Applicant v Respondent

Supreme Court of Victoria|2011-06-17|Before: OSBORN J

LAND VALUATION AND COMPENSATION - Trial of preliminary questions - Highest and best use of land - Hypothetical zoning - Claimant's land part of a larger parcel otherwise rezoned for residential purposes in 1991 - Proposed freeway the real and substantial cause of failure to rezone claimant's land - Consequences in respect of value of claimant's land arising from freeway proposal - Decrease in value arising from the freeway proposal to be disregarded - Section 43 Land Acquisition and Compensation Act 1986.

2 The acquired land comprised part of Lot D on Plan of Subdivision 404446G totalling 5.659 hectares with a 345.6 metre frontage onto Golf Links Road.[1] In 1991, the claimant's land formed part of a larger parcel known as the Tahnee Lodge Land ('the TL land'), the balance of which was rezoned Residential 3 in 1991, and later under a new format planning scheme, Residential 1. The claimant contends, and I accept, that the claimant's land, unlike the balance of the parcel, was not rezoned in 1991 from a rural to a residential zone because of the proposal for a freeway which has ultimately led to the acquisition forming the basis of this proceeding.

3 The acquired land straddles the boundary of two municipalities; the eastern part of the site being located in the Mornington Peninsula Shire, and the western part in the City of Frankston. The Urban Growth Boundary is aligned with the municipal boundary in question. That part of the land included within the municipality of Frankston lies within the Urban Growth Boundary while that part located within the municipality of the Mornington Peninsula does not.

4 At the relevant date, the acquired land was partly zoned Residential 1 under the Frankston Planning Scheme ('FPS') and partly included in the Green Wedge Zone under the Mornington Peninsula Planning Scheme ('MPPS'). The land was affected by Public Acquisition Overlays (PAO1 & PAO7), partly affected by a Significant Landscape Overlay (Schedule 1) and a Design & Development Overlay (Schedule 7), and partly included in a Development Plan Overlay (Schedule 1).

5 This form of zoning had been adopted in May 1999 under the new format planning scheme. It placed the land partly in a Residential 1 Zone only in conjunction with the Public Acquisition Overlay and, in effect, in substitution for a reservation for public purposes.

6 The claimant claims compensation pursuant to the provisions of the Land Acquisition and Compensation Act 1986 ('the LAC Act') and has referred a dispute with the authority over the amount of such compensation to the Court. The LAC Act provides that the Court 'must determine the compensation payable in the particular circumstances of the case having regard to the provisions of this Act'.[2]

7 The primary measure of compensation in the present case will be the difference (if any) in the market value of the claimant's land on a before and after basis.[3]

8 The determination of both the before and after values requires an assessment of those values by reference to the highest and best use to which the land might reasonably be expected to be put at the relevant date.

9 Section 43(1) of the LAC Act also requires the question of highest and best use to be assessed disregarding certain matters associated with the acquisition. Section 43(1)(a) and (d) provide:

(1) In assessing compensation, the following matters must be disregarded -

(a) any increase or decrease in the market value of the interest in land which is acquired arising from the carrying out, or the proposal to carry out, the purpose for which the interest was acquired;

...

(d) in a case where the land in which the acquired interest subsists is reserved for a public purpose in a planning instrument, any restrictions upon the use or development of that land which are imposed by, or are a consequence of, the reservation;

10 The effect of s 43(1) is that the question of market value is to be assessed by reference to hypothetical assumptions which require the effects of the carrying out or proposal to carry out the purpose for which the land was acquired to be disregarded.

11 Section 43(1)(d) requires a particular class of circumstances bearing on the value of the land to be disregarded, namely planning restrictions imposed pursuant to the reservation of the land for a public purpose.

12 The relevant public purpose is not necessarily one related to the purpose for which the land was acquired.

13 On the other hand, s 43(1)(a) is directed not to a particular class of circumstances affecting value, but a causal consequence of a specified character. Any increase or decrease in the market value of the interest in land which is acquired must be disregarded if it arises from the carrying out or the proposal to carry out the purpose for which the land was acquired.

14 The better view may be that the relevant purpose is the underlying statutory purpose of the acquisition.[4] Nevertheless, this case has proceeded on the basis that the relevant purpose was the creation of the Mornington Peninsula Freeway Link, which the evidence shows was a longstanding roadway proposal pre-dating the planning decisions in issue. Nothing turns on the question of whether the relevant purpose could be more broadly defined.

15 The words 'arising from' are wide words.[5] The sub-section does not specify a particular form of causal connection. The phrase utilises ordinary English words. The ultimate question for the Court is one of fact, namely whether an increase or decrease in the market value of the land arose from the proposal to carry out or implementation of the purpose for which the interest was acquired. In turn, if the phrase 'arising from' is to be given its ordinary meaning then commonsense notions of causation must be applied.[6]

16 The question is to be determined by reference to the test formulated in the statute and not by alternative formulations under other legislation governing parallel circumstances.[7]

17 Likewise, the words of the statute are not to be subjected to a judicial gloss. It was submitted on behalf of the authority that s 43(1)(a) does not enable the Court to deem to have occurred events which have not in fact occurred. Whilst this might be the effect of the proper application of the causal requirement postulated by the statute in a particular fact situation, I do not accept that the general words 'arising from' can be artificially limited in this way. What s 43(1)(a) requires to be disregarded is a consequence with respect to value, not a class of circumstances bearing on value. The question which the provision raises is whether such a consequence has arisen from the implementation of or proposal to carry out the relevant purpose.

18 On 29 October 2010, Emerton J ordered that the following questions be tried as preliminary questions in the proceeding:

(1) For the purposes of assessing market value of the land in the 'before' situation under the Land Acquisition and Compensation Act 1986 (Vic), what zoning of the land should be assumed at the acquisition date?

(2) If the answer to question (1) is the land, or any part of it, would not have been zoned for residential use at the acquisition date -

(i) What were the prospects of the land, or any part of it, being re-zoned for such use at any time after the acquisition date?

(ii) If there was any prospect of the land being re-zoned for residential use, when would such re-zoning be anticipated to occur?

19 These questions seek to address what has been identified as the first task of the valuer in cases of this type. They seek to clarify the basis on which the highest and best use of the land is to be resolved. They address the concept of underlying zoning.[8]

20 The resolution of the preliminary questions will necessarily confine the valuation issues between the parties.

21 The parties accept that the relevant law is generally as stated in my decision in McCann v Roads Corporation.[9] Insofar as there is dispute as to the relevant legal principles, that dispute is essentially one of mixed fact and law relating to the proper application of s 43(1)(a) to the facts in issue. In the circumstances, I will not repeat the analysis of the broader statutory framework which I undertook in McCann.

22 The claimant contends that if it were not for the freeway proposal the whole of the land would have been zoned Residential 1 at the relevant date (as in fact it substantially was) and would not be subject to public acquisition overlays. In turn, the claimant contends that the highest and best use of the land was residential use at the relevant date.

