Brimbank City Council v Keilor Homes Pty Ltd

Brimbank City Council brought an appeal against Keilor Homes Pty Ltd to the Court of Appeal of the Supreme Court of Victoria, challenging a decision made by the Victorian Civil and Administrative Tribunal (VCAT). The primary issue in dispute was the assessment of compensation due to Keilor Homes for the reduction of allowable floor space ratio (FSR) in a development permit granted by the Brimbank City Council. Keilor Homes had purchased the land in reliance on the permit's terms, and the permit was subsequently amended, leading to a financial loss for the developer. The lower tribunal had determined that Keilor Homes was entitled to compensation, but Brimbank City Council contested this conclusion, arguing that there was no causal connection between the permit amendment and the loss suffered.

The court examined whether a causal connection existed between the amendment of the permit and the financial loss claimed by Keilor Homes. The court assessed the evidence provided by Keilor Homes to establish whether the loss was a direct consequence of the permit amendment. The court acknowledged that a reduction in allowable FSR would typically result in financial loss for a developer, but it was necessary to determine if the specific loss claimed by Keilor Homes was directly attributable to the permit amendment. The court considered the evidence of the diminution in value of the land due to the reduced FSR and whether this was a foreseeable consequence of the amendment.

The court concluded that a causal connection was established between the permit amendment and the financial loss suffered by Keilor Homes. The court found that the loss was a foreseeable consequence of the permit amendment and that the developer had acted in reliance on the permit's terms when purchasing the land. The court held that the permit amendment directly resulted in the diminution of the land's value, justifying compensation. The court upheld the VCAT's decision that Keilor Homes was entitled to compensation for the loss suffered due to the permit amendment. The appeal was dismissed, and the original decision was affirmed.