East Melbourne Group Inc v Minister for Planning

[2005] VSC 242

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4550 of 2005

EAST MELBOURNE GROUP INC	Plaintiff
- and -
MINISTER FOR PLANNING	First Defendant
-and-
PCH MELBOURNE PTY LTD (ACN 076 397 239)	Second Defendant

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JUDGE:	MORRIS J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9-12 May 2005
DATE OF JUDGMENT:	7 July 2005
CASE MAY BE CITED AS:	East Melbourne Group v Minister for Planning
MEDIUM NEUTRAL CITATION:	[2005] VSC 242

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JUDICIAL REVIEW – Ministerial Powers – Amendment to Melbourne Planning Scheme – Hilton Hotel – Exemption from notification requirement – Unreasonableness – Irrelevant considerations – Improper purpose –Relevancy of departmental documents in explaining basis of Minister’s decision - Whether Minister required to afford procedural fairness to residents – Preparation of amendment by department – Regard to Ministerial directions – Regard to Victoria Planning Provisions – Nature of privative provision in s 39(7) of Planning and Environment Act 1987 – Interpretation of planning approval for use and development– Planning and Environment Act 1987, ss 3, 4, 8, 9, 12, 17, 18, 19, 20, 21, 29, 31, 35, 39, 46M

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Anthony Southall QC Mr David O’Brien	William Murray
For the First Defendant	Ms Michelle Quigley SC Dr Karin Emerton	Victorian Government Solicitor
For the Second Defendant	Mr Ian Pitt SC Mr Adrian J Finanzio	Best Hooper

HIS HONOUR:

1. On 14 December 2004 the Minister for Planning, Mary Delahunty, adopted and approved Amendment C101 to the Melbourne Planning Scheme (“the amendment”), which had the effect of allowing the redevelopment of land in the vicinity of the Hilton on the Park Hotel (“the Hilton Hotel”) in East Melbourne.  The Minister also exempted herself from the requirements of the Planning and Environment Act 1987 (“the Act”) which would have required the amendment to be notified to affected persons, with the result that the amendment was made without the knowledge of nearby residents. The East Melbourne Group Inc (“the East Melbourne Group”), an association that represents residents in the East Melbourne area, has brought an action before this court claiming that the Minister acted unlawfully in exempting herself from the notification requirements and in adopting and approving the amendment. This claim is resisted by the Minister and by the owner of the land directly affected by the amendment, PCH Melbourne Pty Ltd (“PCH”). In order to assess whether the claims of the East Melbourne Group ought be upheld, it will be necessary to consider the provisions of the Act, particularly provisions relating to the amendment of planning schemes. It will also be necessary to carefully examine the factual circumstances leading up to, and concerning, the Minister’s decisions. However, before turning to these questions, it is desirable to briefly outline the main contentions advanced by the plaintiff.

Main contentions of plaintiff

1. The principal contention advanced by the plaintiff was that the Minister’s decision to exempt herself from the exhibition and notification provisions of the Act was invalid because it was based upon the proposition that the development authorised by the amendment, which included a 15 storey building adjacent to the Hilton Hotel containing 89 apartments, would be completed by March 2006 so as to provide accommodation for visitors attending the Commonwealth Games. The plaintiff contended that this was totally unrealistic and was a decision that no rational minister could have made. In addition to contending that the decision was visited with Wednesbury unreasonableness[1], it also claimed the decision was taken after considering irrelevant matters and was motivated by an ulterior purpose.  Taken together, the plaintiff described these errors as constituting a vitiating error in the exercise of the Minister’s power to exempt herself from the notification requirements.

   [1]     Wednesbury unreasonableness is so called after the case of Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 and means a decision which is devoid of plausible justification.

1. The defendants answered these contentions by pointing out that the project sought to be carried out by PCH involved a number of elements.  First it was said that the redevelopment would involve the refurbishment of the existing Hilton Hotel.  Second, it was said that the redevelopment would involve the refurbishment of the front part of the MCG Hotel.  Third, the development would involve the construction of the 15 storey building, containing 89 apartments, at the rear of the existing MCG Hotel.  Fourth, the project would involve the modification and restoration of an existing historic building, known as “Mosspennoch”, in Clarendon Street, East Melbourne.  And fifth, the project would involve the construction of a new apartment building facing Clarendon Street adjacent to the Mosspennoch building.  The defendants maintained that the first two elements of the project, namely the refurbishment of the Hilton Hotel and the refurbishment of the front portion of the MCG Hotel, could reasonably be regarded as being able to be completed in time for the Commonwealth Games.  Thus they maintained that, to the extent that the Minister’s decision was based upon the provision of accommodation for the Commonwealth Games, it was reasonably and validly made having regard to the first, or the first two, elements of the project.

1. However the plaintiff had a rejoinder to this contention.  It said that, if the Minister relied on the benefit that the refurbishment of the Hilton Hotel would produce for the Commonwealth Games, she took into account an irrelevant consideration, namely a private commercial consideration.  This was because this refurbishment did not require planning permission and was not a matter the subject of the approval by the amendment.

1. The plaintiff’s second main contention was that the Minister’s decision to exempt herself from the notification requirements of the Act was invalid because she had failed to consult with nearby residents, and provide them with an opportunity to be heard, before she decided to exempt herself. The facts in relation to this contention are not in dispute: the Minister did not provide nearby residents with an opportunity to be heard, notwithstanding that they would clearly be affected by the decisions to exempt herself from the notification requirements and then adopt and approve the amendment. Rather this issue turns upon whether the Minister was obliged to comply with the rules of procedural fairness before exempting herself from the notification requirements. The plaintiff submitted that the Minister was so obliged; the defendants, relying upon the decision of Brooking J in Grollo Australia Pty Ltd v Minister for Planning[2], submitted to the contrary.

   [2] [1993] 1 VR 627.

1. The plaintiff also relied upon a number of other contentions which, for convenience, I will collectively call subsidiary issues. The first of these was that the Minister had not personally prepared the amendment, with the consequence that it was invalid. Second, it was said that the Minister breached a duty imposed by section 12(2) of the Act by failing to have regard to a direction concerning the exercise of her discretion to prepare a planning scheme amendment. Third, it was said that notice required to be given to certain statutory authorities was not provided. Fourth, it was argued that the Minister’s decision was manifestly unreasonable, or took into account an irrelevant consideration, by being based upon the virtue of preserving the heritage value of the MCG Hotel.

1. The second defendant relied upon section 39(7) of the Act as an additional answer to some of the plaintiff’s contentions. This provides that an amendment that has been approved is not made invalid by a failure to comply with specified provisions of the Act. The plaintiff contended that this provision was confined to procedural defects and did not apply to any of its contentions, which went to matters of substantive ultra vires.

1. By way of counterclaim, the defendants have raised the meaning of the amendment and, in particular, whether the approval introduced by the amendment applies to the existing use of the Hilton Hotel.  The plaintiff joined issue with this counterclaim.  This is relevant, for reasons that will become apparent when I discuss the facts, as it could provide an answer to a contention that since 31 December 2004 the existing Hilton Hotel has been operating unlawfully.

1. I propose to first set out the relevant statutory provisions, then make my primary findings on matters of fact, and finally deal with the contentions of the parties. 

A brief sketch of the relevant statutory provisions

1. The purpose of the Planning and Environment Act is to establish a framework for planning the use, development and protection of land in Victoria in the present and long term interests of all Victorians.[3]  The Act does not directly impose planning controls.  Rather it authorises the making of planning schemes which, in turn, impose controls over the use, development and protection of land.  Planning schemes exist in all municipal districts in Victoria.  The East Melbourne area is within the City of Melbourne and is subject to the Melbourne Planning Scheme.

   [3] Section 1, Planning and Environment Act 1987.

1. From time to time it is necessary to amend planning schemes. The Act empowers the Minister to prepare amendments to any provision of a planning scheme.[4]  It also empowers a municipal council, such as the City of Melbourne, to prepare amendments to a planning scheme in force in its municipal district.[5] Various other authorities may also prepare amendments to planning schemes. Collectively persons who may prepare amendments to planning schemes are described in the Act as “planning authorities”.[6] Section 12 of the Act imposes certain duties upon, and invests certain powers in, planning authorities. For example, a planning authority must implement the objectives of planning in Victoria and may prepare amendments to a planning scheme for which it is a planning authority.[7] Section 12(2) of the Act provides, in part:

“12(2)In preparing a planning scheme or amendment, a planning authority –

(a)must have regard to the Minister’s directions; and

(aa)must have regard to the Victoria Planning Provisions;”

The Victoria Planning Provisions are a set of standard planning provisions, made pursuant to Part 1A of the Act, which are required to form the kernel of each planning scheme in Victoria.

[4] Section 8(1)(b), Planning and Environment Act 1987.

[5] Section 8(3), Planning and Environment Act 1987.

[6] Section 9, Planning and Environment Act 1987.

[7] Section 12(1)(a) and (d), Planning and Environment Act 1987.

1. Part 3 of the Act deals with amendment of planning schemes. Section 17 provides that a planning authority must give copies of any amendment it prepares, together with an explanatory report and any document applied, adopted or incorporated in the amendment, to various persons. For example, if the Minister prepares an amendment, he or she must give a copy to the relevant municipal council. Section 18 then provides that the planning authority that has prepared an amendment, and the person who has been given a copy of it under section 17, must make the amendment, the explanatory report, and any document applied, adopted or incorporated in the amendment available for any person to inspect free of charge until the amendment is approved or lapses. Section 19 of the Act requires the planning authority to give notice of the preparation of an amendment to ministers, public authorities and municipal councils that it believes may be materially affected, to the owners and occupiers of land that it believes may be materially affected and to certain other prescribed persons. This obligation is subject to certain qualifications which need not be further considered in the present context. A planning authority must also publish a notice of any amendment it prepares in a newspaper generally circulating in the area to which the amendment applies. These notices must be given in accordance with regulations made under the Act and must set a date for submissions to the planning authority. The purpose of sections 17, 18 and 19 of the Act is to provide for public notification of an amendment to a planning scheme, targeted at persons who are likely to be affected, so as to enable those persons to consider the amendment and make a submission to the planning authority as to whether the amendment should be adopted.

1. Section 20 of the Act enables a planning authority to apply to the Minister to exempt it from any of the requirements of section 19 or the regulations in respect of an amendment. If the Minister considers that compliance with any of those requirements is not warranted or that the interests of Victoria or any part of Victoria make such an exemption appropriate, the Minister may exempt the planning authority from any of these requirements.[8] Section 20(4) is of particular relevance in the present context. This provides:

“20(4)The Minister may exempt himself or herself from any of the requirements of sections 17, 18 and 19 and the regulations in respect of an amendment which the Minister prepares, if the Minister considers that compliance with any of those requirements is not warranted or that the interests of Victoria or any part of Victoria make such an exemption appropriate.”

The Minister may consult with the responsible authority or any other person before exercising the powers under section 20(4), but, by reason of section 20(5), is not obliged to do so.[9]

[8] Section 20(1) and (2), Planning and Environment Act 1987.

[9] See section 20(5), Planning and Environment Act 1987. It is to be noted that this sub-section was substituted in 1993 for the previous sub-section which did require consultation with the responsible authority unless this was impracticable.

1. Division 2 of Part 3 of the Act deals with submissions about an amendment. Section 21(1) provides that any person may make a submission to the planning authority about an amendment of which notice has been given under section 19. I observe that there is no right for a person to make a submission about an amendment of which no notice has been given under section 19. Hence, if the Minister validly exempts himself or herself from the requirements of section 19 in respect of an amendment which the Minister prepares, with the result that no notice is given under section 19, there is no right for a member of the public to make a submission to the planning authority about that amendment.

