VCAT provides guidance about a Council's role in the planning scheme amendment process

In the recent decision of Danaher v Whittlesea CC [2019] VCAT 552, the Tribunal held that Whittlesea City Council had failed to comply with the Planning and Environment Act 1987 (Act) regarding the way it dealt with submissions to an amendment to the Whittlesea Planning Scheme, and that the Council’s actions informed the Planning Panel’s failure to afford procedural fairness.

Mark Bartley and Alex Gelber of HWL Ebsworth Lawyers successfully represented the landowner (Danaher).

The decision is significant as it provides guidance to councils and landowners regarding the planning scheme amendment process, and demonstrates how councils’ failures to comply with the Act prior to a Panel hearing can lead, or contribute, to failures to provide procedural fairness to landowners in the context of the hearing.

Background

Amendment C204 to the Planning Scheme (Amendment) sought to implement a structure plan by applying the Activity Centre Zone (ACZ) to a large area of South Morang on a precinct basis. The exhibited version of the Amendment noted both “Industry” and “Accommodation” as prohibited uses in Precinct 5.

On the basis that “Industry” would be prohibited, Danaher submitted that “Accommodation” should be allowed in a mixed use development format. However, following discussions with landowners other than Danaher, Council approached the Panel process on the basis that “Industry” should not be prohibited, but should be allowed without the need to obtain a planning permit. The Council used the fact that “Industry” was to be allowed without a permit as one of the reasons to reject Danaher’s submission.

Danaher had only a few days notice of the Council’s changed position before the Panel hearing. Following the issue of the Panel report, Danaher applied to VCAT pursuant to section 39 of the Act, seeking declarations that the Council had failed to comply with the Act, and that the Panel had failed to afford procedural fairness.

Failure to comply with section 23 of the Act

Section 23 of the Act requires that once a Planning Authority has considered a submission regarding an amendment it must do one of the following things:

• Change the amendment in the manner requested;
• Refer the submission to a panel appointed pursuant to the Act; or
• Abandon the amendment or part of the amendment.

While the Council did not formally change the Amendment before the Panel process, the Council failed to comply with s 23 when it considered a submission from another landowner (530 McDonalds Rd Pty Ltd) and did not undertake any of the required actions. Rather, the Council made broad changes to the Amendment documentation, other than in response to submissions, including to the status of “Industry” in Precinct 5, and continued to negotiate with landowners other than Danaher without providing any further notice of the proposed changes or advising Danaher.

The Tribunal also considered that even if the Council had the power to formally change the Amendment before the Panel process, it did not do so in the manner requested by the submission filed by 530 McDonalds Rd Pty Ltd. Accordingly, it is clear that a Council may not make broad unilateral changes to a planning scheme amendment before the Panel hearing.

It should be noted that unlike common practice, where proposed changes might be put during the Panel hearing, usually using a tracked changes version of the Amendment, here the Council tendered the modified amendment as the formal amendment adopted by Council.

The Tribunal held that the Council’s failure to comply with s 23 of the Act substantially disadvantaged Danaher, as he prepared for the Panel, briefed expert witnesses and appeared at the hearing on the basis of the exhibited Amendment.

Failure to afford natural justice

Under the Act, the Panel is bound by the rules of natural justice, but no such obligation explicitly applies to a Council. The Tribunal commented that the concern of the law is to avoid practical injustice, and to ensure that a person is entitled to a “fair crack of the whip”.

Significantly, the Tribunal held that the obligations of procedural fairness lie not only with the Panel, but also the parties appearing before it, and that a party is entitled to have reasonable notice of the case that it is required to meet. The Tribunal further held that the Council was under an obligation to provide submitters with reasonable notice of any post-exhibition changes that may be relevant to their submission.

The Council argued that it had provided notice of the change to the status of “Industry”, and relied on a number of formal Council resolutions. However, the Tribunal commented on the lack of clarity in those resolutions, particularly in relation to which submissions were being referred to the Panel and which were not. It was also significant that:

• Prior to the Panel hearing, the Council circulated an amended table of land uses to some landowners, but not others;
• At the Directions Hearing the Council provided no indication about the change in the status of “Industry”; and
• The Council’s Part A submission provided no detail about the change in the status of “Industry” other than a track-changed schedule to the ACZ.

Therefore the Tribunal found that the Council substantially disadvantaged Danaher by failing to make him aware of such changes. The Tribunal has previously held that a Panel is not under an obligation to “spoon feed” landowners. Significantly in this case the Tribunal held that the onus to resolve procedural unfairness did not rest entirely with Danaher, and that it was incumbent upon the Panel to afford procedural fairness, having been appraised of a significant shortcoming in the way that Danaher had been treated.

Implications of the decision

Councils should be aware that:

• Transparency is critical when dealing with landowners in relation a planning scheme amendment. Post-exhibition changes to amendment documentation are a natural part of the planning scheme amendment process, however councils should actively notify other landowners if any changes in the council’s position have the potential to affect submitters’ interests;
• Failures to comply with the Act during or after exhibition of an amendment may inform or contribute to failures by the Panel to provide procedural fairness to landowners; and
• It is critical to clearly demonstrate which submissions are being referred to the Panel and which are not, and advise the Panel accordingly. Particular attention should be paid to the drafting of the relevant council resolution.

Landowners, whether sophisticated developers or otherwise, should be:

• Aware that discussions with council officers are likely to occur following the exhibition of an amendment, and before the Panel hearing;
• Alert to whether the position presented by a council at a Panel hearing might be distinctly different from the exhibited amendment; and
• Aware that a council’s actions may inform the Panel’s failure to afford procedural fairness in those circumstances, which is reviewable at VCAT.

How can we help you?

HWL Ebsworth Lawyers has advised extensively and represented parties in a number of planning scheme amendments. We are able to advise on individual matters or provide general guidance to both councils and landowners. Please do not hesitate to contact us to discuss the implications of this decision for your matter.

This article was written by Mark Bartley, Partner and Alex Gelber, Associate.