Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2016] VSCA 187

• Manage change in Strategic Redevelopment Areas carefully; protect the existing and ongoing viable use of existing industries; retain employment generating uses where possible; and subject to appropriate justification, introduce new land uses.
• Require the following matters be addressed, as appropriate, in consideration of applications for change in Strategic Redevelopment Areas:
  • The extent of contamination.
  • Range of future uses.
  • All infrastructure requirements including community facilities and open space.
  • Potential off site impacts, and measures to manage them.
  • Traffic management plans which address connectivity within and between sites.
  • Staging of development.
  • Mechanisms/proposals to protect ongoing viable industries from encroaching sensitive uses such as buffer distances and acoustic measures to attenuate noise levels within the new development.
  • Future character of the area and potential impact on neighbouring residential character.
  • Measures to protect ongoing viable industry.
  • Social Impact Assessment.
  • Incorporation of Environmentally Sustainable Design Principles.
  • Diversity in housing choice including affordable housing.
  • Appropriate zoning and planning controls to guide future development and manage the potential impact of interface issues on adjoining land uses.
• Require the preparation of an Outline Development Plan (ie a master plan), for Strategic Redevelopment Areas that are no longer suitable for traditional industrial uses and are in multiple ownership in consultation with land owners, adjoining land owners, key government stakeholders and the Council to ensure that the Strategic Redevelopment Area as a whole can integrate with its surrounds and address significant interface issues.
• Support applications for site specific rezoning only if the applicant can demonstrate that the proposal will not prejudice the future development of the remainder of the precinct and that it is consistent with an Outline Development Plan or Master Plan that has been prepared to manage overall change in the precinct.
• Ensure that there is an appropriate interface between conflicting land uses when planning for the redevelopment of redundant industrial sites identified as Strategic Redevelopment Areas.
• Require residential and other new sensitive land uses to include appropriate measures to protect residential amenity including noise attenuation within new buildings and appropriate design and siting of private open space to protect occupants' amenity.
• Ensure that there is an appropriate interface between existing and future land uses within redundant industrial areas identified as Strategic Redevelopment Areas when planning for redevelopment of the precinct.
• Where appropriate, consider the potential for new character in future residential areas of the Strategic Redevelopment Areas.
• Ensure the provision of appropriate community infrastructure or an adequate contribution to support new communities.
• Ensure that the existing road layout and subdivision pattern that defines and characterises the broader neighbourhood is considered and respected by new development.

Implementation

These objectives and strategies will be implemented by:

Policy Guidance (criteria for the exercise of discretion)

• Use local policy at Clause 22.01 to ensure that heritage issues are given appropriate consideration at an early stage when making decisions about the future uses and development of industrial sites.
• Use local policy at Clause 22.02 to ensure the viability of ongoing industries.
• Use local policy at Clause 22.11 to ensure that signs respond to the character and amenity of areas and do not detract from the character of a locality, building or site.

• Apply the Design and Development Overlay, or a Development Plan Overlay or other appropriate planning control to implement the Hobsons Bay Industrial Land Management Strategy 2008 to manage the transition of redundant industrial land identified as a Strategic Redevelopment Areas for alternative uses.
• Apply the Development Plan Overlay or the Design and Development Overlay to ensure that new, refurbished and converted developments for new residential and other noise sensitive uses constructed in proximity to existing industry include appropriate acoustic measures to attenuate noise levels within the building and private open space areas.
• Apply the Environmental Audit Overlay to contaminated sites.
• Apply the Land Subject to Inundation Overlay and the Special Building Overlay to land identified as being flood prone.
• Apply the Heritage Overlay to conserve characteristics that contribute to the individual identity of heritage places and precincts within Hobsons Bay and ensure that their cultural significance is not diminished by the loss of any fabric which contributes to the significance of the heritage place or precinct and inappropriate new development.

• Prepare Outline Development Plans (ie a master plan) for entire precincts identified as Strategic Redevelopment Areas in the Industrial Land Management Strategy 2008 prior to consideration of rezoning applications.
• Manage the transition of the Strategic Redevelopment Areas as outlined in the Hobsons Bay Industrial Land Management Strategy 2008, through the development of Outline Development Plans, Development Plan Overlays, Design and Development Overlays or other planning tools, as appropriate, to ensure an integrated development that, amongst other things, ensures appropriate buffer distances are maintained from nearby industry and the ongoing operations of the Port are protected.
• Review the level of existing facilities and services to meet the needs of new communities.[35]

99 It can be seen that these provisions contemplated an ongoing process over many years in order to manage potential change within the SRAs. They contemplated the introduction of new land uses subject to appropriate justification. They required a series of specific potential constraints to be addressed. They also contemplated that the transition in use of redundant industrial land would be managed in accordance with the ILMS 2008. We will come shortly to the process which led to the inclusion of these provisions in the planning scheme and to the terms of the ILMS. But it is important to note that this version of the ILMS post-dates the leak and was not referred to in the planning scheme in December 2006, being the date with which grounds 1, 2 and 4 are concerned.

100 Local policy with respect to the built environment contemplated that the amenity of residential areas would be protected from the effects of noise, air, water and land pollution.[36]

101 Economic development policy sought to stimulate and facilitate appropriate industrial activity and employment opportunities by differentiating between core and secondary industrial areas, protecting those areas from the impacts of encroachment of residential and other sensitive land uses, and managing the successful transition of identified SRAs through further detailed planning.[37] The Altona petroleum refinery falls within a core industrial area, the adjoining industrial area to the east of the refinery comprises a secondary industrial area, and the applicants' land falls within the northeast portion of an SRA while the Akuna Drive industrial area is again a secondary industrial area.

102 Mr Milner summarised the principal competing thrusts of the policy provisions overall as follows:

• The need to protect the health and safety of the community and through land use planning and urban design create and protect a high standard amenity in which residents are not affected by adverse environmental effects.
• Prevent environmental problems by not siting incompatible land uses close together.
• The need to protect industrial activity in industrial zones from the encroachment of unplanned residential and other sensitive uses which will adversely affect industrial viability and sustainability.
• The need to ensure sufficient land is available for a range of uses including residential and industrial purposes to meet forecast demand. Included among the ways that this might be achieved is by urban consolidation, redevelopment and intensification of existing urban areas.[38]

103 In addition to the policy framework governing the ongoing planning of the applicants' land and other land within its vicinity, the question of the appropriateness of the applicants' land for residential development also fell to be considered by reference to a Ministerial Direction given under ss 7(5) and (6) of the P&E Act with respect to contaminated land. Minister's Direction number 1 published on 27 September 2001 governed amendments to a planning scheme that may affect the use of potentially contaminated land. The applicants' land falls within this category because it is known to have been used for industry and to have formed part of a refuse tip and been the subject of some dumping of waste and fill. The Minister's Direction requires the council as planning authority to either ensure that a Certificate of Environmental Audit or Statement of Environmental Audit with conditions that are suited to sensitive use (including residential use) has been issued;[39] or include a requirement in an amendment facilitating such use that a certificate or statement be issued before a sensitive use, construction or works in association with the sensitive use commence.[40]

104 The planning history of the land before the leak shows continuing difficulty and conflict over the manner in which the policy objectives affecting its redevelopment should be resolved.

105 Before 1989, the applicants' land was used for the purpose of an abattoir and zoned General Industrial. It appears that the abattoir commenced in about 1930. After it ceased, the land was used in part as landfill.

106 Between 1989 and 1995, three proposals for rezoning the land from industrial to residential were unsuccessful. In the ordinary course, if authorised by the Minister,[41] planning scheme amendments first undergo a public exhibition process.[42] If submissions are received which give rise to issues of concern,[43] the proposed amendments are referred to an independent panel. After the panel has considered the submissions and conducted a hearing with respect to them, the panel reports to the council.[44] The council may then adopt the amendment with or without changes.[45] The amendment is then subject to ministerial approval[46] and potential parliamentary revocation[47] before it comes into force.

107 The first two proposals did not proceed to a public exhibition process. The Minister refused to support the processing of these initial proposals for rezoning because of the two kilometre buffer recommended by the EPA between sensitive uses and petroleum refineries.

108 The third (amendment L14 to the planning scheme) went through an exhibition process and a hearing before an independent panel to consider submissions made with respect to it. The panel found that the amendment was premature and it was abandoned by the council. The panel recommended against L14 on the basis of the two kilometre buffer distance provided for by the EPA buffer policy.

109 In 1997, the council adopted the initial ILMS and Hobsons Bay Industrial Land Use and Development Guidelines. These documents set out objectives, strategies and guidelines for the different industrial areas within the municipality. The industrial area within which the applicants' land is located was identified as a location suitable for the development of modern 'high tech' industries, and associated use and design guidelines were provided. Other industrial areas were identified for rezoning.

110 Again in late 1997, an environmental audit report was prepared in relation to the subject site and surrounds. The report identified the land as contaminated and unsuitable for residential development, but generally suitable for garden industrial development.

111 In September 1998, an application was lodged by the applicants seeking development approval for 107 industrial warehouses with associated car parking on the applicants' land. A number of objections were received following notification of the proposal and the council requested further information from the applicant. The proposal did not proceed.

112 A proposal was then advanced for residential development of the land which required a rezoning. Amendment C1 to the planning scheme was approved for exhibition by the Minister, exhibited and, after modification, went before an independent panel. The proposal at that stage was for 104 attached dwellings. The C1 amendment was considered in the context of two contradictory local land use strategies: the 1997 ILMS, which identified the land as an area with potential for industrial expansion, and the 1999 Living in Hobsons Bay: Population and Housing Beyond 2000 - Our changing neighbourhoods, which recognised the land as having potential for residential rezoning.

113 The panel report of March 2001 recommended that the amendment be abandoned for the following reasons:

(a) poor response to the strategic planning framework;

(b) loss of industrially zoned land;

(c) increase in traffic movement and volumes;

(d) inappropriate access opportunities and points;

(e) over development of the land;

(f) pressures may come to rezone other industrial land in the area;

(g) located within the 2 km buffer zone of the Mobil complex; and

(h) proposal is in an insufficient state of readiness for approval and is premature.

114 Each of these concerns directly reflected aspects of the relevant planning policy framework.

115 Between 2003 and 2006, there were a series of iterations of the ILMS. The February 2006 version included within an SRA the majority of what was subsequently designated as Precinct 13, but removed the applicants' land from that area, suggesting that the applicants' land should remain within its current zoning. This version of the ILMS was exhibited along with amendment C33.

116 An October 2006 version of the ILMS also did not include the subject site within an SRA but correspondence from council officers dated 23 October 2006 noted council's support for the inclusion of the applicant's land within Precinct 13 'to allow the rezoning of the site from industrial to residential'. As at the date of discovery of the leak, however, the ILMS adopted by council did not support a change to the zoning of the applicants' land.

117 Further, on 22 December 2006, the EPA advised Mobil with respect to the Mobil land in Precinct 13:

EPA would have serious concerns should it be proposed to rezone land not previously used for residential purposes within the recommended buffer to the residential zone.

118 As we have said, the leak was discovered in December 2006. In 2007, amendment C33 to the planning scheme was put forward, seeking to adopt the updated ILMS as a reference document to the scheme and make associated changes to local planning policy. The amendment related to all industrial zoned land in the municipality. The council submitted to a panel that all the industrial land in Precinct 13 (including the applicants' land) should be included in a SRA with a preferred future zoning of Residential 1. The panel rejected this submission and recommended that the area in Precinct 13 designated for redevelopment not include the applicants' land.[48]

119 The C33 panel was not persuaded that an appropriate justification for a residential outcome had been provided and, in particular, that the various matters raised by the C1 panel had been satisfactorily addressed.

120 The council ultimately did not follow the recommendation of the panel, but determined to adopt C33 and designate all the land within Precinct 13, apart from the Akuna Drive industrial estate, as within the SRA.[49] See the depiction below.

121 As the SRA provisions we have set out above make clear, the planning scheme still refers to the June 2008 ILMS as a reference document and nominates it as the basis for forward planning for the SRA. The 2008 ILMS states at its outset:

The municipality is one of the most significant locations for a number of major industries in Victoria and this strategy is intended to consolidate that position and at the same time assist the transition of some of the traditional industrial land uses to more appropriate zones.

• To audit and assess the suitability and desirability of the City's industrial land resources (supply) to meet future industrial market demands, provide employment, and achieve State and Local Planning objectives.

• To decide whether any land currently zoned industrial is better suited to achieve urban consolidation and provide for additional housing or commercial growth.[50]

1.1 Key Findings

In summary, the key findings of the review are:

• Hobsons Bay currently has 1,782 hectares of land zoned for the purpose of industry, which accounts for approximately one third of all of the land in Hobsons Bay.
• Council has identified 22 industrial precincts in the City, each with its own role and function. Whilst there is industrial land in most of the suburbs, the majority of the core industrial land is concentrated in Altona.
• A classification system has been developed to indicate the future role and function of these precincts.
• Industrial land in the municipality is an important source of jobs, employing approximately 27,690 people. The City forms part of the Werribee Growth Area, and plays an important role in providing local and regional employment.
• Hobsons Bay will continue to be a primary location for industries of state significance and as a consequence they will influence the surrounding land use patterns.

• Motor vehicle building, Toyota Australia;
• Petroleum refining and storage in Altona and Spotswood;
• Ship building in Williamstown;
• Inter-modal freight terminals in Altona;
• Petrochemical complex in Altona;
• ACI Glassworks Spotswood and
• Food Processing (Dons), Altona North.
• Hobsons Bay's supply of vacant industrial land could be fully developed in 11 years based on an estimated take up rate of 36 hectares per annum.
• Specific initiatives contained in the State Government's Melbourne 2030 strategy support this outcome, but not at the expense of required industrial land [sic].
• The amenity and environmental impacts of all industrial estates in the City can be improved. Opportunities exist to better manage, and in some cases remove conflict between industry and other sensitive land uses.
• Some industries require action to protect the viability of their operations from encroaching sensitive uses.
• A review of the 22 precincts has identified nine precincts in Hobsons Bay that are considered suitable (in whole or in part) for review for alternative land uses ...[51]

124 It can be seen that the 2008 ILMS identified precincts as suitable 'for review'. They included part of Precinct 13 including lots A and B. The area identified also included the Arundel stud land and the caravan park land but excluded the Mobil land.

125 The first key recommendation in the 2008 ILMS emphasised the need to manage change in SRAs carefully, protect existing and ongoing viable industrial areas and carry out further investigation before the introduction of new land uses.

1. Manage change in Strategic Redevelopment Areas carefully, protect the existing and ongoing viable industrial uses, retain employment generating uses where possible, and subject to further investigation, introduce new land uses.

• Preparation of Outline Development Plans (ODPs) and/or, Master Plans, Development Plans and Design and Development Plans for the nine Strategic Redevelopment Areas. These plans should be prepared in consultation with the landowners, adjoining landowners, local communities, relevant state agencies and the Council. They should also identify, among other things, the extent of land contamination, potential off site impacts and measures to manage them.
• Proposals submitted to the Council should:
  • Identify the possible range of future uses, infrastructure and community infrastructure needs.
  • Include staging of development and proposals for the protection and/or management of viable industries, future character, future zoning and planning controls.
  • Provide a high standard of amenity and environmentally sustainable design, and consideration of any significant native flora protection where identified.
  • Consider individual applications where appropriate for site-specific rezoning following the approval of an ODP or Development Plan Overlay (DPO) and Design Development Overlay (DDO) for the whole of the specific Strategic Redevelopment Area, subject to evidence being provided that the future development of the remainder of the precinct will not be adversely affected.[52]

126 In the present case, no outline development plan has been approved for the relevant part of Precinct 13. There has been no effective further investigation of the introduction of new land uses.

127 The 2008 ILMS went on to identify a future industrial land use framework by reference to the core industrial areas, secondary industrial areas, and strategic redevelopment areas to which we have previously referred.

128 It emphasised the necessity for careful management of strategic redevelopment:

The Council must ensure that the strategic redevelopment of key areas/sites identified as a result of this Strategy is managed carefully. The ultimate aim will be to achieve net community benefit. The Council should not be driven by developer pressure to achieve the highest and best use on their land alone. A precinct approach must be taken to redevelopment to ensure the highest level of integration.

