Appellant v Respondent

Supreme Court of Victoria|2006-06-21|Before: OSBORN J

Appeal pursuant to s.148 Victorian Civil & Administrative Tribunal Act 1998 - Section 87 and s.94 of the Planning & Environment Act 1987 - Amendment of permit - Loss suffered with respect to part of price paid for land in reliance upon permit prior to amendment - Requirement for causal connection between loss suffered and amendment.

1 This is an appeal on questions of law pursuant to s.148 of the .

"Submit a statement from an environmental auditor stating that the soil on the site is not contaminated and safe to build/live on."

4 No such audit had been required pursuant to the planning permit and the requirement had not been anticipated by the developer. The site had formerly been used for a petrol station but had been subject to remediation following the removal of tanks in 1995. The developer produced evidence in relation to this to the building surveyor but he was not satisfied.

5 Thereafter Council advised the developer that it was of the view that the permit required amendment to add conditions requiring either a certificate of environmental audit or a statement pursuant to the Environment Protection Act 1970 that the environmental conditions of the land were suitable for residential use. In turn it initiated proceedings pursuant to s.87 of the P&E Act seeking such amendment on 9 December 2006 on the ground of its own mistake in failing to include the necessary conditions.

6 The developer completed the purchase of the land in late December 2004.

7 The developer then obtained a report from environmental consultants which was submitted to an independent environmental auditor in February 2005. This audit ultimately certified that the site was satisfactory on 13 April 2005. Following this certification the Council's building surveyor issued a building permit on 4 May 2005.

8 Prior to this the developer had agreed to the amendment of the permit and the permit was formally amended by the Victorian Civil and Administrative Tribunal ("the Tribunal") with the consent of all interested parties on 9 May 2005 to incorporate the following condition:

"15A. Prior to commencement of the development permitted by this permit, either

(i) a certificate of environmental audit must be issued for the land in accordance with s.53Y of the Environment Protection Act 1970; or

(ii) an environmental auditor appointed under the Environment Protection Act 1970 must make a statement in accordance with s.53Z of that Act that the environmental conditions of the land are suitable for residential use;

(iii) three copies of the certificate of environmental audit or statement, complete audit report and audit area plan must be submitted to the responsible authority;

(iv) a copy of the certificate or statement or environmental audit issued for the land must be provided to each owner of the land or part of the land. Where there are conditions attached to the issue of a Statement of Environmental Audit, the statement must be provided under a covering letter, which draws attention to any conditions on the statement of environmental audit."

9 The application by Council to the Tribunal to amend the permit had concluded in the following terms:

"It is just and fair in the circumstances to amend the permit in the circumstances because:

• But for the material mistake, the requested conditions would form part of the permit;

• If the permit is not amended in the form requested, considerable waste of resources and potential harm may occur if the permitted development is constructed and the land is in fact contaminated;

• No building work has commenced;

• Section 94 provides a right to compensation in certain circumstances if the permit is amended." (My emphasis)

10 Section 94(2) of the P & E Act provides:

"If a permit is cancelled or amended under this Division the responsible authority is liable to pay compensation to any person who has incurred expenditure or liability for expenditure as a result of the issue of the permit in respect of--

(a) any of that expenditure which is wasted because the permit is cancelled or amended; and

(b) any additional expenditure or liability necessarily incurred in purchasing other land to use or develop in the required manner because the permit is cancelled or amended."

11 On 17 March 2005 the developer made a conditional application for compensation in the following terms:

"The responsible authority by application P3339/2004 issued in the VCAT Planning and Environment List has applied for amendment of permit No. P020563 issued on 16 May 2003. If the responsible authority's application is granted the applicant seeks compensation pursuant to s.94 of the Planning and Environment Act 1987 on the ground set out in the annexed statement of facts and seeks consolidation of this application within the responsible authority's application P3339/2004."

12 The application was supported by a statement of facts which was subsequently further particularised.

13 A statement of evidence was filed on behalf of the developer which made clear that its managing director had relied at the time of purchase upon the terms of the permit and upon his knowledge of Council practice.

