Applicant v Respondent

PLANNING AND ENVIRONMENT - Aboriginal cultural heritage - Requirement of a cultural heritage management plan prior to development - Where cultural heritage management plan was obtained over most of subject land after reservation and prior to permit application, and did not extend into the area reserved under the public acquisition overlay - Significance of existing cultural heritage management plan in assessing readiness for development in valuation process - Whether failure to apply for a further cultural heritage management plan that extended over the whole of the subject land broke the chain of causation of financial loss - Whether claimant required to obtain cultural heritage management plan for hypothetical development in area subject to the reservation for valuation purposes - Aboriginal Heritage Act 2006 (Vic) ss 42, 43, 46, 52, 53, 54, 61, 63 - Aboriginal Heritage Regulations 2007 (Vic) regs 7, 25, 26, 49.

ONUS OF PROOF- Legal and evidentiary of proof in establishing right to compensation - Whether any legal or evidentiary burden for matters going to determination of quantum - Approach to proof in compensation proceeding.

1 The applicant, Jeffrey Barrett, has owned land at 1005 Ballan Road, Wyndham Vale (the Subject Land) since 1 July 1981. On 6 August 2010, an amendment to the Victorian Planning Provisions, Amendment VC68, came into effect. It applied public acquisition overlays which reserved land for the purposes of the future Regional Rail Link, the Outer Metropolitan Ring/E6 Transport Corridor (OMR) and the Western Grasslands Reserves.[1] The Wyndham Planning Scheme was amended such that Public Acquisition Overlay Schedule 5 (PAO5) reserved certain land, including part of the Subject Land, for the OMR.

2 Mr Barrett owned an adjoining parcel of land at 2 Argoona Road, Manor Lakes (Argoona Road Land). The Argoona Road Land was subject to PAO5 and also subject to Public Acquisition Overlay Schedule 7 (PAO7) which reserved land for the Western Grasslands Reserves. The properties with the two overlays marked are shown on the following diagram:[2]

3 On 26 March 2020, Mr Barrett applied to the Wyndham City Council for a permit to develop the Subject Land and the Argoona Road Land. The permit application was refused by the Council on 1 June 2021. The first of the grounds for refusal was that the land within the PAO5 reservation was required for the OMR, and the proposed subdivision was not consistent with the purpose of the reservation.[3] Mr Barrett made a further application for a planning permit, and on 18 June 2021, a permit was granted permitting an alternative development of the Subject Land, which excluded the area covered by PAO5.

4 Mr Barrett made a claim to the Head, Transport for Victoria[4] for compensation pursuant to ss 98(1)(a) and 99(a)(i) of the Planning and Environment Act 1987 (Vic), based on the first permit refusal. These provisions allow for the payment of compensation in circumstances where land has not yet been acquired for a public purpose, but is subject to what is sometimes called 'planning blight', by reason of the land having been made subject to reservation for a public purpose under a planning scheme. Transport for Victoria is the Authority responsible for the payment of compensation.

5 The Authority did not respond to Mr Barrett's compensation claim within the time period stipulated under the statutory scheme,[5] and did not initially make any offer of compensation. On 19 June 2023, Mr Barrett referred his claim to this Court. In the Particulars of Claim filed on 11 August 2023, Mr Barrett identified the circumstances of the refusal of the permit for development of the Subject Land and stated that he had suffered financial loss as the natural, direct and reasonable consequence of the land being reserved for a public purpose under the planning scheme.[6] He claimed $31.31 million as financial loss pursuant to s 98(1)(a) of the Planning and Environment Act, and $182,017.73 as expenses for the preparation of the claim pursuant to s 101 of that Act.

6 The Authority in its formal response did not admit that Mr Barrett had suffered any financial loss as a consequence of the PAO5 reservation, and denied that he was entitled to the compensation he sought.[7] The Authority's initial Particulars of Offer filed in response to Mr Barrett's Particulars of Claim made a $0 offer for financial loss and $0 for professional expenses pursuant to s 101.[8] On 21 March 2024, the Authority amended the Particulars of Offer to remove the statement that the Authority 'did not admit' that the refusal of the permit gave rise to a right to compensation on Mr Barrett's part, and to include an admission that the permit refusal was sufficient to trigger a prima facie right to claim compensation pursuant to s 99(a)(i).[9] However, notwithstanding that acceptance, the Authority continued at that time to make no offer of compensation.[10]

7 Mr Barrett amended his Particulars of Claim on 3 March 2025, to claim a reduced amount of $28,275,000 as financial loss and $182,017.73 as expenses.[11] On 14 March 2025, the Authority filed Further Amended Particulars of Offer in which it admitted that Mr Barrett had suffered a financial loss as the natural, direct and reasonable consequence of the Subject Land and the Argoona Road Land being reserved for a public purpose. It made an amended offer in the sum of $18,650,000 as financial loss with expenses of $75,000.[12]

8 Notwithstanding the eventual admissions in the Further Amended Particulars of Offer, at trial the Authority made opening submissions that Mr Barrett's claim was 'hypothetical, divorced from the actual circumstances of his actual financial loss'.[13] The Authority's written and oral submissions[14] referred at length to authorities which recognise that the requirement that loss for the purposes of pt 5 of the Planning and Environment Act must be actual financial loss.[15] That proposition was, however, not contested by Mr Barrett. The Authority did not ultimately deny that Mr Barrett had suffered financial loss within the scope of s 98(1)(a). The Authority's emphasis on the need to establish 'actual' financial loss was refined to more specific submissions responding to the way in which Mr Barrett quantified his claim, specifically that:

(a) some of the loss claimed by Mr Barrett was not caused by the reservation, but rather because of a failure to obtain a further cultural heritage management plan (CHMP) over the whole of the Subject Land, which meant that the land was not eligible for a planning permit or 'development ready', and could not be valued as such;[16]

(b) a potential increase in value of the Argoona Road Land as a consequence of the PAO5 reservation should be brought to account in the assessment of compensation payable with respect to the Subject Land;[17] and

(c) it was not open to value the Subject Land on the basis that part of the land subject to a road reservation which was owned by the Crown would be acquired by the purchaser.

9 The issues at trial were, therefore, limited to matters relating to the determination of the appropriate quantum of compensation to be paid to Mr Barrett. For the reasons below, I have accepted Mr Barrett's approach with respect to the first two issues above, but have not accepted his claim as it relates to the third.

The statutory scheme applicable to compensation for planning blight

10 Part 5 of the Planning and Environment Act provides for compensation to land owners and occupiers in the circumstances identified in that Part. The provisions of the Act which apply to the claim are the provisions as they stood at the time of the refusal of the permit on 1 June 2021 (the Relevant Date).

11 Unlike the provisions for compensation for compulsory acquisition of land in the Land Acquisition and Compensation Act 1986 (Vic), Part 5 is directed to providing compensation to landowners or occupiers for financial loss arising from adverse effects on the use or ability to dispose of land as a result of reservation of land for public use.[18] In Plunkett v Roads Corporation,[19] Richards J (as her Honour then was) described the purpose of the pt 5 compensation provisions as being:

... to provide for fair compensation for affected landowners, while also facilitating orderly land use planning for public purposes and conserving public funds by deferring the payment of compensation until actual loss is suffered. This balancing of private and public interests is in keeping with the purposes set out in s 4 of the PE Act.[20]

12 Those statutory purposes include the objectives of 'the fair, orderly, economic and sustainable use, and development of land';[21] to 'enable the orderly provision and co-ordination of public utilities and other facilities for the benefit of the community',[22] and 'to balance the present and future interests of all Victorians.'[23] The objectives of the planning framework established by the Act include 'to provide for compensation when land is set aside for public purposes and in other circumstances'.[24]

13 Section 98 of pt 5 provides for the right to claim compensation. Relevantly, it states:

(1) The owner or occupier of any land may claim compensation from the planning authority for financial loss suffered as the natural, direct and reasonable consequence of -

(a) the land being reserved for a public purpose under a planning scheme; or

(b) the land being shown as reserved for a public purpose in a proposed amendment to a planning scheme of which notice has been published in the Government Gazette under section 19; or

(c) a declaration of the Minister under section 113 that the land is proposed to be reserved for a public purpose; or

(d) access to the land being restricted by the closure of a road by a planning scheme.

....

(3) A person cannot claim compensation under subsection (1) if -

(a) the planning authority has purchased or compulsorily acquired the land or part of the land; or

(4) The responsible authority must inform any person who asks it to do so of the person or body from whom the first-mentioned person may claim compensation under this Part.

99 When does the right to compensation arise?

A right to compensation and the liability of a planning authority or responsible authority to pay compensation arises -

(a) under section 98(1)(a), (b) or (c) after -

(i) the responsible authority has refused to grant a permit for the use or development of the land on the ground that it is or may be required for a public purpose; or

(b) under section 98(1)(a), (b) or (c), on the sale of the land concerned under section 106; or

15 The Court of Appeal in Jomaring Pty Ltd v Head, Transport for Victoria summarised the effect of these provisions:

Reservation compensation is payable under Pt 5 of the PE Act where the reservation of land for public purposes blights the potential use of the land or adversely affects its value. Section 98(1) of the PE Act provides a right for an owner or occupier of land to claim compensation for financial loss suffered as the natural, direct and reasonable consequence of the land being reserved for a public purpose. The right to receive that compensation arises in the circumstances set out in s 99 ....[25]

Statutory scheme relevant to planning permit applications and refusals

16 As Mr Barrett relies on s 99(a)(i) (refusal to grant a permit) as giving rise to his right to compensation and to the Authority's liability to pay it, it is relevant to refer to statutory provisions relating to planning permit applications and permit approvals or refusals.

17 Part 4 of the Planning and Environment Act provides for the making of planning permit applications required by planning schemes. Permits for the development of land must, pursuant to s 47(1)(a) of that Act, be made in accordance with the regulations[26] to the responsible authority. In the case of the Subject Land, that authority is Wyndham City Council. Section 55(1) requires the responsible authority to give a copy of the application, together with prescribed information, to every person or body that the planning scheme specifies as a referral authority. Section 55(4) provides that a planning scheme may specify that a referral authority is a 'determining referral authority' or a 'recommending referral authority'. Under PAO5, the Department of Transport falls into the category of a determining referral authority.

18 Section 56(1) of the Planning and Environment Act requires the referral authority to consider the applications referred to it and provides that it may inform the responsible authority in writing that it does not object to the granting of the permit, does not object if the permit is subject to conditions, or that it objects to the granting of the permit on any specified ground. Section 60(1) requires the responsible authority to consider, amongst other things, any decision and comments of a referral authority. The responsible authority may then, pursuant to s 61(1), decide to grant a permit, grant a permit subject to conditions, or refuse to grant a permit on any ground it thinks fit. Relevantly for the present proceeding, s 61(2) provides that the responsible authority 'must decide to refuse to grant the permit if a relevant determining referral authority objects to the grant of the permit' and 'may' decide to refuse to grant a permit if a relevant recommending authority objects. As discussed further below, the Head, Transport for Victoria, as a determining referral authority, objected to the grant of the permit for the development of the Subject Land.[27]

19 Part 5 of the Planning and Environment Act contains provisions relevant to the determination of the quantum of compensation, if a right to compensation arises. Section 104 provides for the maximum amount of compensation payable as follows:

104 Maximum amount of compensation payable

The compensation payable for financial loss under section 98 must not exceed the difference between -

(a) the value of the land at the date on which the liability to pay compensation first arose; and

(b) the value that the land would have had at the date if the land had not been affected by any circumstance set out in section 98(1) or (2) or 107.

20 Section 104 acts as a cap on the amount of compensation that may be awarded, rather than a stipulation as to how the exercise of quantifying loss is to be performed.[28]

21 Section 104A makes specific provision for the treatment of zoning decisions in assessing compensation under pt 5. Relevantly, it states:

104A Actual zoning of land may be considered in determining compensation

(1) In assessing compensation under this Part for the financial loss suffered by the owner or occupier of land, if -

(a) the land is reserved or is proposed to be reserved for a public purpose; and

(b) the reservation or proposed reservation forms or will form the boundary of a zone in a planning scheme or an amendment to a planning scheme; and

(c) the decision to impose the zoning boundary was not related to the purpose for which the land is or is proposed to be reserved -

regard may be had to the actual zoning of the land as at the date when the liability to pay compensation first arose and, where relevant, to the actual zoning boundary at that date.

22 Section 106 provides for an alternative basis on which compensation may be claimed under s 98. It is contextually relevant in understanding the purpose and operation of the compensation provisions. It states:

(1) The owner of land may claim compensation under section 98 after the sale of the land if -

(a) the owner of the land sold it at a lower price than the owner might reasonably have expected to get if the land or part of the land had not been reserved or proposed to be reserved; and

(b) before selling the land, the owner gave the relevant authority not less than 60 days notice in writing of the owner's intention to sell the land.

23 Section 101 provides that legal, valuation or other expenses reasonably incurred in preparing and submitting a compensation claim may be claimed if compensation is payable under s 98.

24 Pursuant to s 110, compensation which is paid under the Act must be noted on the title to the land. Section 110 relevantly states:

(1) Any person who has paid compensation under this Act or a corresponding previous enactment to the owner or occupier of any land and who has not already done so under that enactment must lodge a statement with the Registrar of Titles without delay.

(2) The statement must in the prescribed manner -

(a) describe the land for which the compensation was paid; and

(b) give the prescribed particulars of the compensation.

...

25 The notation of compensation on title interacts with the requirement in the Land Acquisition and Compensation Act that compensation already paid must be brought to account in calculating any further compensation payable when the reserved land is compulsorily acquired. Section 41(5) of that Act provides:

If compensation has previously been paid in respect of the land pursuant to Part 5 of the Planning and Environment Act 1987, the amount of compensation payable under this Part in respect of an acquired interest in land or in respect of land in which an acquired interest subsists must be reduced by the prescribed amount.

26 Section 41(7) of the Land Acquisition and Compensation Act provides a formula for calculating the prescribed amount.

Statutory provisions on resolution of disputed compensation claims

27 Section 105 provides that certain parts of the Land Acquisition and Compensation Act apply to the determination of compensation under pt 5 of the Planning and Environment Act. It states:

105 Land Acquisition and Compensation Act to apply

Parts 10 and 11 and section 37 of the Land Acquisition and Compensation Act 1986, with any necessary changes, apply to the determination of compensation under this Part as if the claim were a claim under section 37 of that Act.

28 The applied sections of the Land Acquisition and Compensation Act relate to disputed compensation claims and their resolution.

29 Section 37 provides for the making of a claim for compensation in circumstances where no offer of compensation is made. It states, relevantly:

37 Claim for compensation where no offer made

(1) If a person is entitled to claim compensation under this Part, and the Authority has not made an offer to that person under section 31, that person may make a claim for compensation under this section.

(2) Subject to section 106(1), a claim for compensation under this section must be made within two years after the date of acquisition.

(4) Subject to section 106(1), the Authority must, before the expiration of three months after the day on which a notice of claim is served upon it under subsection (1), serve upon the claimant a statement in writing replying to the notice of claim.

(5) The Authority may in that statement -

(a) admit the claim; or

(b) make an alternative offer of compensation; or

(c) reject the claim.

....

30 Part 10 of the Land Acquisition and Compensation Act provides mechanisms for resolution of disputed claims. Section 80 states:

80 Application or referral of disputed claim

The Authority or the claimant may -

(a) apply to the Tribunal for determination of a disputed claim in accordance with this Act; or

(b) refer a disputed claim to the Court for determination in accordance with this Act.

31 Section 89 of Part 10 provides for the determination of the disputed claim by the Victorian Civil and Administrative Tribunal or this Court:

(1) On an application or referral of a disputed claim under this Part, the Tribunal or Court is to determine the amount of compensation in accordance with this Act to be paid in respect of the claim and may make any orders necessary to give effect to that determination.

(2) An appeal to the Court of Appeal from a determination or an order made by the Court under this section lies only on a question of law and with leave of the Court of Appeal.

Section 5A of the Valuation of Land Act 1960 (Vic)

32 Section 104 of the Planning and Environment Act, in referring to the 'value' of land, raises the application of s 5A(1) of the Valuation of Land Act 1960 (Vic).[29] That section provides:

(1) Unless otherwise expressly provided where pursuant to the provisions of any Act a court board tribunal valuer or other person is required to determine the value of any land, every matter or thing which such court board tribunal valuer or person considers relevant to such determination shall be taken into account.

33 Section 5A(3) of the Valuation of Land Act identifies, non-exhaustively, matters which are to be taken into account in determining value. It provides:

Without limiting the generality of the foregoing provisions of this section when determining such value there shall, where it is relevant, be taken into account -

(a) the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;

(b) the effect of any Act, regulation, local law, planning scheme or other such instrument which affects or may affect the use or development of such land;

(c) the shape size topography soil quality situation and aspect of the land;

(d) the situation of the land in respect to natural resources and to transport and other facilities and amenities;

(e) the extent condition and suitability of any improvements on the land; and

(f) the actual and potential capacity of the land to yield a monetary return.

Relevance of ss 41 and 43 of the Land Acquisition and Compensation Act

34 Part 4 of the Land Acquisition and Compensation Act contains provisions relevant to the determination of compensation under that Act. Section 41 contains general principles on which assessment of compensation is to be based, and s 43 identifies certain matters which must be disregarded in the assessment. Part 4 is not applied directly to claims under the Planning and Environment Act by s 105 of that Act. However, that Part became relevant in the parties' submissions by reason of the Authority's submission that although s 43(1)(a) in pt 4 of the Land Acquisition and Compensation Act does not apply directly, the Court should have regard to authorities applying that section, or equivalent provisions in New South Wales land acquisition legislation.[30]

35 Section 43(1)(a) provides:

(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; ...

36 The Authority also raised an issue as to the applicability of the Pointe Gourde principle, a common law principle deriving from a decision of the Privy Council. It is substantively to the same effect as s 43(1)(a), that any impact of the scheme of acquisition on the value of acquired land is to be disregarded when assessing compensation for compulsory acquisition.[31] The Authority submitted that '[w]hile not expressly stated, the Claimant relies upon the Pointe Gourde principle in making the Development Ready Assumption'.[32] The Authority submitted that the Pointe Gourde principle had no application and that it is the terms of the statute that are determinative.[33]

37 Mr Barrett submits that s 43, and authorities interpreting those sections, have no application to claims under pt 5 of the Planning and Environment Act.[34] He submits that the only provisions of the Land Acquisition and Compensation Act that are applicable are those expressly 'picked up' by s 105 of the Planning and Environment Act.[35] He refers to authority which warns against having regard to acquisition regimes in construing Part 5.[36] In Jomaring, the Court of Appeal quoted Gobbo J in Studley Developments Pty Ltd v Department of Planning and Urban Growth,[37] in which his Honour said:

It is important to remember that the recovery for loss and damage [under pt 5] is drawn very much from common law principles and is not based on any statute derived from resumption law.[38]

38 Mr Barrett also made clear that his submissions, which did not refer to the Pointe Gourde principle, also did not rely on that principle implicitly.[39] Reliance was, rather, placed on the language of s 104, which refers to the value the land would have had if it 'had not been affected by' the circumstances in s 98(1), relevantly the reservation, and on other aspects of the context and purpose of s 98.[40]

39 In Kajag Pty Ltd v Head, Transport for Victoria, Richards J considered whether ss 41 and 43 of the Land Acquisition and Compensation Act have any application to claims for compensation under pt 5 of the Planning and Environment Act.[41] In that case, the Authority had submitted that because s 105 did not call into operation ss 41 and 43, those provisions had no application to the pt 5 regime.[42] It did make the submission (contrary to its position in this case) that it was permissible to have regard to the Pointe Gourde principle.[43] The claimant in Kajag submitted that it was the statutory language of pt 5 that governed the question of compensation and not ss 41 and 43, and that the question was what loss was the natural, direct and reasonable consequence of the land being reserved for a public purpose.[44] Ultimately, Richards J determined that it was unnecessary to answer the specific question as to the status of ss 41 and 43 in the case before her.[45]

40 The compulsory acquisition regime is a fundamentally different regime than the specific regime providing for compensation for the effect of planning scheme reservations in pt 5 of the Planning and Environment Act. That Act and the Land Acquisition and Compensation Act are two distinct pieces of legislation, falling to be construed on their own terms, and not by reference to principles developed in the context of other legislation.[46] As Emerton J observed in Barilla v Roads Corporation, the Planning and Environment Act was enacted after the Land Acquisition and Compensation Act, enabling a consideration of the acquisition regime and how it might inform the Part 5 regime.[47] It was open to have regard to the extent to which provisions from the latter Act should inform the process under pt 5 of the Planning and Environment Act, and Parliament identified in s 105 the specific provisions of the Land Acquisition and Compensation Act that were to apply. Section 105 did not apply ss 41 and 43 of the Land Acquisition and Compensation Act. There is, in my view, no basis on which to conclude that those sections, or authorities which apply them, are applicable to claims under Part 5.

41 In reaching that conclusion, I have taken into account the terms of s 90(2) of pt 10 of the Land Acquisition and Compensation Act (a part picked up by s 105 of the Planning and Environment Act). Section 90(2) provides that in determining the compensation payable, the Court is not bound by the exercise of any discretion, or any opinion or determination of the Authority,[48] but 'must determine the compensation payable in the particular circumstances of the case having regard to the provisions of this Act'.

42 I do not take the effect of s 90(2) as being to require the determination of compensation under pt 5 of the Planning and Environment Act to be done having regard to the provisions of the Land Acquisition and Compensation Act. Section 105 of the Planning and Environment Act states that the relevant parts of the Land Acquisition and Compensation Act apply to the determination of compensation under pt 5 'with any necessary changes.' A necessary change would be, in my view, to interpret 'the Act' in s 90(2) as the Planning and Environment Act rather than the Land Acquisition and Compensation Act.

43 Although there is authority to the effect that the Pointe Gourde principle is applicable in the context of claims under pt 5 of the Planning and Environment Act,[49] the body of subsequent authority emphasising the primacy of the statutory language does cast some doubt as to the extent to which the principle itself has any freestanding application to pt 5 claims. The Authority ultimately accepted that Mr Barrett was not relying on that principle[50] so it is unnecessary to determine the issue here.

Statutory provisions relevant to Cultural Heritage Management Plan requirements

44 One of the two major issues in dispute relates to the requirement for a CHMP prior to development.

45 The Aboriginal Heritage Act 2006 (Vic) provides requirements for the preparation of a CHMP in certain circumstances. This involves an assessment of the relevant area to determine the nature of any Aboriginal cultural heritage present in the area.[51] CHMPs are required in a range of circumstances, including those identified in the Aboriginal Heritage Regulations 2007 (Vic) and the subsequent Aboriginal Heritage Regulations 2018 (Vic). The Aboriginal Heritage Regulations required the preparation of a CHMP where an activity area is located within an area of cultural heritage sensitivity, or when the proposed activity is a high impact activity.[52] In the present case, the activity area the subject of the development proposed in the planning permit application was within an area of cultural heritage sensitivity because it was within 50m of cultural heritage places listed on the Victorian Aboriginal Heritage Register, and within 200m of a waterway.[53] As the proposed activity involved a residential subdivision into three or more lots it was also a high impact activity for the purpose of the Aboriginal Heritage Regulations.[54]

46 Section 52 of the Aboriginal Heritage Act provides that a decision maker must not grant a statutory authorisation for an activity unless a CHMP is approved for the activity.

47 The assessment procedure required for the CHMP, and requirements for the contents of the CHMP, are and were at the relevant times subject to requirements under the Aboriginal Heritage Act and Aboriginal Heritage Regulations.[55] They include requirements to engage a 'heritage advisor' to assist in preparing the plan,[56] and to give notice of the intention to prepare the plan to a range of persons and entities, including each relevant registered Aboriginal party (RAP).[57] RAPs may then elect to evaluate the plan. If the CHMP is not evaluated by a RAP, the sponsor may apply to the Secretary for approval of the plan. Where the Secretary is the sponsor for a CHMP, and no RAP evaluates the plan, the Secretary may apply to the Aboriginal Heritage Council for approval of the plan.[58]

Relevant history of the Subject Land and compensation claim

48 Mr Barrett purchased the Subject Land, an irregularly shaped block of land with a frontage to Ballan Road, in 1981. The Subject Land was then included in a Rural Zone, outside the Urban Growth Boundary in the planning scheme.[59] The Subject Land had homestead and outbuildings on it, and was used for some time for conducting a horse riding school.[60] The Argoona Road Land adjoins the Subject Land to the south-west. An aerial photograph at approximately the Relevant Date shows the two properties.[61]

49 In 2010, significant amendments to the planning scheme were effected by Amendment VC68,[62] as part of a process of planning for long term infrastructure and planning objectives, including the OMR, the Regional Rail Link, and associated establishment of the Western Grasslands Reserve. The amendments as they related to the Wyndham Planning Scheme included the incorporation of public acquisition overlays PAO5 (relating to the OMR) and PAO7 (relating to the Western Grasslands Reserve). The history of the strategic planning of the region which led to VC68 was addressed in the parties' expert reports and has been recounted in other decisions of this Court.[63] The limited scope of the disputed questions I have to determine makes it unnecessary to recount that history here.

50 The map below shows the properties as at the Relevant Date.[64] The Subject Land and the Argoona Road Land are outlined in red. To the east of the Subject Land on Ballan Road (the diagonal road marked in pink) is 955 Ballan Road. The blue curved line is the Urban Growth Boundary at that date, which had been applied by Amendment VC68 in 2010 and brought most of the Subject Land within the Urban Growth Boundary for the first time.[65]

51 Importantly, and as discussed further below, it was common ground between the Authority and Mr Barrett (based on the agreement of their town planning experts) that at the Relevant Date the Subject Land would, absent the PAO5, all have been within the Urban Growth Boundary, as that boundary would have aligned with the western title boundary of the Subject Land.[66] The experts also agreed that absent the PAO5, the Argoona Road Land would have been located outside the Urban Growth Boundary at the Relevant Date, with the exception of a small section which was then located inside the Boundary. That section is situated within a buffer to an adjacent quarry, which would constrain urban development.

52 In 2014, Ecology and Heritage Partners Pty Ltd was commissioned by the owner of the property at 955 Ballan Road, Greencor Developments Pty Ltd, on behalf of the C and R Gordon Superannuation Fund (the Proponent), to commence arrangements for the preparation of a CHMP. The CHMP was for proposed residential development across an activity area encompassing that property and two other parcels of land, being a large part of the Subject Land and an adjoining parcel of land owned by a third party.[67] There was no evidence as to what arrangement between the three landowners had led to the Proponent being the sponsor of the plan. The activity area for the purposes of the plan did not encompass all of the area that is the subject of the OMR reservation, but stopped at the midpoint of the land the subject of the OMR reservation. The CHMP explained, with respect to the extent of the activity area:

The northern and western boundary follows the centreline of the proposed Outer Metropolitan Ring Road (OMR), although the land within the OMR will not be developed as part of this activity.[68]

53 The way in which the PAO5 reservation for the OMR was noted in the CHMP is shown in the following map from the CHMP.[69] It shows the OMR reservation in black hatching, and the red line showing the boundary of the CHMP activity area, at the mid-point of the OMR reservation:[70]

54 The following map from CHMP 13322 shows the activity area, and two triangular shaped parts of the Subject Land to the north and to the west which were on the other side of the midpoint of the OMR reservation, which were not within the activity area (Unassessed Segments):[71]

55 The CHMP involved a standard assessment which identified two Aboriginal places comprising stone artefacts on 955 Ballan Road, the property neighbouring the Subject Land (registered Aboriginal places VAHR 7822-3837 and VAHR 7822-3836). The CHMP also identified that within the activity area a drainage channel to the north and elevated landforms would have the highest sensitivity. The lower plains were identified as having lower likelihood of Aboriginal Cultural Heritage. A complex assessment was performed, involving excavation of three test pits and multiple shovel test holes. Stone artefacts were found in the activity area, primarily on the surface with a small number under the surface.[72]

56 The CHMP was evaluated by the relevant RAP, the Wadawurrung Traditional Owners Aboriginal Corporation, which gave a Notice of Approval of CHMP 13322 under s 63 of the Aboriginal Heritage Act.[73] The approved CHMP was titled 'Quandong Precinct Structure Plan, 955 Ballan Road, Wyndham Vale, Victoria: Aboriginal Cultural Heritage Management Plan Number: 13322' (CHMP 13322).