1. There is a detailed process set out in Division 2 of Part 3 of the Act concerning the consideration of submissions. This process may involve the referral of a submission to an independent panel appointed under Part 8 of the Act. If this occurs the panel must consider all submissions referred to it and give a reasonable opportunity to be heard to any person who has made a submission referred to it. The planning authority is then obliged to consider the panel’s report before deciding whether or not to adopt the amendment.[10]

   [10] Section 27(1), Planning and Environment Act 1987.

1. Division 3 of Part 3 of the Act deals with the adoption and approval of an amendment. Section 29(1) provides:

“29(1)After complying with Divisions 1 and 2 in respect of an amendment or any part of it, the planning authority may adopt the amendment or that part with or without changes.”

A planning authority other than the Minister must submit an adopted amendment to the Minister.[11] Section 35 then provides that the Minister may approve an amendment, or part of an amendment, prepared by the Minister or submitted to the Minister under section 31, with or without changes and subject to any conditions the Minister wishes to impose. The Minister may also refuse to approve an amendment or part of an amendment.[12] The Minister must cause a notice of the approval of every amendment to be laid before each House of Parliament within ten sitting days after it is approved. This notice must state whether the Minister has exempted the planning authority, or himself or herself, from any of the requirements of sections 17, 18 or 19 or the regulations. An amendment may be revoked wholly or in part by a resolution passed by either House of Parliament within ten sitting days after the notice of approval of the amendment is laid before that House.[13]

[11] Section 31(1), Planning and Environment Act 1987.

[12] Section 35(1), Planning and Environment Act 1987.

[13] Section 38(2), Planning and Environment Act 1987.

1. Section 39 of the Act is headed “Defects in procedure”. Relevant parts of section 39 provide:

“39(1)A person who is substantially or materially affected by a failure of the Minister, a planning authority or a panel to comply with Division 1 or 2 or this Division or Part 8 in relation to an amendment which has not been approved may, not later than one month after becoming aware of the failure refer the matter to the Tribunal for its determination.

(4)The Tribunal may determine a matter referred to it under this section and may do any one or more of the following –

(a)make any declaration that it considers appropriate;

(b)direct that –

(i)     the planning authority must not adopt the amendment or a specified part of the amendment; or

(ii)    the Minister must not approve the amendment or a specified part of the amendment –

unless the Minister, planning authority or a panel takes action specified by the Tribunal.

(5)In exercising its jurisdiction under this section the Tribunal cannot vary a decision made in relation to a matter referred to it or set aside that decision and make a decision in substitution for the decision so set aside.

(7)An amendment which has been approved is not made invalid by any failure to comply with Division 1 or 2 or this Division or Part 8.

(8)Except for an application under this section, a person cannot bring an action in respect of a failure to comply with Division 1 or 2 or this Division or Part 8 in relation to an amendment which has not been approved.”

The reference in section 39(2) to “the Tribunal” is a reference to the Victorian Civil and Administrative Tribunal established by the Victorian Civil and Administrative Tribunal Act 1998.[14]

[14] Section 3(1), Planning and Environment Act 1987.

1. Before concluding this brief sketch, it is desirable to briefly refer to section 4 of the Act, which sets out certain objectives. One of the objectives of planning in Victoria is:

“to provide for the fair, orderly, economic and sustainable use, and development of land.”[15]

One of the objectives of the planning framework established by the Act is:

“to establish a clear procedure for amending planning schemes, with appropriate public participation in decision making.”[16]

[15] Section 4(1)(a), Planning and Environment Act 1987.

[16] Section 4(2)(h), Planning and Environment Act 1987.

The factual context

1. Although the decisions subject to challenge were made on 14 December 2004, it is necessary to go back in time in order to provide appropriate context.

1. On 4 August 1971 the City of Melbourne issued a permit under the Melbourne Metropolitan Planning Scheme which allowed a 21 storey hotel, subsequently known as “the Hilton Hotel”, to be erected on land at 186-226 Wellington Parade, East Melbourne.  A condition of the permit was that 343 car spaces be provided within the Hilton Hotel and that a further 87 car spaces be provided at the rear of the MCG Hotel.  (The Hilton Hotel is on the corner of Wellington Parade and Clarendon Street; the MCG Hotel is immediately to the east of the Hilton Hotel.)  Hence the total number of car parking spaces which were required to be provided by the 1971 permit was 430 spaces.

1. The Hilton Hotel was constructed shortly after the issue of the permit, but there was an adjustment to the number of car parking spaces actually provided.  Some of these adjustments may have been approved by the City of Melbourne, but other adjustments do not seem to have been approved.  Things seem to have been left for a number of years, but by early 1980, in response to concerns expressed by East Melbourne residents, council officers inspected the site to ascertain whether the conditions of the permit had been complied with.  These site inspections indicated that no provision had been made for car parking on the MCG Hotel land and that only 239 car spaces had been provided in the Hilton Hotel basements, instead of the 339 spaces required.  (The council had approved a reduction in the number of basement car spaces from 343 spaces to 339 spaces.)  As a consequence the council sent a notice to the then owner of the Hilton Hotel ascertaining what proposals would be put forward to remedy the car parking shortfall of 187 spaces.  This generated a request to review the condition of the 1971 permit that required the provision of 430 car spaces.  The council maintained it could not revise this condition and that a fresh application for a planning permit would be required to legalise the existing hotel building.

1. Hence in 1981 the then owner of the land applied to the council for a permit to legalise and legitimise the hotel development.  This application was based upon 273 car parking spaces being provided in the basement, which was the number said to be able to be accommodated if an attendant parking system was instituted.  The council decided to grant a permit on 24 February 1981.  This decision was then appealed by nearby residents to the Town Planning Appeals Tribunal.  After hearing the appeal the tribunal directed that a permit should issue, subject to 13 conditions.  This permit, which is Permit CM3276 pursuant to planning controls then in force, is dated 21 January 1982.  The permit is expressed to allow:

“For the land situate at and described as 186-226 Wellington Parade, East Melbourne, for the purpose of making alterations and additions to the existing 21 storey building with two basements plus a plant room floor on top of the building and using basement number two for car parking and plant rooms, basement number one for car parking, plant rooms, a workshop, stores and a restaurant, the ground floor for an hotel, shops, a restaurant, a cafe and ancillary facilities, the second floor for a ballroom, meeting rooms, offices and stores, the first floor for an hotel, plant rooms, offices and a swimming pool and the remainder of the building for an hotel, in accordance with the attached endorsed plans (sheet nos. 1 - 13).”

The 1982 permit was subject to 13 conditions.  One of these required the provision for parking of 273 spaces.  Another condition provided:

“6This permit so far as it relates to the use of the subject premises shall be for a period of three years only as provided for under the provisions of Section 18(7) of the Act but may as provided in that section on an application made before the expiry of the permit be extended for a further specified period.”

It is not clear why condition 6 was inserted in the permit, but one may speculate that it was intended to provide an incentive, or perhaps a disincentive, in relation to complying with the car parking requirements.

1. In 1984 the then owners of the Hilton Hotel applied to extend the permit until 31 December 2004.  This application was considered by the City of Melbourne and it accepted the recommendation of its statutory planner that the permit be so extended.

1. By the year 2001 PCH had become the owner of the Hilton Hotel and the other land the subject of the amendment (which might be described as the MCG Hotel and Mosspennoch).  PCH made an application to the City of Melbourne for a permit under the Melbourne Planning Scheme to enable the MCG Hotel land to be redeveloped.  The council refused to grant a permit for the proposal and PCH sought to review this decision before the Victorian Civil and Administrative Tribunal (“VCAT” or “the tribunal”).  On 3 May 2002 the tribunal handed down its decision, affirming the council’s refusal to grant a permit.[17]  The proposal involved the retention and refurbishment of the MCG Hotel to a depth of approximately 12 metres and the construction of a new building behind the MCG Hotel.  This new building was to comprise 13 levels of apartments, over two to three levels of car parking and additional basement car parking.  The building was to accommodate 60 residential apartments, comprising a mix of one, two and three bedrooms.  The proposed building was to be almost 49 metres high.  The essence of the tribunal’s decision to uphold the council’s refusal to grant a permit can be gleaned from the following paragraph contained in the tribunal’s conclusion:

   [17]PCH Melbourne Pty Ltd v Melbourne City Council [2002] VCAT 301; [2002] 11 VPR 165.

“127Based on the above, we have found that:

•the retained portion of the MCG Hotel is acceptable in terms of the heritage place.

•the form of the proposed building is too high and overwhelming relative to the retained portion of the MCG Hotel given its height and the extent to which it cantilevers over the lower hipped roof section. […]

•the proposed works will overwhelm the setting of some of the ‘A’ graded heritage buildings to the north-west when viewed from the public realm (particularly George Street) and from within those sites (an impact that diminishes as one moves westward).

•the proposed works do not comply with the design outcomes of [the applicable Design and Development Overlay] in so far as the tower will contribute to and extend an appearance of a wall of buildings that is specifically discouraged in the Overlay.

•impacts on adjacent residents in terms of visual bulk are significant, albeit the interface is with a Business 1 Zone.

•car parking, traffic and overlooking impacts are acceptable, or could be made to be so.”

1. The effect of the tribunal’s decision was to require PCH to reconsider its development plans.  Because the tribunal’s decision did not amount to an outright rejection of any development, further plans were prepared to address some of the concerns that had been raised by the tribunal.  These new plans continued to show a substantial new apartment building behind the MCG Hotel, but with a form that stepped down from east to west.  In March 2004 the Victorian Development Director of PCH, Dan Kolomanski, wrote to the President of the East Melbourne Group, Margaret Wood, enclosing a copy of “the latest draft of plans for the proposed development above the Hilton podium and behind the MCG Hotel on Wellington Parade”.  The purpose of the circulation of these draft plans was to obtain comment, no doubt with the intention of avoiding further dispute.

1. At about this time PCH was not just concerned with the redevelopment of its land behind the Hilton Hotel. It also was cognisant of the effect of condition 6 of the 1982 permit and the council’s decision, made in 1984, to permit the use of the Hilton Hotel until 31 December 2004. In order to address this PCH made application to VCAT pursuant to section 87 of the Act to amend the 1982 permit by deleting condition 6. This matter was considered by Senior Member Horsfall on 4 May 2004 and he allowed the amendment to the permit without conducting a hearing. Senior Member Horsfall found that there had been a material change of circumstances since the grant of the permit by reason of:

“•The repeal of Section 18(7) of the Town and Country Planning Act 1961 making provision for extension of a permit authorising the use of land for a particular purpose or for a specified purpose and there being no like provision in the Planning and Environment Act 1987, and

“•The use of the property allowed by the permit having continued for many years without objection by the Responsible Authority.”

Mr Horsfall also commented:

“The Tribunal considers that there is no material before it which indicates that there would be any persons having a material interest in the outcome of the request other than the persons given notice of the request.”

The effect of this tribunal decision was to allow the continued use of the Hilton Hotel pursuant to the 1982 permit.  The East Melbourne Group has subsequently challenged the order made by Senior Member Horsfall in proceedings taken before VCAT.  These proceedings have not yet been heard as the parties agreed it was desirable to first determine the present proceeding. 

1. On 6 August 2004 the City of Melbourne gave notice that PCH had applied for a permit pursuant to the Melbourne Planning Scheme to demolish the rear of the MCG Hotel and construct a 15 storey building comprising 89 dwellings.  The application also involved the construction of basement levels, a reduction in the standard car parking requirement, alterations to access from the Hilton Hotel to Wellington Parade and the erection of two major promotion signs.  Twenty-five objections were lodged against the application, citing concerns about the impact of the proposed building on heritage objectives, neighbourhood character and amenity.  An officer of the City of Melbourne prepared a report analysing the proposal.  The officer’s conclusion was that the proposal was not consistent with relevant objectives and requirements of the planning scheme, particularly relevant heritage policies and policies directed at the design and development of the Wellington Parade area. 