23 The authority disputes this contention. It contends that but for the freeway proposal the land would be in non-residential zones namely the Rural Conservation Zone under the FPS and the Green Wedge Zone under the MPPS.

24 It also contends that s 43(1)(a) does not enable the Court to in effect deem a rezoning to have occurred which has not in fact occurred.

25 There is no dispute that the public acquisition overlay provisions affecting the land should be disregarded. The question is whether or not the increase in the market value of the bulk of the acquired land deriving from its residential zoning arises from the proposal to carry out the purpose for which the claimant's land was acquired, and in turn whether the balance of the land zoned Green Wedge has suffered a decrease in value arising from such proposal.

26 In an immediate chronological sense, it is conceded by the claimant that the current residential zoning replaced a pre-existing reservation for public purposes intended to accommodate the freeway. As I have stated, the change occurred in May 1999 when the so-called 'new format planning schemes' substituted public acquisition overlay controls for pre-existing public purpose reservations. The question is whether the claimant's land would nevertheless have been zoned residential at an earlier date, together with rest of the TL land, but for the freeway.

27 The claimant's case is that its land would have been rezoned in 1991 to Residential 3 and upon the implementation of the new format planning schemes this zone would subsequently have been transformed to Residential 1 as occurred with the balance of the TL land.

28 The claimant called expert town planning evidence from Mr Marco Negri.[10] The authority called expert town planning evidence from Mr Alistair Kellock[11] and Mr Robert Milner.[12]

29 The Court also undertook a view of the site and its environs.

30 In my opinion, an examination of the relevant planning history in the light of the evidence as a whole leads to the conclusion that all the TL land, including that portion now comprising the claimant's land, would have been recognised as appropriate for rezoning to Residential 3 under the FPS in 1991 in the hypothetical absence of the freeway proposal and subject to appropriate overlay controls minimising the landscape impact of residential development.

31 Further, in my view the consequent loss of value to the claimant's land has 'arisen from' the proposal for the freeway and falls within the terms of s 43(1)(a).

32 Accordingly, the answer to question 1 is Residential 1 subject to a Significant Landscape Overlay (Schedule 1), Design and Development Overlay (Schedule 7), and Development Plan Overlay (Schedule 1).

33 The urban growth boundary would also have been extended around the land.

34 I will now explain my reasons for these conclusions.

35 The claimant's land is Lot D on the attached Plan of Subdivision. At the date of acquisition, it was comprised in Certificate of Title Volume 10384 Folio 714.

36 The land comprises the eastern most portion of Lot 2 of a previous subdivision.

37 The land is located on the south side of Golf Links Road, south-east of the intersection with Stotts Lane.

38 The site is abutted by residential development to the west and north-west, while land use to the north, east and south remains rural. The area to the west also contains substantial treed areas, located both in reserves and on private land. The aerial photograph below shows the mixed pattern of land use which has resulted.

39 The land falls within an area which rises topographically from the Moorooduc Plain in the south to ridgelines lying to the north-west and north-east of the claimant's land. This transition area includes portions where the rise is sufficiently steep to be perceived as an escarpment.

40 Planning for the area has for many years utilised the notion of an east-west escarpment as dividing urban land use to the north from non-urban land use to the south. Clause 21.01 of the current MPPS summarises this policy history as follows:

The Peninsula has also experienced strong population growth over the past twenty years, increasing substantially from the 1981 population of approximately 74,000. However, it has been State government policy since the early 1970's to limit the expansion of Melbourne to designated growth corridors, such as the SEGA,[13] and more recently to encourage urban consolidation as a means of managing the pressure for fringe development.

One of the objectives shaping these policies has been to avoid the spread of urban development onto the Peninsula. In this context, the Baxter-Mt Eliza escarpment has been identified as a visual and physical boundary between the Peninsula and metropolitan Melbourne. This policy was reinforced by the definition of the Peninsula's new municipal boundary as part of the process of Local Government amalgamation in 1994.

The Mornington Peninsula is not a designated urban growth area and the limitation of urban development on the Peninsula is consistent with State policies for the Peninsula that have emphasised environmental and landscape conservation, the role of the Peninsula as a recreational area and the potential of Western Port for deep water port activities. These priorities continue to be emphasised in the State Planning Policy Framework. In this context the Peninsula has a different but complementary role to other parts of Melbourne in meeting the overall needs of the community.

41 The area surrounding the claimant's land has, however, been the subject not only of this broad strategy but also the subject of specific zoning decisions.

42 On 11 September 1991, the Minister for Planning and Housing approved Amendment L8 to the FPS. This amendment rezoned that part of the TL land not comprised in the claimant's land from 'Corridor One Zone' to 'Frankston Residential 3'.

43 The explanatory report prepared for the purposes of public consultation relating to Amendment L8 stated:

This amendment rezones the land in the Baxter area from existing rural zones to a variety of residential zones.

The rezonings follow an examination of the Baxter area as a location suitable for containing some of Melbourne's outward growth.

The rezonings result from a comprehensive draft outline development plan (ODP) for the Baxter area covering parts of the municipalities of Frankston, Cranbourne and Hastings. The ODP was prepared at the instigation of the three Councils and the Department of Planning and Urban Growth.

The land within the amendment area is divided into two zones, Frankston Residential 3 and 4.

The amendment makes provision for local structure plans to be prepared and controls the felling of vegetation in heavily treed areas. It also requires the Responsible Authority (City of Frankston) to consider the layout of subdivisions and buildings at the permit stage.

In some areas that have been subject to market gardening or other intensive land use soil must be tested for contamination before subdivision can proceed.

It is likely that when any individual subdivision is given consideration provision for works, services and other facilities such as pre-school centres and neighbourhood houses will be required. These items must either be provided for in the subdivision or paid for as part of the development.

The amendment also proposes the deletion of two reservations set aside for retarding basins. These will be located elsewhere once agreement has been reached on the Outline Development Plan and with the appropriate agencies.

44 Amendment L8 originally proposed to include in the Frankston Residential 1 Zone all that part of the TL land located between Stotts Lane and the freeway reservation to the south of Golf Links Road.

45 The Panel convened pursuant to the Planning and Environment Act 1987 ('P&E Act') to consider submissions in respect of the amendment recommended that the Residential 1 Zone not be adopted and that the land between Stotts Lane and Golf Links Road should remain in its then rural zoning pending resolution of the future of the freeway or alternatively be placed in a Residential 3 Zone.

46 In the event, the Minister for Planning and Housing approved the creation of a Residential 3 Zone over the TL land (other than the portion now comprising the claimant's land).

