Kingston v Head, Transport for Victoria; Jomaring Pty Ltd v Head, Transport for Victoria

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

VALUATION, COMPENSATION AND PLANNING LIST

S ECI 2020 04458

David Ronald Kingston	Plaintiff
v
Head, Transport for Victoria	Defendant

S ECI 2020 04463

Jomaring Pty Ltd	Plaintiff
v
Head, Transport for Victoria	Defendant

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JUDGE:	Quigley J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 to 17 August 2023
DATE OF JUDGMENT:	23 October 2023
CASE MAY BE CITED AS:	Kingston v Head, Transport for Victoria; Jomaring Pty Ltd v Head, Transport for Victoria
MEDIUM NEUTRAL CITATION:	[2023] VSC 618

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LAND VALUATION — ACQUISITION AND COMPENSATION — Claims for compensation upon compulsory acquisition — Land Acquisition and Compensation Act 1986 (Vic) (‘LAC Act’), ss 41(5) and 41(7) — Reduction of compensation by “prescribed amount” due to previous compensation payment — Whether both provisions appropriately triggered — Determination of “prescribed amount”.

STATUTORY INTERPRETATION — Construction of s 41(5) of the LAC Act — Application to facts — Whether previous monies paid were “compensation” paid — Whether previous payments were “made pursuant to Part 5 of the Planning and Environment Act 1987 (Vic)” (‘P&E Act’) — Whether Part 5 of the P&E Act a re‑enactment — Town and Country Planning Act 1961 (Vic), ss 40, 41, 42, and 43 — Legislative history — Interpretation of Legislation Act 1984 (Vic), ss 4 and 16(b) — Satisfaction as to re‑enactment — Mitchell v Latrobe Regional Hospital (2016) 51 VR 581; Waterfront Place v Minister for Planning (2019) 59 VR 556; Attorney‑General (Qld) v Australian Industrial Relations Commission (2002) 213 CLR 485 applied — No contrary intention apparent — Section 41(5) validly engaged.

STATUTORY INTERPRETATION — Construction of s 41(7) of the LAC Act, ‘B value’ component — Market value of land at time of previous compensation triggers — Literal construction approach versus contextual approach — Whether ‘actual zoning’ required to have existed for the purposes of the B value — Historical context of land reservation and zoning — B value capable of being determined in all of the circumstances.

LAND VALUATION — EVIDENCE — Comparable sales — Weight to be given to retrospective versus contemporaneous valuations — ‘Willing but not anxious’ vendor — LAC Act, s 40, and Spencer v the Commonwealth (1907) 5 CLR 418 — Reliability of comparable sales — Contemporaneous valuations preferred — Valuations upon which previous compensation was based carry significant weight — Uncertainty or obscurity of compensation to be resolved in favour of the dispossessed landowner — Rigby v Secretary to the Department of Sustainability and Environment [2012] VSC 427 applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Batt KC, Mr P O’Farrell and Mr J Fetter	Rigby Cooke
For the Defendant	Mr J Pizer KC, Mr B Chessell and Mr M Roberts	Hall & Wilcox

TABLE OF CONTENTS

Introduction

Background

The Present Acquisitions
The Narrowing of Issue in Dispute – Sections 41(5) and 41(7) of the LAC Act
History of the Land
1921 to 1970: The Parent Title
1971 to 1978: Early Subdivision and Transfers of the Land
1978 to 1979: Rezoning and Road Reservations
1981 to 1987: Sales of the Eastern Residential Land to the Bardoel Family
1983 to 1987: Creation of the Permanent Trustee Land, Kingston Land and Jomaring Land
1982 to 1983: Sale of the Permanent Trustee Land to AFT/PT Nominees
1982 to 1983: AFT’s Purchase of the Coram Land
Difference between the Coram Sale Price and the Kingston Sale Price
1983 to 1985: Relevant Status and Amendment of the Garden Industrial Zone
1984: The Previous Payments
The Kingston TCP Payment – Loss on Sale
The Jomaring TCP Payment – Financial Loss

1991 to 1994: Transition to Proprietorship by the Present Claimants
1999: Introduction of the New Format Planning Scheme

Status of the Land at 29 March 2019 – the Acquisition Date
The Road Construction Authority, Roads Corporation and the Authority
Legislative History
1944 to 1960: Early Acquisition Law
1961 to 1965: Recognition of Previous Compensation in Acquisition Law
1986 to 1988: The LAC Act and the P&E Act
2006: Amendment of Section 41(7)

Relevant Law

Key Provisions in Issue
General Principles of Acquisition Law
Compensation Generally
Market Value
Disturbance Losses
Pre-referral Professional Expenses
Solatium
Interest

Issues for Determination

Analysis

Is s 41(5) of the LAC Act engaged?
Were the Previous Payments “compensation”?
Were the Previous Payments paid “in respect of the land”?
Were the Previous Payments made “pursuant to” Part 5 of the P&E Act?
Is Part 5 of the P&E Act a Re-Enactment of the Relevant Provisions of the TCP Act?
Is There a Contrary Intention Which Would Override s 16(b)?
Alternative Argument Based on s 206 of the P&E Act

What is the Correct Construction of Section 41(7)?
Concessions made by the Claimants
Construction of the B Value Component

Calculation of the “Prescribed Amount”
The A and C Values
The B Values – Market Value at Previous Relevant Dates
Contended B Values
The Valuation Evidence of Haines and Keck
Matters in Agreement
Comparable Sales – Haines
Comparable Sales – Keck
Comparable Sales – Claimants’ Updated Position

Claimants’ Alternative B Values
Authority’s Primary B Values Based on Mr Colson’s Reports
Kingston
Jomaring
Reasoning

Analysis in Respect of the B Values
Overview
Weight to be Given to the Contemporaneous Versus the Retrospective Valuation
The Role of the Garden Industrial Zone
Negotiations on Price in the Context of the GIZ and in the Wake of the Coram Sale
Market Value and the ‘Willing But Not Anxious’ Vendor
Reliability of the Permanent Trustee Sale
Coram Sale Information
The Role of Mr Lawson
Were the Kingston and Coram Sales Interdependent?
Reliability of the Coram Sale
Weight to be Given to Mr Colson’s Valuations
Claimants’ Alternative B Values
Conclusion on the B Values

Determination of the ‘Prescribed Amount’ in Each Proceeding
Kingston
Jomaring

Conclusion

Annexure A

HER HONOUR:

INTRODUCTION

The plaintiff parties in these proceedings are David Ronald Kingston (‘Mr Kingston’) and Jomaring Pty Ltd (‘Jomaring’), which is a company owned by Mr Kingston (together, ‘the Claimants’). Mr Kingston is the sole director and secretary of Jomaring.

The Claimants seek compensation for the compulsory acquisition in 2019 of two land holdings they respectively owned, land which is the remnant of a larger title once owned by the grandfather of Mr Kingston. Large portions of both land holdings were acquired by the predecessor of the respondent (‘the Authority’) in order to facilitate the construction of the (now completed) Mordialloc Freeway.

The lands in question have a complicated history of subdivision, sale, and previous monies paid in respect of compulsorily impacted land prior to the 2019 acquisition in 1984 (‘the Previous Payments’). The relevant legislation and the relevant planning scheme also have a complicated history.

As a result of the narrowing of issues between the parties,[1] the key matter for determination is whether s 41(5) of the Land Acquisition and Compensation Act 1986 (Vic) (‘the LAC Act’) is engaged. This requires determination as to whether s 41(5) applies in respect of the monies previously paid to Mr Kingston’s family in 1984, including consideration of whether the Previous Payments amount to ‘compensation’ in the sense of the LAC regime.
[1]Joint Memorandum of Counsel (filed 24 July 2023 in S ECI 2020 04458 and S ECI 2020 04463, Supreme Court of Victoria) (‘Joint Memorandum’).

If s 41(5) is engaged, the ‘prescribed amount’, which is deduced from the formula set out in s 41(7), must be determined. This will depend on the proper construction of the elements of s 41(7) of the LAC Act and the evidence of the market value of the land at the time the Previous Payments were made.

BACKGROUND
The Present Acquisitions

On 29 March 2019 (‘the Acquisition Date’) the Authority’s predecessor, the Roads Corporation, compulsorily acquired portions of two land holdings situated at 260 Centre Dandenong Road (‘the Acquired Land’).

The state of the two relevant land holdings, the Kingston Land and the Jomaring Land, prior to the present acquisitions can be depicted as follows:

Figure 1 - Status of land holdings prior to 2019 acquisition.

The Acquired Land consists of:

(a) 3.02 ha (‘the Acquired Kingston Land’) out of 3.35 ha described in Certificate of Title Volume 09757 Folio 263, owned by Mr Kingston (‘the Kingston Land’);[2] and

(b) 5.07 ha (‘the Acquired Jomaring Land’) out of 6.33 ha described in Certificate of Title Volume 10199 Folio 121, owned by Jomaring (‘the Jomaring Land’).[3]

[2]Being parcel 25 on Roads Corporation Survey Plan SP23743, depicted at Court Book (filed in S ECI 2020 04458 and S ECI 2020 04463, Supreme Court of Victoria), doc 469, 6027 (‘CB’).

[3]Being parcels 23 and 26 on Roads Corporation Survey Plan SP23743, depicted at CB, n 2, doc 470, 6028.

Between the two land holdings runs a sewerage pipetrack owned by Melbourne Water, shown above in purple, which has an area of 1.39 ha and is parcels 24, 28 and 30 on Roads Corporation Survey Plan SP23743 (‘the Melbourne Water Land’).

Parcels 23, 25, and 26 (as marked on Figure 1 above) were acquired, with the Acquired Land depicted in yellow in the following aerial image (Figure 2). Parcel 29, the remaining Kingston Land (0.3329 ha), is depicted in purple, and parcel 27, the remaining Jomaring Land (1.26 ha), is depicted in green.

Figure 2 - Aerial image showing acquired and remaining lands.

Upon these compulsory acquisitions, the Claimants were entitled to claim compensation pursuant to s 30 of the LAC Act. On 12 April 2019, the Authority made an initial offer of compensation being $610,187 for the Acquired Kingston Land and $908,432 for the Acquired Jomaring Land.

The parties could not agree on the appropriate compensation and on 3 December 2020 the Claimants commenced these proceedings by way of a Notice of Referral filed in relation to each of the two land holdings.

By their Particulars of Claim,[4] the Claimants contended that as a result of the acquisitions they were entitled to $52,782,234.23 in compensation (plus interest and further costs), comprising of:

(a) $18,251,386.26 in respect of the Acquired Kingston Land; and

(b) $34,530,847.97 in respect of the Acquired Jomaring Land.

[4]Filed 16 February 2021 in S ECI 2020 04458 and S ECI 2020 04463, Supreme Court of Victoria.

By its Particulars of Offer,[5] the Authority offered a total of $1,724,922.31 in compensation (plus interest and further costs), comprising:

(a) $718,946.64 in respect of the Acquired Kingston Land; and

(b) $1,005,975.67 in respect of the Acquired Jomaring Land.

[5]Filed 26 March 2021 in S ECI 2020 04458 and S ECI 2020 04463, Supreme Court of Victoria.