57 The approved recommendations in CHMP 13322 covered a range of matters, some of which recorded the findings arising from the assessment,[74] and others relating to steps to be taken in the development of the land. These included:

(a) Aboriginal artefacts at the two Aboriginal places were to be salvaged, analysed and reported on, and then, with all other cultural material, returned to the custody of the RAP for reburial (Recommendations 4, 5, 11 and 12).

(b) A program of interpretation regarding Wadawurrung occupation of the activity area and emphasising the importance of the watercourse landform on the site as a resource was to be prepared by the RAP, supported by the sponsor. The interpretative strategy was to include at minimum an interpretative trail along the watercourse, landscaping and planting of beds of Murnong plants at the southern and northern ends of the watercourse, and display of stone artefacts sourced from those collected in the activity area (Recommendation 6).

(c) Soils were to be retained and redeposited in the activity area (Recommendations 7 and 13).

(d) All contractors involved in activity on the site were to be made aware of the two Aboriginal places in which the artefacts had been identified, as part of a cultural awareness induction program (Recommendations 2, 9 and 14).

(e) Representatives of the RAP were to be permitted access to the activity area during construction and variations to the recommendations were to be discussed and agreed between the RAP and the sponsor before implementation (Recommendations 15 and 16).[75]

58 From March 2018, the Quandong Precinct Structure Plan (Quandong PSP), which covered part of the area in which the Subject Land is located, was being developed. The Wyndham City Council published a Quandong Precinct Structure Plan Background Report.[76] A precinct structure plan is a component of the contemporary Victorian planning scheme. It plans for land use and infrastructure planning over particular parts of urban growth areas, to guide planning for commercial, industrial and residential development including planning for infrastructure and community facilities. The Quandong PSP was finalised in November 2018[77] and published in the Government Gazette on 3 September 2020.[78] The Quandong PSP referred to and relied on CHMP 13322. Relevantly, the Quandong PSP stated:

Prior to transfer of ownership, land adjoining the waterway must develop and implement an interpretive strategy regarding Wadawurrung occupation of the precinct, with reference to the importance of the watercourse landform as a resource, as detailed in the Cultural Heritage Management Plan (CHMP 13322), to the satisfaction of the Registered Aboriginal Corporation and the responsible authority.

As a minimum, the strategy will include:

• An interpretive trail along the watercourse, involving a series of interpretive boards describing aspects of [Wadawurrung] occupation and use of the area;
• Landscaping and planting of beds of Murnong ([Microseris] scapigera) in areas of open space at the southern and northern ends of the watercourse; and
• The inclusion of an appropriate display of stone artifacts (sources from the artifacts collected during the CHMP) within the interpretive trail.[79]

59 The parties agreed that absent PAO5, the use of the Subject Land would have been planned through this Quandong PSP.[80]

On 26 March 2020 Mr Barrett applied for a permit for the residential development of the Subject Land and the Argoona Road Land.[81] The application for a permit was based on a concept masterplan for a residential subdivision across both properties, and extending into the area the subject of the OMR (the Before Plan).[82] An extract of the Before Plan is below. The area filled in green in the north of the Subject Land is described in the key to the plan as 'Passive Open Space':

61 The planning permit application was also supported by a planning report addressing the site and surrounds, the development proposal, the planning policies and controls and a planning assessment.[83] At the same time, Mr Barrett applied for a permit for the residential development of the Subject Land only, on the basis of a plan with the OMR in place.[84]

62 The Council referred the permit applications to the Department of Transport as a determining referral authority. The Department communicated its objection to the grant of the permit based on the Before Plan on the basis that the section of land in the permit application area within PAO5 is required for the future Outer Metropolitan Ring Transport Corridor. On 1 June 2021, the Council, having regard to the Department's objection, consistent with s 61(2) of the Planning and Environment Act, refused to grant the permit based on the Before Plan.

The issues in dispute in determining quantum of compensation

63 There were two primary issues on which the parties disagreed, which had a material potential impact on the quantum of the compensation.

The Cultural Heritage Management Plan 'development ready' assumption

64 The first of the significant disputed issues was whether, having regard to the need to ascertain the value of the Subject Land at the time on which the liability to pay compensation first arose, the land should be valued on the basis that it was ready for the grant of a permit for the proposed property development. The Authority contends, in summary, that the land was not 'development ready' at the Relevant Date, because having regard to requirements under the Aboriginal Heritage Act, no development could occur on the Subject Land until a CHMP for the whole of the Subject Land had been prepared.[85]

65 The fact that CHMP 13322 did not extend to those areas which had been reserved for the OMR under PAO5 was a matter noted in the town planning report on the application,[86] but was not one of the reasons identified by the Council for refusal.[87]

66 The Authority instructed its valuation experts to assume that the Subject Land should be valued on the basis that in the 'before' or 'unaffected' scenario, a planning permit had not been issued at the Relevant Date; and that the permit would not have been issued until a CHMP for the whole of the land was prepared, which would take at least 13 to 19 months.[88] The experts took this into account by applying a deferral period representing the estimated time to obtain a complete CHMP, which had the effect of discounting the value of the Subject Land at the Relevant Date.[89]

67 Mr Barrett contends that the appropriate counterfactual to the existence of the PAO5 reservation, or the 'unaffected' scenario that should be adopted, is that absent the reservation, the CHMP that had been obtained in 2015 would have covered the whole of the Subject Land, as there would have been no reason to exclude any part of the land if it was not reserved for the OMR.[90] Mr Barrett's expert approached the valuation on the basis that the hypothetical purchaser could have proceeded to develop the land from the Relevant Date. The difference in value between the experts attributable to this issue is approximately $7 million.

Whether enhancement of Argoona Road land is relevant in assessing compensation

68 The second significant issue relates to the fact that Mr Barrett owns the Argoona Road Land adjoining the Subject Land, and that land is part of the area which was the subject of the application for a planning permit for proposed development. The Authority contends that the Argoona Road Land's value was enhanced by the reservation,[91] in that the effect of PAO5 was that parts of the land which would, absent the reservation, have been zoned Rural Conservation Zone, would in the 'after' scenario be inside the Urban Growth Boundary and available for development. The difference in value arising from this issue was said by the Authority to be approximately $2.5 million.

69 Mr Barrett contends that it is not open, under pt 5, to take into account in assessing value any improvement or devaluation of land which is not the subject of the claim for compensation, and that the Argoona Road Land is not to be taken into account in assessing the financial loss the subject of the claim.[92]

70 By close of trial, the only further material issue in dispute related to a reserve for a proposed road (Quandong Road) on the Subject Land which is owned by the Crown and not by Mr Barrett (the Paper Road). Mr Barrett's position was that it was open to approach the valuation on the basis that a prospective purchaser would purchase the land, and value it on that basis, subtracting acquisition costs.[93] The Authority submitted that it was not open to take the Paper Road into account in assessing the value of the Subject Land.[94]

71 Expert evidence was obtained by Mr Barrett and the Authority on a range of issues relevant to the valuation of the land in the 'before' and 'after' scenarios. These experts participated in conclaves and prepared joint reports on the different subject matter areas. The valuation experts took the opinions of these experts into account in arriving at their opinions on value. At trial, none of the experts other than the valuation experts were called to give evidence or to be available for cross examination.

(a) On ecology: the expert reports of Brett Lane filed by Mr Barrett;[95]

(b) On hydrology: an expert report and supplementary expert report of Tommy Plahcinski[96] filed by Mr Barrett and an expert report of Bertrand Salmi filed by the Authority.[97] Two joint hydrology reports by these experts were filed.[98]

(c) On traffic engineering: an expert report of Charmaine Dunstan[99] filed by Mr Barrett and an expert report of Valentine Gnanakone[100] filed by the Authority. A joint expert report of Ms Dunstan and Mr Gnanakone was also filed.[101]

(d) On development costings: an expert report and a supplementary expert report of civil engineer Nick Glasson[102] filed by Mr Barrett and an expert report of civil engineer Charles Shinkfield filed by the Authority.[103] Two joint reports of these experts were also filed.[104]

(e) On town planning: an expert report of town planner Marco Negri filed by Mr Barrett[105] and a town planning expert report by town planner Alison Milner filed by the Authority.[106] A joint report of Mr Negri and Ms Milner was filed.[107]

(f) Witness statements including expert evidence was filed on the issue of cultural heritage.[108] As this evidence was of some importance to the parties' submissions on the CHMP issue they are referred to in more detail below.

73 There were ultimately limited issues in dispute as between these experts and none were called for cross examination. The valuation evidence was based on assumptions deriving in part from the primary experts. Mr Barrett relied on an expert report from valuer Andrew Kinnaird.[109] The Authority relied on expert reports of valuer Peter Molloy[110] and an expert report of valuer Geoffrey Brown[111] who the Authority requested to undertake a 'peer review' of the opinions of Mr Kinnaird and Mr Molloy.[112]

74 There was an initial issue between the parties as to whether Mr Barrett as a claimant bore the onus of proof of establishing both the right to compensation and its quantum. The Authority's original position was that the claimant 'has the onus of establishing actual financial loss relevantly caused by the reservation'.[113] The Authority acknowledged several authorities of first instance judges which observe that neither party bears a legal onus of proof in the assessment of claims for compensation under pt 5 of the Planning and Environment Act, but submitted that those authorities were to that extent incorrect.[114] The Authority submitted that the existence of an onus of proof on the claimant was established by the Court of Appeal's decision in Brompton Lodge Pty Ltd (in liquidation) v Head, Transport for Victoria[115] and by the 'onus of proof' in s 140(1) of the Evidence Act 2008 (Vic).[116] That section provides:

(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

75 In closing submissions, the Authority acknowledged that s 140 only dealt with standard of proof and accepted that this was a different concept to onus. However, it maintained the position that the claimant bears a legal onus or burden of proof.[117] It therefore remains to consider the position established by the authorities on whether the Planning and Environment Act imposes a legal burden of proof on a claimant under s 98. The Authority relies primarily on the Court of Appeal's decision in Brompton Lodge, and also contends that in Barilla, Emerton J 'acknowledged that a legal burden of proof applies to s 98'.[118]

76 Mr Barrett accepted that he had a legal onus to establish that the reservation of the Subject Land caused him financial loss, and that this was the effect of Brompton Lodge.[119] However, he submitted that the question of onus on matters relating to quantum required a more nuanced analysis.[120] It was submitted that in the context of the matters to be assumed for the analysis of the land's value when 'unaffected' by the reservation and the comparison with the 'affected' scenario, there is no legal onus of proof on establishing factual or counterfactual assumptions. He also submitted that the authorities show that in cases where there is doubt, questions of fact are resolved in favour of the claimant.[121] Mr Barrett says that in the present case, there is no legal onus in respect of the valuation process, including with respect to the appropriate assumption as to the extent of CHMP 13322.[122] It is, he contended, for the Court to be satisfied on the matters arising in the context of the counterfactual analysis on the balance of probabilities, and any doubt should be resolved in Mr Barrett's favour.[123]

77 The language of pt 5 of the Planning and Environment Act does not provide any clear basis for the imposition of a legal burden of proof on either a claimant or the relevant authority, with respect to the measurement of the loss and the application of the statutory cap in s 104. A claimant's right to compensation arises only if the circumstances in s 98(1) and s 99 or s 106 are established. Relevantly, having regard to the provisions relied on in this case, a claimant must establish that they are an owner or occupier of land, and suffered 'financial loss as the natural, direct and reasonable consequence of ... the land being reserved for a public purpose under a planning scheme.'[124] In order to establish that the right to compensation has arisen, the claimant must also establish that 'the responsible authority has refused to grant a permit for the use or development of the land on the ground that it is or may be required for a public purpose.'[125]

78 Once those matters are established by a claimant, the effect of s 99 is that the claimant has a right to compensation, and the responsible authority has a liability to pay compensation. Nothing in the statutory language imposes any onus with respect to the question, arising as a result of the claimant's statutory right and the authority's statutory liability, of the quantum of that compensation.

79 It is, therefore, necessary to consider the authorities on this issue closely. In first instance authorities which have discussed the issue of onus of proof under pt 5 of the Planning and Environment Act, the conclusion has been expressed that there is no legal onus of proof established by the statutory scheme. These include Kajag, in which Richards J stated there is no legal onus of proof with respect to claims under pt 5 of the Planning and Environment Act.[126] Similarly, Emerton J in Rigby v Secretary to the Department of Sustainability and Environment[127] and Richards J in Crowe v Head, Transport for Victoria[128] have held that determination of claims for compensation under the Land Acquisition and Compensation Act does not involve a legal onus.

80 It is appropriate to consider first the scope of what was established by the Court of Appeal's observations in Brompton Lodge. That case involved a claim for compensation under pt 5 of the Act, relying on s 106 in relation to loss arising on sale of the land. The relevant contract of sale was complex and was concluded in the context of an existing project development agreement over the land between the selling landowners (the applicants) and the property developer which purchased the land.[129] It included an assignment of the compensation which would be received pursuant to s 106 of the Planning and Compensation Act. Importantly, a director of the first applicant gave evidence at the trial that he had been fully compensated in the sale price for any loss caused by the reservation of the land.[130]

81 The statement in Brompton Lodge on which the Authority relies as establishing that the claimant bears a legal burden of proof to establish a claim under s 98 was made in the following context (underlining added):

As for the fact that the three other valuers - including the valuers retained by the Authority - purported to quantify the amount of compensation payable, this evidence was based on an incorrect legal premise and we do not accept it.

In our view, the primary judge did not err when he held that the applicants had failed to discharge the onus of establishing loss suffered as the natural, direct and reasonable consequence of the imposition of the Reservation. The primary judge was correct to hold that there was no evidence from Mr Carpenter or anyone else that the applicants sold the Brompton land at a lower price than they might have expected to receive had part of it not been reserved. The fact that the primary judge accepted that the Brompton land was sold at a gross undervalue did not prevent him from concluding that the requirements of s 106(1) had not been satisfied and that the applicants had failed to establish that they had suffered financial loss for the purposes of s 98(1).[131]

82 The Court thus confirmed that there is an onus on a claimant to establish the circumstances in s 98(1) that there was 'loss' suffered as the natural, direct and reasonable consequence of the reservation of the land. Given that the evidence was to the effect that the claimant had not suffered loss on sale of the land,[132] it was not possible in that case to establish that relevant loss had been caused. In those circumstances, it was unnecessary for the trial judge or the Court of Appeal to go further and consider questions of quantification of loss. The Court of Appeal's statement does not, in my view, involve any opinion as to the onus of proof applicable on questions arising in determining quantum, such as assumptions relevant to counterfactual scenarios in the valuation process.

83 Moving to the cases in which the view had been expressed at first instance that there is no legal onus of proof in claims under pt 5, Rigby related to a claim for compensation under the Land Acquisition and Compensation Act. Justice Emerton determined to answer separate questions relating to how the subject land would have been zoned had there been no proposal to compulsorily acquire it for parklands.[133] Her Honour observed that there were several legal issues affecting the hypothetical and conjectural nature of this determination. First, her Honour explained that the Court must rely on the expert evidence of town planners, and the expression of opinion based on hypothetical circumstances presents particular difficulties. It was important for these experts to reveal their reasoning processes as far as possible to enable them to be evaluated by the Court.[134] Secondly, her Honour made the following observations with respect to the onus of proof:

although both parties approached the question before the Court as one of whether the subject land would have been rezoned by the relevant date in the absence of the scheme of acquisition, the Secretary submitted that this cast an onus on the claimants to establish that a rezoning would have occurred. I do not accept that the claimants bear a legal onus, if that is what is suggested. It is a matter for the Court to determine, based on expert opinion, what the zoning of the subject land would have been absent the Parklands proposal.[135]

84 Thirdly, her Honour observed that 'the proper approach in compulsory acquisition matters is generally to lean in favour of the dispossessed proprietor, all other things being equal.'[136] Her Honour explained:

The claimants submit that as the circumstances of the case require over 30 years of planning history to be peeled back to determine the zoning of the subject land, to the extent that doubt arises or matters remain obscure, the doubt or obscurity should be resolved in ... favour of the claimants. I accept this submission. In Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd, Dixon J identified a different purpose in valuing property in revenue cases from compensation cases: in the compensation cases the purpose was to ensure that the person to be compensated was given a full money equivalent of his or her loss, while in the revenue cases it was to ascertain what money value was plainly contained in the asset so as to afford a proper measure of liability to tax.[137]

85 Kilpatrick involved a claim for compensation under pt 5 of the Planning and Environment Act, in which Garde J cited the observations of Emerton J in Rigby with approval. His Honour said:

In compensation cases, doubts and obscurities where they exist are ordinarily resolved in favour of the more liberal estimate of compensation. In Rigby v Secretary to the Department of Sustainability and Environment, Emerton J said:

...the proper approach in compulsory acquisition matters is generally to lean in favour of the dispossessed proprietor, all other things being equal.[138]

86 Crowe was a proceeding involving a claim for compensation under the Land Acquisition and Compensation Act for land acquired to construct the Drysdale Bypass_._ It involved the determination of separate questions relating to the appropriate assumptions as to how the land would have been zoned but for the Bypass proposal. The claimant contended it would have been zoned 'residential'. The Authority contended that it would have remained zoned as farming land.[139] Justice Richards observed that there were two preliminary matters to bear in mind when approaching the separate questions:

The first is that neither party bears a legal onus of proof - the question of what the zoning of the Drakes land and the Murradoc land would have been in the absence of the Bypass proposal is to be determined based on all of the evidence, in particular the expert evidence. [footnote 11: Rigby [25]-[27]].

The second matter to bear in mind is that Mr and Mrs Crowe are the dispossessed owners of the land acquired by the Authority and that, all other things being equal, the proper approach is to lean in their favour. [footnote 12: Rigby, [28]-[29], citing Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Ltd [1947] HCA 10; (1947) 74 CLR 358, 373-4 (Dixon J) and McBaron v Roads and Traffic Authority of New South Wales (1995) 87 LGERA 238, 244-5.] That said, s 140 of the Evidence Act 2008 (Vic) provides that, in a civil proceeding such as this one, the Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. While I may resolve any doubt or obscurity in the evidence in favour of Mr and Mrs Crowe, ultimately the separate questions must be determined on the civil standard of proof.[140]

87 Kajag related to a claim for compensation under pt 5 of the Planning and Environment Act, with respect to land affected by a reservation for the purpose of the OMR. The land had been sold after the reservation and the previous owner was claiming compensation for loss on sale pursuant to s 106(1). The issue in dispute was the amount of the financial loss, which required facts to be found as to what the highest and best use of the land would have been in the absence of the reservation, what the zoning would have been in the absence of the reservation, and what areas of land would have been required for waterways and flood protection.[141] Justice Richards described the fact finding process required in the case as 'a hypothetical one that has been described as "both radical and uncertain"', which 'involves peeling back the planning history and re-imagining the strategic planning decisions that would have affected the Property in the absence of the OMR reservation.'[142] Her Honour observed that her findings must be based on expert evidence, rather than by forming her own inexpert opinion from the relevant planning history.[143] As to the question of onus, her Honour stated:

In cases such as this one, neither party bears a legal onus of proof. I must make findings of fact on the basis of all the evidence, in particular the expert evidence, on the balance of probabilities.[144]

88 The Authority relied on observations of Emerton J in Barilla as an acknowledgement that 'a legal burden of proof applies to s 98'. Her Honour did not directly discuss the question of onus of proof. However, in the context of considering the aspect of the Barillas' claim relating to the costs of selling the land the subject of the compensation claim, her Honour concluded that the costs were neither financial loss compensable pursuant to s 98, nor expenses payable pursuant to s 101. Her Honour observed:

The process of regression through 'precursor steps' contended for by the Barillas could result in the absurd outcome that the loss on sale itself became an expense involved in the preparation of the claim. Furthermore, it would invite claims for costs ordinarily dealt with as 'financial loss' under s 98, with the accompanying burden of establishing that the loss was the 'natural, direct and reasonable consequence' of the reservation, to be made under the less burdensome test in s 101.[145]

89 It is not clear to me that her Honour, in referring to the 'accompanying burden of establishing that the loss was the "natural, direct and reasonable consequence" of the reservation', was intending explicitly to refer to a legal burden of proof relating to all elements of claims for compensation pursuant to s 98. In comparing that burden to the 'less burdensome test in s 101', her Honour appears to have been focussing on the nature of the causal relationship between the loss and the reservation in s 98. I understand her Honour to be accepting that the claimant had a legal burden of proof to establish that there was loss of a kind satisfying that strict causal relationship. That is consistent with the Court of Appeal's observations in Brompton Lodge. However, it does not follow from the statement in Barilla that her Honour took the view that the claimant carries a legal burden of proof with respect to all aspects of the determination of a s 98 claim, including with respect to the appropriate assumptions to be made in the counterfactual situation involved in the quantum assessment.

90 The position with respect to any onus of proof is, in my view, the more nuanced one identified by Mr Barrett. That is, as established by Brompton Lodge, a claimant has a legal onus of establishing that the financial loss claimed is of a kind described in the relevant limb of s 98, and also that an event in s 99 or s 106 has occurred, so that the right to compensation arises and liability is imposed on the particular authority. However, there is no onus relating to the determination of the factual questions involved in determining the quantum of compensation, including the appropriate matters to be assumed in the 'unaffected' counterfactual exercise and the facts relevant to the 'affected' scenario. My reasons for this are as follows.

91 First, there is nothing in the language of the Planning and Environment Act which expressly or by clear implication imposes any legal onus or otherwise addresses questions of onus.

92 Secondly, turning to the authorities, I do not accept that the observations of Emerton J and Richards J at first instance on questions of onus were wrong. I also consider that they are, properly understood, consistent with Brompton Lodge. The cases of Rigby, Crowe and Kajag dealt with questions of the appropriate assumptions to be made when assessing the value of land. I construe their Honours' observations in those cases to the effect that there is no legal onus of proof applicable to the Court's findings on assumptions or the parameters of that exercise. It is to be determined by the Court on the basis of the expert evidence, with no legal onus on a party in that process. As a result, as observed by Quigley J in Kingston v Head, Transport for Victoria with respect to the position under the Land Acquisition and Compensation Act:

Whilst there is no legal onus of proof under the LAC Act, each party naturally bears the practical onus of convincing the Court to find in their favour, and findings of fact must be made on all the evidence available to the Court and on the balance of probabilities.[146]

93 The absence of an onus of proof with respect to matters going to the assessment of quantum is consistent with the fact that claims for compensation for compulsory acquisition of property for public purposes, or for financial loss in the case of planning blight, involve a balancing exercise. Established rights of private individuals or entities in land must be balanced with the State's right to pursue broad public purposes and objectives in the planning context. The compensation process in pt 5 of the Planning and Environment Act is premised on a recognition that it is just and appropriate to compensate owners when their land is reserved for a purpose to benefit the public. That is reflected in the statutory objectives of balancing the present and future interests of Victorians and of providing compensation when land is set aside for public purposes in ss 4(1)(g) and 4(2)(l) of the Planning and Environment Act. It is consistent with this that the only thing a claimant must establish in claims under pt 5 of the Planning and Environment Act is that their claim is of the kind identified in the Act as giving rise to a right to compensation: in this case, the requirement that it is one for 'financial loss suffered as the natural, direct and reasonable consequence of ... the land being reserved for a public purpose under a planning scheme' within s 98(1)(a).

94 The absence of a burden of proof is also consistent with the fact that the primary method of resolving claims for compensation in pt 5 of the Planning and Environment Act is not intended to be by way of proceedings in this Court, but rather an administrative process. The Act establishes a scheme whereby it is anticipated that the relevant authority will generally pay appropriate compensation in an administrative process not involving the Courts, in which process concepts of legal onus are not relevant. Section 98 provides for the making of a claim for compensation by the claimant. Section 99 then resolves the question of the liability to pay it by setting out the circumstances in which a 'right to compensation' and also the 'liability of a planning authority or responsible authority to pay compensation arises'. Through s 105 providing that s 37 of the Land Acquisition and Compensation Act applies to claims for compensation, the scheme provides a timeframe in which the relevant authority 'must' respond, by admitting the claim, making an alternative offer of compensation, or rejecting the claim. Section 37 acknowledges that some matters in the claim may require negotiation in order to reach a resolution.[147] It is only if that process fails to resolve the claim that it becomes a disputed claim which may be the subject of an application to the Tribunal, or referred to this Court. Administrative determinations of the kind conducted by a tribunal frequently do not involve any onus of proof.[148] That would be the case if a disputed compensation claim was referred to the Tribunal. It is consistent that no legal onus of proof arises in this Court, beyond the preliminary issue of whether the claim is in fact one for which compensation lies within the meaning of s 98 of the Planning and Environment Act.

95 The first of the two major issues between the parties was the question of whether it was appropriate to assume, in valuing the Subject Land if unaffected by the PAO5 reservation, that the land was ready to be granted a permit for residential development.

96 In the context of pt 5 of the Planning and Environment Act, it is established that the assessment of financial loss caused by a reservation for a public purpose is to be conducted by a comparison of the value of the land before (or unaffected by) the reservation and after (or affected by) the reservation. The Court of Appeal in Jomaring explained the usual approach to determining the quantum of the loss to be compensated:

The usual method of determining reservation compensation is to assess the 'before' value of the affected land at the relevant date in the absence of the reservation and the 'after value' of the same land at the same date having regard to the effect of the reservation. The after value is often described as the carcass value, or the residual value. The amount of reservation compensation is determined by deducting the after value from the before value.[149]

97 The comparison of the 'before' / 'unaffected' and the 'after' / 'affected' values to inform the assessment of financial loss under pt 5 of the Planning and Environment Act has been applied in the authorities on numerous occasions.[150]

98 There was no material dispute between the parties about the 'after' or 'affected' assessment in this case. It was common ground between the parties and their experts that the highest and best use of the Subject Land in the 'after' scenario is for residential development, and that the land was ready for the issue of a permit for that purpose.[151] The disputed issue was the approach to valuation in the 'before' or 'unaffected' scenario.

99 Mr Barrett's valuation expert, Andrew Kinnaird, was instructed to assume that the Before Plan for the residential development of the Subject Land was an acceptable development, and proceeded in effect on the basis that a permit would be granted for that purpose.[152] Mr Kinnaird referred to the evidence of the cultural heritage experts that CHMP 13322 did not cover the whole of the Subject Land, but proceeded on the basis of the assumption that he was instructed to make that in the 'before' scenario, a CHMP would have been approved over the entirety of the Subject Land at the Relevant Date.[153]

100 The Authority contended that it was not open to Mr Barrett's valuers to proceed on the basis of an assumption that the Subject Land was 'permit ready', because there was no CHMP obtained for the whole of the land and this is a legal prerequisite for the grant of a permit. The Authority's contention was based on four arguments.