47 A letter dated 11 September 1991 from the Regional Manager - Metropolitan South and Westernport of the Department of Planning and Housing ('DPH') indicated:

The escarpment running parallel to Baxter-Tooradin Road should form the natural boundary to stop residential development encroaching on the environmentally sensitive Moorooduc Plains;
The new residential areas north of the escarpment should be developed comprehensively and consistent with urban consolidation policies and at densities higher than normally allowed in the adjoining Frankston Residential 3 Zone;
The low density areas proposed south of the escarpment should be developed comprehensively.

48 It can be seen that the letter does not state a specific conclusion in respect of land actually upon the escarpment. Nevertheless, the rezoning of the TL land did in fact endorse a Residential 3 Zone upon land substantially affected by the escarpment as it was then understood.

49 The letter refers to the escarpment as running parallel to the Baxter-Tooradin Road and forming a natural boundary. In fact, the landform is more complex than this statement suggests. It is this complexity that has generated much of the debate in this case.

50 I accept that the Outline Development Plan ('ODP') process referred to in the explanatory report to Amendment L8 would have occurred whether or not the freeway was proposed. It was put forward by three municipal councils and the DPH. It embraced an area extending north, south, east and west of the claimant's land, including the freeway reservation which was in effect centrally located on a north-south line within the study area.

51 I also accept that the ODP would have resulted in an amendment proposal such as Amendment L8 whether or not the freeway was proposed. It was common ground that Frankston was a 'growth' council at that point in time and I accept that it would have pursued infill development so far as it could, consistently with the outcome of the ODP process. The interest of Frankston in residential development in this area is confirmed by the Strategic Framework Plan which is contained in the present FPS. As Mr Kellock stated, this plan designates land in the general vicinity of the subject land and east of Stotts Lane as 'hobby farms' and 'development opportunity for investigation'.

52 In the absence of the freeway proposal, the area for infill development within the then municipality of Frankston which existed in 1991 potentially extended to the municipal boundary along the railway line some distance to the east of the claimant's land. The extent to which the ODP and subsequent statutory planning processes would have endorsed residential zoning of the claimant's land is, however, very much in issue.

53 I have come to the view that the critical evidence is that of the ODP process and Amendment L8 process. The question of whether the ODP and in turn Amendment L8 would have endorsed residential development of the claimant's land in the absence of the freeway proposal are the central issues.

54 I accept Mr Kellock's view that in the absence of the Mornington Peninsula Freeway Link 'the most critical influence' on the subject land was the change of zoning and thinking that took place under Amendment L8.

55 As he stated in the conclusion of his written report:

As will be observed from the above Frankston South has been the subject of two major conflicting influences - encouragement of a more urban outcome and retention of existing non-urban values related to the Mornington Peninsula.

Recent planning history has seen non-urban values prevailing. Melbourne 2030 has set the broad direction for metropolitan planning. It and the later Melbourne @ 5 million update have directed major metropolitan development to specific growth areas which do not include the Frankston area. While previously known as a potential growth area because of its Corridor zoning these expectations have now been modified by contemporary policy and by the permanent settling of the UGB. The land outside the UGB is within the Mornington Peninsula green wedge which further reinforces the non-urban values of this area.

Prior to Melbourne 2030 the most recent watershed decision by the State government relating to urban growth in this sector was via Amendment L8. This set the limits of urban development and in the then government's decision set some of the parameters that guided decision making at that time. In particular the then Minister referred to stopping any further urban development and using the escarpment or change of slope in this area as a reference point for indicating where urban development should cease and Mornington peninsula values take precedence.

56 In turn, Mr Negri bases his position upon an analysis of what would have occurred pursuant to Amendment L8 in the absence of the freeway proposal.

57 The claimant ultimately put its case in two ways in final address. First, that in the absence of the freeway proposal, the ODP would generally have endorsed residential development above a line according with the predominant east-west alignment of the 80 metre contour. Secondly, that in particular it would have endorsed development of the TL land, including the land now constituting the claimant's land and being the remnant strip created by the freeway reservation not included in Amendment L8.

58 Conversely, the authority's case is that if there were no freeway, the definition of the extent of permissible development upon the escarpment would have been reassessed. It called planning evidence from Mr Kellock, the former departmental Regional Manager, who signed the letter of 11 September 1991 relating to Amendment L8 and was involved in the Amendment L8 process.

59 Mr Kellock's view is that, if the desirable extent of residential development were reassessed in the absence of the freeway proposal, a line approximating the 90 metre contour should be adopted as the theoretical basis of the boundary of residential growth and that no residential development would have been permitted east of Stotts Lane at the relevant date having regard to the relatively limited developable area above the 90 metre contour at this location.

60 The authority also called evidence from a further planning witness, Mr Robert Milner. His view is that in the absence of the freeway proposal, development would not have extended to the claimant's land because of the need to maintain a non-urban break between Frankston and Baxter in a satisfactory form.

61 Mr Milner also takes the position that all land east of Stotts Lane within the City of Frankston would have been zoned for non-urban purposes had the freeway not been proposed for this location.

62 To resolve these issues it is necessary to examine the ODP, the report of the independent panel which considered Amendment L8 and the terms of the Ministry letter relating to the approval of Residential 3 zoning upon the greater part of the TL land.

63 Before doing so it is convenient to refer to a marked up contour plan. This shows that the higher land to the north rises above the 100 metre contour. The Moorooduc Plain containing Baxter to the south is below the 60 metre contour. The plan has been marked up to highlight the 100 metre and 90 metre contours (in yellow and pink respectively). It is also marked (in purple) with a 'V' showing the direction of drainage in the vicinity of the claimant's land. Lastly, it has had marked upon it (in green) an extrapolated line showing a generalised escarpment alignment based on the 80 metre contour. The claimant's land lies south of Golf Links Road where the freeway is shown traversing it. It is north of Acorn Way which is the northern boundary of Baxter and, in turn, north of the green line. It is below the 90 metre contour highlighted in pink. It is within the drainage line embraced by the purple 'V'.

64 In 1990, town planning consultants Loder & Bayly were appointed by the Municipalities of Frankston, Cranbourne and Hastings, together with the DPH, to prepare an ODP for the area surrounding Baxter.

65 The ODP itself states that the need for the ODP came out of the State Strategy for Planned Residential Growth in outer metropolitan areas. The brief stated that the purpose of the ODP was 'to realise the potential for urban infill development in the Frankston corridor, and in so doing to make more efficient use of urban infrastructure'.

66 The study area was bounded by Moorooduc Road to the west, Robinsons Road to the north, Warrandyte Road to the east and extended some distance south of Baxter. The ODP area was described as follows:

The Area

The study area contains a mix of new urban areas, older settlements, low-density living, rural uses, and a variety of broad-acre institutional uses. It contains a mosaic of clearing and vegetation, and of a variety of management patterns. It is undulating in the north and flatter in the south (the start of the Moorooduc Plain) with a gently sloping transition area; 'the escarpment', between.