The Narrowing of Issue in Dispute – Sections 41(5) and 41(7) of the LAC Act

The figures contended by the parties are, clearly, drastically different. The key reason for this is that the parties take opposing views as to the applicability of s 41(5) of the LAC Act, which if engaged will operate to reduce the quantum of compensation in each of the proceedings. Following the narrowing of issues between the parties,[6] this became the primary issue at trial.
[6]In particular, the Joint Memorandum filed by the parties on 24 July 2023 (n 1) sets out their agreement as to the market value of the Acquired Land (for the purposes of s 41(1)(a) of the LAC Act) and the amounts payable in relation to pre‑referral professional expenses (for the purposes of s 41(1)(a) of the LAC Act).

Section 41(5) of the LAC Act currently provides:

If compensation has previously been paid in respect of the land pursuant to Part 5 of the Planning and Environment Act 1987, the amount of compensation payable under this Part in respect of an acquired interest in land or in respect of land in which an acquired interest subsists must be reduced by the prescribed amount.

If s 41(5) applies, the prescribed amount is then determined in accordance with a mathematical formula set out at s 41(7). This provides:

In this section the prescribed amount in relation to land is the amount calculated by the following formula—
x C
where—
A = the amount of compensation previously paid in respect of the land for loss of market value due to—
(i)the reservation or proposed reservation of the land or part of the land for a public purpose in a planning instrument; or
(ii)any part of the land being required for a public purpose.

B = the market value of the land in respect of which the compensation was paid, that value to be determined on the basis of the actual zoning that applied to the land at the date which was the basis for the calculation of that compensation.
C = the compensation payable under this Part for market value and severance less the value of the land attributable to improvements of a durable nature made—
(i) with the consent of the Authority under section 12(1)(b); or
(ii) after the last date on which compensation was paid in respect of the land and before service of the most recent notice of intention to acquire an interest in the land.

The precise way in which s 41(7) should operate, should it be enlivened, was also in issue at trial. The key issues which the Court must determine, and the subsidiary questions raised, are set out in detail below at [165].

The Authority contended that s 41(5) was enlivened due to the Previous Payments received in 1984 in respect of the same land by Mr Kingston’s father and aunt (Dr William Kingston and Irene Young, aka Graham, or ‘the Previous Claimants’). The Previous Payments totalled $532,680 and was comprised of two payments being:

(a) $166,680 paid by the Road Construction Authority (‘RCA’) to the Previous Claimants on 6 September 1984 in respect of land that included the Kingston Land; and

(b) $366,000 paid by the RCA to the Previous Claimants on 17 October 1984 in respect of the Jomaring Land.

The relevant historical matters leading up to and following the receipt of the Previous Payments will now be outlined.

History of the Land
1921 to 1970: The Parent Title

On 4 July 1921, Samuel Kingston acquired a large rectangular block of land at the intersection of Centre Dandenong Road and Boundary Road, Dingley (‘the Parent Title’).[7] It extended approximately 703 metres to the east of the intersection and 772 metres to the south, and comprised some 54.4 ha. The approximate location of the Parent Title is marked in red on Figure 3 below.
[7]A copy of the cancelled Certificate of Title for this property, as described in Volume 04461 Folio 106, was provided at CB, n 2, doc 228, 5179.

South of the Parent Title were two other large blocks, as depicted below. The block immediately to the south came to be owned (largely)[8] by the Coram family (‘the Coram Land’). Further to the south was a block owned by the Follett family, which was later purchased largely by the company AMP and developed for industrial purposes.

Figure 3 - Parent Title, Coram Land, and Follett/AMP Land.

[8]A Mr Bennett owned a small 2 acre parcel to the north‑west of the Coram land.

In 1943, after Samuel Kingston’s death, his wife Mabel Kingston became the registered proprietor of the Parent Title. Then on 1 September 1970, following her death, the Previous Claimants became the joint registered proprietors of the Parent Title.[9]
[9]These registrations can be seen on the Certificate of Title, n 7.

1971 to 1978: Early Subdivision and Transfers of the Land

Throughout the 1970s, the following sections of the Parent Title were transferred by the Previous Claimants:[10]
[10]CB, n 2, doc 228, 5180.

(a) a small section (approx. 0.25 acres) in the north‑east corner of the Parent Title was transferred to the Country Roads Board on 5 May 1971 and was recorded in Dealing E32968 on the Parent Title;

(b) the diagonal area of land which became the Melbourne Water pipetrack was transferred to the Melbourne and Metropolitan Board of Works (‘MMBW’) on 23 February 1972 and was recorded in Dealing E312444 on the Parent Title; and

(c) an additional segment beside the Melbourne Water pumping station, just to the south of Centre Dandenong Road, was transferred to the MMBW on 5 September 1978 and was recorded in Dealing H223054 on the Parent Title.

These transferred sections are depicted in the annexures to the (now cancelled) Certificate of Title for the Parent Title on the following drawn map[11] (marked for clarity according to the lettered paragraphs above):

Figure 4 - Parent Title as depicted on original Certificate of Title.

[11]Ibid, doc 228, 5181.

1978 to 1979: Rezoning and Road Reservations

On 23 August 1978, the area bought by AMP from Mr Follett was rezoned to Reserved Light Industrial, by way of Amendment No. 21 Part 8A to the Melbourne Metropolitan Planning Scheme (‘MMPS’).[12] This area was subsequently developed into an industrial estate, the ‘Redwood Estate’, development of which was completed by 1982.
[12]Ibid, doc 141, 8975.

The growth in the area, and the suburbs beyond, necessitated the eventual creation of a freeway (ultimately, the Mordialloc Freeway). Further rezoning occurred as well as the reservation of particular land for future road purposes.

On 26 April 1979, Amendment No. 21 Part 8B resulted in the following rezoning:[13]

(a) the land owned by the Kingstons and Coram family to the east of the proposed freeway reservation was rezoned to ‘Reserved Living’; and

(b) the land owned by the Kingstons and Coram family to the west of the proposed freeway reservation was rezoned to ‘Garden Industrial’.[14]

[13]Ibid, doc 142, 8996.

[14]It should be noted that this is an atypical zoning which had very limited application, applying only to the lands in question and the surrounding lands. ‘Garden Industry’ was not defined in the Planning Scheme at the time; whereas more common types of industry zoning, such as ‘Light Industry’ and ‘Rural Industry’ were defined in Clause 2. Clause 2 also listed all types of ‘Industrial Zone’ and all types of ‘Business Zone’ but did not list Garden Industrial in either of these definitions.

The rezoning was depicted as follows in Amendment No. 21 Part 8B:[15]

Figure 5 - Segment of Map 70, Amendment No. 21 Part 8B.

[15]CB, n 2, doc 130, 8685 (segment of map extracted).

This amendment did not alter the zoning of the Jomaring Land and the Kingston Land in issue in the present dispute, and this land remained zoned rural. The reservation of the affected Kingston and Jomaring Lands for a proposed main road occurred on the gazettal of Amendment No. 60 Part 1 on 12 December 1979.[16]
[16]Ibid, doc 132, 8686.

These reservations included the following, as relevant to the Acquired Land:

(a) a reservation reserving land for a proposed main road, which is now the Mordialloc Freeway (‘the Main Road Reservation’); and

(b) a road widening reservation, concerning the future widening of Boundary Road and Centre Dandenong Road (‘the Road Widening Reservation’),

These reservations are depicted in Amendment No. 60 Part 1 as follows:[17]

Figure 6 - Segment of Map 70, Amendment No. 60 Part 1.

[17]Ibid, doc 133, 8687 (segment of map extracted).

The following depiction (Figure 7) demonstrates how these reservations impacted the land in question, showing the Acquired Land and the remaining Kingston and Jomaring Lands, as well as the original Parent Title boundary (approximate) for reference:

Figure 7 - Overlay of maps demonstrating the alignment of the reservations with the acquired land.

It can be seen that the Authority did not ultimately acquire the totality of the Main Road Reservation, but did acquire the majority of that land.

1981 to 1987: Sales of the Eastern Residential Land to the Bardoel Family

Between 1981 and 1987, the lands once owned by Samuel Kingston were further divided and several sales of sections of the land occurred. These sales all pertained to the eastern section and were all to the Bardoel family or entities owned by that family. Whilst this area of the land did not form a part of the ultimately Acquired Land, the history of the immediate vicinity provides some context to the valuation exercise. This land was developed over time for residential purposes.

The subdivisions and sales, depicted below at Figure 8, were as follows:

(a) On 9 January 1981, Plan of Subdivision LP136103 created Lot 1 (19.37 ha) to the east and Lot 2 (33.43 ha) to the west, with Lot 2 connected either side of the pipetrack by a vinculum, as well as a road (R1) at the northern edge of Lot 1.[18]
[18]Ibid, doc 271, 5346 (map coloured for emphasis).

(b) On 16 March 1981, Plan of Subdivision LP136636 divided the eastern lot into two smaller lots, Lot 1 (6.716 ha) and Lot 2 (12.65 ha).[19] The northern lot (Lot 1, depicted below in purple) was sold for $150,000 with transfer effected on 8 April 1981.[20]

(c) On 21 August 1986, the southern lot was divided further by Plan of Subdivision LP202476N, which created Lot 1 (1.634 ha) and Lot 2 (11.02 ha).[21] Lot 1 (depicted below in red) was sold for $66,000 with transfer effected on 1 October 1986.[22]

(d) On 10 December 1986, two sequential subdivisions occurred, being LP204599K[23] and LP205216A.[24] This effectively created three lots (1.461 ha, 1.484 ha, and 7.903 ha respectively) which were sold for $74,000, $75,000 and $295,000 respectively, with transfer effected on 12 February 1987.[25]

[19]Ibid, doc 233, 5201 (map coloured for emphasis).

[20]The Transfer instrument (at CB, n 2, doc 234, 5202) is dated 30 March 1981, however the transfer is recorded as Dealing J414892 dated 8 April 1981 on the Parent Title (see CB, n 2, doc 228, 5180).

[21]CB, n 2, doc 252, 5278.

[22]The Transfer instrument (at CB, n 2, doc 255, 5285) is dated 29 May 1986, however the transfer was not affected until after the subdivision had occurred.

[23]CB, n 2, doc 256, 5287.

[24]Ibid, doc 258, 5291 (the image above at (d) combines these two plans).

[25]The Transfer instruments (at CB, n 2, docs 262–264, 5301–5306) are dated 20 July 1986, however the transfer was not effected until the following year.

The total benefit for the Previous Claimants from these sales was $660,000. This equates to an average price per acre of approximately $13,800 (or $34,000 per ha).

Figure 8 - Series of subdivisions to the Eastern part of the lands, 1981-1987.

1983 to 1987: Creation of the Permanent Trustee Land, Kingston Land and Jomaring Land

Throughout a similar time period, transfers occurred pertaining to the western side of the Parent Title (i.e. Lot 2 depicted at (a) on the previous graphic). This area of land contained the land that has become the Acquired Land and the land subject of the Previous Payments.

By Transfer K366646[26] lodged for registration on 11 May 1983 (in respect of which the Plan for Transfer Purposes was lodged prior to registration), the Parent Title was subdivided to create Lot A (27.10 ha) and Lot B (6.332 ha).[27] Transfer K366646 effected the sale of Lot A (below, Figures 9 and 10, white) (‘the Permanent Trustee Land’)[28] to Permanent Trustee Nominees (Canberra) Ltd (‘PT Nominees’) on 22 April 2023. Lot B (below, Figures 9 and 10, green) is the Jomaring Land, being part of the remaining land untransferred in the Parent Title at all times up until the cancellation of that title on 9 June 1994.

