Dates of Hearing Wednesday 6 and Thursday 7 March 2002

MEDIUM NEUTRAL CITATION [2002] VCAT 508

Subject Land Lots 1, 2 and 3 PS 346290H, CA 127D, Part CAs 127B, 128A, 127E and part of former Govt. Road, Parish of Lang Lang East, South Gippsland Highway, Loch

1. Permit No. 00465, issued on 16 March 2001 is hereby cancelled.

For the applicants: Mr Matthew Beazley, solicitor with Deacons Lawyers. Mr Beazley called Mr David Hansen, a town planning consultant with Ratio Consultants Pty Ltd, to give expert evidence. He also called evidence from the applicant, Dr David Morris.

For the responsible authority: Mr Colin Taylor, solicitor with Russell Kennedy Solicitors. Mr Taylor called evidence from the Shire's Strategic Planner, Mr Hutchinson.

For the respondent permit holder: Mr Mark Naughton, solicitor with Minter Ellison Lawyers. Mr Naughton called Mr Andrew Biacsi, a consultant town planner with Contour Consultants Aust Pty Ltd, to give expert evidence.

Other interested parties: Mrs Swanny Becker, a near neighbour who was found by the Tribunal to have a material interest in the outcome of the request, was permitted to table a written submission.

1. This is an application made under Section 87(1)(e) of the Planning and Environment Act (The Act) to cancel Permit No. 00465, issued on 16 March 2001 by South Gippsland Shire Council. The permit allowed the re-subdivision of eight adjoining parcels of land located on the north-east corner of South Gippsland Highway and Henry's Road, some 5.5km north-west of Loch and approximately 4.5km, by road, south of Nyora.

2. These eight lots include three substantial lots, with relatively regular proportions, and areas of 38, 30 and 10 hectares. They also include five smaller and very irregularly shaped lots, created following the realignment of the highway on at least two occasions. These latter lots vary in area between 1.2h and 3.6h. Three are former sections of the highway and have a characteristically serpentine shape and two are parts of former lots cut off by the highway.

3. The permit in contention authorises a re-subdivision of the boundaries of these eight lots to create eight completely different shaped lots. Of these, six would be accessed via a new cul-de-sac opening onto Henry's Road close to its intersection with the highway. These lots would have areas ranging between 1.4h and 3.2h and could best be described as rural residential type lots. Another lot, fronting the highway further to the north-west, would have an area of 3.5h and would contain an existing farmhouse - the only dwelling presently occupying this agglomeration of lots. This farmhouse has been constructed on one of the lots forming part of the former South Gippsland Highway road reserve. The remaining, or balance lot in the proposed subdivision would have an area of 79.5h, which is almost twice the 40h minimum lot size specified for the Rural Zone within which the subject land is located.

4. The consideration of requests for cancellation or amendment of permits has often been described as comprising a series of hurdles each of which must be overcome if the Tribunal is to grant the request. The first hurdle is whether the grounds for cancellation set out at Section 87(1) of The Act are made out. The subject application was made on the ground that there was a failure to give notice in accordance with Section 52 of The Act. Mr Taylor for the Responsible Authority conceded that it had been the Council's intention to give notice of the application for permit to both the Morrises and the Beckers. Their properties, which front the South Gippsland Highway immediately opposite the subject land, are located within a different municipality, namely the Shire of Bass. It was submitted by Mr Taylor that an error was made in determining the address of the Beckers' and the Morris' properties and as a result the wrong persons were notified.

5. Mr Taylor sought to suggest that the notice the Responsible Authority thought it was giving was a notice under Section 52(1)(a), which must be given to the owners and occupiers of allotments or lots adjoining the land to which the application applies "unless the Responsible Authority is satisfied that the grant of the permit would not cause material detriment to any person" (emphasis added). In other words unless the Responsible Authority can be satisfied that no one at all, would suffer a material detriment, all adjoining property owners and occupiers must be notified.