It is proposed that an Outline Development Plan (ODP) and/or Master Plans, Development Plan and Design and Development Plan be prepared for the Strategic Redevelopment Areas that are no longer suitable for traditional industrial uses. These plans will be prepared in consultation with the land owners, adjoining land owners, local community, key government stakeholders and the Council and should identify such matters including but not limited to:

• the extent of any contamination;
• range of future uses;
• all infrastructure requirements including community, and open space;
• potential off site impacts, and measures to manage them;
• traffic management plans, which address connectivity within and between sites;
• staging of development;
• mechanisms/proposals to protect ongoing viable industries from encroaching sensitive uses such as buffer distances and acoustic measures to attenuate noise levels within the new development;
• future character of the area and potential impact on neighbouring residential character;
• future zoning and planning controls, which must include a high standard of environmental sustainable design and measures to protect ongoing viable industry;
• Social impact and needs analysis;
• Incorporation of Environmentally Sustainable Design Principles;
• Diversity in housing choice including affordable housing.

...

Individual applications for site-specific rezoning should only be accepted if the applicant can show that it will not prejudice the future development of the remainder of the precinct and that it is consistent with the development plan for the precinct. Site specific rezoning of industrial land may be appropriate as a means of allowing a gradual change, whilst providing the maximum support for existing viable industrial businesses to continue to operate.[53]

129 The 2008 ILMS went on to deal specifically with the part Precinct 13 SRA which it identified as an SRA including both lots A and B.

This land includes the Hobsons Bay Caravan Park, land previously proposed for the Violet Street development as part of Amendment C1, existing industrial properties in Akuna Drive, 92-100 Champion Road and the remaining vacant land up to Maddox Road. The land is currently zoned Industrial 3 Zone. The land has not been developed to date because the majority of the land is owned by Mobil and has been used as a buffer to the refinery located approximately 1.5 kilometres from the precinct.

There is an existing industrial development in the north east section of this precinct, known as the Akuna Drive Estate. This estate is relatively new, developed in the last 10 years. The quality of development is of a high standard and the uses cater for a different market than the nearby Kororoit Creek Road North Industrial Estate (Precinct 12). A mix of businesses have occupied this precinct, many of which are not traditional industrial uses.

The retention of the whole of the precinct for industrial purposes is likely to have a detrimental impact on the ongoing development and renewal of the nearby older industrial estates to the west and south of this land. The potential for the whole of this precinct to be developed for industrial purposes would be limited by the supply of vacant and redevelopable industrial land that already remains within Precinct 12. It appears that many of the properties within the estate are nearing the end of their economic life and it is expected that they will be redeveloped for small lot industrial purposes.

Retail and commercial land uses are also considered inappropriate given the proximity of the site to the Williamstown commercial precinct, approximately 2km to the east and the neighbourhood-based centre within the Rifle Range Estate fronting Kororoit Creek Road. In addition retail and commercial land uses would be considered 'out of centre development', which would not align with the Councils' Activity Centre Strategy 2006 and current State Planning Policy.

Therefore a residential outcome for the majority of the precinct could be considered, provided appropriate justification for a residential outcome can be provided to the Council. This new neighbourhood should link in with the existing residential area to the immediate east by road and pedestrian access, provide signalised road access to Kororoit Creek Road. It will also be necessary to provide appropriate social and community infrastructure as determined by a social impact assessment. Provision of affordable housing, with a range of dwelling sizes and types must also be provided.

The development of the new residential area will also have to take into consideration the treatment along Maddox Road to buffer against existing industry and provide appropriate links to Maddox Road for vehicle, bicycle and pedestrian movements. A landscape buffer should be provided along Maddox Road. An Industrial 3 rezoning of Part Precinct 12 from Orange Street to Maddox Road will provide a land use buffer for the new residential area.

Akuna Drive Industrial Estate will be allowed to remain in its current form, but be appropriately buffered from any other land use proposed on the land south and west. This could be achieved through a variety of techniques, including landscaping and rear garage access for new residences.

Land at 92-100 Champion Road has recently been sold by VicTrack to private owners and given its relationship to the Victoria University of Technology (VUT) site adjacent, and the campus impending closure, this land should be considered as part of any broader redevelopment of the VUT site. Therefore, 92-100 Champion Road should also be designated as part of the Strategic Redevelopment Area, with a prospective use finalised in conjunction with the VUT site.

It is recommended that any future rezoning of the precinct have regard to Planning Scheme Amendment C1 (rezoning of land in the Violet Garden Estate) and the accompanying panel report and attend to any unresolved matters. Much of this precinct was operated as a landfill site by the former City of Williamstown, as a result, contamination issues will need to be carefully addressed.

The State Government should also be encouraged to provide a railway station in proximity to Maddox Road to service the existing industrial estate in Precinct 12 and the proposed residential neighbourhood in this precinct.

The Council expects any future development to incorporate a high standard of urban design, and appropriately address any other buffer or interface issues.

Any redevelopment of the site must include Environmental Sustainable Design (ESD) principles including but not limited to Water Sensitive Urban Design (WSUD), energy efficient development and water reuse with the site.

In this context, the majority of this precinct is considered to be a Strategic Redevelopment Area, and the rezoning of the majority of the land to a residential zone should be considered subject to the resolution of the above issues.[54]

130 It can be seen that whilst the ILMS indicates that residential rezoning of the applicants' land could be considered, it reiterates the need to address the concerns expressed by the C1 panel and endorses rezoning of the 'majority of the land' contained in the part precinct referred to rather than the whole. It further makes clear that such rezoning is subject to resolution of a series of issues and the completion of precinct master-planning in respect of which adjoining landowners will be consulted.

131 In turn, the 2008 ILMS relevantly supports the ongoing operation of the core petroleum refining industry in Altona and the reduction of impacts on residential amenity and the environment resulting from the refinery. It thus raises the question, amongst other things, as to how the buffer between the refinery and new residential development should be resolved.

132 In summary, although the 2008 ILMS identified the 'majority of the precinct' as having residential potential which could be considered, it did so in qualified terms subject to 'appropriate justification for a residential outcome' being provided to the council and the resolution of a series of development constraints. It also expressly reaffirmed support for the ongoing operation of the Altona petroleum refinery and the need to reduce impacts from the refinery on residential amenity. It further confirmed that the existing Akuna Drive industrial subdivision should stay industrial.

133 Soon after the council came to its final decision in relation to C33, the applicants lodged an application for a combined planning scheme amendment (amendment C74) and planning permit for subdivision relating to lots A and B. The proposal sought approval to:

• rezone the land from Industrial 3 to Residential 1;
• apply an environmental audit requirement; and
• subdivide the land into 121 lots.

134 The application included lots A and B and also the caravan park land and Arundel stud land, which are further to the south, in the proposed rezoning. But it left land owned by Mobil which is also in Precinct 13 within the Industrial 3 zone.[55]

135 After receiving the C74 proposal, the council sought an outline development plan ('ODP') for Precinct 13. An ODP was prepared by consultant planners and presented to the council in early 2011 but the applicants did not support aspects of it. The rezoning proposal and the ODP were considered by the council in February and April 2011. In February 2011, the applicants sought the intervention of the Minister for Planning and requested him to take over the process pursuant to his call-in powers.[56] Following a sequence of correspondence and a ministerial briefing, the Minister declined to intervene. The amendment proposal has not progressed to exhibition and it appears that it has been abandoned. The council had expressed concerns with respect to contamination, industrial interface, access, traffic, drainage and buffer issues.

136 A ministerial briefing note relating to the call-in proposal was tendered in evidence before the trial judge on a confidential basis by the applicants. Three aspects of the briefing note should be recorded. First, its author was not called to give evidence. Secondly, it relevantly noted that, whereas the EPA had not supported the amendment C1 rezoning, it did not oppose rezoning of lots A and B. Thirdly, it relevantly noted that, although amendment C33 had proceeded, the municipal strategic statement had simultaneously been strengthened with words emphasising the significance of the buffer 'to ensure an integrated development that, amongst other things, ensures appropriate buffer distances are maintained from nearby industry ...'.[57] In addition, when approving amendment C33, the former Minister for Planning had requested that 'any Outline Development Plans or future revisions to the strategy be prepared in consultation with State Government agencies ... to ensure that appropriate buffer distances are maintained from nearby industry.'[58]

137 Amendment C74 envisaged that, after the rezoning, a Development Plan Overlay ('DPO3') would require approval of a Development Plan before permits could be granted for development, including subdivision. These controls were designed to address the outstanding issues identified by the C1 and C33 panels and the requirements of the LPPF relating to SRAs. The DPO3 would require an adverse amenity report to be prepared which would identify measures needed to address the potential impacts of nearby industry on residential development within the C74 land.

138 It can thus be seen that amendment C74 did not purport to resolve the buffer and interface issues which had previously been identified by independent panels, but required a two-stage process before residential development could proceed. In the event, the zoning controls have not progressed, even to this provisional stage.

139 The two town planning witnesses who gave evidence at trial expressed different views as to the degree of strategic support for residential development of the applicants' land.

140 It was accepted at trial that both witnesses (who were experienced town planners) had the expertise to give opinion evidence pursuant to s 79 of the Evidence Act 2008. It may also be noted that, as the result of the abolition of the ultimate issue rule by s 80 of the Evidence Act, there was no doubt that the witnesses could directly address the fundamental planning issue between the parties which the judge was called on to resolve, namely whether the land would have been rezoned but for the leak.

141 Mr McGurn quoted the opinion he had previously expressed when giving evidence on behalf of the applicants to the C33 panel in 2007. In his view, the rezoning of the land for residential development was appropriate in both a locational and policy sense. In addition, he considered the approval and gazettal of amendment C33 in December 2008 had strengthened the strategic basis for rezoning of the applicants' land by placing it within an SRA.

142 In his report, Mr McGurn responded to the views of the C33 panel as follows:

• By designating part of Precinct 13 as a 'Strategic Redevelopment Area' in the ILMS, Council's policy at Clause 21.06 has identified this area as 'redundant industrial land' where redevelopment is encouraged.
• The ILMS identifies 'rezoning the majority of the precinct for residential use ...' as one of its expected outcomes.
• Viable industrial land has been given status as either a 'core' or 'secondary' industrial area in the Strategy and Clause 21.09 specifies that these areas are to be protected from the encroachment of sensitive land uses.
• Whilst buffer distances are outside my area of expertise, I understand from the Amendment C33 Panel Report that the adjoining Mobil land was purchased specifically to provide a buffer between its refinery and the residential area to the north east. From a town planning perspective, the inclusion of Precinct 13 (with the exception of the Akuna Drive Estate) as a Strategic Redevelopment Area within the ILMS (June 2008) does not 'force' Mobil to rezone its land to residential and it can continue to be utilised as a buffer between the Industrial 1 Zone and potential residential zoned land.
• Whilst traffic matters and in particular the use of Violet Street as the principal access point to the plaintiffs' land is also outside my area of expertise, the residential use of Violet Street rather than any future use by trucks and heavy vehicles associated within industrial uses, would be a preferable outcome in a planning sense given the existing residential character of the street.[59]

143 Ultimately, Mr McGurn considered that lots A and B of the applicants' land were 'capable of being rezoned for residential purposes particularly given the policy support provided in the Hobsons Bay Planning Scheme and noting its redundancy for industrial purposes and location adjacent to an established residential area.' In his view, the following considerations provided a strong platform for concluding that the rezoning of the applicants' land for residential purposes was appropriate and worthy of support:

• The rezoning is consistent with, and will give effect to, the ILMS (June 2008) and would implement Council's vision for the redevelopment of redundant industrial land.
• As suggested by the ILMS, the future use of the land for retail or commercial land uses would be considered 'out of centre' and would not be consistent with the policy directions at the State level. Given this, the use of the land for residential purposes appears to be the most logical and appropriate outcome.
• A residential development on the plaintiffs' land has the potential to address the housing forecasts contained within the Western Regional Housing Statement (2006) and is within a strategic redevelopment area earmarked to accommodate some of the estimated additional housing that may be required within Hobsons Bay. Further, I note that the Urban Development Program - Report 2009 V4.2, Department of Planning and Community Development projects a yield of 121 residential lots for Lots A and B (over 3-5 year timeframe) consistent with Amendment C74.
• The redevelopment of the land for housing would further directions within the State Planning Policy Framework and in particular Clause 11 which seeks to provide sustainable development utilising existing urban areas, to concentrate new development close to or within activity centres and to located high trip generating uses in accessible locations. In my view, the land provides an opportunity to extend and link the existing residential settlement patterns to the north and west, and is in close proximity to the range of shopping and community facilities available in the Williamstown Activity Centre.
• In accordance with Clause 16.01, a housing development in this location could readily be serviced from existing infrastructure in the area and take advantage of the existing public open space resource at Quarry Reserve.
• As indicated at paragraph 47 of my evidence with respect to Amendment C33:

'The development of the site for housing would comprise the extension of the existing residential areas to the south. This is logical in that the site can benefit from the existing infrastructure which serves this development and has the potential to provide for meaningful connections to the Quarry Reserve to the east and any other public open space provision in the balance of the land identified in Precinct 13 as being suitable for residential development. Separate vehicular and pedestrian connections to the proposed development can be achieved from Violet Street to the south (subject to resolution of the access issues raised in the context of the previous Panel report) in order to separate residential and industrial traffic, the latter relating to the properties on Akuna Drive to the north.'

• I consider that the interface between the Akuna Drive Estate and Lots A and B could be successfully managed in order to protect residential amenity. In particular, measures such as acoustic wall treatments, landscaping, and separation distances from the nearest dwellings (such as access roads provided between dwellings and the industrial uses) would achieve an acceptable relationship in accordance with Clause 21.06.[60]

144 On the other hand, Mr Milner took a different view of the strategic context:

4.1.1 Strategic context

The land zoned Industrial 3 to the east of Maddox Road, continues to serve a strategically important and valid sub-regional and local role as an industrial buffer and potential industrial use area.

In sub-regional terms, the petrochemical facilities to the west are a major economic feature and asset to the State that warrant protection for their effective economic role and continuing operations. Nevertheless, protection from potential environmental hazards should be provided to the community through separation and buffers. A preferred, but not always achievable land use planning outcome is that a use with off site amenity and safety implications should own and or control the use of the land required as a buffer to the source of the potential nuisance or emission. To this extent, Mobil's ownership and control of the major parcel of land east of Maddox Road as part of a buffer area to its own operations should properly be seen as a soundly based planning and land use outcome until such time as either the extent or need for a buffer is demonstrated to not be required.

It is to be remembered that despite the land being held for the purpose of a buffer, it could also be developed for industrial purposes.

At a local level the Industrial 3 land also serves as a buffer and transition zone to the industrial areas west of Maddox Road and as an industrial use area for a number of businesses, industries and commercial operations located on land with access from Akuna Drive. Akuna Drive is not like some other industrial locations considered within the 2008 ILMS, which are long established areas with obsolete uses and building stock. The use and development of Akuna Drive is properly characterised as recent (have been essentially developed in the last 10 years) and only partially implemented, given that it was designed and subdivided with a view to extending to the west with access provided from both Maddox Road and Champion Road.

Despite the more recent planning decisions to include the subject site (except Lots 35 and 36) and the Mobil land within a Strategic Redevelopment Area, the greater part of the Industrial 3 land east of Maddox Road has a continuing and important industrial role. As the supply of industrial zoned land diminishes in the context of Amendment C33, the land east of Maddox Road retains attributes that remain attractive to commercial and industrial use. It is flat, expansive, in large holdings, proximate to other established businesses and sectors, serviced, and has direct access and exposure to arterial roads and a rail crossing.

This is the appropriate context in which to view proposals to use and develop the plaintiffs' site for residential purposes. The majority of any residential use and development of the subject site would be contained in a relatively narrow irregular space between two partially developed industrial zoned areas and by the railway line and a pipe track.

At a strategic level, orderly land use planning would strongly caution against such an outcome due to the potential conflict of uses and impacts upon perceived amenity and industrial operations.

At a more practical community and urban design level, the development of the subject site for residential purposes under these conditions would be likely to result in both compromised residential and industrial outcomes. Shared access between industrial and residential uses should be avoided. Accordingly the new residential community will only be able to integrate with services in the broader Williamstown area through the established residential area to the south, and the potential for Akuna Drive to connect to Maddox Road will be lost.

