Rigby v Secretary to the Department of Sustainability and Environment
[2012] VSC 427
•14 September 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
S CI 2009 7172
| LORELEI ADELE RIGBY | Applicant |
| v | |
| SECRETARY TO THE DEPARTMENT OF SUSTAINABILITY AND ENVIRONMENT | Respondent |
S CI 2009 8216
| SECRETARY TO THE DEPARTMENT OF SUSTAINABILITY AND ENVIRONMENT | Applicant |
| v | |
| NORTH-SIDE PASTORAL PTY LTD (ACN 004 308 016) | Respondent |
S CI 2009 8217
| SECRETARY TO THE DEPARTMENT OF SUSTAINABILITY AND ENVIRONMENT | Applicant |
| v | |
| MICHAEL TIERNAN (as administrator of the estate of LAWRENCE VALENTINE RIGBY) | Respondent |
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JUDGE: | EMERTON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7-11, 14 May 2012 | |
DATE OF JUDGMENT: | 14 September 2012 | |
CASE MAY BE CITED AS: | Rigby v Secretary to the Department of Sustainability and Environment | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 427 | |
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LAND VALUATION AND COMPENSATION – Land compulsorily acquired for public purposes – Preliminary questions – Land reserved for parkland purpose in 1978 – Hypothetical zoning of the land – Need to disregard the scheme of acquisition – Dispute as to whether land would have been re-zoned as for industrial or business purposes as at date of acquisition – Factors supporting zoning for industrial or business purposes – Policy statements in favour of integrating transport and land-use decisions – Zoning of land subject to Land Subject to Inundation Overlay – State Planning Policy Framework clause 15.02 – Whether land can be rezoned for urban development if the development would be a ‘controlled action’ under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) – Land Acquisition and Compensation Act 1986 (Vic) s 43(1).
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S CI 2009 7172
APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr G H Peake | Rennick & Gaynor |
| For the Respondent | Mr J H Gobbo QC Ms M H Foley | Victorian Government Solicitor |
S CI 2009 8216
APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J H Gobbo QC Ms M H Foley | Victorian Government Solicitor |
| For the Respondent | Mr G H Peake | Rennick & Gaynor |
S CI 2009 8217
APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J H Gobbo QC Ms M H Foley | Victorian Government Solicitor |
| For the Respondent | Mr S R Morris QC Mr P F Chiappi | Best Hooper |
HER HONOUR:
Introduction
This proceeding concerns the hypothetical zoning of a large parcel of what was previously farming land at 1100 Ferntree Gully Road, Scoresby.[1]
[1]Lots 1 and 2 on Plan of Subdivision 618944V being all the land contained in Certificates of Title Volume 4945 Folio 968 and Volume 10798 Folio 317.
The subject land lies on the southern side of Ferntree Gully Road between the Eastern Freeway (‘Eastlink’) and the Dandenong Creek. It was compulsorily acquired on 20 November 2008 (the ‘relevant date’) by the Secretary to the Department of Sustainability and Environment on the basis that it was suitable for conservation, recreation, leisure and tourism uses and it now forms part of the Dandenong Valley Parklands (the ‘Parklands’). The Parklands comprise a significant corridor of open space between the Dandenong Creek and Eastlink, extending approximately 10 kilometres from Vermont South to Wheelers Hill. They are a mix of bushland, semi-rural land, open parkland and developed sporting facilities, variously managed by Parks Victoria, Melbourne Water, the City of Monash, the City of Knox, the City of Whitehorse and private landowners.
The Court is asked to determine how the subject land would have been zoned as at the relevant date had there been no proposal to compulsorily acquire it for the purposes of the Parklands. This is not an easy question, as the subject land has been reserved for parkland purposes since 1978, having been earmarked for acquisition as early as 1973. Given the longevity of the Parklands proposal and the physical development of the Parklands over 40 years, it is difficult to conceive of how the subject land and its surrounds might have been developed in the absence of the Parklands proposal. There can be little doubt that the Parklands proposal has significantly influenced planning in the region for a very long time.
When the subject land was compulsorily acquired, Mr Robert Hugh Davey, as trustee of the estate of Lawrence Valentine Rigby, was the registered proprietor of the subject land. The trustee of the estate is now Mr Michael Tiernan. Ms Lorelei Rigby is one of two beneficiaries of the estate. North-Side Pastoral Pty Ltd (a company associated with Ms Rigby) was the occupier of the land as at the date of acquisition.
Each of Mr Tiernan (as trustee of the estate), Ms Rigby and North-Side Pastoral (collectively, the ‘claimants’) seeks compensation pursuant to the provisions of the Land Acquisition and Compensation Act1986 (Vic) (the ‘LAC Act’).[2] The primary measure of that compensation is the market value of the land as at the relevant date. In order to establish the market value of the subject land at the relevant date, it is necessary to hypothesise its highest and best use, disregarding the scheme which led to the acquisition. This involves ascertaining what the zoning of the subject land would have been at the relevant date, if the purpose or proposal for which the land was acquired – the Parklands – is disregarded.
[2] For the purposes of the preliminary questions now before the Court, the claimants for compensation in each of the three proceedings have the same interest. They have agreed that Mr Tiernan (the respondent in proceeding number SCI 2009 8217) would have the principal carriage of the argument in relation to the preliminary questions. The other claimants adopt the submissions made on his behalf.
There is significant dispute between the Secretary and the claimants as to how the subject land could have been developed had it not been ear-marked for acquisition for the Parklands. The subject land is currently zoned for Rural Living purposes under the Knox Planning Scheme. The Secretary submits that the highest and best use of the subject land was its development in accordance with the provisions of the Rural Living Zone. The claimants submit that in the absence of the Parklands proposal, the subject land would have been regarded as urban land, suitable for development for urban purposes and that the land has attributes that make it suitable for industrial or employment-related uses.
Preliminary questions
On 28 November 2011, the Court ordered the following questions to be tried as preliminary questions in the proceeding:
Question 1:For the purposes of assessing market value of the land in the ‘before’ situation under the LAC Act:
(a) what would have been the zoning of the land or any part of it; and
(b)would any overlay controls have applied to the land or any part of it at the acquisition date had the scheme of acquisition never been proposed?
Question 2:
If the answer to Question 1 is that the land, or any part of it, would not have been zoned Industrial 1 or Business 3 at the acquisition date:
(a)What were the prospects of the land, or such part of it, being rezoned for such use at the time after the acquisition date?
(b)If there was any such prospect of the land being rezoned for business use or commercial development or some other urban purpose other than rural residential, when would such rezoning be anticipated to occur?
The claimants’ answer to Question 1 is that the land to the east of the westerly alignment of the electricity easement that traverses the land would have been zoned Business 3 pursuant to the Knox Planning Scheme. The balance of the subject land would have been zoned Urban Floodway. A Land Subject to Inundation Overlay would also have applied to that part of the land to which the current Land Subject to Inundation Overlay (the ‘LSIO’) applies. A Design and Development Overlay, to encourage good industrial design, may also have applied to the part of the subject land zoned Business 3.
By contrast, the Secretary submits that the appropriate planning controls were the Rural Living Zone, and that the subject land would also have been affected by a Land Subject to Inundation Overlay as at present. On this basis, at best, the subject land would have yielded six rural residential lots.
For the reasons that follow, I have concluded that part of the subject land that will be referred to as ‘Lot 2’ would have been zoned Business 3 at the relevant date had the scheme of acquisition not existed. The remainder of the subject land would have been zoned as Urban Floodway. A Land Subject to Inundation Overlay would also have applied to that part of the land to which the current LSIO applies.
It is unnecessary to answer question 2.
Legal Principles
Section 30 of the LAC Act provides that any person who had an interest in land that is divested or diminished by a compulsory acquisition has a claim for compensation. The general principles on which compensation is to be based are set out, in turn, in s 41(1) of the LAC Act. Relevantly, in assessing the amount of compensation payable to a claimant in respect of an interest in land acquired under the Act, regard must be had to the market value of the interest on the date of acquisition.
Section 5A of the Valuation of Land Act1960 (Vic) provides an underlying framework for the valuation of land in the following terms:
5A. Determining value of land
(1) Unless otherwise expressly provided where pursuant to the provisions of any Act a court board tribunal valuer or other person is required to determine the value of any land, every matter or thing which such court board tribunal valuer or person considers relevant to such determination shall be taken into account.
(2) In considering the weight to be given to the evidence of sales of other lands when determining such value, regard shall be given to the time at which such sales took place, the terms of such sales, the degree of comparability of the lands in question and any other relevant circumstances.
(3) Without limiting the generality of the foregoing provisions of this section when determining such value there shall, where it is relevant, be taken into account-
(a)the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;
(b)the effect of any Act, regulation, local law, planning scheme or other such instrument which affects or may affect the use or development of such land;
(c)the shape size topography soil quality situation and aspect of the land;
(d)the situation of the land in respect to natural resources and to transport and other facilities and amenities;
(e)the extent condition and suitability of any improvements on the land; and
(f)the actual and potential capacity of the land to yield a monetary return.
Section 5A of the Valuation of Land Act envisages that market value is to be assessed by reference to the potential highest and best use available to the land at the relevant date. Such an approach is necessary to reflect the full value of the land to the owner.[3]
[3]Turner v Minister of Public Instructions (1956) 95 CLR 245, 264; March v City of Frankston [1969] VR 350, 356; McCann v Roads Corporation [2011] VSC 96, [23] (‘McCann’).
Section 43(1) of the LAC Act requires the question of highest and best use to be assessed disregarding the scheme which led to the acquisition. Section 43(1)(a) and (d) provide:
(1) In assessing compensation, 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;
In McCann v Roads Corporation,[4] Osborn J referred to the traditional approach to determining zoning parameters of the assessment of highest and best use for the purposes of a hypothetical valuation of land described by McClellan CJ in Smith v Roads and Traffic Authority of New South Wales.[5] That approach requires identification of the zoning of the land at the date of acquisition and determination of whether that zoning was imposed or retained in order to facilitate the implementation of the public purpose for which the land was acquired. However, Osborn J held that the breadth of the terms of the LAC Act was not to be constrained by the Smith formulation. The words of the LAC Act are broad and they are not to be read down by reference to decisions with respect to other legislation. In particular, the words ‘arising from’ are broad words.[6] I understand his Honour to be saying that the Court does not have to be satisfied that there is a causal nexus between the implementation of the public purpose for which the land was acquired and the existing zoning. The ultimate question for the Court is how, as a matter of fact, the words in s 43(1) of the LAC Act are to be applied to the evidence in this case. The evidence may or may not permit a conclusion that another zoning would apply to the land but for the proposal.[7]
[4][2011] VSC 96.