1. At about this time the City of Melbourne was considering introduction of an amendment to its planning scheme – being Amendment C93 – which would introduce mandatory height controls over various parts of its municipal district, including the East Melbourne area.  If adopted and approved, these height controls would have imposed a 24 metre height limit on the MCG Hotel land and would have thwarted the development aspirations embodied in PCH’s then current application for a planning permit.  Indeed, one of the reasons advanced by the officer of the City of Melbourne as to why the planning permit should not be granted was that the development was contrary to the requirements of proposed Amendment C93.

1. This provides the background for the first step in a chain of events which led to the Minister’s decisions under challenge in this proceeding.  By letter dated 13 October 2004 the Victorian Development Director of PCH, Mr Kolomanski, wrote to the Minister for Planning seeking her intervention so as to facilitate the redevelopment of the MCG Hotel site.  The letter, which was marked “Commercial – in-confidence” [sic] highlighted the important investments that PCH and its parent company, Thakral Holdings Limited (“Thakral”) had made in the Victorian economy.  Mr Kolomanski informed the Minister that PCH was seeking to introduce the option of longer stay suites to the Hilton Hotel.  He said that, in response to community demand, PCH was seeking to provide residential accommodation to persons requiring basic living services which would be economically and efficiently provided by the hotel infrastructure.  The total additional accommodation proposed was said to be 89 units.  Mr Kolomanski wrote:

“In order to maintain the 5 star standard of the Hilton Hotel, we will be required to expend at least $15 million on a major refurbishment, together with a $40 million expansion of residential accommodation and refurbishment of the adjacent MCG Hotel.  We also propose to invest a further $20 million on the adjacent historic Mosspennoch property to restore it to its former glory and residential use, and to complete the development of the car park area adjacent to the Hilton on the Park.”

In his letter Mr Kolomanski noted that the net operating profit of the hotel had declined from $11 million in 2001 to $7 million in 2004.  His letter then stated:

“With many Commonwealth Games events to be held at the adjacent Melbourne Cricket Ground, Flinders Park tennis complex and Olympic Park complex, it is vital that we commence works without delay if we are to have the Hilton on the Park fully refurbished and operational for the Melbourne Commonwealth Games in 2006.”

1. Mr Kolomanski then made various other statements to the effect that PCH was frustrated with the planning system and with the opposition it had received to its development proposals from the East Melbourne Group.  Mr Kolomanski concluded his letter as follows:

“We are not a developer that seeks to push the limits.  We are a conservative and ethical company that seeks both excellence and to be a good neighbour and valued member of the local community.  We need to invest in our assets to keep them current and profitable in a difficult Melbourne Hotel market.

Without the assistance of the State Government in maintaining and enhancing the Hilton-on-the Park Hotel and the MCG Hotel, we will have no choice but to review our investment/disinvestment options to stem the continued capital losses.  One very real option is the cessation of the Hilton on the Park in its current form and the redevelopment and orderly disposal of these assets.

Hilton Hotels are a world renowned brand and the withdrawal of such a powerful and respected brand from the Melbourne market would be a regretful but necessary commercial decision by Thakral, a major blow to the 328 hotel employees and approximately 1,400 employees in support and service industries and to the standing of Victoria in the international business community.

We believe that our East Melbourne land holdings, including iconic buildings such as:

•The MCG Hotel (formerly Parade Hotel @ 1853) where the rules of Australian Rules Football are widely believed to have been originally penned;

•Mosspennoch House originally built in 1881; and

•The Hilton on the Park Hotel

represent a site of State significance warranting the intervention of the State Government to ensure that these assets are preserved and enhanced, particularly with many 2006 Commonwealth Games events to be held at the adjacent Melbourne Cricket Ground, Flinders Park tennis complex and Olympic Park athletic complex.”

1. It would not be unlikely that a similar letter was sent to other ministers, such as the Premier and the Minister for State and Regional Development.

1. There is no evidence as to whether the Minister for Planning read the PCH letter of 13 October 2004.  However the Minister’s department was clearly aware of the letter.  Mr John Phillips, a senior manager with the department, gave evidence that on or about 19 October 2004 he was asked to advise the Minister in relation to the letter.  Further, on 18 November 2004 Mr Phillips attended a meeting with senior officers of the Department of Industry, Innovation and Regional Development at which PCH’s request was discussed.  Mr Phillips gave evidence that at this meeting he was told that Thakral had stated that the refurbishment of the Hilton Hotel could be completed before the Commonwealth Games were staged.  Then, on 26 November 2004, relevant officers prepared a ministerial briefing note concerning Amendment C93 in which they recommended that a letter be forwarded to the City of Melbourne about that amendment.  In this briefing note the department officers noted the letter from PCH and indicated that it was consulting with “other parts of government” on the strategic significance of the PCH proposal.

1. Mr Phillips gave evidence that on 26 November 2004 he attended a meeting with Mr Kolomanski and Mr Kevin Love, a deputy secretary of the Department of Sustainability and Environment.  At this meeting Mr Kolomanski explained the proposed development and made a case for government intervention to allow the projects to proceed without further delay.  Mr Phillips’ evidence was that, at this meeting, Mr Kolomanski said that government intervention was required if the refurbishment of the Hilton Hotel was to be completed before the staging of the Commonwealth Games. 

1. In the meantime, PCH was fighting yet another battle with the East Melbourne Group on yet another battleground.  The East Melbourne Group had nominated the MCG Hotel as a building which ought be included in the Victorian Heritage Register pursuant to the Heritage Act 1995. The Registrations Committee of the Heritage Council held a hearing on 22 October 2004 and made its decision in November 2004. In substance, the Registrations Committee decided that the MCG Hotel did not warrant inclusion in the Victorian Heritage Register, although it also decided to refer the matter to the City of Melbourne for consideration of an amendment to the planning scheme concerning the heritage qualities of the building. PCH was represented at the hearing before the Registrations Committee by Mr Ian Pitt SC, who, in turn, relied upon evidence of Mr Peter Lovell, a heritage expert. The Registrations Committee prepared an explanatory note of its decision. This note recorded the following in relation to the submissions by Thakral:

“Mr Pitt SC noted that at an earlier VCAT hearing on the MCG Hotel, Graham Butler [another heritage expert], had noted that the Hotel appeared to date from 1863.  He stated that on the basis of a Notice of Intention to Build dated May 1859, the meeting in 1859 to write the rules of football could not have been held in the existing building.  He said there is no identification of any fabric which demonstrates any association.  He submitted that it was mere speculation that the event took place in the existing building.

Mr Lovell went on to elaborate on this theme noting that the Rules of Football were written in May 1859, while the Hotel was being rebuilt in the period 1859 to 1863 and the surviving fabric is not associated with this event.”

The explanatory note later records:

“Mr Pitt SC concluded that the nomination is not warranted as the hotel does not demonstrate the associations on which the East Melbourne Group relies.”

1. Essentially the Heritage Council Registrations Committee accepted Mr Lovell’s evidence that the hotel was being rebuilt in the period 1859 to 1863.  It was not convinced that the hotel was built to a sufficient state of completion between 1858 and 1863 to allow the rules of football to be written on the existing premises; neither was it convinced that the extant fabric has any definable links to the purported writing of those rules.  It added:

“Even if it were so convinced, the Committee is of the view that the building fabric that remains can in no way be directly associated with or demonstrate to the public the cultural event of the writing of the rules of Australian Football.”

1. On 19 November 2004 PCH lodged an application to VCAT to review the failure of the City of Melbourne to make a decision within the prescribed time to grant a permit for the MCG Hotel redevelopment.  Subsequently this application was listed for hearing by VCAT in February 2005.  However, as a result of the events the subject of this proceeding, that hearing did not take place.

1. On 30 November 2004 Mr Phillips received a telephone call from Ms Melinda Catlow a town planner employed by Contour Consultants Australia.  Ms Catlow told Mr Phillips that she had been retained by PCH to support its request for an amendment to the Melbourne Planning Scheme by preparing draft documents for consideration by the department.  On 7 December 2004 Mr Phillips met with Ms Catlow and Mr Kolomanski to discuss the preparation of documents; and, later that day, Mr Phillips sent an email to Ms Catlow attaching precedents which might assist Ms Catlow in preparing draft documents for the department’s consideration.

1. On 8 December 2004 PCH provided Mr Phillips with copies of draft project schedules for the redevelopment of the MCG Hotel site, the refurbishment of the Hilton Hotel, the restoration of Mosspennoch House and the erection of an apartment building adjacent to Mosspennoch.  These project schedules showed the apartment building on the MCG Hotel site, as well as the restoration of Mosspennoch House and the construction of the apartment building adjacent to Mosspennoch House, as being completed in the last quarter of 2006.  However the draft project schedule for the refurbishment of the Hilton Hotel showed this to be completed in March 2006.  On 10 December 2004 a revised project schedule for the Hilton Hotel refurbishment was forwarded to Mr Phillips.  This showed that the refurbishment would take 145 days in total and would be completed by 14 December 2005.

1. On 9 December 2004 Mr Phillips again met with Mr Kolomanski and Mr Love to discuss the proposed amendment.  At this meeting Mr Love asked Mr Kolomanski what undertakings PCH could give the government in relation to proceeding with the refurbishment and redevelopment of the Hilton Hotel if the Minister was prepared to amend the scheme without notification.  There would appear to have been previous discussions about the question of undertakings as various draft letters had been prepared by PCH outlining certain undertakings.  The final version appears to be a letter dated 10 December 2004 from PCH to Mr Love.  This letter states:

“Thakral wishes to support the 2006 Commonwealth Games by refurbishing the 5 star Hilton-on-the Park Hotel and increase the capacity with longer stay suites and apartments to be constructed over the Ballroom.  The new apartment style facilities will be linked directly into the main hotel at levels 2 and 3.  The majority of apartments will be sold subject to management agreements.  The proceeds of the sales will be used to fund the refurbishment of the Hilton-on-the Park and the MCG Hotel.

The MCG Hotel will be refurbished and the façade faithfully restored as a priority project.  It is expected to be open for Christmas 2005.  The MCG Hotel will be themed to continue its long association with Australian Rules Football, where it is widely believed that the first rules of the game were drafted in the May 1859.”

The letter continued:

“Thakral Holdings Limited, subject to the final approval of the Board, is prepared to give the following undertakings to the Government of Victoria.  The undertakings are subject to Thakral being granted all necessary and timely development/construction approvals consistent with Planning Permit Application TP04/0638 to the Melbourne City Council (in full) prior to 1 January 2005:-

1To refurbish and maintain operation of the Hilton on the Park, using its best endeavours to complete the refurbishment of the hotel prior to the 2006 Commonwealth Games. . [sic]  The Management Agreement currently in place with Hilton Hotels of Australia Pty. Ltd. and Hilton International is valid up to 1 April 2034, subject to usual commercial conditions.  The on-going operation of the Hotel would be subject to maintenance of commercial returns acceptable to Thakral;

2To refurbish and restore the MCG Hotel in accordance with the aforementioned Planning Permit Application TP04/0638 and to facilitate the on-going operation of the MCG Hotel subject to maintenance of commercial returns acceptable to Thakral;

3To restore Mosspennoch House, in accordance with plans and specifications approved by Heritage Victoria by way of permit, for conversion to 6 residential apartments which would be offered for sale to the public.”

1. On 9 December 2004 Ms Catlow sent an email to Mr Phillips attaching various drafts of documents she had prepared in relation to the amendment. On the following day Ms Catlow sent a further email to Mr Phillips, attaching drafts which had been revised by Mr Kolomanski. These draft documents consisted of a draft of the Minister’s reasons for using the power of intervention contained in section 20(4) of the Act, an explanatory report for the amendment, and a draft of a document to be incorporated into the planning scheme.