There is considerable resistance to change from some of the residents of the area who highly value the present character. The area is adjacent to the Langwarrin Flora and Fauna Reserve; there are problems associated with urbanisation close to the Reserve. We propose special measures (discussed in detail in the text) to address these issues but we do not conclude that the issues are sufficient, when weighed against the overall context of this study, to justify an option which prohibits any further development.

The southern part of the area has soil and drainage characteristics which make it less suitable - costlier - to develop. In addition the 'escarpment', and the start of the Moorooduc Plain, have major regional significance as the line of demarcation where metropolitan Melbourne ends and the Mornington Peninsula starts. For these reasons, and as a means of giving coherence to the urban form, the plan tends to concentrate development north of the escarpment.

67 The summary of the main elements of the plan included special protection measures and controls along the escarpment and upper end of Stotts Lane.

68 The ODP contained a landform map which detailed the catchment lines or upper ridgelines rising to the north of the claimant's land. It also delineated by hatching an escarpment constituted by two elements, which viewed together were capable of being regarded as marking a potential east/west transition zone between the urban development of Frankston to the north and west, and the Moorooduc Plain to the south. The claimant's land lies above and on part of the escarpment as designated. Its approximate location was depicted by Mr Negri in evidence in green ink on the landform diagram taken from the ODP.

69 Although Mr Negri's plotting of the claimant's land is not precise, it is plain first that the escarpment traverses the claimant's land. The eastern hatched arm of the escarpment as depicted extends west almost to Stotts Lane. Second, the escarpment as drawn predominantly affects the southern part of the claimant's land. Thirdly, the escarpment is a broad characterisation of landform. It is not plotted by reference to precise contour lines. Fourthly, it is not drawn with precision but hatched to denote a generalised zone taking a linear form.

70 The ODP also included a land capability plan which designated the TL land (including the claimant's land) as having friable duplex soils. As such, the land had the soils most suitable for construction in the study area and was to be preferred for development for construction cost reasons over much of the ODP area.

71 The ODP was based in part on a public consultation process in respect of three development options that were generated during the study.

72 The first of these options was entitled 'Alternative A: Escarpment'. It was premised upon stopping development at the escarpment. Nevertheless, it expressly included the TL land (not affected by the freeway reservation) within a proposed medium density housing area as designated by dark cross-hatching on the plan below.

73 The elements of this alternative included the statement:

Additional landscape management would be needed to preserve the landscape character and reinforce the notion that the Mornington Peninsula starts where development stops.

74 In turn, the ODP identified nine significant issues and discussed them in part by reference to protection of the escarpment. The first issue was the appropriate degree of urbanisation. The ODP found that there were no overwhelming reasons not to further develop the study area, but identified the Moorooduc Plain as the area with the strongest reasons for restricting development.

75 The second issue was 'Design With Landscape and Culture'. The ODP recommended a series of measures aimed at enhancing the sense of character of the area. They included:

Reinforcing the broad scale landscape structure by creating an urban edge along the escarpment and reinforcing this with a tree reserve.

• Provision for an escarpment trail linking the urban areas east to west.

76 The third issue was the 'Escarpment and Moorooduc Planning'. The ODP stated:

FINAL RECOMMENDATION: Minimise the amount of urban change on and below the escarpment.

DISCUSSION: The 'escarpment' line is very subtle (it is not really an escarpment) and would be easily lost in urban change. It is however:

Visually significant as one looks north from the plain.

Topographically and emotionally significant as the place where the Mornington Peninsula starts (and Melbourne stops).

Furthermore the flatter land south of the escarpment carries a cost constraint to develop (see section 3.4). The intent of the Hastings inter-urban zone south of the Baxter-Tooradin Road is to protect the non-urban character of the plain. We believe this principle can and should be carried up and along the escarpment through the allocation of rural, open space, low density, and broad-acre uses. As discussed in issue E however, it is, - within this strategy, possible to allow further self-contained expansion of the Baxter 'nodes' themselves. Furthermore there are a lot of uses, associated with urbanisation but of a broad acre character themselves, which may satisfactorily locate below the escarpment.

77 This discussion recognises some fundamental realities, which were confirmed by the evidence in this case and the view of the subject land and surrounding area which was undertaken by the Court. First, the escarpment line is 'very subtle'. Secondly, it is nevertheless visually significant when viewed from the plain looking north. Thirdly, it is perceived as the place where the Mornington Peninsula starts and Melbourne stops. Fourthly, the flatter land south of the escarpment faces development constraints not found upon the escarpment itself.

78 The recommendation also states an objective of minimising urban change on and below the escarpment in terms upon which the authority places significant reliance.

79 The ODP went on to deal with the issue of roads in the following terms:

FINAL RECOMMENDATION: Retain freeway reservation and utilise existing road grid for the arterial structure. Additional distributor road locations are identified on the Outline Development Plan.

DISCUSSION: The freeway reservation sterilises a significant amount of land. It is not clear if it will ever be built and if so to what standard. If it is built to full grade-separation standard it will bring the area closer to the city but will be a barrier to east-west pedestrian and vehicle movement. If the reservation is removed the recommended uses on either side should generally be extended; this will increase overall residential yield. Major roads in the area: Baxter-Tooradin, Golf Links, Fultons, McClelland, Warrandyte and Frankston-Flinders Road have the potential, in terms of spacing, direction and alignment to provide a good level of arterial service. Stotts Lane will function as a local crossing road (see issue I) and Barretts Road is recommended to be kept and protected as a local street.

80 It can be seen that the ODP took account of the freeway proposal and its sterilising effect, but was not dependent upon it for its fundamental land use strategy. It contemplated a similar overall land use pattern in the event that the freeway did not proceed. It specifically contemplated the extension of the proposed uses on each side of the freeway into the freeway reservation if the freeway did not proceed. It contemplated that this would result in an increase in residential yield.

81 The ODP then dealt with issues relating to Baxter specifically, public transport, and services of different types. None of these specific conclusions adversely affected the prospect of development upon the TL land.

82 It then dealt with individual areas and made specific recommendations with respect to the area containing the TL land:

STOTTS LANE/GOLF LINKS ROAD AREA: FINAL RECOMMENDATION

Low density development to the south, special controls in timbered areas to the north (see drawing 10) realignment of Stotts Lane.

DISCUSSION: In conformity with the strategy approach (Issues A and C), the plan shows lower densities and broad-acre uses in the lower, southern parts of Stotts Lane and higher densities in the north-east. This does not necessarily match current land owners aspirations. Some in the south seek full subdivision. Some in the north seek no change.

Concerning the northern end; we believe that a special design approach, backed by the special guidelines (Section 8) and as illustrated on drawing 10 can achieve the goals of retention of landscape character and protection of particular house environments. This can be done without sterilising what is in many other ways a desirable, and, highly accessible development area. To the south, broadacre uses are proposed. This does not necessarily mean lower development return. It does protect the overall strategy.