[5](2005) NSWLEC 438, [63] (‘Smith’).
[6]McCann v Roads Corporation [2011] VSC 96, [30]-[34].
[7]Ibid [34].
In McCann, the Court was required to answer questions that were in the same form as the preliminary questions now before the Court. Justice Osborn had to determine the hypothetical zoning of land that had been resumed for the purpose of the Geelong Bypass. That land, too, had been reserved for public purposes for a very long time. It was zoned Rural at the date of acquisition, and the question was whether its hypothetical zoning disregarding the proposal to construct the Geelong Bypass was as residential land. His Honour summarised the task of the Court as follows:
This proceeding requires a judgment as to the probable view that the planning authority and in turn the hypothetical purchaser would take of the acceptability of residential development of the claimant’s land as at the relevant date.[8]
[8]Ibid [95].
That, according to his Honour, involved the application of the assessment of net community benefit required by the State Planning Policy Framework in the Greater Geelong Planning Scheme. It required planning and responsible authorities to endeavour to integrate the range of policies relevant to the issues to be determined and balance conflicting objectives in favour of net community benefit and sustainable development.[9]
[9]Clause 11.01.
However, his Honour observed that insofar as the terms of the relevant planning policy and controls were the product of the proposal to implement the scheme of acquisition, they must be disregarded. It will be a question of fact as to whether particular planning scheme provisions are to be regarded as resulting from the proposal or not.[10]
[10]McCann v Roads Corporation [2011] VSC 96, [37]-[38].
In McCann, the Authority submitted that strategic planning documents which were historically premised in part upon the scheme of acquisition had to be disregarded for evidentiary purposes. In response to this submission, Osborn J said:
What s 43(1)(a) of the LAC Act requires is a disregarding of the effect upon value arising from the Bypass proposal. It does not follow from this provision that documents of the kind objected to are necessarily irrelevant. The relevance of their contents will turn upon the purpose for which regard is had to them.
(a)They may contain factual material which is relevant to the underlying land use planning of the area. In particular, such documentation may assist in the identification of inherent characteristics of the land and its context.
(b)They may demonstrate by analogy a probable conclusion to a particular developmental or planning issue affecting the claimant’s land despite the context in which they were formulated.
(c)They may be expressed in terms which permit relevant strategic planning principles to be identified despite the framework in which they were formulated. [11]
[11]Ibid [46].
Justice Osborn concluded that the relevance of particular documents formulated within the context of the proposal would be a question of fact turning upon the particular purpose for which reliance was placed on them and the nature of their content. His Honour described a series of documents related to the planning history of Geelong in respect of which he said:
The documentation relating to this planning history falls to be considered by reference to particular issues. It is not simply to be disregarded as fruit of the poisoned tree on the basis that the longstanding planning of Geelong has included the proposal for the Bypass as a significant component.
Nevertheless, I accept the authority’s submission that the long history of the Bypass proposal makes assessments of the ‘before’ situation difficult and, to a substantial extent, a matter of conjecture. The Bypass was regarded as giving form and definition to the urban edge of Geelong for many years prior to the relevant date. It was also regarded as maintaining more long term options for Geelong’s outward expansion than other alignments.[12]
[12]Ibid [51]-[52].
In this case, the planning history also falls to be considered by reference to particular issues. However, the long history of the Parklands proposal also makes assessments of the ‘before’ situation difficult. Like the Geelong Bypass proposal with which Osborn J was concerned, the Parklands proposal must also be regarded as influencing the pattern of settlement in Scoresby and surrounding suburbs. It will therefore be necessary to tread carefully when having regard to strategic planning documents, particularly local planning policies that are likely to assume and indeed to be built around the existence of the Parklands as a major feature of the region.
Three further legal issues are raised by the hypothetical and conjectural nature of the exercise that the Court is required to undertake.
First, the Court is bound to rely on the expert evidence of town planners for the determination of the preliminary questions before the Court. As Osborn J recognised in McCann, the expression of opinion based on hypothetical circumstances presents particular difficulties.[13] Objective material may be limited, requiring the expert’s judgment to be based largely on accumulated experience.[14] An opinion will not be excluded where objective material is not complete, both because of the difficulties that inhere in the hypothetical exercise and because in compensation matters the starting point is that there is an entitlement to compensation and the Court is required to do its best and make a determination. However, the town planners must reveal as far as possible the reasoning process adopted by them so as to enable the Court to evaluate the evidence and the expert’s conclusions.[15]
[13]Ibid [43].
[14]Smith v Eurobodalla Shire Council [2004] NSWCA 479, [121].
[15]McCann v Roads Corporation [2011] VSC 96, [44].
Secondly, although both parties approached the question before the Court as one of whether the subject land would have been rezoned by the relevant date in the absence of the scheme of acquisition, the Secretary submitted that this cast an onus on the claimants to establish that a rezoning would have occurred. I do not accept that the claimants bear a legal onus, if that is what is suggested. It is a matter for the Court to determine, based on expert opinion, what the zoning of the subject land would have been absent the Parklands proposal. In this case, the Court must decide whether the subject land would have been suitable for rezoning as Industrial 1 or Business 3, having regard to a number of matters, including the location and physical characteristics of the land, and the planning controls and policies affecting land use in the region and across the metropolitan area more generally from the late 1970s onwards.
The Secretary submitted that any proposal for rezoning would have to satisfy the planning authority that the rezoning proposal produced a good planning outcome. The claimants, as the proponents of a planning scheme amendment to rezone part of the land to Industrial 1 or Business 3, would have been required to demonstrate that the rezoning proposal was an acceptable planning outcome when assessed against the Strategic Assessment Guidelines for preparing and evaluating planning scheme amendments.[16]
[16]Exhibit A1, Strategic Assessment Guidelines as of April 2008, tendered on 9 May 2005.
In my view, however, it is problematic to focus on whether the claimants can demonstrate that the planning authority could have been persuaded to rezone the land as Industrial 1 or Business 3. To impose on the claimants the task of satisfying the Court that they would have achieved a rezoning of the land from the existing proposed public open space reservation (prior to 1999) or the Rural Living Zone (after 1999) is to assume that from 1978 onwards the actual zoning of the subject land was the ‘natural fit’ for the land absent the Parklands proposal and was not itself a response to the development of the Parklands. The likelihood that the subject land would have been placed in or would have remained in a Rural Living Zone in the absence of the Parklands proposal is also in issue in the proceeding.
Thirdly, the proper approach in compulsory acquisition matters is generally to lean in favour of the dispossessed proprietor, all other things being equal. The claimants submit that as the circumstances of the case require over 30 years of planning history to be peeled back to determine the zoning of the subject land, to the extent that doubt arises or matters remain obscure, the doubt or obscurity should be resolved in their favour of the claimants. I accept this submission. In Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd,[17] Dixon J identified a different purpose in valuing property in revenue cases from compensation cases: in the compensation cases the purpose was to ensure that the person to be compensated was given a full money equivalent of his or her loss, while in the revenue cases it was to ascertain what money value was plainly contained in the asset so as to afford a proper measure of liability to tax. 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.[18]
[17](1947) 74 CLR 358.
[18]Ibid 373-4.
In McBaron v Roads and Traffic Authority of New South Wales,[19] Talbot J said:
… it is appropriate to seek to do justice by adopting a generous approach in favour of the resumee to ensure that just compensation is paid so far as the Act allows. Therefore any discretion should be exercised in favour of the claimant where practicable in order to achieve a just result.[20]
[19](1995) 87 LGERA 238.
[20]Ibid 244-5.
The land and its context
The subject land is an irregularly shaped parcel of approximately 78.37 hectares with the Dandenong Creek as its western boundary, Ferntree Gully Road as its northern boundary and Eastlink (in part) to its east. It is adjacent to the National Steam Centre, which is immediately beside the on/off ramps to Eastlink.
The subject land is divided into 2 lots, each of which has frontage to Ferntree Gully Road. Lot 1 is the westerly lot which abuts the Dandenong Creek; Lot 2 is to the east of Lot 1 and abuts the National Steam Centre and Eastlink. The central dispute in this case concerns the development potential of Lot 2, which is closest to Eastlink and furthest from the Dandenong Creek.
The subject land is traversed, more or less on the boundary between Lots 1 and 2, by a 140 metre wide transmission line easement which runs through the centre of the land in a north-westerly to south-easterly direction.
These features are best illustrated by reference to the registered plan of subdivision and the aerial photograph of the site that has been included in the expert material put before the Court.[21]
[21]See the Appendix.
At the relevant date, the subject land formed part of an agricultural holding that was used for farming and grazing, as had been the case for many years. As a result, the subject land had been cleared and highly modified for agricultural use. The topography of the subject land was generally flat or undulating, with a change in elevation of approximately five metres over the length of the site.
The subject land was also defined by the floodplain for the Dandenong Creek, which bounded the western edge of the land and drained naturally through the area. The Corhanwarrabul Creek runs to the south of the subject land. The majority of the subject land was situated within the 1 in 100 year flood level identified by Melbourne Water and covered by the LSIO, with the exception of the north-eastern corner on Lot 2, near Eastlink.
Notwithstanding its semi-rural character, the subject land is located in the suburb of Scoresby within metropolitan Melbourne, approximately 25 kilometres from the Melbourne CBD. The well-established Caribbean Business Park is located immediately across Eastlink to the east of the subject land. It is the largest element in a cluster of industrial and commercial developments on the eastern side of Eastlink within Scoresby proper. Industrial/commercial land has been developed to the north of the Caribbean Business Park and to its south-east fronting Stud Road. These areas contain a mix of manufacturing, warehousing and office uses. At the relevant date, the local provisions of the Knox Planning Scheme made specific provision for the Scoresby-Rowville Employment Precinct (the ‘SREP’) in the area bounded by Ferntree Gully, Stud and Wellington Roads and Eastlink.
Established residential areas lie to the west of the subject land, on the other side of the Dandenong Creek, and to its south-east, on the eastern side of Eastlink.
The land has been the subject of a number of compulsory acquisitions since 2003. On 29 May 2003, Southern and Eastern Integrated Transport Authority (‘SEITA’) compulsorily acquired part of the land for the purpose of Eastlink. On 7 February 2008, the Roads Corporation compulsorily acquired a strip of the land along its Ferntree Gully Road frontage for road widening purposes, and on 20 November 2008, the Secretary acquired the balance of the land in the acquisition that is the subject of this proceeding.
Since the subject land was compulsorily acquired by the Secretary, Melbourne Water has constructed a large wetland on the site. This wetland is intended to treat and reduce pollutants, such as nitrogen, suspended solids and phosphorous, to prevent them from entering Port Phillip Bay. An estimated 315,000 cubic metres of soil has been excavated to build the wetland. Some of this has been used to create a large mound to surround and screen a service centre that has now been constructed on the subject land for Eastlink users.
