Roads Corporation v McCarthy [2004] VSC 369

Supreme Court of Victoria|2004-09-28|Before: OSBORN J

Appeal pursuant to s.148 of the Victorian Civil and Administrative Tribunal Act 1998 with respect to the grant of a planning permit to develop and use land - Public Acquisition Overlay - Jurisdiction of the Victorian Civil and Administrative Tribunal - When referral authority objects to permit - Objectives of the Planning and Environment Act 1987 - Powers of Tribunal.

This is the determination of an appeal pursuant to s.148 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") by Roads Corporation ("the referral authority") against a decision of the Victorian Civil and Administrative Tribunal ("the Tribunal") with respect to the grant of a planning permit to develop and use land in North Road, East Bentleigh.[1]

The subject land is located within a Business 1 Zone under the Glen Eira Planning Scheme. In addition, the front three metre strip of the land is subject to a Public Acquisition Overlay ("PAO") in respect of which the referral authority is nominated as the acquisition authority. The underlying purpose of this overlay is to facilitate a future widening of North Road.

Clause 45.01 of the Planning Scheme sets out the PAO control. The purpose stated for the control is:

"To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning polices. To identify land which is proposed to be acquired by a public authority. To reserve land for a public purpose and to ensure that changes to the use or development of the land do not prejudice the purpose for which the land is to be acquired."

"-Use land for any Section 1 or Section 2 use in the zone.

-Construct a building or construct or carry out works.

By sub-clause 01-2 a permit application must be referred under Section 55 of the Planning and Environment Act 1987 ("the P & E Act") to the authority responsible for acquiring the land.

By sub-clause 01-3 decision guidelines with respect to permit applications under the PAO are stated as follows:

"Before deciding on an application, in addition to the decision guidelines in Clause 65, the responsible authority must consider, as appropriate: * The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies. * The effect of the proposed use or development on the purpose for which the land is to be acquired as specified in the schedule to this overlay. A permit granted under this clause may be conditional on: * The extent of alterations and extensions to an existing building and works, and the materials that may be used. * The location, dimensions, design and material of a new building or works. * The demolition, removal or alteration of any buildings or works. * The demolition or removal of buildings or works constructed or carried out in accordance with a permit under this clause. * No compensation being payable for the demolition or removal of any buildings or works constructed under the permit." (My emphasis)

By sub-clause 01-5 it is provided that any land included in a PAO is reserved for a public purpose within the meaning of the P & E Act, the Land Acquisition and Compensation Act 1986 ("the LAC Act") or any other Act.

In the present case the first respondent ("the permit applicant") sought a permit from the second respondent ("the Council") to use and develop a three storey building comprising 10 dwellings and an office with associated car parking. The front portion of the development extended over that portion of the subject land contained within the PAO.

The Council referred the permit application to the referral authority in accordance with s.55 of the P & E Act and in response the referral authority objected to the grant of a permit which allowed development within the front three metre strip of the land. This objection was made pursuant to s.56 of the P & E Act which provides:

"56. Action by referral authority on application (1) A referral authority must consider every application referred to and may tell the responsible authority in writing that - (a) it does not object to the granting of the permit; or (b) it does not object if the permit is subject to the conditions specified by the referral authority; or (c) it objects to the granting of the permit on any specified ground. (2) The conditions specified by the referral authority may include a condition that something be done to the satisfaction of the responsible authority or a Minister, public authority, municipal council or referral authority. (3) The referral authority may also give the responsible authority its comments on the application. ..."

Thereafter the Council was expressly bound to consider the objection of the referral authority pursuant to s.60(1)(a)(ii) of the P & E Act. Further, it was obliged to give effect to the objection pursuant to s.61(2) which provides:

"(2) The responsible authority must decide to refuse to grant the permit if a relevant referral authority objects to the grant of the permit."

Likewise s.62(1) provides:

"62. What conditions can be put on permits? (1) In deciding to grant a permit, the responsible authority must - (a) include any condition which the planning scheme or a relevant referral authority requires to be included; and ... (b) not include additional conditions which conflict with any condition included under paragraph (a) ..."

Upon receipt of the objection the Council refused the permit on the ground that if the building was set back three metres as required by the referral authority, the urban design outcome was unacceptable. The terms of this refusal demonstrate that the referral authority's objection might be understood as an objection in terms of s.56(1)(c) or as the Council's ground of refusal suggests it might be understood in substance as a requirement for a condition pursuant to s.56(1)(b).

The permit applicant then appealed to the Tribunal pursuant to s.77 of the P & E Act which provides:

"77. Appeal against refusal An applicant for a permit may apply to the Tribunal for a review of a decision by a responsible authority to refuse to grant the permit."

At the hearing of the appeal the permit applicant amended his application by leave of the Tribunal and modified the proposal reducing the footprint of the building and increasing the number of car spaces. Nevertheless, the application still contemplated development within the three metre strip affected by the PAO.