6. All representatives acknowledged in the course of their submissions that there is some continuing doubt as to whether land "opposite" constitutes "adjoining" land and Mr Beazley drew attention to the I think sensible suggestion by then Deputy President Byard in D. & S. Jesson v Frankston City Council 1 AATR 314 at page 318 of the maxim "when in doubt, do" as an approach to be adopted in relation to giving notice. Messrs Beazley and Naughton noted that in any case the Responsible Authority is required to give notice under Section 52(1)(d) to any other person if the Responsible Authority considers that the grant of the permit may cause "material detriment" to them.

7. If adjoining does not include land opposite a site in question and I make no finding as to that, then I consider it would have been unreasonable for the Responsible Authority not to have found that this subdivision might cause material detriment to persons residing and operating a legitimate farming enterprise directly opposite the subject land.

8. A "material" detriment is a detriment that is real rather than fanciful. However, as was found by the Tribunal in Ellul v Shire of Melton (1989) 3 AATR 179 at 187, "it may in fact be only minor". I think it would be unreasonable if the Responsible Authority were to have found that the carving up of rural land into small lots, more capable of residential re-development than the existing irregularly shaped lots, could cause no material detriment to a legitimate farming enterprise located immediately opposite the area where most re-development was likely to occur. Accordingly even if the Responsible Authority's intention to give notice to the Morrises and the Beckers was only based on a perceived obligation under Section 52(a), I find that it should in any case have found, in the event that that obligation does not apply, that the Morrises and the Beckers should be given notice under Section 52(1)(d). I am satisfied therefore that the ground for cancellation is made out.

9. Another of the hurdles, which is somewhat allied to the one considered above, is that which is set out at Section 91(3)(a)(i) of the Act. It provides that the Tribunal must not cancel or amend a permit unless it is satisfied that the person making the request "could not reasonably be expected to have been aware of the application for the permit in time to lodge an objection". I was provided with nothing to suggest that there might have been some other mechanism enabling the Morrises or the Beckers to be made aware of this application for permit - for example, by being a matter receiving considerable public attention and indeed, it was not suggested otherwise by any of the respondent parties.

10. A more discretionary hurdle is that of the time taken to file the request. Section 89(3) of the Act provides that the Tribunal may refuse to consider a request "unless it is satisfied that the request has been made as soon as practicable after the person making it had notice of the facts relied upon in support of the request".

11. The permit was issued by the Shire on 16 March 2001 and on that same day the Morrises were made aware of the existence of the permit during a conversation with a local real estate agent. The Morris' request was lodged with the Tribunal on 30 March 2001, in other words within two weeks of finding out about the permit. I am satisfied that there is no reason for finding otherwise than that their request was lodged expeditiously.

12. This brings me to the more subjective matters set out at Section 91(3)(a)(ii) and 91(3)(c). These provide that the Tribunal must not direct a Responsible Authority to cancel or amend a permit unless it is satisfied that the person bringing the request "was substantially disadvantaged by the issue of the permit; and ... it would be just and fair in the circumstances to do so".

13. My ultimate finding in this proceeding is that it would be just and fair in the circumstances to cancel this permit. In reaching this conclusion I have been influenced primarily by my finding that the requestors were substantially disadvantaged by the issue of the permit. They were disadvantaged because had the proper processes been followed and they had been able to put forward their concerns, this permit would not have been granted.

14. As was found by then Deputy President Judge David Jones in Corry v Shire of Nathalia 1990 4 AATR 232 at 242 - a case not dissimilar to the present one - a consideration of whether it would be just and fair in the circumstances to cancel a permit "involves the Tribunal in considering all the circumstances including the planning merits of the proposal, the detriment which may be suffered by the persons seeking the cancellation, if it is not cancelled and the detriment that may be suffered by the holder of the permit if it is cancelled".

15. Since that decision the Act has been amended to include Section 90A which confirms that the Tribunal must take account of Section 84B(1) of the Act "as if the request were an application for review". This section provides, among other things, that the Tribunal must take into account the relevant planning scheme. That is to say the planning merits of the permit application are a relevant consideration.

What is the disadvantage likely to be suffered by the Permit Applicant?

16. The Plan of Subdivision has not been certified and none of the lots have been sold - other than the farmhouse lot under a different subdivisional layout which is the subject of another application before this Tribunal. It cannot be said therefore that the development is substantially completed. However, on the strength of the permit having issued, the permit holder entered into contracts of sale for purchase of the land and the combined purchase price was $560,000. The contract did not include any "let out" clause.