Planning history
The planning history of the subject land and its surrounds since 1965 was detailed in the reports of the expert planning witnesses. There is little, if any, disagreement about the sequence of the planning controls and the relevant planning events relating to the subject land and its surrounds. That sequence is broadly as follows:
(a)Between 1965 and 1977, the subject land was outside the metropolitan boundary and was zoned for a combination of Rural and Stream uses under the former City of Knox and Shire of Ferntree Gully Planning Schemes. The planning scheme maps for 1965 show the presence of the proposed Scoresby freeway reserve (Eastlink) affecting the south-east corner of the subject land.
(b)Between 1978 and 1987, the subject land came under the Melbourne Metropolitan Planning Scheme (the ‘MMPS’). The amendment bringing the subject land under the MMPS[22] saw the majority of the land, together with the majority of the neighbouring lands along the Dandenong Creek, reserved for Proposed Public Open Space.[23] The Proposed Main Road reservation (Eastlink) continued to affect the south-east corner of the subject land.
[22]Melbourne Metropolitan Planning Scheme, Part 1A, Amendment 3.
[23]Appendix G – 1978–1999 Zoning Controls.
(c)Between 1987 and 1999, the subject land came under the Knox Planning Scheme administered by the City of Knox. It continued to be included in the Proposed Public Open Space reservation, and the Proposed Main Road reservation continued to cover its south-east corner.
(d)In November 1999, with the introduction of the Victoria Planning Provisions (‘VPPs’) and new format planning schemes, the subject land was included within the Rural Living Zone under the Knox Planning Scheme. A Public Acquisition Overlay (‘PAO2’) was applied to the whole of the subject land, except for the part required for road purposes. PAO2 showed that the subject land was required for a public park and recreation and was to be acquired by Parks Victoria.
PAO2 was expressed ‘to reserve land for a public purpose and to ensure that changes to the use or development of the land do not prejudice the purpose for which the land is to be acquired’.
(e)By notice of acquisition published in the Government Gazette on 29 May 2003, SEITA compulsorily acquired part of the south eastern corner of the subject land for the purposes of Eastlink.
(f)In 2004, Amendment C21 to the Knox Planning Scheme placed the LSIO over most of the land.
(g)On 2 March 2006, the City of Knox issued a planning permit which authorised the subdivision of the subject land into three lots.[24] A condition of the permit required an agreement under s 173 of the Planning and Environment Act 1987 (Vic) to prevent construction on the land outside identified building envelopes.
(h)In 2008, the owners of the subject land made a further application for a permit to subdivide the subject land into six lots to be used for single dwellings. This application was subsequently withdrawn.
(i)By notice of acquisition published in the Government Gazette on 7 February 2008, the Roads Corporation compulsorily acquired part of the subject land fronting Ferntree Gully Road for road widening purposes.
(j)On 20 November 2008, the acquisition that is the subject of these proceedings took place.
[24]Planning Permit P2005/6553.
As at the relevant date, therefore, the subject land was zoned Rural Living pursuant to the Knox Planning Scheme and was subject to two overlays: the LSIO and PAO2 (for ‘public park and recreation’).
The purpose of the Rural Living Zone is to provide for residential use in a rural environment and for agricultural land uses which do not adversely affect the amenity of surrounding land uses, to protect and enhance the natural resources, biodiversity and landscape and heritage values of the area, and to encourage use and development of land based on comprehensive and sustainable land management practices and infrastructure provisions. The minimum lot size is eight hectares, with a maximum of one dwelling. Permitted uses include accommodation (other than dependent persons unit and dwelling), convenience shop, freeway service centre, hotel, leisure and recreation, medical centre, restaurant, and service station. Prohibited uses include industry, office, retail premises and warehouse.
The purpose of the LSIO is to identify land in a flood storage or flood fringe area affected by a 1 in 100 year flood[25] to ensure that development maintains the free passage and temporary storage of floodwaters, minimises flood damage, is compatible with the flood hazard and local drainage conditions and will not cause any significant rise in flood level or flood velocity, and to protect water quality in accordance with the provisions of the relevant State Environment Protection Policy.
[25]Or any other area determined by the Flood Plain Management Authority.
The planning history of the land on the eastern side of Eastlink (or what is also referred to as the freeway reservation in this context) also received much attention from the parties and their experts.
From the late 1960s or early 1970s, the land to the east of the freeway reservation and south of Ferntree Gully Road was zoned partly Light Industrial and partly Special Use Zone to enable the development of the Caribbean Business Park, which now forms part of the SREP. A Floodway Zone encompassing the floodplain for Corhanwarrabul Creek also applied to the land east of the freeway reservation. This zoning was imposed after the freeway reservation was established in 1965, but before the subject land was earmarked for regional open space in 1973.
There have been a number of amendments to the Knox Planning Scheme affecting the land to the east of the freeway reservation since 2000.
Amendments C22 and C23 were exhibited in 2001 and finally gazetted in 2004.
Among other things, Amendment C22 rezoned parts of the SREP from partly Industrial 1 (the bulk of the site), partly Residential 1 and partly Special Use 1 to partly Business 3 and partly Urban Floodway zone. Amendment C22 introduced a policy and regulatory framework for the development of the SREP, where research and development, industry technology and warehousing and distribution uses would be encouraged in what is described as ‘a high amenity setting’.
Amendment C23 rezoned land to the south east of the Caribbean Business Park at 966 Stud Road from Industrial 1 to Business 3, and rezoned 6.6 hectares of land from Public Park and Recreation to Business 3.
In April 2004, Amendment C21 introduced the LSIO over large areas of land within the City of Knox, including parts of the Caribbean Business Park near the Cohranwarrabul Creek. As discussed, the LSIO also covers much of the subject land.
In 2008, Amendment C73 simplified the planning controls applying to the SREP to by, among other things:
(a) removing the office floor cap and deleting statements within cl 22.08 requiring office uses to be in conjunction with research and development, industry/technology and/or warehousing/distribution; and
(b) realigning the Urban Floodway Zone, consistent with Melbourne Water’s approval.
This resulted in the creation of an additional parcel of land zoned Business 3 adjacent to Eastlink to the south of the Caribbean Business Park.
Amendment C73 was directed to securing better utilisation of the SREP. It recognised the SREP as a significant area, given its size, the limited number of owners and its location within the south-eastern corridor. Its importance had been further enhanced by the improved facilities along the principal public transport network and the construction of Eastlink.
The explanatory statement for Amendment C73 recorded that the development that Amendments C22 and C23 had been designed to encourage had not eventuated, and that the removal of the office cap and the simplification of the existing controls would facilitate the SREP’s development as a major employment centre. It referred to ‘a current under supply of employment opportunities such as this in the area’ which could be addressed on site through the changes to the planning controls.
Flooding and ecological issues
Flooding
The subject land forms part of the floodplain for the Dandenong Creek and is largely covered by the LSIO. Flooding and drainage issues would clearly affect the use of the land for urban purposes.
The claimants retained Mr Warwick Bishop[26] to carry out hydraulic modelling of flood flows on and around the subject land and to prepare an expert report that dealt, among other things, with the development potential of the floodplain if cut and fill techniques were used to raise land levels on part of the site. Mr Bishop initially provided a report dated 5 March 2010 which, among other things, analysed the data and source of modelling used as the basis for the LSIO, the cut and fill criteria which applied as at the date of the adoption of the LSIO, the cut and fill criteria which applied at the relevant date and the area of the subject land which could be filled (applying the relevant cut and fill criteria as at the LSIO adoption date and the date of acquisition).
[26]A hydraulic engineer with Water Technology Pty Ltd.
Having regard to his hydraulic modelling, Mr Bishop concluded that, using appropriate cut and fill techniques, an area of approximately 31 hectares, principally on Lot 2, could be filled to enable commercial or industrial development to take place.
For its part, the Secretary retained Mr Gavin Hay of GHD to answer a number of questions, including what planning controls, if any, should have applied to the subject land to address the risk of flooding as at the relevant date; the criteria, if any, that a referral or responsible authority would have considered when determining whether the subject land could have been filled and cut; and what parts of the subject land a referral or responsible authority would have been likely to have permitted to be filled and cut.
Mr Hay’s modelling[27] indicated that the 100 year ARI[28] design flood was likely to ‘overtop’ Ferntree Gully Road. Mr Hay concluded, however, that with appropriate detailing, development within the area identified by Mr Bishop was unlikely to result in significant upstream flooding impacts for events up to and including the 100 year ARI design event, and that fill depths sufficient to provide freeboard to the existing 100 year ARI flood level could generally be achieved with generally accepted fill depths. However, there remained concerns regarding the viability of development within the floodplain, because the claimants had not provided a detailed concept of their proposed method of compensating for the loss of floodplain storage nor proof that their proposed compensation method was adequate to prevent an increase in downstream flood levels.
[27]Described in his report dated October 2011.
[28]Average Recurrence Interval.
In response, Mr Bishop prepared a supplementary report on flooding issues dated January 2012. In it, he revised his hydraulic model based on a new LIDAR[29] topographic survey. This survey was captured in November 2008, very close to the relevant date, and was considered the most appropriate data for definition of the floodplain geometry in the study area at that time. The new data was used to define the top of bank height for Ferntree Gully Road, which is a major hydraulic feature of the study area. As a result, the proposed development arrangement or layout was slightly modified in order to accommodate the revised hydraulic conditions, based on the new topographic data and to address issues raised by Mr Hay.
[29]Light Detection and Ranging.
The changes to the proposed development layout arising from the revised modelling were as follows:
(a)The provision of a drainage path along the south side of Ferntree Gully Road to allow the overtopping water to flow back to the main floodplain;
(b)The introduction of an area of excavation to the west of the proposed development area. However, according to Mr Bishop, the exact location and geometry of the cut area is not critical to the hydraulic performance of the system and the same volume could be achieved with a number of different shapes;
(c)The adjustment of the overall area to maintain the developable area of 31 hectares. According to Mr Bishop, the adjustment area is 1 to 1.5 hectares and does not compromise or alter the floodplain behaviour for the site or surrounds.
On 26 April 2012, Mr Bishop and Mr Hay signed a ‘memorandum of agreement’ based upon their meeting on 24 April 2012. The memorandum refers to Mr Hay’s report of October 2011 and Mr Bishop’s supplementary report of January 2012. The memorandum then states:
Whilst it was noted that there are minor details and wording within each report that could be considered points of difference, both parties accept that these are matters of personal preference, rather than substantive issues and do not have a significant bearing on the overall assessment of whether the site is developable.