The permit applicant's case was put to the Tribunal on the basis that when the purpose of the PAO was implemented the front three metres of the building would be readily capable of "detachment" or removal from the building leaving the balance of the building in a form capable of viable use.

After a contested hearing during which the Tribunal heard evidence and received submissions from the affected parties the Tribunal determined to grant the permit applicant a permit and directed the Council to issue such permit pursuant to s.85 of the P & E Act.

The permit granted was, however, subject to conditions including a condition requiring the owner of the land to enter into an agreement pursuant to s.173 of the P & E Act with the referral authority and the Council.

The referral authority contends that the Tribunal's decision should be set aside for three reasons:

(a) it is contended that the Tribunal had no power to grant a permit in circumstances where the Council had no power to do so when it considered the matter consequent upon an objection by the referral authority;

(b) it is contended that the condition requiring a s.173 agreement was invalid by reason of the requirements of s.43(1)(d) of the Land Acquisition and Compensation Act 1986; and

(c) it is contended that it was not open to the Tribunal to conclude on the evidence before it that the front portion of the building was "detachable". (The grounds of appeal are more widely expressed but the attack on the decision on the facts was ultimately limited to this complaint.)

The Jurisdiction of the Tribunal

Section 40 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") provides that the Tribunal has two types of jurisdiction namely original jurisdiction and review jurisdiction. Section 42 provides that review jurisdiction is jurisdiction conferred on the Tribunal by or under an enabling enactment to review a decision made by a decision maker. "Enabling enactment" is defined by the VCAT Act to mean "an enactment by or under which jurisdiction is conferred on the Tribunal".

There is no dispute s.77 of the P & E Act which I have set out above constitutes an enabling enactment.

In turn, s.51 of the VCAT Act relevantly provides:

"51. Functions of Tribunal on review (1) In exercising its review jurisdiction in respect of a decision, the Tribunal - (a) has all the functions of the decision-maker; and (b) has any other functions conferred on the Tribunal by or under the enabling enactment; and (c) has any functions conferred on the Tribunal by or under this Act, the regulations and the rules. (2) In determining a proceeding for review of a decision the Tribunal may, by order - (a) affirm the decision under review; or (b) vary the decision under review; or (c) set aside the decision under review and make another decision in substitution for it; or (d) set aside the decision under review and remit the matter for re-consideration by the decision-maker in accordance with any directions or recommendations of the Tribunal. ..."

"Function" is defined by the VCAT Act to include "jurisdiction, power, duty and authority".

The question raised by the referral authority is whether the Tribunal has a function other than that of the Council as decision maker with respect to the permit application in circumstances where objection has been made by a referral authority. The referral authority's position is that the Tribunal has no power on review to grant a permit which the Council could not grant by reason of the provisions of s.61(2) of the P & E Act 1987.

(a) having regard to the functions conferred on the Tribunal under the enabling enactment; and

(b) having regard to the functions conferred on the Tribunal under the VCAT Act.

A consideration of the P & E Act demonstrates three things:

(a) the objectives of the Act support the view that it was intended to give a right of appeal in the circumstances in issue;

(b) the Tribunal is given discrete powers and is required to exercise those powers pursuant to discrete obligations;

(c) the procedural provisions of the Act expressly contemplate a right of appeal to the Tribunal in circumstances where a decision maker has used a permit pursuant to its obligation under s.61(2).

The Objectives of the P & E Act

In CIC Insurance Ltd v Bankstown Football Club Ltd[2] Brennan CJ, Dawson, Toohey and Gummow JJ said:

"Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. ... if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent."

Likewise, in K & S Lake City Freighters Mason J stated that:

"The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise." [3]

Section 35 of the Interpretation of Legislation Act 1984 specifically provides:

"35. Principles of and aids to interpretation In the interpretation of a provision of an Act or subordinate instrument - (a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; ..."

In the present case the provisions in issue fall to be construed in the context of the P & E Act which states by s.4 that the objectives of the planning framework which it is intended the Act will establish include:

"(2)(j) to provide an accessible process for just and timely review of decisions without unnecessary formality;"

The effect of the referral authority's construction of the Act would be to provide for no review under the Act of a decision made by it and notified to the responsible authority pursuant to s.56 of the P & E Act. The decision of the referral authority would not be subject to review on its merits and the consequential decision of the Council would also be placed beyond review on the merits. Further, insofar as a right might accrue to review the referral authority's decision for want of procedural fairness[4] or other error of law, such review would not be pursuant to the provisions of the Planning and Environment Act 1987 and would be difficult to achieve in a "timely" manner.

In my view, these underlying considerations create a context which does not favour the construction for which the referral authority contends. This construction would fail to give effect to and defeat one of the objectives of the planning framework which the Planning and Environment Act seeks to establish. It would deny a permit applicant access to the process for just and timely review of the decision to refuse a permit which would otherwise be his right and which is a fundamental feature of the system governing permit applications of the type here in issue which the P & E Act otherwise provides as the general norm.