1. It would seem to be about this time that consideration was first given to including in any approval the restoration of Mosspennoch and the construction of an apartment building adjacent to Mosspennoch.  Thus on 10 December 2004 Mr Kolomanski sent an email to Mr Phillips enclosing a copy of a draft elevation of the new building, then described as “Mosspennoch Stage 2”.  Mr Kolomanski said:

“This is just an illustration and subject to a lot more design and consultation.”

1. On 11 and 12 December 2004 (a Saturday and a Sunday) Mr Phillips prepared a draft of a planning scheme amendment report for the Minister and finalised associated amendment documents.  On 13 December 2004 these documents were sent to Ms Catlow for review.  Also on that date Mr Kolomanski responded to a request and paid a fee of $1,860 in relation to the planning scheme amendment.  On 14 December 2004 Ms Catlow obtained the advice of Mr Ian Pitt SC as to the content of the amendment.  Mr Pitt received his instructions at 2:53pm on that day and responded by 3:30pm, with a succinct advice in seven paragraphs.  In turn Ms Catlow forwarded this on to the department.  It was all systems go.

1. Also on 11 and 12 December 2004 Mr Phillips prepared a briefing to the Minister about the proposed amendment.  Before preparing the briefing Mr Phillips was informed by an officer of the Department of Innovation, Industry and Regional Development that the Minister for State and Regional Development, Mr John Brumby, would be writing to the Minister for Planning requesting that the Minister facilitate the redevelopment.  In anticipation of this letter being received, reference was made to it in the ministerial briefing.  The letter was received on 14 December 2004.

1. On 14 December 2004 Mr Phillips finalised the various documents and forwarded them to the Minister for Planning.  These documents included a ministerial briefing note, a minute of a decision to prepare an amendment, a minute of the preparation of the amendment, a minute of the adoption and approval of the amendment, a copy of the amendment, a copy of the explanatory report to the amendment, a copy of the document to be incorporated into the planning scheme by the amendment (entitled “Hilton on the Park Hotel Complex Redevelopment, December 2004”), plans of the redevelopment prepared by Peddle Thorpe Architects, plans of the Mosspennoch apartment building prepared by SJB Architects, plans of the Mosspennoch refurbishment prepared by Allom Lovell & Associates, plans of the MCG Hotel refurbishment prepared by Allom Lovell & Associates, and a copy of reasons of the Minister for the decision to use her power of intervention.  Mr Phillips also prepared a planning scheme amendment report, although it is not clear whether this was provided to the Minister.

1. In the ministerial briefing note Mr Phillips recommended that the Minister agree to prepare, adopt and approve the amendment under section 20(4) of the Act, without notice, by signing the amendment documents.[18]  He also recommended that the Minister sign the explanation of the Minister’s reasons for intervention.

   [18]Strictly speaking, only the exemption from notification is under section 20(4) of the Act; however it is common practice to describe an amendment to which such an exemption applies as a “Ministerial” amendment under section 20(4) of the Act.

1. Mr Phillips gave evidence that, in preparing the ministerial briefing, he was aware that an important element of the proposed redevelopment was the internal refurbishment of the Hilton Hotel.  However, as the refurbishment did not need planning permission, it was not specified in the amendment.

1. The Minister adopted the recommendation made by Mr Phillips on 14 December 2004 and approved the various documents placed before her by Mr Phillips. The approval of the amendment was published in the Government Gazette on 16 December 2004, at which time the amendment came into force.  On 16 December 2004 the Minister made a media release, announcing her decision to approve the amendment.  I will make findings about and discuss these documents in the context of dealing with the plaintiff’s principal contention.

Unreasonableness or other vitiating error

1. The plaintiff’s claim that the Minister’s decision was unreasonable or was otherwise unlawful largely turns on the facts, not the law.  Hence this is not the occasion to delve into the intricacies of the law concerning Wednesbury unreasonableness.  It is sufficient that I adopt the words of Lord Diplock in Bromley London Borough Council v Greater London Council[19] that this ground of invalidity is reserved for “decisions that, looked at objectively, are so devoid of any plausible justification that no reasonable body of persons could have reached them.”[20]

   [19][1983] 1 AC 768, at 821.

   [20]This approach has been adopted in cases such as Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273, at 290 and Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd (1996) 91 LGERA 31 at 76. For recent essays on the question of judicial review for unreasonableness see also Rosana Panetta, “Wednesbury Unreasonableness:  Judicial or Merits Review?” (2002) 9 Australian Journal of Administrative Law 191 and Naomi Sidebotham, “Judicial Review:  Is There Still a Role for Unreasonableness?” (2001) 8 Murdoch University Electronic Journal of Law No 1.

1. It seems plain to me that if the Minister’s decisions in relation to the amendment were based upon the proposition that an abbreviated process was justified so that additional accommodation would be available for the Commonwealth Games then those decisions are so devoid of plausible justification that no reasonable minister could have taken that course.  Put simply, no rational minister could have believed that a building such as that proposed at the rear of the MCG Hotel was likely to have been completed in time for the Commonwealth Games.  Indeed, neither of the defendants argued to the contrary.  Rather the defendants’ case was that the Commonwealth Games only formed a basis of the Minister’s decisions in relation to the refurbishment of the existing Hilton Hotel (and possibly the restoration of the MCG Hotel).  The defendants contend that it was entirely plausible that the Minister would approve the amendment, without notice, by reference to the Commonwealth Games because PCH had given an undertaking to use its best endeavours to undertake the refurbishment of the Hilton Hotel in time for the Commonwealth Games.  Although the plaintiff said that such an explanation would involve the Minister acting improperly, or taking into account irrelevant considerations, I cannot conclude that such an explanation would be devoid of plausible justification.  I suppose it could be said that if the existing Hilton Hotel is refurbished this will be of some benefit to the successful staging of the Commonwealth Games.  Although this benefit might be said to be modest, the court’s role is limited to evaluating the lawfulness of the decisions, not whether they are persuasive.  But what is the truth of the matter?

1. In order to ascertain the basis of the Minister’s decisions I propose to first consider the public documents explaining the exercise of the Minister’s powers.  These documents ought to identify the basis of the Minister’s decision, because they have been directly authorised by the Minister and are intended to be the official justification of the decision.  I will then consider other documents – particularly departmental documents – which may shed light on the Minister’s decision.

1. The public documents explaining the exercise of the Minister’s powers:  The first of these documents is the amendment itself, but this does not shed any light upon the making of the decision as it merely records that a document added to the schedule to clause 52.03 of the scheme is the incorporated document “Hilton on the Park Hotel Complex Redevelopment, December 2004”.  The effect of this addition was to authorise the use and development of the affected land in the terms set out in the incorporated document.  The second public document was the explanatory report in relation to the amendment.  The third public document was the incorporated document “Hilton on the Park Hotel Complex Redevelopment, December 2004”.  This document referred, in turn, to various plans.  The fourth public document was the Minister’s reasons for using her power of intervention.  The fifth public document was the Minister’s media release.

1. The explanatory report to the amendment contains a heading “Why the amendment is required”.  This question is answered:

“The amendment is required to facilitate the refurbishment and redevelopment of the Hilton on the Park Hotel and surrounding properties and restoration of the historic MCG Hotel and Mosspennoch House, to enable their commencement and or substantial completion in time for the Commonwealth Games in 2006.”

This paragraph was based upon a draft prepared by Ms Catlow (with Mr Kolomanski’s assistance) on 10 December 2004, but her draft had referred to the refurbishment, redevelopment and restoration of various buildings and properties “to enable their completion in time for the Commonwealth Games in 2006”.  I infer that Mr Phillips made the change by adding in the words “commencement and or substantial”.  Although it does not make much sense to facilitate the commencement of a development “in time for the Commonwealth Games”, this passage, standing alone, does not prove the plaintiff’s contention that the Minister’s reasons for approving the amendment were so that the redeveloped properties would be available for the Commonwealth Games.

1. The incorporated document gives two purposes for the site specific control.  The first of these is presently relevant, namely:

“To facilitate the redevelopment and expansion of the Hilton on the Park Hotel Complex as tourist accommodation in a timely manner in order to be available for the Commonwealth Games.”

The document describes the address of the land as 178-226 Wellington Parade and 36 Clarendon Street, East Melbourne.  The document states that it allows:

“The demolition, use and development of the land for the purpose of a Residential hotel, dwellings, shop, Food and drink premises, Car park and ancillary uses generally in accordance with the following ‘Incorporated Plans’:”

The document then refers to plans prepared by Peddle Thorpe Architects, a town planning report prepared by Peddle Thorpe Architects, plans prepared by SJB Architects and two sets of plans prepared by Allom Lovell & Associates.  The incorporated document then refers to a number of specific provisions of the Melbourne Planning Scheme that do not apply.  It then sets forth a number of conditions that apply to the demolition, use and development that is permitted.  One of those conditions, which relates to time limits, is expressed as follows:

“30This approval will expire if one of the following circumstances applies:

•The refurbishment of the Hilton on the Park Hotel is not commenced by 1 October 2005

•The restoration of the MCG Hotel is not commenced by 1 October 2005

•The development is not completed by 31 December 2008.

The responsible authority may extend the periods referred to if a request is made in writing before these controls expire or within three months afterwards.”

1. It seems clear enough, as Mr Phillips explained in his evidence, that the refurbishment of the Hilton Hotel did not require planning permission. Whether this was by reason of the definition of “development” in section 3 of the Act or by reason of clause 62.02 of the Melbourne Planning Scheme need not be pursued. Hence the inclusion of the first sub-paragraph in condition 30 is unusual as the approval is linked to development being commenced which is not part of the approved development. Whether development permission can be expressed to be subject to such a condition can be put to one side for the moment. For present purposes it is sufficient to observe that condition 30 makes it clear that, with the possible exception of the refurbishment of the Hilton Hotel and the restoration of the MCG Hotel, the approved development need not be completed until 31 December 2008. I suppose it could be said that there is no inconsistency between approving a development which need not be completed until December 2008 and stating that a purpose of facilitating the development and expansion of the complex was to make it available for the Commonwealth Games (in March 2006). However there is a clear inconsistency between the statement of purpose and the true position, because it would not have been reasonably practicable to erect the apartment buildings, particularly the building to be linked to the Hilton Hotel, before the Commonwealth Games. Incidentally, it would seem that the origin of the statement of purpose was Ms Catlow’s draft of 10 December 2004, although two of her purposes had been collapsed into one.

1. I now turn to the Minister’s reasons for intervening and utilising the power given to her under section 20(4) of the Act. Before doing so it is desirable that I say something about the origin and significance of these reasons. Following the election of the Bracks Government in 1999 the Governor of Victoria articulated the new government’s vision to the Houses of Parliament on 3 November 1999. The Governor noted that it was Mr Bracks’ policy to implement reforms to revitalise Victoria’s democratic institutions, to increase community participation in decision making and to strengthen the power of key independent watch dogs. One of the commitments made by the government, as articulated in the Governor’s speech, was to commence the preparation of guidelines that clearly define the scope and limits of ministerial intervention in planning matters. These guidelines were prepared in December 1999 and the document was called a “practice note”. The practice note was said to apply, inter alia, to the power to amend a planning scheme with exemption from notice requirements under section 20(4) of the Act. It provided that in using the powers of intervention the Minister would make publicly available written reasons for each decision, including an explanation of how the circumstances of the matter responded to the practice note and the legislative criteria for the action. The practice note set out various circumstances in which intervention may be considered. These included where the matter was of genuine State or regional significance, where the matter would give effect to an outcome where the issues had been reasonably considered, where the matter involved the introduction of an interim provision, and where there was a need for urgency and the public interest would be served by immediate action. The practice note concluded:

“As an overriding consideration, ministerial powers will only be exercised having regard to and within the confines of, the legislative provision in question.”

Whilst the practice note on ministerial powers of intervention is of high political importance, having its roots in the birth of the current government, it is not a statutory document and does not impose legislative requirements.  Nonetheless, in the context of a case such as the present, reasons given pursuant to the practice note ought attract the description of “official reasons”.