Figure 9 - Subdivision and Transfer K366646.

[26]CB, n 2, doc 246, 5243.

[27]Ibid, doc 17, 1532 (map coloured for emphasis).

[28]Being the land in Certificate of Title Volume 9526 Folio 099 (now cancelled).

On 8 July 1987, Plan of Subdivision LP204907B[29] further divided the Permanent Trustee Land and resulted in the creation of a parcel of land shown as Lot A (3.35 ha) on that plan, which is the Kingston Land (below, Figure 10, red).[30]

Figure 10 – Plan for Acquisition Purposes, Transfer K366646 (left) and Plan of Subdivision LP204907B (right).

[29]CB, n 2, doc 274, 5357.

[30]Graphic comprised of CB, n 2, doc 246, 5245 and doc 274, 5357 (coloured for emphasis).

Through this period of time the Permanent Trustee Land was subject to the aforementioned reservations under the MMPS as depicted below:

(a) part of the Road Widening Reservation affecting 1.426 ha situated along the northern and western boundaries of the Permanent Trustee Land; and

(b) part of the Main Road Reservation affecting 3.353 ha situated on the eastern portion of the Permanent Trustee Land (ultimately the Kingston Land).[31]

Figure 11 - Map from Survey Plan 16315.

[31]See above at [31]. Map derived from Survey Plan 16315, CB, n 2, doc 404, 5722.

The Jomaring Land remained wholly subject to the Main Road Reservation.

1982 to 1983: Sale of the Permanent Trustee Land to AFT/PT Nominees

It is important to set out some further detail regarding the sale of the Permanent Trustee Land, being the Garden Industrial zoned land, as at 22 April 1983.

In 1982, the Previous Claimants began considering selling the land west of the pipetrack (i.e. ultimately the land which is known as the Permanent Trustee Land), after they were approached by the Australian Fixed Trusts Group (‘AFT’) through John Lawson of Hamilton Lawson Pty Ltd. Mr Lawson was conducting business as a real estate broker and a land valuer. AFT (the parent company of PT Nominees) intended to develop the land for industrial purposes, and was simultaneously negotiating the purchase of the nearby Coram Land. Mr Lawson also represented the Corams in that sale.[32]
[32]CB, n 2, doc 342, 5531.

AFT’s attraction to the Permanent Trustee Land in order to create an industrial park known as ‘Redwood Gardens’ was explained by Thomas Scott Keck in a valuation report in 1984 (the report itself being discussed in context below at [80]):

Further to the south [of the land], at the intersection of Boundary Road with Lower Dandenong Road, an Industrial Estate developed by the AMP Society about Redwood Drive had been established for a couple of years, and contained quite good quality factory premises but was well removed from the subject property.
The significance of the location is that subsequent to the development of the Industrial Estate by AMP in 1978, and which was fully developed and sold out by mid‑1982, the land adjoining to the north, previously owned by “Coram” and in turn abutting immediately to the south of the subject property, was presented to AFT as a suitable site for a new concept Industrial Park. This site of 12.38 hectares was a little less than half the size of the subject property, but was thought sufficient for the proposed use. In short, AFT purchased the site on the 21^st February 1983 and immediately proceeded with its planning. Known as “Redwood Gardens”, the first stage of the development is now complete, and comprises very contemporary good quality warehouse/office facilities designed to have particular appeal to high technology growth industries.
The Estate is to include a commercial centre with Banks, Restaurants, Medical Suites, professional suites for Accountants, Solicitors, and associated business support professions, and will also have relaxation and recreation facilities including an ornamental lake, picnic areas and barbecues, a jogging track, volleyball and basketball courts, and cricket and soccer fields etc.
As early as its initial purchase of the land adjoining immediately to the south of the subject property, AFT was convinced of the suitability of this area for its proposed development, and recognised its need for additional land for further stages of the Estate. The subject property was the only possible land suitable for that purpose, being adjoining and of a complimentary zoning, and as you would be aware, it was in fact purchased by AFT on the 22^nd April 1983.
In summary, I understand AFT is now committed to a total industrial development of the subject and adjoining lands of approximately $45,000,000 over the next five years, the result being, I believe, to firmly establish this immediate location over that time as probably the major south‑eastern suburban industrial sector to the metropolitan area.[33]

[33]Ibid, doc 89, 4814–4815.

In mid‑1982, the Previous Claimants arranged an independent valuation of the Permanent Trustee Land through Mr Graham Burns of Colliers International Property Consultants Pty Ltd (‘Colliers’). By way of letter dated 27 October 1982, Mr Burns estimated the market value of the land as between $5,000 and $10,000 per acre, noting the detrimental impacts of the reservations and of the Garden Industrial zoning (‘the Colliers Letter’).[34]
[34]Ibid, doc 87, 4807. The estimate of value is in the form of a letter and not as a detailed report.

Whilst the Colliers Letter was in response to a request pertaining to the Permanent Trustee Land, it should be noted that the letter referred to 33.5 ha of land which is the total sum of the Permanent Trustee Land and the Jomaring Land (noting this was prior to the subdivision which created those lots).

Discussions occurred in late 1982 between the Previous Claimants and AFT regarding sale of the land at a price of $14,800 per acre.[35] There was an initial Sale Note[36] signed by the Previous Claimants citing a total price $841,155.00 (with a price adjustment if the land was greater or less than 22.768 hectares). This Sale Note, however, expired due to AFT not confirming Board approval for the purchase in time, in accordance with condition 6.[37]
[35]Ibid, doc 343, 5532.
[36]Ibid, doc 337, 5514.
[37]Ibid, 5518. This required Board approval to be given by 1 December 1982 but it was not given until 21 December 1982 – see doc 342, 5531.

The Previous Claimants subsequently became aware of certain proposed amendments to the MMPS which would make the Garden Industrial Zone less restrictive (discussed further below at [72]–[73]). On that basis, on 28 February 1983 the Previous Claimants wrote to the solicitors for AFT withdrawing the sale at $14,800 per acre and offering a price of $20,500 per acre.[38]
[38]Ibid, doc 343, 5532.

A draft contract based on the Previous Claimants new price calculation was prepared by their solicitors on 7 March 1983, and conveyed to the purchaser on that date.[39]
[39]Ibid, doc 345, 5538.

By way of response dated 25 March 1983, AFT made a counter‑offer which included the following proposals:[40]
[40]Ibid, doc 348, 5556–5558.

(a) The price would be $14,800 per acre for 22.31 ha (i.e. 55.129 acres), being the area of the Permanent Trustee Land after subtracting the areas affected by the Road Widening Reservation and the Main Road Reservations.

(b) However, despite no price being allocated to the areas affected by the Reservations, those areas would be included as part of the land sold. In particular, the Road Widening land would be included on the basis that the vendors (the Previous Claimants) would be entitled to all compensation up to an area of 1.43 ha; but if the acquired area was greater the compensation for the additional area would be for the purchaser (i.e. AFT), and if less the purchaser would pay the vendor for the remaining area at the contracted rate per acre.

(c) The contract would contain a conditional clause whereby, should the proposed amendments to the Garden Industrial Zone actually take place, an additional sum would be payable equivalent to the increase in price had the land been valued at $20,500 per acre.

(d) There would be a 99 year lease (as originally proposed in the 7 March draft contract)[41] by AFT back to the Kingston family in relation to the land affected by the Main Road Reservation (i.e. the Kingston Land) at a nominal rent.

[41]Ibid, doc 346, 5539.

The letter stated that AFT wanted the negotiations finalised quickly, as by 29 March 1983 the Coram Land would be settled and AFT had to make “immediate decisions on whether [their] development was for all or part of the land”.[42]
[42]Ibid, doc 348, 5558.

On 26 March 1983, the Mr David Kingston met with the AFT Manager (Mr Athorn) and Mr Lawson and negotiated a final agreement. At the time Mr Kingston was a solicitor and was assisting his father and aunt, the Previous Claimants, in the absence that day of their paid solicitor Mr Thomas Callander. Mr Kingston and Mr Athorn settled the negotiations at $14,800 per acre, with the following additional terms:

1.Contract provides that increased price per acre of $5,700.00 to be paid upon Contingent Event [i.e. the MMPS amendment] within nine years.
2.Escalation or interest on $5,700.00 after year 1 (at bank overdraft rate in excess of $100,000.00).
3.AFT covenants to use best endeavours to effect amendment to MMBW P/S within two years.
4.At expiration of two years AFT has option to terminate “bonus provisions” upon covenanting that it shall not develop in excess of 20% [of the land] …[43]

[43]Ibid, doc 350, 5565

On 22 April 1983, the contract was executed for the sale of the Permanent Trustee Land (27.10 ha) for a total sum of $832,891.[44] Whilst the entire lot was sold, the price was calculated to the exclusion of the lands affected by the Road Widening Reservation and the Main Road Reservation – i.e. on the basis of 22.31 ha of viable land. When $832,891 is divided by 22.31 ha, that provides a price equivalent of $37,318 per ha or $15,110 per acre. That is slightly more than the negotiated price of $14,800 per acre. That is due to the commission of $16,980 paid to the estate agent (Mr Lawson).[45]
[44]Ibid, doc 9, 251.
[45]Ibid, doc 372, 5626.

A lease (i.e. ‘the 99 year lease’)[46] and an option to purchase[47] in the name of the claimant Mr David Kingston were also executed on that day. These pertained to the Kingston Land (3.35 ha) which was subject to the Main Road Reservation and was nominally valued at $10.[48] The 99 year lease was for rent of $1 per annum[49] and the option to purchase was exercisable on a nominal sum of $1, providing Mr Kingston with an eventual fee simple interest in the land. However the option could only be exercised once that land became a separate allotment[50] (which, as discussed above at [40], did not occur until 8 July 1987).
[46]Ibid, doc 349, 5559.
[47]Ibid, doc 354, 5575.
[48]Ibid, doc 9, 254, [9(a)].
[49]Ibid, [9(b)].
[50]Ibid, doc 354, 5576.

The contract also enabled the sale to trigger the eventual ‘compensation’ claim (discussed below at [76]–[85]). By condition 8(a) of the contract, the Previous Claimants remained entitled to all compensation that was payable associated with the future acquisition of the Kingston Land.[51] The parties executed a further written document,[52] also dated 22 April 1983, outlining the precise terms of the agreement as to future compensation (in line with AFT’s counter‑offer summarised at [51(b)] above).
[51]Ibid, doc 9, 253, [8(a)].
[52]Ibid, doc 535, 5572.

As note above (at [39]), the transfer of the Permanent Trustee Land was effected on 11 May 1983 by Instrument K366646, which also divided that title so that the Kingston Land became a separate lot.

1982 to 1983: AFT’s Purchase of the Coram Land

As aforementioned, in 1982 and 1983 AFT were also negotiating the purchase of a large part (12.405 ha) of the Coram Land which abutted the Permanent Trustee Land immediately to the south, with the intention of combining these lands (other than the reservation‑affected land including the Kingston Land) to form the Redwood Gardens Industrial Estate. The sale also concluded around the same time, in April 1983.