As a relatively isolated site, as described above, the residential use of the subject land is not sustainable development in the meaning of the Planning and Environment Act and the Hobsons Bay Planning Scheme.[61]

145 In turn, Mr Milner elaborated his concerns with respect to the need to address the following matters:

• the need for local and State governments to determine that the land is not required to be retained for industry either for reasons of supply or protection of existing industrial uses;
• the need to investigate and remediate pre-existing contamination on the applicants' land, resulting principally from its previous use as an abattoir and landfill;
• the need to provide an adequate buffer to the refinery in accordance with the precautionary principle. The application of that principle suggests that any vacant land within the two kilometre buffer should not be developed for a sensitive use, such as residential, until it can be shown that the buffer is either not required or can be reduced;
• the effect of the interfaces which the land has to industrial land;
• access difficulties.

146 On the other hand, Mr Milner accepted that an area directly adjoining the existing residential development to the south and the Akuna Drive industrial estate to the north, located in the south-east portion of the applicants' land, could be suitable for rezoning.

[62]

147 We pause here to observe that Mr McGurn's opinion put at its forefront the 2008 ILMS which post-dated the leak. Moreover, in our view, Mr McGurn overstated the degree of policy support for a rezoning at the date of his evidence.

(1) The designation of the SRA did not finally determine whether the applicant's land should be characterised as redundant industrial land.

• Clause 21.03-2 makes clear that the designation of a SRA does not of itself resolve the appropriate range of future land uses.
• The 2008 ILMS does no more than designate the possibility of a residential outcome for the majority of the precinct.
• The applicant's land directly adjoins an existing industrial area on Akuna Drive which is relatively recently developed and plainly not redundant. It is the only part of the SRA of which this can be said. Lot A, in particular, is a logical extension of the Akuna Drive industrial estate.

(2) Whilst the SRA designation encourages development of the land within the precinct, clause 21.03-2 specifically required the following matters to be addressed as a condition of change before extension of the adjoining residential area into the precinct:

• contamination (including the pre-existing contamination);
• traffic management;
• adequate protection of existing industry by buffers;
• interface issues arising out of adjoining land use;
• the resolution of a satisfactory overall masterplan for the precinct as a whole.

(3) The planning history of the land, including both the ministerial briefing note and the subsequent ongoing failure to proceed with amendment C74, highlighted that these matters were unresolved.

148 Ultimately, it was necessary for the trial judge to assess the opinions of the town planning witnesses in the light of the whole of the evidence. In so doing, he had an advantage which we do not share, in that he observed the witnesses under cross-examination. Given the delay of more than two years between the relevant oral evidence and the judge's decision, however, this factor cannot be given much weight in the present case.[63]

149 The judge preferred the opinion evidence of Mr Milner to that of Mr McGurn. His Honour explained:

1. In my view, Mr Milner's evidence is preferable to Mr McGurn's on these issues because Mr Milner's evidence, which was not effectively impugned by cross-examination, was the only expert planning evidence as to the plaintiffs' proposed development scenario and their current C74 application.
2. By contrast, the cross-examination of Mr McGurn revealed that his evidence about whether C74 was likely to be approved was founded upon a superseded ILMS. Further, Mr McGurn conceded that he was not conversant with the details of planning application C1 and he gave evidence that the C74 application was not subject to the same criticisms that had been directed to the C33 application. In my view Mr McGurn's failure to research all potentially relevant earlier applications, such as C1 and his lack of diligence in referencing an outdated ILMS are sufficient bases for me to give less weight to his evidence.
3. Mr McGurn's independence as an expert was also questionable, in my view, because of his earlier involvement with the plaintiffs from about 2005 in relation to the C33 and the C74 applications. I consider that this lengthy association with the plaintiffs renders him less than independent and gives rise to another reason to give more weight to Mr Milner's evidence on matters where the experts are in conflict. I also consider that Mr McGurn's concession that he did not take into account the EPA's attitude to the plaintiffs' land being rezoned when he put forward his opinion about the plaintiffs' rezoning prospects, stating, in that regard, that EPA considerations were matters outside his expertise, is a further sound reason to give less weight to Mr McGurn's evidence, when it is in conflict with the evidence of Mr Milner. In my view the interrelation of EPA requirements and concerns is so clearly of importance, including by way of potentially constraining the rezoning and development of the plaintiffs' land, that Mr McGurn's failure to factor EPA matters of relevance into his considerations significantly weakens his evidence on rezoning and development prospects.
4. Finally, I found the way Mr McGurn addressed the prospects of resolution of the constraints in relation to the plaintiffs' land, described by him as being able to be 'worked through', to be of little assistance. This phrase was unenlightening.[64]

150 The approach which an appellate court should take to questions of disputed fact on appeal by way of rehearing has recently been restated by the High Court in Robinson Helicopter Company Inc v McDermott as follows:[65]

A court of appeal conducting an appeal by way of rehearing is bound to conduct a 'real review'[66] of the evidence given at first instance and of the judge's reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings.[67] But a court of appeal should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by 'incontrovertible facts or uncontested testimony',[68] or they are 'glaringly improbable' or 'contrary to compelling inferences'.[69]

151 In our view, the trial judge's assessment of Mr McGurn's evidence has not been shown to be wrong. The judge's assessment accorded with the weight of the evidence and the range of permissible inferences.

• the extent to which Mr McGurn and Mr Milner respectively demonstrated an understanding of the relevant policy documentation;
• the extent to which each witness related the policy documentation to the applicants' proposals for redevelopment;
• the extent to which the witnesses took into account the planning history of the land and, in particular, the matters identified by independent expert panels which had previously considered the appropriateness of residential development upon the land;
• the extent to which Mr McGurn's independence in assessing the current situation may have been affected (perhaps unconsciously) by his prior commitment to an opinion at and prior to the time of the C33 and C44 applications;
• the extent to which the witnesses acknowledged the significance of the EPA buffer; and
• the extent to which the witnesses adequately recognised the practical constraints affecting the applicants' land.

153 In these circumstances, we are not persuaded we should interfere with the trial judge's assessment of the planning witnesses.

154 We are fortified in this conclusion by our own assessment of the planning scheme provisions and policy documents. For the reasons we have already set out above, we are not persuaded that they support Mr McGurn's opinion to the extent that he claimed.

155 If the judge did not err in accepting Mr Milner's opinion, then this conclusion is dispositive of grounds 1, 2 and 4 of the appeal. Once it is concluded that the judge did not err in accepting Mr Milner's opinion that there was no practical prospect of obtaining a residential rezoning, then it cannot sensibly be said that his Honour's ultimate conclusion as to the prospects of rezoning was against the weight of the evidence. This is so whatever criticisms may be levied against his Honour's further detailed conclusions based on the evidence.

156 It is, in turn, not surprising, given the centrality of Mr McGurn's opinion to the applicants' case, that the applicants' written case on appeal simply reiterated the central thrust of Mr McGurn's evidence in the first four reasons advanced for the proposition that the evidence established a high likelihood that the applicants' land would have been rezoned to enable residential development:

The evidence established a high likelihood that the Applicants' land would have been rezoned to enable residential development. The evidence included:

(a) evidence from a town planner (McGurn) that the Applicants' land was a prime candidate for rezoning having regard to the physical and strategic context of the land;

(b) the Industrial Land Management Strategy (ILMS) (June 2008) of the Hobsons Bay City Council promotes the redevelopment of redundant industrial land in the relevant area for residential use;

(c) the applicable planning scheme (the Hobsons Bay Planning Scheme) and the ILMS identified the Applicants' land as suitable for residential development;

(d) the rezoning of redundant industrial land for residential purposes is a Melbourne-wide pattern and is consistent with the State Planning Policy Framework;[70]

157 These contentions fail if Mr Milner's evidence is preferred. Moreover, they overstate the effect of the planning scheme and 2008 ILMS and do not adequately reflect the qualified nature of Mr McGurn's opinion:

... subject to various issues being resolved and managed (eg the industrial interface, contamination, vehicular access, and subdivision design), I consider that there is a good prospect that a rezoning could receive the necessary support and approval from Council and the Minister for Planning.[71]

158 The next two contentions put forward in the applicants' written case as supporting the probability of rezoning go to matters of planning history concerning land other than the applicants' land.

(e) there was substantial evidence of such rezoning in the adjacent and nearby areas;

(f) before the Mobil leak Mobil itself investigated the prospect of rezoning its own nearby land to residential even though its land is closer to the Mobil refinery than the Applicants' land;[72]

159 It does not seem to us that much if any real weight could be given to the history of rezoning and attempted rezoning of other land given that the MSS identifies as a key to achieving the strategic vision for the municipality the need to recognise that various parts of the municipality have to be managed differently and that development potential must consider and respond to local neighbourhood context.[73]

160 Similarly, although the ILMS identifies sites which are suitable for review for alternative land uses, it also explicates the need for comprehensive site-specific analysis of the planning constraints affecting the land.

161 Consistently with these principles, when Mr McGurn was asked in his evidence in chief what was the impact of the fact that the Arundel stud farm and the caravan park were the subject of a recommendation for rezoning, he said:

Well I suppose nothing specifically with respect to the land in question here, except to say that clearly a strategic approach has been taken to the precinct, consistent with what the industrial land management strategy was talking about.[74]

162 Moreover, the planning history of the applicants' land and, in particular, the panel reports with respect to amendments C1 and C33 demonstrate that its rezoning faces special problems. The LPPF provisions with respect to SRAs (which provide the context in which the ILMS is to be used) confirm the significance of the major constraints confronting residential redevelopment in this type of location.

163 In cross-examination, Mr Milner was taken to examples of recent rezonings within the municipality:

• three sites forming parts of the former Port Phillip Woollen Mills site at Nelson Place, Williamstown, had been rezoned from Industrial 1 and Special Use zones to Residential 1 with an Environmental Audit Overlay and Design Development Overlays;
• amendment C77 rezoned land at Millers Road from Industrial 3 to Business 2 with an Environmental Audit Overlay and a Design Development Overlay;
• the former Caltex terminal in Blackshaws Road, South Kingsville, was rezoned to a Residential zone with a Design Development Overlay;
• 231-237 Mason Street, Altona North, had been rezoned from a Public Use zone to a Residential 1 zone.

164 As Mr Milner agreed, these rezonings occurred on sites designated as having potential for redevelopment by the ILMS. The rezonings also adopted particular provisions by way of planning scheme mechanisms to deal with interface issues relating to adjoining land uses and site contamination issues.

165 Nevertheless, it was not suggested in the cross-examination of Mr Milner that any of these sites were so directly comparable to the applicants' land that they necessarily supported the probability that the applicants' land would have been rezoned but for the leak.

166 Furthermore, the basis of Mr Milner's opinion, which the trial judge accepted, was entirely site-specific.

167 The same considerations answer ground 3 of appeal, which takes up specific aspects of this issue.

168 The point is most simply illustrated by the comparison with the Arundel stud land which is said by ground 3(b) to be the most comparable property to the applicants' land. Self-evidently, this land:

(1) does not extend into the EPA buffer to the extent which the applicants' land does;

(2) faces Kororoit Creek Road and has excellent access, whereas the applicants' land does not;

(3) has no comparable history of contamination due to industrial use over the greater part of last century; and

(4) does not abut existing industry or the railway line.

169 In the course of his cross-examination, Mr Milner expressly said that, within Precinct 13, the caravan park land and the Arundel stud site could move to residential use very soon.[75] It was plain from his evidence as a whole why the Arundel stud site did not face the same impediments to rezoning as the applicants' land.

170 The judge's function is not that of a transcript writer. He was not required to summarise every aspect of the voluminous evidence adduced before him. His Reasons explain why he accepted Mr Milner's evidence and the cross-examination of Mr Milner by reference to other industrial land does not demonstrate that he was in error to do so.

171 The applicants' written case then addresses the planning history of the land.[76]

172 We have already addressed that history. In our view, the trial judge was correct to conclude that it demonstrates a recognition of serious impediments to the rezoning of the applicants' land which have yet to be overcome.

173 The written case turns lastly to the question of these impediments:

(l) the weight of the evidence was that all of the alleged impediments to rezoning could be readily addressed at the planning control, development plan or planning permit stages.[77]

174 We turn then to the evidence relating to impediments and, in particular, those which Mr Milner regarded as substantial and which the trial judge accepted prevented the conclusion that the land would have been rezoned prior to the commencement of the proceeding. As his Honour observed:

[Mr Milner] identified five matters which he stated would have to be resolved before the plaintiffs' land could be developed for residential purposes. Those five matters being: Local and State governments to determine that the land is not required to be retained for industry (either for supply or protection of existing industrial uses); land to be remediated of contamination; agreement from the EPA and Mobil that the two kilometre refinery buffer is no longer required; establishment of appropriate buffers from existing industrial uses; and construction of roads providing appropriate access to the site.[78]

175 As Mr Milner stated and the 2008 ILMS identified, the Akuna Drive industrial estate is not redundant industrial land. Rather, it was relatively recently developed and is fully occupied save for the two lots owned by the applicants. It is used for 'new' rather than 'old' industrial purposes.

176 The logical extension of Akuna Drive is into lot A. The figures with respect to supply and demand of industrial land contained in the 2008 ILMS simply do not demonstrate that the applicants' land is surplus to demand for industrial land, either within the municipality or more specifically in this location.

177 It follows that there is a real question as to which parts of Precinct 13 should be regarded as appropriately removed from potential use for industrial purposes.

178 We do not read the planning scheme or the ILMS as having resolved this issue in any final sense in favour of the applicants. Accordingly, Mr Milner was correct to raise this as a threshold strategic planning issue which requires resolution before residential zoning could proceed.

179 In turn, the judge ultimately accepted Mr Milner's opinion and his reasons for that opinion.[79]

180 The industrial history of the applicants' land raised the need to effect decontamination of it before residential development could proceed, irrespective of the effect of the leak.

181 Mr Milner accepted in evidence that, if the land could be remediated to the satisfaction of the EPA, that would resolve this issue.[80]

182 Mr Ramsay's evidence was that the land could be remediated.[81] Nevertheless, the extent and nature of the necessary remediation remained uncertain.

183 The trial judge concluded that the pre-existing soil contamination would not, considered alone, have been likely to prevent the applicants from developing their land for residential purposes.[82]

184 Nevertheless, his Honour also concluded as follows:

... I accept the State's submission that pre-leak the plaintiffs' land was constrained by the existence of soil contamination which would probably cost between $3.5M and $7M to remediate and that unremediated, this factor was an impediment to the residential rezoning and the issue of development permits in relation to the plaintiffs' land.[83]

185 We are not persuaded that there was any error in these conclusions but, insofar as they were adverse to the applicants, it is sufficient to say that Mr Milner's opinion as to the likelihood of a rezoning did not ultimately turn on this issue, nor did his Honour's judgment.

186 The EPA buffer policy provides recommended minimum separation distances between odour or dust-emitting industrial uses and sensitive land uses.

187 It seeks as one of its purposes to provide clear guidance on which land uses require separation and further seeks to prevent new sensitive land uses from impacting on existing industrial land uses.[84]

188 The EPA buffer policy is used by the planning scheme in two ways. First, it is the basis of separation distance controls governing the location of new land uses with adverse amenity potential problems.[85] Secondly, it is also, as we have explained, a relevant policy consideration with respect to rezonings and development approvals which will facilitate new sensitive uses in localities such as that with which we are concerned.

189 The EPA buffer policy has gone through a series of iterations. The parties' cases with respect to it were put by reference to the March 2013 version, although, in one respect at least (to which we shall return), the version which was operative at the date of the leak was, on one view, materially different. Like the parties, however, we will address the buffer policy issues on the basis of the policy that was current at the date of trial.

190 The buffer policy guidelines make clear that they apply only to off-site residual odour and dust emissions which have the potential to impact on human health and well-being, local amenity and aesthetic enjoyment. Whilst odorous substances may also cause hazardous air pollution, the buffer policy guidelines are concerned with odour impact only.

191 The guidelines state the basis for fixing separation distances as follows:

It needs to be recognised that where there are industrial air emissions from premises, even with good pollution control technology and practice, there may still be unintended emissions which must be anticipated and allowed for. While it is an objective of SEPP (AQM)[86] that such emissions should be eliminated, it is recognised that even 'state of the art' facilities are not always guaranteed to achieve this goal 100 per cent of the time. Equipment failure, accidents and abnormal weather conditions are among the causes that can lead to emissions affecting sensitive land uses beyond the boundary of the source premises.