1. The Minister’s reasons commence by stating:

“The Minister for State and Regional Development in a letter dated 14 December 2004 has requested the Minister for Planning to amend the Melbourne Planning Scheme under the powers pursuant to section 20(4) of the Planning and Environment Act 1987 (the Act), to facilitate the redevelopment and refurbishment of the Hilton on the Park Hotel site, East Melbourne.”

This paragraph, which is based upon Ms Catlow’s version, disguises the identity of the person who really initiated the request, that is PCH.  However I am not persuaded that anything turns on this.  In a section headed “Background” the Minister sets out details of the planning application made to the City of Melbourne, which was then subject to proceedings in VCAT, and then refers to the Mosspennoch developments.  The Minister’s reasons then continue:

“7The combined development plans will enable significant quality accommodation to be provided in close proximity to the prime Commonwealth Games venue at the MCG.  It is a site that warrants comprehensive plans for retention of heritage components and built form infill.

8The proposed expansion of the Hilton on the Park Hotel and the refurbishment will also ensure the quality accommodation is provided in a timely manner to accommodate the demands anticipated for the Commonwealth Games.

9On this basis, the development is considered to be of genuine State significance which raises a major issue of State policy and public interest.”

Once again, the Minister’s reasons appear to be based upon Ms Catlow’s draft, although minor editorial changes have clearly been made (I infer by Mr Phillips).

1. In the Minister’s reasons for intervening there is a section headed “Reasons for intervention” which set out a number of matters relating to planning policy.  For example, there are various reasons given as to why the proposed development and amendment achieves the policies of the metropolitan strategy “Melbourne 2030”, is consistent with the State planning policy framework (which forms part of the Melbourne Planning Scheme) and achieves the policy aims and objectives described in the municipal strategic statement (which also forms part of the Melbourne Planning Scheme).  The Minister then states in her reasons that she is satisfied that the proposed development and the amendment raise a major issue of genuine State significance and public interest and will have significant effects beyond the immediate locality.  One of the reasons given in support of this statement is that:

“The hotel refurbishment will be completed in time for the 2006 Commonwealth Games to be hosted in Melbourne.  In turn this facility will raise the image and profile of Melbourne and improve the backdrop to the MCG and the sporting precinct surrounding.”

The Minister then continues:

“19Given the Hilton on the Park Hotel redevelopment project contributes to the accommodation offer available in Melbourne for the Commonwealth Games in a timely manner, I believe it is necessary to avoid delays which may result from the giving of notice, by exempting the project from the provisions of the Melbourne Planning Scheme.”

The last two passages quoted were based on Ms Catlow’s draft.

1. The media release might not be regarded as an official document, but I find that it was part of the public documents concerning the amendment as it was clearly intended to explain to the public the basis for the decision.  In any event, as the content of this release is subject to one of the contentions advanced by the plaintiff, it is desirable to set out passages from it.  It read (relevantly):

One of Melbourne’s most famous sporting pubs, the MCG Hotel, will become a shrine to the birth of Australian Rules Football under a $86 million redevelopment package involving three sites in East Melbourne, the Minister for Planning, Mary Delahunty, announced today.

“The MCG Hotel has long been a traditional watering hole for a post-game beer or two, but even in sports-mad Melbourne, few people realise that this site can be considered the birthplace of Australian Rules Football,” Ms Delahunty said.

“At this location in 1859 some of football’s pioneers first wrote down and formalised the rules of the game, laying the foundations for Melbourne’s world-famous contribution to sport,” she said.

“This package will see this historic site will get the recognition it deserves and become a shrine to the development of our national football code.

“The hotel, built in the early 1860s to replace a timber structure where historians believe the football rules were first documented, will be fully and authentically restored.

“The MCG Hotel will continue to be a place of pilgrimage for sports fans as a theme pub with memorabilia and sporting displays that celebrate the birth of AFL football.”

Ms Delahunty said she had approved a site specific planning scheme amendment to permit the $86 million package of construction projects involving the Hilton on the Park Hotel and surrounding historic buildings, also owned by Hilton owners Thakral Holdings Limited.

The hotel refurbishment will be completed in time for the Melbourne 2006 Commonwealth Games and will provide much-needed tourist accommodation right on the edge of Melbourne’s sporting precinct.

The package includes the restoration of the MCG Hotel and construction of a 15-storey apartment and retail building behind it; the refurbishment of the Hilton on the Park Hotel to preserve its five-star status; and the restoration of historic Mosspennoch House in Clarendon St as part of a 12 apartment complex.

[…]

Ms Delahunty said she had approved Amendment C101 to the Melbourne Planning Scheme to permit the development and had used her ministerial power of intervention to exempt the amendment from the requirement under the Planning and Environment Act to give public notice of the decision.

“This decision is in line with the Ministerial Powers of Intervention in Planning and Heritage Matters Practice Note.  I am satisfied that the proposed development and the amendment raise a major issue of genuine state significance and public interest, and that it will have significant effects beyond the immediate locality,” she said.

“Approval of this amendment means that work can start early next year, ensuring that this project will be finished in time for the 2006 Games.”

1. It is to be observed that the first six paragraphs of the Minister’s media release focus solely upon the proposed refurbishment of the MCG Hotel, which, on any view, was to be a minor component of the proposed redevelopment.  But no criticism can be made of that.  The Minister was entitled to present her decision to the public in a favourable light by emphasising a matter that might be thought to be of public interest.  Whether or not the Minister’s emphasis upon heritage matters has any legal significance is a matter I return to later.  In the context of the plaintiff’s principal argument, the critical parts of the media release were the statement that the Minister had used her powers of exemption because the proposal raised a major issue of genuine State significance and public interest and the references to the Commonwealth Games.

1. I now turn to consider the overall impression created by the various public documents that recorded and explained the Minister’s decision to exempt herself from the notification requirements of the Act in relation to the amendment. In performing this task, I am conscious of the need to avoid an over zealous examination or a construction which is made with an eye (or perhaps an ear) keenly attuned to the perception of error.[21]  I am also conscious that a court should not be “concerned with looseness in the language … nor with unhappy phrasing.”[22] Bearing these matters in mind, I find that the overall impression that was intended to be created by the public documents recording and explaining the Minister’s decision to exempt herself from the notification requirements of the Act was that such a course was necessary for the purpose of providing additional accommodation for the Commonwealth Games. And I think that impression is created. It is true that if one mines down into the public documents an informed person may detect that the Commonwealth Games is only relevant in relation to the refurbishment of the Hilton Hotel and the restoration of the MCG Hotel, neither of which would provide any additional accommodation. But the statement in the incorporated document that the purpose of the site specific control is to facilitate the redevelopment and expansion of the Hilton on the Park complex as tourist accommodation in a timely manner in order to be available for the Commonwealth Games can only be understood as including the proposed serviced apartments at the rear of the MCG Hotel land, as this is the only real “expansion” of the hotel complex facilitated by the amendment.  Further, the Minister’s reasons for exercising the power of intervention can only be understood as meaning that the proposed “combined development”, including the “proposed expansion” of the hotel, were of genuine State significance because they would contribute to the timely provision of accommodation for the Commonwealth Games.  And the statement in the media release that “this project will be finished in time for the 2006 Commonwealth Games”, whilst lacking precision about the content of “this project”, should be taken to have included the expansion of accommodation opportunities by the erection of serviced apartments.  These statements cannot be regarded, as Ms Quigley SC for the Minister submitted, as mere “looseness of language”.

   [21]Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, at 287.

   [22]Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, at 287; see also Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, at 272.

1. The departmental documents explaining the exercise of the Minister’s powers:  But should the minister be confined to the public documents in explaining the basis upon which her decisions were made?  I find that the departmental documents are also relevant in explaining the Minister’s decision.  These include the letters from PCH dated 13 October 2004 and 10 December 2004 and the ministerial briefing note prepared by Mr Phillips dated 14 December 2004. These documents reveal that the only aspect of the development which PCH was undertaking to complete before the Commonwealth Games was the refurbishment of the existing hotel:  an aspect of the development that did not require planning permission.  They also reveal that before agreeing to the amendment the Minister obtained an undertaking from PCH that, if the amendment was approved, PCH would refurbish and maintain operation of the Hilton Hotel, using its best endeavours to complete the refurbishment prior to the 2006 Commonwealth Games.  Thus the following basis for the Minister’s decision emerges:  that the adoption and approval of the amendment, without notification, would benefit the Commonwealth Games because existing accommodation, close to the MCG, would be refurbished as a result of an undertaking given by PCH. 

1. All the evidence should be considered:  When it comes to assessing the plaintiff’s claim that the Minister acted unreasonably or was motivated by improper purposes or had regard to irrelevant considerations, I hold that it is necessary to consider all the evidence which bears on this question and not just the public documents that explained the Minister’s decisions.  As a matter of logic, all evidence which is relevant should be weighed in the balance.  Although certain types of documents ought be accorded more weight than other types of documents, one cannot rule out the possibility that the public documents explaining the Minister’s decision were intended to put a gloss or “spin” on the real basis for the decision, possibly to avoid or minimise public criticism.

1. Conclusion: Having carefully weighed the evidence, I find that the main purpose why the Minister exercised her powers to approve the amendment without notification was to put PCH in a position where it could proceed with the expansion of the Hilton Hotel without having its proposal subject to the normal scrutiny involved in a planning appeal hearing.  One explanation for this is that the Minister regarded the development as economically important to Victoria and she wished to promote it by making development approval more certain.  No doubt there are other explanations.  But the evidence before me does not enable me to exclude the first explanation.  I further find that the Minister found it politically desirable to justify the intervention, not by reference to the main purpose for the exercise of the powers, but by reference to the Commonwealth Games.  This desire was difficult to implement because the development requiring approval would not be ready in time to provide additional accommodation for the Games.  PCH offered a solution to this problem.   On the one hand it threatened to downgrade the hotel if government support was not forthcoming.  On the other hand, it gave an undertaking that it would refurbish the existing Hilton Hotel in time for the Games if its redevelopment plans were approved.  Hence a second purpose for the Minister’s intervention emerged:  namely that the approval would facilitate the refurbishment of the Hilton Hotel in a timely manner for the Commonwealth Games.  That this was a reason for the approval is put beyond any doubt by the soliciting of the undertaking and by condition 30 of the approval, which provides that the approval expires if the refurbishment of the Hilton Hotel is not commenced before 1 October 2005.

1. Hence, whatever criticism might be made of the purposes for the Minister’s decision to intervene, it cannot be said that they are so devoid of any plausible justification that no reasonable Minister could have reached them.  This is so in relation to both the main purpose and the secondary purpose.  Hence the attack based upon Wednesbury unreasonableness must fail.  But what of the contentions based upon irrelevant considerations and improper purposes?

Irrelevant considerations and improper purposes

1. The plaintiff submitted that, if a reason for the exercise of the Minister’s power of exemption was to facilitate the refurbishment of the Hilton Hotel in a timely manner for the Commonwealth Games, the Minister took into account an irrelevant consideration, namely a commercial consideration of a private character.  This argument was put another way:  that the Minister made the decision for an improper purpose by approving development which required planning permission in exchange for an undertaking by PCH to undertake certain works for which no planning permission was required.  But, to the extent that this was a consideration taken into account in granting the exemption, or was a purpose of the exemption, was it unlawful?

