03 June 2020
Last June, we discussed procedural fairness in the compulsory acquisition process and the then-recent decision of the Victoria Supreme Court in Caligiuri & Anor v Attorney General (on behalf of the State of Victoria) & Ors (No 2)  VSC 365 here. In what may be welcome news to some acquiring authorities, this key judgment has since been before the Victorian Court of Appeal, which has overturned the decision of the Supreme Court.
The Supreme Court had held that the acquiring authorities owed a duty to afford the interest holders an opportunity to be heard after the issue of a notice of intention to acquire was served upon them, and prior to the publication of the notice of acquisition. Procedural fairness would also have required the authorities to give serious consideration to what was submitted, and to act fairly in making a decision as to whether and how the acquisition should proceed.
In Melbourne Water Corporation & Anor v Caligiuri & Ors  VSCA 16, the Court of Appeal, by consent, granted the authorities’ application for leave to appeal. It held that the Land Acquisition and Compensation Act 1986 (LAC Act) does not require an acquiring authority to give a person an opportunity to be heard between service of the notice of intention to acquire and service of the notice of acquisition.
The proceedings related to a compulsory acquisition of land pursuant to the LAC Act by Melbourne Water Corporation and Yarra Valley Water.
Upon recommendation by the Minister, the Governor in Council certified that the reservation of the acquisition area for a public purpose under a planning instrument was unnecessary, undesirable or contrary to the public interest under section 5(3). The authorities then served notices of intention to acquire on the interested parties and published notices of acquisition three months thereafter.
The decision of the Court
Although the proceeding was settled between the parties, the Court nonetheless had a duty to be satisfied that there was an appellable error. The Court considered the appeal on the ground that the judge erred in finding that the exercise of a power under section 19 of the LAC Act was conditional upon the right to be heard.
The Court held that section 19 is a ‘machinery provision’ which effects the transfer of land to an acquiring authority. It does not require procedural fairness to be afforded prior to exercise of the power for which it provides and does not ‘re-open’ the question as to whether the acquisition should take place. The question of whether the land should be available for compulsory acquisition is already resolved by the time the acquiring authority serves its notice of intention to acquire, having been either reserved under the Planning and Environment Act 1987 (PE Act) or certified under section 5(3).
The Court found that the acquisition process set out under the LAC Act “evinces a clear legislative intent to exclude a right to be heard prior to the publication of a notice of acquisition”.
Reasons for the decision
In considering the appeal and consent position of the parties, the Court looked to the whole of the acquisition process as set out under the LAC Act and PE Act.
Rather than treating the procedural steps in the LAC Act as separate processes, the Court held that these steps are to be viewed as part of a single process. The first step of the compulsory acquisition process, being the reservation of the land for a public purpose, involves a requirement to afford procedural fairness. Reservation requires an amendment to a planning scheme, which in turn requires public notice to be given, entitles any person to make a submission on the proposed amendment, and places an obligation on the planning authority to consider all submissions made, pursuant to the PE Act.
Having determined that this first step requires procedural fairness to be afforded, the Court went on to accept the parties’ submission that it was unlikely that Parliament intended for there to be multiple rights to be heard in the acquisition process, particularly in light of the comprehensive notice and submission provisions in the PE Act.
The Court held that this analysis is no different if section 5(3) applies to exclude the rights of public participation contained in the PE Act. The exclusion is a function of a recommendation made by the Minister to the Governor in Council that reservation of the land is unnecessary, undesirable or contrary to the public interest. It would be an odd result if, for example, the urgent need for infrastructure made the reservation of the land ‘contrary to the public interest’, yet a relatively complex consultation process had to take place before the final step could be taken to vest the land in the acquiring authority.
Moreover, the Court held that a right to be heard between the service of the notice of intention to acquire and the publication of the notice of acquisition would ‘threaten’ the timely payment of compensation and may “inflict practical injustice”.
What does this mean in practice?
For acquiring authorities, this decision means that once land is reserved or certified, there is no entitlement of a person to be heard in relation to whether the land should be acquired or not. This does not, however, exclude the right to be heard under other Acts or regulations, such as for the purposes of the environment effects statement process.
For interest holders, if a planning authority is considering reserving your land or part of your land for public purposes, your right to be heard on this reservation and any consequent compulsory acquisition appears at the beginning of this reservation process. There is no further provision under the LAC Act for you to be heard in respect of whether the land should be compulsorily acquired. You will, however, be entitled to be heard on matters relating to compensation.
Authors: Joseph Monaghan & Rachel Foo
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