"5. I have been a property developer since 1987. Prior to my present occupation I was employed by the City of Keilor as Deputy Development Approvals Coordinator. I know from my knowledge and experience at the City of Keilor [which was the predecessor at law of the Brimbank City Council] that Council was required to and did maintain a file on each property within its jurisdiction in respect of which a planning permit was required for development or use.

6. I relied upon this fact and was entitled to rely based on my knowledge and experience on the fact that Council maintained records on all matters pertaining to the use and changes of use, and in the normal course of events would have had on its file a copy of any environmental report which was relevant to the residential use for which planning permit P020563 had been issued.

7. The applicant also relied upon a letter from KME Environmental Consultants ... dated 3 October 1995 which stated that any environmental issues regarding the subject land had been dealt with ..."

14 The statement of evidence further evidenced loss suffered as a result of the cost of audit requirement, delay and the amendment proceedings.

15 When the matter came on for hearing it was submitted on behalf of the owner:

"But for the respondent's issue of the permit the applicant would not have purchased the land or would have done so at a figure that took into account the projected costs of complying with the ultimate amendments to the permit which required an environmental audit be carried out by the applicant prior to any development of the land."

16 Ultimately the Tribunal accepted this line of reasoning and concluded as follows:

"Expenditure wasted as a result of the issue of the original planning permit

It is my opinion that the 'wasted expenditure' as a result of the permit is the difference between what the developer would have paid for the land with knowledge of that condition no. 15A and the contract price without that condition.

Another way of expressing this is that the developer paid for a "trouble free" block of land with unencumbered planning permit, but as a result of the permit amendment, was left with a "troublesome" block of land with an audit-encumbered planning permit. What he "wasted" was the extra amount he paid for a "trouble free" site plus permit, when, at the end of the day, he had to expend that extra amount to satisfy the amended permit-with-audit condition. As he says:

Following receipt of this letter, the Applicant instructed its solicitor, John Micallef, to endeavour to withdraw from the Contract of Sale on the grounds that had the proposed amendment to the Planning Permit as foreshadowed in the letter dated 25 November 2004 been known to the Applicant, it would not have entered into the Contract of Sale at all or may have only purchased it at a substantial discount to cover the additional costs and expenses of complying with such permit conditions.

One of the ways of assessing that difference, or 'wasted expenditure' is by deducting from the price he paid the now ascertainable costs of:

i.

audit costs;

ii.

interest incurred between the date of settlement and the date of the building permit (assuming he would have had the building permit by settlement if this audit requisition had not incurred);

iii.

Legal advice and necessary legal involvement in a s.87 VCAT amendment application not brought by him.

It is theoretically possible that he may have paid even less again for the land given the risks associated with obtaining a clean bill of health, but we have no valuation evidence and the advantage of the above is that the wasted expenditure is more certainly assessable."[1]

17 The Tribunal went on to assess the question of the portion of the price paid for the land which was wasted by reference to the expenses subsequently incurred.

18 The Council now appeals to this Court against the Tribunal's decision. On the hearing of the appeal the developer did not appear but indicated by letter its willingness to abide by the decision of the Court.

Ground 1

19 Ground 1 of appeal is as follows:

"The Tribunal misdirected itself as to the proper construction of s.94(2) of the Planning and Environment Act 1987 (Vic) in finding that:

(a) the phrase 'wasted expenditure' as it appears in s.94(2) of the Planning and Environment Act 1987 (Vic) is the difference between what the developer would have paid for the land with the knowledge of the amendment to the planning permit and the contract price without that condition; and/or

(b) what was 'wasted' for the purpose of s.94(2) of the Planning and Environment Act 1987 (Vic) was the extra amount paid by a person wishing to act upon a planning permit to satisfy any condition included in a planning permit by operation of s.87 of the Planning and Environment Act 1987 (Vic)."

20 As I understand it, this ground is directed to the proposition that the expenditure allowed by the Tribunal was "additional" expenditure not wasted expenditure. In part this proposition is put by reference to the different categories contemplated by s.94(2)(a) and (b). It was submitted:

"In the circumstances of the present case, the expenditure incurred by the respondent is properly characterised as 'additional', even 'unforseen' expenditure incurred in furtherance of compliance with the amended permit, rather than expenditure wasted in acting on the permit prior to its amendment."