1. It is well established that private economic considerations are not relevant in the exercise of discretions pursuant to the Planning and Environment Act.  Thus economic competition, feared or expected from a proposed use, is not a planning consideration[23] per se pursuant to the Act.[24]  However a private economic consideration can also be a relevant public economic consideration.  In the context of economic competition, the classic statement is that of Stephen J in Kentucky Fried Chicken v Gantidis: 

“If the shopping facilities presently enjoyed by a community or planned for it in the future are put in jeopardy by some proposed development, whether that jeopardy be due to physical or financial causes, and if the resultant community detriment will not be made good by the proposed development itself, that appears to me to be a consideration proper to be taken into account as a matter of town planning.  It does not cease to be so because the profitability of individual existing businesses are at one and the same time also threatened by the new competition afforded by that new development.  However, the mere threat of competition to existing businesses, if not accompanied by a prospect of a resultant overall adverse effect upon the extent and adequacy of facilities available to the local community if the development be proceeded with, will not be a relevant town planning consideration.”[25]

Similarly development undertaken by a private company may have an effect on the overall extent and adequacy of facilities available to the community (or have some other public benefit); and this will be a relevant planning consideration, notwithstanding that it will also be of benefit to that private company.  This principle does not cease to apply if the beneficial development is not the development the subject of the approval, provided it is an effect of the approval of the development.[26]  In the present case the refurbishment of the Hilton Hotel was made an effect of the approval of the development, by the undertaking by PCH and by condition 30 of the approval.  Hence the fact that the Minister took these matters into account does not invalidate her decisions.

[23]I use the expression “planning consideration”, not in any independent sense, but as embracing those considerations that are relevant in the exercise of discretions under the Act.

[24]Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675 per Barwick CJ.

[25](1979) 140 CLR 675, at 687.

[26]See Australian Conservation Foundation v Latrobe City Council [2004] VCAT 2029, where, sitting as President of VCAT, I held that a panel appointed under the Act to consider an amendment to facilitate the extension of the brown coal fired Hazelwood Power Station must consider submissions about the impact of greenhouse gases. This was so notwithstanding that the amendment only made minor changes to the relevant planning scheme: as an indirect effect of the amendment was to facilitate the continued use of the power station and this would have a consequence on the generation of greenhouse gases.

1. The plaintiff further submitted that if the real purpose of the Minister’s intervention was not to expedite the refurbishment of the Hilton Hotel, but to remove other elements of the project (in particular, the proposed apartments at the rear of the MCG Hotel) from exposure to the due planning process, the intervention was for an improper purpose. I cannot uphold this submission.  The powers available to the Minister can be used for the purpose of promoting particular development, by making it certain and removing it from the planning appeals system.

1. During the course of argument I asked counsel for the plaintiff to consider what would be the legal consequences of a Minister making a decision, for a proper purpose and having regard to relevant considerations, and then, for political reasons, explaining the decision to the public by reference to a different purpose.  Mr Southall QC responded by submitting that such as decision would be invalid.  I cannot agree.  It is the actual purpose of the decision that is relevant to an attack on the legality of a decision by reference to an improper purpose.  And a decision is not based upon irrelevant considerations merely because it has been explained in terms which are politically convenient; it is necessary to show that, in the making of the decision, the Minister has taken irrelevant considerations into account.

1. For the foregoing reasons the plaintiff has not established its case based upon unreasonableness, irrelevant considerations or improper purposes.

Minister was not required to accord procedural fairness

1. I find that, before exempting herself and approving the amendment, the Minister did not consult with or hear from affected stakeholders such as residents living close to the subject land.  This is so notwithstanding the statement by Mr Phillips in the ministerial briefing note of 14 December 2004 that “the key stakeholders affected by this amendment have been consulted”.  However the real question is not whether the procedure followed by the Minister was fair, but whether she was under any obligation to accord nearby residents procedural fairness.

1. The question of whether a Minister for Planning is obliged to comply with the rules of procedural fairness in the exercise of the power conferred by section 20(4) of the Act has been considered by this court on three previous occasions. In Mietta’s Melbourne Hotels Pty Ltd v Roper[27] Beach J held that the Minister was under no such obligation.  Two years later in Antoniou v Roper[28] Murphy J found to the contrary.  Two years after Antoniou Brooking J held in Grollo Australia Pty Ltd v Minister for Planning[29] that the Minister was under no such obligation.  The plaintiff submitted that I should prefer the reasoning of Murphy J in Antoniou.  The defendants relied on Mietta’s and Grollo.

   [27](1988) 1 AATR 354.

   [28](1990) 77 LGRA 451.

   [29][1993] 1 VR 627.

1. It is clear enough that the law in Australia is that there is a strong presumption that an administrative decision maker, the repository of a statutory power, owes a duty to accord procedural fairness, and in particular a “hearing” in some form or other, to any person affected or likely to be affected by the decision, and not merely in respect of a legal or proprietary interest, even though that person is not directly involved in the decision maker’s proceedings; and a clear contrary legislative intent is required to rebut the presumption.[30]  Various examples may illustrate the operation of this principle.  In Keller v Bayside City Council[31] Batt J found that the scheme of the Building Act 1993 manifested a clear intention to exclude an obligation to observe any of the rules of natural justice towards the owners of property adjoining the subject property in relation to an application for a building permit. By contrast, in No 2 Pitt Street Pty Ltd v Wodonga Rural City Council[32] Balmford J found that the Planning and Environment Act did not manifest a clear intention to exclude the obligation to provide some form of “hearing” to an objector before an objection was rejected under section 57(2A) of the Act on the basis that it had been made primarily to secure or maintain a direct or indirect commercial advantage for the objector. In Romanella v City of Melbourne[33] Murphy J of this court found that a responsible authority deciding whether to extend a time limit contained in a permit, in circumstances where there was no statutory right of appeal against a refusal to allow such an extension, was required to provide the applicant for an extension with a fair opportunity to counter arguments urged against the extension.In Melbourne City Council v Becton Corporation Pty Ltd[34], sitting as the President of VCAT, I doubted whether there was any obligation upon a responsible authority to provide potentially affected persons with an opportunity to make submissions before approving a plan required to be approved under a permit condition.  However, notwithstanding what I essayed in Becton, it will always be necessary to examine the particular power the subject of challenge to identify whether there is a clear legislative intent to rebut the presumption that the power will be exercised in a manner which is procedurally fair.

   [30]Annetts v McCann (1990) 170 CLR 596, at 598; Keller v Bayside City Council [1996] 1 VR 356, at 378 per Batt J; and No 2 Pitt Street Pty Ltd v Wodonga Rural City Council (1999) 4 VPR 333, at 340 per Balmford J.

   [31][1996] 1 VR 356.

   [32](1999) 4 VPR 333.

   [33](1986) 62 LGRA 327.

   [34][2003] VCAT 1077 at [117].

1. Like Brooking J in Grollo, I find the reasoning in Antoniou unsatisfactory.  In defence of Murphy J it can be said that the facts in the case were unique and one can understand why a fair minded judge would have sought to identify a remedy to what was an extraordinary intervention by the Minister.  But I share the view expressed by Beach J in Mietta’s and Brooking J in Grollo that Parliament did not intend to require the Minister to observe the rules of natural justice in making a decision to free himself or herself from the consultation requirements of sections 17, 18 and 19 of the Act. Such an outcome would be odd: it would require the Minister to consult before exercising a power that could result in no consultation being necessary. Further, as Brooking J observed in Grollo[35], the fact that the power in section 20(4) of the Act is conditioned upon the Minister forming certain views – for example, that the interests of Victoria make such an exemption appropriate – reinforces such a conclusion. I also agree with Beach J and Brooking J that the Act lays down a code as to the giving of notice of planning scheme amendments and, in conferring the dispensing power by section 20(4), the Parliament has shown with sufficient clarity the intention that, if that dispensing power has been exercised, the exercise of the power to adopt and approve the amendment shall not be subject to the principles of natural justice.

   [35][1993] 1 VR 627, at 637.

1. Mr Southall QC submitted that a duty to observe the rules of procedural fairness arose in the circumstances of this case because the amendment was not merely about policy issues, but directly affected individuals.  However, in my opinion, this cannot determine the issue.  It is true that an obligation to act in a way which is procedurally fair will be more likely to arise in circumstances where a decision has a direct effect on individuals, in contrast to a policy decision of general application.  However the basis for the decisions in Mietta’s and Grollo is that the statute is clear in evincing an intention to exclude any requirement to hear affected stakeholders before exempting an amendment from the consultation process.  This must be so for all amendments, regardless of the nature of the amendment, because the question of whether a given statutory power is conditioned by a natural justice requirement demands a universal answer as such a condition governs every exercise of the power:  Kioa v West per Brennan J.[36]

   [36](1985) 159 CLR 550, at 611-612.

1. Mr Southall QC also referred to recent developments in relation to natural justice, including the decision of the High Court of Australia in Re Minister for Immigration and Multicultural Affairs; ex parte Miah.[37]However I see nothing in these developments which would require a different conclusion on this question than that identified by Brooking J in Grollo.

   [37](2001) 206 CLR 57.

The Minister prepared the amendment

1. The plaintiff submitted that the amendment was unlawful because it had not been “prepared” by the Minister; and no instrument of delegation existed empowering any other person to prepare the amendment. It seems clear enough, and I find, that the drafting of the relevant documents which constituted, and supported, the amendment was carried out by Ms Catlow (a planning consultant engaged by PCH) and by Mr Phillips (a departmental officer), with the final versions being prepared by Mr Phillips.  These documents were then submitted to, and approved by, the Minister.  The plaintiff contends on this finding that the Minister’s power was unlawfully delegated to Mr Phillips (and possibly Ms Catlow).  I cannot accept this.  The Minister personally made the key decisions about the amendment; and there is no evidence that she did not make the decision to initiate the preparation of the amendment.  When a minister is entrusted with administrative functions, he or she may act through officers of his or her department.  This principle depends in part on the special position of constitutional responsibility which ministers occupy and on the recognition that the functions of a minister are so multifarious that the business of government could not be carried on if ministers were required to exercise all of their powers personally.[38] Further, the Act envisages that a private citizen may propose an amendment[39] and I see no reason why that citizen could not prepare the content of the proposed amendment. It is thus open for a planning authority, complying with sections 7(6) and 12 of the Act, to prepare an amendment by simply adopting[40] a proposed amendment prepared by a private citizen.  In other words, it is sufficient if the planning authority makes the decision to prepare the amendment (whether or not at the time of the decision the documents are physically in existence); it is not necessary for the planning authority to undertake the clerical or intellectual work of physically drafting or typing the documents which constitute an amendment.

   [38]O’Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1, at 11-12; Carltona Limited v Commissioners of Works [1943] 2 All ER 560, at 563; Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24, at 38.

   [39]Section 203(1)(c) of the Act.

   [40]I use this word in its common sense, and not in the sense used in section 29 of the Act.

1. This conclusion is consistent with the approach taken in the context of section 28(1)(b) of the Freedom of Information Act 1982, which makes a document an exempt document under that Act if it has been “prepared by a minister”. In Birrell v Department of Premier and Cabinet[41] the Full Court held that a public opinion survey carried out by a private consultant under contract with the Government could not be regarded as being a document “prepared by a minister”. However the court observed that a document would be prepared by a minister, in the context of section 28(1)(b), if there was some contribution by the minister to the content of the document, even if it be only by his or her signature adopting and authenticating material supplied by officers.[42]

   [41][1988] VR 73.

   [42][1988] VR 73, at 76.

Minister did not breach duty imposed by section 12(2) of the Act

1. The plaintiff submitted that the decisions of the Minister in relation to the amendment were invalid because, in preparing the amendment, the Minister failed to comply with the practice note in relation to ministerial powers of intervention. It was also said that the Minister’s decisions were invalid because, in preparing the amendment, the Minister failed to have regard to the Victoria Planning Provisions. Both of these arguments are based upon the terms of section 12(2) of the Act, which I have set out earlier.

1. The Minister is empowered to issue directions under section 7(5) and 46M(1) of the Act. These provide:

“7(5)The Minister may issue directions or guidelines as to the form and content of any planning scheme or planning schemes.

”46M(1)The Minister may issue written direction to planning authorities in relation to the preparation and content of development contributions plans.”