(a) It is wrong, as a matter of law, to assume that the Subject Land was 'development ready', and would give Mr Barrett a windfall.[154]

(b) The 'development ready' assumption was premised on the Point Gourde principle which does not apply to assessment of compensation under the Planning and Environment Act.[155]

(c) The 'development ready' assumption is not open as a matter of fact on the evidence.[156]

(d) The part of the claimed loss 'which represents the difference between the assessment of financial loss based on the Development Ready Assumption and the assessment of financial loss not making the assumption was caused by the Claimant - specifically, his independent choice in not obtaining an approved CHMP or CHMPs for Both Properties broke the chain of causation such that he caused the additional loss.'[157]

101 As to the second of these arguments, the Authority accepted in closing submissions that Mr Barrett had not relied implicitly or otherwise on that principle. It is unnecessary to consider further the status of the Pointe Gourde principle in the context of claims under pt 5 of the Planning and Environment Act.

102 The remaining arguments are addressed in more detail below. It is appropriate first to describe the expert evidence relevant to this issue.

103 Mr Barrett's first cultural heritage expert, Emma McNeil, was the cultural heritage expert who had undertaken the salvage of registered components of one of the Aboriginal Places on the Subject Land.[158] Mr Barrett also tendered an expert report of Andrea Murphy who agreed with Ms McNeil's opinions.[159]

104 The Authority relied on the expert report of Dr Alexander Parmington[160] and statements of Lucy Welsh, who agreed with Dr Parmington's opinions.[161] The Authority also relied on the witness statement of Dr Jesse Martin, the General Manager of the Wadawurrung Traditional Owners Aboriginal Corporation. Two joint cultural heritage expert reports were tendered, one involving Ms McNeil and Dr Parmington, and the other involving Ms Murphy, Dr Martin and Ms Welsh.

105 The cultural heritage experts' evidence addressed the effect of legal requirements relating to a CHMP over the area of a proposed activity on land, and also the more specific question of the likely recommendations which would have been made in a CHMP with respect to the Subject Land (and the Unassessed Segments in particular) if not for the PAO5.

The effect of CHMP 13322 not extending to the entirety of the Subject Land

106 Mr Barrett's original cultural heritage witness, Ms McNeil, was asked to respond to these matters:

8.1.1 the extent of the Land that would have been subject to cultural heritage protection, absent its reservation under the PAO5 for public purposes; and

8.1.2 taking into account your response to paragraph 8.1.1:

(a) explain the likely recommendations that would be included in a complex CHMP absent the PAO5 (and assuming all of the Land was within the Quandong PSP);

(b) whether those recommendations would differ from the recommendations that informed CHMP 13322; and

(c) if the recommendations differ, explain the extent to which development works would be permitted within any area designated as having Aboriginal cultural heritage sensitivity.[162]

107 Ms McNeil concluded, with respect to the Aboriginal Heritage Act that her review of the areas of Aboriginal cultural heritage sensitivity and CHMP13322 provided no reason to consider that the area reserved for the OMR could not be developed, save for an area in the north around the draining line. [163]

108 Ms Murphy, in addition to expressing her agreement with Ms McNeil's conclusions,[164] expressed the opinion that it was unlikely that a claimant would obtain an approved CHMP for a 'hypothetical development plan'.[165]

109 For the Authority, Dr Martin expressed the opinion that the CHMP process does not entail consideration of the likelihood of a proposed development to go ahead, so that the concept that some of the development proposed in the plan is 'hypothetical' would not preclude assessment.[166]

110 Dr Parmington was asked questions relating to the hypothetical scenario absent the PAO5 reservation (described in his instructions as 'the Scheme'), including:

In the Hypothetical Scenario, (i.e. in the absence of the Scheme, but having regard to PAO7) what would have been the likely cultural heritage considerations influencing planning controls for the Subject Land at the Relevant Date?

How would your conclusions as to the extent, if any, the Subject Land which would have been designated for cultural heritage considerations influencing planning controls in the Hypothetical Scenario affect the content of a Cultural Heritage Management Plan applicable to the Subject Land absent the Scheme at the Relevant Date?

Are there any aspects of the proposed development in the Claimant's Before Plan for the Subject Land ... which you consider to be contrary to or inconsistent with the cultural heritage considerations influencing planning controls which likely would have applied in the Hypothetical Scenario?[167]

111 The opinions that Dr Parmington expressed in response to each of the questions focussed on the effect of the statutory scheme.[168] In response to question 2, he stated that the 'primary cultural heritage consideration' was 'the fact that there was no approved ...CHMP for the entirety of the Subject Land - i.e. CHMP 13322 does not include its northern part.'[169] He had earlier explained his opinion as to the significance of this fact:

Under Part 4, Division 3, Section 52 of the Aboriginal Heritage Act 2006, decision makers, that is a person or body empowered under an Act or regulations to grant statutory authorisation, must not grant a statutory authorisation for the activity unless a CHMP is approved under Part 4 of the Act in respect of the activity. As such, the absence of an approved CHMP for the entirety of the Subject Land would preclude the approval of a planning permit under the Planning and Environment Act 1987.

The Claimant could reapply for planning approval with an approved CHMP that encompasses the entirety of the Subject Land. This approval, however, would likely require a heritage assessment of the Subject Land under the Aboriginal Heritage Act 2006, the outcomes, and associated costs of which are uncertain.[170]

112 It appears from the second paragraph of this part of Dr Parmington's report that he believed that a new CHMP encompassing the 'entirety of the Subject Land' would have been required. He was not asked to address whether a CHMP could have been prepared for that part of the land not covered by CHMP 13322. Nor was he asked what the effect of the existence of CHMP 13322 would be on the process for the remaining Unassessed Segments. There may well be a question as to whether he would be qualified to express a view on that issue, given that it is ultimately a question as to what the statutory scheme permits and the operation of the regulatory framework. That question as to admissibility of the opinions arises with respect to the conclusions actually reached by Dr Parmington as to the effect of the absence of a CHMP on an application for a planning permit, given that it involves an opinion as to the effect of the Aboriginal Heritage Act 2006. However, no objection was made to his evidence.[171]

Expert evidence on likely recommendations in a CHMP absent the PAO5

113 Ms McNeil expressed the view that there were no Aboriginal cultural heritage features, deposits or landscapes that would prevent the development of the land which was the subject of the OMR and not covered by CHMP 13322.[172]

During the standard and complex assessment for CHMP 13322 ... no features or deposits were uncovered that would identify the area of the OMR as having significant Aboriginal cultural heritage values that would prevent development should the OMR be removed. CHMP 13322 allows for the provision of the drainage line in the north of the activity area to be remodelled in accordance with Melbourne Water's drainage planning scheme, allowing for a 50-meter buffer either side of the drainage line to be left for passive open space. Apart from the 50-meter buffer either side of the drainage line there are no Aboriginal cultural heritage features, deposits or landscapes that would prevent the development of the OMR.

If the OMR is to be developed a new CHMP would have to be undertaken to provide statutory protection for this activity. This CHMP would be [a] mandatory requirement, because an OMR is considered a high impact activity pursuant to Regulation 47(1)(f), and is located in an area of statutory cultural heritage sensitivity pursuant to Regulation 26(2) of the Aboriginal Heritage Regulations 2018. CHMP 13322 ... does not provide statutory protection for the development of the OMR.[173]

115 In her Second Report, Ms McNeil expressed the opinion that if the Subject Land set aside for the OMR had been identified as land developable for residential development during the CHMP, it was unlikely that further recommendations would have been made outside of those already made in the approved CHMP.[174] She explained that opinion as being based on the assessments completed for CMHP 13322, as follows:

Section 3 (Activity Description) of the approved CHMP (13322) identified Lot 6 (the [Subject] Land) as within the developable extent of the activity area. Furthermore, the CHMP 'assumes that the entire activity area will be subject to development ([CHMP 13322], 9); As a result of this assumption, the entire activity area was subject to both a standard and complex assessment ... The standard identified four surface Aboriginal stone artefacts within Lot 6 [the Subject Land]. The complex assessment did not identify any subsurface Aboriginal cultural heritage within Lot 6 ...

There are no management recommendations outlined in the approved CHMP that relate to areas where Aboriginal cultural heritage was not identified. For this reason, it is unlikely further recommendations would have been made, outside of those included within the approved CHMP, for the development of the area set aside for the OMR. The contingencies presented within CHMP 13322 are relevant to the land outside of the registered Aboriginal places.[175]

116 Ms Murphy agreed with this opinion in her expert report.[176]

117 Dr Parmington's opinion was primarily that in the 'before' scenario, no development could take place over the northern part of the Subject Land as a further CHMP over the whole of the Subject Land would have been required by the Aboriginal Heritage Act.[177] However, he also expressed the opinion that in the absence of PAO5, the recommendations in CHMP 13322 which imposed 'minimal management requirements on the subject land' would apply, with the recommendation relating to the planting of Murnong beds potentially extending into the northern part of the Subject Land:

The only other cultural heritage considerations influencing planning controls for the Subject Land that may have differed in the absence of the Scheme is the footprint of the area for planting Murnong beds outlined in the Quandong PSP ... The footprint of these planting beds is delimited to the northwest by the land reserved for PAO5, and so this area may have also applied to the parts of the watercourse in the northern part of the Subject Land, had that area not been reserved for PAO5. In addition, it is possible that Quandong PSP would have extended the footing of the Aboriginal cultural heritage interpretative trail further into the Subject Land in the absence of the Scheme. The inclusion of both the interpretative trail and the Murnong planting beds responds to recommendation 6 in CHMP 13322...

...

The Before Plan also does not set aside land for the part of the Murnong planting bed within the Subject Land designated in the Quandong PSP ... While this area is not a substantial size, [its] precise dimensions are unknown.[178]

118 In the Joint Cultural Heritage Expert Statement, Ms McNeil and Dr Parmington were asked what recommendations were likely to be included in a complex CHMP absent the PAO5, and assuming that all of the land was within the Quandong PSP. Ms McNeil noted that her original opinion was that:

There are no management recommendations outlined in the approved CHMP that relate to areas where Aboriginal cultural heritage was not identified. For this reason, it is unlikely further recommendations would have been made, outside of those included within the approved CHMP, for the development of the area set aside for the OMR. The contingencies presented within CHMP 13322 are relevant to the land outside of the registered Aboriginal places.[179]

119 Dr Parmington reiterated his opinion that the primary outcome absent the PAO5 reservation was that the existing CHMP did not cover the entirety of the Subject Land.[180] He also acknowledged that if not for PAO5 for the OMR, a CHMP may have recommended planting of Murnong beds in the northern part of the Subject Land, and the footprint for the Aboriginal cultural heritage interpretative trail may have extended further into the Subject Land.[181]

120 Dr Parmington also accepted that 'it is reasonable to extrapolate that the results [of] a heritage assessment of the remaining (i.e. unassessed) portion of the Subject Land would be consistent with the general findings of CHMP 13322, as they relate to the presence and absence of cultural heritage.'[182]

121 In the Joint Cultural Heritage Expert Statement, Ms McNeil expressed a revised opinion following the conference that, having regard to Dr Parmington's opinion that CHMP 13322 does not cover the entirety of the Subject Land, recommendations for the unassessed portions cannot be determined until a CHMP covering those areas was determined.[183] However, she did continue to express the opinion that if the land set aside for the OMR has been identified as land developable for residential development during the CHMP it was unlikely that any further recommendations would have been made outside those included within the approved CHMP.[184]

122 The Authority instructed Mr Molloy as follows (emphasis added):

A hypothetical purchaser would have been advised that a planning permit would not have issued for the hypothetical development shown in the Before Plan unless and until (at least) the following was obtained and, where applicable, the Before Plan was amended:

Cultural heritage:

(i) A Cultural Heritage Management Plan (CHMP) for the whole of 1005 Ballan Road approved under Part 4 of the Aboriginal Heritage Act 2006 (Vic) was obtained.

(ii) The Before Plan was amended to set land aside (at least) for the Murnong planting bed shown in Plan 5 of the Quandong PSP (document 22 in the Schedule).

(iii) The development proposed in the Before Plan was consistent with any management recommendations in any approved CHMP for 1005 Ballan Road (as to which, see assumption 5 below).

(iv) It is possible that the Murnong planting beds and interpretive trail shown in PSP Plan 5 would have extended into 1005 Ballan Road following the watercourse up to Ballan Road. It is not possible to advise the extent of the planting bed and interpretive trail as that would require heritage assessment with the Registered Aboriginal Party.[185]

123 Mr Molloy described the assumption and his response to it in his valuation exercise as follows (emphasis added):

CHMP: A planning permit for the "Before 1" Plan would not have issued until a CHMP was obtained for the "unaffected" Subject Land (assumption 1.b(i)). Further, I am instructed the CHMP preparation process would involve consultation with the relevant Registered Aboriginal Party and assessment by a heritage advisor, which would take somewhere between 13 to 19 months to complete, and it would have uncertain management and cost outcomes (assumption 5.(a), (b) and (c)).

I have adopted timing of 16 months to prepare and adopt the CHMP, being the mid-point of the instructed range and I have assumed a permit would issue shortly thereafter. In terms of costs, Mr Shinkfield's "Before 1" costs allow $25,000 for the CHMP preparation process, which I have considered, noting that allowance excludes remediation (i.e., CHMP recommendations). Accordingly, the CHMP outcome risk still remains.[186]

...

Land Value Rates

As outlined earlier, I have had primary regard to the sale of 955 Ballan Road, Manor Lakes in establishing the market value of the Subject Land. On my analysis, that property sold for circa $1.54m per hectare of GDA in a cash transaction. It was also virtually permit approved at the time of sale. I am also comfortable that that sale is not affected by severance impacts associated with its OMR adjacency, except for the reservation of a minor area of land at its western extent.

However, my instructions require me to assume that a permit was not issued at the Relevant Date, and that there are several timing, cost and risk matters requiring satisfaction before a permit would issue. Of primary concern is the completion of a CHMP, which I have assumed is some 16 months away, and comes with cost and risk implications.

Accordingly, I have adopted $1.54 million as the "permit approved" land value per hectare of Gross Developable Area (GDA) for the Subject Land, which I have then deferred for 16 months at a suitable discount rate to reflect the time, cost and risk issues associated with the deferral. To that end, I have adopted a discount rate of 8% per annum, which is in line with the discount rate I adopt in my cash analysis of the sales, which I consider incorporates the same time, cost and risk elements.

Based on the foregoing, I calculate the deferred land value at $1.385 million per hectare, which I apply to the GDA area of the Subject Land.[187]

124 Mr Brown was instructed to conduct a 'peer review' of the Mr Kinnaird and Mr Molloy's valuation evidence. As relevant to the issue of development readiness of the Subject Land and the CHMP, Mr Brown was instructed to assume that, relevantly:

(b) a hypothetical purchaser would have been advised that a planning permit would not have been issued for the hypothetical development of the Ballan Road Property shown in the Revised Before Plan unless and until (at least) the following was obtained and, where applicable, the Revised Before Plan amended:

(i) a Cultural Heritage Management Plan (CHMP) for the whole of the Ballan Road Property approved under Part 4 of the Aboriginal Heritage Act 2006 (Vic) was obtained;

(ii) the Revised Before Plan was amended to set land aside (at least) for the Murnong planting bed shown in Plan 5 of the Quandong PSP.

Note that the evidence establishes that it is possible that the Murnong planting beds and interpretive trail shown in PSP Plan 5 would have extended into the Ballan Road Property following the watercourse up to Ballan Road. It is not possible to advise the extent of the planting bed and interpretive trail as that would require heritage assessment with the Registered Aboriginal Party.

...

(c) a planning permit for the hypothetical development of Both Properties was not issued at the Relevant Date (1 June 2021);

(d) a hypothetical purchaser would have been advised that a planning permit would not have issued for any hypothetical development of Both Properties unless (at least):

(i) the matters noted in sub-paragraph (b) above regarding the Ballan Road Property were attended to;

(ii) an approved CHMP under Part 4 of the Aboriginal Heritage Act 2006 (Vic) for the Argoona Road property was obtained;

e) a hypothetical purchaser of either the Ballan Road Property or Both Properties would have been advised that:

i) the proposed development of either would need to be consistent with any management recommendations/conditions in any approved CHMP [or] CHMP's [sic];

ii) the process for the preparation of any CHMP, whether for the whole of the Ballan Road Property or for Both Properties, would have involved consultation with the relevant Registered Aboriginal Party and assessment by a heritage advisor;

iii) the outcomes, including any management recommendations applicable to the development of the Ballan Road Property and/or Both Properties, and associated costs of the process are uncertain.[188]

125 Mr Brown observed that it was his understanding that:

- It is contended by the Authority that there is no practical or legal impediment as to why the Claimant could not have obtained a CHMP for the 'hypothetical' or unaffected development. A CHMP for the entirety of the Ballan Road Property had not been prepared at the Relevant Date and therefore it follows that a planning permit could also not have been issued at the Relevant Date.

- The likely timeframe for the completion of a complex assessment CHMP with the Registered Aboriginal Party (RAP) would likely be in the order of 12-18 months as agreed between Dr Parmington on behalf of the Authority and Ms McNeil on behalf of the Claimant.[189]

126 Mr Brown emphasised the importance to the conclusions drawn by Mr Molloy and Mr Kinnaird of the instructions given to them on the CHMP:

Mr Molloy has adopted the position that a CHMP is required, which is in accordance with his instructions. He has adopted a deferral period of 16 months, being the mid point of the agreed position of Dr Parmington and Ms McNeil.

I have also been instructed to assume that a CHMP is still required.

Mr Kinnaird in accordance with his instructions assumed in the unaffected (before) [scenario] that a CHMP would have been approved over the entirety of the Ballan Road Property as at the Relevant Date.

Accordingly, the variations between the valuers and myself is the instructed assumptions.[190]

127 Mr Brown's ultimate conclusion with respect to the impact of the CHMP issue again emphasised the assumptions that he was instructed to make:

I am to assume that a planning permit had not been issued at the Relevant Date and cannot be issued until such time that an approved Cultural Heritage Management Plan on the entirety of the Ballan Road Property has been obtained. I understand that this process could take between 12 to 18 months.

Accordingly, similar to Mr Molloy, I agree that it is an appropriate approach to discount the 'permit ready' rate to reflect the timing delay and risk associated with obtaining the CHMP and Planning Permit. Noting a typical cash settlement period of 3-6 months for most transactions, whether permit approved or otherwise, it is not considered appropriate to defer the 'permit ready' rate for the entirety of the anticipated process length as this process could be theoretically commenced concurrent with a hypothetical sale having been entered into and running in conjunction with a Planning Permit application. I have therefore adopted a slightly more conservative deferral period of 12 months at a discount rate of 8%. The discount rate is the valuer's personal opinion, reflecting issues of financial matters as at the Relevant Date including perceived risk, government bond rates, consumer price index (CPI), cash rate, (including expected movements) and returns from alternate forms of investment.[191]

128 In their Joint Statement of Valuation Experts, Mr Kinnaird, Mr Molloy and Mr Brown noted that a significant proportion of the difference in assessed financial loss related to the deferral of the 'Permit Ready' rate, and that this was an 'instructed assumption for Brown and Molloy' and a legal matter which the valuers were not qualified to resolve. They observed that:

The valuers agree that Kinnaird's alternative financial loss assessment detailed above demonstrates/reinforces the notion that the planning permit deferral issue is the key difference between them in terms of financial loss. In this regard, Kinnaird notes that if Molloy were to remove his instructed planning permit deferral, his assessment of Financial Loss for the Ballan Road property would be higher than Kinnaird's.[192]

129 Mr Brown confirmed in cross examination that his opinion was 'based on the instructions ... that there was no CHMP at the relevant date' and the 'advice' that it would take '12 to potentially 18 months to obtain a CHMP', and explained:

in the before situation, the documentation to achieve a planning permit was not with the planning authority, and there would be a 12 to 18 month period to achieve a CHMP, and there was potentially a further delay to actually commence obtaining a CHMP.[193]

130 It is apparent that the issue of whether or not the Subject Land was ready for a permit to be issued in the 'before' scenario was not a matter determined by reference to the differences in each valuer's expert opinion on how the land was to be regarded for the purposes of the 'unaffected' scenario, but derived from the assumptions that each were instructed to make. The Authority submitted that 'it is not the Authority who asks the Court to make any assumption underpinning the assessment of the Claimant's financial loss'.[194] This is not correct. As is apparent from the instructions set out above, the Authority instructed its valuers with multiple assumptions, including assumptions that no planning permit would issue until a CHMP was obtained, which would take 12 to 18 months.[195] It is, therefore, necessary not only to consider the appropriateness of the assumptions made by Mr Barrett's experts, but also those the Authority's experts were instructed to make.

Submissions on the 'development ready' assumption and CHMP issue

131 Mr Barrett submits that the only question is whether his claimed loss is the 'natural, direct and reasonable' consequence of PAO5, and s 98 should not be qualified by restrictions not present in the statute's terms.[196] He contends that the context of s 98, and the purpose of pt 5 of Planning and Environment Act, provide the following straightforward guidance:[197]

(a) Section 104 provides a 'cap' which limits the scope of the compensation to be paid.[198] He referred to the authorities which recognise, taking into account s 104, that the loss is to be assessed comparing the value of the Subject Land 'before' or 'unaffected' by the reservation to the 'after' or 'affected' value, as at the Relevant Date.[199]

(b) One aspect of the purpose of pt 5 is identified in s 4(2)(l) of the Planning and Environment Act, which is 'to provide for compensation when land is set aside for public purposes and in other circumstances.' The relevance of that objective of the planning framework has been recognised as relevant to the construction of pt 5.[200]

132 Mr Barrett submits that the various authorities relied on by the Authority which arise under the Land Acquisition and Compensation Act are not a sound guide to the application of pt 5 of the Planning and Environment Act, and the authorities on pt 5[201] simply reinforce the importance of the straightforward language of s 98 read in context.[202] He submitted that it is conventional and consistent with the provisions of pt 5 requiring consideration of the financial loss caused to him as a 'natural, direct and reasonable consequence' of the imposition of PAO5, 'to make factual findings as to the zoning and other planning controls that should be assumed to apply to relevant land in the before scenario'.[203]

133 Here, absent PAO5, the Subject Land would all have been within the Urban Growth Boundary. The CHMP would, in preparation for proposed residential development activity, to the extent of that Urban Growth Boundary, have extended to the whole of the Subject Land. He contended:

... in the hypothetical before, it should be inferred that the proponent of CHMP 13322 would have followed the boundaries of the UGB to delineate the activity area and that CHMP 13322 would have covered all of the [Subject Land]. There is no logical or commercially sound reason for the activity area to randomly break across the [Subject Land] (and not follow the UGB) in the "before", particularly given the PAO5 land would have been suitable for residential development in the "before". [204]

134 The Authority contends that this approach to the 'before' scenario is incorrect, on the basis of the discrete arguments referred to at [100] above, which need to be addressed in turn.

The Authority's first argument - it is wrong to make the 'development ready' assumption as a matter of law

135 The Authority first relies on the principle of valuation and compensation law that land is to be assessed having regard to its current state and advantages and potentialities, but that potentialities must not be treated as if they had been realised.[205] In Turner v Minister for Public Instruction,[206] Dixon CJ observed that market value is:

necessarily affected by all the advantages which the land possessed and these might be a matter of future or even contingent enjoyment. Future advantages or potentialities must not be excluded. At the same time the value of these things must be assessed according to the condition of the land as it stood at the time of resumption: 'it is the present value alone of such advantages that falls to be determined': Cedars Rapids Manufacturing & Power Co. v Lacoste [(1914) AC 569, 576].[207]

136 The Authority also refers to authority demonstrating that it is not open to assume 'events' that did not in fact occur or deem improvements which were not in fact made to the land.[208] It contends, having regard to these principles of compensation law, that it is not open to assume that a permit would have been granted for the residential development for the whole of the Subject Land. It submits:

While there was the potential to obtain an approved CHMP for Both Properties at the Relevant Date ... that was a potential only. The assessment of financial loss must not notionally bring that potential into actual being and assess compensation on that basis. To do so would provide the Claimant with a windfall, rather than compensation or recompense for his actual financial loss...[209]

137 The Authority accepts that in conceiving the hypothetical 'before' scenario, it is open to make some assumptions about the situation which would have prevailed had the reservation not been made. However, it contends that this is limited to assumptions as to planning controls and zoning decisions.[210] It was said that it was not open to make assumptions about 'facts (events)'.[211] It relies for that proposition on the terms of s 104A of the Planning and Environment Act. That section provides that in assessing compensation, regard may be had to 'actual' zoning. The Authority contends that this should be understood to mean that 'the only matter that might be assumed in the counterfactual is different zoning, where the zoning of land was related to the reservation. It is not open to assume any other matter or thing.'[212]

138 The Authority developed this submission to contend that 'planning controls' as well as zoning assumptions are open in the counterfactual enquiry as to the 'before' scenario. [213] The Authority contended that this is established by authorities in the context of both the Planning and Environment Act and the Land Acquisition and Compensation Act.[214] In closing, the Authority summarised its position as follows (emphasis in original):

...the Authority's position [is] that the counterfactual enquiry is confined to reimagining the highest and best use development potential of land unaffected by reservation, by reference (only) to policy and like documents which regulate and otherwise govern the permissible use and development of land.

....

In the Authority's submission, a survey of cases which have considered the counterfactual task required in assessing loss under Part 5 of the [Planning and Environment Act] supports its position that the counterfactual enquiry required under s 98(1)(a) is confined to a consideration of the impact of a reservation upon the highest and best use of land having regard to its planning and like controls. Further, that the only matters that might be disregarded in the before are matters which are imposed upon land and which affect its highest and best use development potential. It follows that the only matters that might be assumed in the counterfactual are of this nature. The Development Ready Assumption is not therefore open as a matter of law.[215]

139 Mr Barrett submits that the Authority's approach does not identify the appropriate counterfactual situation in the 'before' scenario, in the absence of PAO5:

The Authority's approach in seeking to rely on the incomplete CHMP [13322] is misconceived. The correct approach to the before scenario is to assume the absence of the OMR (and related zoning and planning controls, including PAO5) - and not to assume the presence of the OMR (and PAO5)...

... The Authority's instructed assumption to its experts raises the question of the correct assumption as to the extent of the area of CHMP [13322] in the before scenario. That is, is it legitimate to assume the boundaries of CHMP [13322] would have remained the same in the before scenario as in the after scenario? The Court should find that it is not.

...

The text of ss 98, 99 and 104 of the [Planning and Environment Act], read together, invite the Court to compare the before (or unaffected) and after (or unaffected) value of the [Subject Land] as at the Relevant Date to isolate the impact of the OMR project (which informed the underlying zoning, planning controls and development prospects of land in the general area), PAO5 and the financial loss caused as a consequence. That comparison exercise serves to identify within the meaning of s 98(1)(a), "the financial loss suffered as the natural, direct and reasonable consequence of ... the land being reserved".