We agree on the following matters in relation to the flooding issues for the land at 1100 Ferntree Gully Road, Scoresby:
· The modelling approaches of GHD and Water Technology are broadly consistent and appropriate for the hydraulic assessment of the site.
· The site is within a flood plain and predominantly covered by the LSIO.
· With appropriate detailing development of part of the site (as specified in the Bishop report) is possible through filling of the flood plain.
· It is possible to appropriately develop the site without causing detrimental hydraulic impacts (by incorporating cut/fill balances and bunding as proposed).
· The revised modelling by Water Technology (based on the LIDAR data), addresses the concerns raised by GHD in their review of earlier modelling based on less reliable topographic data.
· We believe that all substantive flood hydraulics issues raised in the GHD report including those associated with flood plain storage and the overtopping of Ferntree Gully Road have been addressed as summarised in Section 6 of the Water Technology report.
As a result, the experts agreed that it was possible to flood-proof the area of 31 hectares on the subject land identified by Mr Bishop that is predominantly located in Lot 2. They agreed that this could occur without causing detrimental hydraulic impacts.
The claimants accept that the LSIO would still have applied to the subject land in the same form as is presently the case. However, they say that the LSIO is no impediment to the zoning of the subject land, or parts of it, as Industrial 1 or Business 3. There is evidence for precisely such rezoning in the SREP.
Ecological issues
The principal ecological issue identified by the Secretary was the possibility that a small fish, the Dwarf Galaxias, was present on the subject land.
In 2000, the Dwarf Galaxias was listed as a vulnerable species under the Environment Protection and Biodiversity Conservation Act1999 (Cth) (‘EPBC Act’). This listing has the consequence that an ‘action’ that could have a significant impact on Dwarf Galaxias must be referred to the relevant Commonwealth Department[30] under the EPBC Act and may require approval as a ‘controlled action’.
[30]Now the Department of Sustainability, Environment, Water, Population and Communities, previously the Department of the Environment Heritage and the Arts.
The Secretary’s expert on Dwarf Galaxias, Mr Chris Bloink of Biosis Research, and the claimants’ expert, Ms Tanya White, disagreed about the chances of finding Dwarf Galaxias on the subject land, and in particular, on Lot 2, which is the area identified for rezoning as Business 3 by the claimants.
Mr Bloink’s evidence was that Dwarf Galaxias is and was known to occur in the Dandenong Creek and its tributaries, Blind Creek and Corhanwarrabul Creek, and in wetlands and dams located on the floodplain of these waterways. All of the database records of the species in the Dandenong Creek catchment are from the 1980s and 1990s. The closest record is from the Corhanwarrabul Creek, approximately 200 metres from Lot 2, in 1986. Targeted snapshot surveys for Dwarf Galaxias conducted in the general area between 1999 and 2004 failed to detect the species. However, Dandenong Creek and tributaries in the immediate vicinity of Ferntree Gully Road, Wheelers Hill, and downstream to Wellington Road were considered to offer optimal habitat and the species was still considered likely to occur. The likelihood was based on the presumption that the species still existed somewhere in a refuge location within the Dandenong Creek catchment. In December 2009, Dwarf Galaxias were recorded at two locations: a flood plain dam in Wheelers Hill and within a drain adjacent to Dandenong Creek in Endeavour Hills.
Mr Bloink’s assessment of the likelihood of finding Dwarf Galaxias on the subject land focussed on the presence (identified from aerial photographs) of two drains or drainage lines running from the north-east of the subject land in a south-westerly direction towards the Corhanwarrabul Creek wetlands. The drainage lines traverse Lot 2, converge into a single drainage line just east of the boundary with Lot 1, which then runs down to the Corhanwarrabul Creek wetlands. This is where Mr Bloink carried out a targeted survey of Dwarf Galaxias in 2011 for the purposes of his report.
In Mr Bloink’s view, in November 2008, Dwarf Galaxias should have been considered to have a medium likelihood of occurrence in the drains when inundated. Given the presence of drains and the location of the floodplain, Lot 2 appeared to support transient habitat for Dwarf Galaxias. The drains in question appeared to be contiguous with those downstream of Lot 2 and to connect directly with the Corhanwarrabul Creek. Based on the aerial photography, a potential refuge habitat for Dwarf Galaxias appeared to exist on the lower reaches of the drain just upstream from the confluence with the Corhanwarrabul Creek. If Dwarf Galaxias inhabited this pool or Corhanwarrabul Creek, then in the absence of any barriers, Dwarf Galaxias could potentially access and inhabit the drain within and downstream of Lot 2, not just during flood, but any time the drain was inundated or flowing following significant rainfall. Although such habitats are transient, they are of critical importance to Dwarf Galaxias as they facilitate disbursal of the species, allowing for colonisation of new or former habitats, and they provide habitat for spawning and development of larval and juvenile Dwarf Galaxias in the relative absence of predatory species.
In Mr Bloink’s view, Dwarf Galaxias had an even higher likelihood of occurrence downstream of Lot 2. Mr Bloink carried out a targeted survey in August 2011 in five locations downstream of Lot 2. The survey did not record Dwarf Galaxias.
Ms White carried out a peer review of Mr Bloink’s expert report. She agreed that Dwarf Galaxias were known to occur within the Dandenong and Corhanwarrabul Creek catchments and might still occur within the surrounding area. However, the species was not detected in surveys conducted in 2004, 2007, 2008 and 2011 and no suitable habitat was identified throughout Lot 2. There was no evidence in past and more recent surveys of the species downstream from the Dandenong and Corhanwarrabul Creeks to suggest that the fish originated from Lot 2.
The ecological experts agreed on the following matters:
(a)There was potential for Dwarf Galaxias to have occurred within Lot 2 and Lot 1 at the relevant date;
(b)The habitat within Lot 1 and Lot 2 was highly modified, particularly in terms of vegetation;
(c)Dwarf Galaxias can and do occur in highly modified ephemeral water courses, including unmapped drains;
(d)the presence of Dwarf Galaxias within Lot 2 at the relevant date cannot be known, only predicted.
However, they disagreed on the likelihood of Dwarf Galaxias occurring within the Lot 2. Ms White was of the view that Dwarf Galaxias were likely to be permanently absent from Lot 2, whereas Mr Bloink thought that Dwarf Galaxias had a medium likelihood of occurrence within Lot 2 and a medium to high likelihood of occurrence within Lot 1 and downstream. The experts also disagreed on the sufficiency of the information available as at the relevant date as a basis for concluding that Dwarf Galaxias was unlikely to be present. Ms White believed that there was a sufficient basis to draw this conclusion, whereas Mr Bloink believed that the basis for such a conclusion was insufficient.
Expert planning evidence
The claimants relied on the evidence of Mr Marco Negri[31] and Mr Robert Milner[32] as to the underlying zoning of the subject land, while the Secretary tendered reports and called evidence from Mr David Whitney[33] and Mr Brendan Rogers.[34] Each of the experts reviewed the history of planning controls applicable to the subject land and nearby land. There was little or no disagreement as to this history. However, there were stark differences in opinion as to whether the relevant part of the subject land (Lot 2) would have been zoned Industrial 1 or Business 3 by the relevant date, had the Parklands proposal not existed.
[31]Mr Negri’s report dated 11 March 2012.
[32]Mr Milner’s report dated November 2012.
[33]Mr Whitney’s report dated 6 August 2009, revised report dated 13 October 2009 and final report dated 22 August 2011.
[34]Mr Rogers’ reports dated 1 July 2011, 15 July 2011, September 2011 and October 2011.
Claimants’ planning evidence
Mr Negri
Mr Negri gave evidence that, in the absence of the Parklands proposal, the physical development in the area would have been quite different by 2008. Instead of the parkland reservation constraining the development of the subject land throughout the 1970s, 1980s and 1990s, the subject land would have been available for wider purposes. Although during the 1950s and 1960s, the subject land and surrounds were located within a rural shire, over the next 30 to 40 years the area grew to be one of the most populous municipalities in Victoria. By November 2008, Scoresby had been fully developed as an urban locality with housing, business and commercial development. It was surrounded by established residential suburbs, including Wheelers Hill to the west, Wantirna to the north, Knoxfield to the east and Mulgrave to the south. Hence, by the relevant date, the subject land was located within an urban area. It is likely that from the 1970s onwards, a number of different scenarios would have been considered for the subject land. In the absence of the Parklands proposal, it was likely that the subject land would have been used for urban purposes.
According to Mr Negri, the Rural Living zone was applied to the subject land and to other properties within the corridor bounded by the Dandenong Creek and Eastlink as a ‘holding zone’ pending the future acquisition of those lands for public purposes. It was a zone that reflected the physical nature of the subject land at the time. In Mr Negri’s view, the planning controls reflected the fact that the subject land was nominated to form part of the Parklands in the early 1970s. The Parklands proposal had been reflected in the applicable planning controls and had influenced the zoning of the subject land, as well as the nature of land use and development in the area, for approximately 35 years prior to the relevant date. At the relevant date, although the subject land was still pasture land and was contained in a Rural Living zone, it was located within an urban area. Its zoning did not reflect its context or the surrounding land use and development.
Mr Negri therefore concluded that the Rural Living zone did not reflect the preferred use of the land or the long-term likely use of the land. In the absence of the Parklands proposal, the land would have been urban land, with its development potential constrained by flood and environmental considerations associated with the Dandenong Creek. These would have been managed having regard to the guidelines provided in the VPP Practice Note ‘Applying Flood Provisions in the Planning Scheme’. The flood implications for the land would have been managed in a similar way to the approach adopted for the land to the east of Eastlink.
Mr Negri’s review of the planning policies as at the relevant date revealed there was a lack of employment land within the City of Knox and that preferred locations for such land were close to major transport routes. The subject land would have been attractive to industry and business, given its proximity to major transport routes and to the existing industrial/business area on the other side of Eastlink.
Mr Negri concluded that by the relevant date, that part of the land not subject to flooding or likely to be capable of being filled would have been included within the same zone applying to the employment area to the east, a Business 3 Zone. The part of the land outside of the active flood plain which was unable to be filled would also have been included in the Business 3 Zone but its development opportunity would have been constrained.
Mr Milner
Mr Milner also reviewed the lengthy planning history associated with the land and the area. He noted that, between 1973 and 1999, a number of zone changes occurred to the land to the east of the freeway reservation, and industrial land use and development commenced. According to Mr Milner, given the uptake of land for industrial purposes and the ever-increasing urban context of the subject land, it would have been only a matter of time before the commercial opportunities of the subject land became evident.
Like Mr Negri, Mr Milner considered that there was very little policy basis for the zoning of the subject land as Rural Living, other than that the Rural Living zone loosely reflected the existing nature and use of the subject land and would effectively safeguard it from use and development which would prejudice its future development for public purposes.