In order to effect the sale, on 1 April 1983, the lands once held by the Coram family (depicted in yellow on Figure 3 above at [22]) were subdivided by Plan of Subdivision LP141797. The Corams also held a small parcel of land on a separate title which sat along the western boundary of their main holdings, about midway down the frontage to Boundary Road.[53] The land ultimately sold (12.405 ha) was comprised of the small parcel holding and Lot 1 of the subdivision. Lot 1 and the small parcel are depicted on LP141797 as follows:

Figure 12 - Subdivision of Coram Land, LP141797.

[53]Being that described in the Certificate of Title Volume 8224 Folio 984.

It can be seen that this subdivision aligns with the subdivision of the Permanent Trustee Land depicted above (at [40], Figure 10), in terms of the diagonal lines which carve off the reserved land in both instances.

Negotiations between AFT and the Corams commenced in early‑mid 1982 and were ongoing when the negotiations with the Kingstons regarding the Permanent Trustee Land were intensifying in late 1982. The connection between the two purchases, and whether the purchase of the Permanent Trustee Land was conditional on the successful purchase of the Coram Land, is of some contention in these proceedings.

By letter dated 21 December 1982, Mr Athorn on behalf of AFT advised Mr Lawson as follows:

Re: Purchase of Land from Estate of Kingston and Coram
This will confirm that our Board has formally approved the purchase of the above parcels of land …
We wish to reiterate at this point that the Board approval is on the basis of both parcels of land being purchased, the purchase of each being interdependent on the purchase of the other.[54]

[54]Ibid, doc 342, 5531.

However, in a further letter to Mr Lawson three months later, dated 25 March 1983, Mr Athorn stated as follows:

Finalization must be reached quickly as by the 29^th March the Coram land will be settled and we must make immediate discissions [sic] on whether our development is for all or part of the land.[55]

[55]Ibid, doc 348, 5558.

The sale of the Coram Land settled on 21 February 1983 and was ultimately effected by Transfer K338294 on 15 April 1983,[56] one week prior to the settlement of the Permanent Trustee Land. The Coram Land sold for $672,535, which for an area of 12.40 ha equates to approximately $21,900 per acre or $54,200 per ha.[57]
[56]Ibid, doc 237, 5211.
[57]However, it should be noted that any estate agent or other fees included in the sale price are not known to the parties or the court, and this could alter the price per acre slightly. As discussed at footnote 39, estate agent fees were included in the price for the Permanent Trustee Land.

Difference between the Coram Sale Price and the Kingston Sale Price

As discussed, the Permanent Trustee Land purchased from the Kingstons sold for $14,800 per acre or $36,570 per ha. That is approximately 30% less per acre than the Coram Land.

In the 25 March 1983 letter, Mr Athorn explained the difference between the price per acre for the Coram Land and the price per acre for the Permanent Trustee Land:

The price paid to Coram was higher, due to the closer proximity of sewer, water, drainage, electricity and the gas service to the Coram land, and the requirement for less service road on the Boundary Road frontage.[58]

[58]CB, n 2, doc 348, 5554.

However it can be noted that Mr Keck in his 1984 valuation report, after citing this explanation by AFT, remarked as follows:

Furthermore, I imagine AFT considered itself the only purchaser, apart from which the subject land represented a vehicle for future planning stages for some years ahead, involving considerable holding costs. Accordingly, AFT remained firm at an offer considerably lower than the asking price.[59]

[59]Ibid, doc 89, 4817.

What conclusions can be drawn from this price difference will be discussed in the analysis to follow.

1983 to 1985: Relevant Status and Amendment of the Garden Industrial Zone

At the time of the sale on 22 April 1983, the Garden Industrial Zone (‘GIZ’) (and thus both the Permanent Trustee Land and the Coram Land) was restricted by Clause 7 of the MMPS, the Table to which provided (at Section 17B, Column 3) with respect to any ‘Light Industry’ development on such land that:

(a)the site shall not be less in area than 2 hectares;
(b)the total floor area shall not exceed 20 per centum of the area of the site;
(c)no building shall exceed 2 storeys in height;
(d)no building or works (other than for the provision of means of access or for lawns, gardens and improvements ancillary thereto and other than a fence, an advertisement if permitted by or pursuant to this Ordinance, and sewerage, drainage, water and gas mains, or pipelines, electricity transmission lines operating at a voltage of less than 220,000 volts and telephone lines) shall be constructed closer than –
(i)20 metres from the site frontage;
(ii)10 metres from any other boundary; and

(e)All storage of machinery, equipment, materials or goods takes place within a building.[60]

[60]Melbourne Metropolitan Planning Scheme, Planning Scheme Ordinance (as at Reprint 10, dated 22 December 1982), cl 7, table s 17B, col 3.

Column 5 of the Table to Clause 7 provided:

Any purpose specified in Column 3 of this Section of this Table if the conditions set forth opposite such purpose are not complied with.

The effect of this was that, where the Column 3 conditions were not met, the use of the land for ‘Light Industry’ was prohibited.

At a similar time, the Springvale Council was considering requesting that the planning authority, the MMBW,[61] consider an amendment to the MMPS which would allow a higher site coverage for land subject to the GIZ. This was discussed at a meeting on 6 December 1982 (‘Springvale Council meeting’), at which the Council determined to recommend to the MMBW an amendment to the following effect (among other things):

The total site coverage for the estate, exclusive of public roads, shall not exceed 45%, including outside storage areas, providing that the responsible authority may grant bonuses of up to 2% for each of the following: fully co‑ordinated architectural and landscape treatments, an ornamental lake of at least 1000m², recreation facilities, a café‑restaurant‑club, or other features considered by the responsible authority to be worthy of such encouragement …[62]

[61]The Melbourne Metropolitan Board of Works (‘MMBW’) was the relevant planning authority prior to the introduction of the Planning and Environment Act 1987 (Vic).

[62]Ibid, doc 341, 5529.

However, these amendments were not effected at the time of the sale of the Permanent Trustee Land, and the MMBW ultimately did not accept all of the recommendations of the Council including the 45% coverage recommendation.

It was not until 19 June 1985 that the amendment, being Amendment No. 233 Part 4 to the MMPS, was gazetted.[63] Among other matters, with respect to the GIZ, this amendment:
[63]Ibid, doc 17, 1502.

(a) reduced the minimum lot size from 2 ha to an average of 0.6 ha (with no lot to be less than 0.25 ha in area);

(b) increased the site coverage limit from 20% to 35%; and

(c) removed the 2 storey height limit.[64]

[64]Ibid, doc 17, 1502.

1984: The Previous Payments

As noted above, the ‘Previous Payments’ comprised two separate payments of monies:

(a) $166,680 paid by the RCA to the Previous Claimants on 6 September 1984 in respect of the Permanent Trustee Land which included what became the Kingston Land (‘the Kingston TCP Payment’); and

(b) $366,000 paid by the RCA to the Previous Claimants on 17 October 1984 in respect of the Jomaring Land (‘the Jomaring TCP Payment’).

The Kingston TCP Payment – Loss on Sale

On 27 January 1984, the Previous Claimants lodged with the RCA a claim under s 41 of the Town and Country Planning Act 1961 (Vic) (‘the TCP Act’) for loss or damage arising out of the 1983 sale of the Permanent Trustee Land[65] (‘the Loss on Sale Claim’). The claim sought payment in the amount of $120,000, based on the valuation of Mr Lawson as set out in his report for the Previous Claimants dated 1 June 1983.[66]
[65]Ibid, doc 370, 5619.
[66]Ibid, doc 88, 4808.

However, Mr Lawson’s valuation related only to the 3.353 ha affected by the Main Road Reservation (i.e. the Kingston Land) and did not account for the 1.426 ha affected by the Road Widening Reservation.[67] Therefore, on 27 March 1984, the Previous Claimants lodged an amended claim under s 41 of the TCP Act (‘the Amended Claim’).[68] The Amended Claim sought the sum of $172,386.10, which comprised:

(a) $120,000 for loss on sale allegedly occasioned by the Main Road Reservation (i.e. as impacting the Kingston Land); and

(b) $52,386.13 for loss on sale allegedly occasioned by the Road Widening Reservation (i.e. as impacting the northern and western boundaries of the Permanent Trustee Land).[69]

[67]Ibid.

[68]Ibid, doc 374, 5632.

[69]Ibid, doc 376, 5642.

On 13 June 1984, the Previous Claimants referred the matters in dispute arising from the Amended Claim to the Land Valuation Board of Review (‘the Board’).[70]
[70]Ibid, doc 381, 5655 and doc 382, 5659.

The RCA obtained two valuations as to the appropriate monetary payment. The RCA instructed the valuers to make a valuation as at 22 April 1983 in respect of the loss on sale with reference to two aspects of the Permanent Trustee Land:

(a) the 3.353 ha subject to the Main Road Reservation (i.e. the Kingston Land), which was marked in the instruction as Area A; and

(b) the 1.426 ha subject to the Road Widening Reservation, which was marked as Areas C and D.[71]

[71]Ibid, doc 378, 5652 and doc 379, 5653.

On 13 July 1984, Mr Keck furnished an independent report for the RCA providing an assessment as to loss on sale as follows (‘Mr Keck’s 1984 Kingston Report’):[72]
[72]Ibid, doc 89, 4811.

(a) a primary valuation of $170,998 comprised of:

(i) $117,783 for Area A; and

(ii) $53,215 for Areas C and D; and

(b) a residual value of $7,345 pertaining to Area A only.

On 18 July 1984, Anthony Colson, on behalf of the Valuer‑General Victoria (‘the VGV’), furnished a report for the RCA providing an assessment as to loss on sale as follows (‘Mr Colson’s 1984 Kingston Report’):

(a) a primary valuation of $164,180; and

(b) a residual value of $7,500 comprised of:

(iii) $7,400 for Area A; and

(iv) $100 for Areas C and D.[73]

[73]Ibid, doc 91, 4842.

The same day, the Department of Property and Services (‘the Department’) gave approval to the RCA to make an offer of settlement based on the assessment prepared by Mr Colson.[74] This offer totalled $166,680 and was comprised of:
[74]Ibid, doc 390, 5676.

(a) $164,180, being the primary valuation provided by Mr Colson; and

(b) $2,000, being valuation fees; and

(c) $500, being legal fees.[75]

[75]Ibid, doc 388, 5674.

A Notice of Offer on these terms was provided to the Previous Claimants the following day, 19 July 1984.[76] Then on 1 August 1984 a conference was held between the parties and their solicitors, at which the Previous Claimants agreed to accept the offer.[77] The valuers, Mr Lawson and Mr Colson and the current claimant Mr Kingston were also present at that conference.[78]
[76]Ibid, doc 392, 5684.
[77]Ibid, doc 394, 5688.
[78]Ibid.

By a Deed of Release dated 6 September 1984,[79] the sum of $166,680 was paid to the Previous Claimants in full and final settlement of the claims and entitlements for the financial loss incurred on the sale of the Permanent Trustee Land by reason of the relevant reservations. The Deed of Release specifically provided that in consideration of the payment of $166,680:

1. The Claimants HEREBY RELEASE AND FOREVER DISCHARGE RCA from any action of any description whatsoever or any entitlement in respect of any claim for compensation which the Claimants may have in respect of any claim for loss or damage arising out of the sale of the land.
2. THE CLAIMANTS HEREBY INDEMNIFY RCA in respect of any action of any description whatsoever which may be made by any other person or corporation at any time in respect of a loss or damage claim arising out of the sale of the land to the intent that if RCA is required to pay compensation in relation thereto to any such person or corporation the Claimants will re‑imburse RCA fully in respect thereof.[80]

[79]Ibid, doc 407, 5727.