The Tribunal is not constrained to have regard only to those matters to which the decision maker might have had regard. Section 84B(1) sets out matters which the Tribunal must take into account in making its decision and s.84B(2) provides:

"(2) The matters set out in sub-section (1) are in addition to any other matters which the person or body in respect of whose decision the application for review is made could properly take account of or have regard or is required to take account of or have regard to in making its decision."

There is no doubt, however, that the Tribunal must take account of the objection which was made by the referral authority. The Tribunal is so required by s.84B(2) having regard to the obligation imposed on the Council pursuant to s.60(1)(a)(ii) to consider any decision and comments of a referral authority which it has received.

The critical question is whether the Tribunal was further bound by s.61(2) or s.62(1)(a) to give effect to the referral authority's objection.

"(1) After hearing an application for review, the Tribunal may - (a) direct that a permit must not be granted; or (b) in the case of an application for review of a refusal or failure to grant or a decision to grant a permit - (i) grant the permit and direct the responsible authority to issue it; or (ii) grant the permit, direct that the permit must or must not contain any specified conditions and direct the responsible authority to issue the permit; or ... (e) direct that a permit must or must not contain any specified condition; ..."

These powers confer an independent discretion upon the Tribunal. The discretion is not expressed to be fettered in the manner in which the parallel discretions given to a responsible authority pursuant to s.61 and s.62 are fettered by the requirements of a referral authority.

It was submitted on behalf of the referral authority that s.85 was procedural only. I do not accept this submission. Section 85(1)(b) empowers the Tribunal both to grant a permit and direct that the permit must contain any specified conditions and direct the responsible authority to issue it. It is the last power which is procedural only. The power to grant is the power to exercise the discretion to grant. The power to direct that the permit must or must not contain any specified conditions is the power to exercise a discretion as to conditions. Section 85 thus gives the Tribunal substantive functions in accordance with s.51(1)(b) of the VCAT Act in addition to those otherwise conveyed by s.51(1)(a) of the VCAT Act. It also provides for specific procedural powers which displace the general procedural provisions set out in s.51(2) of the VCAT Act.

The Act thus evinces a clear intention to state the powers of the Tribunal separately from those of a responsible authority. The apparent plain meaning of the powers of the Tribunal is that they are not subject to the limitations found in ss.61 and 62 of the P & E Act.

This was the view taken by Smith J with respect to the Tribunal's powers to consider the merits of conditions required by a referral authority in VicRoads v AGC Advances Ltd & anor[5]. In that case it was contended by VicRoads that the Tribunal was bound by the obligations imposed by s.62(1) of the P & E Act upon a responsible authority.

Smith J analysed the statutory scheme of appeal then in force as follows:

"By s.25(2) of the Administrative Appeals Tribunal Act 1984, the Tribunal 'may exercise all the powers and discretions that are conferred by the relevant enactment on the person who made the decision.' But the Tribunal's powers in relation to planning appeals are specifically dealt with in the Planning and Environment Act 1987. It provides for a general right of appeal against any condition in a permit imposed by a responsible authority. This is done in the following section: '80. Appeals against conditions on Permits. An applicant for a permit may appeal to the Administrative Appeals Tribunal against any condition in a permit which the responsible authority has issued or decided to grant to the person.' By its reference to 'any condition' the Act prima facie allows an appeal in respect of conditions imposed by virtue of s.62(1) of the same Act. Section 85 deals with the powers of the Tribunal Planning appeals. S.85(1)(e) in particular provides that the Tribunal may 'direct that a permit must or must not contain any specified condition' Again the provision is in the broadest terms. If there is an inconsistency between the general provision, s.25 of the Administrative Appeals Tribunal Act 1984, and the above specific provisions, the specific provisions must in my view prevail. The Tribunal's power in relation to conditions is to be found in s.85 and not in s.62. Thus it was not relevant for the Tribunal to consider s.62(1) in reaching its decision and the failure to mention it is not an error."

In my view the same reasoning applies to the parallel provisions in issue before me governing both objections by a referral authority to the grant of a permit and requirements for conditions.

This view is confirmed by a further procedural provision of the P & E Act. Section 83 expressly contemplates the possibility of review proceedings in respect of a refusal to grant a permit consequent upon an objection by a referral authority and in respect of a refusal consequential upon a requirement by a referral authority for a permit condition unacceptable to the responsible authority. Section 83 provides:

"83. Parties to review (1) In addition to any other party to a proceeding for review under this Act, a referral authority is a party to a proceeding for review - (a) of a refusal to grant a permit if - (i) the referral authority had objected to the grant of a permit; or (ii) it was refused because a condition required by the referral authority conflicted with a condition required by another referral authority; and (b) of a permit condition if the referral authority had required the condition to be included in the permit."

There would no point in providing for such a review if upon a hearing the Tribunal was as a matter of law simply required to give effect to the referral authority's original objection or requirement with respect to a condition.

The terms of s.83 thus in my view make clear that the Act does contemplate a review in circumstances where the referral authority contends in this case no review can occur.