According to Mr Milner, an ‘obvious and logical’ response to the development of the subject land in the absence of the public open space reservation which balanced the need for urban land, economic development and strategic growth options, would have been to apply an Industrial Zone across the subject land, accepting the Dandenong Creek environs as a long-term and defensible boundary to the western expansion of the industrial precinct. The industrial use of the subject land would have met the Council’s higher order policies in the Municipal Strategic Statement to support greater employment opportunities within the municipality. The subject land had great potential use as industrial land due to its exposure to transport facilities and its compatibility with industrial and other development in the area. Applying an Industrial Zone to the subject land would have recognised the existing or potential uses of the subject land and more accurately reflected the existing urban structure of the area, in particular the industrial areas to the east and the residential areas to the west.
Mr Milner agreed that it was likely that some form of buffer would have applied to the land adjacent to Dandenong Creek, given the sensitivity of the Creek environs and its susceptibility to flooding. An Urban Floodway Zone would have been appropriate for this purpose (it had been applied for this purpose along Corhanwarrabul Creek to the east of the freeway reservation). The LSIO would still have applied to the subject land with much the same boundary as exists today, although the location of the LSIO boundary could have been influenced during this time, depending on the demand for land and the pressure to flood-proof the area. This would have required filling the flood prone areas east of the powerline easement and detailed flood modelling to predict the level of the 1 in 100 year flood, which had typically formed the boundary of the LSIO.
However, Mr Milner observed that the LSIO was independent of any underlying zone and had no impact on the location of zoning boundaries, until such time as detailed flood modelling was undertaken.
According to Mr Milner, in the absence of the Parklands proposal, Industrial zoning, together with an Urban Floodway Zone would have applied to the subject land until the introduction of the new format Knox Planning Scheme in 1999. In 2004, Amendment C23 to the Knox Planning Scheme rezoned the land to the immediate east of the freeway reservation from Industrial, Rural Living and Special Use Zones to Business 3 zones. If the development potential of the subject land was limited at this time, it is likely that it would have remained in an Industrial 1 Zone. If, however, the subject land was only partially developed, it would likely have been rezoned to Business 3 as an extension of the SREP.
Mr Milner noted that the subject land is effectively an island site, having road and creek frontage to two of its boundaries, open space to the south and the National Steam Centre to the north-east. The nearest sensitive land use is the residential suburb of Wheelers Hill to the east. This is located approximately 500 metres away from the area identified as suitable for development, with the intervening area containing a powerline easement and the stream environs of the Dandenong Creek. The use of the subject land for offices, manufacturing industries or associated commercial or industrial uses, would not unreasonably impact on the existing levels of amenity experienced by the nearest residential properties.
As to access, Mr Milner noted that the only available access to the subject land is via Ferntree Gully Road. In his view, the subject land could easily be developed for industrial/office uses in such a way as to provide convenient access to Ferntree Gully Road, without impacting on public safety or the operation of Ferntree Gully Road.
Mr Milner concluded that, from a land use perspective, the development of the subject land, or part of it, for commercial/industrial uses was entirely appropriate, given its access to Eastlink, the nearby SREP and the adequate separation distance from residential and other sensitive land uses. The development of the subject land could easily produce acceptable outcomes in terms of the State Planning Policy Framework and the Local Planning Policy Framework, and a permit could easily be obtained, subject to meeting acceptable design outcomes. He therefore saw no Planning Scheme impediments to the commercial/industrial development of the subject land in the manner contemplated.
This led Mr Milner to conclude that, in the absence of the Parklands proposal, the subject land would have been zoned either Industrial 1 or Business 3, depending on the development potential of the land, with a buffer of Urban Floodway Zone adjacent to Dandenong Creek. The LSIO would have applied to the subject land, but its boundary would have been influenced by the level of flood-proofing undertaken, subject to detailed flood modelling.
Secretary’s planning evidence
Mr Whitney
Mr Whitney gave evidence that Eastlink had played a significant part in influencing the zoning of land in the area. It had been an integral part of the future planned major road network for metropolitan Melbourne since the introduction of planning controls and the reserve for the Scoresby Freeway was shown in planning schemes as early as 1965. In Mr Whitney’s opinion, the freeway reservation provided a convenient planning boundary and logical boundary for the Parklands in the vicinity of the subject land. He agreed that, had the freeway reservation not been in place, an argument could be made that the subject land (or more particularly that part of it lying outside the flood plain) would have been included in the Industrial 1 Zone (subsequently rezoned to Business 3) for the land on the eastern side of Eastlink, and could have been developed and used as an extension of the SREP.
According to Mr Whitney, the application of the Melbourne Water 1 in 100 year flood line was the appropriate (and only) record of flooding potential on the land and was the basis for determining the extent of the LSIO. Although the presence of a Land Subject to Inundation Overlay is not a prohibition on development, and while modification of the floodplain may be justified where a sound planning outcome is achieved, the carrying out of works to create a fragmented parcel of Business 3 land would not have served any strategic planning purpose. Modifying the flood plain would be harder to justify where there was nothing by way of strategic support suggesting that the City of Knox was in need of additional industrial or business zoned land.
According to Mr Whitney, State policy suggested that a rezoning of the land would not have been guaranteed. This is because State policy seeks to:
(a)ensure development does not compromise waterways as significant open space, recreation, aesthetic, conservation and tourism assets;
(b)respond to the impact of climate change;
(c)identify land affected by flooding;
(d)avoid intensifying the impacts of flooding through inappropriately located uses and development; and
(e)discourage incompatible land use activities in areas subject to flooding.
In Mr Whitney’s opinion, the presence of the LSIO over the major portion of the subject land, particularly all of the land with a direct frontage to Ferntree Gully Road, provided a logical basis for the Rural Living Zone given to the land. In the absence of the compulsory acquisition, it would at best have been open to the claimants to seek rezoning of a portion of the subject land from Rural Living to Business 3 as a separate amendment based on flood studies that had been commissioned. In seeking a rezoning, the claimants would have had to demonstrate the strategic feasibility of such a proposal and that the creation of a discrete business district separated from the business area to the east of Eastlink was an acceptable planning outcome. It would therefore have been necessary to establish that:
(a)there was sound planning merit in modifying the flood plain simply to enable a development outcome suited to the claimants;
(b)it was acceptable to reduce the open nature of the creek valley, which acted as an important ‘green corridor’ through an otherwise highly urbanised area;
(c)while modifying a portion of the land, the balance of the land was not rendered sterile, that is, incapable of being used for rural living purposes;
(d)there was a demand for additional Business 3 Zone land in the area; and
(e)there was planning merit in creating a separate business enclave separated from the established business area to the east of Eastlink.
As a result, Mr Whitney was unable to accept that an approach to have the relevant part of the land rezoned to Industrial 1 or Business 3 would have been successful. He concluded:
·At the relevant date the land was included in the Rural Living Zone and subject of overlays indicating that the whole of the land was to be acquired by Parks Victoria as part of the Dandenong Valley parklands and that the major portion of the land lay inside the 1:100 year flood level;
·While it is likely that had the land never been required for Eastlink then that portion of the subject land lying above the 1:100 year flood level could have been developed and used in accordance with the provisions of the Business 3 Zone in conjunction with the Business 3 zoned land to the east. However that situation is not a consideration in this matter as at the Date of Acquisition, Eastlink was constructed and the land was included in the Rural Living Zone and divorced from the Business 3 zoned land to the east;
·In the ‘before’ situation, the land could only be developed in accordance with the provisions of the Rural Living Zone. At best this would yield 6 rural residential lots. In the ‘after’ situation, this potential is lost.
Mr Rogers
Mr Brendan Rogers set out a chronology of planning controls from 1965 to 2008 and carried out an overview of the recent planning applications for the subdivision of the subject land.
The planning and development history revealed that the subject land had been zoned for non-urban purposes since the late 1960s. When looking at the wider area, it was apparent that the subject land and lands running parallel with the eastern bank of the Dandenong Creek within the adjoining area had developed as part of a rural/non-urban corridor. Lands removed from the Dandenong Creek, specifically those east of the Eastlink, had witnessed continued residential, commercial and industrial growth.
Mr Rogers identified several attributes that he said shaped and influenced the pattern of development that had emerged. These included:
(a)the susceptibility of the land to flooding;
(b)the alignment of the Freeway resulting in a narrow strip of land between the Dandenong Creek and the Freeway, forming a barrier to large scale development and effectively dividing the land from the urban areas to the east;
(c)the location of the transition line easement; and
(d)the site’s limited access options.
Mr Rogers emphasised that when considering an application for development on lands subject to flooding, cl 44.04-6 (decision criteria) of the LSIO required the Council to consider whether the proposal could be supported on lands outside of the flood affected areas and the impact that the proposed development may have on flooding/flood damage to adjoining lands. While it was reasonable to assume that ground level works and drainage measures could be introduced to allow some of the land to be developed, the extent of the land affected by the LSIO limited the potential of the land to support any significant extent of development, according to Mr Rogers.
Mr Rogers also referred to areas of cultural heritage sensitivity that had been identified on the site. These were the corridor running along the Dandenong Creek and a small area located on the south-eastern corner of Lot 2. Under the Aboriginal Heritage Act2006 (Vic) and the Aboriginal Heritage Regulations2007 (Vic), an application for a ‘high impact activity’ within an area of cultural heritage sensitivity must be accompanied by a cultural heritage management plan.
According to Mr Rogers, had the land not been earmarked for the Parkland, it would have been zoned for low density type land use for the following reasons:
(a)the land is bounded by two significant development barriers, the freeway to the east and the Dandenong Creek to the west, which reduces its ability to integrate with urban land uses within the wider area;
(b)access to the land is effectively limited to Ferntree Gully Road along its northern boundary;
(c)the capacity of the land to support development is significantly affected by the presence of flooding, as illustrated by the extent of the area covered by the LSIO;
(d)only a small portion of the land is unaffected by flooding. This flood-free area is set back from the northern boundary and would require access across flood-prone lands, raising issues of adequate and safe access;
(e)the areas of the land which are subject to flooding coincide with the areas that would be subject to a cultural heritage management plan if ‘high impact activities’ were proposed;
(f)the transmission line easement which runs through the centre of the site represents an obstacle for development and would result in a fragmented development pattern, limiting both the type and extent of development which could be supported on the land; and
(g)both creek and freeway setback requirements would reduce the area of the site which can be developed.