17. Mr Naughton submitted that cancellation would, as a consequence, result in a substantial pecuniary loss for his client and that it needed to be recognised that his client had done nothing wrong. He had relied on the validity of the permit and had, as a consequence, entered into these contractual obligations.

18. However, as was found in the Corry case - and as is also the case here - Section 94 of the Act provides a right to compensation where a permit is cancelled. There are certain provisos at Section 94(4), but those do not apply here.

19. I have not been persuaded by Mr Naughton's submission that it is relevant, in this case, to take into account the possible trouble and expense of pursuing a compensation claim. If this was to be the case, it would seem to make the compensation provision in the Act rather meaningless.

20. The subject case is distinguishable from that of Cooper v Surf Coast Shire Council [2000] VCAT 2180, decided by former Member Moles. In that case cancellation would had resulted in substantial alteration or demolition of the permit holder's dwelling. Ms Moles, in assessing the disadvantage to the permit holder, found that any compensation claim would not include solatium, to cover the personal inconvenience and loss of the permit holder's home. In the subject case the permit holder's place of residence is not affected.

21. Accordingly, I must weigh the fact that the permit applicant is blameless and the fact that the "disadvantage" is compensatable, against the blamelessness of the requestors and - as was found by Judge Jones in the Corry case - "all the circumstances including the planning merits of the proposal [and] the detriment which may be suffered by the persons seeking the cancellation, if [the permit] is not cancelled".

22. The subject land lies within the Rural Zone of the South Gippsland Planning Scheme. In addition to implementing the State and Local Planning Policy Framework, the purpose of this zone includes providing for the sustainable use of land for extensive animal husbandry, and "ensuring that subdivision promotes effective land management practices and infrastructure provision".

23. At Clause 35.01-4 a permit is required to subdivide land and each lot must be at least 40h. There are however exceptions to this limitation and the subject permit was granted pursuant to one of these, namely that a permit may be granted to create smaller lots if:

"* The subdivision is the re-subdivision of existing lots. The number of lots must not be increased and all lots must be at least 0.4h."

24. At Clause 35.01-5 application requirements are set out for subdivision proposals and it is stated that an application to subdivide must be accompanied by a report which explains how the proposed subdivision:

* responds to the decision guidelines for this zone.

* responds to any additional objectives and performance requirements set out in any relevant local planning policy in this scheme.

25. I was not made aware of any such report that may have accompanied this application for permit. In addition to these requirements there is an extensive set of decision guidelines at Clause 35.01-6 which must be considered, as appropriate in relation to applications for permit under the provisions of the rural zone. I will not set these out in full here but they include matters such as

* the compatibility of the proposal with adjoining and nearby farming and other land uses.

* the farm size and the productive capacity of the site to sustain the rural enterprise and whether the use or development will have an adverse impact on surrounding land uses.

* the requirements of any existing or proposed rural industry.

* the protection and enhancement of the natural environment and the character of the area, including the retention of vegetation and fauna habitat and the need to revegetate land including riparian buffers along water ways, gullies, ridge lines, property boundaries, discharge and recharge areas.

* the impact on the character and appearance of the area.

* the impact of the development on the existing and surrounding rural uses.

26. The evidence of the permit holder's own witness, Mr Biacsi, was that the configuration of Lots 2-7, which lots the ones to be set around the cul de sac in the south-eastern corner of the land, with access from Henry's Road, warranted further consideration. In his opinion "a suitable balance would be struck" if among other things:

* The number of lots serviced by the cul de sac was reduced from 6 to 5 and their areas increased to at least 2 hectares.

* Tree planting was required on the boundaries of the allotment prior to sale.

* If the large lot was to be increased to 81 hectares - a matter that was discussed in the course of the hearing - that a Section 173 agreement be entered into to prevent its future subdivision so preventing its as of right development with two dwellings rather than one.