The comparative exercise requires the Court to make findings of fact as to the assumed highest and best use of the [Subject Land] absent PAO5, in the before scenario.[216]

140 Mr Barrett contends that the appropriate approach is first to assume the absence of the reservation, and then consider the relevant attributes of the land without the reservation. He submits that the authorities do not establish that in that process the attributes of land or assumptions as to those attributes are limited to the zoning of the land.[217]

141 Mr Barrett notes that the activity area for CHMP 13322 extended to the centreline of the OMR, which the Urban Growth Boundary followed in the 'affected' or 'after' scenario (reflecting the maximum area intended for future residential growth).[218] He then refers to the joint evidence of the planning experts that in the hypothetical 'before' scenario, the Subject Land would all have been included in the Urban Growth Boundary, as that boundary would (absent the PAO5) have followed the title boundaries of the Subject Land.[219]

142 It is submitted on the basis of that evidence it should be inferred that in the 'unaffected' scenario, absent PAO5 for the OMR, the sponsor of CHMP 13322 would in identifying the activity area have (as it did in reality) delineated it by reference to the Urban Growth Boundary. That boundary would have been, on the basis of the planning experts' agreement, the title boundary of the Subject Land. The activity area in CHMP 13322 would, therefore, in the 'before' scenario, have covered the whole of the Subject Land. There would have been no rational reason in the 'unaffected' scenario to confine the activity area by a boundary other than the title boundary of the Subject Land.

143 It is said to be 'both a modest and reasonable inference, having regard to the planning documents and expert evidence, that CHMP 13322 should be assumed to cover the whole of the [Subject Land] in the hypothetical before scenario'.[220]

144 Mr Barrett submits that the decision in Kajag is 'relevantly on all fours with' the present case and provides important guidance on his claim as to the approach to the counterfactual exercise entailed in the 'before' or 'unaffected by the reservation' scenario.[221] He submits that the case demonstrates that the assumptions which may be made are not limited to zoning but may extend, as they did there, to matters such as how a drainage scheme would have been designed in the absence of a reservation.[222]

Consideration - what counterfactual assumptions are legally open in the assessment of loss?

145 As observed above,[223] it is established that the assessment of financial loss caused by a reservation under pt 5 of the Planning and Environment Act, is to be conducted by a comparison of the value of the land before the reservation and after the reservation. This was explained by Gobbo J in Studley Developments:[224]

It has been the settled practice in claims for loss and damage suffered as a result of the operation of a planning scheme to approach the assessment of loss by a "before" and "after" exercise. This involves valuing the land as if it was not affected by the relevant planning restriction in the "before" exercise and then considering its value as affected by the restriction in the "after" exercise. Where the land is reserved for a main road and would but for this reservation have been ripe for a residential subdivisional development, its value would have been almost nil in the after exercise and the assessment would result in a loss figure almost, if not wholly, equivalent to the full value of the land upon a fee simple basis.

146 Assessment of the value of land for the purposes of pt 5 engages the question of the market value of the land and its highest and best use.[225] In Turner,[226] relied on by the Authority,[227] Dixon CJ cautioned that, in assessing market value the Court must take into potential advantages or potential that land may have, but must not 'notionally bring what is only potential into actual being and value it as if it existed'.[228]

147 Justices Williams and Kitto agreed with this observation, with both of their Honours also citing the Privy Council's observation in Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam that 'it is the possibilities of the land and not its realized possibilities that must be taken into consideration'.[229]

148 Taking this caution into account, the question remains as to what assumptions are appropriate in order to properly take into account the potentialities of the land, without treating them as if the potentialities had been brought into being. The Authority relied on several considerations to support its submission that assumptions involved in the counterfactual 'before' assessment are confined to zoning and 'planning controls'.

149 The first submission was that because s 104A of the Planning and Environment Act addresses only the treatment of zoning in determining compensation, this was the only matter which could be disregarded in a counterfactual.[230] This submission was not developed. It did not in any case advance the Authority's position that 'planning controls' generally (and not zoning alone) may be the subject of assumptions. I do not, in any case, see anything in the terms of s 104A, which states that regard 'may' be had to the actual zoning of the land at the date when liability to pay compensation first arises, nor in its context in pt 5, which indicates that s 104A was intended to confine the assumptions which may appropriately be made in identifying the quantum of financial loss for the purposes of pt 5.

150 It was also submitted that s 5A(3) of the Valuation of Land Act limited the matters which could be considered in the counterfactual.[231] Again, this submission was not clearly developed. Having regard to the broad guidance provided by s 5A(3), which refers non-exhaustively to matters which are to be taken into account, I also do not regard it as placing any restriction on the types of matters which may have to be assumed in the counterfactual exercise involved in the valuation of land before and after a reservation. Consistent with the general valuation principles in the authorities, there is an emphasis on consideration of the highest and best use to which the land might reasonably be expected to be put and any potential use, as well as the impact of any statutory, regulatory or planning scheme.[232] Section 5A(3) does not provide support for a contention that in re-constructing the situation of the land in the 'before' scenario, assumptions may only be made only as to imposed planning controls.

151 The Authority otherwise relied on an interpretation of the authorities in which the assumptions that had been made in the valuation process related to zoning or planning controls. It contended that these authorities demonstrated a principle confining the appropriate counterfactual assumptions in a 'before' scenario to imposed planning controls.[233]

152 The Authority primarily relied on Equity Trustees, which involved a claim under s 98 of the Planning and Environment Act in which the issue was the appropriate zoning of the land in the counterfactual.[234] The claimant contended that the highest and best use in the 'before' valuation should be determined assuming that a permit had been obtained to subdivide the land while it was zoned 'Rural', notwithstanding that prior to the reservation, the zoning had changed to 'Special Conservation' which did not allow the subdivision. The effect of the argument was not only to disregard the public purpose reservation or its effects, but also the zoning which was in place prior to it. Justice Gobbo held that it was 'not open to the claimant, or for that matter the authority, to reach back in time to select an attribute albeit expressed as its then highest and best use, and then seek to apply this at the relevant date regardless of the highest and best use at that date.'[235]

153 His Honour did not state as a general proposition that counterfactual assumptions for the 'before' scenario were limited to planning controls, and I do not construe his Honour's judgment as having established such a principle. The primary issue was the appropriate date for the assumptions and measurement of highest and best use, rather than an analysis of the nature of the assumptions which may need to be made for the counterfactual analysis in the 'before' scenario.

154 The other cases relied on by the Authority did relate to zoning, but did not contain any statement of principle that assumptions in the 'before' scenario are limited to zoning and planning controls.[236] I did not discern from these authorities any clear basis for confining the types of counterfactual assumptions informing the 'before' or 'unaffected by the reservation' assessment to 'planning controls' and zoning, to the exclusion of other elements of the planning process.

155 The case which provides the most direct guidance on this issue is Kajag, because it was a case under pt 5 in which the 'before' assessment was not limited to a zoning related assumption. The Authority characterised Kajag as a case which demonstrated that the relevant counterfactual assumptions for the 'before' exercise are limited to 'planning controls'.[237] Mr Barrett contended, to the contrary, that Kajag demonstrated that there was no such limitation.[238] It is, therefore, necessary to consider Kajag in some detail.

156 Kajag involved a claim for compensation under ss 98 and 106 of the Planning and Environment Act following a claimed loss on sale, arising from the reservation of land north of Melbourne for the OMR. There was a dispute between the claimant and the Authority as to the attributes of the relevant land for the purposes of the 'before' scenario, absent the reservation for a public purpose. There were two main issues in dispute. The first was as to the zoning of the land. The second related to the areas of the subject land, if any, which would have been required for waterways and flood protection.[239]

157 Justice Richards noted at the outset of her Honour's judgment the nature of the findings that this dispute required her to make:

The central issue in dispute is the amount of financial loss suffered by Kajag as the natural, direct and reasonable consequence of its land being reserved for the OMR. That requires me to make findings of fact as to what would have been the highest and best use of the Property in the absence of the reservation, and what areas of the land would have been required for waterways and flood protection. [240]

158 Her Honour observed that the nature of this fact finding exercise 'involves peeling back the planning history and re-imagining the strategic planning decisions' that would have affected the property in the absence of the reservation in that case.[241]

159 The expert hydrologists in Kajag agreed that in order to develop the property it would be necessary to maintain the conveyance of the flows from two creeks either through or around the property. They also agreed that Melbourne Water would have developed a 'Drainage Services Scheme_'_ (or 'Development Services Scheme') (DSS) to provide guidance on the assets required to provide drainage, flood protection and water quality treatment for development in the area.[242] The hydrologists gave evidence about the likely decisions that Melbourne Water would have made as to the DSS based on matters including features of the land, and also public Melbourne Water documents. These documents related to development design principles, waterways strategy and design and included a DSS Principles document and other planning related documents.[243]

160 Justice Richards observed that the questions relating to waterways and flood protection required findings about the likely treatment of the two creeks if the property were to be developed for future urban use in the absence of the PAO7 for the OMR, and that those findings must be based on the expert opinion evidence. Her Honour observed that both hydrology experts had put forward a feasible drainage scheme for the property. However her Honour preferred the evidence of one expert, based in part on the way in which each expert had taken into account the policy, design and strategy documents to identify the approach that Melbourne Water was likely to have taken with respect to the drainage scheme absent the reservation.[244] In particular, and relevantly to the present case, her Honour observed with respect to the expert whose evidence was preferred that:

He reimagined how Melbourne Water would have designed the Kalkallo Creek DSS if the OMR reservation was not in place, by reference to principles and inputs that would likely have guided its decisions, in particular the DSS Principles and the two [background studies assessing the Kalkallo Creek catchment].[245]

161 Mr Barrett contends, having regard to the facts and determination in Kajag, that 'on the issue of onus, there is no relevant distinction between a zoning assumption, an assumed planning control, assumed strategic draining decisions by Melbourne Water, and the assumed extent of CHMP 13322'.[246]

162 The Authority ultimately accepted that Kajag did involve findings going beyond zoning or planning controls in the counterfactual, but contended that the assumption relating to waterways and flood protection related to 'a policy document that affected the use and development of the claimant's land'.[247] The Authority contended that this finding, and Richards J's reference to 'strategic planning decisions', means that assumptions should be confined to 'decisions of policy made by authorities about land use planning', referring only to 'policy and like documents which regulate or otherwise govern the permissible use and development of land'.[248] It was submitted that it is not open to make assumptions as to elements of the planning environment and land use planning contributed to by a claimant or third parties.[249]

163 I am not persuaded that anything in the Planning and Environment Act, or in the authorities, establishes a principle that the assumptions applicable in the 'before' exercise are confined to assumptions as to zoning or 'planning controls' imposed by authorities. Nothing in the cases to which I was directed went that far. Although many of the cases were related to counterfactual assumptions related to zoning, they did not establish as a matter of principle that assumptions were strictly so confined.

164 The decision in Kajag is an example of having to re-imagine how a decision as to an aspect of the planning process - there, the design of drainage schemes - would have been made absent the reservation. The experts in that case had regard to strategic planning and design documents and principles, as well as relevant aspects of the subject land in identifying the decision that would likely have been made as to the drainage scheme, and her Honour preferred the evidence of the expert who most closely took into account those matters. I do not read her Honour's reasons as suggesting that the strategic planning decisions and steps which can be taken into account are strictly limited to decisions or steps by 'authorities' as contended by the Authority.

165 In the present case, the assumption that CHMP 13322 would, absent the reservation, have extended to the boundaries of the Subject Land, was based on the evidence of planning experts as to the Urban Growth Boundary in the absence of the PAO5 reservation, and the evidence of the cultural heritage experts that any further recommendations as to the Unassessed Segments would have been minimal. The assumption also entails a logical inferences as to what the CHMP activity area would have been, based on that evidence, if unaffected by the reservation.

166 I see no difference in principle to the process in Kajag of expert evidence informing a conclusion as to Melbourne Water's likely decision as to the design of the DSS, to the situation in this case. That expert evidence informed an assumption relevant to the valuation of the property in the 'unaffected' scenario.[250] In the present case, there was evidence of the planning experts that the likely position of the Urban Growth Boundary in the 'before' or 'unaffected' scenario would have been at the title boundary of the Subject Land. In combination with the consideration that CHMP 13322 was for the proposed activity of residential development, that evidence is used to inform the assumption that in the 'unaffected' scenario, CHMP 13322 would have extended to the Urban Growth Boundary which would have been to the title boundary of the Subject Land. That assumption is then relevant to the valuation of that land in the 'unaffected' scenario.

167 The statutory language in pt 5 of the Planning and Environment Act and guidance in other authorities is consistent with this conclusion. Consideration of the situation 'if the land had not been affected' by the reservation (in the language of s 104(b)) contemplates regard being had to a range of matters including strategic planning decisions that would have affected the Subject Land in the absence of the reservation.[251] While these will principally be decisions in the hands of regulators or authorities with a role in land use planning, there is no rationale to limit the analysis strictly to such decisions, and it may be artificial to do so. Other elements of land use planning may have such an interaction with a reservation for a public purpose that it would be entirely artificial not to re-imagine what they would have been if unaffected by the reservation, in order properly to determine the situation of the land in the 'before' or 'unaffected' scenario.

168 I take into account the Authority's submission that the provisions of the Planning and Environment Act must be construed so as not to permit windfalls to claimants.[252] I accept that the Court must be cautious not to accept a counterfactual analysis based on self-serving assumptions by landowners which could result in a windfall, such as assumptions which would involve treating hypothetical work on the land as having actually been completed, or selectively going to a more favourable point in time in planning history rather than the relevant date. However, that objective of preventing windfall gains or overcompensation is achieved by the limitation in the terms of s 98. That is, only the loss suffered as the 'natural, direct and reasonable consequence of' the land being reserved for a public purpose is compensable. It is not appropriate in my view to instead approach the assessment process in a way that would rigidly limit the categories of counterfactual assumption which may be made by the Court in properly determining the factual parameters of the 'before' situation.

169 It is also necessary, in approaching the valuation evidence, to note that although the Authority's argument focussed on whether Mr Barrett's valuation expert made appropriate assumptions as to permit readiness, the Authority also instructed its own valuation experts to make assumptions. Those assumptions entailed, in effect, the proposition that there was no CHMP applicable to the Subject Land which was relevant to whether a permit would be granted.[253] Mr Brown, the Authority's expert valuation witness, confirmed that his opinion as to the 'before' scenario was 'based on the instructions ... that there was no CHMP at the relevant date'.[254] That instruction was given notwithstanding the fact that it was not disputed that both the unaffected and affected scenarios were to be approached on the basis that CHMP 13322 existed and applied to a large part of the Subject Land.[255] I do not think that the Authority's instructed assumption that a new CHMP for the whole of the Subject Land was required was the legally or factually correct premise from which to assess the 'before' scenario.

170 My conclusion, revisiting the strategic planning decisions and outcomes which would have occurred if the PAO5 reservation for the OMR had not affected the Subject Land, is that it is an appropriate assumption to make that CHMP 13322 would have applied to the entirety of the Subject Land. This is because:

(a) The evidence is that in the 'after' scenario, CHMP 13322 extended to the developable area of the Subject Land, taking into account the reservation for the OMR. This was reflected in an activity area extending to the midpoint of the OMR which was also the Urban Growth Boundary. There is no reason to assume in the 'unaffected' scenario that the CHMP would have been for an activity area any less than the developable land.

(b) The evidence is to the effect that absent the reservation, the whole of the Subject Land would have been included in the Urban Growth Boundary at the Relevant Date.[256] As the proposed activity for CHMP 13322 was residential development, in that unaffected scenario the activity area for the CHMP would have extended to the full extent of the Urban Growth Boundary. The evidence is that this would have followed the title boundary of the Subject Land.[257]

(c) Absent PAO5 for the OMR, there would have been no other basis for the boundary of the activity area for CHMP 13322, which was a plan for the proposed activity of residential development, to cease before the Urban Growth Boundary (the title boundary of the Subject Land) and be positioned in a location intersecting the Subject Land.

(d) A CHMP was in fact approved over most of the Subject Land in 2015, prior to the Relevant Date - CHMP 13322. There is no basis on which it is appropriate to assume that absent the OMR, CHMP 13322 would not have been applied for and approved. It was implicitly accepted by the experts that CHMP 13322 was in existence in the 'before' scenario.[258] CHMP 13322 informed the Quandong PSP which the planning experts agreed would have been in place, and formed the context for the planning and development of the Subject Land, absent the reservation.[259] The expert evidence of the cultural heritage consultants was consistent with approaching the 'unaffected' scenario on the basis that CHMP 13322 was part of the relevant context.[260] The Authority's assumption that there would be a new CHMP covering the same area as the approved CHMP 13322 notwithstanding that CHMP 13322 had already played a part in the planning of the area is a reconstruction of the 'before' scenario that is not consistent with the evidence.

171 In these circumstances, I accept that it is an appropriate assumption to make in the 'before' scenario that, absent the PAO5 reservation, CHMP 13322 would have extended to the whole of the Subject Land. It is the assumption most consistent with identifying the financial loss suffered as the 'natural, direct and reasonable consequence of' the land being reserved for PAO5, within the meaning of s 98 of the Planning and Environment Act.

Alternative assumption taking into account CHMP 13322

172 An alternative assumption could have been that because CHMP 13322 existed over most of the Subject Land in the 'before' scenario, the land was to be valued taking into account the a need for a purchaser of the Subject Land on the Relevant Date to apply for and obtain a CHMP for the remaining Unassessed Segments of the land.[261]

173 There does not appear to be anything in the Aboriginal Heritage Act which would prevent the preparation and approval of a more confined CHMP over the remaining segments in that way. Such a CHMP would be able to take into account the findings and recommendations in CHMP 13322. The desktop, standard and complex assessments over the activity area, covering most of the Subject Land, had already been done for CHMP 13322 and had given rise to detailed findings and recommendations which informed the Quandong PSP.[262] There was no evidence that these assessments would need to be done again if a CHMP for the Unassessed Segments only, or a further CHMP for the activity area extended to those segments, was sought.

174 Neither party addressed that alternative scenario in their instructions or questions to experts.[263]

175 I consider that the better approach, having regard to the need to reconstruct the situation if the Subject Land had been unaffected by the reservation, and to the expert evidence, is to make the assumption I have accepted at [170]-[171] above that the activity area in CHMP 13322 would have extended over the whole of the Subject Land, rather than this alternative assumption. However, if I am wrong in that conclusion, the correct assumption is not the Authority's instruction that an entirely new CHMP over the whole of the Land was required and that this would take between 13 to 19 months.[264] That would be inconsistent with the evidence which established that the complex assessment, including digging and sampling, had been done over so much of the Subject Land. That work enabled, in the opinion of Ms McNeil who addressed the issue directly, a conclusion that there were unlikely to be significant Aboriginal cultural heritage values which would involve different outcomes than CHMP 13322 in the area of the OMR reservation. Ms McNeil observed that during the standard and complex assessments for CHMP 13322, no features or deposits were uncovered that would identify the area of the OMR as having significant Aboriginal cultural heritage values that would prevent development. She expressed the view that 'the contingencies presented within CHMP 13322 are relevant to the land outside of the registered Aboriginal places'.[265]

176 It is not, therefore, appropriate to assume, as was the effect of the Authority's instruction to its experts, that obtaining a further CHMP extending to those smaller segments of land would have been the same lengthy process as obtaining a new CHMP over the entirety of the land.

177 As no legal burden of proof applies to this aspect of the claim relating to the appropriate assumptions to be made in the counterfactual,[266] it falls to the Court to determine the appropriate approach on the basis of the evidence, with any doubt being resolved by leaning in favour of the claimant. The evidence establishes on the balance of probabilities that if it was necessary to allow for any further time to assess the remaining segments of the Subject Land and obtain a CHMP, it would not be a process of the same duration as obtaining a CHMP over the whole of the land without the benefit of any prior work.

178 In these circumstances, if, contrary to my conclusion that it is appropriate to assume that CHMP 13322 would have covered the whole of the Subject Land in the 'unaffected' scenario, and it was necessary instead to assume that a CHMP was required for the remaining segments of land, I find that this would involve a small proportion of the time that the Authority instructed its valuers to assume. This would mean a lesser deferral period than the valuers applied to account for that process. In the absence of evidence as to the time it would take to obtain a CHMP over the remaining small areas, Mr Barrett's expert valuation in my view more closely reflects the value of the land in the 'unaffected' scenario with respect to the CHMP issue. I would accept it rather than that of the Authority's expert valuers.

The Authority's submission that the 'development ready' assumption is not made out on the evidence

179 The Authority contended that the assumption made by Mr Barrett's valuation experts that the Subject Land was 'permit ready' relies on two propositions, neither of which were, it submitted, established on the evidence:[267]

(a) it is not possible to obtain a CHMP for a hypothetical development such as that in the Before Plan (first inference); and

(b) there is no reason to suggest that the area of 1005 Ballan Road covered by the OMR could not be developed, based on the recommendations contained in CHMP 13322 (second inference).

180 The Authority submits that the Court should be extremely cautious about the assumptions that should be made, and that they must be based on the evidence.[268] The Authority submits that the first inference is based on the Murphy Report, and that she has now retracted her evidence, in that Ms Murphy now accepts that 'if a CHMP had been initiated, it would have been assessed'.[269]

181 The Authority's submissions in relation to the first inference were somewhat difficult to reconcile with the ways in which it had put its arguments in relation to the 'development ready' assumption.

182 The Authority submitted both that 'there is no evidence that the Proponent would have extended the activity area to the whole of 1005 Ballan Road which would have therefore been assessed for the purpose of CHMP 13322 absent the reservation';[270] and that '[t]here was no impediment to the Claimant himself seeking and obtaining a CHMP as part of his Permit Application and the presence of PAO5 did not preclude him from doing so'.[271]

183 The Authority thus relied on two alternative positions:

(a) first, that it was necessary to approach the assumptions on the basis that the Proponent, when applying for the CHMP in 2015, should have, but did not, take the step of making the application over the whole of the Subject Land, and that there was no evidence on that issue; and

(b) second, that it was Mr Barrett who was obliged to apply for a further CHMP in the context of his permit application, but there was also no evidence on why that had not occurred.

This latter way of putting the argument is more closely related to the Authority's separate contention that there was a break in the chain of causation of loss arising from the failure of Mr Barrett to obtain a CHMP over the whole of the Subject Land, which is addressed separately below.

184 The first version of the Authority's argument relates to its submission that:

There is no basis in law to disregard the decision of the Proponent, freely made, six years prior to the Relevant Date. Moreover, there is no basis at law to assume something that the Proponent did not in fact do.[272]

185 The primary response to this argument is that there is a basis in law for making assumptions, which does not involve a disregard of the Proponent's decision. The basis is the need to engage in a counterfactual analysis of what the situation of the Subject Land would have been if not affected by the reservation, and a reconstruction of what the planning related decisions would have been absent the reservation.

186 However, focussing on the Authority's complaint that there was no evidence to support the assumptions, I also do not regard them as having merit.

187 The Authority's arguments were based on its own, in my view misconceived, characterisation of Mr Barrett's submissions, and were apt to confuse and overcomplicate the issues. As discussed above, Mr Barrett's focus was on the assumption required by pt 5 in reconstructing the situation of the Subject Land if not affected by the reservation. I do not regard that analysis to be based on the first inference the Authority attributes to Mr Barrett. I have concluded above that had PAO5 for the OMR not affected the Subject Land, the appropriate assumption is that CHMP 13322 would not have stopped at a boundary informed by the OMR, but would have extended to the title boundary of the Subject Land. That does not rely on any conclusion about whether it was or was not possible to obtain a CHMP for a hypothetical development; it is simply an assumption as to what would have occurred absent the reservation.

188 As to the Authority's argument that there is no evidentiary basis for the assumption that CHMP 13322 would have extended over the Subject Land, it relies on the premise that the Proponent should have applied for a CHMP for a hypothetical development over the Unassessed Segments. The Authority submits that:

it is not appropriate to make assumptions (particularly by inference) about steps that a claimant or, relevantly, the Proponent [of CHMP 13322] in this case, would have taken but did not in fact take, particularly when the evidence of the expert Aboriginal cultural heritage experts establishes that PAO5 did not (and does not) preclude the Proponent (nor the Claimant himself) from undertaking those steps. [273]

189 This objection is misconceived. The evidence on which the counterfactual analysis is based is, as noted at [166] and [170] above. It is that evidence that forms the basis of the assumption that absent the reservation, CHMP 13322 would have extended over the whole of the Subject Land.

190 The Authority's argument in focussing on the absence of evidence as to what the Proponent's could have done involves an expectation of engagement with the subjective motivations for decision making of persons involved in the strategic planning process. That type of analysis is not, in my view, called for in the 'before' and 'after' comparison process. That analysis is generally informed by expert evidence, primarily the evidence of planners, having regard to the inputs into the planning process and how they may have differed absent a particular reservation for public purposes. Evidence of the subjective intention of a participant in the planning process, including of the proponent of a CHMP, would not in my view materially advance the required counterfactual analysis.

191 I therefore reject the Authority's arguments as to there being an inadequate factual foundation for the inference that CHMP 13322 would have extended over the whole of the Subject Land, absent the reservation.

192 The Authority contends with respect to the second inference that Mr Barrett has not discharged an evidentiary burden on him of establishing the assumption that CHMP 13322 would, absent PAO5, have involved no recommendations or requirements inconsistent with the grant of a permit if it extended to the whole of the Subject Land. It contends that the evidence establishes that obtaining a further CHMP would have taken 12 to 18 months in addition to a 6 to 12 month waiting period for the assessment, and that the outcomes of the complex assessment for that new CHMP were unknown, so that the full development potential of the Subject Land was 'likewise unknown'.[274] That submission relied on the statement in the Joint Cultural Heritage Expert Statement to the effect that recommendations for the unassessed portions of the Subject Land cannot be determined 'until a complex CHMP for these areas is completed and the presence of Aboriginal cultural heritage determined'.[275] The Authority says that the inference on which Mr Barrett relies, that if CHMP 13322 had extended to the whole of the Subject Land, the findings would have been consistent with those in fact made in CHMP 13322, is 'pure speculation' or 'guesswork'.[276]

193 Mr Barrett submits that it is reasonable, having regard to the expert evidence and particularly the conclusions made in the Joint Cultural Heritage Expert Statement, to assume that a version of the CHMP extending to the boundary of the Subject Land would have been similar in its requirements to CHMP 13322, which are 'minimal'.[277] He submits that the Joint Cultural Heritage Expert Statement established that it was reasonable to extrapolate from the existing CHMP 13322 to conclude that the findings relating to the planting of Murnong beds, extension of the Aboriginal cultural heritage interpretative trail and potential reburial of artifacts, would likely be replicated for the northern end of the Subject Land which was not covered by CHMP 13322.[278] Mr Barrett submits that there would not have been any major impediment to development of the Unassessed Segments of the Subject Land.[279]

Consideration - the evidence supports assumption that if a CHMP extended over the whole of the Subject Land, further requirements would have been minimal

194 It is not correct in my view to say as the Authority does that the opinions expressed on the likely outcomes of a CHMP over the Unassessed Segments were 'pure speculation' or 'guesswork'.