Mr Rogers calculated that just under ten hectares or 8.4% of the total land area was free from flooding at the relevant date. This area was removed from adjoining land uses by the presence of a freeway, suggesting its ability to integrate with surrounding urban land uses was considerably restricted. For this reason, he did not consider that it would have been suitable for either industrial uses, like those on lands to the east, or residential uses, like those on lands to the east and west. Instead, it may have been more suitable for low density residential land use such as that supported by the Council when it granted the subdivision permit. The view taken by the Council in relation to this permit application was reasonable, as it provided for building envelopes on the land not affected by the LSIO with a density and layout appropriate to the characteristics of the site.
Mr Rogers disagreed with Mr Negri’s view that planning policies at the relevant date revealed there to be a lack of employment land within the City of Knox. From his examination of the policy in place at the time, the Council recognised the potential in the area for future industrial and commercial expansion as a result of its proximity to the city, the availability of large serviceable land areas, and the availability of road infrastructure. However, it was necessary to consider whether other employment land, which was more appropriate for development than the subject land, was available in the region along the Eastlink corridor. Mr Rogers concluded that there was.
Furthermore, Mr Rogers identified land comparable to the subject land that had not received the treatment that the claimants ascribe to the subject land. Land zoned Business 3 on the northern side of Wellington Road, east of Eastlink, was restricted by the LSIO to its north. This area, bounded by Eastlink, the transmission line and Corporate Avenue, was occupied by a golf driving range and fell within the LSIO. Based on the argument put forward by the claimants, it could potentially have been filled to raise it above the flooding area to extend the Business 3 Zone. However, that had not occurred.
Mr Rogers gave some general evidence about the demand for industrial land in the region. His analysis of the availability of Business 3 land from the 2008 UDP report suggested that there was an equivalent of 18 years’ supply of such land. For Industrial 1 land, there was about 9½ years’ supply. The 2009 UDP report suggested there had been a slower take up of Business 3 land in 2009. Mr Rogers concluded that there was no shortage of such land in the eastern region.
Mr Rogers agreed that Eastlink had triggered industrial re-zonings along its route. He said that the transport corridor was an important consideration, but it was not the sole generator of employment land. There had also been re-zonings along the Officer-Pakenham corridor, which were more influenced by the need to provide jobs for suburban areas.
Submissions
The Secretary’s submissions focussed on the lack of impetus for or any good planning reason for rezoning of the subject land for urban purposes. The ‘good planning reason’ lies at the heart of the Secretary’s case: the Secretary contends that the case for the claimants boils down to planning opportunism in that it is encapsulated in a series of general propositions which are essentially uncontentious but which would support a business zoning for any parcel of flat, serviceable land within easy access of Eastlink. Planning is the orderly control of where certain types of land use ought to be located in the interests of the community as a whole. Simply because a development outcome may be shown to be technically feasible does not mean that it is one that would necessarily have been permitted to occur through rezoning in the past. The claimants would have to demonstrate that the proposed rezoning would achieve a net community benefit and produce a good planning outcome.
According to the Secretary, the evidence disclosed no rationale for rezoning the subject land prior to the late 1990s. The freeway reservation was the appropriate boundary for industrially zoned land and there was no impetus or need to change policy direction over a lengthy period - even having regard to policy documents such as ‘Victoria, The Next Decade’ (April 1987), ‘Shaping Melbourne’s Future’ (August 1987), ‘A Place to Live’ (April 1992), and ‘Living Suburbs’ (December 1995), with their themes of urban consolidation and the integration of transport planning and land use decision-making. Thereafter, the positive factors pointed to by the claimants were either illusory or would have had little persuasive weight in the eyes of the City of Knox as the planning authority.
As to the potential for rezoning the subject land from 1999 onwards, the Secretary submitted as follows:
(a) From 1999 onwards, State planning policy for floodplains (cl 15.02) would have caused the planning authority to exercise considerable caution before facilitating the development of flood prone land, particularly where there was no imperative to provide further industrial land;
(b) In 2001 and 2002, Amendments C22 and C23 and Melbourne 2030 would not have precipitated an amendment to rezone the subject land. The amendments are best characterised as consolidating an existing industrial or employment precinct. The length of time that it took to approve Amendments C22 and C23 tends to indicate that the relevant decision-makers did not share a sense of urgency to address industrial land supply in Knox;
(c) In 2004, a panel hearing took place in respect of the imposition of the LSIO. This would have been the perfect opportunity to agitate for the land to be rezoned for development for industrial purposes. However, the owners chose not to avail themselves of the opportunity, thereby impliedly conceding that the subject land was inappropriate for industrial development;
(d) Between 2004 and the relevant date there was no substantial change in planning policy or in any material fact that would have caused the planning authority to rezone the subject land. While there were references to the economic benefits generated by Eastlink, the physical construction of Eastlink did not alter the planning policy or physical context of the subject land in any meaningful sense; and
(e) By 2008, clause 22.08 of the Knox Planning Scheme relating to the SREP was in the Planning Scheme and Amendment C73 had been gazetted to facilitate the expansion of the SREP. The identification of the SREP’s as the Council’s key employment area and its subsequent expansion weakened any potential justification for the rezoning of the subject land.
According to the Secretary, the attributes of the site that had shaped and influenced the pattern of development and therefore the likely zoning of the subject land were as follows:
(a)The freeway reservation – not the Parklands – limited the potential of the subject land to be zoned and used for industrial purposes;
(b)The subject land has no connectivity with the industrial/employment areas to the east;
(c)The subject land is susceptible to flooding and only a small area is outside the 1 in 100 year flood level;
(d)Overriding State policy included a number of clauses which suggested that an industrial zoning of the subject land would not have been appropriate: policies relating to the environment, conservation of native flora and fauna, protection of catchments, waterways and ground water, and flood plain management;
(e)There were potentially very significant constraints posed by the likely presence of Dwarf Galaxias within and downstream of the subject land;
(f)There was no strategic support at the local level for a Business 3 or Industrial 1 zone for the subject land;
(g)The proposal to fill the floodplain to facilitate a development area to be zoned Business 3 would render the majority of the land sterile and unable to be developed; and
(h)There was no identified need for industrial land in Knox.
Generally, the Secretary submitted that the minimal encouragement of industry in Knox must be weighed against the competing objectives in other policies in the Knox Planning Scheme relating to floodplain management and the protection of biodiversity. The LSIO would serve as a warning sign to the planning authority as to the capacity of the subject land to be used for industrial purposes and the requirement for substantial drainage works which would call into question the suitability of the land for rezoning. The provisions of clause 15.02 (floodplain management) and the objective to assist in the protection of the flood storage function of floodways and waterways would have been pivotal to the consideration of any rezoning application. Consideration of the flood risk posed by the rezoning would not have been a straightforward matter, as was plain from the years it has taken to resolve the flooding issues in the proceeding. Issues such as flooding and environmental constraints such as flora and fauna were matters which had a direct bearing on land capability and development, and would need to be addressed at the rezoning stage. It would make no sense to rezone land for a purpose which could not in practice be realised or which might have significant environmental ramifications. In this regard, the subject land is quite different from the much smaller portions of land that are flood prone and have been rezoned in the SREP. There was strategic support for those rezonings in the Planning Scheme.
For their part, the claimants submitted that the attributes of the subject land made it suitable for zoning as industrial or commercial land. In his opening submissions, Senior Counsel for the claimants took the Court through a suite of government policy documents dating from the late 1960s which were said to show government policy favouring urban consolidation and encouraging employment generating land uses and industry on major transport links and close to potential workforces. Those policy documents included:
(a) ‘Planning Policies for the Melbourne Metropolitan Region’, Melbourne Metropolitan Board of Works, which included an integrated transport plan and general zoning proposals to include urban corridors and ‘green wedges’;
(b) ‘Victoria - The Next Decade’ (April 1987), which was directed to enhancing Victoria’s economic competitiveness as a manufacturing economy;
(c) ‘Shaping Melbourne’s Future – The Government’s Metropolitan Policy’ (August 1987), which identified the pattern of future metropolitan development and identified significant employment locations, including in a corridor in the east running down to the south-east and emphasised the need for urban consolidation;
(d) ‘A Place to Live – Urban Development 1992-2031’ (April 1992), which identified the need to change urban growth patterns and to generate more local employment opportunities;
(e) ‘Living Suburbs – A policy for metropolitan Melbourne into the 21st century’ (December 1995), which identified manufacturing and technology precincts (including in the east), and major metropolitan transport corridors;
(f) ‘Challenge Melbourne – Issues in Metropolitan Planning for the 21st Century’ (Department of Infrastructure, 2000), which discussed the importance of industrial land availability and identified the eastern region as having less available industrial land than most other parts of the metropolitan area;
(g) ‘Melbourne 2030 – Planning for Sustainable Growth’ (October 2002), which includes the initiative of assessing the impact of the Scoresby Integrated Transport Corridor on the demand for new industrial land, and addressing any supply issues.
From this raft of policy documents, the claimants identified four planning themes and a number of sub-themes:
(a)Urban consolidation became evident in the late 1980s and was reinforced in the early 2000s. It is a major theme of planning policy that has evolved over the last 20 years.
(b)Transport and land use decisions should be integrated.
(i) It is important for industry that there be accessibility to roads, rail, ports and employees.
(ii) Eastlink was major State infrastructure and was intended to promote economic activity.
(iii) The Scoresby corridor is of strategic economic importance.
(c)It is important to Victoria to encourage employment and industry.
(i)It is a role of planning to facilitate industrial activity and industrial opportunities.
(ii)It is important that there be adequate supply of industrial land.
(iii)The nature of industry is changing and planning must accommodate that change in nature.
Strategic support for urban development
The State Planning Policy Framework[37] contains policies protecting floodplains and the environment more generally; however, it also emphasises the importance of planning to contribute to economic wellbeing and the need to create opportunities for innovation and the knowledge economy within existing and emerging industries by, among other things, supporting the development of business clusters. Clause 17.03 seeks to ensure the availability of land for industry and to facilitate the sustainable development and operation of industry and research and development activity. Clause 18 refers to the integration of land use and transport planning around existing and plan declared highways, railways, principal bus routes and tram lines.
[37]The Court was taken to the Knox Planning Scheme as in force in 1999 and as in force in 2008. In the event, nothing turns on the difference between the two versions.
As Mr Whitney said in his evidence, it is possible to find a dot point in the State Planning Policy Framework to support any position. It is a question of balancing the dot points. Mr Whitney’s balancing of policies suggested that there was no imperative to create further industrial land in the locality of the subject land. According to Mr Whitney, State planning provisions recognise floodplains as important components of the natural systems of the city. While floodplains can be manipulated to achieve a planning outcome, that should only be done with caution. Filling part of the floodplain could render the remaining land sterile. In the light of these factors, it would have to be demonstrated that there was some sort of demand for additional Business 3 zoned land in the area. Mr Whitney argued that no such demand had been flagged in the Local Planning Policy Framework. In other words, no demand for Business 3 zoned land had been identified on a localised basis.