21 I do not accept this submission. There is no reason in principle why part of the contract price paid in reliance upon the unamended permit cannot be regarded firstly, as expended as a result of the issue of the initial permit and secondly, as wasted because the permit was subsequently amended.

22 Reference to the legislative history of the relevant provisions does not alter this conclusion. Insofar as previous legislation referred to expenditure being rendered "abortive" this does not compel a contrary view.

23 Section 94(2) contemplates loss akin to loss of value to the owner becoming compensable pursuant to s.s.(a) and further loss by way of additional expenditure of a specific type becoming compensable pursuant to s.s.(b).

Ground 2

24 Ground 2 of appeal is:

"The Tribunal erred in law in finding that the costs of the environmental audit were 'wasted expenditure' and therefore a proper basis for an award of compensation pursuant to s.94(2) of the Planning and Environment Act 1987 (Vic)."

25 When the Tribunal's reasons are read as a whole it is apparent that the Tribunal did not find the costs of the audit were wasted expenditure as such, but that such costs reflected the wasted value of part of the price paid for the land. It is true paragraph 44 of the decision states:

"We find the audit costs amounting to $42,016.50 necessarily incurred or 'wasted' in respect of this former petrol filling station being converted to a residential development."

Nevertheless this paragraph appears under the heading "Assessment of Quantum". What the Tribunal did was to assess the quantum of that part of the price paid for the land which was wasted in accordance with its reasoning at paragraphs [40]-[43] which I have set out above.

26 Having said this, it was further submitted on behalf of the Council that in the present case the environmental audit costs were not incurred because the permit was amended but because of the admittedly unlawful action of the building surveyor.

27 The Tribunal dealt with this question by observing firstly, that if the Council was correct about the audit requirement being made under the building process, then the Council could have avoided its obligations under the relevant State Environment Protection Policy and eventually under s.94 by not requiring a s.87 amendment at all. The Tribunal addressed the question whether the audit requisition was a "planning requirement" or a "building requirement" in the following terms:

"There is no doubt that the council, exercising its planning powers, is responsible pursuant to cl.13 & 14(4)(a) of the SEPP (Prevention and Management of Contamination of Land), for requiring certificates of environmental audit to be issued before any building work associated with a sensitive use has commenced.

Nowhere in that SEPP is the obligation placed upon the building surveyor under the building controls (Building Act 1993, Building (interim) Regulations 2005 or the Building Code of Australia).

As for the content of the building controls themselves, pursuant to the Building Act 1993, s. 24:

(1) ...the relevant building surveyor must not issue a building permit unless he or she is satisfied that-

(a) the building work and the building permit will comply with this Act and the building regulations; and ......

(d) the building permit will be consistent with that planning permit or other prescribed approval.

Given that the planning permit existed, Wawrowski's requisition appears beyond power. The relevant planning permit had been obtained and had the developer appealed Wawrowski's requisition to the Building Appeals Board, he would have had it struck out. In other words, the audit was a direct result of the amended planning permit, not the building permit.

Furthermore, as SKM's audit report states twice at pages 1 & 5, it perceives its involvement as a result of the council's planning responsibility:

.... and the City has subsequently required that, prior to development and use, an environmental audit is to be conducted under the Environment Protection Authority Act 1970 to confirm that that site is suitable for the proposed residential use.

.... It is understood that the City of Brimbank has issued a permit for the proposed residential development and has subsequently required that, prior to commencement of the development and use, an environmental audit is to be conducted under the Environment Protection Act 1970, to conform that the site is suitable for the proposed residential use."[2]

28 These conclusions are not the subject of any attack in the notice of appeal. Because the developer did not appear and was entitled to choose to abide by the decision of the Court on the stated grounds of appeal, the better view is that the appellant should be strictly confined to them.