[80]Ibid, 5727–5728.

On 1 November 1984, a statement prepared under s 41(3) of the TCP Act was lodged with the Registrar of Titles in respect of the Kingston TCP Payment paid on 6 September 1984.[81]
[81]Ibid, doc 251, 5264.

The Jomaring TCP Payment – Financial Loss

On or about 18 October 1983, a planning permit application (no. TP1072, ‘the Permit Application’)[82] was made on behalf of the Previous Claimants to the MMBW to use and develop the Jomaring Land. The intention was to develop the land for the purposes of “light industry” in accordance with the conditions contained within Column 3 of Section 17B (GIZ) of the Table to clause 7 of the MMPS.[83] At the time, the Main Road Reservation applied to the whole of that land.
[82]Ibid, doc 360, 5590.
[83]Ibid, doc 359, 5586.

On 27 January 1984, the MMBW refused the Permit Application on the ground that part of the land was required for a public purpose being the Proposed Main Road (‘the Permit Refusal’).[84]
[84]Ibid, doc 371, 5624.

On 28 March 1984, the Previous Claimants lodged a claim under s 41 of the TCP Act with the RCA for loss or damage arising out of the Permit Refusal in the sum of $485,037, based on a valuation conducted by Mr Lawson [85] (‘the Permit Refusal Claim’).
[85]Ibid, doc 375, 5637.

On 13 June 1984, the Previous Claimants referred the dispute to the Board[86] (as discussed above, the claim for the Kingston TCP Payment was also referred to the Board on that date). The RCA subsequently requested valuations as to the financial loss incurred as a result of the Permit Refusal.
[86]Ibid, doc 383, 5663 and doc 384, 5666.

On 13 July 1984, Mr Keck furnished an independent report for the RCA providing an assessment as to loss as follows (‘Mr Keck’s 1984 Jomaring Report’):[87]

(a) a primary valuation of $300,000; and

(b) a residual value of $13,000.

[87]Ibid, doc 90, 4824.

Mr Colson, on behalf of the VGV, provided the following assessment as to loss:

(a) a primary valuation of $318,950; and

(b) a residual value of $16,000.[88]

[88]Ibid, doc 412, 5736.

The Jomaring Land was also discussed at the 1 August 1984 conference, however no settlement was reached as to an appropriate figure at that time, and the valuers Mr Colson and Mr Lawson were asked to reconsider their positions as to valuation methodology.[89]
[89]Ibid, doc 399, 5707.

The VGV’s valuer did reassess his valuation, and on 20 August 1984 furnished a report providing as follows (‘Mr Colson’s 1984 Jomaring Report’):

(a) a primary valuation of $362,373; and

(b) a residual value of $16,700.[90]

[90]Ibid, doc 92, 4847.

On 25 September 1984, the Department gave the RCA approval to make an offer of settlement based on the reconsidered valuation prepared by Mr Colson.[91] The offer was in the sum of $366,000 which comprised:
[91]Ibid, doc 414, 5740.

(a) $362,373, being the primary valuation provided on Mr Colson’s reassessment; and

(b) $1,300, being valuation fees; and

(c) $2,000 being legal fees;

with the total rounded to the nearest thousand.[92]

[92]Ibid, doc 412, 5738.

By a deed of release dated 17 October 1984, the Previous Claimants agreed to accept the sum of $362,373 in full and final settlement of their claims and entitlements in respect of the loss or damage compensation arising from the Permit Application refusal.[93] The RCA paid that sum to the Previous Claimants on that date. The Deed of Release provided that:

The Claimants accept the aforementioned sum in full and final settlement of all their claims and entitlements and costs of or incidental thereto pursuant to the Claimants’ claim for compensation mentioned above and pursuant to the provisions of the Town and Country Planning Act 1961, the Valuation of Land Act 1960, the Lands Compensation Act 1958, the Transport Act 1983 and all other Acts and Regulations AND HEREBY ABSOLUTELY RELEASES RCA from any action of any description whatsoever or any entitlement in respect of the abovenamed refusal to grant the application to develop or the Claimants’ claim for compensation herein mentioned.[94]

[93]Ibid, doc 416, 5746.

[94]Ibid, 5748.

On or about 1 November 1984 a statement prepared under s 41(3) of the TCP Act was lodged with the Registrar of Titles in respect of the monies paid to the Previous Claimants on 17 October 1984.[95]
[95]Ibid, doc 250, 5260.

1991 to 1994: Transition to Proprietorship by the Present Claimants

On 25 February 1991, William Ronald Kingston became the sole proprietor of the balance of the Parent Title including the Jomaring Land.[96]
[96]‘Joint Statement of Agreed Facts’, filed 14 October 2021 in David Ronald Kingston v Head Transport for Victoria (S ECI 2020 04458, Supreme Court of Victoria), [14] (‘Kingston Agreed Facts’).

On 8 October 1993, William Ronald Kingston and Jomaring Pty Ltd executed a Transfer of Land Form, the effect of which was to transfer the Parent Title (including the Jomaring Land) to Jomaring Pty Ltd (of which he was the director at the time). The transfer was recorded in Instrument T136333T dated 8 October 1993 registered on 9 June 1994.[97]
[97]CB, n 2, doc 268, 5334.

By Instrument S762399J dated 26 October 1993, Permanent Trustee Australia Limited (formerly PT Nominees) transferred the Kingston Land to the claimant Mr Kingston. He formally became the registered proprietor of the Kingston Land upon registration of Instrument S762399J on 28 October 1993,[98] after exercising the option to purchase contracted for in April 1983 (discussed above at [55]).
[98]Ibid, doc 275, 5361.

On 9 June 1994, upon registration of Instrument T13633T, the Parent Title was cancelled and Certificate of Title Volume 10199 Folio 125 was issued in respect of the Jomaring Land.[99] The claimant Jomaring became the registered proprietor of the Jomaring Land, described in Certificate of Title Volume 10199 Folio 125 as Lot 1 on Title Plan 095013T (formerly known as part of Lot 2 on Plan of Subdivision LP136103).[100]
[99]Ibid, doc 268, 5334.
[100]Ibid, doc 269, 5336.

In 2004, following the death of Mr William Kingston, the claimant Mr David Kingston became the sole director of Jomaring,[101] and thus from that point effectively had proprietorship over both the Jomaring Land and the Kingston Land.
[101]Ibid, doc 484, 6072.

1999: Introduction of the New Format Planning Scheme

On 22 December 1999, the Kingston Planning Scheme was gazetted as part of the New Format Planning Scheme system.[102] It was at this point that the distinction between land being designated as within a ‘zone’ as distinct from a ‘reservation’ ceased to exist. The New Format Planning Scheme system instead designated all land to be within a ‘zone’ of a particular kind, and then subject to varying ‘overlays’.
[102]Ibid, doc 160, 9522.

The Kingston New Format Planning Scheme applied an ‘Industrial 1 Zone’ to the Kingston Land and a ‘Residential 1 Zone’ to the Jomaring Land, and a ‘Public Acquisition Overlay 1 (with Purpose of Acquisition – Roads)’ over all of the Kingston Land and Jomaring Land.[103] This is depicted as follows:

Figure 13 - Zones and Overlays under the Kingston (New Format) Planning Scheme.

[103]Ibid.

Status of the Land at 29 March 2019 – the Acquisition Date

Accounting for the amendments discussed, as at the Acquisition Date:[104]
[104]Ibid, [19].

(a) the Kingston Land was subject to the following controls under the Kingston Planning Scheme (‘KPS’):

(v) the Industrial Zone, Schedule 1 (entirely);

(vi) the Public Acquisition Overlay, Schedule 1 (entirely); and

(vii) the Special Building Overlay (partially);

(b) the Jomaring Land:

(i) had direct access to Centre Dandenong Road; and

(ii) was subject to the following controls under the KPS:

(1) the General Residential Zone, Schedule 3 (entirely);

(2) the Public Acquisition Overlay, Schedule 1 (entirely); and

(3) the Special Building Overlay (partially);

(c) the Melbourne Water Land:

(i) contained the main outfall sewer known as the South Eastern Trunk Sewer; and

(ii) was subject to the following controls under the KPS:

(1) the Road Zone, Category 1 (entirely);

(2) the Public Acquisition Overlay (partially); and

(3) the Special Building Overlay (partially); and

(d) an open drain, depicted as dashed lines on LP136103 (shown above at [36(a)]), affected part of the Kingston Land, the Jomaring Land, and the Melbourne Water Land.

These zones and overlays, as applicable to the Kingston Land and Jomaring Land, are depicted below.

Figure 14 - Zones and Overlays as at Acquisition Date.

The Road Construction Authority, Roads Corporation and the Authority

On 1 July 1989, the former statutory functions of the RCA vested in Roads Corporation (‘VicRoads’) pursuant to the Transport (Amendment) Act 1989 (Vic).[105]
[105]Kingston Agreed Facts, n 96, [35].

On 1 January 2020, the former statutory functions of VicRoads vested in the Authority by Order in Council dated 23 December 2019 published in the Victoria Government Gazette on 27 December 2019 pursuant to the Transport Integration Act 2010 (Vic).[106]
[106]Ibid, [36].

Legislative History

The history of legislative enactments and amendments regarding compensation for land acquisition in Victoria is pertinent to the central issues in dispute in these proceedings.

1944 to 1960: Early Acquisition Law

The Town and Country Planning Act 1944 (Vic) (‘TCP Act 1944’) was the first comprehensive planning enactment in Victoria. The TCP Act 1944 established the first system of planning schemes, empowering planning authorities to prepare and manage planning schemes[107] and to prohibit the development of land pending approval of the relevant scheme.[108]
[107]Town and Country Planning Act 1944 (Vic), s 7 (‘TCP Act 1944’).
[108]Ibid, s 12.

This new regime required a system of compensation for planning blight. Any person interested in lands “injured or prejudicially affected” by an interim development order or planning scheme could obtain compensation from the responsible authority (subject to the provisions of the Act).[109] Compensation was to be assessed under the Local Government Act 1928 (Vic), which (in s 801) provided “principles” for determining compensation, a key principle being that the measure of damages was the “direct pecuniary injury to the claimant”.
[109]Ibid, s 22.

Responsible authorities were separately empowered to “compulsorily purchase” land,[110] with compensation for acquisition to be assessed under the Lands Compensation Act 1928 (Vic). In assessing compensation, s 35 of that Act directed that “regard” be had to several factors, including the value of the land. There was no reference at this time to a deduction for compensation previously paid.
[110]Ibid, s 21.

The concept of compensation for compulsory acquisitions by authorities other than responsible planning authorities was introduced in 1958. The Lands Compensation Act 1958 (‘LC Act’) required “compensation” to be paid for such an acquisition. Section 11B set out four “principles” for how compensation was to be assessed (including market value), but again there was no requirement to reduce the payment due to previous compensation paid.

1961 to 1965: Recognition of Previous Compensation in Acquisition Law

The Town and Country Planning Act 1961 (Vic) (‘TCP Act’) came into effect on 19 December 1961.

