Even Worse than a Refusal at VCAT

An interesting case which identified an issue with the implementation of Precinct Structure Plans has caught our attention.

In Skerdero Pty Ltd v Cardinia SC [2014] VCAT 1334, the applicants, who owned a significant tract of land on the urban fringe, sought to develop their land with a residential subdivision. A portion of their land was identified by the Precinct Structure Plan as being slated for a ‘government primary school’. A provision in the Urban Growth Zone, which applied to the land, stated that a permit for subdivision ‘must be generally in accordance with the precinct structure plan’. This posed a problem for the applicant. Their proposed ‘residential development’ was clearly not in accordance with the precinct structure plan which anticipated a school on part of their site.

In such a situation, the landholder is entitled to seek compensation through Section 98 (2) of the Act. However, in order to do so, the application needs to first be refused in order for the applicant to claim. Specifically the Act states:

‘…compensation from a responsible authority for financial loss suffered as the natural, direct and reasonable consequence of a refusal by the responsible authority to grant a permit to use or develop the land on the ground that the land is or will be needed for a public purpose’. (our emphasis added)

As noted above any grounds of refusal to grant a planning permit must articulate that the land is ‘needed for a public purpose’ to ignite the opportunity for compensation pursuant to Sec.98(2).

This lead to the relatively unusual situation of the applicant bringing an expert witness to the Tribunal to argue that the application should be refused as it was not generally in accordance with the precinct structure plan.

Unfortunately, the Tribunal found that it did not have jurisdictional power to refuse the application, noting that the Urban Growth Zone provisions calling for a subdivision to accord with a precinct structure plan, essentially made the development prohibited. VCAT found itself unable to refuse the application (on the grounds that it could not determine the application). The applicant was left without the refusal they were seeking.

Further inflaming this situation the Department of Education and Early Childhood Development, the authority responsible for providing the school, declined to be a joined to the appeal. This left the Tribunal unable to confirm if it was the Department’s intention to actually use the affected land for the purposes of a public school.

The permit applicant was ultimately left with a piece of land that couldn’t be developed and no avenue for compensation.

This decision is an untidy outcome that poses questions for other landowners hoping to develop land within precinct structure plans (including those currently being formulated on the urban fringes of the city).

Decision is also interesting as it is one of the few examples of opportunities available to landowners to seek compensation against responsible authorities for financial disadvantage under the planning regime. However, readers will note the distinction between the opportunities presented to an applicant in this instance, where the land is slated for a ‘public purpose’, as opposed to any other residentially zoned land on which an application is refused.

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