Section 705 of the Sustainable Planning Act 2009 (SPA) entitles an owner of an interest in land to be paid reasonable compensation by a local government if, as a result of a change to the planning scheme or planning scheme policy, the only purpose for which the land could be used is a public purpose.
In the decisions of Chong & Yang v Logan City Council [2016] QCA 12 and [2015] QPEC 12 (Chong's case) the Planning and Environment Court and the Court of Appeal had occasion to consider section 705 of the SPA including the expression "could be used".
FACTS
The Queensland Court of Appeal (COA) delivered judgment in Chong's case on 5 February 2016. The COA dismissed an appeal against the refusal of a claim for compensation ($2.5 million) lodged by the applicants pursuant to section 705 of the SPA following a change to the zoning of part of their land from an investigation zone to a conservation zone.
The case related to amendments to the Logan City Council Planning Scheme which took effect in November 2011. Prior to the amendments, part of the applicants' land was in a non-urban zone and the other part in an investigation zone. When the amendments commenced, the land previously within the investigation zone was placed in a conservation zone. While the balance of the land remained in the non-urban zone, that zone was subject to provisions which differed to those that had applied earlier.
The applicants had a low set residential dwelling lawfully constructed on the subject land and wanted to subdivide their land into 11 light industrial lots.
DECISIONS
The Planning and Environment Court (PEC), in refusing the claim for compensation (a decision not disturbed by the COA), considered it relevant to have regard to the fact that some code assessable uses were available for the land, including a food outlet/restaurant if that use was carried out with but incidental and subordinate to public recreation.
At first instance, the PEC held that the expression "could be used" in section 705 of the SPA has the connotation of possibility rather than probability and that evidence of the prospects of approval of an available use may be relevant and admissible when interpreting section 705 of the SPA. The primary judge concluded that if a small scale restaurant was approved and carried out with, but incidental and subordinate to, the public park, then it could not be said that the only purpose for which the land could be used was a public purpose. The PEC considered that the food outlet/restaurant could operate on a commercial basis and that its customers would not be limited to users of the public park. As a result, the PEC was satisfied that the subject land could be used for a purpose other than only a public purpose (and other than the purpose for which it was being used when the change was made) with the subsequent result that section 705 of the SPA could not be engaged.
The COA held that the primary judge did not make any legal errors and that the PEC's resolution of the issue was correct. The COA preferred the view that a restaurant or food outlet lawfully conducted on the applicant's land could be a use of the land for a commercial purpose, and not for a public purpose.
DISCUSSION
This case demonstrates that in considering a claim for compensation under section 705 of the SPA it is relevant to have regard to the probability of an approval of an available use and that evidence of the prospects of approval of an available use may be relevant and admissible. For instance, if evidence showed, on the balance of probabilities, that such an application would be likely to be refused, then such a use is illusory and should not be regarded as a use for which the land might be use.
Care has to be taken not to confuse the word 'purpose' in section 705 as a synonym for 'use'. The distinction was explained in Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534 where purpose was described as "the end which is seen to be served by a particular use of premises". Here, the use of the land for a restaurant or food outlet was considered to be a use for a commercial purpose, and not for a public purpose.
In ascertaining the purpose for which the land could be used, Chong's case does not alter earlier case law which acknowledges that section 705 of SPA contemplates that land may be used concurrently for more than one purpose. Where land can be used for several purposes, each is to be regarded as a purpose in applying section 705.
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