Unlike routine emissions, unintended emissions - industrial residual air emissions (IRAEs) - are often intermittent or episodic and may originate at or near ground level. Separation distances seek to avoid the consequence of IRAEs. An adequate separation distance should allow IRAEs to dissipate without adverse impacts on sensitive land uses.

However, the recommended separation distances provided in this guideline are not an alternative to source control. In preparing this guideline, EPA is not condoning uncontrolled off-site air emissions in contravention of SEPP (AQM) requirements. Rather, this guideline acknowledges that SEPP (AQM) objectives might not always be met, and the beneficial uses specified in the SEPP (AQM) might not always be protected in the vicinity of a premises.

In addition, if a premises has been located on a site with an inadequate separation distance, subsequent remedial action to alleviate off-site effects, either within or beyond the separation distance, will be required if IRAEs occur. However it should be realised that such action may require costly, high technology solutions, which may not be economically feasible or fully effective, thus jeopardising the economic viability of the industry and potentially not alleviating off-site effects. This is a lose/lose situation which needs to be avoided.

Responsible planning therefore needs to take these issues into account by considering the potential impacts the proposed development might have on its surroundings, and the potential impacts that surrounding land uses might have on the proposed development. This guideline seeks to protect sensitive land uses from odour and dust by taking into account the potential impacts of industry encroaching on sensitive uses and the potential impacts of sensitive uses encroaching on industry.

In addition, under the VPPs,[87] industrial land uses have use rights which enable the industry to operate, provided they comply with relevant regulations. Accordingly, planning authorities and other responsible authorities need to carefully consider the appropriate separation of industrial land uses from sensitive land uses. When strategic land use plans are being developed for a precinct that has been identified for transition from an industrial land use to sensitive land uses, the planning authority should consult with potentially affected industries in order to develop a staged implementation plan that allows for the smooth transition of land uses over a period of time.[88]

192 The guidelines then state recommended default minimum separation distances for particular industries:

The index contains a definition of each industry and, in some cases, a description of the Industry or Information of the scale of the industry. The recommended separation distances assume that the industry is operating in compliance with relevant statutory rules and policies. However, the recommended separation distances are not based on any further or particular assumptions about the industry, the likelihood of IRAEs or the environment surrounding the industry. Rather, the recommended separation distances are EPA's default minimum in the absence of a detailed, site-specific assessment for a proposed industrial or sensitive land use.[89]

193 The buffer distance from sensitive uses recommended for petroleum refineries is two kilometres.

194 Clause 9 of the buffer policy provides for variation from the recommended default minimum buffer distance. It requires that changes to relevant land use will not receive planning approval until the variation is approved by the EPA:

Where a variation from the recommended separation distance is sought, approval should not be given by the planning authority or other responsible authority until the relevant land use separation issues have been resolved to the satisfaction of EPA.

195 The buffer policy also envisages that the proponent of land use change will bear the burden of justifying variation to the relevant buffer distance and that modelling of air quality will be relevant to the discharge of that burden:

It should be the responsibility of the 'agent of change' to provide evidence to the planning authorities or other responsible authorities that a variation from the recommended separation distances is appropriate. For the purposes of this guideline, the 'agent of change' is the proponent of the proposed land use that will give rise to the consideration of separation distances.

...

When seeking to prove that a recommended separation distance should be varied, the 'agent of change' must take into account the principles contained in this guideline, the modelling protocol set out in schedule C to SEPP (AQM) and any other guideline or code that is applicable to the industry in question.

There are no statutory obligations on an industry to supply information about its operations to third parties in respect to separation distances. However, industries are encouraged to support separation distance assessments, either by supplying modelling input data to third parties or undertaking their own assessments of their operations. Where the 'agent of change' is a new industrial land use within the separation distance around an existing industry, it may be in the interests of the existing industry to undertake its own assessment.[90]

196 The buffer policy then sets out criteria which must be considered before a variation is accepted:[91]

Separation distances seek to mitigate the consequences of IRAEs. Any proposal to vary from a recommended separation distance should detail why the consequences of IRAEs are such that variation from the recommended separation distances is justified.

Table 4 provides a guide to the criteria that must be considered during the assessment of site-specific variation to the recommended separation distances. Consideration of these criteria is a prerequisite for site-specific variation, but not a guarantee that a variation is justified. Additional information may be required in many cases, including sufficiently detailed data to enable dispersion modelling.

Table 4: Criteria for site-specific variation

Existing industry has formally indicated that it will transition out of an area and over a specified timeframe.

The industrial plant and equipment have an exceptionally high standard of emission control technology.

An environmental risk assessment of IRAEs has been completed that demonstrates a variation is justified.

The plant is significantly smaller or larger than comparable industries.

There are exceptional topographic or meteorological characteristics which will affect dispersion of IRAEs.

Particular IRAEs are either highly likely or highly unlikely to occur.

197 In the present case, Mr Milner accepted that the EPA might accept a reduction of the buffer requirement between the refinery and the applicants' land if it was satisfied by the evidence including dispersion modelling that such a reduction was justified. He nevertheless maintained that the EPA had not accepted that the buffer should be reduced and until it did so, the buffer remained an impediment to rezoning.

198 The trial judge went further than this and found first, that the applicants had not established that the six 'minimum criteria' set out in the buffer policy for a site specific variation of the buffer distance had been or could be satisfied. Secondly, his Honour found that the evidence of Mr Pollock as to odour plume dispersion modelling, upon which the applicants relied, was unlikely to persuade the EPA that the buffer distance should be modified.

199 Insofar as the first conclusion is concerned, we accept the applicants' submission that the six considerations which the EPA buffer policy stipulates are not 'minimum criteria' but rather matters to which regard must be had.

200 The same may not be so clear in terms of the 1990 version of the EPA buffer policy which was in force at the time of the alleged substantive opportunity. Although couched in the framework of a guideline, this version in terms required satisfaction of criteria rather than merely their consideration. Mr Davies, an atmospheric scientist, quoted the relevant portion of the 1990 policy in a report adopted by him in evidence:

Industrial residual air emission (IRAE) buffer distances recommended in the list are based on overseas and local experience, on the assumption of good practice.

If site specific circumstances seem to indicate a reason for departing from the recommended distance, the advice of the Environment Protection Authority should be obtained. As a guide, the following criteria should be satisfied before detailed consideration is given to site-specific variation of a guideline distance listed in this document.

1. The plant has a standard of emission control technology significantly better than the good level of control assumed in the preparation of this document. Best Available Technology would normally be necessary.

b) An environmental audit of residual emissions has been completed.

1. There is no history of complaints arising from residual emissions (in the case of an existing plant).

1. The plant is significantly larger or smaller than those on which the recommended distance is based, to an extent which will substantially affect residual emissions performance.
2. There are exceptional topographic or meteorological characteristics which will affect dispersion of residual air emissions.

Satisfaction of these criteria will be a prerequisite for considering site-specific variation of the recommended distance; but does not guarantee that a different distance will be determined. Additional information will be required, in most cases including sufficiently detailed data to enable dispersion modelling. Objective procedures for determining site-specific IRAE buffer distances for individual operations are being investigated by EPA, and will be made available as soon as possible. The onus will be on the party seeking variation of the recommended distance to demonstrate clearly that that distance is inappropriate for the particular situation.[92]

201 Nevertheless, it remains relevant to say, by reference to the 2013 EPA buffer policy, that in the present case, it was clear that:

(1) the existing refinery is not in transition out of the area;

(2) the refinery does not have an exceptionally high standard of emission control technology;

(3) no environmental risk assessment had been carried out;

(4) the refinery is not exceptionally smaller than comparable plants and the two kilometre buffer imposed by the policy had been formulated on the basis of evidence specifically relating to the Altona petroleum refinery;

(5) there are no exceptional topographical characteristics affecting the site but meteorological data does enable plume dispersion modelling to be undertaken with respect to the probable contours of relevant odour plumes;

(6) there was no evidence regarding exceptional IRAEs.

202 A whole series of contextual factors which might favour a variation were thus absent in this case. Insofar as the listed considerations are concerned, the applicants put their case with respect to variation of the buffer by reference to meteorological characteristics.

203 It might be expected that the EPA would reach a decision with respect to any proposed variation of the buffer distance having regard to, amongst other things:

(1) its understanding of the capacity of the refinery to generate residual air emissions having regard to its size and the nature of its emission control technology and processes;

(2) its understanding of the history of the buffer policy and in particular its basis in data relating to the Altona petroleum refinery;

(3) the history of complaints with respect to odour emissions in the area surrounding the Altona petroleum refinery including the areas adjacent to the applicants' land; and

(4) the adequacy of the odour plume dispersion modelling carried out in accordance with the protocol stipulated in the buffer policy.

204 The applicants' case as to the probability of a variation was put on the basis of the evidence of Mr Pollock, an environmental engineer, who gave evidence with respect to odour plume dispersion modelling and EPA complaint history. The effect of Mr Pollock's evidence was contested by the evidence of Mr Davies, an atmospheric scientist, who gave evidence for Mobil.

205 Mr Pollock prepared an initial report in April 2011 which addressed:

(1) the history of the buffer prescribed for the refinery;

(2) the history of odour complaints associated with the area surrounding the refinery;

(3) local meteorological data with respect to wind direction and strength; and

(4) the extent of a directional dispersal buffer which allowed for local meteorology and gave equal protection in the event of a plant malfunction to sensitive uses in the vicinity of the refinery.

206 As Mr Pollock recorded, the two kilometre buffer, when plotted around the refinery site, covers residential areas in Seaholme and Altona, as well as portions of Newport, Williamstown and Altona North. In some places, the separation of existing residential areas from the refinery is reduced to less than half the buffer distance.

207 This is the result of residential development prior to the implementation of buffer guidelines in 1977 and further development during an initial period when the buffer was fixed at one kilometre.

208 A buffer of two kilometres was selected in 1984 for petroleum refineries based on detailed work by EPA officers in examining the complaint history concerning the Altona petroleum refinery at that time. It was found that the critical restraint requiring separation from residences was not hazard, but odour impact (ie dis-amenity leading to complaint of offensive odour). The detailed survey and analysis was done by Mr Peter Ramsay, who is now an environmental auditor who gave evidence with respect to site contamination in the present case.

209 Six population segments were surveyed, three from residential areas north of the refinery and three from residential areas to the south. The plot of the percentage of persons annoyed in each segment at least monthly by odour against distance from the refinery was found to fit a linear correlation. The analysis supported a 2,240 metre perimeter buffer boundary. Investigation of other buffer guidelines elsewhere (eg Israel) showed 2,000 metres was being used for refineries refining crude oil with a sulphur content of > 0.5 per cent, and the 2,000 metre value was adopted in the Victorian policy.

210 Mr Pollock analysed the wind rose data collected in 1995 at Paisley, some 1.5 kilometres northeast of the refinery. He identified the followed features:

• The prevailing wind directions are from the NW and SW quadrants, with a combined incidence of [approximately] 66%;
• There is a clear incidence of strong winds from the north, south and west, reflecting the movement of synoptic weather systems from the west;
• The incidence of due west winds (placing the subject land downwind of the refinery) is low at 7%, and
• The incidence of light winds is highest from the N and NNE, with a separate subsidiary incidence of light SE winds. The former is due to cool air drainage from the hills to the north, while the latter is due to the cooling of bay breezes in the early evening.[93]

211 Mr Pollock then modelled probable odour plume dispersion utilising the 1995 meteorological data and the AUSPLUME model specified by the EPA. The modelling showed that, in conditions where odour released at ground level travelled to the two kilometre radius to the south, neither ground level odour nor equivalent odour from a 120 metre incinerator stack would impact upon the applicants' land. It was only equivalent odour from a 46 metre high flare stack on the eastern boundary of the refinery which would affect the applicants' land.

212 Mr Pollock's figure 6 shows contours derived from modelling of odour plumes from equivalent odour emissions for ground level release, the 46 metre stack and the 120 metre stack.[94]

213 In Mr Pollock's view, the pattern of odour complaints was also directly responsive to the wind rose.

• The critical upset emission leading to the requirement for a buffer for refineries has been taken to be odour rather than for dust.
• The assessment has derived reduced buffers to the east from the Mobil refinery compared to the default value of 2000 m that was assigned to that refinery as a result of site-specific investigations by EPA in the late 70s and early 80s.
• The reduction is sufficient to not encroach onto the subject land parcels for both ground-level upset odour releases and for upset odour releases from the main incinerator stack DP48.
• The buffer reduction for an upset odour release from the flare stack DP33 is however not sufficient to clear the subject land parcels.
• The Polwatch odour complaint database is not sufficiently detailed to identify what [percentage] of complaints were due to upsets in the flare stack compared to upsets resulting in either ground-level releases or a release from the incinerator stack.
• Hence, while it is likely that the land parcels will not be as exposed as residences in Altona on the 2000m default buffer, the proof has been provided in this report for upsets resulting in ground-level or high ([approximately] 120 m) releases only.
• The marginally increased potential exposure at the subject land parcels compared to the exposure at 2000 m south of DP33 is of significance only if it can be shown that most of the odour complaints result from upsets in the flare stack compared to the combined upsets from the incinerator stack and from ground-level releases.
• This information is only likely to be held in the Mobil maintenance logs.[95]

215 Mr Davies provided a written review of Mr Pollock's report on 2 December 2011 and expanded that review in oral evidence in chief.

216 Mr Davies accepted that there had been significant advances in the development of tools for assessing odour impact since the buffer was devised and, in particular, significant advances in the use of odour dispersion models. The use of the AUSPLUME model was appropriate.

217 Nevertheless, Mr Davies concluded that there was insufficient odour emission data relating to unintended or accidental causes at the Altona refinery for the development of a robust odour dispersion model for the refinery. Mr Pollock's modelling was based on assumed emission rates derived from the previous report of other consultants. Mr Davies also explained that the AUSPLUME model theoretically utilises the 99.5th percentile of odour transmission. 99.5 per cent of odour transmission represents the 44th highest hour in a given year; there would be 43 hours of higher odours in a year and then lower odours for 45 hours and beyond.

218 Mr Davies accepted, however, that modelling could still be used to assess the relative differences over different years in odour dispersion rates and directions of dispersion by considering generic figures, as Mr Pollock had done in his first report. Mr Davies supplemented the 1995 meteorological data that Mr Pollock had used with additional 2002 and 2008 data. He concluded there was substantial annual variation in the wind data.

219 In turn, and to demonstrate this, Mr Davies modelled the same value of 3.9 odour units which Mr Pollock had adopted for contour modelling of odour from the 46 metre stack in his first report. The result of this modelling was to extend materially the predicted impact of odour onto and beyond the applicants' land. The 2008 result was the most dramatic.[96]

220 Mr Davies said that one odour unit is the acceptable level by EPA criteria.[97] Mr Pollock had not modelled probable odour levels affecting the applicants' land. Odour would continue beyond the 3.9 odour unit contour first modelled by Mr Pollock. It would be greater within the 3.9 odour unit contours modelled by Mr Davies for 2002 and 2008. Odour units of 3.9 or more would be noticeable to residents.

221 Mr Davies also analysed relevant complaints data and concluded that it showed a concentration of complaints within the two kilometre buffer. A plotting of the complaints also shows the extent of sensitive uses to the north and south as distinct from the east and west.[98]

222 Mr Pollock then prepared a response report dated February 2012. In that report, he accepted that inter-annual variability in wind climate may materially affect the modelling of derived parameters such as directional buffers.

223 Mr Pollock nevertheless emphasised that the contours chosen in his initial report were those which gave rise to a 2,000 metre range to the south. They thus plotted what would be necessary to give equal dis-amenity protection in other areas within the radial boundary. He stated:

The point in the selection of the criterion contour in each of the three instances above is that the value will be a function of the particular meteorological dataset selected. The point that [Mr Davies] makes in relation to inter-annual variability also applies to the selection of the criterion contour, so that it is not valid to apply the same criterion values that were appropriate for the 1995 dataset to a simulation for an alternate year. Effectively when that is done, the normalisation to 2000 m as described above has relied on a different dataset to that used in the simulation.[99]

224 Plotting of the contours generated by the 46 metre stack on the basis of the 1995, 2002 and 2008 meteorological data using Mr Pollock's methodology utilised odour unit values of 3.9, 5 and 6.5 odour units respectively. It resulted in the following figure:[100]

225 It can be seen that in 2002 the contour touches on the applicants' land but in 2008 the contour is to the west of the applicants' land, affecting the Mobil land.