Under the TCP Act, as first enacted, it remained the case that planning authorities could prepare planning schemes and make interim development orders,[111] with planning blight compensation available[112] (subject to limitations)[113] and with such compensation to be assessed under the Local Government Act 1958 (Vic). Planning authorities could also “compulsorily take” land[114] and in that regard had to pay compensation, to be assessed under the LC Act which remained in force.
[111]Town and County Planning Act 1961 (Vic) (‘TCP Act 1961’), s 17.
[112]Ibid, 41.
[113]Ibid, 42.
[114]Ibid, s 40.

What was new in the TCP Act was that, pursuant to s 42(4), when a responsible authority was required to pay compensation under ss 40 or 41, “regard” had to be had to any amounts of compensation already paid or payable under the TCP Act “or any corresponding previous enactment”.

However, no formula or other stipulation as to the mode of assessing the relevance of previous compensation was provided. Therefore, there was no consistent approach across the valuation industry, with both arithmetic and proportional approaches being common and established practice.

In 1965, s 41(2) of the TCP Act was amended to provide for the assessment of compensation for planning blight to be done under Part III of the Valuation of Land Act 1960 (Vic) (‘VLA’) with “such adaptations as are necessary” (required because Part III dealt with compensation for acquisitions only). However, the VLA continued the requirement that assessment of compensation be determined in accordance with s 11B of the LC Act (discussed at [112] above).

1986 to 1988: The LAC Act and the P&E Act

On 8 May 1986, the Land Acquisition and Compensation Bill 1986 (‘the LAC Bill’) was introduced into Parliament. This followed a report which Stuart Morris, barrister, had provided to the relevant Minister in 1983 on the operation of the compulsory acquisition legislation (‘the Morris Report’).[115] The Minister then established the Land Acquisition Task Group to work on the reforms and that Task Group prepared a subsequent report.
[115]Stuart Morris, Land Acquisition and Compensation: Proposals for New Land Acquisition & Compensation Legislation: Report to the Minister for Planning (Ministry for Planning Victoria, 1983) (‘Morris Report’).

The Second Reading Speech for the LAC Bill explained that the “[t]he Morris Report as modified by the task group report formed the basis of the Bill”[116] and set out the following major objects of the Bill:
[116]Victoria, Parliamentary Debates, Legislative Assembly, 8 May 1986, 2015 (JH Kennan, Minister for Planning and Environment) (‘LAC Second Reading’).

1.to establish uniform practices to be adopted by acquiring authorities in the course of compulsory or negotiated acquisition of land;
2.to reform, consolidate and codify the law relating to compensation for interests in land;
3.to establish a system of land acquisition which is equitable to all landowners and which does not impose such burdens on Government so as to prevent proper planning and public sector activity;
4.to ensure certainty in the practices of land acquisition;
5.to encourage a cooperative rather than a confrontationalist relationship between Government and landowner; and
6.to establish a speedy system of resolution of disputed claims concerning acquisition of interests in land.[117]

[117]Ibid, 2013.

The LAC Act was assented to on 23 December 1986 and came into operation on 29 November 1987. The LAC Act continued the scheme for the recognition of previous compensation in assessments for compensation, by the combined operation of ss 41(5) and 41(7).

Meanwhile, on 17 September 1986, the Planning and Environment Bill 1986 (‘P&E Bill’) was introduced into Parliament and read for a second time the following day. Notably, that version of the Second Reading Speech contained the following remarks:

The compensation provisions set out in Part 6[118] largely reflect the existing provisions of the Town and Country Planning Act. Nowhere in the Bill is the evidence of plain language and straightforward style more striking. The right to claim compensation has been clarified and the possibility of payments for solatium to householders and necessary expenses to all claimants has been recognised. Following the report on compensation by Mr Stuart Morris, the right to claim in cases of proposed reservation for public purposes has been clarified and the Minister administering the Land Acquisition and Compensation Act is given power to deal with cases of hardship. For administrative reasons, very small claims will not be allowed and compensation will not be recoverable when reservations are removed if it was paid more than six years previously.[119]

[118]This became Part 5 on the final draft of the Act.

[119]Victoria, Parliamentary Debates, Legislative Assembly, 18 September 1986, 670 (Frank Wilkes, Minister for Housing).

Following some delay caused in the Legislative Council, the P&E Bill was reintroduced into the Assembly (largely in the same form, but now dated 1987) on 25 February 1987 and was read a second (or a ‘second‑second’) time the following day.

In the (second) Second Reading Speech, the P&E Bill was described as a “total overhaul of the now outdated Town and Country Planning Act”.[120] The following objectives of effective planning legislation were also stated:
[120]Victoria, Parliamentary Debates, Legislative Assembly, 26 February 1987, 171 (Ian Cathie, Minister for Education).

recognise that planning is an activity involving elected officials, appointed advisers, interested members of the public, individually or in groups, and professional practitioners;
provide for continual strategic planning, attempting to clarify our view of the future;
ensure that values can be made explicit, through articulation of objectives and policies;
provide an ability to set rules about the use and development of land;
establish a framework for making, amending, administering and enforcing those rules by appropriate levels of government;
provide a framework for the resolution of disputes about the way land should be used and developed;
provide for compensation for those whose land is or will be required for a public purpose.[121]

[121]Ibid, 172.

The P&E Act was assented to on 27 May 1987, but did not commence until 16 February 1988. Therefore, there was a period of about 11 weeks (29 November 1987 to 15 February 1988) where the LAC Act operated according to its original terms.

Under those terms, s 41(5) provided (emphasis added):

If compensation has previously been paid in respect of the land pursuant to section 41 of the Town and Country Planning Act 1961, the amount of compensation payable under this Part in respect of an acquired interest in land or in respect of land in which an acquired interest subsists must be reduced by the prescribed amount.

On 16 February 1988, three things happened simultaneously upon the commencement[122] of the P&E Act:
[122]Most of the provisions came into operation on 16 February 1988, with Part 1 and s 204 of the Act commencing when the Act was assented to on 27 May 1987.

(a) Part 5 of the P&E Act was enacted;

(b) most of the TCP Act, including ss 40, 41 and 42, was repealed;[123] and

(c) s 41(5) of the LAC Act was amended to refer to Part 5 of the P&E Act rather than s 41 of the TCP Act.[124]

(‘the February 1988 legislative events’).

[123]Planning and Environment Act 1987 (Vic) (as originally enacted), s 205 and sch item 131. The latter reads:

The whole Act is repealed except sections 1, 3, 27A, 49(lA), 49(1B), 49(lC), 49A(1), 49A(lA), 49A(2), 49C to 49O and the Fourth Schedule.

[124]Ibid, s 205 and sch item 42.

These amendments brought s 41(5) into its present form:

If compensation has previously been paid in respect of the land pursuant to ~~section 41 of the Town and Country Planning Act 1961~~ Part 5 of the Planning and Environment Act 1987, the amount of compensation payable under this Part in respect of an acquired interest in land or in respect of land in which an acquired interest subsists must be reduced by the prescribed amount.[125]

[125]Amendment marked/emphasis added.

The Explanatory Memorandum and Second Reading Speech do not specifically refer to this change.

At this time, as originally enacted, the s 41(7) formula in the LAC Act for calculating the “prescribed amount” expressed integer B as follows:

B = the market value of the land in respect of which the compensation was paid, that value to be determined as if the underlying zoning applied to the land at the date which was the basis for the calculation of that compensation.

2006: Amendment of Section 41(7)

In 2006, the Road Legislation (Projects and Road Safety) Act 2006 (Vic) was enacted. Section 59(1) introduced the new s 43(1A) into the LAC Act, dealing with the situation where a reservation is used by a planning authority to create a zone boundary, and where the decision to impose the boundary is unrelated to the original purpose of the reservation. In addition, s 59(3) amended s 41(7) of the LAC Act as follows, to bring it into its present form:

B = the market value of the land in respect of which the compensation was paid, that value to be determined ~~as if the underlying zoning applied to the land~~ on the basis of the actual zoning that applied to the land at the date which was the basis for the calculation of that compensation.[126]

[126]Amendment marked/emphasis added.

Again, the Explanatory Memorandum and Second Reading Speech were silent as to this particular change.

The considerable amendments over time to the relevant legislation are part of the network of facts which become relevant upon the statutory construction exercise presently before the Court. They demonstrate how the relevant law has been shaped.

RELEVANT LAW

It is now pertinent to set out the relevant law, as at the Acquisition Date of 29 March 2019 (and as it remains at present).

Key Provisions in Issue

As noted, the key provisions in issue are ss 41(5) and 41(7) of the LAC Act. These are extracted both above at [16] and [17] and below at [166] and [246], and therefore will not be repeated here.

Of relevance to the interpretation of s 41(5) of the LAC Act is s 16(b) of the Interpretation of Legislation Act 1984 (Vic) (‘the ILA’). Discussed further below, s 16(b) relevantly provides:

16Appeal and re‑enactment
Where an Act or a provision of an Act is repealed and re‑enacted (with or without modification) then, unless the contrary intention expressly appears—
…
(b)insofar as any subordinate instrument made or other thing done under the repealed Act or provision, or having effect as if so made or done, could have been made or done under the re‑enacted Act or provision, it shall have effect as if made or done under the re‑enacted Act or provision.

Section 16(b) is consistent with s 4(1)(a) of the ILA which provides:

(1) The provisions of this Act—
(a) unless a contrary intention appears in this Act or in the Act or subordinate instrument concerned, extend and apply to all Acts, whether passed before or after the commencement of this Act, and to all subordinate instruments, whether made before or after that commencement …

General Principles of Acquisition Law

The right to compensation for the acquisition of land is and remains entirely statutory.[127] Accordingly, the task of the Court is to accurately interpret and apply the express provisions of the LAC Act.
[127]Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259, [29]; Secretary to the Department of Economic Development, Jobs, Transport & Resources v Manor Lakes (Werribee) Pty Ltd (2017) 224 LGERA 195 [VSCA], [24]–[25].

As with any statutory interpretation exercise, both the broader purposes or scheme of the relevant legislation and its specific provisions will guide the process. The High Court has frequently restated this fundamental principle.[128] It was recently and concisely stated by the plurality in SZTAL v Minister for Immigration and Border Protection[129] as follows:

The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.[130]

[128]See e.g., Project Blue Sky Inc v Australian Broadcasting Authority (1998) 1994 CLR 355; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 (‘Alcan’).

[129][2017] HCA 34.

[130]Ibid, 14 (Kiefel CJ, Nettle and Gordon JJ).

This passage demonstrates that, whilst context and legislative intent cannot displace the clear meaning of the statutory text,[131] they carry significant weight in any construction exercise.
[131]See Alcan, n 128, [47].

Further to these general principles, it has been recognised by this Court with respect to land acquisition matters that obscure matters should be resolved in favour of the dispossessed party. As Emerton J stated in Rigby v Secretary to the Department of Sustainability and Environment (‘Rigby’):[132]

[T]he proper approach in compulsory acquisition matters is generally to lean in favour of the dispossessed proprietor, all other things being equal … [T]o the extent that doubt arises or matters remain obscure, the doubt or obscurity should be resolved in the favour of the claimants.

[132][2012] VSC 427, [28] (‘Rigby’).

Justice Emerton drew on the decision of Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (‘the Commissioner case’),[133] in which Dixon J compared the standard to be applied to value estimates in each compensation and tax revenue cases. His Honour said:

While this difference cannot change the test of value, it is not without effect upon a court’s attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.[134]

[133](1947) 74 CLR 358 (‘the Commissioner case’).

[134]Ibid, 373–374.