By reason of section 7(6) of the Act, a planning authority must comply with a direction of the Minister under sub-section (5). It is arguable that the reference to “the Minister’s directions” in section 12(2) of the Act is confined to directions made pursuant to section 7(5) or 46M(1). Be this as it may, in practice there are numerous ministerial directions that have been made under neither of these powers: concerning potentially contaminated land, metropolitan strategy and various growth areas within the metropolis, rural residential development and the strategic assessment of amendments. These directions have purported to have been made pursuant to section 12(2)(a) of the Act.

1. However it is unnecessary to pursue the question of whether section 12(2)(a) of the Act empowers the Minister to make directions, as it is quite clear that the practice note in relation to ministerial powers of intervention does not purport to be a ministerial direction, whether under section 12(2)(a) or otherwise. I have already explained the genesis and role of the practice note. In reality, it is no more than a formal statement of intent in relation to the manner in which ministerial powers of intervention will be used in planning and heritage matters.

1. Mr O’Brien, who appeared with Mr Southall QC for the plaintiff, also relied upon Ministerial Direction No 11, which deals with strategic assessment of amendments.  This direction, which is said to apply to the preparation of all planning scheme amendments, requires a planning authority, in preparing an amendment, to evaluate certain strategic considerations and include a discussion about them in the explanatory report.  One of the strategic considerations is:

“How does the amendment support or implement the State planning policy framework and any adopted State policy?”

It was said that the practice note in relation to ministerial intervention was an adopted State policy and that, as a result, there was an obligation for the Minister to comply with its terms.

1. Frankly I regard this submission by the plaintiff as far fetched. First, I would not regard the practice note in relation to ministerial intervention as an “adopted State policy” in the sense intended in Ministerial Direction No 11, as it is not a type of policy that is designed to be implemented by a planning scheme or would be affected by the content of a planning scheme. Second, the requirement of Ministerial Direction No 11 is simply that such a policy be evaluated and discussed; the direction does not require compliance with such a policy. I find that the practice note was evaluated and discussed. Third, section 12(2)(a) of the Act does not require compliance with a ministerial direction; it only requires that regard be given to a ministerial direction. Clearly the practice note was taken into account in the making of the amendment. And fourth, there remains the issue, which I do not need to decide, as to whether section 12(2)(a) applies to directions, or perhaps I should say purported directions, which have not been made pursuant to section 7(5) or 46M of the Act.

1. I turn to the plaintiff’s contention that the decisions of the Minister were invalid because, in preparing the amendment she failed to have regard to the Victoria Planning Provisions.  This argument was predicated upon the stated purpose of clause 52.03 of the Melbourne Planning Scheme – which is a provision drawn from the Victoria Planning Provisions – where it is said that provisions dealing with specific sites, designed to achieve particular land use and development outcomes, were to be provided “in extraordinary circumstances”.  The plaintiff relied upon an extract from the Victoria Planning Provisions Practice Manual where it is stated that planning schemes made using the Victoria Planning Provisions are to minimise or eliminate site specific provisions.  This practice note contains a section dealing with how site specific provisions in earlier schemes should be dealt with.  One possibility identified was to use the method of including a proposal in the table to clause 52.03 of a scheme.  The manual states in relation to this method that:

“This method can only be used for exceptional transitional cases or to achieve a particular land use and development outcome which is consistent with a major issue of policy and is necessary to achieve or develop the planning objectives of Victoria.”

1. Once again, I regard this contention as misconceived. First, it cannot be said that the proposed development is not consistent with a major issue of policy or is not necessary to achieve the planning objectives of Victoria. Even if one puts to one side the issue of the Commonwealth Games, the development authorised by the amendment is a major development and could be regarded as consistent with the State’s tourism and economic policies; and, similarly, could be regarded as being necessary to achieve relevant planning objectives. Second, the requirement in section 12(2)(aa) of the Act is to have regard to the Victoria Planning Provisions.  The practice manual may explain those provisions, but are not to be substituted for them.  The provisions themselves anticipate that specific controls will be appropriate in extraordinary circumstances.  But how can it be said that the present circumstances are not extraordinary?  Certainly by reference to the nature of the development and the proposed expenditure it is easy to conclude that the proposal is out of the ordinary.  Further a decision as to whether or not a proposal is extraordinary will be very much a matter of political judgment.  Third, there is no requirement to comply with the Victoria Planning Provisions.  All that the statute requires is that in preparing the amendment the planning authority must have regard to the provisions.  There is no basis for concluding that the Minister has failed to have regard to the provisions in this case.

Statutory notice

1. In its written submission the plaintiff also contended that the Minister’s power to exempt herself from the requirements of section 19 of the Act did not extend to exempting herself from the requirements of section 19(1)(c), which requires that a planning authority give notice of the preparation of an amendment to certain statutory authorities. This contention does not appear to have been pursued – at least, with any vigour – and rightly so because the contention lacks merit. The contention seems to rely upon section 20(3)(b) being, somehow, incorporated into section 20(4). Section 20(3) is dealing with the power of the Minister to exempt a planning authority other than the Minister. Where the Minister is the planning authority section 20(4) is the relevant provision in relation to exemption.

The Minister did not unreasonably base her decision on heritage considerations

1. The next contention advanced by the plaintiff was that the Minister acted unreasonably in making her decisions in relation to the amendment because she relied upon certain heritage issues that were implausible and unsustainable.  This argument relied heavily upon the first six paragraphs of the Minister’s media release where the Minister stated that the MCG Hotel was a site that could be considered to be the birthplace of Australian Rules Football.  Reference was also made to the explanatory report, which identified a benefit said to result from the amendment to be:

“The refurbishment of the MCG Hotel in a form more consistent with the original hotel building and to identify and promote the MCG Hotel as the site where the first rules for Australian Rules Football were written in May 1859.”

The second part of the quoted paragraph seems to have been added by Mr Kolomanski and subsequently adopted by Mr Phillips and the Minister.

1. It was cynical for Mr Kolomanski to have added these words, in the light of Mr Pitt’s submissions to the Heritage Registration Committee and the committee’s findings.  And the emphasis given to the heritage issue in the Minister’s media release sits uncomfortably with the reasons given by the Heritage Council Registrations Committee in refusing to add the MCG Hotel to the Heritage Register.  But, nonetheless, the plaintiff’s contention meets with a number of difficulties.  First, a close scrutiny of the media release makes it clear that the Minister was not asserting that the rules of Australian Rules Football were written in the existing MCG Hotel building, but only upon the site of that building.  Second, the heritage issue was only one of the matters raised in the Minister’s media release and cannot be taken in isolation, notwithstanding the emphasis given to it.  Third, the media release must be considered in the context of other documents, particularly the formal reasons given for intervention and the explanatory report to the amendment.  Counsel for the plaintiff claimed that it was disingenuous for the Minister to emphasise heritage issues when the Heritage Council had decided, just two months earlier, not to add the building to the Heritage Register.  However, whether this is so or not, it has no legal consequences. 

Section 39(7) is not a bar to the proceeding

1. As the matter may go further, it is desirable that I deal with the submission advanced by the second defendant that the plaintiff’s action must fail by reason of section 39(7) of the Act. This provides that an amendment which has been approved is not made invalid by any failure to comply with Divisions 1, 2 or 3 of Part 3 of the Act or Part 8 of the Act. The second defendant relied upon the analysis of Brooking J in the Grollo case. The plaintiff resisted this contention by submitting that section 39(7) was only concerned with defects in procedure and that as its claim went to substantive questions section 39(7) had no application.

1. In the Grollo case Brooking J was concerned not with section 39(7) of the Act, but what was then section 39(2). It is true that the content of the two sub-sections is essentially the same, but the context has changed somewhat. Hence it is desirable to examine this changed context in order to see what, if any, implications arise. It may also be useful if I first put section 39(7) in an historical context.

1. The origins of section 39(2) of the Planning and Environment Act, as it was when it was first enacted in 1987, would seem to be section 30(7) of the Town and Country Planning Act 1961.  This provided that:

“A planning scheme approved by the Governor in Council shall not be invalidated or affected by reason only that any omission defect failure irregularity or informality in or in relation to the preparation exhibition or submission thereof is subsequently discovered.”

It seems clear enough that section 30(7) was directed at defects in procedure, rather than matters of substantive ultra vires, such as having regard to irrelevant considerations or acting for an improper purpose. In my opinion, for the reasons that follow, it is likely that when the Parliament enacted section 39(2) in 1987 it intended that it would have a similar operation to section 30(7) of the Town and Country Planning Act.  This conclusion is reinforced by the “Inaugural Guide to the Planning and Environment Act 1987” published by the Ministry for Planning and Environment in February 1988. That document records that the equivalent provision to section 39 is section 30(7) of the Town and Country Planning Act and it discusses section 39 under a heading “Defects in Procedure”.[43]

[43]When the Planning and Environment Act was first enacted, the view of commentators was to the same effect:  see, for example, Julia Bruce, The New Planning System in Victoria, The Law Book Company, 1988, pages 195-197.

1. The Planning and Environment Act was one of the first Acts drafted in Victoria using a “plain English” method.  Although this method has been criticised[44], and it can sometimes increase the need for judicial choice in statutory interpretation, it need not lead to absurd or unlikely outcomes.  In truth the use of “plain English” is a compromise.  On most occasions it will make legislation easier to read and comprehend; but this will sometimes be at the expense of precision.  However where words are imprecise the court is not bound to slavishly follow an interpretation dictated by the grammatical meaning of the words used. As the High Court pointed out in Project Blue Sky Inc v Australian Broadcasting Authority, ordinarily the legal meaning will correspond with the grammatical meaning:

“But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”[45]

[44]See, for example, the decision of Tadgell JA in Halwood Corporation Limited v Roads Corporation [1998] 2 VR 439.

[45](1998) 194 CLR 355, at 384, per McHugh, Gummow, Kirby and Hayne JJ.

1. Section 39(7) of the Act is part of a section headed “Defects in Procedure”. Although it is true, as Brooking J observed in Grollo, that a heading, whilst relevant, is not part of the Act, unlike Brooking J, I regard it as of assistance in reinforcing the interpretation that the section is concerned with procedural deficiencies and not substantive failures. I cannot agree that a substantive failure to comply with the Act in approving an amendment – such as acting for an improper purpose – would be reasonably understood as a “defect” in “procedure”, notwithstanding that these are words of wide import. Although this is not the ultimate test, it reinforces my view that such a substantive failure was not intended to be protected by the words in section 39(7).

1. In Grollo Brooking J was troubled by the difficulty of identifying a test which would be certain in its application in identifying what types of failures to comply would be protected by the privative provision.  He could see an argument that the provision should receive a construction which would exclude cases of bad faith, in the sense of failures to comply which were intentional.  Hence he rejected the contention that the provision should be read down in a way which requires regard to be had to the number or seriousness of the failures to comply.  He held that the provision extends to a case of total failure to comply, at all events where that is not a knowing failure.  From my part, I doubt that the Parliament was intending to distinguish between intentional failures to comply and unintentional failures to comply.  Rather I think the distinction was between failures of a procedural kind – which the privative provision protected – and failures sometimes categorised as “substantive ultra vires” which infect the making of the decision in a manner whereby it was not made according to law. Put another way, section 39(7) was not intended to provide a licence for a planning authority or a minister to go beyond the confines of the Act.

1. It should also be pointed out that section 39(7) only protects a failure to comply with certain parts of the Planning and Environment Act.  For example, it does not protect a failure to comply with section 6 (What can a planning scheme provide for?), or section 12 (What are the duties and powers of planning authorities?). Hence section 39(7) would not protect a decision by a planning authority to prepare an amendment in a manner whereby it did not take into account any significant effects which the amendment might have on the environment.[46] Thus it would be surprising if section 39(7) protected the adoption or approval of an amendment which was motivated by an improper purpose or took into account an irrelevant consideration or failed to take into account a relevant consideration or was unreasonable in the Wednesbury sense.