195 First, the experts' evidence did in fact address the likely outcomes of an assessment over the Unassessed Segments. Ms McNeil expressed the opinion that there was no reason to suggest that the area proposed for the OMR (the Unassessed Segments of the Subject Land) could not be developed should the OMR be removed, with the exception of a 50m buffer either side of the drainage line in the northern segment.[280] Ms McNeil also agreed with Dr Parmington that the Murnong planting beds in the Quandong PSP (and recommended in CHMP 13322) would potentially extend to the watercourse in the northern segment and the Aboriginal cultural heritage interpretative trail may also have extended into that segment.[281] She identified reasons for her conclusions, including an analysis of what was identified in the complex assessment completed for CHMP 13322.[282]

196 Ms Murphy agreed with Ms McNeil's conclusions and expressed the view that the contingencies provided in the CHMP for management of Aboriginal heritage discovered during the activity would apply to the Subject Land absent PAO5.[283]

197 The Authority's expert Dr Parmington also observed that the existing CHMP 13322, which identified the outcomes for a large proportion of the Subject Land, 'impose[d] minimal management recommendations on the Subject Land' aside from the requirements as to salvage and reburial of artefacts, cultural awareness training for employees and contractors involved in disturbing works in the activity area and the implementation of an interpretative strategy along the watercourse, the latter of which influenced the planting of Murnong beds as reflected in the Quandong PSP.[284] He observed that the outcome of a CHMP over the whole of the Subject Land was 'uncertain'.[285] That conclusion did not appear to be based on features of the land or evidence as to cultural heritage findings with respect to the land. Rather it was based on the fact that because there was no CHMP in place over the Unassessed Segments, a further CHMP over the whole of the land would be legally required, the outcome of which would be uncertain as it had not occurred.[286]

198 Dr Parmington was, however, able to express the opinion, based on the evidence available to him, that the cultural heritage considerations which would have differed in the absence of PAO5 would have been the potential for the planting of Murnong beds and potentially the footprint of the Aboriginal cultural heritage interpretive trail to extend into the northern segment of the Subject Land.[287]

199 Ms McNeil and Dr Parmington's conclusions, that the only likely cultural heritage requirements which would have applied to the Subject Land in the absence of PAO5 were the potential extension of the Murnong beds and the interpretative trail, were based on a rational evidentiary basis, including CHMP 13322 and the complex assessment on which that plan is based. I am satisfied that there is adequate evidence to support the conclusion that had CHMP 13322 extended over the whole of the Subject Land in the before scenario, it was not likely to include recommendations which would have been inconsistent with a permit for residential development over the whole of the Subject Land. There may have been adjustments required by Wyndham City Council to the Before Plan in order to accommodate extension of the Murnong beds which were identified in the Quandong PSP but not incorporated in the Before Plan.[288] However that does not suggest that the Before Plan as modified with that adjustment would not have obtained planning approval. It is acknowledged that the Murnong planting beds in the Quandong PSP involved a small area and the most natural and reasonable assumption is that if the Council raised this as an objection to the grant of a permit, the Before Plan would have been altered to accommodate it.

200 For these reasons, I do not accept the Authority's contention that there was no factual basis for the 'permit ready' assumption.

No proper evidentiary foundation for the Authority's assumption as to the deferral period

201 It is also appropriate to explain in this context an additional reason why the Authority's position on the appropriate assumption on the 'permit ready' issue cannot be accepted. There was in my view not a proper factual foundation for the assumption that the Authority instructed its expert valuers to make that a 13 to 19 month period would be required to obtain a CHMP.

202 Mr Molloy was instructed that it should be assumed in the unaffected scenario that a hypothetical purchaser would be advised that a planning permit would not have issued for the hypothetical development of the Subject Land until a CHMP for the whole of the Subject Land was approved, and the Before Plan would have been amended to set aside land at least for the Murnong planting bed identified in the Quandong PSP. He was also instructed that:

[t]he process for the preparation of any CHMP, whether for the whole of 1005 Ballan Road or for 2 Argoona Road, would have involved consultation with the relevant Registered Aboriginal Party and assessment by a heritage advisor [and] ... would have taken quite some time (at least around 13 to 19 months).[289]

203 Mr Molloy did make those assumptions.[290] Mr Brown was instructed to make assumptions to the same effect, save that he was not instructed that the process for preparation of the CHMP would have taken 'taken quite some time (at least around 13 to 19 months)'.[291] Mr Brown instead assumed that the likely timeframe for completion of the complex assessment for a CHMP with the RAP would be between 12 to 18 months, based on Dr Parmington and Ms McNeil's assessment in the Joint Cultural Heritage Expert Statement.[292]

204 The Authority's valuation experts concluded, taking into account the instruction as to the time that would be taken to obtain a CHMP over the whole of the Subject Land, that they should apply a discount to the 'permit ready' rate to reflect the respective deferral periods.

205 The evidentiary basis for the assumption of a 13 to 19 month period to obtain a CHMP which Mr Molloy was instructed to adopt is unclear. The expert evidence did include some evidence as to time periods for CHMPs, but only with respect to the Argoona Road Land. Ms McNeil gave an estimated time for completing a complex assessment CHMP with the RAP for the Argoona Road Land, being 12 to 18 months with a waiting period of between 6 to 12 months for the Wadawurrung Traditional Owners Aboriginal Corporation to undertake fieldwork.[293] Ms McNeil was not asked for any time periods with respect to preparation of a CHMP for the Subject Land or any part of it. Dr Martin was not asked to estimate the time that would be taken for evaluation of the CHMP for the Subject Land.

206 In the Joint Cultural Heritage Expert Statement of Dr Parmington and Ms McNeil, Dr Parmington agreed that the 'likely timeframe for completing a complex assessment CHMP with the [RAP] for the Argoona Land would likely be 12 to 18 months', with an additional 6 to 12 month waiting period for the fieldwork to be done by the Wadawurrung Traditional Owners Aboriginal Corporation as the RAP.[294]

207 The Authority accepted that there was no evidence directed to the time period for a CHMP over the Subject Land, and that the cultural heritage experts had not been asked whether there would be a reduced time period by reason of the existence of CHMP 13322. Nor was there any accounting for any the benefit of the existence of CHMP 13322 in the expert evidence.[295]

208 It was not, in my view, a sound assumption to make that the required time for a CHMP over the whole of the Subject Land would take the same amount of time as the Argoona Road Land. The Argoona Road Land was not the subject of any previous complex assessment or CHMP, and had not been subject to the same level of investigation as the Subject Land.[296] Further, the evidence of Dr Parmington was that it was 'highly probable' that additional Aboriginal Places would be identified on the Argoona Land during preparation of the CHMP for that land, whereas there are no registered Aboriginal Places on the Subject Land.[297] In these circumstances, the evidence of preparation times for a CHMP for the Argoona Land was not an appropriate basis from which to extrapolate in making an assumption for the preparation time for a CHMP for the Subject Land.

209 Secondly, the Authority's assumption of a period extending up to 19 months would appear to incorporate some waiting period for the fieldwork to be done by the RAP. However the Authority's witness Dr Martin, the General Manager of the Wadawurrung Traditional Owners Aboriginal Corporation**,** gave evidence in response to Ms Murphy's observations as to the RAP having limited resources.[298] He said that the Corporation 'has seven full time heritage advisors who work with me and who are available to participate in the investigations and field work required for the preparation of a CHMP. In 2020/2021, as best as I can recall, there [were] four full time heritage advisors'.[299] He did not give evidence that there would be a waiting period of 6 to 12 months, nor that there would be a waiting period at all.[300]

210 If, contrary to my conclusions at [170]-[171] above, it was necessary to assess the 'unaffected' value of the Subject Land on the basis that a further CHMP for the whole of the Subject Land must be obtained, the relevant assumption for that purpose would need to be an assumption based on evidence which addressed, to the most accurate extent possible, the actual time frame that would be involved. The assumption on which Mr Molloy was asked to act had no identified factual basis, and that adopted by Mr Brown, based on the cultural heritage evidence, ultimately related to a different property. In those circumstances, their opinions as to deferral periods based on those assumptions did not have a proper foundation.

The Authority's argument that a failure to apply for a CHMP over all of the Subject Land 'broke the chain of causation'

211 The Authority's remaining argument on the CHMP / 'permit ready' issue was that insofar as Mr Barrett's financial loss was premised on making the 'development ready' assumption, that loss was caused by his failure to apply for a CHMP which extended over the whole of the Subject Land before he applied for the planning permit.[301]

212 The Authority contended that Mr Barrett's failure to apply for a CHMP to cover the whole of the Subject Land had the effect of 'breaking the chain of causation', with the effect that financial loss was not caused by the PAO5 reservation but by Mr Barrett himself.[302] It was contended that this failure was a novus actus interveniens which broke the chain of causation between the reservation and the financial loss, and that the 'proximate cause' of the financial loss was Mr Barrett's decision not to make an application.[303]

213 The Authority in opening submitted generally that 'the asserted loss (should it be established) was not relevantly caused by the reservation but rather because of the Claimant's own failure to obtain a CHMP over the whole of the site', and that 'it was the Claimant's failure to obtain a CHMP over the whole of the land as at the relevant date that was the proximate cause of loss'.[304]

214 There is a tension between that argument that Mr Barrett was the cause of the financial loss and the concession made by the Authority shortly before trial that the reservation of parts of the Subject Land had caused financial loss to Mr Barrett. It is also difficult to reconcile with the Authority's acceptance that the Council did not identify as a reason for refusal of the permit any matter relating to the requirement for a CHMP, including the fact that CHMP 13322 did not cover the entirety of the site. The Authority refined the submission to make clear that the causation argument only applied to that financial loss which was the difference between the loss assessed making the 'development ready assumption' and the loss assessed not making that assumption.[305]

215 The Authority's submissions were premised on Mr Barrett as a matter of fact having been obliged to make an application for a CHMP covering the entirety of the Subject Land, but having failed to do so.[306] It submitted that Mr Barrett:

could have spent, but chose not to spend, the money and time required to obtain a CHMP for the whole of 1005 Ballan Road and 2 Argoona Road. The Claimant could readily have sought to obtain a CHMP, like he did for the material submitted with his Permit Application. Had he done so, he would be entitled to have his financial loss assessed on the basis of an approved CHMP (had one been approved). However, he chose not to. Having made that election, to the extent that there is any loss attributable to the absence of a CHMP, the Claimant caused that loss...[307]

the asserted loss (should it be established) was not relevantly caused by the reservation but rather because of the Claimant's own failure to obtain a CHMP over the whole of the site and/or the Proponent's decision in 2015. That step of the Claimant was necessary to perfect his claim to unlock the 'permit ready' potential of 1005 Ballan Road at the Relevant Date. Not having taken that step, it is not open to him to claim the asserted $7M loss attributable to the Assumption Issue as against the Authority. That loss was not the natural, direct and reasonable consequence of the OMR reservation; it was a consequence of the Claimant's inaction.[308]

217 The Authority's position was first that there was no CHMP in place over the Subject Land and that Mr Barrett should have obtained another CHMP.[309] In closing submissions, the Authority did make the more qualified contention that the proximate cause of the loss was 'the decision either by the claimant himself or the proponent not to seek a CHMP over the remaining land'.[310]

218 The Authority argued that its conclusion followed from the fact that the test for causation is very strict. It referred to the decision of Batt J in Halwood Corporation Ltd v Roads Corporation[311] interpreting the requirement that the loss be the 'natural, direct and reasonable consequence' of the reservation, and acknowledging the common law cases on causation of loss and intervening acts which break the chain of causation of loss.[312] On this basis, the Authority submits:

The test for causation under s 98(1)(a) of the P&E Act is strict - a very close causal connection is required, and the loss cannot have been caused by some intervening act, or failure to act, such as the Claimant's independent choice in not seeking a CHMP or CHMPs for Both Properties [i.e. the Subject Land and the Argoona Road Land].[313]

219 The Authority also relied on two recent decisions of the New South Wales Court of Appeal, Sydney Metro v G & J Drivas Pty Ltd[314] and oOh!media Fly Pty Ltd v Transport for NSW.[315] The cases related to the compensation regime applicable to compulsory acquisition of land under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (NSW Act), and the application of the statutory disregard provision in s 56(1)(a) of that Act. That section is directed to disregarding any impact on value 'caused by' the public purpose for which land is required in the valuation process. In each case, the claimants sought to have the value of the land take into account value deriving from steps to enhance the land that they would have taken, but did not when they became aware of the likely acquisition. The effect of the Court's conclusion in both cases was that the compensation payable did not encompass compensation for a valuation which took into account costs not actually expended, or improvements not actually realised.[316]

220 The Authority contended that these cases were authority for the proposition that it was not open to assume in the counterfactual that CHMP 13322 extended over the whole of the Subject Land and that it strongly supported its argument as to the operation of s 98(1)(a) because the case law on analogous legislation 'forms part of the context in which s 98(1)(a) is to be construed'.[317]

221 Mr Barrett submits that there was no break in the causal chain. He observes that cases such as Halwood and Brompton Lodge involved purchasers making informed choices to purchase or sell land in the knowledge of the reservation and the financial impact that the purchase or sale would have, which were held to break the chain of causation.[318] That analysis was not applicable to this case where:

(a) Mr Barrett had owned his land since 1981, prior to the Authority imposing the reservation for the OMR and 'sterilising at least part of its future urban use' and causing a diminution in the value of the land;[319] and

(b) the break in the chain of causation is said to be the failure to carry out 'an entirely artificial CHMP process for the uncovered small portion of the land, in circumstances where the evidence clearly shows on the balance of probabilities that absent PAO5, there would already be a CHMP in place'.[320]

222 It is submitted that the effect of the Authority's causal argument would be to 'generate enormous waste and hurdles for claimants, and wasted time for statutory officers'. The example is given of a claimant, who is refused a permit for development on the basis of the land being reserved for a freeway, having to take steps to remediate the land from environmental contamination to render it suitable for residential development even though the expensive remediation works would be entirely unnecessary.[321]

Consideration: failure to apply for a new CHMP did not break the chain of causation

223 The Authority submits that the 'critical question for the Court to determine is: What was the proximate cause of the asserted loss?'[322] This approach in my view obscures the question raised by the terms of the statutory regime. The critical question is that posed by s 98: what was the 'financial loss suffered as the natural, direct and reasonable consequence of ... the land being reserved for a public purpose under a planning scheme'? That is the 'basal limitation' on the right to compensation.[323]

224 It is a premise essential to the Authority's 'novus actus interveniens' argument that a CHMP over the whole of the Subject Land, or a CHMP for the Unassessed Segments, should in fact have been obtained by Mr Barrett at some time prior to the Relevant Date. This further step is said to have been necessary in order for the entirety of the Subject Land to be regarded as 'permit ready' and Mr Barrett's failure to do so constituted the 'break in the chain of causation' or 'novus actus interveniens', relying of observations of Batt J in Halwood. I do not accept that Halwood or other authority compels the artificial approach to the valuation exercise contended for by the Authority.

225 Justice Batt's analysis in Halwood[324] in my view demonstrates the importance of maintaining primary focus on the 'commonsense' question posed by the language of s 98. His Honour cited the observation in Medlin v State Government Insurance Commission that if, in a situation where an act or decision of the plaintiff or a third party constitutes an immediate cause of loss or damage:

it can be seen that the necessary causal connexion would exist if the intervening act or decision be disregarded, the question of causation may often be conveniently expressed in terms of whether the intrusion of that act or decision has had the effect of breaking the chain of causation which would otherwise have existed between the breach of duty and the particular loss or damage. The ultimate question must, however, always be whether, notwithstanding the intervention of the subsequent decision, the defendant's wrongful act or omission is, as between the plaintiff and the defendant as a matter of commonsense and experience, properly to be seen as having caused the relevant loss or damage.[325]

226 In Halwood, the intervening cause was that the claimant had purchased the land in full knowledge of the reservation, so that any financial loss was 'self-induced'.[326] The concept of a break in the chain of causation has a clear, commonsense application in those circumstances. That commonsense approach does not support the argument in this case, that a claimant who has clearly suffered some financial loss by reason of a reservation for a major public project over his land, must take positive steps[327] to 'perfect' a claim for financial loss to avoid a conclusion that he himself has caused the loss. There is, in my view, in the present scenario no element of 'self-induced' loss which would attract the analysis in Halwood.

227 The New South Wales Court of Appeal decisions relied on by the Authority - Sydney Metro and oOh!media - are also of limited assistance given their materially different statutory context and material factual differences.

228 In Sydney Metro, a statutory corporation acquired land for the public purpose of a new metro train line. The acquired land had a two-storey mixed use office and retail complex on it, and it was common ground between the parties that the highest and best use of the site at the relevant time was as a development site for a mixed commercial/retail development. The owners of the land had previously, in December 2018, obtained development consent to construct a twenty five-storey tower on the site. By February or March 2019, the owners suspected that there was a possibility that the land may be acquired, and determined not to progress certain aspects of the tower development. In October 2019, the owners were informed that the land would be acquired, and they decided to stop work on the development completely. The land was not acquired until March 2021.

229 The issue in Sydney Metro was whether the market value for the land should be determined taking into account the anticipated progression of the development of the site up until the relevant date in March 2021, in circumstances where that progression did not occur.[328] The primary judge allowed compensation for an increase in market value of the land as though certain planning and development steps that the claimant would have undertaken before the acquisition, but did not take after learning of the proposed acquisition, had in fact been undertaken. The trial judge made that allowance without having set off a cost for having taken those steps.[329] The trial judge treated this as a result of the requirement in s 56(1)(a) of the NSW Act, which her Honour construed as requiring an enquiry not into a hypothetical sale to a hypothetical purchaser, but:

rather a determination, in the circumstances of this case, as to what stage the particular development by these Applicants would have reached but for the proposal to carry out the Public Purpose.[330]

230 The relevant provision of the NSW Act, s 56(1)(a), relevantly provided:

56 Market Value

(1) In this Act -

Market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, **disregarding (**for the purpose of determining the amount that would have been paid) -

(a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, ...[331]

231 In Sydney Metro, Kirk JA, with whom Payne JA and Griffiths AJA agreed, held:

The public purpose here - the undertaking of the Sydney Metro West project - did not itself directly cause the relevant effect on the value of the land. Rather, it was the two decisions of the respondents. Further, those decisions were not taken in response to the public purpose itself. The respondents were acting in response to the possible acquisition of their land, regardless of the nature of the purpose for which it was being acquired. Thus the effect on the value of the land was two stages removed from Sydney Metro's carrying out of the public purpose. It involved independent decisions of the owners, in a freely chosen (if entirely rational) response to the possibility that their land would be acquired, where that acquisition was occurring in order for Sydney Metro to continue carrying out the public purpose. It strains the reasonableness of legal attribution for the free choices of the owner, responding to the proposed acquisition as opposed to the public purpose itself, to affect the amount that the acquirer has to pay.[332]

232 The decision in Sydney Metro was followed by the Court of Appeal in oOh!media. In that case the appellant had advertising signs on land which was acquired. It sought to have the land valued taking into account the fact that it had intended to digitise the advertising signs, which would have increased the value of the land. It did not pursue the digitisation project when it learnt of the likely acquisition of the land.[333] It was held, consistent with Sydney Metro, that the claimant sought compensation for an increase in market value not in fact achieved because of its own choices made prior to acquisition, in response to the potential for the land to be acquired. The Court held:

This is a case, like [Sydney Metro], where the claimant sought compensation for a putative increase in market value not in fact achieved because of its own choices made prior to the date of acquisition, being choices made because of the possibility or certainty of its interest in the land being acquired. The fact that the market value did not actually increase because of that choice is not required to be disregarded by s 56(1)(a) of the [NSW Act]. The land was to be valued as it was, including all its potentialities for development.[334]

233 There are several reasons why neither Sydney Metro nor oOh!media support the Authority's contention that a failure by Mr Barrett to obtain a further CHMP over the whole of the Subject Land constituted an intervening act which broke the chain of causation.

234 Firstly, the legislative scheme in the NSW Act is materially different to the provisions of pt 5 of the Planning and Environment Act, which are in issue here. The NSW Act is directed to compensation for acquisition rather than to compensation for loss arising as a consequence of a reservation for a public purpose. Further, the analysis in the NSW cases turned on the terms of s 56(1)(a), a section which is not present in the Planning and Environment Act. Section 56(1)(a) is in similar terms to s 31 of the Land Acquisition and Compensation Act. That section is not replicated in the Planning and Environment Act, nor is it directly applied by s 105.

235 The terms of s 56(1)(a) of the NSW Act were important to the Court's determination in Sydney Metro. That section requires disregard only of increase or decrease in value 'caused by the carrying out of ... the public purpose'. The distinction in s 56(1)(a) between the public purpose, and the proposed compulsory acquisition, was of some importance in the Kirk JA's analysis, in the passage noted at [231[335]] above.335

236 Kirk JA acknowledged that steps taken by an owner may be relevant to the valuation exercise. His Honour observed:

The limitation is better expressed by saying that increases or decreases in value caused only by choices made by the owner because of the proposed acquisition are not to be disregarded pursuant to s 56(1)(a). In general, it is the fact of possible acquisition which is of concern to the owner, not the actual or proposed carrying out of the public purpose itself. That does not mean that the likelihood of a rezoning or development consent being obtained by the date of acquisition but for the actual or proposed carrying out of the public purpose is necessarily to be ignored, even though doing so may have involved taking account of steps that would have been taken by the owner. That is so because a step in the causal analysis in such cases may be that any application for rezoning or for consent would likely have been refused because of the public purpose. Thus the public purpose itself in such a case has causal significance in the analysis beyond steps the owner would or would not have taken because of the proposed acquisition. [336]

237 Secondly, the Sydney Metro case related to development steps that the claimant had decided to cease not because of the public purpose, but because of an awareness of the likely future acquisition of the land. In the present case, the decision to have CHMP 13322 extend only to the mid-line of the OMR reservation and not to the whole of the Subject Land was made not because of the prospect of a reservation, but because the reservation was in fact already in place.

238 Thirdly, in the Sydney Metro case the claimant was seeking to bring to account in the valuation of the land development steps which had not yet occurred, but which may have occurred according to the claimant had it not ceased progress on the project because of the pending acquisition. In the present case, Mr Barrett is not seeking to bring to account any future hypothetical work in the evaluation of his property, but is seeking to have a planning process that had already been completed prior to the relevant date revisited and reconstructed to reflect what the process would have been if the land had not been affected by the reservation. There is in my view no attempt to take the benefit of steps not undertaken. Nor is there an intervening cause between the reservation and the loss that was incurred as a natural consequence of a significant part of the land having been reserved for the OMR.

It has been said for this statutory scheme, as for previous schemes, that 'the land must be valued at the relevant date in its existing condition with all its potentialities as potentialities': Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159 at [15]. Thus, for example, where the land has the potential to be rezoned in a way that will affect its value, that will be taken into account in the valuation process, just as it would have been a factor were the property to have been sold in the open market on the relevant day... that still involves valuing the land as it is on the date of acquisition. Sydney Metro also accepted that s 56(1)(a) might require the valuation to proceed on the basis that the land would in fact have been rezoned as at the date of acquisition - that is, so that rezoning was certain, not just a potentiality - if it was established on the facts that that would have occurred but for the public purpose: see, for example_, Council of the City of Ryde v Azizi_ [2019] NSWSC 1605 at [52]- [53]. Sydney Metro further accepted that where it was established that development consent would have been obtained but for the public purpose then that, too, could be taken into account in assessing the market valuation.[337]

240 This observation above in my view supports the conclusion that the potential to obtain the permit is appropriately taken into account as an assumption for the valuation of the land in the 'unaffected' scenario, as the CHMP would have extended to the whole of the Subject Land had it not been affected by the reservation for the public purpose.

The analysis required by Part 5 of the Planning and Environment Act

241 To return to the statutory language of the financial loss which is compensable under pt 5 of the Planning and Environment Act, it is useful to note the observations of Emerton J in Barilla:

In Halwood Corp Ltd v Roads Corporation, and subsequently in Melbourne Citylink Authority v Tefford, the Court held that 'natural' means arising according to the usual course of things; 'direct' means without intervening agency or intermediate; and 'reasonable' means not going beyond the limit assigned by reason or not extravagant or excessive. The three adjectives, in combination, connote a very close and limited connection between the event giving rise to compensation and the financial loss suffered.[338]

242 Plainly the close causal connection required by s 98(1)(a) may be broken or interrupted in certain circumstances which will mean that claimed loss does not have the necessary direct, natural or reasonable connection. However, I do not accept the Authority's argument that Mr Barrett was required to apply for or procure a new CHMP to avoid the conclusion that there was 'a break in the chain of causation' of his financial loss.

243 First, and most obviously, the absence of a new CHMP over the whole of the Subject Land was not a factor identified by the Council as a reason for refusal of the permit, so it did not constitute an intervening factor that caused the financial loss in that direct way.

244 Secondly, the relevant authorities, to the extent that they touch on questions of intervening causes or breaks in the chain of causation in the context of compensation claims, relate to positive decisions taken by claimants. They are decisions to purchase or sell land notwithstanding knowledge of a reservation and its effect,[339] or decisions actively taken to stop development or improvement processes on the land.[340] They do not support a position that a failure to act to take steps to 'perfect' assumptions for the purpose of the 'before' scenario should be treated as being the proximate cause of a loss, instead of the quite obviously material cause of the effect of land being reserved for a public purpose such as a road.

245 Thirdly, the Authority's approach is not, in my view, consistent with the terms of the Planning and Environment Act. The requirement that the loss be the natural, direct and reasonable consequence of the land being reserved for a public purpose, and the rational and practical approach to assessment of financial loss required by pt 5 of the Act does not mandate the overly complex and artificial approach entailed in the Authority's position. It would require a landowner whose land can no longer be used for its highest and best use because it is reserved for a public purpose, and who seeks to claim compensation, to take complex steps to demonstrate the land's potential capacity at the relevant date. Those steps would be purely to 'perfect' assumptions relevant to the hypothetical 'before' or 'unaffected' scenario for the purposes of the comparison between affected and unaffected value. A requirement to take steps involving not only expense to the claimant,[341] but also demands on public and community resources, to avoid a conclusion that there has been an omission breaking the chain of causation would be a surprising way for a compensation scheme to operate. I am not persuaded by the Authority that the Act does have that effect.

246 The Authority submitted that there should be no concern about the potential of its position causing 'claimants to incur costs that really don't appear on their face to be useful other than advancing the claim for compensation itself,' because this was said to be 'just the feature of this compensatory regime'.[342] I am conscious that the valuation process involves ensuring that potentialities are treated as potentialities and not as realised outcomes. I also accept that seeking compensation under the statutory scheme may entail steps being taken, such as making the permit application to crystallise the right to compensation and the liability to pay it under s 99, which may be for technical purposes related to compensation rather than in truth for a planning objective. I do not accept, however, that the valuation process contemplated by pt 5 of the Planning and Environment Act compels an approach which requires a claimant to pursue all steps down the path of a hypothetical development which are devoid of any practical purpose, simply for the purpose of avoiding a conclusion that a failure to do so may be characterised as negating the causal effect of the reservation.

247 Those considerations are in my view sufficient to dismiss the Authority's argument as to a break in the chain of causation. However there is a further reason why the Authority's argument is flawed. The Authority's argument is premised on the contention that Mr Barrett (or a third party) was obliged to, but did not, in fact obtain a new CHMP in respect of the whole of the Subject Land for a hypothetical residential development extending into the area reserved for the OMR.[343] For the following reasons, I do not think that this premise is legally or factually open, having regard to the requirements of the Aboriginal Heritage Act.

The Aboriginal Heritage Act does not contemplate a CHMP for a hypothetical development

248 The Authority contends that the evidence was to the effect that there was 'the potential to obtain an approved CHMP for 1005 Ballan Road at the Relevant Date despite it being affected by the OMR reservation'.[344] An issue which was not directly addressed in the Authority's submissions is whether, having regard to the terms of the Aboriginal Heritage Act, it would have been open as a legal matter to obtain approval for a CHMP for a hypothetical activity.