27. Fundamental to Mr Biacsi's evidence was his opinion that a re-subdivision would have an overriding benefit of creating a very large lot more capable of sustainable agricultural use than the present amalgam - that is provided the cul de sac lots were reduced to five in number and each lot increase to at least 2 hectares. This benefit, in his opinion, outweighed the possible disbenefits recognised elsewhere in the Scheme's planning policy framework, that can arise out of the creation of an estate of quasi rural residential lots.

28. I find this whole proceeding relies on a finding as to what the appropriate balance should be. I should say here however that I was not persuaded by Mr Naughton's argument that the cul de sac lots would be likely to be developed for soil based agricultural pursuits such as herb farming. I find on the balance of probability that they will be used primarily for residential purposes - with some keeping of animals - consistent with what occurs on other such lots around Nyora.

What does the State and Local Planning Policy Framework say?

29. The State Planning Policy Framework at Clause 17.05 refers to agriculture and has as its objective:

"To ensure that the State's agricultural base is protected from the unplanned loss of high quality productive agricultural land due to permanent changes of land use and to enable protection of productive farm land which is of high quality and strategic significance in the local or regional context."

30. High quality productive agricultural land is defined at Clause 72 of the Scheme to mean:

"Land which is used for animal husbandry or crop raising, and is capable of continuing to sustain agricultural production, and:

(a) is of prime, or very good, agricultural quality, having regard to soil type, growing season, and availability of infrastructure, and is of sufficient extent to support agricultural activities on an economically viable scale; or

(b) has been identified through a regional, sub-regional or local study as being of particularly good quality and strategic significance for agriculture in the regional or local context."

31. The subject land is located within an area marked on the Strategic Framework Plan at Clause 21.05 of the Scheme as, "high quality agricultural soils - protect and promote sustainable agricultural practices which are economically and environmentally efficient". This part of the South Gippsland Shire, with its fertile soils and high rainfall, is well known for being among the most productive grazing land in the State.

32. At Clause 21.04-4, the Shire's "vision" in relation to agriculture is "to protect high quality agricultural land and to promote sustainable agricultural practices which are both economically and environmentally efficient".

33. At the same time, the Shire's "vision" in relation to settlement and housing, at Clauses 21.04-1 and 21.04-3, reads as follows:

"The vision for the Shire is to maintain sustainable communities and with this will come the need to clearly identify the roles and functions of the various towns and villages as well as maintaining a clear interface between these settlements and surrounding rural areas." (emphasis added)

"The vision for the Shire is to provide a range of housing opportunities in serviceable areas and in areas where development will not have a detrimental impact on the environment nor result in a significant loss of high quality agricultural land nor adversely impact on the coast." (emphasis added)

34. At Clause 21.06 the Settlement Strategy for Nyora is set out. The stated objective for Nyora is:

"To strengthen Nyora as a sustainable low density community through the promotion of economic growth and the provision of a quality lifestyle."

35. Strategies that have been identified in the Scheme to achieve this objective include protecting the rural environment of the area and promoting sustainable forms of development within Nyora. Under the heading "Implementation" one of the stated measures for implementing the strategies and objectives for Nyora is "to apply the Rural Zone outside the town boundary to limit further small lot subdivision_"_ (emphasis added).

36. The Framework Plan for Nyora identifies existing rural residential areas and "preferred future" rural residential opportunities. Without exception these are located adjacent to the town boundaries and extending no more than 1km from the town centre. The subject land is located well outside of these identified areas. It could not be said that the Local Planning Policy Framework, or indeed the State Planning Policy Framework provides any basis whatsoever for creating a series of rural residential type lots abutting the highway between Nyora and Loch.

37. The evidence of Mr Hutchinson however, was that in November 2001 the Shire had placed on exhibition a different structure plan for Nyora providing for extensive rural residential development around the township and indeed, using up an area of approximately 1400h of existing rural zoned land. In his view providing such a substantial opportunity for rural residential development at this, the closest township to the development corridor extending out from Cranbourne - some 45km to the north-west - could act as a mechanism or justification for preventing or reducing the pressure for rural residential development elsewhere in the Shire. Based on his discussions with estate agents it was Mr Hutchinson's opinion that there is a significant demand for rural residential allotments in the Nyora area and, by providing for this opportunity, demand elsewhere might be assuaged.

