AG Dennis Pty Ltd v Minister for Environment - [2023] VSC 44

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST

S ECI 2020 03470

AG DENNIS PTY LTD & ORS (according to the attached schedule)	Applicants
v
MINISTER FOR ENVIRONMENT	Respondent

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	13, 16–18, 23–27, 30 May, 11 August 2022
DATE OF JUDGMENT:	15 February 2023
CASE MAY BE CITED AS:	AG Dennis Pty Ltd & Ors v Minister for Environment
MEDIUM NEUTRAL CITATION:	[2023] VSC 44

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VALUATION OF LAND – Seven applicants jointly owned 20 titles comprising 2,518.31 hectares of land – Respondent applied planning overlay reserving the land for a public purpose – Applicants made claim for compensation pursuant to ss 98 and 106 of the Planning and Environment Act 1987 – 20 titles offered for sale simultaneously and sold to single purchaser – Whether compensation should be assessed on basis of hypothetical development of land without the planning overlay – Whether compensation should be assessed on basis of direct sales comparison – Whether land should be valued on assumption that absent the reservation for public purpose the 20 titles would have been offered for sale on an individual and staggered basis – Whether quantum of compensation should be discounted to reflect market saturation if 20 titles were offered for sale simultaneously – Compensation assessed on basis of direct sales comparison – Compensation assessed on basis that absent public reservation of land the 20 titles would not have been offered for sale simultaneously – Planning and Environment Act 1987 ss 98, 104, 106 – Land Acquisition and Compensation Act 1986 ss 80, 105.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Messrs J Gobbo KC and P Chiappi	Minter Ellison
For the Respondent	Ms M Foley SC and Mr I Munt	Victorian Government Solicitor’s Office

TABLE OF CONTENTS

Introduction	1
Background	1
*Reservation of the Subject Land*	3
*Sale of the Subject Land*	4
*The applicants’ claims*	5
Legislative framework	11
Issues for determination	13
Are the applicants able to claim compensation under ss 98 and 106 of the Act on an individual sale basis?	13
*Consideration*	16
Issues arising out of the expert evidence which affect valuations of the Subject Land	18
*Engineering evidence*	19
(i). Cost of extending electricity and telecommunications infrastructure to the Subject Land	20
(ii). Costs of road construction under the Tract Plan	21
*Ecological evidence*	22
(i). Whether approvals for native vegetation offsets would be granted	23
(ii). Buffer zones around non-dwelling infrastructure	24
(iii) Co-location of offsets	26
(iv). The costs of obtaining offsets	27
(v). The time that it would take to obtain the offsets	28
*Planning evidence*	28
(i) Which planning controls would have applied to the Subject Land in the absence of PAO7?	29
(ii). The likelihood of the future inclusion of the Subject Land in the UGB	35
(iii). The likelihood of obtaining approvals for the subdivision and development of Subject Land under the proposed Tract Plan	37
*Valuation evidence*

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] VSC 44
Decision Date: 15 February 2023

CaseChat Overview and Summary

AG Dennis Pty Ltd and others sought compensation against the Minister for Environment following the imposition of a planning overlay that reserved their jointly-owned land for a public purpose. The applicants, who collectively owned 20 titles of land totalling 2,518.31 hectares, claimed that the planning overlay effectively deprived them of the opportunity to develop their land. They sought compensation under sections 98 and 106 of the Planning and Environment Act 1987.

The central issue before the court was the appropriate method of valuing the land for the purposes of determining compensation. The applicants argued that the land should be valued based on a hypothetical development scenario, without the planning overlay. They contended that the compensation should be assessed by direct sales comparison and that the land should be valued on the assumption that, absent the reservation for a public purpose, the 20 titles would have been offered for sale on an individual and staggered basis. The applicants also argued that the compensation should be discounted to reflect market saturation if the 20 titles were offered for sale simultaneously. Conversely, the Minister for Environment maintained that the compensation should not be based on hypothetical development, but rather on the actual sale of the land.

The court held that compensation should be assessed on the basis of direct sales comparison and that the land should be valued on the assumption that, absent the public reservation, the 20 titles would not have been offered for sale simultaneously. The court reasoned that the simultaneous sale of the 20 titles would likely have resulted in market saturation, thereby reducing the sale price. The court also noted that the Land Acquisition and Compensation Act 1986 provided that compensation should be assessed in accordance with the market value of the land at the time of the reservation. The court concluded that the applicants were not entitled to compensation based on a hypothetical development scenario, as this would not reflect the actual market conditions. Instead, the compensation should be assessed based on the actual sale of the land, with appropriate adjustments to reflect market saturation.

The court ordered that the compensation payable to the applicants be assessed in accordance with the actual sale of the land, with adjustments to reflect market saturation. The applicants were not entitled to compensation based on a hypothetical development scenario, and the court dismissed their claim for compensation.

Orders