The VCAT Act also supports a like conclusion. The provisions of schedule 1 which relate to planning appeals reinforce the view that the Tribunal is not restricted to the exercise of the powers available to the Council when it considered the application.

There are two relevant contextual considerations. First, clause 62 of schedule 1 provides:

"The Tribunal has jurisdiction to determine a proceeding under a planning enactment despite any failure to comply with the planning enactment or any other enactment and, in doing so, may determine to disregard that failure if the Tribunal considers it in the interests of justice to do so."

In my view this provision would in appropriate circumstances enable the Tribunal to entertain an appeal with respect to the decision of a Council in circumstances where an application had not gone to a referral authority in accordance with s.55 or a responsible authority had not decided a matter strictly in accordance with ss.61(2) or 62(1). The Tribunal's powers are not dependent upon the procedural validity of a decision in accordance with the Planning and Environment Act.

Secondly, cl.64 provides for amendment of an application in the following terms:

"(2) At any time in a proceeding to which this clause applies the Tribunal may make any amendment it thinks fit to the application for the permit, works approval or licence the subject of the proceeding. (3) Without limiting the generality of sub-clause.(2), the Tribunal may make an amendment to an application for a permit under the Planning and Environment Act 1987 - (a) as to a use or development different from the use or development mentioned in the application; (b) as to the land to the use or development of which the application relates."

The power to amend expressly extends to amendment "as to a use or development different from the use or development mentioned in the application." It follows that it is open to an appellant permit applicant to seek to remove by amendment on appeal that feature of an application which has provoked objection or led to the requirement of a condition by a referral authority. The question of whether such an amendment should be made would require an exercise of discretion in accordance with the circumstances of each case. Nevertheless in normal circumstances one might expect the Tribunal to approach the question of amendment in accordance with the principles stated by Marks J in Pacific Seven v City of Sandringham[6] and expressed by him in reference to the possibility that the characterisation of a land use might lead to the conclusion that it included an element which was not permissible.

"But even if the answer is unfavourable to the applicant, I regard it as the duty of the Tribunal or the responsible authority, whichever body happens to be considering the problem, to consider informing the applicant of the effect of the proposed disqualifying use, so that the applicant is afforded the opportunity to abandon its pursuit or indicate willingness to comply with a condition restraining that use. The words of s21 and s21A of the Town and Country Planning Act should be borne in mind as expressing the intention of the legislature that the substance of an application should be determined. Planning is a difficult exercise with flexibility as (sic) essential ingredient."[7]

It is necessarily implicit in the power to amend which I have referred to, that the Tribunal is not bound to refuse an application by reference to the obligations of the Council with respect to the original application considered by it. To hold otherwise would defeat the purpose of a broad power to amend which is clearly directed to facilitating appropriate outcomes in accordance with the merits of the situation. If the referral authority's position as to the jurisdiction of the Tribunal were correct then it would seem as a matter of strictness the Tribunal could neither disregard an irregularity or amend an application to overcome the objection or requirement of a referral authority, even if the referral authority consented to such a course.

It follows that the referral authority's first contention should be rejected by reason of the terms of the provisions contained in the P & E Act granting power to the Tribunal, the procedural provisions contained in both the P & E Act and the VCAT Act, and the relevant purpose of the P & E Act which underpins the appeal provisions.

The Tribunal granted a permit subject to conditions which included:

"Before any development of the subject land commences the registered proprietor of the subject land shall enter into a Section 173 Agreement with VicRoads and Council. The agreement must include the following terms: No compensation will be payable by VicRoads to any person with any interest in the subject land for: * any loss or damage suffered as a consequence of the removal or alteration of works permitted under [this] planning permit ... issued at the direction of the Tribunal ... as a result of the acquisition of the land which is the subject of the Public Acquisition Overlay applying to the land. * The cessation or limitation of any use permitted under [this] planning permit ... issued at the direction of the Tribunal ... as a result of the acquisition of the land which is the subject of the Public Acquisition Overlay applying to the land. * The registered proprietor of the land is to indemnify VicRoads from any claims made against VicRoads for loss or damage made in relation to the above matters, including VicRoads' legal costs. The agreement is to be registered on any title created as a result of the subdivision of the original allotments. The Applicant is to bear VicRoads' and Council's legal costs including the costs of drafting and registering the Agreement."

The terms of such condition were put to the Tribunal by the referral authority itself as the appropriate form of condition if, contrary to its primary submission, a permit were granted.

It is, however, submitted by the referral authority that condition 4 "whilst clear enough on its face is ambiguous as to its effect upon later rights."

The concession that the condition is clear enough on its face reflects the reality that it is certain in the sense that it imposes a certain obligation upon the permit holder.

