.AU DEFINING MATTERS 2020 22
Commercial
Joint procurement by Alpine, Towong and
Indigo Shire Councils
Our team
Andrew Whiteside
As councils look to overhaul their legacy assets, in the face Partner | Commercial
of increasing costs, joint procurements can provide more 61 3 9258 3353
andrew.whiteside@maddocks.com.au
efficient and better value outcomes for all councils involved.
Viviane Karoumbalis
Senior Associate | Commercial
61 3 9258 3521
In early 2019, Alpine, Towong and Collectively, the councils were able to viviane.karoumbalis@maddocks.com.au
Indigo Shire Councils were faced negotiate a better deal than they would
with how 3 small regional councils have individually, at a lower cost to each Georgia Hunt
Senior Associate | Commercial
with similar requirements and limited council (by splitting the procurement 61 3 9258 3739
budgets could obtain the new IT and solution implementation costs). georgia.hunt@maddocks.com.au
systems they needed at a reasonable
The core Maddocks team of Andrew
price.
Whiteside, Georgia Hunt and Viviane
Maddocks Procurement and Karoumbalis worked primarily with key
Technology team worked with the council representatives at lead council
councils and their IT consultants to: Alpine Shire Council, Charlie Bird and
• consider the procurement and Victoria Schmidt.
governance issues associated with The project identified the following key
a joint procurement considerations for councils:
• put in place a memorandum of
• joint procurements require careful
understanding between the councils
planning and an agreed approach
regarding the procurement approach
upfront
(including how to divide joint costs
and escalate disagreements as to • there are various models that can
scope and approach) be adopted to undertake joint
procurement, including one off
• formulate the contracting approach
unincorporated joint ventures (such
which enabled the councils to
as the Alpine, Toowong and Indigo
contract jointly for shared
approach) or the establishment
implementation services, but enter
of more elaborate means such as
into separate software-as-a-service
councils establishing a company
licence and support agreements
to under take a series of joint
• assist with contract negotiations procurements on their behalf.
with the preferred vendor.
Whatever the approach, the councils
The higher value of the joint participating must ensure that they are
procurement enabled the councils to closely aligned as to requirements,
attract tenders from new vendors, who governance and expectations, or
may not have responded to individual they risk not achieving the expected
tenders by each of the councils. efficiencies and value intended from
the joint procurement.
23 DEFINING MATTERS 2020 MADDOCKS.COM.AU© Maddocks (2020) The copyright in this publication is owned by Maddocks. All rights are expressly reserved. This publication may not be downloaded, printed or reproduced, in whole or in part, without the prior written consent of Maddocks. Copyright enquiries and requests for additional copies should be directed to Maddocks. Disclaimer This publication provides general information which is current as at the time of production. The information contained in this communication does not constitute legal or other advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information and any action taken or decision made by any party based on this publication is not within the duty of care of Maddocks. Maddocks disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information contained in this publication. Any party that relies on the information contained in this publication does so at its own risk. Access to this publication is not intended to create nor does it create a solicitor-client relationship between the reader and Maddocks. MADDOCKS.COM.AU DEFINING MATTERS 2020 24
maddocks.com.au
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