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Important decisions in the Victorian planning and environment sphere

30 March 2021

#Planning, Environment & Sustainability, #Property, Planning & Development, #Local Government

Published by:

Christopher Watt

Important decisions in the Victorian planning and environment sphere

In this article, we look at the following three recent Victorian court cases that may be important for landowners, municipal councils, builders and planners:

Mason v Head, Transport for Victoria [2021] VSCA 19 (12 February 2021)

The Court of Appeal considered whether a landowner’s right to claim compensation for financial loss suffered upon the sale of land reserved for a public purpose died with him, or whether this right to compensation could pass to the beneficiaries of his estate. The Court ultimately found that the right survived the death of the landowner, and his beneficiaries were entitled to make a claim for loss upon the sale of the subject land. 

In August 2010, part of the subject land was reserved by the Whittlesea Council for a public purpose as a transport corridor for the proposed outer Metropolitan Ring Road. The owner of the subject land passed away in November 2011, leaving a life interest in the subject land to his wife, with the interest in the remainder to his four children. These family members were the applicants in this proceeding.

Section 98(1) of the Act provides an owner or occupier with a right to compensation for financial loss suffered in connection with their land being reserved for a public purpose under a planning scheme. Section 99(b) of the Act specifies that this right to compensation arises upon sale of the land. Section 108(1) deems a person ineligible to claim for compensation if they were not the owner or occupier of the land at the time the right to claim compensation arose, and Section 108(2) deems the owner ineligible for loss on sale claims if they acquired the land after reservation or notice of proposed reservation.

Here, the Applicants gave notice to the Respondent, Transport for Victoria, of their intention to sell the subject land and make a claim for compensation under section 98 of the Act (‘loss on sale’ claim). In response, the Respondent advised the Applicants that they did not have a claim because they had acquired the land after the date of introduction of the Public Acquisition Overlay.

In this proceeding, the Respondent submitted that claims under section 98 are only available to those who were owners or occupiers of the subject land at the date of reservation pursuant to section 108 of the Act and Halwood Corporation Ltd v Roads Corporation [1998] 2 VR 439 (leading authority for the position that section 98 compensation is only available to whomsoever owns the land at the date it is reserved for a public purpose).

The Court acknowledged that the statutory purpose behind section 98, 99 and 108 was to preclude the making of claims by persons who actively acquire land in the knowledge that it is proposed to be reserved.

The Court of Appeal held that the reasoning in Halwood was incorrect insofar as it held that only an owner or occupier at the date of the reservation of land could make a claim for compensation of the type which the applicants contemplate. The Court found that section 98 “provides the source of a right to compensation” which then arises via a section 99 event (sale of the land, in this situation). Regardless of who owned the subject land at the date of reservation, the Court held that what is relevant for section 98 and 99 is who owns the land when the right to compensation arises (in this proceeding, being when the land is sold).

Section 108(1) only requires ownership on the date the right to compensation arises and not when the reservation occurs. However, section 108(2) excludes those from compensation who ‘acquired’ the land after reservation or notice of proposed reservation. The Court held ‘acquired’ should be given “its active meaning”, being to obtain title or ownership in land, rather than its passive meaning whereby land is acquired by estate succession. This gives effect to the overarching objects of the Act by avoiding unfairness towards people who have inherited land found themselves barred from compensation and allows “orderly and economic use” of land by encouraging development.

The Applicants were found to have an entitlement to compensation under section 98 of the Act upon the sale of the subject land. 

Mornington Peninsula SC v Premier Homes Pty Ltd (Red Dot) [2021] VCAT 94 (9 February 2021) 

Mornington Peninsula Shire Council (Council) sought a declaration from the Tribunal, constituted by Deputy President Mark Dwyer and Member Claire Bennett, under section 149A(1)(a) of the Act with respect to the definition of ‘dependant person’s unit’ (DPU) under the Mornington Peninsula Planning Scheme (Scheme).

The Tribunal ultimately declined to make any declaration, as it was not persuaded either way as to whether the Buildings were designed to be moved. The difficulty lay with the emphasis on ‘design’ in the definition of DPU under the Scheme.

Clause 73.03 of the Scheme defines a DPU as “a movable building…”. At clause 73.01, the definition of a ‘moveable building’ requires the structure to be “designed to be moved on more than one occasion”. Both parties agreed that a moveable building must be designed to be moveable, and not just be able to be moved, and can be moveable in deconstructed segments. As the applicant, the Council had the burden of satisfying VCAT that the Buildings have not been ‘designed to be moved from place to place on more than one occasion’.