249 The expert evidence addressed the position of the relevant RAP on evaluation of CHMPs. The Authority's expert Dr Martin, the General Manager of the Wadawurrung Traditional Owners Aboriginal Corporation, gave evidence that as the relevant RAP, it would evaluate a CHMP if it is given notice of a 'notice of intent' to prepare a CHMP. It would not decline to evaluate any CHMP absent exceptional circumstances such as a conflict of interest.[345]

250 Mr Barrett's expert, Ms Murphy, initially expressed the view that '[a]n approved CHMP for a hypothetical development plan would not have been obtained', both because the RAP would be unlikely to provide resources to a hypothetical development, and also because '[a] hypothetical CHMP is unable to address Section 61 [of the Aboriginal Heritage Act] matters without knowing the impact of the activity.'[346] The latter legal opinion was not pressed at trial. Ms Murphy later in the Second Joint Cultural Heritage Expert Statement agreed with the other experts that the RAP would have assessed the CHMP, and in the unlikely event that the RAP did decide not to evaluate it, it would have been evaluated by First Peoples State Relations pursuant to the Aboriginal Heritage Act.[347]

251 The joint evidence of the cultural heritage experts made clear that they regarded it as confusing to consider the concept of an application for a 'hypothetical' activity, as CHMPs are focussed on a proposed activity. The experts did not address the question of how an application for a CHMP for an activity that a proponent did not actually propose to undertake would be treated.

252 Ultimately, the preparedness of the RAP to perform the complex assessment does not resolve the issue of whether a CHMP could properly be approved under the Aboriginal Heritage Act with respect to a hypothetical development activity such as residential development in an area reserved for a public road. That is primarily a legal question.

253 Having regard to the terms of the Aboriginal Heritage Act, I do not think that the Authority's contention that a CHMP could be approved for a purely hypothetical activity is sound. That Act does not, in my view, contemplate such applications. I am also not persuaded of the legal proposition that such a plan could ever appropriately be approved under that Act. This is because the scheme established by the Act is based on CHMPs being required in relation to specific 'proposed' activity. It is implicit, in my opinion, that this language refers to a situation whereby a proponent in fact proposes to undertake the activity. A consideration of the relevant provisions of the Aboriginal Heritage Act reinforces that view.

254 The circumstances in which a CHMP is required are identified in s 46(1). That section identifies a range of circumstances in which a cultural heritage management plan is required 'for a proposed activity'. Section 47 provides that the regulations may identify the circumstances in which a CHMP is required for 'an activity or class of activity'.

255 Section 44(1) of the Aboriginal Heritage Act provides that any person other than the Minister may be a sponsor of a CHMP. Relevantly, ss 44(2)(e) and (f) provide that the 'proponent of an activity' (or their representative) may be the sponsor.

256 Division 5 of pt 4 relating to 'Approval of Cultural Heritage Management Plans' identifies the circumstances in which a CHMP may be approved. Section 61 sets out the matters to be considered in assessing whether a CHMP 'relating to an activity is to be approved'. These matters all engage a consideration of the relevant 'activity', how it will be conducted, and measures which can ensure that the activity minimises harm to Aboriginal cultural heritage. A RAP may approve the plan under s 63(1). There are also circumstances in which the sponsor of a plan may apply to the Secretary for approval of a CHMP, or, if the Secretary is the sponsor of a plan, the Council may approve a plan: ss 65 and 66. The specific considerations under s 61 apply to each of those entities.

257 The centrality of the proposed activity in the approval process, and the work involved in assessing that activity which is required under the Act, makes it unlikely that it was intended that the approving bodies would undertake the relevant consideration of the application if the activity is purely hypothetical and no person 'proposes' in fact to undertake it.

258 Further, s 67(2) provides that if the sponsor of a CHMP decides to 'discontinue the preparation of the plan, or the activity to which the plan relates, at any time before the plan or activity is completed', the sponsor must give the Secretary notice of the decision to discontinue, and all assessment documentation relating to Aboriginal cultural heritage prepared or obtained in the course of the preparation of the plan. There is a penalty applicable for failure to comply with that obligation. The existence of this obligation to notify the Secretary if the sponsor of a CHMP proposes to discontinue the activity to which a CHMP relates cannot sensibly be applied to a purely hypothetical activity. The section contemplates that the usual course is that the activity will be 'completed' and if it is not, and is discontinued, this is a matter which must be notified to the Secretary. That requirement, accompanied by a penalty for failure to comply, is entirely inconsistent with a possibility that the CHMP process may relate to an activity which was, at all relevant times during the preparation of the plan, purely hypothetical, and which the sponsor did not in fact propose to undertake.

259 I finally note that s 52(1) of the Aboriginal Heritage Act, which was of some importance to the Authority's argument,[348] prevents the grant of statutory authorisation 'for an activity' unless a CHMP has been approved 'in respect of the activity'. The prohibition imposed by s 52(1) will have no work to do if no activity is actually to be conducted.

260 As a whole, the provisions of the Aboriginal Heritage Act relating to CHMPs show a fundamental concern with ensuring that planning for proposed activity on land takes into account Aboriginal cultural heritage, through a careful process of identifying all heritage values and considerations, and then planning to prevent or minimise impact of the particular proposed activity on the identified Aboriginal cultural heritage elements. The Act does not, in my view, contemplate engaging in this complex and important process with respect to purely hypothetical activity for a purpose distinct from the Act, such as facilitating valuation for a claim for compensation under the Planning and Environment Act for loss incurred, in substance, by being unable to undertake an activity.

261 In arriving at that conclusion, I accept the evidence of the Authority's expert, Dr Martin, that the RAP would evaluate a CHMP if it is notified to it, and would not decline to evaluate any CHMP absent exceptional circumstances such as a conflict of interest.[349] As Dr Martin says, the evaluation process does not require the RAP to make any assessment of the likelihood of the activity occurring, so would not entail declining to evaluate a plan by reason that the activity may be unlikely to eventuate.[350] I also accept, as Dr Martin observed, that any activity for which a CHMP is required, not yet having occurred, involves some element of hypothesis.[351] The Act specifically contemplates the potential for a CHMP or the proposed activity the subject of a plan to be discontinued, and provides that the valuable information derived from assessments of Aboriginal cultural heritage must be provided to the Secretary.

262 However, this does not alter the statutory language relating to the requirements and processes for CHMPs, which refer to 'proposed' activity. The experts themselves made a distinction between 'hypothetical activity' and the objective of a CHMP to be a 'focused assessment of impact to Aboriginal cultural heritage by a proposed activity'.[352] The experts were not asked to address a CHMP for activity that the proponent does not propose to undertake (because it would be prevented by the planning scheme) and is purely hypothetical, and is lodged only for the purpose of enhancing a compensation claim rather than facilitating informed management of Aboriginal cultural heritage. The answer to that question is in any case more a legal question involving interpretation of the Aboriginal Heritage Act, than a question for expert evidence.

263 For the above reasons, I do not accept that the Aboriginal Heritage Act provided for Mr Barrett, or any other person, to apply for a CHMP for a proposed activity of residential development of the remaining segments of the Subject Land in circumstances where he did not in fact propose any such activity. That Act does not, in my view, contemplate such purely hypothetical applications, and nothing in that Act has the effect of requiring such applications in the context of pt 5 of the Planning and Environment Act.

Evidence does not otherwise support the novus actus interveniens argument

264 The Authority also submits that Mr Barrett did not call any evidence to explain why an application for a CHMP had not been made prior to applying for the permit.[353] It emphasised the fact that Mr Barrett, in the course of making the permit application, obtained other supporting information which was based on the hypothetical Before Plan as indicating that he should have also obtained a further CHMP over the Unassessed Segments. He obtained the Transport Impact Assessment Report (TIAR) to avoid the permit being refused for failure to address traffic issues, as submitted by Authority.[354]

265 Mr Barrett contends that any evidence as to why he did not make any further CHMP application would not assist the resolution of the issue as it could only be speculation[355] and potentially dismissed as self-serving.[356]

266 I have already concluded that the causation argument based on a failure to apply for a further CHMP is misconceived, so that no evidence on this issue was required. Even had that not been the case, I do not accept that any evidence from Mr Barrett as to why he did not make a further CHMP application would have advanced the consideration of the question of whether CHMP 13322 would have extended to the entirety of the Subject Land absent PAO5. Such evidence would have had very limited weight, given its potential to be reconstructed and self-serving.

267 The fact that a TIAR was obtained is distinguishable from the obtaining of a CHMP. That is primarily because the Department of Transport, in its capacity as referral authority, had in fact required the Council to provide the TIAR in the permit application process.[357] The TIAR was plainly required to finalise that permit application process. No such request was made for a further CHMP.

268 The Argoona Road Land, like the Subject Land, is impacted by the PAO5 reservation for the OMR. It was also the subject of the planning permit application which was refused, but was not the subject of Mr Barrett's compensation claim.

269 The experts agree that in the 'before' or 'unaffected' scenario, the entirety of the Argoona Road Land would have been zoned 'rural conservation zone' and not suitable for residential development.[358] In the 'after', or 'affected' scenario, two relatively small segments of the Argoona Road Land fall within the Urban Growth Boundary and could, theoretically, be developed in future. One is a small triangle of land at the south-western corner of the Subject Land, and the other is a strip of land below it:[359]

270 The Authority contends that PAO5, by having the effect that some of the Argoona Road Land is now able to be the subject of residential development, has resulted in an increase in the value of that land. The Authority contends that to ensure that Mr Barrett is compensated for no more than his 'actual financial loss', it is necessary to take into account not only the financial loss arising from the reservation over the Subject Land for which he has claimed compensation, but also the enhancement of the value of the Argoona Road Land which was also the subject of the planning permit application and refusal.[360]

271 The Authority submits that the proper construction of ss 98 and 99, in context, and reading the Act as a whole, requires the land the subject of the compensation claim under s 98(1)(a) to be understood not as the land the subject of the claim for compensation, but as 'at least the land the subject of the Permit Refusal'.[361] It contends that if s 98(1)(a) is read as referring to the land the subject of the claim for compensation, this would have the effect that it 'allows an owner to in effect self-select the land the subject of a claim for compensation and that compensation is to be assessed accordingly.'[362] The Authority accepts that a claimant is entitled under s 98 to select any land it owns or occupies as for the purposes of making a claim. However it says that to construe the Act as requiring assessment of financial loss with respect only to property the subject of a claim, rather than all of the claimant's land subject to a planning permit refusal, would not be just and would 'lead to potential and obvious abuses of the compensation regime.'[363] It is also submitted that to ignore the enhancement in value of other land affected by a reservation and subject to the same planning permit refusal would 'provide a windfall, which may never be brought to bear in any subsequent acquisition'.[364]

272 Mr Barrett contends that the text, context and purpose of ss 98 and 99 of the Planning and Environment Act are to the effect that only the land that is the subject of the claim for compensation is to be considered in identifying and quantifying the financial loss. It is said that there is no basis in the Act to take enhancement of the Argoona Road Land into account in the calculation of Mr Barrett's loss arising from the imposition of PAO5 on the Subject Land.[365] It is also contended that even if contrary to that position, the Argoona Road Land is relevant in assessing the compensation payable with respect to the Subject Land, the quantum of any increase in value of the Argoona Road Land is not agreed. This is in part because of features affecting the more southern developable pocket of land, primarily a buffer for the purposes of a quarry and a gas easement which, in Mr Barrett's submission, make it uncertain whether that land can be developed.[366]

273 It is appropriate to note at the outset that it was not submitted by the Authority that it was necessary to take into account the Argoona Road Land in assessing financial loss as a matter of proper valuation practice. It was said to be a requirement of the statutory scheme. This was consistent with the valuation evidence. Mr Brown observed that Mr Kinnaird had not undertaken an assessment of the Argoona Road Land, and stated that he considered that it was inappropriate to exclude this property. However the basis of his opinion was not a matter of valuation practice but was based on his understanding of the applicable legislative provisions. He explained his conclusion as follows:

It is noted that the three Certificates of Title that form the holding are all in the registered proprietor's name of Jeffrey Robert Barrett. I consider it is appropriate in assessing financial loss pursuant to the [Planning and Environment] Act for it to be consistent with the assessment of compensation under the Land Acquisition and Compensation Act 1986 and the need to have regard to 'the enhancement or depreciation in value of the interest of the claimant, at the date of acquisition, in other land adjoining or severed from the acquired land by reason of the implementation of the purpose for which the land was acquired'.[367]

274 Assessment by reference to the Land Acquisition and Compensation Act is not an appropriate basis on which to conclude that it is necessary to assess the financial loss by reference to the Argoona Road Land as well as the Subject Land. As discussed above, assessment of financial loss pursuant to the Planning and Environment Act does not involve the application of provisions of the Land Acquisition and Compensation Act other than those applied by s 105 of the former Act.

275 It is necessary to turn to the terms of the Planning and Environment Act to consider whether they support the Authority's contention.

Consideration - the proper construction and effect of ss 98 and 99

The text of ss 98 and 99: the focus is on the land the subject of the claim for compensation

276 The starting point is to consider the language of ss 98 and 99 in the context of the Planning and Environment Act to determine whether these provisions require that the assessment of financial loss take into account not only the natural, direct and reasonable consequence of the reservation on the land the subject of the claim for compensation, but also the effect on other land owned by the claimant. This task of statutory interpretation must commence with a consideration of the statutory text, considered in its context, including the purpose and policy of the relevant provisions.[368]

277 Section 98(1) provides, as relevant to the present claim:

(1) The owner or occupier of any land may claim compensation from the planning authority for financial loss suffered as the natural, direct and reasonable consequence of -

(a) the land being reserved for a public purpose under a planning scheme;

278 The Authority contends that the opening words, or chapeau, of s 98 identifies the person who may make a claim for compensation but 'does not resolve the issue of identifying the assessable land that gives rise to the Authority's liability to pay compensation'.[369] It submits that the words of s 98(1)(a) are of 'potentially extraordinarily wide import as they are constrained only by "the land" being reserved by a public purpose', and that it is 'not possible to resolve the potential breadth of those words'.[370] The Authority submits that the relevant land is to be understood by reference not to the chapeau of s 98 but to the terms of ss 98(1)(a) and 99(a)(i). It is said that 'the land' for the purposes of those sections is the land the subject of the permit refusal referred to in s 99(1)(a), or 'the land being reserved for a public purpose under a planning scheme' in s 98(1)(a).[371]

279 This is not, in my view, how the legislation is to be read.

280 First, I do not accept the Authority's submission that the reference to 'the land' in s 98(1)(a) is constrained only by the language of that paragraph and the reference to it being 'reserved for a public purpose', with the effect that the words have extraordinarily wide import or a breadth that cannot be resolved. A natural reading of s 98 requires reading its components in sequence, and in particular reading s 98(1)(a) in the context of the introductory words or chapeau. The chapeau provides a natural constraint on how the words of s 98(1)(a) are to be read. The starting point is the reference in the chapeau to the owner or occupier 'of any land' claiming compensation. When 'the land' is then referred to in s 98(1)(a) and thereafter, it is natural to read it as the land the subject to the claim for compensation which is the subject of the chapeau. That would have the effect that s 98(1)(a) with the chapeau reads, omitting irrelevant parts:

... the owner... of any land may claim compensation ... for financial loss suffered as the natural, direct, and reasonable consequence of ... the land being reserved for a public purpose...

281 A harmonious and natural reading of s 98 involves construing the word 'land' consistently throughout,[372] and reading the reference to 'the land' in s 98(1)(a) in the context of the previous reference to 'any land' in the chapeau to s 98(1).

282 It is not, in my view, appropriate to read the words of s 98(1)(a) as being limited by the terms of s 99(a)(i), and its provisions relating to the refusal or failure to grant a permit, or the grant of a permit subject to conditions. Those sections must be read together, but s 98(1)(a) also must be read in its immediate context, in particular the chapeau of s 98, and in the context of the whole of the Planning and Environment Act, and not solely s 99(a)(i).

283 The reference in s 98(1) to 'any land' and 'the land' is engaged in other sections in Part 5 which also fall to be considered in determining how the phrases are to be construed. For example, s 98(3) refers to limits on the ability to claim compensation, and again refers to 'the land', as follows:

(3) A person cannot claim compensation under subsection (1) if -

(a) the planning authority has purchased or compulsorily acquired the land or part of the land;

(b) a condition on the permit provides that compensation is not payable;

(c) the land has been, or is required to be, provided to a development agency or the collecting agency under section 46GV(4); or

(d) the land has been, or is to be, acquired by a development agency in accordance with an approved infrastructure contributions plan.

284 The opening words of s 98(3) state that a person 'cannot claim compensation under subsection (1) if...' before referring to the circumstances in (a) to (c) which include references to 'the land'. The references to 'the land' in subparagraphs (a), (c) and (d) are thereby expressly tied back to s 98(1). The word 'land' in s 98(3) should be regarded as bearing the same meaning throughout that subsection unless the context requires otherwise. That is readily possible if the 'land' is understood, consistent with the reference back to s 98(1), as simply the land the subject of the claim for compensation.

285 Secondly, once it is understood that the reference to 'land' in s 98 should be understood as having a consistent meaning throughout - that is, that it is a reference to the land the subject of the compensation claim referred to in the chapeau to s 98(1) - it is clear that the reference in s 99(a)(i) to the right to compensation and liability to pay compensation arising 'under section 98(1)(a), (b) or (c)' will incorporate that consistent s 98 meaning. Section 99(a)(i) relevantly states:

A right to compensation and the liability of a planning authority ... to pay compensation arises -

(a) under section 98(1)(a), (b) or (c) after -

(i) the responsible authority has refused to grant a permit for the ... development of the land on the ground that it is or may be required for a public purpose...

286 Section 99(a) engages ss 98(1)(a), (b) and (c), and the terms of those sections properly construed. It does not dictate the meaning of those sections. Applying the meaning of land used in ss 98(1)(a), (b) and (c), it follows that s 99(a)(i) is to be construed in this way:

A right to compensation and the liability of a planning authority ... to pay compensation arises... under section 98(1)(a), (b) or (c) after ... the responsible authority has refused to grant a permit for the ... development of the land [the subject of the claim for compensation] on the ground that it is or may be required for a public purpose....

287 Thirdly, there is nothing in the context or purpose of the Planning and Environment Act which alters the above conclusions. The provisions in s 4 of the Act in relation to the objectives of planning in Victoria, and the planning framework established by the Act, are consistent with a focus on the financial loss suffered as a natural, direct and reasonable consequence of land that is the subject of a claim for compensation being reserved for a public purpose. The objectives are, as the Authority contends, consistent with a concern to provide only fair and not excessive compensation for that financial loss.[373] However they are also consistent with the interests of a landowner or occupier obtaining fair compensation where their land is affected by a reservation for a public purpose.[374] As observed by Richards J in Plunkett, the compensation provisions in pt 5:

strike a balance between the private interest of owners and occupiers of affected land, and the public interest in 'fair, orderly, economic and sustainable' land use and development...

...

Their purpose is to provide fair compensation for affected landowners, while also facilitating orderly land use planning for public purposes and conserving public funds by deferring the payment of compensation until actual loss is suffered.[375]

288 The objectives of the Planning and Environment Act and the balancing of interests they reflect do not provide any decisive support for the Authority's construction.

289 The provisions relating to recording of compensation in ss 110 to 112 are an additional contextual consideration which suggests that the Planning and Environment Act does not contemplate that enhancement in value of land, which is owned by the claimant but is not the subject of a claim for compensation, will be taken into account in assessing quantum of compensation. Section 110 provides for persons who have paid compensation under the Act or a corresponding previous enactment to lodge a statement with the Registrar of Titles which must, according to s 110(2):

(a) describe the land for which the compensation was paid; and

(b) give the prescribed particulars of the compensation.

290 Pursuant to s 110(3), the Registrar of Titles must make any recordings in the Register which are necessary to bring the statement to the notice of anyone searching the Register. Section 111 provides for recovery of compensation paid if, inter alia, the planning scheme is amended to remove the reservation and the owner must repay it. Section 112 provides for reimbursement of compensation the subject of a statement under s 110. It is unclear how these provisions would operate if enhancements to the value of land other than the land the subject of a claim for compensation were taken into account in determining the quantum of compensation, given that no 'compensation was paid' for the other land within the meaning of s 110(2).

291 Finally, it is relevant to take into account the legislative history of these provisions. The Planning and Environment Act was enacted shortly after the Land Acquisition and Compensation Act, and drafted with awareness of the contents of that Act.[376] However, the Planning and Environment Act does not contain an express statutory provision relating to enhancement of adjoining land of the kind included in s 41(1)(e) of the Land Acquisition and Compensation Act. Section 41(1)(e) provides:

41 General principles on which compensation is to be based

(1) Except as otherwise provided in this Part, in assessing the amount of compensation payable to a claimant in respect of an interest in land which is acquired under this Act, regard must be had to the following factors -

(e) the enhancement or depreciation in value of the interest of the claimant, at the date of acquisition, in other land adjoining or severed from the acquired land by reason of the implementation of the purpose for which the land was acquired;...

292 The Planning and Environment Act by reason of s 105 of that Act applies specific provisions of the Land Acquisition and Compensation Act, with necessary changes. It does not apply s 41 or any part of it. It is apparent that in the legislative process attention was directed to the scope of the valuation principles and processes which should be adopted for the purposes of pt 5 of the Planning and Environment Act from the statutory regime for land acquisition. No specific provision was made with respect to enhancement or depreciation of adjoining or severed land in the Planning and Environment Act. It can be inferred in these circumstances that there was no legislative intention that such enhancement or depreciation be brought to account in the process of assessing compensation for the effect of a reservation under pt 5.

The requirement that only 'actual financial loss' be compensated does not require that impacts on land other than land the subject of a claim be taken into account

293 The Authority's position was that there was 'no need to determine the meaning of "the land" in s 98(1)(a) of the [Planning and Environment Act] in this case' but that the primary requirement was to 'ascertain the Claimant's actual financial loss the natural, direct and reasonable consequence of PAO5'.[377]

In assessing the Claimant's loss (which he has the right to receive by reason of 99(a)(i)), the question arises, on the facts of this case, whether the assessment of Claimant's actual financial loss (and the Authority's corresponding liability) must have regard to the Permit Refusal and therefore Both Properties. The Authority contends that it must because any award of compensation would overcompensate and not reflect the Claimant's actual financial loss.

The Authority contends that its position is supported by a reading of Part 5 and the P&E Act as a whole. The Authority relies upon the statutory context as supporting its position in relation to the issue of the Claimant's actual financial loss. It does not, however, consider it either necessary nor indeed desirable (given unintended consequences) that the Court make any firm conclusion about the meaning of 'any land' or 'the land' as those terms are used in Part 5 including in s 98(1). The task for the Court is that of ascertaining actual loss having regard to the circumstances of this case; nothing more.[378]

295 With respect to the element of the Authority's contention relating to the requirement that 'actual' financial loss must be sustained in order for compensation to be payable under pt 5, it is clear from recent Court of Appeal authority that this is the case. The Court of Appeal in Brompton Lodge observed (emphasis added):

In contrast, the scheme in pt 5 of the PE Act recognises that the reservation of land will not, in and of itself, cause loss. Indeed, reservation may enhance the value of land where it is for a purpose which, when effected, will make the land more valuable, such as the establishment of a transport corridor in an area slated for urban development. It may, at the time of reservation, not be clear whether and to what extent the value of land is reduced or enhanced by the reservation. The highest and best use of the land and its market value may change subsequent to reservation. Even where reservation can be expected to reduce the value of land, there will be no financial loss to the owner unless and until it impedes the owner's ability to use or develop the land, or where it results in a loss on the sale of the land.[379]

296 The Court observed that it was clear 'that the compensation regime in pt 5 of the PE Act is concerned with the actual loss suffered by the owner of reserved land, not with an abstract or hypothetical loss, or a loss likely to be suffered in the future if and when the reserved land is resumed'.[380] The Court has thus emphasised the importance of identifying a real loss rather than some 'abstract or hypothetical loss' or some future potential loss upon later acquisition or resumption of the land.

297 Accepting the Authority's emphasis on the importance of compensating only actual financial loss, this does not ultimately resolve the issue in the present case. The issue that remains is what does the Planning and Environment Act require in identifying the land for the purposes of assessing that actual financial loss: is it the land the subject of the claim for compensation, or the land the subject of the permit application?

298 The Authority's submission, referred to at [293]-[294] above, is that the 'statutory context' supports its position but that it is 'unnecessary' for the Court to construe and make a conclusion as to the meaning of the words 'any land' and 'the land' in s 98(1). It is said that the Court should not conclude what those words mean, but should focus on the issue of what 'actual financial loss' was suffered. This is inconsistent with the clear and consistent authority on the construction of statutes. That is:

'... the task of statutory construction must begin with a consideration of the [statutory] text.' So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and insofar as, it assists in fixing the meaning of the statutory text.[381]

299 The terms of the Planning and Environment Act are determinative[382] and it is necessary to engage with them closely as the starting point.

300 For the reasons at [280]-[292] above, the text of ss 98 and 99 and the context of those sections focuses on the land the subject of the claim for compensation. Section 99 engages the issue of whether the responsible authority has refused to grant a permit for the use or development of that land. Determination of the quantum of the claim for compensation involves determination of the actual financial loss suffered as the natural, direct and reasonable consequence of the land the subject of the claim for compensation being reserved for a public purpose under a planning scheme.

Authority's argument as to potential windfalls and overcompensation

301 The Authority acknowledges that in any future acquisition process, the Argoona Road Land would be valued on a before and after basis, and that in both scenarios, the reservation would be excluded completely.[383] The outcome of the valuation process would be that the land was worth more in the 'after' scenario than in the 'before', so that 'there would be a deficit resulting in a nil award'.[384] The increase in land would not be accounted for in the sense of the Authority having no entitlement to be paid an amount reflecting the increase in value.[385]

302 Mr Barrett submits that any concern that he will obtain a windfall if the Argoona Road Land is not taken into account in determining the quantum of compensation payable with respect to the Subject Land is misconceived, as any enhancement of the value of the Argoona Road Land will be brought to account if the Authority seeks to acquire the two properties. It is submitted that:

First, the value of the land will be assessed together on a before and after basis under s 41(3) of the [Land Acquisition and Compensation Act], and the assumed hypothetical "before" scenario will be compared with the actual after scenario (which includes the enhancement in respect of the Argoona Land), having regard to the statutory directions contained in s 43(1)(a) and (d). That compensation will be further adjusted by the planning compensation already paid, having regard to the statutory directive and formula contained in ss 41(5) and (7) of the [Land Acquisition and Compensation Act].

Second, in the case of the Barrett Land alone, the Authority on acquisition could seek to offset any residual compensation payable at that point under s 41(1)(e) of the [Land Acquisition and Compensation Act].