The southern end of Stotts Lane drops off a relatively steeper pitch of the escarpment. Some realignment, which would involve altering outer boundaries of the reserve slightly is desirable to reduce gradients, increase landscape response, and reduce run-off rates after heavy rain.

Stotts Lane is long and relatively straight. Therefore, although it is not a full arterial road in a network sense, (rather it is a local crossing road) traffic behaviour will be incompatible with private driveway access, which should be prohibited.[14]

83 The ODP thus concluded that potential adverse impacts upon landscape character could be managed on that part of the escarpment comprising the TL land (at the northern end of Stott's Lane), by adopting appropriate design measures. The nature of those design measures was amplified elsewhere. Their character is illustrated by Drawing 10 in the ODP which relates to an area which extends south of Golf Links Road onto the TL land.

84 An outline structure was proposed in accordance with the following generalised plan. The TL land is designated for new residential development between Stotts Lane and the freeway reservation.

85 In turn, the detailed ODP itself specifically designated the TL land for special residential development described as follows:

There are existing houses, good tree stands and commanding land forms in this area. There are some aspirations to maintain this area at low densities but we believe that - within the overall strategy context - this is not justified. With special controls ... on tree retention, and siting, and provision of some 'RDP' areas of 400-450 square metres this area will yield twelve dwellings/hectare. Approximate area: 34 hectares. Assume 12 dwellings/hectare. Potential yield 400 dwellings, 1300 people.[15]

86 The ODP also proposed a trail line running below the TL land but along the escarpment.

87 Whilst the ODP itself, as translated into detailed diagrammatic form, is not readily reproducible in the format of this judgment, the designation of the TL land to the southwest of the corner of Golf Links Road and Stotts Lane for residential development is plain. Conversely, the land to the east of the claimant's land is not designated for residential development but kept in a low density institutional use. This also reflects the structure plan set out above.

88 When the document is read as a whole, I accept Mr Negri's conclusion that despite the literal terms of the 'escarpment' recommendations, it plainly endorsed residential development of the TL land (save for that part affected by the freeway proposal), provided that appropriate landscape design measures were adopted.

89 In turn, the ODP did not identify matters which would support the conclusion that the remnant strip affected by the freeway proposal and now constituting the claimant's land should be treated differently from the balance of the TL land. It expressly contemplated the extension of adjoining uses if the freeway did not proceed and envisaged that this would increase overall residential yield.

90 No sensible planning reason has been advanced for not including the remnant strip in the same zoning as the balance of the TL land if there were no freeway. The principal argument for the authority is simply that the TL land would not itself have been zoned for residential purposes but for the freeway. In my view, the ODP supports the contrary view and, in turn, the claimant's position.

Amendment L8 to the City of Frankston Planning Scheme is intended to rezone some portions of land in the Baxter area, generally in the vicinity of Golf Links Road, to a variety of residential zones whose densities vary according to factors such as natural site features and nearby uses.

There are also provisions in the amendment as exhibited for the protection of vegetation and for the deletion of two reservations no longer required for retarding basins.

This amendment originated in the desire to create more residential land in the Frankston corridor to accommodate the continuous metropolitan expansion in this sector of Melbourne. A recommendation that a Development Plan be produced for the Baxter area and implemented through changes to local Planning Schemes was made during hearings to L19 to the Cranbourne Planning Scheme, a recent amendment which rezoned land in that municipality to Reserved Living ahead of any overall plan. A strong recommendation, supported by the Department of Planning and Housing, was that such a Plan should be made for all related land in the Baxter area. Amendment L8 sets out to provide zonings which reflect the intent of the Plan as it affects the land within the City of Frankston.

The Department of Planning and Housing has since developed its South Eastern Growth Area Plan which provides for 140,000 new residents in the South-Eastern corridor. Comparison of this level of development with that recommended by the consultants under the Outline Development Plan, for a total of some 9,000 to 11,500 new residents in the Baxter study area as a whole, gives a realistic picture of the significance of this development when seen in a metropolitan context.

However, environmental and local cultural issues remain to be resolved in deciding the future of the present amendment and the Planning Minister is on record as saying that the development contained in this amendment will be the last to be approved in the Baxter area.

93 I interpolate that the evidence as a whole supports the view that Amendment L8 would have been, in effect, the last chance to rezone the claimant's land for urban purposes in the hypothetical absence of the freeway.

94 The Panel made clear that the position of the DPH was that the ODP should be regarded as having developed a broader planning context for the amendment in issue and that the DPH had revised its initial position on the amendment.

95 The position of the DPH was reflected in an amended plan set out below.

96 It can be seen that the Frankston Residential 1 Zone originally proposed west of Baxter and between Stotts Lane and the freeway alignment has been deleted.

97 Conversely, the TL land remains proposed Frankston Residential 1. It sits to the north of land not proposed for residential use and situated between Stotts Lane and the proposed freeway.

98 The Panel noted that it was a commonly held concern that 'urban breaks' be maintained, particularly in conjunction with protecting the escarpment.

99 The Panel also recorded the status of the freeway proposal as uncertain in terms of its future design and timing. It noted that the future configuration of any freeway had vital implications for the proposed development of the area and the ability of the western and central portions of Baxter to function as a cohesive community.

100 The Panel supported the notion of maintaining and reinforcing the inter-urban break as proposed in the ODP.[16]

101 The Panel also distinguished between the development potential of the northern portion of the land east of Stotts Lane and the southern portion.

102 The Panel recommended that the northern portion of this land, comprising the TL land, should not be zoned Residential 1, but nevertheless recognised that the land had potential for residential development.

18. The panel recommends the deletion of the R1 zoning over the portion of land between Stotts Lane and Baxter Tooradin Road on the east of Stotts Lane.

While the panel accepts the arguments about servicing and general suitability for development of the northern portions of this land, it is difficult to find persuasive arguments as to why it should be zoned for conventional residential density development. This is particularly so in the light of the common view expressed at the hearings that the land immediately to the north (Westerfield etc) should be given special protection and not now rezoned to R3 and the fact that land across Stotts Lane, regarded by all as the only direct expansion of the Frankston urban mass in this amendment, is to be zoned R3, but with density controls which will allow greater flexibility than conventional residential subdivision.

While the density of use on the retirement village site is very high, its off-site effects would be less than conventional urban development because of the age and lifestyle of its residents and therefore is not in the panel's view, in itself, justification for R1 development on this site.

The panel has examined all of the submissions and supporting material and takes the view that while there may be an absence of arguments to oppose development at all on this site, and perhaps its development was recommended on that basis, there is equally an absence of arguments to support R1 given that it is elsewhere used within the ODP area and this amendment only at specified urban nodes.

The future of the freeway will have very significant influence on the perception and actual environmental quality of the location for development. It will impact greatly on the overall future growth of Baxter, and on the way people can move around the area, and how these small communities relate and function together. However, even without the potential presence of the freeway there is no visible logic in this zoning. The arguments that DPH advance for the southern portion's removal, concerning fragmentation of residential development, apply equally to this land.