38. As I stated in the course of the hearing I regard the draft Nyora Structure Plan to be very much at a preliminary stage. Given also the fact that its author was not even aware of, let alone had applied, the Guidelines for Rural Residential Development which, pursuant to Ministerial Direction No. 6 made under Section 12(2)(a) of The Act, are required to be complied with when preparing any amendment which would have the effect of allowing rural residential development, I can give the draft Structure Plan no weight whatsoever.

39. The State Planning Policy objectives for agriculture, at Clause 17.05-2, are to be implemented by having regard, among other things, to the following:

"Permanent removal of high quality productive agricultural land from the State's agricultural base must not be undertaken without consideration of its economic importance for the agricultural production and processing sectors.

Subdivision of high quality productive agricultural land should not detract from the long term productive capacity of the land_._

In considering a proposal to subdivide or develop agricultural land, the following factors must be considered:

* The desirability and impacts of removing the land from primary production, given its agricultural quality and productivity.

* The impacts of the proposed subdivision or development on the continuation of primary production on adjacent land, with particular regard to land values and to the viability of infrastructure for such production.

* The compatibility between the proposed or likely development and the existing uses of the surrounding land. ...

Where inappropriate subdivisions exist on land of high agricultural quality, priority should be given by planning authorities to their restructure." (emphasis added)

40. Mr Hansen, who gave evidence on behalf of the requestors, was prepared to acknowledge the benefit of creating one very large lot, as being consistent with the rural zone purpose for subdivision to "promote effective land management practices". He nevertheless had a different opinion from Mr Biacsi as to where the balance should lie between this benefit and the disbenefit of a series of rural residential lots. In his opinion these disbenefits included the removal of high quality, productive agricultural land from sustainable agricultural use, the likely introduction of an activity at odds with legitimate farming practice - in terms of differing expectations - and the facilitation of a development pattern out of character with the existing broad, rural rolling hills landscape. In Mr Hansen's opinion the better balance lay closer to four lots - one large and three smaller - rather than the eight proposed. This recognised the existence of these moderate to large lots plus the amalgam of former road and excised lots. In his opinion also the smaller lots would best be sited in the north-west corner of the site, near to the exiting dwelling, rather than in the south-east corner opposite the Morris'.

41. I find myself very much persuaded by Mr Hansen's opinions although I would accept there is a scope for the amalgam to be considered as two potential lots, giving a yield of five lots overall. It is clear to me that a significant factor in the selection of the number of lots proposed here has been the fact that the subject land already comprises eight lots. The fact however that a permit may be granted for eight lots under the specific exemption provision at Clause 35.01-4, is not to imply however that a permit should or will be granted. This much is made very clear at Clause 65 of the Planning Scheme. This clause goes on to say that the Responsible Authority must decide whether a proposal will "produce acceptable outcomes in terms of the decision guidelines of the clause". These decision guidelines refer to the State and Local Planning Policy Framework, the purpose of the zone and any matter required to be considered under the provisions of the zone. In addition, specific guidelines are set out for subdivision

42. It was suggested by Mr Naughton that to leave the existing amalgam of lots as they are would be contrary to the encouragement, in the State Planning Policy Framework, for planning authorities to give priority to the restructure of inappropriate subdivisions in areas of high agricultural quality. In his submission the "outcome" of a large rural lot, more capable of sustainable agricultural use than any of the existing amalgam of individual lots, was too good an opportunity to miss.

43. My concern however lies with the prospect, at the same time, of creating another form of inappropriate subdivision - one which is equally discouraged under the State and Local Planning Policy Framework and one which is more likely to break up the rolling hills character of the land and result in the removal of productive agricultural land than the present amalgam which, due to their serpentine shape and hence inappropriateness for development with single dwellings, can be said to be more likely to remain in use for farming.

44. I am also not persuaded that this present amalgam of eight lots must necessarily stand as justification for an eight lot outcome. If this was the case then every time a section of former road was declared surplus, a justification for its purchase by abutting farm owners would be the prospect of resubdividing it to create a future rural residential lot. Without such an expectation the sale price of such surplus parcels is more likely remain low, thereby favouring its consolidation with an adjacent farm holding and, as a consequence, fulfilment of the State Policy Framework for inappropriate subdivisions to be restructured.