This is the sense in which certainty is ordinarily understood to be a precondition to a valid permit condition. The relevant principles have been accepted for many years to be those set out in Weigall Constructions Pty Ltd v Melbourne & Metropolitan Board of Works[8]. In that case Pape J adopted the tests stated by Lord Denning in Fawcett Properties Ltd v Buckingham County Council[9]:

"Mr. Megarry was on stronger ground when he likened the condition to a by-law...I can well understand that a by-law will be held void for uncertainty if it can be given no meaning or no sensible or ascertainable meaning. But if the uncertainty stems only from the fact that the words of the by-law are ambiguous, it is well settled that it must, if possible, be given such a meaning as to make it reasonable and valid, rather than unreasonable and invalid. Lord Wensleydale said so in this House in R v Saddlers Co [1863] EngR 91; (1863) 10 HL Cas 404, at p. 463. `As in one sense of the word the by-law is good, and in the other not, the rule is that it ought to be construed so as to make it valid, not to defeat it.' And at (AC) p. 678 his Lordship said: `I am of opinion that a planning condition is only void for uncertainty if it can be given no meaning or no sensible or ascertainable meaning, and not merely because it is ambiguous or leads to absurd results. It is the daily task of the courts to resolve ambiguities of language and to choose between them; and to construe words so as to avoid absurdities or to put up with them. And this applies to conditions in planning permissions as well as to other documents'."

"I think it is plain that in planning cases an over-technical approach should not be adopted in seeking to give a sensible meaning to conditions imposed in permits, for of necessity the condition is to operate in futuro and cannot be so worded as to contain every last detail which human ingenuity might conceive to be desirable Lord Denning in the Fawcett Property Case, supra, at (AC) pp. 677 and 678 pointed out that in relation to wills the construction of defeasance clauses alleged to be void for uncertainty provides no analogy to the method of construction of conditions in planning permits, for in wills such conditions (which work a forfeiture) are construed with peculiar stringency, and in Hall and Co Ltd v Shoreham-by-sea Urban District Council, supra, Wilmer, LJ, at (AC) p. 245 said: "I do not think that the words used by a local authority in imposing conditions are to be scrutinized in the same way as the words used by a parliamentary draftsman." See also Turner v Allison, [1971] NZLR 833, where Richmond, J (in a passage which had the concurrence of the other members of the Court of Appeal), at p. 857, remarked that there was nothing in the Town and Country Planning Act 1953 (NZ) which required the Board to settle every last detail of the conditions which it sought to impose."[10]

Certainty may be achieved by the specification of a definite obligation or by the imposition of an obligation which is capable of final ascertainment pursuant to the Act. The latter situation occurs most commonly in the planning context when a permit condition requires that something be done to the satisfaction of a responsible authority or referral authority (see s.56(2) and s.62(2)(a) of the P & E Act). Section 149 of the P & E Act provides in turn for the final ascertainment of the content of such an obligation by way of application to the Tribunal:

"149. Application for review (1) A specified person may apply to the Tribunal for the review of - (a) a decision of a specified body in relation to a matter if a planning scheme specifies or a permit contains a condition that the matter must be done to the satisfaction, or must not be done without the consent or approval, of the specified body; ... "

Likewise, s.184 of the P & E Act provides for application to the Tribunal if the content of a s.173 agreement cannot be finalised:

"Application to Tribunal (1) An owner of land may apply to the Tribunal for an amendment to a proposed agreement if - (a) under a planning scheme or a permit the use or development of land for specified purposes is conditional upon an agreement being entered into under this Division; and (b) the owner objects to any provision of the agreement."

In these circumstances insofar as the language of the condition contemplates a further agreement it is not uncertain for similar reasons to those stated by Barwick CJ in Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd[11]:

" The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin's words in this connexion in Hillas & Co Ltd v Arcos Ltd [1932] UKHL 2; (1932) 147 LT 503, at p 512 ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright's words in Scammell (G) & Nephew Ltd v Ouston (1941) AC 251 is not "so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention", the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.

In this case the contract itself provided the means of the resolution of any question as to what items constituted supplier's costs, namely, by the decision of an arbitrator whose judgment as to whether or not there had been a variation in items of expenditure which were embraced in what he found to be the supplier's costs was agreed to be final and binding, subject of course to the terms of the Arbitration Act, and thus to the possibility of a case stated for the opinion of the Court."

The question of law which the referral authority seeks to agitate is stated in the notice of appeal as follows:

"Whether a condition precluding the payment of compensation by Roads Corporation relating to loss associated with the use or development of the land authorised by the permit upon acquisition of the land is invalid by reason of the requirements of section 43(1)(d) of the Land Acquisition and Compensation Act 1986."

It is apparent from the submissions made on behalf of the referral authority that the point in issue is to be understood as directed to the question whether the Tribunal could in the proper exercise of its discretion impose a condition in the form in issue having regard to the ultimate legal effect of the agreement contemplated. It is not said that the requirements of s.43(1)(d) of the LAC Act rendered the content of the relevant condition uncertain. What is said to be uncertain is the ultimate legal consequences of the condition after its performance by way of the making of an appropriate s.173 agreement..