Given the course recommended for the Arjon and other properties over Stotts Lane, the panel takes the view that if retention of the land to the east to Stotts Lane in rural zones is not viewed as an acceptable outcome, then the land should be zoned R3 with identical controls to those over the Arjon-Chase group of sites. This has the added benefit that it should allow site flexibility so that development can be planned to protect residents from the impacts of the freeway.

19. The panel recommends that the portion of land between Stotts Land and Golf Links Road, shown R1 on the exhibited amendment should not be so zoned. The panel takes the view that this land should remain in its present rural zoning pending resolution of the future of the freeway and its future development resolved at the same time as the portions of land to the south on Baxter Tooradin Road.

If this course cannot be agreed upon, the land should be placed in a R3 zone with flexible density down to 8 houses per hectare and site feature protection and siting control through a Local Structure Plan.[17]

103 The net result of the Panel's recommendations was thus that it recognised the greater development potential of the TL land as against the land to its south, but did not endorse a Residential 1 zoning. In its view, rezoning of the TL land should either await further resolution of the freeway proposal or be restricted to a Residential 3 zoning.

104 In the event, the Minister did approve Residential 3 rezoning of the TL land other than that portion affected by the freeway proposal.

105 I have already set out the letter of 11 September 1991 which stated the Minister's reasons in summary form. The letter expresses clear principles with respect to development above the escarpment and the restriction of urban development below the escarpment. It does not, in terms, address the escarpment itself. The TL land was materially affected by the escarpment as it was delineated by the ODP at that time.

106 In my view, the probability is that but for the freeway proposal the same conclusion as was reached with respect to the portion of the TL land zoned Residential 3, would have been reached with respect to the balance of the TL land then affected by the freeway proposal (ie the claimant's land). It would have been rezoned despite being in material part located on the escarpment.

107 The then prevailing understanding of the escarpment is reflected in a subsequent report of Woodward Clyde undertaken for the Frankston City Council in February 1998 and entitled 'Strategic Non Urban Review - Frankston Langwarrin and Baxter'. It delineates the escarpment as coming across the southern portion of the TL land (including the claimant's land) and traversing the freeway before passing over the knoll to the east. This drawing is more legible and precise than the hatched depiction contained in the ODP. Nevertheless, it articulates the same concept.

108 The Minister accepted the Panel's view that the TL land was suitable for residential development but not for 'conventional residential density development.'

109 This view echoed the specific conclusions of the ODP with respect to land on the eastern side of Stotts Lane at its northern end.

110 I am satisfied the freeway proposal was the reason the claimant's land was not zoned Residential 3 in 1991.

111 I have reached these conclusions on the basis of the evidence relating to the TL land specifically and not on the basis of a conclusion that residential development would also have extended to the east of the claimant's land.

112 I accept Mr Milner's view that the extension of urban development on the 80 metre contour running around the knoll to the east of the claimant's land would have materially diminished the sense of separation of Baxter from the urban area to the north.

113 For completeness I record that the application of the Residential 1 Zone to the claimant's land under the Frankston new format planning scheme also tends to support the view that it should be regarded as a logical adjunct to the adjoining residentially zoned land, rather than the non-residentially zoned land to the south. Nevertheless, I place little weight on this factor. The critical evidence is that bearing on what occurred in 1991.

114 There are a number of factors which were submitted by the authority to warrant rejection of the factual conclusion I have reached and it is desirable for the sake of completeness to deal with each of them individually. I will list them as propositions stating my response to each of them.

(a) The ODP treats the TL land as an infill site by reason of the freeway

115 The ODP brief embraced the notion of 'infill' in the broad sense, including development extending to the municipal boundary a substantial distance east of the claimant's land.

116 Further, the ODP proceeded deliberately by way of reference to a broad study area which was bisected by, rather than contained by, the freeway. I do not accept that the ODP treated the land as an infill site by reason of the freeway. It is true that it defined the extent of development proposed on the TL land by reference to the freeway reserve. However, it went on to make clear that if the freeway did not proceed the zoning of the TL land should be extended. It did not treat the implementation of the freeway as essential to the structure of land use zoning it proposed.

117 It is not sufficient for the authority to show that the terms of the ODP relating to residential zoning were 'influenced' by the proposed freeway alignment. When read as a whole the ODP does not support the conclusion that the ODP treats the TL land as appropriate for residential development by reason of the freeway.

(b) The claimant's land falls within a valley and should be regarded as below the escarpment

118 As Mr Milner acknowledged, the claimant's land in broad terms falls on or above the escarpment as plotted in the ODP. Nevertheless, the claimant's land falls within a depression which runs generally from north to south and contains a drainage line. This depression is one of the features which renders the topography surrounding the site complex. The contours are most clearly read on a plan prepared by Miller and Merrigan Pty Ltd dated 9 December 2010 and accompanied by cross-sections. The effect of the depression is to place the bulk of the claimant's land between the 80 and 70 metre contours. The balance of the TL land rises effectively from the 80 metre contour to above the 100 metre contour.

119 The topography is much more complex than a simple east-west escarpment. Nevertheless, some natural dissection of the east-west escarpment line does not mean that the concept of a generalised east-west escarpment would not have been recognised as a valid response to the broad character of the landscape as postulated in the ODP and endorsed subsequently by the Minister.

120 I accept Mr Negri's view that the escarpment was a 'concept'.[18] Further, the concept did not require uniform adoption of a particular contour or landform as the universal descriptor of its location.

121 Further, it is plain that the escarpment as drawn in the ODP does traverse the claimant's land. The north-south depression is not depicted as a break in the escarpment line.

122 It is apparent that the Minister regard the concept of an escarpment 'parallel to Baxter-Tooradin Road' as valid when he approved Amendment L8. The concept implicitly embraced the depression to which the authority refers.

123 I also accept the submissions made on behalf of the claimant that the presence of a north-south depression would not materially affect the visual impression of an escarpment when viewed from the south. It is this impression which was particularly highlighted as significant in the ODP. The depression does not materially affect the broad transition from the urban north to the non-urban south.

124 Further, I accept the claimant's submission that development within the depression would not necessarily be visually prominent, particularly if properly designed and landscaped within a framework of appropriate overlay controls.

125 Mr Kellock gave evidence which sought to redefine the plotting of the escarpment. I note that despite his involvement in the ODP and Amendment L8 process the views he now expresses were not expressed at that time. More fundamentally however, I accept Mr Negri's view that the concept of the escarpment was not based upon precise plotting of contours. This is hardly surprising when the ODP itself stated that there is in the strict sense no escarpment. I prefer Mr Negri's view that the ODP and in turn Amendment L8 proceeded on a more generalised concept of the escarpment expressed in the hatched plan contained in the ODP.