45. The State Policy at Clause 17.05-2 refers specifically to the need to consider the impacts of subdivision on land values and it is widely recognised that the residential value of land is greater per hectare than its rural or farm value. Indeed I think some support for this proposition can be gleaned from the nature of submissions received in relation to the draft Nyora Structure Plan. According to Mr Hutchinson the only opposition has been from property owners whose land is not included within the 1400h identified for a rural residential future. Their concern is that they wish to be included and no doubt this can be attributed to the likely instant increase in the land value of their properties.

46. To conclude on this issue I believe it open to find that the Morrises were substantially disadvantaged by not being able to participate in the planning process as, by doing so, they could have been expected to so influence the decision in relation to this permit as to achieve either a refusal of permit or a permit with a substantially lower lot yield. As submitted by Mr Naugton, relying on the decision in Attorney General ex rel Whitten v Shire of Gisborne (1980) 45 LGRA "substantial" given its natural meaning "must be taken to mean detriment [disadvantage] of a real kind and not a trivial or imaginary kind .... It must be a detriment [disadvantage] in an objective and reasonable sense". In Castanzo v Yarra 2000 VCAT 1469 - also referred to by Mr Naughton, the loss of a chance to put some ground of objection that could reasonably have been expected to have been upheld by the Council (or Tribunal on review), so as to alter the outcome of the permit application was found to be a substantial disadvantage. Likewise in this case, the disadvantage to the Morrises was substantial.

47. When weighed against the compensatable disadvantage to the permit holder I find the disadvantage to the requestor is greater. Having regard also to the poor planning outcome which would result in the subdivision as presently permitted, I find it just in the circumstances to cancel the permit. Furthermore, balancing all the competing issues, including the fact that the permit holders may seek compensation and that they may also seek another permit, I think it fair also that the permit be cancelled.

48. As noted earlier I am of the view that a five lot outcome, including one very large lot and four smaller lots of around 2 hectares would be the more appropriate outcome for this land. This relies primarily on my having been unpersuaded that the more serpentine lots provide any justification for individual development with dwellings. Accordingly the amalgam of lots surrounding the existing house site provides no justification, I believe, for more than two lots. This, taken with the three other large lots - which I agree could quite legitimately been considered as capable of development with single dwellings - provides a justification for re-subdivision to five lots overall. The basis for this finding is that, provided one is of a more substantial size, the advantages, in sustainable agricultural terms, can be said on balance, to outweigh the disadvantage of a group of smaller lots.

49. Unfortunately I find myself unable to direct that the permit be amended in order to achieve this outcome. This is due to the fact that the detailed siting of the three smaller lots would need to be carefully considered, having regard to the topography of the land. Significantly I was provided with no contour information and without it, it is difficult to determine the most appropriate siting of the lots in order to ensure that their future development with housing would not unduly disrupt the open rolling hills character of the land. This character is very different to the more closed vistas that prevail further along Henrys Road, towards Nyora, where the land has been zoned and is being developed for rural living.

50. I am also persuaded that the permit should not be amended because of the substantial changes that will be required to the conditions of the permit, including - given the proximity to the Henry's Road native wildlife sanctuary - the need for a covenant to prevent, at the very least, the keeping of cats. Consistent with Mr Biacsi's evidence also, a Section 173 Agreement would be necessary in order to prevent the future subdivision of the large lot. And I agree with Mr Taylor that there is a need to give further consideration to the operation of the dam in the south-eastern corner of the land. I was left very unclear as to whether this dam was to provide the sole reserve for all of the smaller lots in the case of bushfire or whether the CFA's usual requirement for a specific emergency reserve to be provided, per allotment, might be more practicable. Considered together I believe these outstanding issues would be best dealt with in the context of a properly supported, fresh permit application.