226 Mr Pollock also undertook a further analysis of the complaint data.

• [Mr Davies's] review of [Mr Pollock's] report did not correctly apply the directional buffer analysis to the additional years (2002 and 2008) of available meteorological data;
• When correctly applied, the use of 2002 and 2008 meteorological data shows a reduced extension of the directional buffer for a mid-level (46 m) release towards the subject land compared to that found for year 1995;
• There is some basis to prefer the 2002 and 2008 meteorological data to the 1995 data, since the former were recorded using an improved acoustic anemometer compared to the rotating cup anemometer operating in 1995;
• The odour complaint history supplied by Mobil supports the conclusion of the directional buffer analysis, namely that a significantly reduced buffer in the easterly direction is appropriate;
• The application of the derived directional buffer to the [applicants'] land shows that the buffer does not extend to that land parcel for both ground-level and high level (120 m) releases; and
• The directional buffer for a mid-level (46 m) release is close to but does not constrain the subject land for either of the year 2002 or 2008 meteorological datasets.[101]

228 In cross-examination, Mr Pollock accepted, amongst other things:

• That the effect of the guidelines was to place the onus on the applicants to justify a variation;
• This is the first refinery buffer analysis that he has done;
• Residential development is located within the buffer at various locations for historic reasons but this does not justify further encroachment within it;
• The two kilometre buffer has been retained after a series of reviews by the EPA;
• His experience is that the EPA applied the buffer policy stringently;[102]
• His evidence went to one of the six considerations referred to in the guideline;
• He had adopted nominal odour emission rates taken from a previous consultant's report;
• He had not modelled probable odour effects upon the applicants' land but rather a directionally based buffer equivalent to a two kilometre buffer at the most sensitive point of the odour contours;
• His modelling did not meet all the criteria stipulated in the SEPP protocol referred to in the buffer policy;[103] and
• Such modelling is intended to determine whether a given emission source complies with design criteria.

We are not attempting to predict the odour level downwind of a given source. We are purely only using it to determine how the meteorology ends up with a non-radial buffer.[104]

• He had not seen an audit or assessment of actual residual emissions from the refinery. He was told there was not such an audit or assessment.
• He did not know what equipment may in fact be the cause of the majority of IRAEs.
• The stacks modelled by Mr Pollock are still in operation.
• The complaints relate to odours from a variety of sources.
• Mobil documentation includes odour audits that have been undertaken annually since 1996 to assess and identify ongoing sources of different odours. He has not seen these.
• The type of odour audit undertaken by Mobil would not capture the data necessary to model the effect of IRAEs.
• There has been a reduction in greenhouse and benzene gas emissions from the refinery.
• Mobil's target is that there be no community complaints about odour.
• Between 2002-05 there has been a diminution in complaints. Since 2002 the confirmed complaints[105] have been less than 20 per annum.
• The bitumen plant which was likely to be a significant source of complaints has ceased operation.
• In 2012, only two odour complaints were confirmed.

The problem is that ... there's [an] arbitrary emission rate that's been used in the modelling, so we don't know whether or not those arbitrary emissions reasonably reflect the emissions from the refinery and therefore what the impact would be, what the actual impact is at 2,000 metres in any direction ...[106]

231 We interpolate that the evidence demonstrates that the modelling undertaken by Mr Pollock and Mr Davies had different purposes and each had its own independent internal logic.

232 Mr Pollock sought to establish the relativity of a 2,000 metre radial buffer by a series of directionally modelled dispersion plumes.

233 Mr Davies sought to demonstrate first, that modelling of this kind was materially affected by variations in annual meteorological data and, secondly, that the modelling undertaken by Mr Pollock implied detectable and unacceptable levels of odour affecting the applicants' land.

234 The modelling by each expert assumed generic arbitrary emission rates. For this reason, neither set of modelling demonstrates probable odour levels upon the applicants' land if it is developed residentially.

235 The trial judge preferred the evidence of Mr Davies.

I consider that Mr Davies' opinions are more persuasive on the issue of the likelihood that the existing buffer would be favourably varied by the EPA. In my view Mr Davies' evidence is of more weight and is more convincing because I am persuaded that, for the reasons given by Mr Davies, Mr Pollock's proposed variation to the buffer is most unlikely to be acceptable to the planning authority or the EPA. This is because Mr Pollock's directional analysis uses an arbitrary emission rate and it is not possible to know whether those emission rates reasonably reflect the emissions from the Mobil Refinery. Accordingly, Mr Pollock's modelling does not convince me of the impact of the likely emissions, to a distance of 2,000 metres in any direction. It would not be possible to compare the effect of Mr Pollock's arbitrary emissions with the odour criteria.[107]

236 The judge's conclusion that Mr Pollock's modelling did not convince him of the impact of likely odour emissions accorded squarely with the weight of the evidence.

237 We further note that the independent panels which considered amendments L14, C1, and C33 were not persuaded that the buffer should be reduced in the absence of EPA agreement to that reduction. The C33 panel considered the proposal before it in June 2007. It seems to us that the overwhelming probability is that no planning approval for a residential rezoning would be given unless the relevant land use separation issues had been resolved to the satisfaction of the EPA.[108] We accept that, although both the SPPF and LPPF seek to support the refinery and endorse the necessity for an adequate separation buffer to sensitive uses, the buffer policy was ultimately no more than a matter to be taken into account in determining whether a rezoning application should be approved and that breach of it was not legally determinative of the outcome. Nevertheless, we do not think it probable, given the history of the buffer policy itself and the Altona petroleum refinery, that either an independent panel or the Minister for Planning would have approved a rezoning without the agreement of the EPA pursuant to the EPA buffer policy clause 9. This provision, which we have quoted above, states unequivocally that approval should not be given by the planning authority until the relevant land use separation issues have been resolved to the satisfaction of the EPA.

238 The ultimate question for the trial judge was whether he was persuaded that the EPA would accept a reduction of the buffer distance, not whether, on the evidence before him, a reduction was appropriate.

239 A portion of the applicants' land extends materially closer to the refinery than the adjacent residential area to the south. The question of the need to continue the buffer was particularly acute for this area.

240 As the judge recorded, Mr Pollock did not directly opine that the EPA would agree to variation of the buffer. In turn, whether or not the judge was correct to prefer Mr Davies's evidence to that of Mr Pollock, it seems to us that, as the respondents submit, the evidence relied on by the applicants on this issue, taken at its highest, was inconclusive:

• the applicants' proposal for variation depended on one aspect of six considerations only;
• the modelling used assumed values for rates of emission;
• Mr Davies's analysis showed material differences in annual meteorological conditions;
• the directional modelling undertaken by Mr Pollock generated implicit values which would cause unacceptable odours on the applicants' land;
• the modelling did not purport to predict actual odour conditions upon the applicants' land;
• the weight that the EPA would give to the other contextual considerations that we have previously identified is uncertain.

241 The buffer policy remained a real and substantial impediment to rezoning until the EPA accepted a reduction in the relevant buffer. By the date at which the trial judge determined this matter, the applicants had been seeking such a reduction for more than 10 years without success. The evidence was that the EPA applied the buffer stringently.

242 In submissions on the appeal, it was put on behalf of the applicants that the ministerial briefing note with respect to proposed amendment C77 demonstrated that the EPA would accept a reduction in the buffer. We do not accept that this is so. The briefing note also made clear that the resolution of appropriate buffer distances remained an open issue. Further, amendment C74 has not proceeded. More fundamentally, no direct evidence of a formal response to amendment C74 from the EPA was adduced at trial and no response from the EPA to Mr Pollock's modelling was put in evidence.

243 It seems to us that in these circumstances, the judge's ultimate conclusion that the buffer distance issue remained unresolved and a material impediment to the rezoning of the applicants' land accorded squarely with the weight of the evidence.

244 The next constraint identified by Mr Milner related to the interface of the applicants' land with adjoining non-residential land uses. Mr Milner accepted in cross-examination that this interface might be addressed by acoustic barriers, landscaping and setback measures. These issues would not prevent a rezoning but would directly affect the probability of approval of the applicants' hypothetical development plans. The judge was correct to conclude as follows:

The plaintiffs do not put forward a specific design solution to industrial interface impediments.[109]

245 But it may be accepted that these issues alone would not have precluded a rezoning.

246 Mr Milner next identified access constraints as materially affecting the potential for residential development of the applicants' land. His evidence was that residential traffic should not share the industrial area access via Akuna Drive. In turn, access was inadequate unless, hypothetically Hygeia Avenue, was constructed to the point of giving access to the applicants' land. The applicants did not propose the construction of Hygeia Avenue (presumably because of the substantial expense potentially involved). The applicants' planning consultant had advised that this was 'not on the table'.[110]

247 Mr McGurn's opinion was that access arrangements could be worked through, and that access via Violet Street would be more appropriate for residential than industrial development. There was no obvious necessity for industrial development of the applicants' land to be accessed by Violet Street rather than Akuna Drive. But the inadequacy of residential access via Violet Street is starkly demonstrated by the applicants' hypothetical development plans to which we shall shortly turn.

248 In our view, Mr Milner was correct to identify the resolution of access issues as a major impediment to rezoning. The judge was also correct to conclude as follows:

However, on the evidence there is no basis upon which to conclude that the identified impediment in relation to access has been adequately addressed. Mr McGurn is not an expert in relation to this issue and his evidence fails to persuade me that the plaintiffs have any prospect of successfully resolving this constraint.[111]

249 The trial judge was entitled to accept Mr Milner's conclusions as to the prospects of a residential rezoning. Those conclusions accorded with the weight of the evidence. They were not 'glaringly improbable' or 'contrary to compelling inferences'. Grounds of appeal 1 to 4 must therefore fail.

250 The difficulties with interface and access issues confronting residential development of the applicants' land are most clearly demonstrated by the hypothetical development proposals put forward on behalf of the applicants as the basis for the quantification of their claim for damages.

251 The problems can be seen in the subdivision proposal depicted below.[112]

252 The only access to the subdivision is via Violet Street, which is itself no more than a collector street.

253 A 'temporary court head' is shown adjoining what remained an industrial zone to the west.

254 The interface with the railway line comprises a 3 metre acoustic fence and the interface to the Akuna Drive industrial area comprises an 8 metre high masonry wall.

255 No buffer is provided to the industrial zone to the west and to the south.

256 The provision of integrated space for landscaping and interfaces with adjoining land is restricted to the body corporate site. The provision of public open space is minimal.

• If you stand in the middle of the site, whichever way you turn, except for a very small gap, your experience is of industrial uses, a railway embankment and further industrial potential use to the south and west.[113]
• Sustainable communities are very well connected to their context and the applicants' land is severely constrained in its ability to connect with surrounding land uses which are predominantly industrial or vacant land zoned industrial.
• Acoustic barriers would provide significant separation from the surrounding areas, creating essentially a walled community.[114]
• The land has very constrained access to adjoining areas.[115]

258 In Mr Milner's view, none of the hypothetical development plans advanced by the applicants would receive permit approval.

259 Mr McGurn did not give evidence supporting any of the hypothetical development proposals as likely to receive planning permit approval. Accordingly, Mr Milner's evidence as to their unacceptability was uncontradicted. The trial judge was correct to accept Mr Milner's uncontradicted evidence, which was rational, detailed and credible.

260 The fact that Mr Milner accepted that some residential development might occur in the area immediately adjoining an existing residential area reinforced rather than detracted from the credibility of his evidence. The hypothetical development proposals involved residential development throughout lots A and B; a much wider area. Grounds of appeal 1 to 4 fail at this level also.

Conclusion with respect to hypothetical development proposals

261 It follows that, even if the trial judge erred in accepting Mr Milner's opinion with respect to the prospects of a rezoning, there was no satisfactory basis for any quantification of damages which took as its starting point the hypothetical development proposals advanced by the applicants. The applicants failed to establish that there was any substantive chance that proposals of the type they advanced would have received planning permit approval.

262 Before leaving the evidentiary issues relating to the consequences of the contamination caused by the leak, it is convenient to address grounds 8 and 9 of appeal.

263 Both these grounds assert that the trial judge erred in law in finding that the applicants' opportunity to residentially develop the land was not lost as a result of the leak. The conclusion challenged is one of fact. It will not involve an error of law unless it was not open to the judge to reach it.[116] The grounds go on, however, to allege that the conclusion was also against the weight of the evidence. A ground in this form does not raise an error of law but may be raised on appeal by way of rehearing such as the present. We shall deal with the applicants' contentions on both bases.

264 Mr Milner's evidence was that the leak did not impact on the planning process in relation to the applicants' land.[117] It was open to the judge to accept this evidence as part of a coherent set of conclusions as to the existence of the opportunity.

265 If, however, it is hypothesised first that, contrary to the judge's primary conclusion, the applicants had an opportunity to residentially develop the land at the time of the leak and secondly that the realisation of that opportunity was affected by the contamination resulting from the leak, the further question arises as to whether the contamination has in fact deprived the land of future potential for residential development.

266 The trial judge found that the applicants had not persuaded him that residential development was no longer possible on the land in the ascertainable future.

267 The trial judge concluded that he was unpersuaded by the core evidence adduced by the applicants relating to this issue from a developer, Mr Williams. In particular, the judge found that the evidence of Mr Williams to the effect that he would not pursue residential development of the applicants' land was not in point, because Mr Williams assumed that he, as the developer, would be required to undertake remediation of the land. Mr Williams did not take into account the fact that Mobil was required to and would remediate the land to CUTEP.

268 The judge also accepted the evidence of Mr Mirkov, an environmental expert called by Mobil. Mr Mirkov gave evidence as to the likely course of contamination, probable achievement of CUTEP and the interrelationship between the contamination caused by the leak and the applicants' ability to residentially develop the land.

269 On the basis of Mr Mirkov's evidence, the judge concluded as follows:

Furthermore, I consider that it is likely that the plaintiffs will, at the conclusion of the CUTEP process, be able to secure a Statement of Environmental Audit in respect of their land. Leaving aside the above impediments which prevent residential rezoning of the plaintiffs' land, such a Statement of Environmental Audit would likely be subject only to the condition that any development by the plaintiffs will not breach the depth where the underlying groundwater contamination would pose health risks. Mr Mirkov's evidence was that such a Statement of Environmental Audit would enable the plaintiffs to develop their land residentially notwithstanding the contamination caused by the Mobil leak. Mr Mirkov's unchallenged evidence was to this effect.

Mr Mirkov's evidence on the above matters, which I consider to be of critical importance, was not opposed by any contradictory evidence adduced by the plaintiffs. Nor was Mr Mirkov cross-examined on the substance of his reports on critical areas of his evidence. Mr Mirkov was not cross-examined by the plaintiffs as to:

(i) whether Mobil's remediation to CUTEP would be a definitive outcome for the plaintiffs' land so far as it was necessary to deal with groundwater contamination;

(ii) whether the plaintiffs would be able to obtain a Statement of Environmental Audit; and

(iii) his evidence that the issue of a Statement of Environmental Audit would allow the plaintiffs to undertake a residential development on their land.

The combination of Mr Mirkov's evidence and the evidence of Messrs Keighran and Stewart was:

(a) there was no unacceptable risk to residential occupants or an onsite workforce down to 2.5 metres;

(b) the plaintiffs' one basement storeroom/carpark development scenario was within the envelope of excavation down to 2.5 metres;

(c) there was no unacceptable risk to onsite construction and maintenance workers down to 4.5 metres.

The above evidence establishes that the plaintiffs will not be prevented by groundwater contamination from proceeding with their Terrace House or Higher Density residential development scenarios. Those forms of development that involve excavation levels above the contaminated groundwater, are likely to be able to be undertaken as authorised by a Statement of Environmental Audit. This is the substance of Mr Mirkov's unchallenged evidence on this pivotal matter.

Further, the evidence is that Mobil is remediating the leak in accordance with the RAP and will continue to remediate the plaintiffs' land until it achieves CUTEP, as it is legally required by the EPA to do.[118]

270 There was no error of law in these findings and they accorded with the weight of the evidence, which was relevantly uncontradicted.

271 After further addressing the evidence called as to clean-up costs, the judge preferred Mr Mirkov's evidence to that called on behalf of the applicants from Mr Nunn.