126 Mr Negri described it as a growth plan based upon an 'escarpment theory'.

127 Mr Kellock produced 'Nearmap' and other cartographic evidence. He also described particular topographical features such as the way in which Stotts Lane traverses to the topography. I accept that the escarpment could now theoretically be defined more precisely than was done in the ODP and Amendment L8 process.

128 Nevertheless, the claimant's case is put on the basis of the probable planning outcome at the time of Amendment L8 in the hypothetical absence of the freeway proposal.

129 I accept Mr Negri's view that that outcome would have been informed by the understanding of the escarpment concept articulated in the ODP and reflected in the zoning decisions actually implemented by Amendment L8 and further reflected by the Minister's statement that Amendment L8 reflects the concept of an east-west escarpment parallel with Baxter-Tooradin Road stopping residential development 'encroaching on the environmentally sensitive Moorooduc Plains'.

130 I do not accept the underlying zoning of the claimant's land is to be determined by reference to the knowledge of the hypothetical purchaser at the relevant date with respect to the physical characteristics of the environs. The claimant's case is not that the claimant's land would have been regarded as ripe for rezoning at the relevant date, but that it would have been rezoned in 1991 in the absence of the freeway proposal.

(d) The rezoning of the TL land in 1991 would be contrary to recommendations in the ODP report to minimise the area of urban change on or below the escarpment

131 Despite the terms of the statement of general principle with respect to the escarpment contained in the ODP, as Mr Negri emphasised in his evidence, the ODP plainly and unambiguously endorses residential development of the TL land, subject to appropriate landscape design measures. The rezoning of the whole of the TL land in 1991 would not have been contrary to the ODP report read as a whole.

(e) The TL land would not have been rezoned in the absence of the freeway applying the relevant planning principles discussed as at 1991 in the L8 panel report

132 The Amendment L8 Panel Report postulated two acceptable outcomes, namely deferment of rezoning of the TL land or zoning to Residential 3. The latter was adopted. Neither was a rejection of residential development of the TL land. The solution endorsed by the Minister was entirely consistent with the ODP and the position of the DPH before the Amendment L8 Panel. I do not accept that the Amendment L8 Panel Report can be read as indicating residential zoning of an appropriate type was not acceptable if the freeway did not proceed.

(f) The rezoning of the TL land to residential in the words of the panel, even without the presence of the freeway would be a zone for which there is no visible logic

133 The Panel accepted the arguments about development potential in terms of the servicing and soil suitability of the TL land. It did not accept conventional residential density development was appropriate. It was the use of the Residential 1 Zone which it characterised as having no visible logic. It did so in the context of proposals for adjoining Residential 3 Zones. I accept that neither the TL land nor the claimant's land would have been rezoned Residential 1 in 1991 in the absence of the freeway. Both would have been rezoned Residential 3.

(g) The L8 Panel recommended that the land remain in a rural zone

134 The Panel took the view that the land should remain in a rural zone for the time being pending resolution of the future of the freeway. It also recommended as an alternative fallback position that it go into the Residential 3 Zone. It is this alternative which the Minister accepted. In my view, he would have accepted the same alternative with respect to the claimant's land but for the freeway proposal. He would have applied the same solution to the whole of the TL land as it then was.

(h) The TL land was as Mr Milner concluded an infill development land only rezoned because it was bounded to the east of the freeway - there was no other satisfactory planning boundary that was or could have been identified

135 I do not accept this proposition. Either the drainage line might have been identified (as Mr Milner himself suggested at one point in oral evidence) or the title boundary could have been adopted as the zone boundary. There are obvious problems in dividing a single title into different zones, particularly when the division places only a relatively small strip of land into one of the zones. The division of the TL land into different zones which resulted from Amendment L8 was made in express contemplation of the fact that the land would be divided by the construction of the freeway. If no such subdivision were proposed, the better view is that of Mr Negri that the whole of the TL land would have been placed in a single zone. As Mr Kellock observed in his written report, the zone boundary adopted by Amendment L8 involved a 'pragmatic approach'. Mr Kellock also stated, and I accept, that it is quite unusual for zone boundaries to run through the middle of properties. It is usual to adopt a cadastral boundary reflecting land titles. In my view, the boundary adopted by Amendment L8 in the absence of the freeway proposal would also have adopted a pragmatic approach and would have embraced the whole of the title boundary of the TL land.

(i) The Minister's letter of 11 September 1991 is inconsistent with the proposition that the subject land, being land below the top of the escarpment, should be rezoned residential

136 The letter does not in terms deal with land on the escarpment. It is not inconsistent with the rezoning of that part of the TL land which in fact occurred under Amendment L8 save for the freeway strip. Nor is it inconsistent with the rezoning of the subject land.

(j) The rezoning of the TL land is an anomaly only explicable by reason of the presence of the proposed freeway

137 The rezoning of the TL land was not an anomaly. It was supported by the view taken by the broadly based strategic analysis contained in the ODP. It was part of a logical pattern of land use zoning as proposed in the structure adopted in the ODP. In turn, Amendment L8 refined the ODP. The rezoning of the TL land resulted from a deliberate choice made by the Minister in response to the Panel's alternative recommendations. Neither those recommendations nor the terms of the Minister's response indicate the rezoning of the TL land was dependent upon the freeway proposal.

138 I do not accept the authority's submission that rezoning of the TL land should be disregarded as constituting a consequence of the freeway proposal.

(k) The failure to rezone the land to the north of Golf Links Road and to the south of the TL land for residential purposes pursuant to L8 demonstrates that it was only rezoned because of the freeway proposal

139 The land within the triangular area to the north of Golf Links Road was not rezoned pursuant to Amendment L8 because of its heritage, landscape and environmental significance. It was not comparable to the TL land in these fundamental aspects of its character.

140 The fact that the land to the south of the TL land was not rezoned for residential development pursuant to the Amendment L8 process, reflects the logical outcome of the ODP, the Panel Report and the Minister's decision. The TL land fell into a different category for the reasons identified in that process.

(l) The rezoning of the claimant's land would be contrary to the need to give recognition to and to preserve the integrity of the land form of the escarpment which carries the cultural value of being the line of divide between the Mornington Peninsula and Melbourne (as stated in the ODP)

141 The ODP itself endorsed residential development of the TL land. The claimant's land formed part of the TL land in 1991 and the probability is that it would have been treated in the same way were it not for the freeway proposal.

142 The ODP does not define a clear land form which has 'integrity'. Nor read as a whole does it support the view that the concept of a divide precluded rezoning of the TL land.

(m) The rezoning of the claimant's land would be contrary to the strategic imperative to prevent development creeping over the escarpment from the north and the policy to maintain the escarpment as the urban edge at the top of the escarpment rather than its toe

143 The concept of the escarpment was not defined in the ODP in terms of a precise no-go line. The ODP itself recommended residential development in an appropriate form upon the TL land.