51. Having delivered oral reasons for my decision to cancel this permit, Mr Naughton for the permit holder applied for his clients' costs to be awarded against the Responsible Authority. His principle justification was that his client, being blameless, should not be required to bear the costs of defending an action resulting from the Council's inadvertent mistake of not giving notice of the application for permit to either the Morrises or Beckers. It was his submission also that had his client not been granted a permit by the Council, he would have looked for land elsewhere rather than pursuing an application for review to this Tribunal. Accordingly, the fact that the cancellation proceeding had enabled the merits of the proposal to be tested was irrelevant because his clients would not have taken the matter on review, in any case.

52. At the same time, Mr Beazley for the requestors applied for his clients' costs to be awarded against the Council also. He also cited the fact that his clients were blameless. In addition he relied on the, I thought curious, argument that his clients would not have sought to contest the Responsible Authority's decision even if the decision had been to grant the permit as applied for. Mr Beazley submitted also that in instances such as this, the absence of an award of costs stands as a disincentive for persons to pursue public interest actions of this nature. Mr Beazley placed particular weight also on the fact that the Responsible Authority had gone out of its way, in his submission, to defend its position rather than adopting a neutral stance, having conceded that it had made an error.

53. Mr Taylor, needless to say, relied heavily on the fact that the Council's failure to give notice to the Morrises and the Beckers was an accident and not a result of mal fides or entrenched mismanagement on the part of the Responsible Authority. He also noted that while the Tribunal had found against the Council, the Council's decision could not be described as untenable. In support of this he placed weight on the fact that the Tribunal had found ultimately that the land could be re-subdivided. Where the Tribunal had differed from the Council was in relation to the appropriate balance to be struck between large and small lots.

54. Section 109 of the Victorian Civil and Administrative Tribunal Act sets out the Tribunal's powers in relation to the awarding of costs. It provides that except in certain specified circumstances the general rule is for each party to bear their own costs. This means, unlike in the courts where costs invariably lie with the "losing" party, that a person who takes or defends an action before the Tribunal will spend as much or as little as they decide or believe themselves able to spend. Being an expert Tribunal a party can be assured also that the person hearing the request will have an understanding of the gravity and nature of the issues at stake. Also, by not being bound by the Rules of Evidence and able to inform itself as it sees fit, the Tribunal is not necessarily limited to the case put by the parties - even if they are not professionally put. To a great extent therefore persons need not be discouraged or put off, for financial reasons, in bringing actions that could be said to be in the public interest. If they are unsuccessful they can also be reasonably confident that they will not be required to pay another party's costs.

55. The exceptional circumstances set out at sub-sections 109(3)(a) and (b) refer mostly to improper or unreasonable conduct on the part of a party and which takes place in the course of the proceeding itself. These exceptions can also be said to be directed towards ensuring that persons are not put off by bringing an action to the Tribunal because, if another's unreasonable conduct results in the proceeding being unnecessarily extended, the disadvantaged party can recoup such unforseen costs.

56. Sub-sections 109(3)(c) and (d) refer more to the nature, complexity and relative strengths of the claims made and sub-section 109(3)(e) is wider, allowing costs for "any other matter the Tribunal considers relevant". The power to award costs under Section 109 is at all times subject to the Tribunal being satisfied that, in the particular circumstance, it would be "fair to do so".

57. I have not been persuaded by Mr Beazley's submission that an award of costs against the Council would stand as useful encouragement for other persons to pursue public interest claims. Rather, I regard the usual rule for each party to bear their own costs as sufficient incentive in itself.

58. I also accept Mr Taylor's submission that the Council's position, whilst perhaps naïve or misguided was not so untenable as to suggest that it would be fair to award costs on that basis.

59. What then of the fact that this entire proceeding - if one accepts the suggestion that the parties would not have otherwise taken the matter on review to this Tribunal - would not have occurred had the Council not made an error in its giving of notice?

60. In this regard I accept Mr Taylor's submission that the error made in relation to the giving of notice was entirely accidental and was in no way due to entrenched mismanagement or malfides on the part of the Council. It was "just one of those things" regrettable, yes but not, I find, an appropriate or sufficient reason for an award of costs against the Council.

61. Accordingly therefore, I find no justifiable or fair basis for departure from the usual rule of each party bearing their own costs.