As well as protecting the flood-carrying and flood-storage capacity of floodways and floodplains, State policy aims to provide protection to floodplains of environmental significance. Mr Whitney cautions generally against modification of the floodplain in the absence of good reason to do so. The Court heard no evidence on the environmental significance of the floodplain other than as potential refuge habitat for the Dwarf Galaxias. However, assuming that the floodplain as a whole was of environmental significance, that, along with the policy imperative to protect the flood-carrying capacity and flood-storage function of floodplain would have to be carefully considered and weighed in deciding whether the proposed rezoning should be allowed. However, it would not be incompatible with the State policy referred to for Lot 2 to be rezoned for urban uses, providing the flood and environmental impacts could be properly managed. In my view, a planning authority considering the proposed rezoning would not need to be satisfied that there was a pressing need for industrial or business land in the locality in order to justify modification of the floodplain per se.
Nonetheless, the question of demand for employment land on a localised basis in order to justify the rezoning of the land received much attention from the parties.
The claimants pointed to local policy support for the use of land for employment generating purposes. The Municipal Strategic Statement (cl 21) refers to the availability of tracts of relatively flat serviceable land together with a network of arterial roads that provides an opportunity for significant commerce and industrial development; cl 21.04 includes in the ‘land use vision’ facilitating and maintaining local employment; cl 21.06-1 is specifically directed to ‘facilitating and maintaining local employment’ and has as its objective to maintain and increase employment opportunities within the municipality by, in part, applying industrial and business zones to land to provide opportunities for industrial and commercial development.
Clause 22.08 provides specifically for the SREP and refers to the Scoresby-Rowville Industrial Area Review 2000, which identified emerging trends in the global production economy. Amendment C73, which among other things, simplified the planning controls relating to the SREP and realigned the boundary of the Urban Floodway Zone to permit further development within the LSIO, records ‘a current undersupply of employment opportunities such as this in the area which can be addressed on site through changes to the planning controls’.
Outside of the Planning Scheme, Mr Rogers analysed the availability of Industrial and Business 3 land using the 2008 and 2009 UDPs, which suggested at least 9.5 years’ availability of industrial or business land in the eastern region. For their part, the claimants relied on the 2003 UDP, which referred to a shortage of industrial land in the east.
Ultimately, I consider the debate about whether there was or was not a need for additional industrial or business land in the locality to be sterile. Quite apart from the impossibility of excluding the possibility that there was a need for industrial or business land in the City of Knox at some time during the relevant 30 year period, the better approach is that described by Mr Negri when explaining the need to balance the policies in the Knox Planning Scheme. In this case, as in most others, it will involve a balancing of opportunities and constraints: the opportunities that might emerge from an economic perspective and the constraints imposed by the presence of the flood zone. It is a question of the weight to be applied to each of them in order to achieve a net community benefit.[38] Mr Negri regarded the flood and environmental issues to be a ‘bundle of constraints’ that would need to be dealt with as part of any planning scheme amendment, whereas there were ‘industrial drivers’ relating to the strategic strength of the site that involved higher level strategic decision-making.[39]
[38]Transcript, 245.
[39]Transcript of Proceedings, Rigby v Secretary to the Department of Sustainability and Environment (Supreme Court of Victoria, S CI 2009 7172, S CI 2009 8216, S CI 2009 8217, Emerton J, 7-11, 14 May 2012) 247 (‘Transcript’).
I accept that there is an impetus for land to be developed and used economically and efficiently, and that there will be encouragement for land that has good access to transport linkages and is close to other industrial and business land to be developed and used for the same or similar purposes. That impetus must be balanced against competing factors, including flooding and environmental constraints, to achieve net community benefit.
Mr Rogers was correct to point out that alternatives must be considered to developing flood prone land. He pointed to a number of alternative sites for the development of industrial or business land in the region. It will nearly always be possible to identify other (possibly better) locations for the development of industrial or business land. However, that is not to say that the industrial drivers will not also favour that form of development for the subject land. If the flood and environmental issues can be appropriately managed, the drivers generated by the topography of the land, its location on or in proximity to major road infrastructure and the linkages that this provides, along with its proximity to the SREP and other industrial and commercial land, will provide strong support for its rezoning.
In any event, having regard to the development of the SREP and the extension of commercial/industrial development further east along Ferntree Gully Road beyond Stud Road, it seems to me to be likely that there has been demand for industrial or business land in the City of Knox in the past 30 years. However, for the reasons given, the Court does not need to be satisfied that the planning authority would have been satisfied that there was a pressing need for additional industrial or employment land in the locality of the subject land to justify its rezoning. Ultimately, Mr Whitney agreed with the proposition that for land to be zoned industrial, there did not need to be an active demand for industrial land and it did not require active policy support.[40]
[40]Transcript 452. However, Mr Whitney qualified that answer by saying that if land was to be included in an industrial zone as an amendment to a planning scheme, it would require ‘some sort of strategic support’.
I do not accept the proposition that the development of the SREP weakens the justification for the rezoning of the subject land. Although the Caribbean Gardens development predates the Parklands proposal, the concentration of development in the industrial and business precincts to the east of Eastlink must be viewed in light of the fact that the land to the west of Eastlink was designated for development as the Parklands and was unavailable for industrial or business development. As a result, little weight can be given to local policy that focuses on the SREP as the principal business precinct in the City of Knox. Had it not been for the Parklands proposal, industrial and commercial development may have taken root to the west of Eastlink on Ferntree Gully Road, rather than extending further east along Ferntree Gully Road. On the basis of the planning evidence, it is more likely that industrial and commercial development in Scoresby would have remained close to Eastlink rather than extending in linear fashion away from Eastlink along Ferntree Gully Road towards the Dandenong Ranges.
This raises the critical issue in this case. When considering how the development of the subject land would have responded to orderly planning and the need to ensure economic and sustainable development, it is necessary to peel back 30 years of planning history. I accept the evidence of Mr Negri that in the absence of the Parklands proposal, the physical development in the area in which the subject land is located would have been quite different by 2008. The Parklands proposal has constrained the development of the subject land and surrounding land from the 1970s onwards, and it would otherwise have been available for wider purposes. The subject land is located within an urban area surrounded by established suburbs and industrial and commercial development. I accept the evidence of Mr Negri that, absent the Parklands proposal, it is likely that from the 1970s onwards, a number of different scenarios would have been considered for the subject land.
In my view, this calls into question the paradigm in which the Secretary considered the historical likelihood of a rezoning taking place. I accept the evidence of Mr Negri that the Parklands proposal has long been reflected in the applicable local planning controls, through a range of reservations, overlays and policy provisions both in the Knox Planning Scheme, and before that in the MMPS. This means that the kind of step by step analysis of the encouragement (or discouragement) given by the planning controls to the rezoning of the land at different periods undertaken on behalf of the Secretary has limited utility, as the relevant controls were predisposed to the maintenance of the subject land in a Rural Living Zone.
As a result, I find the claimants’ reference to broad trends expressed in Government policy statements more useful than local planning policy to assess the likely use and development of the subject land in the absence of the Parklands proposal. Although in the usual course no great weight would be given to policy statements of a general nature that are not referred to or incorporated in the planning scheme, this is not the usual course. The Court is required to consider planning policy since 1978 and how it might have applied to land that has to be imagined in the absence of the Parklands proposal and therefore placed a different physical context. In this circumstance, high level planning strategy documents such as those relied on by the claimants, become relevant.
I accept that the suite of policies referred to - ‘Planning Policies for the Melbourne Metropolitan Region’, ‘Shaping Melbourne’s Future’, ‘A Place to Live’, ‘Living Suburbs’, ‘Challenge Melbourne’ and ‘Melbourne 2030’ - emphasise broad policy directions (urban consolidation, integrating transport and land use decisions, the facilitation of employment opportunities and industry in Victoria, the development of land for industry with good accessibility to roads, rail ports and employees, the importance of Eastlink to promote economic activity, and the strategic importance of the Scoresby corridor) that support the development of the subject land for industrial or commercial purposes.
Mr Whitney agreed with the series of propositions put to him by Senior Counsel for the claimants relating to government policy statements. He agreed that important policy themes emerging over the last 20 years have included urban consolidation, integrating transport and land use decisions, the importance of facilitating employment opportunities and industry in Victoria, that land with good accessibility to roads, rail ports and employees was desirable for industry, that Eastlink was major State infrastructure that was intended to promote economic activity, and that the Scoresby corridor in particular was of strategic economic importance. He agreed that it was important that there was an adequate supply of industrial land and that industrial land supply had to be sufficiently flexible to accommodate the changing nature of industry, that there was strategic value in having clusters of industry and that there ought to be appropriate separation between industry and sensitive uses. Mr Whitney agreed that Lot 2 would satisfy most of these points.[41] He agreed that if the subject land were developed, it would form part of an industry cluster.[42] He agreed that, subject to dealing with flooding, the topography of the land made it suitable for industry.[43]
[41]Transcript 468.
[42]Transcript 472.
[43]Transcript 475.
Like Mr Whitney, Mr Rogers agreed that the themes and sub-themes developed by the claimants were major themes and sub-themes of planning policy that had evolved over the last 20 years. When asked whether he accepted that the zoning of the subject land to the east of the electricity easement to Industrial 1 or Business 3 would be consistent with all those policy themes and sub-themes, he answered, ‘Not all of them’.[44] He referred to the lack of integration between the subject land and the SREP, and the absence of clustering, along with the flooding considerations. In relation to clustering, Mr Rogers agreed that the subject land was proximate to the SREP, but said that it was not well integrated because of the linkage being Ferntree Gully Road. However, Mr Rogers could not say whether Ferntree Gully Road went over Eastlink or under Eastlink.
[44]Transcript 531.
With the exception of the matters carved out by Mr Rogers, I take the Secretary’s planners to agree that the development of Lot 2 as industrial or business land would satisfy most of the planning themes and sub-themes identified by the claimants. I also accept the evidence of the claimants’ planners that planning policies have historically sought to foster urban consolidation and economic development, and that applying an Industrial 1 or Business 3 Zone to the land would recognise the existing or potential uses of the land and more accurately reflect the existing urban structure of the area.
I am persuaded that in the absence of the Parklands proposal, the subject land would have been attractive to industry and business, given its proximity to major transport routes and the existing industrial/business area on the other side of Eastlink. The raft of policies concerning or referring to the integration of land use decisions with available transport infrastructure support the fairly self evident proposition advanced by the claimants’ expert witnesses that the situation of the subject land adjacent to the on/off ramps for Eastlink at Ferntree Gully Road positioned it extremely well for use for commercial and industrial purposes. It also enjoyed the benefit of comparative isolation from the surrounding residential suburbs.