(n) The rezoning of the claimant's land would be contrary to the desire to preserve a non-urban break between the township of Baxter and urban Melbourne approaching from the north and the green wedge policy consistent with that urban break

144 Whilst I accept Mr Milner's view that further residential development to the east of the claimant's land south of Golf Links Road would have the potential to materially diminish the sense of non-urban break to Baxter, I do not accept that the development of the TL land (include the claimant's land) would in the absence of the freeway have been regarded as unacceptable in terms of impact upon the non-urban break.

145 It is plain that the ODP, the Panel Report and the Minister did not take this view with respect to the TL land provided an appropriate form of residential development was adopted.

(o) The escarpment trail line shown on the ODP should not be regarded as a significant dividing line

146 I accept Mr Milner's view that the primary purpose of the escarpment trail was not that of a land use boundary demarcation. I do not rely upon it for my conclusions.

The case for which the plaintiff contends is not arguable or correct as a matter of law. Section 43(1)(a) requires that certain matters be 'disregarded'. It is, as is plain from its language, an exclusionary provision. It does not permit an assumption of that which did not only not occur but for which there is no factual foundation in the evidence.
'Disregard' corresponds to 'ignore', to leave out of consideration and not be taken into account when assessing the 'before' market value. The requirement to 'disregard' in section 43(1)(a) is to be distinguished from the requirement to have 'regard' as is found, for example, in section 41(1) of the [Land Acquisition and Compensation] Act. The section does not impose a requirement and nor does it contemplate or permit that alternative facts be positively 'assumed'.
'Regard' cannot be had under the guise of the proper application of section 43(1)(a) to matters that have not in fact occurred. To assume a zone is in existence at the relevant date in respect of the subject property, based on an assumed historic event, for these purposes, an assumed 1991 rezoning, is to make an impermissible assumption as to a positive state of affairs. To do so is to go beyond 'disregarding' acts, facts and matters 'arising from' the proposal, that which the section requires and permits. The Court cannot proceed in the proper application of s43(1)(a) as the plaintiff's case requires on the premise that a different zoning would have been in existence at the relevant date because of supposed actions and events in 1991 which matters and events never took place. To 'disregard', that which is referred to in the section, is not to be equated to 'to imagine'.[19]

148 I accept s 43(1)(a) does not permit conclusions for which there is no factual foundation in the evidence, but otherwise I do not accept this analysis. As I have already sought to explain, s 43(1)(a) does not require particular classes of circumstances to be disregarded. It requires a causal consequence of a specific character to be disregarded. The question of whether an increase or decrease of value has arisen from the implementation of, or a proposal to carry out, the purpose for which the interest was acquired, is a question of fact. The word 'disregard' does not confine the ordinary meaning of the words 'arising from' within the wording of the section.

149 The greater part of the claimant's land is currently zoned Residential 1. It is only if the increase in value resulting from that zoning is to be disregarded as arising out of the freeway proposal, that the claimant cannot maintain this value.

150 Once it is accepted that, in the absence of the freeway, this land would have been rezoned Residential 3 in 1991 (and upon the implementation of the new format planning scheme Residential 1) then the increase in value cannot be said to arise out of the freeway proposal.

151 Conversely, if that portion of the land which is zoned Green Wedge was not included in the residential zoning in 1991 because of the freeway proposal, the resultant loss of value should be disregarded.

152 The claimant's case is not based upon matters 'which have not in fact occurred', but on matters which have occurred, namely the ODP process and subsequent rezoning of the bulk of the TL land.

153 It is a question of fact as to whether the claimant's land has achieved an increase in value or suffered a loss of value as a result of the freeway proposal.

154 I am satisfied that the value deriving from the residential zoning affecting the bulk of the claimant's land has not in a real and substantial sense been the adventitious result of the freeway proposal. It is the zoning which would have been applied to the land as a matter of history in 1991 in the absence of the freeway proposal.

155 It was submitted on behalf of the authority in final address that it accepted that if in fact application had been made in 1991 for a rezoning of the claimant's land and the rezoning proposal had been rejected, then it would be necessary to disregard 'the proposal for the road and the impact of it which had resulted ... in the rezoning not going ahead.'

156 There are two problems with this submission. First, in 1991 the P&E Act did not give a landowner a right to apply in any formal way for a planning scheme amendment. The power to propose planning scheme amendments was restricted to planning authorities. A landowner had no right to seek a rezoning equivalent to the right of an owner to seek a permit for a permissible use under a planning scheme. Only an informal request could be made.

157 Secondly, there was in fact plainly no prospect of a rezoning in 1991 given the freeway reservation. Such an application would be entirely artificial. Such an application could not trigger a right to compensation equivalent to that provided for upon permit refusal pursuant to ss 98(2) and 99 of the P&E Act. To construe the claimant's entitlement to compensation upon subsequent compulsory acquisition in the manner submitted on behalf of the authority would require such an artificial basis for compensation as to be anomalous and unjust.

158 The construction of s 43(1)(a) which I favour, gives effect to the notion of equivalence which underlies the provision of just compensation. The authority's construction does not.

159 The real and substantial cause of the failure to rezone the claimant's land in 1991 was the freeway proposal. Any consequent loss of value arose from the proposal to carry out the purpose for which the land was ultimately acquired.

160 In turn, the effect of the Public Acquisition Overlay (applied pursuant to the new format planning scheme) affecting the land at the relevant date should be disregarded as arising from the purpose for which the land was ultimately acquired.

161 Conversely, the value of the claimant's land at the relevant date arising from the Residential 1 Zone (also imposed pursuant to the new format planning scheme) should not be disregarded as arising from the proposal to carry out the purpose for which the land was ultimately acquired.

162 In the absence of the freeway proposal, the whole of the claimant's land would have been zoned Residential 3 under the Frankston Planning Scheme prior to the new format planning scheme and subsequently Residential 1.

163 It follows that that portion of the land included in the Green Wedge Zone would also have been included in the Residential 1 Zone in the hypothetical absence of the freeway proposal upon the transition to the new format planning scheme.

164 For the above reasons question 1 should be answered as follows:

(1) For the purposes of assessing market value of the land in the 'before' situation under the Land Acquisition and Compensation Act 1986 (Vic), what zoning of the land should be assumed at the acquisition date?

Answer: Residential 1 subject to a Significant Landscape Overlay (Schedule 1), Design and Development Overlay (Schedule 7), and Development Plan Overlay (Schedule 1) under the Frankston Planning Scheme.

[1] Lot D totals 5.722 hectares in area.

[4] Cf Springfield Land Corporation (No 2) Pty Ltd v State of Queensland 2011 HCA 15, [19]-[20], per French CJ, Gummow, Hayne and Crennan JJ, a case relating to s 20 of the Acquisition of Land Act 1967 (Qld).

At a glance

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Before

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Judgment (213 paragraphs)

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Legislation Cited (3)

Cases Cited (3)