In each case, any theoretical windfall gain in respect of the Argoona Land would be expressly accounted for. Alternatively, should the Authority seek in future to unwind the OMR reservation, s 111 of the [Planning and Environment Act] has the effect that the planning blight compensation paid in respect of the Barrett Land may be recovered.[386]

303 The Authority contends that the potential interaction with the treatment of land in the compulsory acquisition process is not something which can bear on the statutory construction of ss 98 and 99 of the Planning and Environment Act.[387] I accept that it is the case that it cannot directly inform the construction issue. However, the issue was raised by Mr Barrett not as a matter relevant to statutory construction but in response to the Authority's assertion that to 'self-select'[388] land for a claim for compensation and not bring to account potential enhancement of other land by reason of a reservation would result in windfall gains or over-compensation, or be generally unjust. The question of whether adjustments made if one or both properties are acquired would counteract or ameliorate any 'benefit' in the context of the pt 5 compensation claim is relevant to that submission.

304 I accept Mr Barrett's submission that if reservation PAO5 has resulted in an increase in the value of the Argoona Road Land, this may be brought to account if the Authority does seek to acquire the Subject Land and the Argoona Road Land. Section 41(3) of the Land Acquisition and Compensation Act will require compensation to be assessed by reference to the valuation of the properties on a before and after basis, and the 'after' valuation will incorporate any enhancement in the value of the Argoona Road Land.

305 If the Authority acquired only the Subject Land, s 41(1)(e), which provides that in assessing compensation, regard must be had to the enhancement or depreciation in value of the claimant's interest in other land adjoining the acquired land by reason of the implementation of the public purpose for which the land is acquired, will apply.

306 The enhancement of the Argoona Road Land by reason of the implementation of the OMR and associated planning changes would accordingly be taken into account in assessing any residual compensation payable with respect to the Subject Land. It is possible that there may be a notional enhanced value of the Argoona Road Land in excess of the amount that could be 'offset' in this way. The fact that there is no mechanism in either the Planning and Environment Act or the Land Acquisition and Compensation Act for the Authority to require payment from Mr Barrett to that extent is not a reason to construe pt 5 of the Planning and Environment Act other than according to its terms.

307 Had the legislature intended to ensure that any enhancement of other land owned by a claimant by reason of a reservation for a public purpose was brought to account at the stage of the pt 5 compensation process, that outcome could readily have been achieved by specific provision to that effect in the Planning and Environment Act. Section 41(1)(e) of the Land Acquisition and Compensation Act, referred to at [291] above, provided a clear example of how this could be done.

The factual issue - to what extent is the value of the Argoona Road Land enhanced by PAO5?

308 In circumstances where I have concluded that it is not appropriate to take into account any enhancement of the value of the Argoona Road Land in determining the quantum of the compensation for financial loss payable with respect to the Subject Land, it is unnecessary to determine the precise value of that enhancement.

309 While it would usually be desirable to make a factual finding on matters which may arise in the event that I am wrong in a legal conclusion, I do not think it desirable to do so in this case. The submissions on the quantum of the enhancement were such that the issue was not fully ventilated in a way that makes a finding readily available.

310 The Authority contended that 'there is no contest' that 'PAO5 enhanced the value of 2 Argoona Road', based on the Joint Statement of Valuation Experts of Mr Kinnaird, Mr Molloy and Mr Brown,[389] and that it was an 'established fact' that the value of the enhancement was 'approximately $2,500,000'.[390] That was not, however, an agreed position.

311 Mr Kinnaird's valuation of the Argoona Road Land treated the land as unaffected by the PAO7 as well as PAO5, which was a matter materially relevant to his conclusions as to value of the Argoona Road Land. It was accepted in submissions for Mr Barrett that it was incorrect to assume that PAO7 did not apply.[391] However, Mr Kinnaird's Report and the Joint Statement of Valuation Experts was not altered to that effect. The Authority submitted that, adjusting for this error, Mr Kinnaird's estimate of the enhancement should be adjusted to increase from $450,000 to 'around' $2,500,000, and contended that a financial benefit of approximately that amount was an established fact.[392] The Authority identified some calculations potentially relevant to how it arrived at that figure,[393] but Mr Kinnaird, in cross examination, did not specifically endorse any final calculation as to value of the Argoona Road Land, taking into account the need for adjustment to the PAO7 assumption.[394]

312 Although Mr Barrett accepted in submission that Mr Kinnaird was in error in disregarding PAO7 in his valuations, he contended that the Authority's submissions as to the extent of the enhancement should not be accepted. This was primarily because the evidence did not establish that the southern slice of the Argoona Road Land would be developable. Although that pocket would be within the Urban Growth Boundary, it was agreed in the Joint Statement of Town Planning Experts that this land 'is located within the buffer to the adjacent quarry (WA43) which would constrain urban development.'[395] At trial, Mr Kinnaird gave evidence that the easement affected the per ha value of that land.[396]

313 Mr Barrett also relied on the evidence of Mr Negri, which identified that the land was also encumbered by a gas easement and that any developable area fell between the gas easement and the reservation for the OMR.[397] Mr Molloy, valuer for the Authority, observed that '[r]esidential development of that land is ...considered heavily constrained for the foreseeable future until, presumably, the quarry resource is exhausted, and the buffer removed', and noted that the quarry has not yet commenced operating.[398] The Authority's other valuation expert, Mr Brown, stated that the land 'is considered to be heavily encumbered due to being located within the quarry buffer zone' and agreed with Mr Molloy's assessment that the future development potential of this component is unlikely to be realised in the short to medium term.[399] The two experts were cross examined but did not alter their opinions on those issues.[400]

314 The northern pocket of land did not have the same development constraints. Mr Kinnaird appeared to accept that this land had development potential and should be valued as such, but did not make entirely clear how many hectares of the land were encompassed by that conclusion.[401]

315 On the basis of the evidence, Mr Barrett submitted that the increase in value of the Argoona Road Land was so speculative that it ought not to be brought to account on this basis. He also asserted that if any increase was to be taken into account, 'the valuers [are] only separated by approximately $220,000'.[402] He submitted that:

the valuation evidence demonstrates that the southern portion of the Argoona Land is impeded from development by a quarry, gas easement, and proximity to the OMR (see [Applicant's Outline of Opening Submissions], [122]-[129]). It is unclear as to when any value from the rezoning with respect to this land (even if just treated as equivalent to green wedge) could be realised by Mr Barrett, if ever.[403]

316 There was, therefore, no agreement on the extent of the increase in value of the Argoona Road Land on the evidence. It was not the subject of agreement in the joint statement of the valuers. The consequence of Mr Barrett's acceptance that Mr Kinnaird should not have assumed the absence of PAO7 and its flow on effect to the enhanced value of the Argoona Road Land was not clearly identified in evidence or submissions. In these circumstances it would not be desirable to make a finding on that issue when such a finding is not strictly necessary to determine the proceeding. In these circumstances, and in light of my conclusion above that any enhancement the Argoona Road Land is not to be taken into account in assessing the financial loss arising as the natural, direct, and reasonable consequence of the reservation on the Subject Land, I will not make any factual findings on the issue.

317 The Subject Land is intersected by a reserve for a planned road, Quandong Road (or 'Paper Road'). The position of that road reservation is shown on the registered plan below:[404]

318 The Before Plan for the development of the Subject Land assumes that the Paper Road (which has an area of approximately 0.6ha) will be incorporated into the Subject Land, and will be in part subject to the drainage reserve for this northern part of the land, and in part available for residential development.

319 Mr Barrett's valuation expert, Mr Kinnaird, expressed the opinion that the total developable land area is 63.20ha and the gross developable area (GDA) is 51.45ha in the 'before' scenario. He valued the land on the assumption that 0.47ha of the Paper Road land would be developable in the 'before' scenario, which contributed to the developable land area.[405]

320 Mr Molloy for the Authority expressed the opinion that the total developable land area in the before scenario is lower, at 62.60ha, with the GDA at 51.955ha.[406]

321 The primary reason for the difference in the developable land area was that Mr Kinnaird assumed that the Quandong Road reserve or Paper Road would be incorporated in the Subject Land.[407]

322 The Authority submits that it is not open to include the Paper Road in the developable land, which was not at the Relevant Date owned by Mr Barrett as claimant. It submits that it is necessary to be the 'owner' of land to have a right to claim compensation under s 98(1)(a) of the Planning and Environment Act, and, because the land the subject of the Quandong Road reserve was not owned by Mr Barrett, the claim should simply be dismissed insofar as it relates to the Paper Road. The Authority also submits that even if it was accepted that Mr Barrett could purchase the Paper Road land, he would not have a right to claim compensation, as he would have acquired the land after the reservation and he would not satisfy the standing requirement in s 108(1) by reason of s 108(2)(a).[408]

323 The Authority submits that the issue appears to be worth approximately $350,000, and contends that if Mr Kinnaird's assessment was otherwise accepted it would need to be revised by a deduction of that amount.[409]

324 Mr Barrett submits that Mr Molloy as well as Mr Kinnaird had assumed that in the 'before' scenario, the road reserve would be acquired by a purchaser or developer of the Subject Land and could be taken into account on that basis.[410] It was only when instructed to put that assumption aside that Mr Molloy altered his opinion as to the developable area.[411]

325 Mr Barrett submits that questions of whether he did or did not own the land at the time a right to compensation arose are not material as the relevant issue is the value of the land, and that the appropriate assumption is that 'the putative purchaser would have assumed he or she would buy that land, and factored the acquisition into the price he or she paid for the [Subject Land]'.[412] He submits that this is an appropriate assumption by reason of expert evidence of a traffic engineer that the Paper Road was in fact redundant and would not be constructed in the 'before' scenario.[413]

326 It is clear from the terms of pt 5 of the Planning and Environment Act that only an owner or occupier of land may claim compensation for financial loss suffered as a consequence of that land being reserved for a public purpose. Section 98(1) states that '[t]he owner or occupier of any land may claim compensation'. Section 101 limits the claim for expenses to the owner or occupier of the land, and s 106(1) refers to a claim for compensation only by the 'owner of land'. Section 108 provides:

108 Persons who are not eligible to claim compensation

(1) A person does not have a claim for compensation in respect of any land if that person was not the owner of occupier of the land at the time the right to claim compensation arose.

(2) A person does not have a claim for compensation in respect of the sale of land which the person acquired after -

(a) notice is published in the Government Gazette under section 19 of a proposed planning scheme or amendment to a planning scheme which shows the land as being reserved for a public purpose; or

(b) the approval of a planning scheme or amendment reserving the land for public purposes; or

(c) a declaration under section 113 that the land is proposed to be reserved for public purposes -

unless a subsequent amendment to the planning scheme provides or proposes more stringent planning controls over the use or development of the land.

327 It is clear that Mr Barrett could not claim compensation for financial loss due to the reservation of the land the subject of the Quandong Road Reservation as the owner of that land, as he clearly does not own it. The terms of the legislation above make clear that this is not open.

328 Mr Barrett did not contend that his entitlement arose by reason of him being an 'occupier' of the Paper Road land.[414] It is not necessary to consider whether there may have been an entitlement to claim compensation on that basis, because I am not persuaded that the evidence on the issue supports Mr Barrett's approach. Also, it is not clear that the terms of the statute determine this issue.

329 The argument for Mr Barrett is that his valuer's approach to the Paper Road does not involve valuing that land as if it was his. Rather, it is submitted that the Subject Land actually owned by Mr Barrett should be valued on the basis that a purchaser of that land would assume that they can purchase the Paper Road land, and incorporate it into its development. The per hectare value of the Subject Land actually owned by Mr Barrett would then reflect that potential to purchase the Paper Road land. Such an analysis would not entail the future purchaser then seeking compensation for the Paper Road land (which as the Authority says would be precluded by s 108), and the cost of the acquisition is brought to account in Mr Kinnaird's valuation.

330 This is an important issue, which was not explored in submissions in great detail because of the limited financial impact. The correct approach to this problem may well be an important issue of principle with consequences in future cases, and I do not think it appropriate to express a definitive view on it. That is appropriate because Mr Barrett's claim, insofar as it relates to treatment of the Paper Road, should in my view be rejected having regard to the expert evidence on the issue.

331 Even if it was accepted, as submitted for Mr Barrett, that the appropriate assumption is that the hypothetical purchaser in the counterfactual 'before' scenario would be that the Paper Road could be purchased from the Crown for incorporation into a residential subdivision, such that it would have factored this potential into the acquisition cost, there remains a question as to how that then impacts the valuation of the Subject Land. It remains necessary to consider the experts' opinions applying that assumption.

332 In my view, Mr Barrett's submission that Mr Molloy and Mr Kinnaird were initially agreed as to the appropriate approach to the Paper Road, and support his position, is not entirely correct.

333 Mr Kinnaird explained that, with respect to the Paper Road:

In my assessment, I have made a below the line deduction of an estimated cost of acquisition of this road, noting it is currently in public ownership. I have assessed a 50% discount to headline land rate and estimated an approximate developable area/encumbered area of this parcel based on the development plans provided. I have estimated the developable portion of the paper road to be approximately 0.47 hectares and have undertaken calculations on this basis.[415]

334 Mr Molloy did accept that the Paper Road would likely be able to be purchased and consolidated into the Subject Land, but noted that this may have taken at least 12 months. He said (emphasis added):

Paper Road: The unmade section of the Quandong Road Reserve (i.e., Paper Road) is shown incorporated in the "Before 1" Plan. A formal road closure process and purchase from the Crown would need to occur before a permit could issue for development. That process would have taken at least 12 months and the outcome is uncertain (assumption 1.(b)).

Regarding the risk of an adverse outcome, I consider that low because the Paper Road primarily traverses the Western Grassland Reserve to the west of the Subject Land. Because of that, I consider it unlikely that it would ever be constructed. Further, suitable alternative road connections on the Subject Land are proposed as part of the development. I therefore consider it likely that the Quandong Road Reserve (the Paper Road) would be consolidated into the "Before 1" Plan.

In terms of timing, I have assumed the above process would be undertaken contemporaneously with the CHMP preparation, meaning it would be completed before the CHMP and would not impact on timing.

In terms of purchase cost, I have assumed, based on my experience, that would be based on the inglobo land value rate of the broader Subject Land, and I have incorporated an adjustment accordingly.[416]

335 Mr Molloy accepted that the process of incorporating the Paper Road into the Subject Land would take some time (and appeared to proceed on the basis of the 12 month period in the assumption). However, he also expressed the opinion that this 'would not impact on timing' as it would be contemporaneous with the process of obtaining a CHMP. As I have rejected the Authority's argument that a new CHMP would be required, it is not appropriate to proceed on an assumption that there would be a CHMP process. On that basis, there would remain a 12 month period to be factored into the expert opinion, relating only to the Paper Road acquisition, which was not done. Had it been done, there may have been similar effects to the discount attributable to the deferral period adopted by the experts in their analysis on the CHMP issue.

336 It is not clear from the terms of Mr Kinnaird's report that his process of dealing with the Paper Road includes reference to the time period that may be required for the acquisition process, and whether that was factored into the acquisition costs that he deducted. Having regard to Mr Molloy's analysis, I cannot be satisfied on the balance of probabilities that Mr Kinnaird's opinion that 0.47ha of the Paper Road should be taken into account as developable land is correct.

337 I also have some reservations about the conclusion reached by Mr Kinnaird that the developable area is larger by reason of the incorporation of the Paper Road. That does appear to approach the issue on the basis that he is valuing both the Subject Land and the developable part of the Paper Road land per hectare, rather than attributing a higher price per ha to the Subject Land owned by Mr Barrett on the basis that it is more valuable given the potential to acquire the Paper Road. The former approach would appear prima facie consistent with the inability to claim compensation with respect to land not owned or occupied by a claimant. The issue was not explored at trial. I do not need to resolve it, given my conclusion above that I otherwise do not accept the approach of Mr Barrett's valuation expert to the Paper Road issue.

338 Mr Barrett did not dispute the Authority's conclusion that the financial impact of the Paper Road issue appeared to be approximately $350,000.[417] There was no real exploration in submissions of how that figure was identified as the consequence of the loss. As it was not contested, I accept that this is an appropriate amount to deduct from the total claim to reflect my conclusions above.

339 Both parties accepted that although there were some minor differences between the experts on aspects of the valuation, those matters were not so material as to require individual determination. The material issues were the threshold issues of whether the Subject Land was 'permit ready', the treatment of the Argoona Road Land, and the Paper Road. The Authority very sensibly submitted as follows:

If both threshold issues are determined by the Court in favour of the Claimant, the Claimant contends that he is entitled to an award of $28,275,000 under ss 98 and 99 (allowing for the cap in s 104). The Authority does not contest this quantum if the Court rules on the threshold issues in favour of the Claimant, save for the inclusion of the paper road.[418] Should the Court reject the paper road's inclusion in an award, the quantum of the award will need to be recalculated to exclude the paper road.[419]

340 Mr Barrett embraced this submission. He submitted that adopting elements of Mr Molloy's valuation, adjusted on the basis that the CHMP issue is resolved in Mr Barrett's favour and the Subject Land should be valued on the basis that it is permit ready, may give rise to a higher quantum of loss. However, he did not actively seek an assessment of his loss on that basis, and took the position that the Court could comfortably make the award of compensation in the amount sought by him in his Amended Particulars of Claim, namely $28,275,000.[420] As Mr Barrett accepted that the financial impact of the Paper Road issue was approximately $350,000, it is appropriate to reduce the total by that amount, to $27,925,000.

341 The parties conferred with respect to Mr Barrett's expenses claim pursuant to s 101 of the Planning and Environment Act, and informed me in closing submissions that it was resolved with an agreed amount which had already been paid.[421] In these circumstances it is unnecessary to address that aspect of the claim further.

342 I assess Mr Barrett's financial loss as a natural, direct and reasonable consequence of the Subject Land being reserved by PAO5 for the public purpose of the OMR as $27,925,000.

343 I will hear the parties as to the form or orders and the appropriate costs orders.

[1] Expert Report of Alison Milner of Milner Planning Advisory dated 21 June 2024 (the Authority's town planning expert) (Milner Report), p 5.

[2] Milner Report, p 5, (Figure 2) extracting a diagram from the Wyndham Planning Scheme, Amendment VC68.

[3] Refusal to Grant a Planning Permit re 1005 Ballan Road Wyndham Vale and 2 Argoona Road Manor Lakes, issued 1 June 2021, p 1 (Document within Exhibit R6), which stated:

'VicRoads (Department of Transport) as determining referral authority pursuant to Section 55 of the Planning and Environment Act 1987 objects [to] the granting of a planning permit on the following grounds:

• The section of land within the Public Acquisition Overlay (PA05) is required for the future Outer Metropolitan Ring Transport Corridor and the proposed subdivision of this land is not consistent with the purpose of the PAO.'

[4] An office created by the Transport Integration Act 2010 (Vic) s 64A.

[5] See Land Acquisition and Compensation Act 1986 (Vic), s 37(4) and Planning and Environment Act, s 105, referred to at [27]-[31] below.

[6] Applicant's Particulars of Claim filed 11 August 2023, [1]-[7].

[7] Respondent's Particulars of Offer filed 8 September 2023, [7]-[9].

[8] Respondent's Particulars of Offer, Particulars of Offer, on p 7.

[9] This amendment occurred after an application was made by Mr Barrett for the hearing of separate questions (by summons filed 8 December 2023) which was heard by Richards J (as her Honour then was) on 14 March 2024. The first proposed separate question related to whether the 1 June 2023 Notice of Refusal of the planning permit application enlivened Mr Barrett's right to claim compensation under pt 5 of the Planning and Environment Act. The Authority resisted the hearing of separate questions. However, senior counsel for the Authority, when questioned on its position on the threshold question of whether the refusal satisfied the requirements in s 99 of the Act, and its continued maintenance of a $0 offer of compensation, acknowledged that its position on that issue 'is not the best part of our case': Transcript 14 March 2024, T38.07-10. The Authority later made a formal concession and informed the Court that it did not maintain any argument that the requirements of s 99 were not satisfied: T84.04-T86.05. Orders were subsequently made for the Particulars of Offer to be amended accordingly.

[10] Respondent's Amended Particulars of Offer filed 21 March 2024, [6(e)]; [8(a)]; p 8.

[11] Applicant's Amended Particulars of Claim filed 3 March 2025, [12]; [14].

[12] Respondent's Further Amended Particulars of Offer filed 14 March 2025, [7(a)]; Particulars of Offer on p 8.

[13] Authority's Outline of Opening Submissions filed 10 June 2025, [55]-[60].

[14] Authority's Outline of Opening Submissions, [54]-[68]; Transcript 19 June 2025, T157.11-159.03; T162.08-163.04; T237.11-31; T241.12-T246.26; T247.10-250.23; Transcript 26 June 2025, T725.27-729.22. See also Authority's Outline of Closing Submissions filed 26 June 2025, [26]-[31].

[15] Mason v Head, Transport for Victoria [2021] VSCA 19; (2021) 63 VR 175, 185 [50(a)] (Beach, Emerton and Osborn JJA); Brompton Lodge Pty Ltd v Head, Transport for Victoria [2021] VSCA 302, [91]-[92] (Emerton, Kennedy and Osborn JJA).

[16] Aide Memoire of the Authority handed up on 20 June 2025, [20].

[17] Authority's Outline of Closing Submissions, [188]-[190].

[18] See, for example, the observations of Emerton J, as her Honour then was, in Capela v Minister for Energy, Environment and Climate Change [2018] VSC 360, [19].

[19] Plunkett v Roads Corporation (2019) 239 LGERA 156.

[21] s 4(1)(a).

[22] s 4(1)(e).

[23] s 4(1)(g).

[24] s 4(2)(l).

[25] (2025) 264 LGERA 1, 22 [56] (Emerton P, Richards JA and Garde AJA).

[26] Planning and Environment Regulations 2015 (Vic).

[27] Letter from Department of Transport (Team Leader Statutory Planning, under delegation from the Head, Transport for Victoria) to Wyndham City Council, 21 October 2020. Note also Town Planning Delegate Report at pp 5 and 21-22.

[28] Barilla v Roads Corporation (2017) 54 VR 198, 213 [71]-[73] (Emerton J, as her Honour then was).

[29] The Valuation of Land Act has been acknowledged to be relevant to assessment of compensation claims under pt 5 of the Planning and Environment Act in Studley Developments Pty Ltd v Department for Planning & Urban Growth [1993] VicRp 3; [1993] 1 VR 15, 20 (Gobbo J); Kilpatrick v Head, Transport for Victoria [2020] VSC 53, [33] (Garde J).

[30] Transcript 19 June 2025, T203.15-T204.06; Transcript 20 June 2025, T312.24-T315.18 (submissions). Authority's Outline of Opening Submissions, [115]-[120]; Transcript 27 June 2025, T858.30-T859.06; T965.07-17, referring to Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority (1991) 24 NSWLR 156 (Handley JA, with whom Kirby P agreed); Roads Corporation v Love (2010) 179 LGERA 113 (Vickery J); oOh!media Fly Pty Ltd v Transport for NSW [2024] NSWCA 200; (2024) 261 LGERA 273 (Kirk JA, with whom Leeming JA and Adamson JA agreed).

[31] Authority's Outline of Opening Submissions, [121]-[134], referring to Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, 572. See, as to the relationship between this principle and s 43(1)(a), the observations of Garde J in McGuiness v Roads Corporation [2018] VSC 802, [15].

[32] Authority's Outline of Opening Submissions, [121].

[33] Authority's Outline of Opening Submissions, [122]-[123], citing Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259, 275 [47] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ).

[34] Applicant's Outline of Closing Submissions, [18]; [30], Annexure A.

[35] Applicant's Outline of Closing Submissions, [18(b)].

[36] Applicant's Outline of Closing Submissions, [18(c)].

[37] [1993] VicRp 3; [1993] 1 VR 15.

[38] Jomaring, 23 [62] quoting Studley Developments, 22. See also Mario Piraino Pty Ltd v Roads Corporation (No 2) [1993] VicRp 9; [1993] 1 VR 130, 136-137 (Gobbo J) and Equity Trustees Executors & Agency Co Ltd v Melbourne & Metropolitan Board of Works [1994] VicRp 39; [1994] 1 VR 534, 546 (Gobbo J).

[39] Transcript 18 June 2025, T92.02-T93.14.

[40] Applicant's Outline of Closing Submissions, [34].

[41] [2023] VSC 392 [225]-[232] (Richards J).

[46] See the observations, in the context of New South Wales legislation, of the High Court in Walker, 269-272, [29]-[35].

[48] The Authority is defined by s 3(1) of the Land Acquisition and Compensation Act as 'a person or body who or which (a) is authorized by or under the special Act to acquire land; and (b) in the special Act is expressed to be the Authority for the purposes of this Act'. The special Act is defined in s 3(1) as 'an Act or a provision of an Act which is expressed to be a special Act for the purposes of this Act'. Section 172(3) of the Planning and Environment Act provides that 'The Land Acquisition and Compensation Act applies to this Act and for that purpose (a) the Planning and Environment Act 1987 is the special Act; and (b) the Minister or the responsible authority is the Authority'.

[50] Transcript 27 June 2025, T855.21-T856.04.

[51] Aboriginal Heritage Act 2006 (Vic), s 42.

[52] Aboriginal Heritage Regulations 2007 (Vic), reg 7. These were the Regulations in force at the time that CHNP 13322 was prepared and approved.

[53] Aboriginal Heritage Regulations, regs 25-26. See 'Quandong Precinct Structure Plan, 955 Ballan Road, Wyndham Vale, Victoria, Aboriginal Cultural Heritage Management Plan Number: 13322', 8 May 2015 (CHMP 13322), p viii-ix.

[54] Aboriginal Heritage Regulations, reg 49.

[55] Aboriginal Heritage Act, ss 43, 53; Aboriginal Heritage Regulations, pt 3.

[56] Aboriginal Heritage Act, s 58.

[57] Aboriginal Heritage Act, s 54; Aboriginal Heritage Regulations, pt 3.

[58] Aboriginal Heritage Act, ss 65 and 66.

[59] Expert Report of Marco Negri of Contour Town Planners dated 9 May 2024 (the town planning expert for Mr Barrett) (Negri Report), [81]-[85].

[62] Notice of Approval of Amendment and Notice of Ratification of Amendment for VC68, Victoria Government Gazette, No S 310, 6 August 2010.

[63] See, for example, Kajag [2], [18]-[19], [30]-[31].

[64] The map is drawn from the Milner Report, p 71.

[66] The town planning experts Marco Negri and Alison Milner agreed that this was the appropriate assumption. See Joint Statement of Town Planning Experts, Marco Negri for the Applicant and Alison Milner for the Respondent, dated 28 June 2024, p 1(Exhibit F): 'Negri and Milner agree that absent the PAO5 for the OMR the land at 1005 Ballan Road, Manor Lakes (Property) would have been included in the Urban Growth Boundary at the Relevant Date (1 June 2021), which would have aligned with the property's western title boundary consistent with the Statement of Underlying Provisions.'

[67] Lots 6, 7 and 8 on Title Plan LP125256, Parish: Werribee and County: Grant. See CHMP 13322 p viii.

[70] At the southern end of the borders of the activity area, the border departs from the OMR reservation midline and stops at the boundary of the Argoona Road Land (as that land was not one of the three parcels of land the subject of the CHMP), and then follows the boundary of the Subject Land.

[73] See Cultural Heritage Management Plan - Notice of Approval, 8 May 2015, included in CHMP 13322, p ii; p viii. The RAP is described in the Cultural Heritage Management Plan - Notice of Approval as 'The Wathaurung Aboriginal Corporation trading as Wadawurrung'.

[74] Recommendations 1 and 8 were to the effect that harm to the two registered Aboriginal heritage sites in the activity area could not be avoided but would be mitigated by artefact salvage and implementation of an interpretative strategy. Recommendations 3 and 10 were that no further archaeological investigation was required as the archaeological character of the site had been clearly established.