29 Moreover, it seems clear that the audit costs were incurred not merely in response to the requisition of the building surveyor but also in response to Council's application for amendment of the permit first foreshadowed on 25 November 2004 and instituted on 9 December 2004. The written outline of submissions of the Council to the Tribunal stated in part:

"The costs of the environmental certificate do not fall within s.94(2):

(a) The costs were not incurred as a result of the issue of the permit. On the contrary, the costs were incurred after notice had been given that the permit required amendment;

(b) The costs were not wasted. The environmental certificate is a necessary part of the development process. The costs are an expense which are incurred in part, due to the change in the permit but that is not the same as costs wasted because of the change. The permit holder will have the benefit of the certificate in his dealings with purchasers of the residential units and any further financiers of the development project. ..." (My emphasis)

(a) it was acknowledged on behalf of the Council the costs were incurred after notice had been given that the permit required amendment;

(b) it was acknowledged by the Council the costs are an expense which was incurred in part due to the change in the permit; and

(c) the grounds of appeal do not directly challenge the Tribunal's conclusion that "the audit was a direct result of the amended planning permit, not the building permit";

it is difficult to see how the Tribunal's findings as to what constituted wasted expenditure in this regard can readily be challenged.

31 Nevertheless, in deference to the submissions made to me on behalf of the Council, I shall seek to further address the terms of s.94(2)(a). In my opinion the phrase "any of that expenditure which is wasted because the permit is cancelled or amended":

(a) requires a causal not a temporal connection; and

(b) is sufficiently broad to cover the process of cancellation or amendment and not merely the final order made by the Tribunal for cancellation or amendment.

32 The principles supporting the first conclusion are elucidated in a line of authority examined by Gobbo J in King & Ors v Minister for Planning and Housing[3]. That case concerned the interpretation of legislation providing for compensation for the compulsory acquisition of land.

33 His Honour was concerned to resolve whether a claim for "any loss attributable to disturbance" pursuant to s.41(1)(d) of the Land Acquisition and Compensation Act 1986 ("the LAC Act") extended to expenses incurred prior to the service of a notice of intention to acquire land.

34 Section 40 of the LAC Act defines loss attributable to disturbance:

" 'loss attributable to disturbance' means any pecuniary loss suffered by a claimant as the natural, direct and reasonable consequence of--

(a) the service upon the claimant of a notice of intention to acquire, where the Authority has refused or failed to give consent to the carrying out of improvements to the land in respect of which that notice has been served or the effecting or obtaining of any sales, transactions, licences or approvals in respect of that land; and

(b) the fact that an interest of the claimant in that land has been divested or diminished, being a pecuniary loss for which provision is not otherwise made in this Part."

35 His Honour analysed the decision in Prasad v Wolverhampton Borough Council[4] and two cases referred to in Prasad namely Smith v Strathclyde Regional Council[5] and City of Aberdeen District Council v Sim[6].

36 It is unnecessary to repeat his Honour's careful analysis in full but in Smith the Lands Tribunal for Scotland applied the dictum of Romer LJ in Harvey v Crawley Development Corporation[7]:

"... any loss sustained by a dispossessed owner [at all events one who occupies his house] which flows from a compulsory acquisition may properly be regarded as the subject of a compensation for disturbance, provided, first, that it is not too remote and, secondly, that it is the natural and reasonable consequence of the dispossession of the owner."

37 In the City of Aberdeen case the Court of Session of Scotland again referred to this dictum and also to the statement of principle of Lord Alness in an earlier case of Venables v Department of Agriculture for Scotland[8]. The City of Aberdeen case was concerned to interpret the phrase "occasioned to him by reason of his dispossession". Their Lordships said:

"The Lord Justice-Clerk in Venables regarded the claim for disturbance as one of equity. In the absence of any statutory definition or restriction, we regard that as a proper test. It seems to us to be inequitable if a claim which satisfies the tests of Romer LJ [1957] 1 QB 485, 494 should be denied the right to compensation because the expenditure was incurred prior to the service of the notice to treat, when similar expenditure incurred subsequent to the service of the notice would be admitted. Provided the tests are satisfied the former situation seems to us to be 'a loss occasioned by reason of his dispossession.' We accordingly take the view that the decision in Smith ... was right and that the tribunal took the right course in following it in the circumstances of the case. Consequently we do not consider that Bloom (1977) 35 P&CR 423 should be followed. That being so we reject the submission of the appellants that the date of the notice to treat or indeed any of their alternatives is the necessary datum line. As Sellers LJ said in Harvey ..., it is a question of fact in each case."[9]

38 In Prasad the appellants had lived in a house within a declared clearance area until October 1979 when they vacated it. On 2 November 1979 the Council served a notice to treat on the appellants who then lodged a claim inter alia for disturbance. In order to succeed the appellants had to show that they had been "displaced from land in consequence of the acquisition of the land". The Court of Appeal ultimately ruled that a person may be displaced "in consequence" of the acquisition of land if there was a causal and not necessarily a temporal connection. The Court approved the Scottish decisions in Smith and Sim.