This liberal approach to resolving obscurities must be borne in mind.

Whilst there is no legal onus of proof under the LAC Act, each party naturally bears the practical onus of convincing the Court to find in their favour, and findings of fact must be made on all the evidence available to the Court and on the balance of probabilities.[135]
[135]Kajag Pty Ltd v Head, Transport for Victoria [2023] VSC 392, [28] (‘Kajag’).

Compensation Generally

Section 30 of the LAC Act provides that every person whose “interest” in land has been divested or diminished by a compulsory acquisition “has a claim” for compensation.

Per s 3 of the Act:

(a) an “interest” is defined broadly to include not only legal or equitable estates, but also all rights, powers and privileges “in connexion with land”; and

(b) “compensation” is defined as compensation “to which a person is entitled under this Act”.

Part 4 of the LAC Act is titled ‘Measure of compensation’ and is the key Part of the Act engaged in these proceedings.

Section 41(1) sets out the six “factors” to which regard must be had in assessing compensation, being (in short):

(a) market value;

(b) special value;

(c) severance loss;

(d) disturbance loss;

(e) injurious affection; and

(f) professional expenses.

The precise manner and result of the application of these factors to the present facts is, at least for some of these factors, a matter of controversy between the parties. It is therefore appropriate to further detail the law concerning some of these key valuation factors, and the matters now agreed between the parties will be otherwise noted.

Market Value

Section 41(1)(a) of the LAC Act provides that regard must be had to the “market value of the interest on the date of acquisition”.

Pursuant to s 40, “market value” is defined as follows:

market value, in relation to any interest in land on a particular date, means the amount of money that would have been paid for that interest if it had been sold on that date by a willing but not anxious seller to a willing but not anxious purchaser …

Application of this definition requires an objective consideration of the behaviour of hypothetical “willing but not anxious” parties. In such an exercise, the hypothetical parties are assumed to have access to all relevant information that is available.[136]
[136] Kenny & Good Pty Ltd v MGICA (1999) 199 CLR 413, [49]–[50].

Where only part of a claimant’s land has been acquired, as is the case in both proceedings here, s 41(3) provides the method of calculation of the market value – the market value of the claimant’s interest in the whole parcel of land before acquisition, minus the market value of the claimant’s interest in the residual land remaining after the acquisition. In other words, a “before and after” approach is to be taken.

The market value of land should be assessed by reference to the highest and best use of the land at the acquisition date, given planning and other restrictions and taking into account the potential for different uses in the future.[137]
[137]Valuation of Land Act 1960 (Vic), s 5A; see e. g. Rigby, n 132, [14]; ISPT Pty Ltd v Melbourne City Council (2008) 20 VR 447 (VSCA), [41].

Section 43 of the LAC Act sets out further matters affecting the assessment of compensation. Section 43(1) provides, as relevant, that where land was reserved for a public purpose prior to the acquisition the following matters must be disregarded:

(a) any increase or decrease in the market value of the interest in land which is acquired arising from the carrying out, or the proposal to carry out, the purpose for which the interest was acquired;
…
(d) in a case where the land in which the acquired interest subsists is reserved for a public purpose in a planning instrument, any restrictions upon the use or development of that land which are imposed by, or are a consequence of, the reservation …

To apply these provisions, the Court must therefore proceed on a hypothetical basis, and decide the market value of the land supposing that there had never been the planning reservation or proposal to carry out the public works in question.[138]
[138]Kajag, n 135, [21].

It should be noted that the market value of each of the acquired parcels of land (inclusive of severance and injurious affection) as at the Acquisition Date has been agreed, as recorded in the Joint Memorandum filed on 24 July 2023.[139] However, the parties made it clear this does not mean they are in consensus as to the interpretation and determination of the particular ‘market value’ amounts referred to in the formula in s 41(7) of the LAC Act, the interpretation of which is a key issue in this dispute.
[139]Joint Memorandum, n 1.

Further, whilst Mr Colson’s reports do not detail whether he utilised the direct comparison approach or another valuation methodology, this is not symptomatic of any flaw or that a reliable approach was not used. The level of sophistication and detail as to methodology set out in the valuation reports completed by Mr Colson and Mr Keck in the mid‑1980s is, understandably, not the same as what might be expected in 2023. The level of transparency and recording on the analysis has changed over time. Given the reliance placed on his reports by the Valuer‑General’s Office, Mr Colson can reasonably be presumed to have utilised sufficient methodology in his valuations. Further, his assessment was not challenged by the Previous Claimants and the claims settled on the basis of his assessment of value.

Evidence of the care that Mr Colson took to ensure he produced a considered and comprehensive valuation can be seen in the records from mid‑1984. At a conference held on 2 July 1984, Mr Colson and Mr Keck met and discussed their respective valuations. At this point, Mr Keck had completed his detailed valuations and provided his figures, which are recorded in the minutes of the meeting, however Mr Colson had not yet finalised his process. It is recorded that Mr Colson had “carried out investigations” and that “his assessment would be fairly close” to Mr Keck’s.[333] Approximately five weeks later, at a further meeting (the attendees of which included Mr Colson, Mr Lawson, Dr William Kingston, Mr David Kingston, and Mr Callander) Mr Colson explained that he had completed his valuation and provided his figure in respect of the loss on sale claim, which was slightly lower than Mr Keck’s.[334] It is evident that Mr Colson took time within that five-week interim to independently consider his valuation and to arrive at a figure that was different to Mr Keck’s.
[333]Ibid, doc 387, 5671.
[334]Ibid, doc 394, 5688.

However, ultimately the valuations of Mr Colson and Mr Keck are very similar, and hold essentially equal weight in terms of their contemporaneousness. On one hand, Mr Colson’s reports formed the basis of the Previous Payments. On the other hand, Mr Keck was available to give evidence and the evidence he gave was persuasive. In this sense, I am compelled to treat the Colson and Keck valuations with the ‘benefit of the doubt approach’ encapsulated by Rigby and the Commissioner case (see above at [140] and [141]). Those authorities indicate that matters of doubt in assessments of compensation should be resolved liberally in favour of the dispossessed landowner.

Mr Keck’s assessment of value was marginally more favourable in respect of the Kingston Land, and Mr Colson’s valuation was more favourable in respect of the Jomaring Land. Accordingly, I shall adopt these valuations for the purposes of the respective B value in each proceeding.

Claimants’ Alternative B Values

The Claimants’ alternative B values, as discussed above at [322], were calculated based on two propositions:

(a) That the Permanent Trustee Land was as valuable as the Coram Land (i.e. $54,215 per hectare); and

(b) The Jomaring Land was worth 30% more than the Permanent Trustee Land (i.e. 30% more than $54,215 per hectare which is $70,478 per hectare).

I have already determined, on the basis of the documentary evidence and the oral evidence of Mr Keck, that the Permanent Trustee Land was not more valuable than the Coram Land. In rejecting that first proposition, the second calculation is rendered nugatory as it is contingent upon the first.

Conclusion on the B Values

I am not persuaded that the market reconstruction approach undertaken by Mr Haines should be preferred over that of the two valuers who actually valued the land almost contemporaneously with the previous relevant dates, particularly as the Keck and Colson valuations were very similar, with the Colson valuations forming the formal basis of compensation paid to the Previous Claimants. No doubt, it is a truism that all valuation assessments must be done retrospectively. That said, the valuation which is conducted closest to the time of the relevant date must have greater veracity, all things being equal. This proposition is inevitably amplified in situations such as this, where there are two valuations conducted at almost the same date in proximity to the relevant date, and the opposing evidence (of Mr Haines) is a reconstruction of the market almost 40 years later.

As noted above, the fact that the 1980s valuations were (expectedly) less detailed than the modern norm does not in my view diminish the authenticity of those earlier valuations. The information available as a matter of public record in 2023 is more extensive. However the identification of potential comparable sales remains the starting point, as it did in 1983 and as it is in contemporary times. Equally, a deep understanding of the market, the range of potential vendors and purchasers, the economic environment, and in general what might be described colloquially as ‘a nose to the ground’, are all parts of a valuer’s toolbox. Mr Keck and Mr Colson possessed all of those advantages in the context of the previous relevant dates.

I hold significant disquiet in my assessment of the instructions given to Mr Haines; instructions which were of the odour of an allegation that the Permanent Trustee Sale was not arm’s length due to the role of Mr Lawson and which plainly influenced Mr Haines’ assessment to an irreversible extent. I harbour significant disquiet as to the shifting sands of the approach taken by the Claimants to the withdrawal of those instructions at the eleventh hour.

I also am concerned by the decision not to call Mr Kingston, the only person who may have been able to provide direct evidence of the circumstances which had been alluded to but then withdrawn. He was potentially the closest witness, who had the ability to provide contemporaneous evidence. The only witness who was involved in a contemporaneous way, albeit as a consultant valuer, was Mr Keck. Whilst he did not have any direct recollection of conversations or enquiries that he made, his valuation stands as a contemporaneous record and ought to be given significant weight.

The expected and preferred approach to retrospective assessments in the valuation industry is clear – contemporaneous reports are preferred and retrospective assessments should be done by valuers who were qualified at the relevant time, where that is possible. Consequently, I am of the view that the valuations ascribed by Mr Colson and Mr Keck to the market value of the Kingston Land and the Jomaring Land, at the time of the Previous Payments, represent reliable assessments of market value for the purposes of the B values in these proceedings. Both valuations were conducted at a time much more contemporaneous with the previous relevant dates.

I am not satisfied that there is any evidence that could persuade me that the sale of the Permanent Trustee Land was a forced sale or otherwise compromised, such that it could not be considered a true arm’s length or Spencer sale. Additionally, I am satisfied that the parties were aware of the Coram Land sale price and that both of these sales represented the market value respectively.

I conclude that the valuations undertaken by Mr Keck and Mr Colson are to be preferred over that of Mr Haines. In so far as there is a difference in the valuation undertaken by Mr Keck and Mr Colson:

(a) Mr Keck’s valuation should be preferred in the Kingston proceeding; and

(b) Mr Colson’s valuation should be preferred in the Jomaring proceeding.

As discussed, the marginal difference in the Keck and Colson valuations is to be resolved by affording the more generous compensation payment in each proceeding.

Therefore, in the Kingston proceeding, I adopt the alternative B values contended for by the Authority based on the valuation of Mr Keck. In the Jomaring proceeding, I adopt the Authority’s primary B values based on Mr Colson’s report, the calculation of which is explained above at [327]–[329].

These values are as follows:

B value

Kingston proceeding

$112,700 ($37,318/ha)

Jomaring proceeding

$303,474 (≅ $58,000/ha)

Determination of the ‘Prescribed Amount’ in Each Proceeding
Kingston

The prescribed amount in the Kingston proceeding is $10,954,863. That amount is calculated as follows:

Where: A = $103,749;
B = $110,414; and
C = $11,900,000

x C =
x $11,900,000 = $10,954,863

Jomaring

The prescribed amount in the Jomaring proceeding is $21,126,352. That amount is calculated as follows:

Where: A = $290,104;
B = $303,474; and
C = $22,100,000.

x C =
x $22,100,000 = $21,126,352

CONCLUSION

I have found that s 41(5) of the LAC Act is engaged in these proceedings, such that the compensation payable in respect of the present acquisitions (the relevant date being 29 March 2019) should be reduced due to the Previous Payments received by the Previous Claimants in 1984. Those were payments of compensation made pursuant to the relevant legislative framework such to engage that provision, due to the continuation by way of enactment of the legal rights and obligations under the TCP Act in the form of the P&E Act.