[76] Quandong Precinct Structure Plan Background Report, Wyndham City Council, March 2018.

[77] Quandong Precinct Structure Plan, November 2018, Wyndham City Council.

[78] Victoria, Victorian Government Gazette, No G 35, 3 September 2020, 1688.

[79] Quandong Precinct Structure Plan, p 15.

[80] The town planning experts Marco Negri and Alison Milner agreed that this was the appropriate assumption. See Joint Statement of Town Planning Experts, pp 1-2: 'Negri and Milner agree that absent the PAO5 for the OMR the future urban role of the Property [Subject Land] would have been planned through the Quandong Precinct Structure Plan. Negri and Milner agree that this planning would have resulted in the part of the land affected by the PAO5 for the OMR being included in the Urban Growth Zone - Schedule 16 (UGZ16) with the General Residential Zone being the applied zone'.

[81] Application for a Planning Permit dated 26 March 2020.

[82] Plan dated 23 March 2020 attached to Application for a Planning Permit titled 'Concept Masterplan - Before'.

[83] Planning Report for 1005 Ballan Road and 2 Argoona Road Manor Lakes, prepared by Tract, 26 March 2020.

[84] This application was also supported by a Planning Report.

[85] Authority's Outline of Opening Submissions, [105]-[109].

[86] Town Planning Delegate Report, p 1.

[87] Refusal to Grant a Planning Permit, p 1.

[88] See Joint Statement of Valuation Experts (Andrew Kinnaird, Geoffrey Brown and Peter Molloy) dated 28 February 2025, p 4 (Exhibit A).

[89] Molloy Report, p 35 [172]; Brown Report, p 61 [133].

[90] Transcript 18 June 2025, T44.15-24; T57.11-25.

[91] Authority's Outline of Opening Submissions, [14(a)].

[92] Applicant's Outline of Opening Submissions, [27].

[93] Applicant's Outline of Closing Submissions, [98]-[99].

[94] Authority's Outline of Closing Submissions, [195]-[196].

[95] Expert Reports of Brett Lane dated 22 March 2021, 6 May 2022, 26 May 2022 and 10 May 2024.

[96] Expert Witness Statement of Tommy Plahcinski dated 9 May 2024 and Supplementary Expert Witness Statement of Tommy Plahcinski dated 19 September 2024.

[97] Expert Witness Statement of Bertrand Salmi dated 13 June 2024.

[98] Joint Statement of Hydrology Experts, Tommy Plahcinski for the Applicant and Bertrand Salmi for the Respondent dated 28 June 2024 (Exhibit E) and Supplementary Joint Statement of Hydrology Experts, Tommy Plahcinski for the Applicant and Bertrand Salmi for the Respondent dated 6 December 2024 (Exhibit I).

[99] Expert Witness Statement of Charmaine Dunstan dated 9 May 2024 (Dunstan Report).

[100] Expert Witness Statement of Valentine Premkumar Gnanakone dated 13 June 2024.

[101] Expert Conclave - Traffic Engineering Joint Key Issues Statement dated 26 June 2024 (Exhibit D).

[102] Expert Witness Report - Utility Servicing & Development Costs filed 16 May 2024 and Supplementary Expert Witness Statement of Nick Glasson dated 31 October 2024.

[103] Expert Witness Statement of Charles Shinkfield dated 28 June 2024.

[104] Joint Statement of Civil Engineering Experts, Nick Glasson for the Applicant and Charles Shinkfield dated 12 July 2024 (Exhibit H) and Supplementary Joint Statement of Civil Engineering Experts, Nick Glasson for the Applicant and Charles Shinkfield for the Respondent dated 4 December 2024 (Exhibit K).

[105] Expert Report on 1005 Ballan Road, Manor Lakes, of Marco Negri filed 13 May 2024 (Negri Report).

[107] Joint Statement of Town Planning Experts (fn 66 above).

[108] For Mr Barrett: Expert Reports of Emma McNeil dated 16 May 2022 (First McNeil Report) and 8 May 2024 (Second McNeil Report); Expert Report of Andrea Murphy dated 20 September 2024 (Murphy Report). For the Authority: Expert Report of Dr Alexander Parmington dated 3 June 2024 (Parmington Report). Witness Statement of Dr Jesse Maurice Martin dated 11 November 2024 (Martin Report); Expert Witness Statement of Lucy Welsh dated 19 November 2024 (Welsh Statement). Joint Statement of Cultural Heritage Experts, Emma McNeil for the Applicant and Dr Alexander Parmington for the Respondent dated 11 June 2024 (Exhibit C) (Joint Cultural Heritage Expert Statement) and Joint Statement of Cultural Heritage Experts, Andrea Murphy for the Applicant and Dr Jesse Martin and Lucy Welsh for the Respondent dated 17 December 2024 (Exhibit J) (Second Joint Cultural Heritage Expert Statement).

[109] Expert Report of Andrew Kinnaird dated 6 December 2024 (Kinnaird Report) (Exhibit P1).

[110] Expert Report of Peter Molloy dated 15 August 2024 (First Molloy Report) (Exhibit R4); Supplementary Expert Report of Peter Molloy dated 12 February 2025 (Supplementary Molloy Report) (Exhibit R5).

[111] Expert Report of Geoffrey Brown dated 12 February 2025 (Brown Report) (Exhibit R1).

[112] Transcript 23 June 2025, T538.10-18 (Brown XN).

[113] Authority's Outline of Opening Submissions, heading to C2.6; [79].

[114] Authority's Outline of Opening Submissions, [78]-[79]; see also Authority's Outline of Closing Submissions at [44]; Transcript 26 June 2025, T732.26-29; Transcript 27 June 2025, T964.01-21.

[115] [2021] VSCA 302.

[116] Authority's Outline of Opening Submissions, [78].

[117] Authority's Outline of Closing Submissions, [42]-[44]; Transcript 26 June 2025, T731.17-T732.01 (submissions).

[118] Authority's Outline of Closing Submissions, [38]; [43].

[119] Applicant's Outline of Closing Submissions, [6].

[120] Transcript 27 June 2025, T895.07-09; T896.09-31 (submissions); Applicant's Outline of Closing Submissions, [8]-[10].

[121] Applicant's Outline of Closing Submissions, [11]; Transcript 27 June 2025, T900.05-14.

[122] Transcript 27 June 2025, T902.03-09.

[123] Applicant's Outline of Closing Submissions, [15(c), (e)].

[124] s 98(1)(a).

[125] s 99(a)(i).

[127] [2012] VSC 427, [25]-[28] (Rigby).

[128] [2021] VSC 180, [13]-[14] (Crowe).

[129] Brompton Lodge, [103] (Emerton, Kennedy and Osborn JJA).

[131] Brompton Lodge, [106]-[107]. See also [41], where the Court observed: 'The applicants had to prove that they suffered financial loss as a result of the imposition of the Reservation.'

[132] Brompton Lodge, [101]-[102].

[142] Kajag, [21], citing Emerton J in Rigby, [193].

[144] Kajag, [28], citing Crowe, [13]-[14].

[145] Barilla, 227 [127] (underlining added).

[146] [2023] VSC 618, [143].

[147] See Land Acquisition and Compensation Act, ss 37(7), (10)-(11).

[148] Swan Television and Radio Broadcasters Ltd v Australian Broadcasting Tribunal (1985) 8 FCR 291, 297 (Sweeney, Toohey and Wilcox JJ); Bausch v Transport Accident Commission (1996) 24 MVR 392, 409 (Eames J); Nagalingam v Minister for Immigration, Local Government and Ethnic Affairs [1992] FCA 470; (1992) 38 FCR 191, 200 (Olney J).

[150] See Studley Developments, 20 in which Gobbo J was upheld on appeal to the Full Court: Studley Developments Pty Ltd v Department of Planning & Urban Growth [1994] VicRp 45; [1994] 1 VR 643, 645-646 (Southwell and Teague JJ, with whom Brooking J agreed). See also Barilla, 213-214 [70]; Kilpatrick [38], [236]; Kajag [253], [259(11)].

[151] Authority's Outline of Closing Submissions, [50].

[153] Kinnaird Report, p 2: 'Based on the cultural heritage evidence ... and noting paragraph 9.2.3 of my instructions, I have assumed that in the Before scenario that a CHMP would have been approved over the entire subject property known as 1005 Ballan Road, Manor Lakes as at the relevant date of valuation.'

[154] Authority's Outline of Opening Submissions, [106(a)].

[155] Authority's Outline of Opening Submissions, [106(b)], [121]-[1234].

[156] Authority's Outline of Opening Submissions, [106(c)].

[157] Authority's Outline of Opening Submissions, [106(d)] (emphasis in original).

[162] First McNeil Report, Annexure 1.

[165] Murphy Report, pp 3-4 [4.1.3]-[4.1.4]. Ms Murphy identified reasons for that view including both 'practical issues' and 'legal issues'. The section of her report dealing with opinions on the legal issues were not read, following an objection to admissibility: Transcript 23 June 2025, T443.01-20.

[166] Martin Report, p 9 [46]-[47].

[167] Parmington Report, [2.2], p 8, questions 2, 3 and 4.

[168] Parmington Report, [3.2.2] p 29; [3.2.4] p 30; [3.2.5] p 31.

[169] Parmington Report, [3.2.2] p 29.

[170] Parmington Report, [3.2.1] p 29.

[171] The Authority relied on the ultimate conclusion reached in the Second Joint Cultural Heritage Expert Statement: Transcript 20 June 2025, T285.28-T293.20. Note that the opinions as to the effect of the Aboriginal Heritage Act in Ms Murphy's report were not admitted following an objection. See fn 165 above.

[176] Murphy Report, [4.1.1]-[4.1.2].

[177] Parmington Report, [3.2.2], p 29.

[178] Parmington Report, [3.1.1]-[3.2.2], pp 29-30.

[179] Joint Cultural Heritage Expert Statement, p 12.

[180] Joint Cultural Heritage Expert Statement, p 13.

[181] Joint Cultural Heritage Expert Statement, pp 7-8.

[182] Joint Cultural Heritage Expert Statement, p 13.

[183] Joint Cultural Heritage Expert Statement, p 13 (Question (a)).

[184] Joint Cultural Heritage Expert Statement, p 13 (Question (b)).

[185] Letter of Instruction, Russell Kennedy to Peter Molloy, 21 July 2024, [1](b).

[187] Molloy Report, p 36 [174]-[177].

[188] Brown Report, pp 5-6 [19] (emphasis added).

[190] Brown Report, p 29 [73]-[74] (emphasis added).

[191] Brown Report, p 61 [133] (emphasis added).

[192] Joint Statement of Valuation Experts, pp 9 and 13.

[193] Transcript 23 June 2025, T555.08-16 (Brown XXN).

[194] Authority's Outline of Opening Submissions, [108] (emphasis in original).

[195] See also the Molloy Report at [14]: 'I am also instructed to assume that a planning permit would not have issued until such time as various matters were addressed, and the relevant plans amended, in relation to Cultural Heritage, Ecology, development of the 'Paper Road', Inter-parcel connections and Hydrology.' Mr Molloy also noted at [17]: 'Instructed assumption 5 directs me to assume that, in answering Questions 1 and 2, the process for the preparation of any Cultural Heritage Management Plan, being the matter of Cultural Heritage under paragraph 14 above, would have involved a process of consultation and assessment that would have taken quite some time (at least around 13 to 19 months), and would have uncertain outcomes in terms of recommendations and costs.'

[196] Applicant's Outline of Closing Submissions, [31]-[34] citing Mason, [47]-[48].

[197] Applicant's Outline of Closing Submissions, [31]-[34].

[198] Barilla, 213-214 [74] (Emerton J).

[199] Applicant's Outline of Closing Submissions, [34(a)]; [38] citing Studley Developments, 20.

[201] Referring to Studley Developments, Equity Trustees, Halwood Corporation v Roads Corporation (1995) 89 LGERA 280 (Batt J), Brompton Lodge, Mason and Kajag.

[202] Applicant's Outline of Closing Submissions, [37]-[49].

[203] Applicant's Outline of Opening Submissions, [92(a)].

[204] Applicant's Outline of Opening Submissions, [92(c)].

[205] Authority's Outline of Opening Submissions, [111].

[206] [1956] HCA 7; (1956) 95 CLR 245.

[208] See Authority's Outline of Opening Submissions, [115]-[117]. The Authority relied on McCann v Roads Corporation [2011] VSC 96, [35]-[36] (Osborn J). The Authority also relied on the decision in Yates where, in a compulsory acquisition context, vacant land was valued on the assumption that buildings had in fact been erected, and leased, capitalising net rents but deducting establishment and building costs. This approach was rejected by the majority of the New South Wales Court of Appeal at 174-176 (Handley JA, with whom Kirby P agreed). The Authority also referred to Love, 129-130 [36] (Vickery J).

[209] Authority's Outline of Opening Submissions, [120] (emphasis in original).

[210] Authority's Outline of Opening Submissions, [154], [159]; Authority's Outline of Closing Submissions, [57].

[211] Authority's Outline of Opening Submissions, [77]; see also [117] and Authority's Outline of Closing Submissions, [57], [78]-[79].

[212] Authority's Outline of Opening Submissions, [128] (emphasis in original); Authority's Outline of Closing Submissions at [57].

[213] Authority's Outline of Opening Submissions, [76]-[77], [154], [159]; Authority's Outline of Closing Submissions, [57], [116(a)]; Transcript 19 June 2025, T186.23-T187.28; T189.09-18; T195.01-20; T206.08-T207.30; T210.16-T211.09; T215.27-T216.03; T216.31-T217.04.

[214] Primarily from Love v Roads Corporation [2014] VSCA 30; (2014) 200 LGERA 76, 94 [68], 96 [76] (Maxwell P, Whelan and Santamaria JJA). See Authority's Outline of Opening Submissions, [132]-[134].

[215] Authority's Outline of Closing Submissions, [111], [113].

[216] Applicant's Outline of Opening Submissions, [83]-[86] (emphasis in original), referring to Kajag at [20].

[217] Applicant's Outline of Closing Submissions, [40].

[218] Applicant's Outline of Opening Submissions, [90]-[91], referring to the evidence of Mr Negri and Ms Milner to the effect that the CHMP activity area did not extend beyond the Urban Growth Boundary, as the Boundary followed the centreline of the OMR: Negri Report, [31] and [41] and Milner Report, [159]-[163] and [215].

[219] Applicant's Outline of Opening Submissions, [92(b)], referring to Joint Statement of Town Planning Experts, p 1.

[220] Applicant's Outline of Opening Submissions, [89].

[221] Applicant's Outline of Closing Submissions, [50].

[222] Applicant's Outline of Closing Submissions, [50]-[54].

[225] Barilla, 213-214 [74]-[78] (Emerton J). See also Brompton Lodge [91], [95] (Emerton, Kennedy and Osborn JJA); Kajag [92] (Richards J); and s 5A(3)(a) of the Valuation of Land Act.

[226] [1956] HCA 7; (1956) 95 CLR 245.

[227] Authority's Outline of Opening Submissions, [112]-[114]; Authority's Outline of Closing Submissions, [64]-[68]; Transcript 20 June 2025, T294.03-T297.28.

[228] [1956] HCA 7; (1956) 95 CLR 245, 268 (Dixon CJ).

[229] [1956] HCA 7; (1956) 95 CLR 245, 281 (Williams J); 288 (Kitto J) citing Raja Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam [1939] UKPC 15; [1939] AC 302, 313 (Lord Romer for the Court).

[230] Authority's Outline of Opening Submissions, [128].

[231] Transcript 19 June 2025, T206.08-T207.03; T217.27-30; see also Authority's Outline of Closing Submissions, [95]-[96].

[232] Valuation of Land Act, ss 5(3)(a)-(b).

[233] Transcript 19 June 2025, T195.01-20; T210.16-T211.12.

[236] McCann, [30] citing Smith v Roads & Traffic Authority (NSW) [2005] NSWLEC 438 [63] (McClellan CJ), Crowe and Rigby, referred to in Authority's Outline of Opening Submissions, [76] and the Authority's Outline of Closing Submissions, [116(b)], [125]-[129].

[237] Authority's Outline of Opening Submissions, [76].

[238] Applicant's Outline of Opening Submissions, [86], referring to Kajag, [20]; See also Applicant's Outline of Closing Submissions, [51].

[246] Applicant's Outline of Closing Submissions, [15(d)].

[247] Authority's Outline of Closing Submissions, [110].

[248] Authority's Outline of Closing Submissions, [110]-[111] (emphasis added).

[249] Authority's Outline of Closing Submissions, [91].

[251] Kajag, [21], [125] citing Rigby, [193].

[252] Authority's Outline of Closing Submissions, [83].

[254] Transcript 23 June 2025, T555.08-09.

[255] This was assumed in the Parmington Report, [3.2.3], p 30; Joint Cultural Heritage Expert Statement, answers to Question 4, at pp 5-7; answers to Question 2 at pp 7-8, answer to Question 3 at pp 8-9.

[256] Joint Statement of Town Planning Experts, pp 1-2. See [51] above.

[257] Joint Statement of Town Planning Experts, pp 1-2.

[258] Parmington Report, [3.2.3], p 30; Joint Cultural Heritage Expert Statement, answers to Question 4, at pp 5-7; answers to Question 2 at pp7-8, answer to Question 3 at pp 8-9.

[259] Joint Statement of Town Planning Experts, p 1. See also Parmington Report, [3.1.4.4] pp 23-24.

[260] Dr Parmington and Ms McNeil agreed that CHMPs are not altered on the basis of planning controls or reservations of land under planning schemes: Joint Cultural Heritage Expert Statement, pp 8-9.

[261] As suggested in the Authority's Outline of Closing Submissions, [133].

[262] Note that CHMP 13322 refers to previous archaeological investigations conducted for the purposes of other CHMPs in the vicinity of the Subject Land: see part 5.5 'Previous Archaeological Investigations' referring to the contents of CHMPs 12343, 10964, 11580, 11108, 10905, 10906, 11330 and 11272, and the numerous reports identified in the Table 5. It also refers to the outcomes of salvage activity on certain sites. CHMP 13322 then identified, from the review of the previous assessments, a detailed 'Aboriginal Archaeological Site Prediction Statement' for the area, at part 5.6.

[263] The issue was raised in the course of submissions: Transcript 20 June 2025, T290.29-T291.28; Transcript 27 June 2025, T905.21-T906.03.

[264] Molloy Report, [172]; Brown Report, [73]-[74];

[265] First McNeil Report, p 15 and Second McNeil Report, p 9.

[266] See paragraphs [90]-[94] above.

[267] Authority's Outline of Opening Submissions, [135]; Authority's Outline of Closing Submissions, [141]-[152].

[268] Authority's Outline of Closing Submissions, [55].

[269] Authority's Outline of Opening Submissions, [136], fn 226.

[270] Authority's Outline of Closing Submissions, [139] (emphasis added).

[271] Authority's Outline of Closing Submissions, [10] (emphasis in original). See also [56], fn 78 of those submissions.

[272] Authority's Outline of Closing Submissions, [58].

[273] Authority's Outline of Closing Submissions, [56].

[274] Authority's Outline of Opening Submissions, [136], fns 227 and 228.

[275] Joint Cultural Heritage Expert Statement, p 13; Authority's Outline of Opening Submissions, [83(e)].

[276] Authority's Outline of Closing Submissions, [151(a)]; Authority's Outline of Opening Submissions, [140].

[277] Applicant's Outline of Opening Submissions, [93], [95].

[278] Transcript 18 June 2025, T70.13-23.

[279] Transcript 18 June 2025, T70.13-23.

[281] Joint Cultural Heritage Expert Statement, pp 7-8.

[282] First McNeil Report, p 15; Second McNeil Report, p 9.

[284] Joint Cultural Heritage Expert Statement, pp 6-7. See also pp 6-7 where Dr Parmington states: '...CHMP 13322 ... imposes minimal management recommendations on the Subject Land, aside from a requirement for the salvage of VAHR 7822-3836 (Recommendation 11), its subsequent reburial (Recommendation 12), cultural awareness training for employees and contractors involved in ground disturbing works in the activity area (Recommendation 14), and the implementation of an interpretative strategy along the watercourse in Lot 7, outside of the Subject Land (Recommendation 6)... The last of these recommendations influenced the designation of a Murnong planting bed in the Quandong PSP ... part of which intersects with the Subject Land.'

[285] Joint Cultural Heritage Expert Statement, p 6.

[286] Joint Cultural Heritage Expert Statement, p 6 where Dr Parmington states: 'The Claimant could reapply for planning approval with an approved CHMP that encompasses the entirety of the Subject Land. This approval, however, would likely require a further heritage assessment of the Subject Land under the Aboriginal Heritage Act 2006, the outcomes, and associated costs of which are uncertain.'

In response to the question as to what would have been the cultural heritage considerations influencing planning controls for the Subject Land in the absence of PAO5, Dr Parmington responded: '... the primary cultural heritage consideration influencing planning controls for the Subject Land at the Relevant Date is the fact that there was no approved [CHMP] for the entirety of the Subject Land - i.e. CHMP 13322 does not include its northern part ... . As such, the absence of an approved CHMP for part of the Subject Land would preclude the approval of a planning permit under the Planning and Environment Act 1987. This requirement would not have changed in the absence of the [PAO5 reservation]'.

[287] Joint Cultural Heritage Report, pp 7-8.

[288] Joint Cultural Heritage Expert Statement, p 9.

[289] Molloy Report, Appendix A (Letter of instructions dated 21 July 2024).

[291] Brown Report, [19], referring to letter instructions dated 20 December 2024.

[294] Joint Cultural Heritage Expert Statement, p 14.

[295] Transcript 24 June 2025, T579.24-31.

[297] Joint Cultural Heritage Expert Statement, p 15; see also CHMP 13322 part 10, which identifies the registered Aboriginal Places on the 955 Ballan Road Property only.

[300] Note too that the Aboriginal Heritage Act contemplates, in any event, that an application can be made for a planning permission prior to the approval of a CHMP: a note to s 52(1) states that the subsection (which prevents a decision maker from granting a statutory authorisation for an activity unless a cultural heritage management plan is approved) 'does not prevent a sponsor from lodging an application for a statutory authorisation before a cultural heritage management plan is approved'. The potential to apply for the permit pending the CHMP was not addressed in the expert evidence.

[301] Authority's Outline of Opening Submissions, [141]-[143].

[302] Transcript 26 June 2025, T696.01-04 (submissions).

[303] Authority's Outline of Opening Submissions, [152]; Transcript 19 June 2025, T255.06-16; Transcript 26 June 2025, T731.12-16.

[304] Aide Memoire of the Authority, [20]-[21].

[305] Authority's Outline of Opening Submissions, [152].

[306] Authority's Outline of Opening Submissions, [152]; Authority's Outline of Closing Submissions [10].

[307] Authority's Outline of Opening Submissions, [152] (emphasis in original). That position was maintained in the Authority's Outline of Closing Submissions, [10]: 'There was no impediment to the Claimant himself seeking and obtaining a CHMP as part of his Permit Application and the presence of PAO5 did not preclude him from doing so. The evidence establishes that it would have taken quite some time, around 12 to 18 months on top of a 6 to 12 month waiting period to obtain a CHMP.' The Authority also relied on the evidence that the RAP 'would have undertaken the Aboriginal cultural heritage assessments necessary to grant a CHMP in respect of the development the subject of the Claimant's Before Plan', notwithstanding that it would relate in part to a hypothetical activity that the Proponent did not propose to undertake: Authority's Outline of Closing Submissions, [10], [56].

[308] Authority's Outline of Closing Submissions, [158] (emphasis in original).

[309] See Authority's Outline of Opening Submissions, [10(a)] ('the land was not, as a matter of fact, development ready because the Claimant had not obtained a CHMP'); [152] referring to the 'absence of a CHMP', and [157]: '[I]t is a matter of undisputed fact that the Claimant would not have been able to obtain planning approval for the development of [the Subject Land] in the before scenario without undertaking the time-consuming task of obtaining a CHMP for the whole of that property. The Authority does not rely upon the approved CHMP for that position. It relies upon the absence of a CHMP and the agreed evidence of the Aboriginal cultural heritage experts.' (emphasis added).

[310] Transcript 26 June 2025, T787.22-23 (emphasis added).

[311] (1995) 89 LGERA 280, 298-304.

[312] Transcript 20 June 2025, T278.28-T284.02.

[313] Authority's Outline of Opening Submissions, [143].

[314] [2024] NSWCA 5; (2024) 113 NSWLR 429.

[315] [2024] NSWCA 200; (2024) 261 LGERA 273.

[316] Sydney Metro, 443 [52]; 444 [58]; oOh!media, 286 [46]; 290 [58]-[59].

[317] Transcript 26 June 2025, T798.03-17; T827.24-T828.02 (submissions); Authority's Outline of Closing Submissions, [133].

[318] Applicant's Outline of Closing Submissions, [65(b)]

[319] Applicant's Outline of Closing Submissions, [65(b)(i)]

[320] Applicant's Outline of Closing Submissions, [65(b)(iii)] (emphasis in original).

[321] Applicant's Outline of Closing Submissions, [65(b)(iv)].

[322] Authority's Outline of Closing Submissions, [159] (emphasis in original).

[325] Halwood, 298 citing Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1, 6 (Deane, Dawson, Toohey and Gaudron JJ) (emphasis added).

[327] That is, other than the step which may give rise to the right to compensation under ss 99 or 106 of the Planning and Environment Act.

[328] Sydney Metro, 434 [14] (Kirk JA, with whom Payne JA and Griffiths AJA agreed).

[329] See the description of the trial judgment in Sydney Metro at 434-435 [16]-[19]; 438 [27]-[28]; 440-441 [42].

[330] G&J Drivas Pty Ltd v Sydney Metro [2023] NSWLEC 20, [17] (Duggan J) quoted in Sydney Metro at 438, [27].

[335] That is, Sydney Metro, 440 [40].

[336] Sydney Metro, 450 [89] (emphasis added).

[337] Sydney Metro, 441 [43] (emphasis added).

[341] I note the possibility that such steps taken purely for the purpose of making a claim could potentially expose the Authority to an obligation to pay those costs to the claimant under s 101. Such costs might arguably not be regarded as costs of the permit application which remain costs to be borne by the claimant, but as 'legal, valuation or other expenses reasonably incurred in preparing and submitting a claim' and thus falling within the scope of s 101. That would be so in my view if they are characterised as described by senior counsel for the Authority as costs for which 'the purpose was to advance a claim for compensation' and which are a 'necessary feature of ... being able to maximise the claim for compensation ... by ... demonstrating the realised potential of that land' (Transcript 26 June 2025, T708.23-27; T709.12-14).

[342] Transcript 26 June 2025, T709.01-10.

[343] Authority's Outline of Opening Submissions, [152]; Authority's Outline of Closing Submissions, [10].

[344] Authority's Outline of Closing Submissions, [83].

[345] Martin Report, p 8 [42]; pp 9-10 [50].

[347] Second Joint Cultural Heritage Expert Statement, p 2.

[348] Authority's Outline of Opening Submissions, [83(b)].

[349] Martin Report, p 8 [42]; pp 9-10 [50].

[350] Martin Report, p 9 [45]-[46].

[352] Second Joint Cultural Heritage Expert Statement, p 2 (emphasis in original).

[353] Authority's Outline of Opening Submissions, [137]; Authority's Outline of Closing Submissions, [143]-[152].