39 Gobbo J applied the same principle in Mario Piraino Pty Ltd v Roads Corporation No. 2[10]. In that case his Honour was concerned with s.98 of the P & E Act which provided a right to compensation for loss suffered as the natural, direct and reasonable consequences of a refusal of planning permit. In that context he expressed the opinion that the term "consequence" had a causal and not a chronological connection and that expenditure incurred before a refusal was recoverable provided such expenditure was lost or rendered abortive because of the refusal.[11]

40 In King however Gobbo J commented upon the nature of the claim in issue in Mario Piraino (No. 2):

"It will be seen therefore that the decision in Piraino's case is not of direct application both because of the significant difference in the legislation and also because although the expenditure preceded the relevant date, the loss of the expenditure was itself the consequence of the event that occurred on the relevant date, namely the denial of planning permission."[12]

41 In King itself his Honour held that the terms of s.41(1)(f) of the LAC Act did not alter the thrust of the principles that were canvassed in Prasad's case.

"With this background, s.41(1)(f) is to be seen as being expressed in quite general terms. For a start it is expressed as being in respect of expenses necessarily incurred 'by reason of the acquisition of the interest'. Even though Prasad's case confirms that the phrase 'in consequence of' is not narrower in scope than the phrase 'by reason of', it certainly is supportive of the claimants' argument that in s.41(1)(f) of the Act, Parliament chose to use the words 'by reason of the acquisition' even though the word 'consequence' appears elsewhere in the Act in connection with compensation entitlement. It may be, of course, argued that the word 'necessarily' is intended to introduce an added link between the acquisition and the incurring of the expenditure. I am of the view that the word 'necessarily' does not alter the thrust of the principles that were canvassed in Prasad's case. I doubt whether the word 'necessarily' adds a great deal to the phrase considered in some of the earlier English cases, namely 'naturally and reasonably incurred by reason of the compulsory acquisition'."[13]

42 His Honour was of the view that one reason for not reading s.41(1)(f) restrictively was "what might be described as a right in principle has been recognised in the decision in Prasad's case and in the cases therein referred to."[14]

43 It can be seen that the principle stated in Prasad has now been accepted as a result of decisions of this Court over a number of years as applicable to the interpretation of the compensation provisions of the LAC Act and the P & E Act.

44 In my opinion the words of s.94(2)(a) of the P & E Act and in particular the phrase "wasted because the permit is cancelled or amended" should be construed in accordance with the same principle. Such principle is intended to give a fair and equitable right to compensation. The word "because" should be understood to embrace a causal connection and not to require a temporal consequence.

45 Since the decision in King the principle stated in Prasad has been examined and affirmed by the Privy Council in Director of Buildings and Lands v Shun Fung Ironworks Ltd[15].

46 In 1981 the claimant occupied land in Hong Kong which was the subject of notice by the government that it intended to resume the land for the purpose of a new town. Such resumption led to a claim for compensation. Under the relevant ordinance the claimant was entitled to fair and adequate compensation for loss or damage suffered "due to the resumption of the land".

47 When the matter came to the Privy Council the judgment of the majority delivered by Lord Nicholls of Birkenhead identified the third issue arising with respect to the assessment of such compensation, as being whether a loss occurring before resumption can be regarded for compensation purposes as a loss caused by the resumption. His Lordship observed that at first sight a cause must precede an effect but that such an approach would lead to practical results from which one instinctively recoils. The underlying purpose of the legislation was identified by His Lordship in the following terms:

"The starting point for a consideration of this conundrum must be to remind oneself that, far from furthering the legislative purpose of providing fair compensation, the Crown's contention would have the opposite effect. It would stultify fulfilment of that purpose. Coming events may cast their shadows before them, and resumption is such an event. A compensation line drawn at the place submitted by the Crown would be highly artificial, for it would have no relation to what actually happens. That cannot be a proper basis for assessing compensation for loss which is in fact sustained. Take the person who sensibly and reasonably moves out a few days before resumption. On the Crown's argument he would have to be told that he cannot recover his removal expenses. Such a person would listen with bewilderment on having the niceties of causation patiently explained to him. He would listen with wide-eyed incredulity on being told that logic led to the inescapable conclusion that his claim failed and that he ought not to have taken the sensible course he did. That would rightly bring the law into disrepute. That, frankly, would be to indulge in legal pedantry of a most unattractive kind."[16]

48 After further considering argument by reference to the notion of mitigation loss His Lordship concluded:

"The principle

So where can the boundary be drawn sensibly? If the line contended by the Crown is rejected, as it must be for the reasons already spelled out, there is no sensible stopping place short of recognising that losses incurred in anticipation of resumption and because of the threat which resumption presented are to be regarded as losses caused by the resumption as much as losses arising after resumption. This involves giving the concept of causal connection an extended meaning, wide enough to embrace all such losses. To qualify for compensation a loss suffered post-resumption must satisfy the three conditions of being causally connected, not too remote, and not a loss which a reasonable person would have avoided. A loss sustained post-scheme and pre-resumption will not fail for lack of causal connection by reason only that the loss arose before resumption, provided it arose in anticipation of resumption and because of the threat which resumption presented. In the terms of the Resumption Ordinance, a pre-resumption loss which satisfies these criteria is as much 'due to' the resumption of the land as a post-resumption loss.

This conclusion should give no cause for surprise. A narrow justification for giving causal connection an extended meaning in this context can be found in the reasoning underlying the Pointe Gourde principle, applied to losses attributable to the scheme but which arise before resumption. But the rationale is more broad-based. This is not the occasion to examine whether a comparable approach is applicable also in other legal contexts, such as claims for damages for wrongful expulsion from land. Suffice to say, everyone seeks to plan ahead, and the law would be more than a tool, used by lawyers when attributing legal responsibility for a happening to a particular source. In everyday terms, loss caused by the threat of an act which later eventuates would normally be regarded as loss caused by the act just as much as loss incurred after the act has happened.

If the line is drawn in this way the result is fair and sensible. Had there been no scheme, the losses in question would have not arisen. The result is coherent because it accords with the established Pointe Gourde principle. It also means that compensation is not depending on whether the acquiring authority acts speedily or tardily in carrying through the process culminating in resumption. Losses arising after the inception of the scheme will attract compensation, however short or long the shadow period, provided they satisfy the criteria mentioned above."[17]

49 In the present case the relevant loss was as I have said found by the Tribunal to be that part of the price paid for the land in reliance upon the relevant permit which was wasted as a result of the permit amendment.

50 Such loss calculated by reference to the audit expense can be said to be a loss suffered because of the amendment despite the fact that the amendment was formally effected after the audit was completed, for precisely the same reasons as those articulated in the Shun Fung case. The audit costs were incurred after Council had applied to the Tribunal for the relevant amendment to permit and at a time when Council was refusing to allow the developer to enjoy the benefit of the permit in the absence of an audit meeting the requirements of the proposed amended condition. The loss suffered (by way of price differential) was causally connected to the permit amendment, it was not too remote and it was not a loss which there was any evidence a reasonable person would have avoided.

51 In King Gobbo J went on to make observations which parallel the second line of interpretation which supports the view I have reached:

"There is a further basis which may be able to sustain the claim for expenditure, namely the view that the words 'acquisition of the interest' should be treated as being very widely expressed and that accordingly since acquisition is not in this context tied to the date of acquisition as it is, for example, in the other sub-paragraphs of s.41(1), one should read 'by reason of the acquisition of the interest' as though it was intended to be linked to the acquisition, whether this was compulsory or voluntary. If this be so, then it is easier to sustain the argument which has received some support in Prasad's case, namely to regard acquisition as a process 'often prolonged which begins with a resolution by an authority, (or perhaps even before, if Sim v Aberdeen was rightly decided)'..."[18]

52 The observations as to the implementation of a "scheme" to acquire which I have quoted from the judgment of Lord Nicholls echo this line of reasoning.