272 Mr Nunn's evidence was that the remediation of the applicants' land to a depth of 10 metres would cost $95 to $206 million. Mr Mirkov's evidence was that Mr Nunn's remediation proposals were unreasonable and went beyond what was necessary to enable residential development of the land. He also gave evidence that remediation to CUTEP would give a definitive outcome.[119]

273 The judge gave further detailed reasons for rejecting the evidence of Mr Williams generally, and in particular as to the cause of a stigma affecting the land.[120]

274 Ultimately, the judge concluded as follows with respect to the issue of contamination:

It is likely that the plaintiffs' land can be remediated so as to attain a Statement of Environmental Audit. The condition likely to attach to the Statement of Environmental Audit is that the development should not reach the depth where the underlying groundwater contamination would become a risk.

The groundwater beneath the plaintiffs' land is, in addition to the hydrocarbons from the Mobil leak, contaminated by diesel or a similar contaminant of unknown source. It is unclear when diesel-like contamination occurred.

The Mobil leak has contaminated the groundwater beneath the plaintiffs' land with petroleum hydrocarbons in the area of the plume. That groundwater contamination is stable.

As required by the EPA, Mobil has been remediating and continues to remediate the groundwater contamination caused by the Mobil leak. Mobil is required to do so to the EPA's satisfaction and at Mobil's expense.

CUTEP is not a negotiated position as between the polluter and the EPA.

Mobil's remediation is to be undertaken pursuant to the applicable RAP and in accordance with EPA Publication 840.

Mobil's clean up and remediation works, to CUTEP as required by the EPA, will restore all the beneficial uses of the plaintiffs' land to the extent practicable.

When CUTEP is determined by the EPA, following receipt of a satisfactory Environmental Auditor's Report, it is likely that the EPA will impose a Groundwater Management Plan on Mobil. The conditions relating to the plaintiffs' land and arising from the Environmental Audit or Statement of Environmental Audit are likely to restrict developments on the plaintiffs' land to a maximum of one underground construction level.

It is, in my view, not established by the evidence that after CUTEP there will be any significant financial or regulatory risk to the plaintiffs.

The plaintiffs' alternative remediation strategy, discussed by Mr Nunn, is not likely to be suitable or adequate or reasonable for the reasons earlier identified by reference to Mr Nunn's evidence.

Remediation to CUTEP is likely to be achieved within the next 5 to 10 years.

It is likely that the plaintiffs can obtain a Statement of Environmental Audit which would enable the plaintiffs to pursue their plans to residentially develop the plaintiffs' land unconstrained by the groundwater contamination caused by the Mobil leak save as to the conditions likely to be applied by such a Statement of Environmental Audit.

For the above reasons, the Mobil leak has not prevented the plaintiffs from being able to develop their land for residential use.[121]

275 The grounds of appeal directed to the question of the ongoing potential for residential development do not grapple with the detailed evidentiary basis upon which the judge reached his conclusion. Rather, they simply seek to assert in a rolled-up manner the thrust of the applicants' case with respect to this issue.

276 In particular, the grounds do not directly confront Mr Mirkov's uncontested opinion as to how the statement of environmental audit procedure would allow residential development to proceed (assuming that the other constraints affecting the property were resolved and the land was able to be rezoned).

277 The applicants' submissions on appeal are in turn primarily directed to contested aspects of the evidence concerning the nature and extent of the contamination.

278 First, it was submitted that the remediation which has been undertaken has been ineffective and grossly inadequate. This submission is no more than one of pejorative assertion. It does not demonstrate that Mr Mirkov's conclusions should have been rejected.

279 Secondly, it was submitted the contamination had not reached a steady state and was continuing to spread. Mr Mirkov's evidence was that, whilst a steady state had not been reached, the plume was not continuing to spread.

280 Mr Mirkov's opinion in this regard was not challenged in cross-examination.

281 Thirdly, the applicants submitted that they led evidence as to what would be required to fully remediate the land by way of total excavation. This is true, but that evidence was not accepted. What was accepted was the proposition that CUTEP was feasible within a reasonably proximate time period and that, if this was achieved, this would form an acceptable basis for rezoning subject to environmental audit and development conditions.

282 Fourthly, the applicants submitted that the evidence did not permit precise quantification of the extent of the contamination. This is also true, but this fact again did not preclude a judgment that the process described by Mr Mirkov was reasonably achievable. Nor was it put to him in cross-examination that it did.

283 Fifthly, the applicants submitted that the evidence was that Light Non-Aqueous Phase Liquid ('LNAPL') oil contamination would take five to 15 years and not five to 10 years for clean-up as the judge recorded.[122] The short answer to this is that, as Mobil submits, the estimates given at the date of trial equated to a further five to 10 years for clean-up. The more fundamental answer is that in principle Mr Mirkov's prognosis and the judge's conclusions based upon it were not dependent upon a 10 year time frame as against a 15 year time frame for clean-up. The applicants' case was never formulated by reference to delay. It contemplated and required a finding of effective permanent loss of residential development potential.

284 Sixthly, the applicants submitted that CUTEP may not remediate the land to such an extent that a reasonably prudent developer would proceed with residential development. This submission sought to avoid the plain effect of Mr Mirkov's evidence, which was that, when CUTEP is achieved, it is probable that the application of the environmental audit procedure and appropriate development conditions would enable rezoning and in turn reasonable development.

285 Seventhly, the applicants asserted that the judge should have accepted the evidence of Mr Williams that he would not seek to develop the land for residential purposes. The judge gave detailed reasons for rejecting Mr Williams's evidence which is unnecessary for us to repeat in detail.[123] As we have said, they included the fact that Mr Williams proceeded on the fundamentally false premise that the developer would be required to achieve CUTEP. In addition, the judge found, amongst other things, that Mr Williams should not be regarded as an independent witness and had uncritically accepted matters of which he was advised by Mr Cini, on behalf of the applicants.

286 Eighthly, it was submitted that the judge misapprehended Mr Mirkov's evidence as to capacity to safely construct buildings with a 1.5 metre deep basement. A careful reading of Mr Mirkov's evidence demonstrates that this is not so. After carrying out soil gas measurements with probes over the areas worst affected with LNAPL, Mr Mirkov concluded:

The measurements indicate that if the undegraded soil gas readings are taken from directly above the LAPL at 4.5 metres depth the risks to human health are unacceptable for all forms of residential occupants but acceptable for construction workers and maintenance workers. These outcomes are however considered unnecessarily conservative given that we have obtained actual data that shows the rate of degradation.

The actual measured soil gas concentrations were then used to model the hydrocarbon gas exposures to people either living or working above the plume. The modelling, which was undertaken by Ms Karen Teague on my behalf who is a fate [sic: read freight] and transport and risk assessment professional on my panel of EPA approved experts, indicates that the degraded soil gas concentrations as measured presence of the current LNAPL plume (which according to Gilbert is a mixture of both the gasoline leak and a pre-existing diesel source) does not pose any unacceptable human health risk to occupants of residential, commercial or industrial buildings.[124]

287 The level of the contaminated ground water generating soil vapour above it means that there is no unacceptable risk to the use of a basement storeroom/car park. Further, we are not persuaded that the judge misread Mr Mirkov's report, as was submitted on appeal.

288 Ninthly, the applicants complained of the judge's findings with respect to their own intentions. As the judge recorded, the applicants' position as to their own intentions with respect to residential development changed during the course of the trial hearing. The judge did not accept that they had in fact abandoned their long term intention to residentially develop the land:

I am also unpersuaded that the plaintiffs have abandoned their intention to develop their land residentially. Throughout the proceedings, up until the plaintiffs' written submissions dated 4 February 2014, the plaintiffs put forward a case directed in part to establishing that at all material times they pursued their residential development plans and intended to develop the land residentially. In their Closing Submissions of 4 February 2014 the plaintiffs submitted that their pursuit of rezoning and development was pointless and their opportunity in that regard had been lost. Even during the course of evidence at trial the plaintiffs confirmed that they were pursuing the planning process so as to rezone and be granted planning approval for a residential development of their land. The plaintiffs adduced evidence from Mr Cini to this end. That evidence is conveniently summarised in Schedule A of Mobil's Closing Submissions.

The plaintiffs' claimed abandonment of residential development plans

At no point did the plaintiffs adduce any evidence that the plaintiffs had decided to abandon their development plans.

The plaintiffs have, since Mr Mirkov filed his first report, been aware of the criticisms of Mr Nunn's approach and the plaintiffs have at all times been able to obtain information about the progress of the clean-up efforts. The State submits therefore that the plaintiffs' 'apparent about face', which the State emphasises remains unsupported by the evidence, in relation to their ability and intention to develop the land, should not be accepted. The State cites in this regard the plaintiffs' closing submissions [63] which argued that the plaintiffs had, before and after they were advised that their land was contaminated, actively engaged in seeking to maximise the economic potential of their land by having it rezoned.

Mobil argued in Reply [11] that the evidence is that the plaintiffs have not abandoned their development plans. In this regard Mobil cited Mr Cini's evidence at trial that the plaintiffs did not intend to sell the land. Mobil also details other parts of Mr Cini's evidence as set out below in support of the State's submissions that the plaintiffs have not abandoned their plans to develop the land and that the plaintiffs have called no evidence to the contrary.

[particulars omitted]

It is for these reasons that I am unpersuaded by the plaintiffs' submission that they have now abandoned their intention to develop the land. In my view, on the evidence I have referred to and the overwhelming thrust of the case long put forward by the plaintiffs, the plaintiffs maintain their intention to develop their land residentially, if and when they are able to do so. As a result, in my view, the plaintiffs remain likely, when convenient for them, to continue to prosecute their planning application to that end.

Further, in my view, the plaintiffs' persistent and long term pursuit of their several applications to develop their land residentially reflects the plaintiffs' long held belief that they have not, by reason of the Mobil leak, lost the opportunity to develop their land residentially.

In this regard I also find that the plaintiffs are prepared to continue to hold their land and pursue the rezoning process for as long as it takes to conclude a suitable development.[125]

289 The applicants submitted that their desire to develop the land residentially changed during the course of the trial when they understood the true extent of the contamination of their land and consequent changes to the development risk profile. It seems to us, with respect, that his Honour's conclusions accorded with the weight of the evidence. The applicants' case was that their intention changed after Mr Cini, a director of the applicants' had given evidence. There was no evidence called to establish the asserted change of position. The judge was left with the evidence of Mr Cini and a series of unsubstantiated assertions. These fell, in part, to be assessed against the fact that the applicants had not proceeded with the equivalent of the 107 lot industrial subdivision they had at one stage put forward despite the fact that, as counsel submitted in final address, there was no planning impediment to doing so. But, in any event, whatever may have been the applicants' intentions, Mr Mirkov's evidence remained dispositive of the underlying issue raised by these grounds of appeal.

Conclusion as to loss of opportunity grounds of appeal

290 For the above reasons, the applicants have failed to satisfy any of the grounds of appeal directed to the loss of opportunity to develop lots A and B for residential purposes.

291 The judge's ultimate conclusions on these issues, set out at [59] above, accorded with the weight of t[126]evidence.126

292 The gravamen of grounds 5, 6 and 7 can be stated this way: the judge erred by concluding that the appropriate measure of damages for harm done to the applicants by Mobil's breaching conduct was diminution in the value of the land. Assessment of damages on that basis would undercompensate the applicants. The judge was wrong to hold that to assess damages on a loss of opportunity basis would be likely to overcompensate the applicants. This erroneous conclusion explained why his Honour had concluded that damages should not be assessed on a loss of opportunity basis. Only by awarding damages on that basis would damages have adequately compensated them.

293 In part, the submissions under cover of grounds 5, 6 and 7 attacked the judge's conclusion that no valuable opportunity had existed at a relevant time, which opportunity had been lost by reason of the leak. But we have concluded that the judge was correct to find that the applicants did not establish a valuable opportunity at any relevant time. It follows that, even if there was some error in the judge's analysis of the principles pertaining to assessment of damages for damage to land, and even if the judge's concern that the applicants not be overcompensated led to his wrongly rejecting loss of opportunity as the basis for assessment of damages in this case, it would not alter the outcome of the matter before us.

294 Nonetheless, in case our conclusion that no loss of valuable opportunity was made out is wrong, we should address those grounds. We do so, reminding ourselves that although the statement of claim did not advance a claim for loss of opportunity damages,[127] such a case was advanced at trial; and that a claim for damages based upon diminution of value of the land, although articulated in the statement of claim, was eschewed by the applicants at trial. It appears that a deliberate tactical choice was made in this regard despite the fact that a claim might have been advanced claiming loss of market value in the first instance, together with the additional value allegedly lost to the plaintiffs of any opportunity not captured by market value.

295 The applicants submitted at trial that, although there was limited case law of instances where loss of opportunity damages had been assessed in respect of torts affecting land - damages being normally based on diminution in value or cost of reinstatement - nonetheless damages were not thereby confined, and loss of opportunity damages were available.

296 For its part, Mobil submitted that (a) the normal measures of damages for torts affecting land is diminution in value or else the cost of reinstatement, (b) cases in which loss of profits were awarded in the case of damage to land were instances of consequential loss attributable to disruption of an existing or imminent activity there carried on, and (c) the applicants had not identified any previous case in which the loss of opportunity to develop land would not be reflected in its diminution in value.

297 At trial, it was submitted for Victoria that the principle of recovery, as applying to the present claim, was for diminution in value, which represented the damage suffered by the applicants. If the applicants were to be awarded damages for loss of opportunity, they would be overcompensated in the event that - contrary to their closing submission that the asserted opportunity had been lost and that the land could not be developed - their land was in the future developed.

298 The judge carefully analysed texts and authorities to do with compensation for damage to land. He concluded that assessment of damages by reference to diminution in value or by way of cost of reinstatement are the most common forms in which, in Australia and the United Kingdom, damage to land has been compensated. He further concluded that cost of reinstatement will not necessarily be inappropriate only because it exceeds diminution in value. He recognised also that there have been cases in which consequential damages for loss of profits or loss of opportunity have been awarded in addition to damages for diminution in value or cost of reinstatement.

299 His Honour did not conclude that loss of opportunity damages would never be available in a claim respecting damage to land. He rightly accepted that the overriding goal in the assessment of damages is that a plaintiff should be awarded fair and just compensation that will, as far as money can do, put the plaintiff in the position in which it would have been if the tortious conduct had not occurred.

300 His Honour's conclusions, upon the question of principle, were as follows:

1. The cases discussed above indicate that usually, the appropriate measure of damages for injury done to land is the diminution in value of the land or the costs of reinstatement. Courts will start with what the plaintiff has asked for, and then consider whether that measure of damages is fair and reasonable in light of the injury suffered, the difference between the diminution in value on the one hand and reinstatement costs on the other, and any special value in the land. Damages may also be awarded for consequential losses, including lost profits or lost commercial opportunities. The measure of damages must be approached in a realistic way.[128]
2. Where loss of opportunity damages have been awarded in nuisance and negligence cases, they have been awarded as consequential loss, and not as a substitute for diminution or reinstatement damages. In this case, the plaintiffs do not claim for consequential loss. Rather, they make a claim for injury done to the land, and they claim loss of opportunity damages rather than diminution or reinstatement damages.
3. There may be circumstances where the overriding goal of compensation, namely putting the plaintiff in the position it would have been in but for the commission of the tort, requires that loss of opportunity damages be awarded as a substitute for diminution or reinstatement damages. Such circumstances may include where the plaintiff establishes that it has a special value in the land, that remediation is not possible, and that there are no replacement properties available on the market for the plaintiff to purchase. Another example might be where a plaintiff loses a once-off opportunity to sell the land for a price above the market value. In that case, damages for diminution in value, ordinarily calculated by reference to market values, would not adequately compensate the plaintiff, and reinstatement would be unhelpful because the purchaser has moved on.[129]

301 His Honour concluded, as we have previously noted, that the appropriate measure of damages was diminution in value in the circumstances of this case. That was so for a number of reasons: The applicants had not demonstrated that remediation of the land was not possible. 'The claimed opportunity was not a once-off opportunity, such as an opportunity to sell to an over-anxious buyer who moves on and purchases elsewhere'.[130] As the applicants would have it, the opportunity was enduring or ongoing, tied to the land. Once the land was remediated, the opportunity upon which the applicants relied - which, in the event, the judge found was not an opportunity at all, a fortiori not an opportunity which had been lost because of Mobil's breaching conduct - might be pursued and realised.