The underlying premise of the argument reflects the premise identified in Franceschini v The Melbourne and Metropolitan Board of Works & Ors[12] with respect to the basis of a decision to permit a use as distinct from a decision to impose a condition:

"I took one unexpressed but underlying premise of the argument to be that, unless the Tribunal could be satisfied that the avowed purpose of the proposed use by the Foundation was one which it could actually carry out having regard to its disclosed intentions, then there was no legitimate reason to direct that a permit be granted; and hence there was no power to so direct. I suppose, more accurately, it might be said that an exercise of the power in those circumstances would involve an abuse of the power."

In effect it is here contended that unless the Tribunal could be satisfied that the condition was effective the exercise of the power to impose the condition was invalid.

Of course what was in issue in Franceschini was a threshold issue governing the discretion to grant a permit, whereas what is put in issue here is the validity of a condition.

The primary issue between the referral authority and the applicant was, however, whether a permit could be granted which was consistent with the purpose stated in the PAO control:

"To reserve land for a public purpose and to ensure that changes to the use or development of the land do not prejudice the purpose for which the land is to be acquired."

The condition in issue gives or seeks to give the referral authority consequential protection following a conclusion that development in the form proposed would not otherwise prejudice the implementation of the purpose for which the land is intended to be acquired.

The underlying test of validity of a permit condition by reference to purpose is that stated by Harris J in 271 William Street v City of Melbourne[13]_,_namely: Is the condition reasonably capable of being related to the implementation of planning policy when the scope of such policy is ascertained from the relevant planning legislation and the relevant planning scheme? As Ashley J held in Crichton v Moorabbin[14] this test remains the test under the Planning and Environment Act 1987.

Once it is accepted for the reasons that I have already set out that the condition challenged by the referral authority is certain in terms of the obligation it imposes upon the landowner, it could only be said to be invalid if:

(a) it could be demonstrated that the condition was not reasonably capable of being related to the implementation of planning policy in the relevant sense; or

(b) it could be demonstrated that it was not reasonably open to the Tribunal to regard it as an effective mechanism for this purpose.

(a) That although s.62(2)(e) of the P & E Act specifically contemplates the imposition of conditions further claims for compensation under the P & E Act itself, it does not specifically contemplate conditions of the type here in issue. Section 62(2)(e) provides:

"(e) a condition providing that no compensation is payable under Part 5 in respect of anything done under the permit or setting out - (i) the circumstances in which compensation will be paid for anything done under the permit; and (ii) the amount, or the method of determining the amount, of compensation payable; ..."

(b) The combined effect of s.30 and s.43(1)(d) of the LAC Act renders the legal consequences of the proposed agreement uncertain. Section 30 of the LAC Act provides:

"30. Right to compensation on acquisition Subject to this Act, every person who, immediately before the publication of a notice of acquisition, had an interest in land that is divested or diminished by the acquisition of the interest to which that notice relates has a claim for compensation."

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

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

..."

In addition it was sought to argue that the combined effect of s.30 and s.43(1)(a) renders the legal consequences of the proposed agreement uncertain. Section 43(1)(a) requires to be disregarded in assessing compensation:

"(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;"

Insofar as this last contention is concerned the point in issue was not argued before the Tribunal and was not the subject of leave to appeal. It gives rise to a question of law which is not identified in the notice of appeal and in these circumstances should not be entertained by this Court.[15]

Conversely as I have indicated the question of the effect of s.43(1)(d) is expressly raised in the notice of appeal and the argument now put to me was put to the Tribunal in a written submission which first referred to the terms of s.43(1)(d) and then stated:

"The Act provides that compensation may be payable to claimants with 'an interest in land' which includes a legal or equitable interest in the land, an easement, right, charge, power or privilege in, under over, affecting or in connexion with land (section 3) and for loss attributable to disturbance, being any pecuniary loss suffered by a claimant as the natural, direct and reasonable consequence of the diminution of an interest in land (section 40). The entitlement to compensation therefore extends beyond the registered proprietor of the subject land. In circumstances where ten residential units and offices are to be developed with five of the units directly abutting those portions of the development to be demolished it is highly likely that claims arising from loss and damage as a result of the acquisition of the land will eventuate. For example, it is foreseeable that the owner of one of the units to be constructed may suffer financial loss as a consequence of the acquisition of the land reserved by reason of a decrease in value of their units (which could conceivably occur in circumstances where a major road is extended to a point immediately below their private open space), or loss and damage which may be sustained as a result of the works required to remove the office below and solatium (section 44)."

The referral authority's submission was further elaborated before me and I accept that because the occupiers of each of the units within the property will have both pedestrian access to those units through the ground floor lobby which extends through the PAO affected land, and also have vehicle access to the car park across such land, it is inherently likely any future lease of individual units may grant such occupiers an interest in the land proposed to be acquired in the relevant sense required by the LAC Act. In turn, it follows that any future acquisition of the three metre strip may give rise to potential claims by such persons.

In these circumstances I further agree that the effect of s.43(1)(d) would be such that an agreement entered into pursuant to s.173 of the P & E Act between the Council, the referral authority and the registered proprietor may not preclude such claims by other occupiers.