Mr Rogers was the only one of the four expert planners who did not see any urban potential for the subject land. Although I found his evidence thoughtful and thorough, his view, does not take into account the influence of the Parklands proposal on the development of the land and surrounds, or take adequate account of the drivers that predispose the subject land to industrial or business development if the flood and ecological impacts can be appropriately managed.
It is true, as Mr Rogers in particular argued, that the subject land is bounded by two significant development ‘barriers’ which reduce its ability to integrate with urban land uses within the wider area: the freeway to the east and the Dandenong Creek to the west. The rezoning of Lot 2 as Industrial 1 or Business 3 would create a discrete business district separated from the business area to the east of Eastlink. Moreover, access to the land would be limited to Ferntree Gully Road along its northern boundary. The transmission line easement which runs through the centre of the site also represents an obstacle for development.
As Mr Whitney pointed out in his evidence, the SREP is a self-contained business enclave and its development plan foreshadows all sorts of synergies between the various uses that occupy land there. There are central open spaces and facilities, banks, cafes and so on. A separate enclave on the other side of Eastlink would arguably not be large enough to create such an environment. Moreover, the linkages between it and the SREP would necessitate movement by car, which is undesirable.
I accept that the barrier created by Eastlink between any commercial/industrial development on the subject land and the commercial/industrial land to the east is not optimal. Mr Whitney may well be correct to say that the size of the developable land (Lot 2) is insufficient to enable the development to be self sufficient, and that this would generate car trips to the SREP. However, it would not prevent synergies with the land to the east, so as to confer the general advantages of a clustering of industrial/commercial development in the locality.
The transmission lines, which dominate the landscape, would also be a feature that would have to be accommodated in an industrial development.
Ultimately, however, these are matters that would have to be taken into account when determining the particular form of urban development for the land. They do not cause me to change my mind about the likely underlying zoning of the land.
Rural Living Zone
Mr Whitney agreed that the purposes of the rural living zone include and focus upon living within a rural environment. He agreed that, apart from land that was earmarked for compulsory acquisition, in the Knox Planning Scheme the Rural Living Zone was used in areas outside the urban growth boundary on land that belonged in a ‘green wedge’ area.
Mr Rogers also agreed that the principal nominated purpose of a Rural Living Zone was to provide for dwellings in a rural environment. He agreed that the rural living zone was typically applied in areas around provincial cities and around the periphery of the metropolis. He accepted that a Rural Living Zone in a location like the subject location was an anomaly. Nonetheless, Mr Rogers considered that it gave ‘the best fit’. The alternatives would have been a Comprehensive Development Zone or Special Use Zone, which he did not think was warranted. He believed that the zone that came closest to being able to deal with the circumstances of the subject land would be a zone allowing a low density residential scenario with a handful of lots.
I find it improbable that, in the absence of the Dandenong Valley Parklands, the subject land would have been restricted to a quasi-rural zoning of that kind, given its location in such a highly urbanised region. I accept Mr Milner’s evidence that there was little policy basis for the zoning of the land as Rural Living except insofar as it loosely reflected the existing nature and use of the subject land and would safeguard its future use as parkland. I also accept Mr Negri’s evidence that the zone did not reflect the preferred use of the land or the long term likely use of the land. Scoresby is plainly not a rural area and has not been since the late 1960s and 1970s when the City of Knox experienced significant urban growth. It has been an established urban area for more than 40 years. Applying a Rural Living Zone to the subject land is anomalous given its urban setting and its potential for use as industrial land due to its excellent exposure to transport infrastructure and its proximity to other industrial and commercial land.
For the reasons I have outlined, I consider the use of the subject land for industrial and/or business purposes to be a more likely and better planning outcome in the absence of the Parklands proposal than its development for ‘rural living’. It is anomalous to promote the construction of dwellings on large rural blocks within a highly developed urban environment like Scoresby, especially in the absence of the Parklands. If the Parklands otherwise remained a feature of the Creek corridor, it might make some sense to maintain a rural living zone on its periphery. In the absence of the Parklands, however, it makes little sense to maintain an area the size of the subject land for rural blocks and semi-rural purposes. Given its location beside Eastlink, and the visually striking power line easement that runs right across it, it presents as an unlikely opportunity for a tranquil rural lifestyle.
I agree with Mr Rogers in particular that the subject land has some limitations as a site for urban development. As Mr Rogers said in his evidence, the routing of Eastlink a short distance to the east of the Dandenong Creek created a corridor of land that was hemmed in on both sides. The land between Eastlink and the Dandenong Creek is isolated from the communities and developments to the east and the west. In my view, the subject land is well used as parkland. That does not, however, determine its most likely underlying zoning in the absence of the Parkland proposal.
The Court has been presented with the alternatives of the development of the part of the land that can be raised above the floodplain for industrial or business purposes or its retention in a zone for low density residential subdivision termed ‘Rural Living’. In my view, having regard to the policies in the Knox Planning Scheme, especially the State Planning Policy Framework, the objective of the Planning and Environment Act to facilitate development, and to the higher level government policy statements referred to by the claimants, along with underlying strategic factors such as the location of the land, its topography, drainage patterns and orientation, the subject land would have been rezoned for business or industrial purposes by the relevant date in the absence of the Parklands proposal. Such rezoning would have produced a good planning outcome and achieved a net community benefit.
1998 planning panel decision
It is necessary, finally to consider the single instance where an application of sorts was actually made on behalf of the owners of the subject land to have it rezoned for industrial purposes.
In response to the claimants’ assertion that the Rural Living Zone is a ‘holding zone’ that does not reflect the underlying zoning of the subject land, the Secretary relied on the panel report of September 1998 for the new format Knox Planning Scheme. Solicitors for Mrs E Rigby made submissions to the panel to have that part of the land above the floodplain included in the Industrial 1 Zone, which was the then current zoning of the land to the east of the freeway reservation. Mrs Rigby’s submissions were supported by town planning evidence.
The panel report records that the Knox City Council did not accept that the land was suitable for urban development. The Council submitted that the Rural Living Zone was an appropriate zoning, citing the potential of the land to flood as an important consideration.
The planning panel was not prepared recommend that the subject land be zoned Industrial 1. In response to Mrs Rigby’s submission, it said:
The Scoresby Transport Corridor is clearly the boundary between urban land uses (on the eastern side) and non-urban or recreation uses (on the western side). The panel sees this as a realistic edge/boundary and can see no reason to vary this.
The Secretary submitted that it was apparent from this comment that the planning panel saw the freeway reservation and not the Parklands proposal as the defining feature of the area, resulting in the subject land being outside the area identified for industrial/urban development. The panel could have altered the zoning to Industrial 1 and left the public acquisition overlays on the subject land, but did not do so. In refusing to accede to the submissions that an Industrial 1 Zone was appropriate for the subject land, the panel provided the best indication that is available of what was considered as at 1998 to be the appropriate zoning of the subject land. By contrast, the panel considered the submissions regarding an Industrial 1 zone (as opposed to the Residential 1 zone that had been exhibited) for land at 966 Stud Road. The panel ultimately did not make any recommendations in relation to this land because it was the subject of a site specific rezoning which occurred before the panel delivered its report. However, in relation to the Boral site, the panel was prepared to allow a Special Use Zone over the exhibited Rural Living Zone, even though a Public Acquisition Overlay also applied to that land and the Rural Living Zone did not prohibit the use of the land for extractive industry.
The claimants contend that the panel’s consideration of the submission made on behalf of Mrs Rigby provides no guidance as to the underlying zoning of the subject land in the absence of the Public Acquisition Overlay. The new format planning schemes were to be ‘policy neutral’, that is, they were not to change the effect of the planning controls already governing the land. The controls over the subject land included controls for proposed public open space and a proposed main road. The exhibited zone was Rural Living with Public Acquisition Overlays for VicRoads and Parks Victoria. The Council contended that this zoning was consistent with land being remnant rural land, but the panel commented that the Scoresby transport corridor was the boundary between urban land uses on the eastern side, and non-urban or recreation uses on the western side. The panel therefore took as a given the recreation uses that were provided for between the Dandenong Creek and the freeway reservation.
According to the claimants, therefore, it is clear that the panel was not prepared to consider the underlying zoning of the subject land: the panel did not seek to consider what the zoning of the land would have been in the absence of the Parklands proposal. To the contrary, it had regard to the Parklands proposal in recommending no change to the exhibited Rural Living Zone.
I accept the submissions of the claimants. The planning panel did not consider the zoning of the land in the absence of the Parklands proposal. The reference to the freeway reservation as an appropriate boundary was made in that context.
In any event, it would be dangerous for the Court to accept what the panel said about the appropriate zoning of the land upon the introduction of the new format planning schemes, as the context in which the planning panel undertook its consideration was fundamentally different from the present. The task of the planning panel was not hypothetical; it did not have to proceed on the basis that 30 years of planning built upon the Parklands proposal as one of its central planks should be disregarded.
Ultimately, is a matter for the Court to determine the underlying zoning of the land on the basis of the evidence, and in particular the expert planning evidence, before it.
Conclusion
The exercise that the Court has been asked to undertake is a hypothetical one that involves peeling back 30 years of planning history and re-imagining the physical development of the subject land and its surrounds. The task is both radical and uncertain. Doing the best that I can having regard to the characteristics of the land and its surrounds, along with applicable planning policies and Government policy statements, I find that, in the absence of the Parklands proposal, it is likely that Lot 2 would have been zoned Business 3 as at the relevant date on the basis that its highest and best use was the same as or similar to the land on the other side of Eastlink. Such zoning is compatible with the flooding and environmental constraints of the land, and with orderly planning, having regard to the planning controls at the relevant times and broader (metropolitan and state-wide) policies to encourage the integration of land use and transport infrastructure.
To so find is not to accede to planning ‘opportunism’ by the claimants. It is not to find that any piece of flat land close to major road infrastructure would be suitable to be zoned for industrial or business purposes. I have paid careful attention to the expert evidence before the Court. Ultimately, I have preferred the evidence of Mr Negri and Mr Milner. I am persuaded that the development of Lot 2 for industrial or business purposes would have produced the best planning outcome. By contrast, the zoning of the land as Rural Living would be anomalous in the absence of the Parkland proposal given the heavily urbanised region in which the land is situated.
The answer to the first preliminary question is that the land to the east of the westerly alignment of the electricity easement that traverses the land would have been zoned Business 3 pursuant to the Knox Planning Scheme. The balance of the subject land would have been zoned Urban Floodway. A Land Subject to Inundation Overlay would also have applied to that part of the land to which the current LSIO applies.
It is unnecessary to answer the second preliminary question.
Appendix
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