302 In a passage criticised in this Court, the judge said:

The plaintiffs may later develop the land and make the profits claimed in this proceeding. To award the plaintiffs for lost damages for loss of opportunity when the plaintiffs will retain the land and the opportunity continues to exist would be likely to overcompensate the plaintiff.[131]

303 The judge also considered that loss of opportunity damages were inappropriate in the present case because, as he found the situation to be, the applicants had no 'special value' in the land. The land was not unique. There were other development sites available to the applicants, which could be said to be reasonably comparable, in the inner Melbourne area.

304 The judge summarised the circumstances which rendered diminution in value damages more appropriate and just than loss of opportunity damages as follows:

(a) at the time of the leak, the plaintiffs had not decided how and when to develop the land;

(b) pre-leak, it was uncertain how and when the land may be developed;

(c) after the leak, it is uncertain how and when the land may be developed;

(d) the plaintiffs no longer seek to enforce remediation by their earlier injunctive relief (as proposed by [a witness called for the plaintiffs]);

(e) remediation of the plaintiffs' land to CUTEP is likely to restore that land to its highest and best use;

(f) I am not satisfied that the plaintiffs have established that their land will not be developed in some manner in the future;

(g) damages for diminution in value are likely to be more reliably and accurately ascertained;

(h) the upper bound of the reinstatement costs in excess of $200M is such as to probably render such remediation uncommercial when considered against the likely market value of the plaintiffs' land and likely upper bound development yield, and therefore also impractical and not a reasonable measure of the plaintiffs' loss; and

(i) diminution of value damages are essentially determined by the market at the relevant time;

(j) damages based on diminution in value represent a more appropriate, fair and reasonable compensation to the plaintiffs for the injury suffered.

1. An assessment of damages based on diminution of value of the land as a result of the contamination injury is, in my view, the much more preferable measure. That is because the alternative sought by the plaintiffs, namely damages for loss of opportunity carries with it a significant risk in this case that the plaintiffs will, or may be, overcompensated because they ultimately develop the land in some way involving residential development. Alternatively, the plaintiffs may well sell their land for a price that factored in potential residential development in the future. This is in my view exacerbated by the way the plaintiffs frame their damages claim. They seek to be compensated on the basis that their residential development plan would have been achieved in all respects as envisaged in relation to cost, timing and scope notwithstanding the many planning and environment vicissitudes which are likely to affect that development, including the resolution of the re-zoning constraints and also the construction and marketing uncertainties. The plaintiffs' compensation involves accepting now, outcomes which would, theoretically, be achieved many years hence and the commercial environment which then exists. Furthermore, the plaintiffs' claim for damages based on their asserted loss of opportunity is by its nature (at this point of time) hypothetical and pregnant with projections and uncertainties whereas the assessment of damages on the basis of the diminution in the value of the plaintiffs' land as a result of the contamination injury caused by Mobil is, for the reasons I have explained,[132] likely to be a more reliable and accurate basis upon which to assess damages.
2. Furthermore, compensation based on diminution of value would value the plaintiffs' opportunity to develop their land residentially, pre-leak, with any decline in the value of the same opportunity post-leak.
3. Similarly, in my view, reinstatement damages would not be as appropriate as damages for diminution of value. This is because, in addition to the reasons I have earlier identified,[133] reinstatement damages are at odds with the fact that Mobil is remediating the plaintiffs' land and continues to be obliged to do so.[134]

305 The judge went on to consider the way in which, and the problems with which, the applicants framed their loss of opportunity claim. It is not necessary to detail the minutiae of that analysis.

306 The judge set out the principles applicable to a loss of opportunity case in some detail.[135] Respecting Sellars v Adelaide Petroleum NL,[136] he said this:[137]

In Sellars the majority view was that causation and the suffering of loss must be proved on the balance of probabilities, while the amount of the loss is determined according to the degree of probabilities or possibilities:

...the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.[138]

307 His Honour referred also to the judgment of Brennan J in Sellars,[139] and to a passage in the judgment of Giles JA in the New South Wales Court of Appeal case of Heenan v Di Sisto.[140]

308 Having set up the conceptual framework, his Honour then explained why, in his opinion, the applicants had failed to make out a loss of opportunity claim. Those reasons, in substance, are the reasons why we have concluded that the judge was correct to find that no valuable opportunity had existed, or had been lost in a way which implicated Mobil, at a relevant time.

309 The applicants submitted in writing, respecting grounds 5 and 7, that the appropriate measure of damages was damages for the lost opportunity to derive profit from the land because only such damages would compensate them adequately for their loss. It was emphasised that the applicants are developers, not just buyers and sellers of land.

310 It was submitted that the judge's reason for not awarding damages for lost opportunity was that doing so would be likely to overcompensate the applicants, as they would retain the land. It was said that was a fundamental misunderstanding of the correct approach to assessing damages. The judge had to decide whether the applicants had lost the opportunity to develop their land for residential use, they having the onus of showing that they had suffered such a loss on balance of probabilities. The applicants were not required to demonstrate that there was no possibility that they had not suffered such a loss.

311 Respecting ground 6, the applicants submitted that additional circumstances demonstrating the judge's alleged error with respect to overcompensation were that the weight of the evidence was to the effect that, as a result of delay -

(a) the magnitude of the contamination to the Applicants' land caused by Mobil's contamination;

(b) the impracticality of a mandatory injunction requiring Mobil to remove all of its contamination (given the likely difficulty, cost and delay that would be involved in removing all the contamination);

(c) the uncertainty as to the level of decontamination of the land that would be achieved by Mobil complying with the requirements imposed by the EPA (ie CUTEP or 'Clean Up to the Extent Practicable'); and

(d) the uncertainty as to how many more years Mobil would need to achieve CUTEP,

the land could not be developed for residential use and the opportunity to do so had been lost.

312 It was submitted that the evidence at trial showed plainly that the applicants' land could no longer be developed for residential use and that the opportunity to do so had been lost.

313 Orally, applicants' counsel referred to Sellars.[141] The facts of that case are notorious, so often has it been cited, and we need not recapitulate them. Counsel particularly relied upon the following passage from the judgment of Mason CJ, Dawson, Toohey and Gummow JJ:

[T]he general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.

The conclusion which we have reached on this question finds support in other considerations. The approach results in fair compensation whereas the all or nothing outcome produced by the civil standard of proof would result in the vast majority of cases in over-compensation or under-compensation to an applicant who has been deprived of a commercial opportunity. Furthermore, it is an approach which conforms to the longstanding practice of taking into account contingencies in the assessment of damages.

314 The first paragraph of that citation was the passage set out by the judge at [290] in his Reasons, see [306] above.

What has happened here is Justice Digby said, 'Because you still have a prospect of redeveloping for residential uses, if I were to give you damages for the loss of that opportunity you would be over-compensated and that would be an unjust result'. But the approach the High Court has laid down, following other jurisdictions, accommodates that because it says that once you find on the balance of probabilities the opportunity has been lost, you allow for the contingencies and the uncertainties at the stage of assessing the damages.

316 Counsel further submitted that there is no special case where the damage is damage to land. The assumption that diminution in the value of land reflected the loss of opportunity was unsupported by evidence.

317 Counsel referred also to Badenach v Calvert.[142] The facts of that case are of no moment for present purposes. The plaintiff's claim failed because it was held that the defendant solicitor,[143] who had taken instructions from the now deceased testator, had not owed the plaintiff, the testator's intended beneficiary of the whole estate, a duty of care having the content which was relied upon. That conclusion decided the case. But there was reference in several of the judgments in the High Court to the factual causation test set up by s 13(1) of the Civil Liability Act 2002 (Tas). That was in the context of a claim in which the asserted damage was the loss of a prospect that the testator, if given appropriate advice by the defendant's solicitor, may have taken steps to protect the plaintiff's position in the face of a possible claim by a member of the testator's family under the Testators Family Maintenance Act 1912 (Tas).

1. The respondent seeks to overcome problems of proof by redefining the loss occasioned by the alleged breach of duty as the loss of the chance that the client may have undertaken the inter vivos transactions. The chance could not be of a better testamentary disposition; none is identified as available.
2. It has been explained that to speak of loss as the loss of a 'chance' distorts the question of causation. It involves the application of a lesser standard of proof than is required by the law and, it follows, by s 13(1)(a). It confuses the issue of the loss caused with the issue of assessing damages which are said to flow from that loss. In that assessment a chance may be evaluated.
3. The respondent's case on causation is not improved by seeking to equate the chance spoken of with an opportunity lost. It may be accepted that an opportunity which is lost may be compensable in tort. But that is because the opportunity is itself of some value. An opportunity will be of value where there is a substantial, and not a merely speculative, prospect that a benefit will be acquired or a detriment avoided.
4. It remains necessary to prove, to the usual standard, that there was a substantial prospect of a beneficial outcome. This requires evidence of what would have been done if the opportunity had been afforded. The respondent has not established that there is a substantial prospect that the client would have chosen to undertake the inter vivos transactions. Therefore, the respondent has not proven that there was any loss of a valuable opportunity.
5. The onus of proving causation of loss is not discharged by a finding that there was more than a negligible chance that the outcome would be favourable, or even by a finding that there was a substantial chance of such an outcome. The onus is only discharged where a plaintiff can prove that it was more probable than not that they would have received a valuable opportunity. To the extent that the majority in Allied Maples Group Ltd v Simmons & Simmons holds that proof of a substantial chance of a beneficial outcome is sufficient on the issue of causation of loss, as distinct from the assessment of damages, it is not consistent with authority in Australia and is contrary to the requirements of s 13(1)(a) of the Civil Liability Act.[144]

319 Gordon J, having held that the solicitor did not owe the plaintiff a duty of care which had been breached, nonetheless also addressed the causation question. Her Honour concluded that the plaintiff could not establish factual causation for the alleged loss, for which reason issues of the sufficiency or value of the opportunity purportedly lost did not arise for consideration. The plaintiff had failed to prove 'the first and necessary step of proving, on the balance of probabilities, a causal relationship between the tortious conduct and the purported "loss of opportunity" before any assessment of the amount of the loss'.[145]

320 Counsel submitted that what the judge should have done was decide on the balance of probabilities whether there was a prospect of rezoning at a relevant time (and he should have so found), and then assess the damage according to probabilities and possibilities, making appropriate reductions or discounts. The discount, counsel submitted, should have been very low - in the order of 10 per cent.

321 It was submitted in writing for Mobil that the judge had not been satisfied on the balance of probabilities that the applicants had an opportunity at a relevant time to develop the land, which opportunity had been lost because of the leak.

322 It was further submitted that the judge had been correct to point to a risk of overcompensation if, contrary to the conclusion just mentioned, there had been an opportunity and it had been lost.

323 Orally, counsel for Mobil submitted that the judge had explained why loss of opportunity damages were not appropriate. Not only had the applicants failed to establish that there had been such an opportunity at a relevant time, the asserted opportunity had not been lost at all because, inter alia, the land could be remediated back to a condition in which its highest and best use - whatever that might be - could be exploited.

324 Counsel was pressed as to the correctness or otherwise of the judge's statement that, 'to award the plaintiffs damages for loss of opportunity when the plaintiffs will retain the land and the opportunity continues to exist would be likely to overcompensate the plaintiffs'.[146] Counsel accepted that if loss of opportunity damages are awarded in a particular case, the whole point of discounting for contingencies is to yield the result that there is no overcompensation.

325 There was this interchange between counsel and the Bench:

ASHLEY JA: But it would be wrong, wouldn't it, to say, 'I won't award loss of opportunity damages because they will overcompensate when you still have, if you like, the raw material or profit' because, if you understand that loss of opportunity damages are to be reduced for contingencies to make sure that that can't happen, it's a bootstraps argument.

MR CALEO: If all the elements of the claim were established, then the part of the analysis where one relying on Sellars discounts or reduces for contingencies would mean you are doing that in an attempt to ensure that one doesn't have over-compensation.

ASHLEY JA: That really seems to me to be just a criticism that might be made of that last sentence, which is repeated on a number of occasions.

MR CALEO: Your Honour, we would accept that it is a criticism that can be made. We contend that it is irrelevant to His Honour's analysis of the substantive elements of the claim.

CHIEF JUSTICE: Is it possible, Mr Caleo, it's just an inappropriate use of language?

MR CALEO: Your Honour, because we contend the last sentence is really nothing more than a reflection of the second last, the notion, 'What you had, which I have concluded was something of very little value at the time, you will still have', then we suggest the last sentence really is doing little more than that. If it is doing more erroneously, then it is irrelevant to the way in which His Honour actually analysed the elements of the asserted claim. To take Your Honour Justice Ashley's example of it becomes a bit bootstraps, you can't then use this to wind back and say, 'That infects His Honour's analysis of the opportunity asserted or whether it is lost'. It is simply a different point.[147]

326 Counsel submitted, respecting a loss of opportunity claim, that there is a need to precisely identify the opportunity said to be lost. That opportunity must be an opportunity to secure financial benefits. In this case, although the applicants' identification of the opportunity had varied over time, the only way in which it could be characterised was the opportunity to secure the financial benefits that might flow from residential development. For such an opportunity to be established, the applicants would have needed to prove, on the balance of probabilities, that the opportunity for residential development was real, this entailing proof that the prospects of rezoning and planning permission were real at the time of breach. That is the way in which the parties had conducted their cases at trial, and the judge had decided the balance of probabilities question adversely to the applicants.

327 Asked why loss of opportunity damages ought not be available, conceptually, in a claim respecting damage to land, counsel replied as follows:

... it's not so blanket a proposition because we would say that the way in which one approaches diminution in value is necessarily looking at the contrast between the land pre-leak - I'm just using pre-leak here because of the facts - and the value of the land now. That, as Mr Brown's report stated, is capable of addressing the question of whether the land pre-leak and what it could have been used for is different to what it could be used for now. So the principles of valuation are capable of giving effect to what might be alleged to have been lost because of the tort.

ASHLEY JA: So that, approached as an issue of diminution in value, loss of opportunity can be built in or should be built in, in an appropriate case, to the before and after.

MR CALEO: Yes, it can be. I hesitate with the word 'should be' because it would of course depend upon the facts ...[148]

OSBORN JA: The valuation before and after won't capture the plaintiffs' loss if there is an existing bargain or some other special value particular to the plaintiff attaching to the land.

MR CALEO: Your Honour is correct.

OSBORN JA: In this case his Honour found that what the complaint was about was the general characteristics of the land which were capable of being evaluated in the marketplace, as it were.

MR CALEO: Yes. With respect, Your Honour, that's correct, because His Honour said two things. He said of course there are those special cases where, because of particular circumstances, a special value attached to the land or an existing opportunity that was ripe to be taken, much as it had been in Sellars, where the fundamental terms of the contract had been negotiated already to be entered into, but His Honour next found this is not that type of case ...[149]

328 Counsel for Victoria, in written submissions, in substance adopted Mobil's submissions with respect to grounds 5 to 7. Orally, counsel submitted that the judge had correctly analysed the authorities dealing with compensation for damage to land, and had recognised, correctly, the circumstances in which consequential loss may be compensated. Further, orthodox principles of valuation allowed for the opportunities both before and after Mobil's breach.

329 So far as the judge's reference[150] to the prospect of overcompensation was concerned, counsel described what his Honour said as 'relevantly inelegant'.

330 Counsel also highlighted the way in which the applicants' case at trial had varied as to identification of the opportunity said to have been lost.

331 When all is said and done, there was relatively little debate, in this Court, about the principles relating to assessment of damages for damage to land which the judge set out in great detail. By that, we mean that the principles which his Honour set out were largely uncontroversial. Thus, such damages are ordinarily awarded on the basis of diminution in value or cost of remediation. Consequential losses, in respect of profits lost by reason of the land having some special value at the time of the offending conduct, or where some personal present or imminent use of the land is frustrated, may be additionally assessed.

332 It is next necessary to note that the judge did not exclude the possibility that loss of opportunity damages might in some case concerning damage to land be a substitute for damages based on diminution in value, cost of reinstatement, and added consequential loss damages in a particular instance. His Honour entertained that possibility, although there is scant support for such an approach. Overall, it is crystal clear that his Honour was guided by the overriding need to ensure that damages would be fair and just compensation, so as to put the applicants, so far as money could reasonably do so, in the position in which they would have been if the leak had not occurred.