The general approach to be taken to the interpretation of interrelated statutes was stated by Kirby P in Commissioner of Stamp Duties v Permanent Trustee Co Ltd:

"... it is proper for courts to endeavour to so construe inter related statutes as to produce a sensible, efficient and just operation of them in preference to an inefficient, conflicting or unjust operation. This is the approach which I take to the task of statutory interpretation in hand."[16]

In the present case as I have already indicated cl.45.01-3 of the decision guidelines with respect to permits under the PAO expressly contemplates that a permit may be conditional on:

"... No compensation being payable for the demolition or removal of any buildings or works constructed under the permit."

It follows that the Tribunal gave effect to a consideration which was contemplated by the PAO control. The reference to "compensation for the demolition or removal of any buildings or works constructed under the permit", is apt to describe an element of compensation potentially payable under the LAC Act upon acquisition. Conversely, it is not apt to describe compensation payable under Part 5 of the P & E Act in consequence of the imposition or removal of a reservation or in consequence of the refusal of a permit on compensable grounds. The permit condition imposed by the Tribunal thus implemented a consideration of planning policy in the sense described in 271 William Street namely policy ascertainable from the purpose and provisions of the relevant planning scheme control. This policy can in turn be seen to give effect to the objectives of planning stated in s.4(1) of the P & E Act including in particular:

"(1) The objectives of planning in Victoria are- (a) to provide for the fair, orderly, economic and sustainable use, and development of land; ... (e) to protect public utilities and other assets and enable the orderly provision and co-ordination of public utilities and other facilities for the benefit of the community; (f) to facilitate development in accordance with the objectives set out in paragraphs (a), (b), (c), (d) and (e); (g) to balance the present and future interests of all Victorians."

Furthermore, although the P & E Act does not expressly provide for a condition mechanism in such circumstances, s.62(2)(f) provides for:

"(f) a condition that the owner of the land or applicant for the permit in anticipation of the applicant becoming owner of the land is to enter into an agreement with the responsible authority under section 173 within a specified period or before the use or development or a specified part of it starts; ..."

In turn s.174 provides that a s.173 agreement (being an agreement between a responsible authority and an owner of land entered into by the responsible authority on its own behalf or jointly with any other person or body), may provide for the following matters:

"(2)(a) the prohibition, restriction or regulation of the use or development of the land; (b) the conditions subject to which the land may be used or developed for specified purposes; (c) any matter intended to achieve or advance - (i) the objectives of planning in Victoria; or (ii) the objectives of the planning scheme or any amendment to the planning scheme of which notice has been given under s.19; (d) any matter incidental to any one or more of the above matters."

These provisions are sufficiently broad to embrace an agreement of the type here in issue and to provide a potential vehicle for the imposition of a requirement giving effect to the intention reflected in the decision guidelines contained in the PAO control. In turn it could not in my view be said that the Tribunal acted so unreasonably as to err in law in imposing the condition that it did although the full and ultimate effect of the condition as between potential future claimants of compensation other than the owner of the land and the referral authority remains to some degree uncertain. The condition might be regarded as reasonable having regard to the limitations placed on future claims by the owner of the land. It might be thought the condition achieved substantial protection for the referral authority and that on this basis in the circumstances of the case such protection was sufficient to be reasonable.

The matter does not, however, end here. The condition in issue ultimately provides that the registered proprietor of the land is to indemnify the referral authority for any claims made against the referral authority for loss or damage suffered as a consequence of the removal or alteration of works permitted under the planning permit, or the cessation or limitation of any use permitted under the planning permit. Given this requirement the Tribunal was entitled to be satisfied that the referral authority was adequately protected against financial loss which might otherwise result from claims arising out of the compulsory acquisition of the front strip of the proposed development.

In my view the condition imposed met the underlying test of validity of a planning condition in that it gave effect to the policy discernible from the Planning Scheme provisions pursuant to which it was imposed and adopted a form which it was reasonably open to conclude would be effective to achieve this policy.

The Tribunal was satisfied with respect to the question whether the proposed use and development could proceed without prejudice to the purpose of the reservation, on the basis of the evidence of Mr Douglas the project architect with respect to the proposed design of the front of the building and what the Tribunal calls "its ability to be separated from the rest of the structure." The Tribunal concluded:

"23. I was advised by Mr Douglas that the front 3m of the building had been designed in such a way that it could be removed at any later date without compromising the structural integrity of the rest of the building. While Mr Douglas agreed with Ms Foley that he was not a qualified building surveyor, he said that based on his architectural expertise, the first 3m of the structure was quite readily able to be isolated and separated from the rest of the building. According to Mr Dougals, in the event of the widening proceeding, then the front skin would, in effect, be able to be moved 3m to the south and attached to the remnant structure. 24. Since the introduction of new format schemes there has been one other relevant Tribunal decision in P & T Pantelakis v Monash City Council v Casey & Ors (P3125/2002; P3126/2002; P3127/2002). In that case, the Tribunal adopted the comments of both Lofts Quarries & Lewenbery and said that: '... there are overriding public policy considerations that support the PAO over this land except for the small above ground intrusions proposed in Scheme 1.' 25. These "small above ground intrusions" involved a glazed entrance canopy and balconies which protruded 1.6m into the overlay widening area which were approved. 26. In my view, a practical solution for this issue is required. On the available evidence it may be many years before VicRoads is in a position to do anything about widening North Road. I agree that this is a worthwhile public infrastructure project and its long term implementation should not be jeopardised. 27. In the meantime though, land should not be sterilised from a short or medium term use so long as the long term objective is maintained. In my view that long term objective could be maintained if the new structure is designed in such a way that it is 'detachable' from the rest of the building, while not compromising the structural integrity of the rest of the building. I believe that this design is capable of accommodating that pre-requisite and accordingly I will not require the 3m setback requested by VicRoads in the event of a permit being granted. I am satisfied (unlike in Lofts) that the applicants have demonstrated that the long term road widening objective will not be compromised by the short/medium term use."

It was submitted on behalf of the referral authority that there was no evidence to support a finding that the front three metre portion of the building was "detachable".

In my view this submission confuses the question of the dictionary definition of the term "detachable" with the sense in which it is apparent the Tribunal used it.

As Lord Hoffman has stated in another context:

"Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the [making of the document] ... The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean."[17]

The word "detachable" is used in inverted commas in paragraph 27 of the Tribunal's reasons. It is intended to have the meaning expressed in paragraph 23 of the decision. The evidence was that the front three metre strip of the building was readily able to be isolated and separated from the balance of the building. It could be removed without compromising the structural integrity of the balance of the building. The front external skin at ground floor level could then in effect be moved three metres to the south and attached to the remnant structure.

In reaching the conclusion that the front portion of the building was detachable in this sense the Tribunal had before it the modified plans of the proposal together with an explanation of those plans from the architect. There is no transcript of the proceedings before the Tribunal in evidence before me. The affidavit sworn in support of the application for leave to appeal, however, corroborates the Tribunal's reasons and states:

"In summary, the evidence of Mr Douglas was that if the road widening proceeded the front portion of the building could be removed and relocated to the south without damaging the integrity of the remaining building."

It is difficult to contend the Tribunal's conclusion was not open to it in the absence of a transcript. In City of St. Kilda v Perplat Investments Pty Ltd[18] the Court of Appeal was confronted with a case where it was apparent that the Tribunal had accepted the evidence of an expert witness as critical to its decision. No transcript or other detailed account of that evidence was available. Young CJ observed at 360:

"In the absence of a full account of the evidence which Mr Biles gave to the Tribunal, it seems to me to be impossible to sustain the appellant's contention that the Tribunal made a finding which was not reasonably open on the evidence."[19]

In the present case as I have said the better view is that what the Tribunal intended by the term "detachable" was that the front portion of the building could be removed without destroying the integrity of the remaining building set back behind the three metre strip. Further, as the Tribunal acknowledged, it is apparent that if the front portion were removed consequential works would be necessary to the remaining building. These works would require a permit and it was not in my view necessary for the Tribunal to be satisfied as to their final detail or appropriate for the Tribunal to seek to fix their final detail at this point in time.

In the circumstances it was sufficient for the Tribunal to be satisfied that the portion of the proposed development within the PAO was severable from the balance of the development in practical terms. In the absence of a transcript it cannot be said that the conclusion it reached as to this question was not open to it. Indeed, it would seem from the available evidence that its conclusion accorded with the evidence of Mr Douglas to which it refers and was squarely open to it.

[1] In accordance with usual practice, the Tribnal has indicated via letter it will abide by the decision of the Court.

[3] [1985] HCA 48; (1985) 157 CLR 309 at 315 recently applied with respect to the jurisdiction of the Tribunal in another context in Winslow Constructors Pty Ltd v Mt. Holden Estates [2004] VSCA 159.

[4] The right to procedural fairness would arise if the referral authority's decision was final and not subject to appeal: cf Romanella & Anor v City of Melbourne (1986) 4 PABR 363: "The Council had a duty to act fairly towards the applicants. This may not have required them to provide an oral hearing to the applicant but at least the applicant should have been made aware of what was being urged against the grant of the extension, and given the opportunity to counter if they could, any such matters." (p.365)

[7] p.163. Sections 97 and 98 of the VCAT Act reflect the like intention to the sections referred to.

[15] cf City of Greater Geelong v Herd & Ors [1997] 20 AATR 293 at 313

[17] Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28; [1998] 1 WLR 896 at 912-913 and see Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.

[19] Crockett J was satisfied that there was sufficient material before the Court to establish that the Tribunal's findings were open to it on the basis of the evidence of the expert witness (p.366). Southwell J was not persuaded that the Court could be satisfied that upon the evidence it was not reasonably open to the Tribunal to make the findings in fact made (p.371).

Town and Country Planning Act 1953

At a glance

Court

Decision date

Before

Source

Judgment (157 paragraphs)

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Legislation Cited (8)

Cases Cited (4)