53 Likewise in the present case the phrase "the permit is cancelled or amended" is not limited by temporal words to the date of completion of such processes. In my view the reference to cancellation or amendment is sufficiently broad to embrace the whole of the process of amendment pursuant to Division 3 of the Act which deals with "cancellation or amendment of permits by tribunal". A broad construction should be adopted to give an equitable effect to the right of compensation. Consequently because the audit costs did not in fact precede the process of amendment they did not precede the amending of the permit in the relevant sense.

54 It follows that Ground 2 of appeal fails.

Ground 3

55 The third ground of appeal is:

"The Tribunal erred in law in finding that the interest paid by the respondent to the Commonwealth Bank in the amount of $9,536.38 was 'wasted expenditure' and therefore a proper basis for an award of compensation pursuant to s.94(2) of the Planning and Environment Act 1987 (Vic)."

56 The Tribunal's finding in this regard was as follows:

"We also find the interest paid to the Commonwealth Bank reasonably incurred because the developer lost no time in applying for building permission after paying the deposit monies, and lost no time in complying with the surveyor's requisitions (excluding audit). Further, the requisitions are standard, non complex ones that would have been satisfied before settlement.

As pointed out earlier in the chronology, the contract contained two special conditions that the planning permit and plans be part of the contract, so time was of the essence in obtaining the building permit; also the developer gained a licence to enter the land to build."[19]

57 The Tribunal did not in terms find that the interest was "wasted expenditure". When its reasons are read as a whole what it found was that the interest paid was reasonably incurred and as such reflected a component of what was wasted by way of payment of the price for the land. In my opinion it was open to the Tribunal to so find. The developer purchased land with a permit facilitating immediate development and the price it paid reflected this fact.

Grounds 4 and 5

58 Grounds 4 and 5 of the appeal are:

"The Tribunal misdirected itself in construing that the legal costs of the s.87 application were 'wasted expenditure' and therefore a proper basis for an award of compensation pursuant to s.94(2) of the Planning and Environment Act 1987 (Vic).

The Tribunal failed to take into account a relevant consideration, namely the effect of s.109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) in determining to award to the respondent its legal costs as part of its claim for compensation pursuant to s.94(2) of the Planning and Environment Act 1987 (Vic)."

59 These grounds also fail for like reasons. It was open to the Tribunal to conclude that the owner in agreeing to purchase the land would have allowed for legal costs in respect of probable s.87 proceedings if it had anticipated the amendment process.

60 Section 109 is not relevant. The costs are not the subject of an award of costs in the s.87 proceeding, but have been awarded as reflecting an element in the price wasted by the developer. It is on this basis that it was open to for the Tribunal to award such costs on a solicitor client basis with respect to the s.87 application.

Ground 6

61 Ground 6 of the notice of appeal relates to the costs of the s.94 application. There is no basis for challenging the Tribunal's decision in this regard if the prior grounds fail.

62 For the above reasons the appeal should be dismissed.

[1] Keilor Homes Pty Ltd v Brimbank City Council (Land Valuation) [2005] VCAT 2079 (28 September 2005) at [40]-[43]

[2] Ibid at [35]-[39]

[3] [1993] VicRp 11; [1993] 1 VR 159

[4] [1983] Ch 333

[5] (1980) 42 P&CR 397

[6] (1984) 47 P&CR 278

[7] [1957] 1 QB 485 at 494

[8] [1932] SC 573

[9] City of Aberdeen District Council v Sim (1984) 47 P&CR 278 at 283

[10] [1993] VicRp 9; [1993] 1 VR 130

[11] [1993] VicRp 9; [1993] 1 VR 130 at 142.

[12] [1993] VicRp 11; [1993] 1 VR 159 at 178.

[13] At 179.

[14] At 181.

[15] [1995] 2 AC 111.

[16] Ibid at 136-137

[17] Ibid at 137

[18] At 181

[19] Keilor Homes Pty Ltd v Brimbank City Council (Land Valuation) [2005] VCAT 2079 (28 September 2005) at [45]-[46]

Environment Protection Authority Act 1970

At a glance

Court

Decision date

Before

Source

Judgment (81 paragraphs)

Parties

Legislation Cited (24)