333 So far as the way in which a claim for lost opportunity damages should be approached, his Honour was correct to conclude that the valuable opportunity said to have been lost must be properly identified. For without proper identification, there can be no basis for determining whether a plaintiff has established, on balance of probabilities, the existence of an opportunity which had some value.

334 It is next the case that, as his Honour stated, a plaintiff who asserts loss of a valuable opportunity must establish on the balance of probabilities not only that the opportunity existed, but that it was lost, and that the breaching party's conduct was causative of the loss.

335 Much emphasis was laid in this Court on the judge's observation, repeated more than once, that to assess damages on a lost opportunity basis would run the risk of overcompensating the applicants. In his oral reply, applicants' senior counsel went so far as to submit that '[t]he issue of overcompensation is the central issue in his Honour's reasoning'. The applicants' submission was that the process of assessment, where account must be taken of probabilities and possibilities, would ensure that overcompensation would not occur.

336 We accept that, if there is to be an assessment of damages for loss of a valuable opportunity, a risk of overcompensation can and should be addressed in the analysis of probabilities and possibilities. So, if the overriding goal of awarding a plaintiff fair and reasonable compensation is best accommodated by an available claim for loss of opportunity damages, assessment on that basis ought not be rejected by a perceived risk of overcompensation. On the other hand - and here we focus upon claims arising out of damage to land and assume the availability of loss of opportunity damages - awarding damages on a diminution in value basis, this importing consideration of highest and best use of land before and after breaching conduct, may, in a particular case, be a more certain, reliable and thus appropriate way of bringing to account an asserted loss of opportunity than assessment on a lost opportunity basis. It is, we think, well possible to envisage a case in which a judge might be satisfied, on balance of probabilities, that breaching conduct was causative of the loss of an opportunity of some value, but that an assessment of damages based upon a series of cascading hypothetical circumstances would be so uncertain that diminution in value damages, making its assessment of highest and best use before and after the breaching conduct, would be a more appropriate method for assessment of damages.

337 Further, we do not accept that simply to establish that the applicants are land developers establishes a case that a loss of market value would be inadequate to compensate them. Rather if, as the judge held, the land was not unique and other reasonably comparable sites were available to them, the fact that the applicants are land developers, if anything, favours the view that loss of market value would provide fair and reasonable compensation.

338 In the present case, the judge rejected a loss of opportunity basis for assessment of damages because he found, on the balance of probabilities, that at the time of Mobil's tortious conduct, the applicants had not established that they had a valuable opportunity constituted by the prospect of rezoning and residential development of the land. It was submitted for the applicants, in counsel's reply, that the opportunity which existed before the leak was the opportunity 'to seek to have the land rezoned' and to 'seek to develop it by building the high density option'. But that, with respect, could not be so. If the opportunity to seek rezoning and to seek a planning permit for residential development had no prospect of success, where lay the valuable opportunity? To respond, as applicants' counsel did, that the question whether the applicants were likely to secure rezoning or to obtain a planning permit for residential development was entirely within the province of assessment, could not be accepted.

339 The judge in fact found not only that the applicants did not have a valuable opportunity immediately before the leak, but also that the leak was not causative of loss of the supposed opportunity. That was for more than one reason. There were inhibitions to rezoning and development which existed before and after the leak. There was already contamination of the land which affected its development potential. The consequences of the leak would be remediated in time to the point that whatever possibility there was in the distant future of the land being rezoned and a permit for residential development being granted, such possibility was no less than it had been before the leak. Having regard to those findings, the applicants' submission that the judge decided not to assess damages on a loss of opportunity basis because of what his Honour said about the risk of overcompensation cannot be accepted.

340 If the applicants had established that the leak was causative of loss of a valuable opportunity, and assuming that loss of opportunity damages may be awarded in a damage to land case in substitution for, or rather than, damages for diminution in value or for cost of reinstatement, then it would have been wrong, in our opinion, for the judge to have rejected assessment of damages on a lost opportunity basis 'across the board' by reason of a supposed risk of overcompensation. But it would be relevant in such a case, in our opinion, to consider whether compensation by way of diminution in value was likely to provide the more reliable assessment of damages notwithstanding the nominal availability of a loss of opportunity basis for assessment.

341 In the present case, as we perceive it, on an assumption that loss of opportunity damages were available, the judge nonetheless concluded that diminution in value damages would be the more appropriate method of assessment. In that connection, we think, it is understandable that his Honour would have preferred a method of assessment which would ensure, reliably, that there was no overcompensation, by contrast with a method of calculation in which, although it ought not occur, the uncertainties of a hypothetical calculation would leave open the risk of overcompensation.[151]

342 Finally, we should mention a submission for the applicants that the judge's conclusion that diminution in value would have yielded a damages award (had the applicants pursued it) of about $1 million, and his Honour's provisional assessment of damages on a lost opportunity basis at more than $66 million, showed that to award damages on a diminution in value basis would grossly undercompensate them. The submission was flawed for at least two reasons. First, the applicants failed to make out a lost opportunity. Secondly, the figure of $66 million took no account at all of probabilities and possibilities, save as noted at [355] below. We add that the submission that any discount should have been low, in the order of 10 per cent, was in our opinion without merit and indeed fanciful.

343 Grounds 5, 6 and 7 must be rejected. Such criticism as was made of the judge's references to a risk of overcompensation, even if valid, could not advantage the applicants. That consideration was not operative in the judge's conclusion that loss of opportunity was not established as a basis for compensating the applicants.

344 Grounds 10 to 14 are concerned with the judge's assessment of loss of opportunity damages in the sum of '$66,829,900 subject to interest entitlements'.

345 Properly, these grounds do not require consideration for two reasons. First, we have concluded that the judge was correct to find that there was no compensable loss of opportunity. Secondly, even if that conclusion was incorrect, it was common ground that, if a compensable loss of opportunity had been established, then quantification of entitlement would have to be remitted for consideration by a different judge on fresh evidence. As we apprehend it, insofar as the applicants pursued any argument with respect to grounds 10 to 14 it was only because of concern that, if there was to be a remitter, the starting point would be the judge's quantum of damages as stated above. But that would not be so.

346 In the circumstances, it is, for practical purposes, pointless to say anything about grounds 10 to 14. Nonetheless, in the highly artificial context which we have described, we will say the following.

347 Grounds 10 and 11 raise a complaint that, in assessing the cost of the projected development, the judge concluded that provision should be made for unionised labour. This finding was criticised for the applicants on the ground that the judge should have accepted evidence given by Warren Keighran, Hallmarc's construction director, that the group did not use unionised labour on its construction sites. The judge, it was submitted, had erred by preferring the evidence of David Stewart, a witness called by Mobil.

348 In preferring Mr Stewart's evidence, his Honour relied upon what he took to be that witness's greater independence, upon evidence which Mr Stewart gave as to the way in which financing costs are ordinarily estimated with respect to large scale developments, and upon his Honour's perception that Mr Keighran's evidence about use of non-unionised labour was based on a single instance of a Hallmarc development.

349 Had it been necessary to closely examine grounds 10 and 11, we think that there would have been something to the applicants' submissions. Mr Keighran's evidence was apparently broader in import than the judge took to be the case. Further, the evidence of Mr Keighran and Mr Stewart did not necessarily collide. The former was speaking about his experience in the conduct of the Hallmarc Group's business, whilst the latter was simply speaking about a broad issue of financing. Finally, the judge arguably erred when he stated[152] that Mr Keighran's evidence was 'insufficient to establish that on the balance of probabilities the plaintiffs' project will not have to absorb the cost of unionised labour'. In a true loss of opportunity assessment of damages, such an obligation would not have fallen upon the applicants.

350 Ground 12 complains that the judge erred in preferring the evidence of a witness called by Mobil, Leslie Brown, to the evidence of the applicants' witness, Bradley Papworth, as to the likely yield from sales of houses and apartments in the so-called 'higher density development'.

351 Ultimately, in oral argument, the applicants' complaint resolved itself into a submission that the Court should say, if remitting a loss of opportunity claim for assessment, that the evidence of both witnesses should be taken into account by the judge to whom that matter was remitted. But then it was agreed that any assessment would be made on fresh evidence. In those circumstances, the advisory judgment which was proposed became irrelevant. We shall say no more about this ground.

353 The complaint there made is that the judge erred 'by in effect holding that a discount of 100 per cent should be applied to the value of the opportunity lost'; and that the judge erred 'by failing to apply a modest discount to the value of the opportunity lost'.

354 Those complaints misunderstand what the judge did. In a footnote to the paragraph in which he assessed loss of opportunity damages at '$66,829,900 subject to interest entitlements', he said:

I note that ordinarily this amount would be discounted by a percentage amount to take into account the degree of probabilities inherent in the plaintiffs' realisation of the asserted opportunity. However here I have not done so because I consider the opportunity to be of no or negligible value.[153]

355 Thus, his Honour did not discount the supposed value of the opportunity lost by 100 per cent. He simply decided that there was no such opportunity. Had he come to the conclusion that, on balance of probabilities, a loss of opportunity had been demonstrated, then, and only then, would probabilities and possibilities have fallen for consideration. We add that the state of the evidence was such that, had the applicants overcome the causation hurdle, the quantum of damages at which the judge arrived would have required a series of sequential and substantial discounts, notwithstanding that individual items going into his Honour's calculation themselves reflected some of the uncertainties of the evidence.

356 For the above reasons, grounds 10 to 14 do not require further consideration. They should be rejected.

[1] Winky Pop became the registered proprietor of lot A, and OR Australia became the owner of the other three properties.

[2] This photograph was part of the report of Mr R Milner, an expert witness called for Mobil at trial. We have removed a notation made by Mr Milner on the photograph. But the subject of the notation is referred to later in these reasons.

[3] Exhibit CMM-1 to the affidavit of Chloe Marion Moore sworn 25 October 2016.

[4] This being obviously a reference to pre-existing contamination. See [8] above.

[5] Winky Pop Pty Ltd v Mobil Refining Australia Pty Ltd [2015] VSC 348 [733] ('Reasons').

[6] Quite apart from the position at common law, this Court has power under rule 64.13 of ch 1 to admit further evidence by 'otherwise order[ing]'. At common law, as was made clear in Commonwealth Bank of Australia v Quade (1991) 178 CLR 134, 141-2, the appeal court must be persuaded that the failure to produce the evidence at trial was not due to want of reasonable diligence on the part of the unsuccessful party; and that it is reasonably clear that the fresh evidence would have produced the opposite result. In Foody v Horewood [2007] VSCA 307 [59]-[66], Chernov JA explained in some detail the nature and extent of difference in approach where an unsuccessful litigant seeks to rely, on the one hand, on evidence which was available before trial's end, and, on the other hand, upon evidence only coming into existence after trial's end. His Honour's analysis has been cited, approved and applied in later cases, including Apostolidis v Kalenik [2011] VSCA 307 [56]-[63] and Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237 [503].

[9] [2007] VSCA 130 [66] (emphasis in original).

[12] Ibid [584]-[586] (citation omitted).

[19] Hobsons Bay Planning Scheme User Guide cl 3.

[24] SPPF cl 11.02-1; MSS cls 21.02-2, 21.02-3 and 21.02-7.

[35] The ILMS 2008 is listed as a reference document.

[39] See Environment Protection Act 1970 ss 4, 53R-53ZE.

[42] Section 19.

[43] Section 23.

[44] Section 25.

[46] Section 35.

[47] Section 38.

[49] The processing of amendment C33 by the council was the subject of Supreme Court litigation: Winky Pop Pty Ltd v Hobsons Bay City Council [2007] VSC 468 (Kaye J).

[54] CB 6414-5. 2008 ILMS, section 2.3.4 (emphasis added).

[59] CB H2522-3. It appears that Mr McGurn was citing the Hobsons Bay Planning Scheme as at the date he wrote his report, although the particular version of the planning scheme incorporating amendments up to a particular date is not specified in his report.

[63] Cf Fox v Percy [2003] HCA 22; (2008) 214 CLR 118, 129 [25] (Gleeson CJ, Gummow and Kirby JJ).

[64] Reasons [397]-[400] (citations omitted).

[65] [2016] HCA 22 [43] (citations in original).

[66] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 126 [25] (Gleeson CJ, Gummow and Kirby JJ).

[67] Devries v Australian National Railways Commission (1993) 177 CLR 472, 479-81 (Deane and Dawson JJ); Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 128 [29] (Gleeson CJ, Gummow and Kirby JJ); Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357, 381 [76] (Heydon, Crennan and Bell JJ).

[68] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, 128 [28] (Gleeson CJ, Gummow and Kirby JJ).

[69] Ibid 128 [29]. See also Miller & Associates [2010] HCA 31; (2010) 241 CLR 357, 381 [76].

[72] CB A10. Applicants' amended written case [8] (citations omitted).

[73] See [95] above.

[76] CB A11. Applicants' amended written case [8].

(g) a careful analysis of the position of the Minister, the Department and the Council regarding rezoning of the Applicants' land discloses that rezoning of the land was the most appropriate outcome;

(h) notwithstanding this, and despite the rezoning application having been referred to the Minister for Planning for his consideration on 2 February 2011, the Minister made no decision and, at the trial, the Court was informed that there was no timeframe for making a decision in relation to the application;

(i) no decision was made by the Minister throughout the course of the trial and the reasons for the lack of decision were not explained;

(j) a Ministerial Briefing Note (MBN) supports the Applicants' position that the Applicants' land enjoys both significant strategic support and the support of the Council for rezoning to Residential 123 and there is nothing in the MBN which indicates that there is any opposition by the Department or the Council to rezoning the land;

(k) after the closing of the evidence, the Minister advised by letter that he 'had declined to intervene' in the rezoning application;

[77] CB A11. Applicants' amended written case [8] (citation omitted).

[78] Reasons [394] (citation omitted).

[86] State Environment Protection Policy Air Quality Management.

[87] The standard planning scheme provisions to which we have previously referred.

[88] CB H6770. Buffer policy, page 5 clause 6.

[89] CB H6771. Buffer policy, page 6 clause 7.

[90] CB H6778-9. Buffer policy, pages 13-4 clause 9.1.

[91] CB H6779. Buffer policy, page 14 clause 9.2.

[92] CB H5236-7. SKM report, page 4 clause 2.2 (emphasis added).

[97] It is unnecessary for our purposes to elaborate the methodology by which odour units are assessed.

[98] CB H5249. Mr Davies also undertook a separate plotting of 'confirmed' and 'unconfirmed' odour complaints. It is unnecessary to further elaborate this data.

[105] Mobil has a process of investigating complaints and if they are confirmed at their point of origin they are listed as 'confirmed'.

[116] S v Crimes Compensation Tribunal [1998] 1 VR 83, 89-90 (J D Phillips JA).

[118] Ibid [541]-[545] (citations omitted).

[121] Ibid [564]-[576] (citations omitted).

[122] Different estimates were given by different witnesses.

[125] Reasons [455]-[461] (citations omitted).

[126] Reasons [584]-[586] (citations omitted).

[127] As distinct from a claim for loss of anticipated profits: see Reasons [46].

[128] Fish Steam Laundry Pty Ltd v Col Johnson Electrics Pty Ltd (1992) 2 Qd R 585, 591.

[129] Reasons [182]-[184] (citation in original).

[134] Ibid [202]-[205] (citations in original).

[136] [1994] HCA 4; (1994) 179 CLR 332 ('Sellars').

[137] Reasons [290] (citation in original).

[138] Sellars [1994] HCA 4; (1994) 179 CLR 332, 355.

[140] [2008] NSWCA 25. See Reasons [296].

[141] [1994] HCA 4; (1994) 179 CLR 332.

[142] [2016] HCA 18.

[143] He and his firm were sued, but we focus upon the individual defendant.

[144] [2016] HCA 18 [37]-[41] (citations omitted).

[151] For completeness, we note that, if loss of opportunity were the correct measure of damages, then it may well be that the value of the opportunity to develop the land by way of industrial subdivision in the 'after' situation should, in strictness, be deducted from the value of the opportunity to develop it for residential purposes in the 'before' situation. After all, the applicants remain land developers with the capacity to develop the land for industrial use. On one view, there is an inherent contradiction in deducting the market value of the land in the land in the after situation as the applicants propose.