The Council argued that the Buildings were not a ‘moveable building’ because each building is required to be almost completely dismantled into its component parts before being moved. The Council led expert evidence to suggest the Buildings did not have discernible elements to facilitate future movability and building plans did not emphasise purpose-designed components to make the building moveable. Premier Homes argued that the design manual for the Buildings provided for design features that pointed towards movability, most significantly for the Tribunal – segmented wall modules, as well as wiring and plumbing to facilitate movability.

The Tribunal noted that there are no universal principles to determine whether a building is designed to be moved or not. A definition engages statutory construction and applying “objective common sense” to specific facts. Ultimately, the Council failed to persuade the Tribunal that the Buildings were not ‘designed to be moved’. The Tribunal accordingly declined to make any declaration.

The Tribunal acknowledged that ‘the outcome in this case is somewhat unsatisfactory’, holding that the question of whether a planning permit is required needs to be simple to determine. The definition of a DPU turning on whether it was ‘designed to be moved on more than one occasion’ is hard to determine; exactly how much deconstruction and reconstruction is required before a building becomes permanent? The Tribunal declined to draw any firm conclusions as to this matter but remarked that the difficulty in applying the regulatory framework in this proceeding may provide a case for regulatory reform.

Melbourne CC v 160 Leicester Pty Ltd (No 2) [2020] VCAT 1435 (16 December 2020)

In the latest instalment of the Corkman Hotel saga, for their ‘deliberately defiant non-compliance’ with previous orders of the Tribunal, 160 Leicester Pty Ltd and its Directors were committed to prison, fined $150,000 and ordered to pay a $250,000 adverse costs order.

In 2016, 160 Leicester Pty Ltd (First Respondent) illegally demolished the heritage-listed Corkman Hotel in Carlton. In 2019, the Tribunal made orders that the site be made available to the public, amongst other things (2019 Orders). 

In November 2020, a further proceeding took place before President Quigley, at which she found the First Respondent and its directors (Second and Third Respondents) guilty of contempt of the Tribunal under section 137 Victorian Civil and Administrate Tribunal Act 1998 for wilful and deliberate noncompliance with the 2019 Orders. The latest proceeding sought to determine the penalty with respect to the finding of contempt.

President Quigley found that the First Respondent, and the Second and Third Respondents were “dragged every step of the way to compliance” and “contrition [was] lacking”.

President Quigley noted factors which are relevant in determining which penalty is appropriate, such as: wider circumstances of the contempt, consequences, culpability, reasons for contempt, and whether a full and ample apology had been made. President Quigley identified that ‘the primary aim of bringing a contempt charge is to enforce compliance’ and cited Moira Shire Council v Sidebottom Group Pty Ltd (No 3) [2018] VSC 556 which states penalties should serve three purposes: specific deterrence, general deterrence and compelling obedience to court orders.

President Quigley imposed a fine of $150,000 on the First Respondent Company, a one month imprisonment for each of the First and Second Respondent directors and held that "imprisonment in all of the circumstances is the just and appropriate penalty.” The Respondents were also ordered to pay Council’s costs of $250,000.

President Quigley found the following circumstances justified the penalties:

  • the Respondents wilfully disregarded the 2019 Orders and only chose to take action ‘at the eleventh hour or not at all'
  • the Respondents did not lack the ability to pay a financial penalty
  • the Respondents did not provide an apology or explanation
  • breach of VCAT orders is separate and distinct from other breaches that give rise to adverse consequences, requiring separate penalty
  • the breaches were part of a “saga” of separate and distinct breaches associated with the illegal demolition.

In handing down the ‘significant and unusual’ jail terms penalties to the Second and Third Respondents, President Quigley noted the overarching importance of compliance to the administration of justice and the rule of law. At [57], her Honour stated, "The community has a right to expect that all laws, including planning laws – which are intrinsically for community benefit – are complied with and that where there is a community impact that the entity which is responsible and benefits from the failure to comply with the Tribunal’s Orders enforcing the planning laws will be punished appropriately." President Quigley indicated that serious penalties were needed for “deterrence and denunciation” to work to protect these ideals.

Authors: Tess Kerridge & Chris Watt

  • This article was originally published in the VPELA Revue.

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Christopher Watt

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