   [46]Compare Australian Conservation Foundation v Latrobe City Council [2004] VCAT 2029, where, sitting as President of VCAT, I held that a panel appointed under the Act to consider an amendment to facilitate the extension of a brown coal fired power station must consider submissions about the impact of greenhouse gases. This holding was based in part upon the duties of a planning authority in section 12 of the Act.

1. When the Planning and Environment Act was amended in 1989, so as to recast section 39, the Minister observed that:

“The Act provides a separate mechanism of review of amendments by an independent panel, and amendments ultimately require the Minister’s approval. The Tribunal does have an important role in resolving disputes of a procedural nature – that is specifically set out in the revised section 39 of the Act. The proposed amendments make this quite clear, and set out the range of disputes to be resolved by the Tribunal.”

If the role of the tribunal pursuant to section 39(1) is to resolve disputes of a procedural nature, then the privative provision in section 39(7) must also be given this interpretation. It is almost inevitable that Parliament intended that the expression “failure to comply” would bear the same meaning in sub-sections (1), (7) and (8) of section 39.

1. In Attorney-General v Shire of Gisborne[47] Murray J of this court was concerned with a privative provision in the Town and Country Planning Act 1961 in relation to planning permits. The provision was section 21A(2), which relevantly provided:

   [47](1980) 45 LGRA 1.

“The issue of a permit shall be conclusive evidence that there has been no failure to comply with this Act or the regulations in relation to … any notice required to be given under section 18B in relation thereto.”

Section 18B was a section which required notice to be given to third parties in the event that the responsible authority formed the view that the grant of a permit may cause substantial detriment to some person. Murray J noted that it had been established that a failure to comply with the provisions of section 18B resulted in any permit which had been granted being invalid. He noted that section 21A(2) was capable of two constructions:[48]

“First, it may be construed as precluding any inquiry as to whether section 18B has been complied with. More narrowly, it may be construed as merely precluding any inquiry as to the form and content, etc, of any notice that was in fact required to be given in relation to the application for a permit. If the broader construction is correct then it would prevent a person, who clearly has suffered or will suffer the greatest detriment by the issue of a permit and who was not given any notice of the application for it, from taking any action once a permit has been issued even though the person affected could not have known of the application. It is difficult to think that Parliament could have intended such a result.”[49]

Murray J therefore concluded that section 21A(2) merely prevented an examination of the form and content of a notice and did not prevent the invalidation of a permit on the basis that a responsible authority failed to discharge its duty to consider whether notification was required. It seems to me that this strain of reasoning has application in relation to the interpretation of section 39(7) of the Act.

[48](1980) 45 LGRA 1, at 6. The reported judgment refers to section 21A(2) as section 22A(2); but this is clearly a mistake as there was no section 22A(2) at the relevant time.

[49](1980) 45 LGRA 1, at 6.

1. Since the decision in Grollo there have also been significant developments in the law in relation to privative clauses generally, typified by High Court decisions such as Miah[50]; SAAP v Minister for Immigration and Multicultural and Indigenous Affairs[51]; Plaintiff S157/2002 v The Commonwealth[52]; and Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Applicants S134/2002[53].

   [50](2001) 206 CLR 57.

   [51][2005] HCA 24.

   [52](2003) 211 CLR 476.

   [53](2003) 211 CLR 441.

1. It is sufficient that I refer to just two of these cases.  The first case that warrants discussion is S157/2002[54] where Gleeson CJ observed that many of the considerations relevant to the interpretation of privative clauses that apply in the Federal jurisdiction also apply in relation to State jurisdiction.[55]  In the context of a nation with a unitary constitution – and this comment is particularly apt in the context of a State jurisdiction – Gleeson CJ quoted the statement of Denning LJ in R v Medical Appeal Tribunal – Ex Parte Gilmore[56]:

   [54](2003) 211 CLR 476.

   [55](2003) 211 CLR 476, at 483.

   [56][1957] 1 QB 574, at 586.

“If tribunals were to be at liberty to exceed their jurisdiction without any check by the courts, the rule of law would be at an end.”

Gleeson CJ observed that the High Court’s approach to privative clauses had developed over a long period and, notwithstanding the wide and strong language in which these clauses have been expressed, there has been a reluctance to recognise that they protect manifest jurisdictional errors or ultra vires acts.[57]  He said that the reasons for judgment of Dixon J in R v Hickman; Ex Parte Fox and Clinton[58] had been taken up by Australian courts in dealing with privative clauses in both State and Federal legislation.  Gleeson CJ explained that the reasoning of Dixon J in Hickman required the whole legislative instrument to be considered in interpreting the scope of a privative clause and in determining whether transgressions of jurisdictional limits necessarily spells invalidity.[59]  The majority of the court in S157/2002 (Gaudron, McHugh, Gummow, Kirby and Hayne JJ) reached a similar conclusion and also relied upon the so called Hickman principle.  The majority explained that the principle is simply a rule of construction allowing for the reconciliation of apparently confliction statutory provisions.  The majority continued:

“Once this is accepted, as it must be, it follows that there can be no general rule as to the meaning or effect or privative clauses.  Rather, the meaning of a privative clause must be ascertained from its terms; and if that meaning appears to conflict with the provision pursuant to which some action has been taken or some decision made, its effect will depend entirely on the outcome of its reconciliation with that other provision.”[60]

The majority identified two basic rules of construction which apply to the interpretation of privative clauses.  The first rule only applies to legislation enacted by the Parliament of the Commonwealth.  The second basic rule, which applies to privative clauses generally, is that it is to be presumed that the Parliament does not intend to cut down the jurisdiction of the courts save to the extent that the legislation in question expressly so states or necessarily implies.  Accordingly, privative clauses are to be strictly construed.[61]

[57](2003) 211 CLR 476, at 484.

[58](1945) 70 CLR 598, at 614-617.

[59](2003) 211 CLR 476, at 487 and at 493.

[60](2003) 211 CLR 476, at 501.

[61](2003) 211 CLR 476.

1. The S157/2002 case was concerned with a privative clause which was far broader than that contained in section 39(7) of the Act. The clause in S157/2002 provided that a relevant decision was “final and conclusive” and “must not be challenged, appealed against, reviewed, quashed or called in question in any court” and “is not subject to prohibition, mandamus, injunction, declaration or certiorari in any court on any account”. Nonetheless the court concluded that the privative clause only applied to decisions which involved neither a failure to exercise jurisdiction nor an excess of the jurisdiction conferred by the Act. It said that so much was required as a matter of general principle because an administrative decision which involves jurisdictional error is regarded, in law, as no decision at all.[62]

   [62](2003) 211 CLR 476, at 506.

1. In Miah the High Court was concerned with a privative clause in an immigration statute that relevantly provided that non-compliance with certain parts of the Act (including a Subdivision AB) “does not mean that a decision to grant or refuse to grant the visa is not a valid decision but only means that the decision might have been the wrong one and might be set aside if reviewed”. The majority of the court held that this provision had no application where there had been a breach of the principles of natural justice because such a breach was not a failure to comply with the relevant parts of the Act. Gaudron J said that the privative provision simply purports to give validity to a decision notwithstanding non-compliance with certain statutory provisions. She said that the purpose of the provision was to ensure that an applicant’s rights are to be ascertained by reference to the decision unless and until set aside. She observed that it said nothing as to the applicant’s statutory or constitutional rights to have a decision reviewed.[63]  Kirby J said of the privative provision:

“Obviously, this is a provision designed to limit judicial review of the delegate’s decisions and to channel disputes about such decisions to the Tribunal.  However, section 69(1) has no present application because the prosecutor’s complaint is not of non-compliance with Subdivision AB, as such, but of non-conformity with a fundamental principle of natural justice not stated in that subdivision but binding on the delegate nevertheless.”[64]

[63](2001) 206 CLR 57, at 87-88.

[64](2001) 206 CLR 57, at 120.

1. In my opinion, if one applies the approach articulated by the High Court in its recent decisions, it is not tenable to conclude that section 39(7) of the Act is intended to prevent a challenge to the exercise of the Minister’s powers to exempt herself from the notification requirements in relation to an amendment or to adopt or approve an amendment, when that challenge is based upon jurisdictional error or substantive ultra vires. The Act identifies clear limits for the exercise of these powers. For example, in the context of section 20(4) the Minister must consider that compliance with the notification requirements is not warranted or that the interests of Victoria or any part of Victoria make such an exemption appropriate. It cannot have been Parliament’s intention to have imposed such limits, with the one hand, and then to have taken away any prospect of enforcing those limits, with the other hand. In this context, I note that there seems to be growing support for what was said by Gaudron J in Enfield City Corporation v Development Assessment Commission[65]:

“Those exercising executive and administrative powers are as much subject to the law as those who are or may be affected by the exercise of those powers.  It follows that, within the limits of their jurisdiction and consistent with their obligation to act judicially, the court should provide whatever remedies are available and appropriate to ensure that those possessed of executive and administrative powers exercise them only in accordance with the laws which govern their exercise.  The rule of law requires no less.”  (Footnote omitted.)

[65](2000) 199 CLR 135, at 157; see for example the endorsement by Hayne J in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24, at [211].

If section 39(7) of the Act is interpreted so as to prevent a challenge to a decision of a planning authority or minister based upon jurisdictional error or substantive ultra vires, this would disable the courts from properly exercising their responsibility to ensure that executive and administrative powers were exercised according to law.  Hence such an interpretation should be rejected.

The meaning of the incorporated document

1. The defendants by counter-claim seek a declaration to the effect that the document incorporated by the amendment authorises the existing use of the Hilton Hotel as a hotel.  The second defendant pointed out that the incorporated document refers to the land as 178-226 Wellington Parade and 36 Clarendon Street, East Melbourne, which land includes the land upon which the existing Hilton Hotel is located.  It has also referred to the terms in which the use of the land is permitted, the exclusion of certain other planning scheme provisions and the fact that the approval contains conditions which regulate the use of land.

1. I note that the defendants’ argument derives no support from the stated purposes of the site specific control, as these relevantly refer to the “redevelopment and expansion” of the hotel complex.  Further, the incorporated document allows the use of land for the purpose of a residential hotel “generally in accordance with” a number of incorporated plans.  The only relevant set of plans is the set in relation to the Hilton on the Park hotel redevelopment, but these are really plans which relate to the development at the rear of the MCG Hotel (including the integration of this development into the existing Hilton Hotel).  It is true that one of these plans states that the existing Hilton Hotel tower is to be refurbished internally.  But it is common ground that no planning permission was required to effect this refurbishment; and I do not regard the incorporated document as purporting to give such permission.

1. In my opinion, what the incorporated document seeks to do is authorise the demolition of certain buildings, followed by the development of the land in accordance with certain plans and then authorise the use of the land, as developed, for the purpose of a residential hotel, dwellings, shop, food and drink premises, car park and ancillary uses.  In my opinion, the incorporated document is not intended to apply to the land in the event that the development (including demolition) is not carried out.  It is important to observe that, by reason of condition 30, the approval expires if certain development – including the refurbishment of the existing hotel – is not commenced by specified dates.  Such a provision is inconsistent with the contention that the approval is intended to embrace the existing use of the hotel.

1. It is true that the approval provides that certain provisions of the Melbourne Planning Scheme do not apply.  But the exclusion of these provisions does not have the effect of taking away rights that may operate pursuant to an unexpired permit; nor does the exclusion of these provisions take away from any existing use rights.  Hence I do not infer from the fact that certain provisions of the scheme do not apply the conclusion that the incorporated document is intended to embrace the existing use of the hotel.  Further, although there are a number of conditions which deal with issues relating to the use of land these are all readily referable to the use of the land when developed in accordance with the plans referred to in the incorporated document.  Hence I do not uphold the counter-claim.

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