I have determined that there are no hindrances to the operation of s 41(7) of the LAC Act, by reason of construction or otherwise, and therefore a prescribed amount can be determined for the purposes of the reduction set out in s 41(5).

Upon a consideration of all of the evidence before me – particularly on the documentary evidence, on the evidence of Mr Keck and of Mr Haines, and on the veracity that can be attributed to those testimonies respectively – I have determined the appropriate prescribed amounts to be factored in for each of the proceedings.

Applying ss 41(5) and 41(7) of the LAC Act, in respect of these two proceedings I find that:

(a) The claimant Mr Kingston is entitled to $1,112,943 in compensation as follows:

$11,900,000 (market value)
+ $167,806 (professional expenses)
- $10,954,863 (prescribed amount based on Mr Keck’s valuation)
= $1,112,943

(b) The claimant Jomaring Pty Ltd is entitled to $1,126,635 in compensation as follows:

$22,100,000 (market value)
+ $152,987 (professional expenses)
- $21,126,352 (prescribed amount based on Mr Colson’s valuation)
= $1,126,635

Orders shall be made accordingly. I shall hear the parties on the final form of orders and in respect of costs.

ANNEXURE A

The following table sets out the provisions of the TCP Act, as it stood immediately prior to the February 1988 legislative events, and what (in the Court’s view) occurred in respect of each provision on 16 February 1988.[335]

[335]Noting that item 131 to the Schedule to the P&E Act provided:

The whole Act is repealed except sections 1, 3, 27A, 49(1A), 49(1B), 49(1C), 49A(1), 49A(1A), 49A(2), 49C to 49O and the Fourth Schedule.

And noting that Prostitution Regulation Act 1986 (Vic) (‘the PR Act’) impacted sone of these remaining provisions.

Where modifications are noted, those modifications were understandably modifications to varying extents.

Section of TCP Act[336]	Title or abridged title in TCP Act	Status on 16 February 1988	Equivalent in P&E Act[337]
1	Short title and commencement	Retained in the TCP Act but amended	-
2	Repeal and savings	Repealed without re‑enactment	-
3	Interpretation	Retained in the TCP Act but amended	-
4	Delegation by Minister	Repealed and redundant	-
5, 6, 6A‑6D	(Previously repealed)	-	-
7	Advisory committees	Repealed and re‑enacted in P&E Act (w modifications)	151
7A	Statements of planning policy (‘SPPs’)	Repealed and redundant (see P&E Act s 204)	-
8	Power to enter buildings & land	Repealed and re‑enacted in P&E Act (w modifications)	133 to 138
8A, 8B	(Previously repealed)	-	-
8C, 8CA, 8D‑8K	Misc. (re SPPs and outdoor advertising)	Repealed and redundant	-
9	Contents of planning scheme	Repealed and re‑enacted in P&E Act (w modifications)	6
10	General provisions as to schemes	Repealed and redundant	-
11	Preparation of planning schemes by council	Repealed with right to amend planning schemes enacted	8(3)
11A	Delegation by responsible authorities (‘RAs’)	Repealed and re‑enacted in P&E Act (w modifications)	188
11B	Delegation of powers	Repealed and re‑enacted in P&E Act (w modifications)	186
11C	Delegation of enforcement of scheme or order	Repealed and re‑enacted in P&E Act (w modifications)	190
11D	Delegation by Secretary	Repealed and re‑enacted in P&E Act (w modifications)	187
12	Regional planning authorities (‘RPAs’)	Significant impact by new P&E regime, but existed under TCP	10
12AA	Preparation of schemes by RPA’s	Repealed with right to amend planning schemes enacted	8(2)
12AB	Council can request amendments	Absorbed into new planning scheme system per s 8 P&E Act	8(3)
12AC, 12A‑12J	Misc. (re RPA’s)	Repealed and redundant	-
12K	Westernport region	Repealed and re‑enacted in P&E Act (w modifications)	152
13	Minister to prepare scheme on default by municipality	Absorbed into new planning scheme system per s 8 P&E Act	8(1)(a)
14	Preparation of planning scheme by Minister (overriding power)	Repealed and redundant in context of new s 8(1)	-
15	Agreements with authorities for preparation of schemes	Repealed and redundant in context of new s 8(1)	-
16	Special powers of Minister	Repealed and redundant in context of new s 8(1)	-
17	Interim development orders (IDOs)	Repealed and redundant (see P&E Act ss 204 and 207)	-
18	Applications for permits	Repealed and re‑enacted in P&E Act (w modifications)	47, 48
18A	Applications for permits for extractive industry	Repealed and re‑enacted in P&E Act (w modifications)	97
18AA	RA may refuse to consider application (more information)	Repealed and re‑enacted in P&E Act (w modifications)	54
18AB	Application referred by delegate to RA	Repealed and redundant	-
18B	Notice of application for permit	Repealed and re‑enacted in P&E Act (w modifications)	52
18BA	Notice given or published in accordance with order or scheme	Repealed and redundant	-
18C	Objections	Repealed and re‑enacted in P&E Act (w modifications)	57
18D	Register of applications	Repealed and re‑enacted in P&E Act (w modifications)	49
19	Appeals	Repealed and re‑enacted in P&E Act (w modifications)	77‑82
19A‑19D	(Previously repealed)	-	-
20	Determination after appeal against failure to issue permit	Repealed and re‑enacted in P&E Act (w modifications)	84
21	(Previously repealed)	-	-
21A	Issue of permit conclusive evidence of compliance	Repealed and redundant	-
22	Determination of appeal	Repealed and re‑enacted in P&E Act (w modifications)	85
22A, 22B	(Previously repealed)	-	-
22C	When permits deemed to be issued after appeal (re IDOs)	Repealed and redundant	-
22D	Conclusion of appeal pending before Minister	Repealed and redundant	-
22E	Appeals (re disputes with RAs)	Repealed and re‑enacted in P&E Act (w modifications)	86
23	Continuity of permits	Repealed and redundant	-
24	Revocation or modification of permit	Repealed and re‑enacted in P&E Act (w modifications)	71
25	Permit in respect of land owned by RA	Repealed and redundant	-
26	Revocation or modification of IDOs	Repealed and redundant	-
27	Issue of permits under planning schemes	Partially redundant / absorbed into P&E Act s 47	47
27A	Persons convicted of certain offences not to hold permits	Retained in the TCP Act but amended by the PR Act	-
28	Provision for objections to be made to scheme	Repealed and re‑enacted in P&E Act (w modifications)	19‑27
29	Modification of provisions of this Act in case of certain schemes	Repealed and redundant	-
30	Submission of planning schemes	Repealed and re‑enacted in P&E Act (w modifications)	31, 32
31	Copy of scheme to be kept at office of RA	Repealed and re‑enacted in P&E Act (w modifications)	42
32	Revocation and amendment of schemes	Repealed and re‑enacted in P&E Act (w modifications)	38
33	Effect of scheme on by‑laws and orders	Repealed and re‑enacted in P&E Act (w modifications)	207
34	Land reserved under Crown Land (Reserves) Act	Repealed and re‑enacted in P&E Act (w modifications)	46
35	Duties of RAs	Repealed and re‑enacted in P&E Act (w modifications)	12
36	Reserved additions to roads on private property	Repealed and redundant	-
37	Application of Local Government Act	Repealed and redundant	-
38	Certificate by RAs	Repealed and redundant	-
39	Proof of existence and contents of orders and schemes	Repealed and re‑enacted in P&E Act (w modifications)	140
39A	Evidentiary provisions	Repealed and re‑enacted in P&E Act (w modifications)	141, 142, 143
39B	Construction of certain references	Repealed and re‑enacted in P&E Act (w modifications)	147
40	Acquisition and disposal of land	Repealed and re‑enacted in P&E Act (w modifications)	172
40A	Power to sell superfluous land to contiguous owners in certain cases	Repealed and redundant	-
41	Compensation for damage resulting from schemes and orders	Repealed and re‑enacted in P&E Act (w modifications)	98(1), 98(2) 108(1), 110, 107
42	Cases in which no compensation payable	Repealed and re‑enacted in P&E Act (w modifications)	98(1), 98(2), 99, 102, 104, 106, 108(2)
43	Transfer of land for which full compensation paid	Repealed and partially re‑enacted in P&E Act	111(2)
44	Power of RA to require removal etc of certain buildings etc	Repealed and redundant	-
44A	Power of RA to execute certain works	Repealed and re‑enacted in P&E Act (w modifications)	123
44B	Sale of salvaged property	Repealed and re‑enacted in P&E Act (w modifications)	123
45	Works carried out under schemes to be deemed works	Repealed and redundant	-
46	Application of Local Government Act	Repealed and redundant	-
47	Proof of service documents	Repealed and redundant	-
48	Hearings by RA	Repealed and re‑enacted in P&E Act (w modifications)	191, 192, 193, 194, 195, 196
48A	Determinations by the RA (extractive industry)	Repealed and redundant	-
49	Offences and penalties	Partially repealed with aspects re‑enacted (w modifications)	126, 127
49A	Power to enter buildings etc	Partially repealed with aspects re‑enacted (w modifications)	133
49B	Offences by corporations	Repealed and re‑enacted in P&E Act (w modifications)	128
49C‑49O	Misc. (re brothels)	Retained in the TCP Act but amended by the PR Act	-
50	Apportionment of cost of works	Repealed and redundant	-
51	Continuation of schemes when municipal district altered	Repealed and re‑enacted in P&E Act (w modifications)	15
52	As to IDOs continued under schemes	Repealed and redundant	-
52A	RA may enter into agreements	Repealed and re‑enacted in P&E Act (w modifications)	173, 174, 176, 177, 178, 179, 180
52B	Registration of agreement	Repealed and re‑enacted in P&E Act (w modifications)	181, 182, 183
52C	Appeals to Planning Appeals Board	Repealed and re‑enacted in P&E Act (w modifications)	184
53, 53A, 54‑56, 56A, 57‑59	Misc. (re Metropolitan Planning)	Repealed and redundant	-
59AA-59AE	(Previously repealed)	-	-
59A, 59B	Misc. (re urban renewal)	Repealed and redundant	-
59C	Permits re historic buildings	Repealed and re‑enacted in P&E Act (w modifications)	62(2)(g)
59D	Conservation and enhancement of designated buildings	Repealed and redundant	-
59E, 59EA	Misc. (re coastal management)	Repealed and redundant	-
59M‑59X	Misc. (re Yarra development)	Repealed and redundant	-
60	Regulations	Repealed and re‑enacted in P&E Act (w modifications)	202, 203

[336]Being Reprint No. 8, which was the applicable version immediately prior to 16 February 1988.

[337]As first enacted 16 February 1988.

citing: Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] 2 AC 111, 125; Waters v Welsh Development Agency [2004] 1 WLR 1304, 1307; Transport for London (formerly London Underground Limited) v Spirerose Limited [2009] 1 WLR 1797, 1822;
quoting: Horn v Sunderland Corporation [1942] 2 KB 26, 49.

B value
Kingston proceeding	$112,700 ($37,318/ha)
Jomaring proceeding	$303,474 (≅ $58,000/ha)

[2023] VSC 618

23 October 2023