ACQUISITION & COMPENSATION - Planning · ACQUISITION & COMPENSATION 6 Contents 6.1 Public land acquisition ... the land, except in cases where section 7 of the LAC Act specifies that

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6.1 Publiclandacquisition ............................................................................................ 36.1.1 Who may compulsorily acquire land? ..................................................................... 36.1.2 Can the Minister for Planning or a responsible authority compulsorily acquire land? ........................................................................................................................ 36.1.3 Governmentpolicyonlandacquisition ................................................................... 46.1.4 How is land acquired? ............................................................................................. 4

6.2 PublicAcquisitionOverlay....................................................................................... 86.2.1 What is reserved land? ............................................................................................ 86.2.2 WhyislandincludedinaPublicAcquisitionOverlay? ............................................. 86.2.3 IsaPublicAcquisitionOverlayalwaysrequired? ..................................................... 9

6.3 Planningcompensation ........................................................................................... 96.3.1 Whatisplanningcompensation? ............................................................................ 96.3.2 Compensationforfinancialloss ............................................................................. 106.3.3 Whoisresponsibleforthepaymentofcompensation? ........................................ 116.3.4 Howisplanningcompensationassessed? ............................................................. 116.3.5 Whatifagreementcannotbereachedastotheamountsofcompensation payable?................................................................................................................. 126.3.6 Cancompensationberecovered? ......................................................................... 13

6.4 Planningcompensationchecklist .......................................................................... 13


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66.1 Publiclandacquisition

6.1.1 Whomaycompulsorilyacquireland?

Anauthoritymayobtaintitletolandeitherbypurchasingitorbyformalstatutoryacquisition.Manyauthoritieshavethepowertocompulsorilyacquirelandforapublic purpose. These include a range of ministers, government departments, public authorities,utilityserviceprovidersandmunicipalcouncils.Abodygiventhepowertocompulsorily acquire land is known as an ‘acquiring authority’ under the Planning and Environment Act 1987.

An acquiring authority may acquire the whole of a piece of land or several pieces of land (for example, for a school or parkland), or part of the land (for example, for a road widening). An authority may also acquire only an interest in the land (for example, an easementacrossapieceoflandtoallowforapipelineorutilityservice).

‘Compulsory’acquisitionmeansthatthelandcanbeacquireddespitethefactthatthelandownermaynotconsenttotheacquisition.Thepowertocompulsorilyacquireland is therefore strictly regulated. An authority can only compulsorily acquire land ifthepowertodosoissetoutinitsgoverninglegislation,whichisdeemedforsuchpurpose to be a ‘special Act’. In some cases, the special Act requires that the acquiring authority can only compulsorily acquire land with the consent of a relevant minister or the Governor in Council.

Where an authority is given the power under a special Act to compulsorily acquire land,theauthoritymustfollowtheprocessforacquisitionsetoutintheLand Acquisition and Compensation Act 1986 (the LAC Act). The authority must therefore either:

• acquire the land or obtain an interest in the land by compulsory process; or

• acquire the land by agreement with the landowner in accordance with the Act.

Ifanauthoritydoesnothavethepowerofcompulsoryacquisition,thecompensationprovisionsoftheLACActdonotapply.Thetransactionwillbelikeanyotherprivatesalebetweenavendorandapurchaserandbothpartieswillbefreetonegotiateasaleprice, subject to any government audit or tendering requirements.

6.1.2 CantheMinisterforPlanningoraresponsibleauthoritycompulsorilyacquireland?

TheMinisterforPlanningandresponsibleauthoritiesaregivenaspecialpowertocompulsorily acquire land. This power extends to:

• any land which is required for the purposes of a planning scheme

LACA s. 3

LACA s. 4

PEA s. 172


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• any land which is vacant, unoccupied or used for any purpose not conforming with the planning scheme (if the minister or the responsible authority believe it isdesirablethatthenon-conforminguseshouldbediscontinued,orthatthelandshould be put to appropriate use in order to achieve proper development in the area)

• anylandsubjecttoadeclarationbytheGovernorinCounciltofacilitatethebetteruse, development or planning of an area.

6.1.3 Governmentpolicyonlandacquisition

Alltransactionsinvolvingthepurchaseoracquisitionoflandbystategovernmentagencies,authoritiesandrepresentativesmusttakeplaceinaccordancewiththeGovernment of Victoria’s Policy and Instructions on the Purchase, Compulsory Acquisition and Sale of Land (August 2000). The Victorian Government Land Monitor (VGLM)isresponsibleforensuringaccountabilityandintegrityinlandtransactions,andisavailabletoprovideguidanceontherequirements(tel(03)94525227).Alternatively,the policy can be accessed online at www.delwp.vic.gov.au.

6.1.4 Howislandacquired?

TheLACActplacesstrictobligationsonanacquiringauthorityinrelationtotheprocessforacquisition.Thisincludesthetimingoftheserviceofnotices,whenandhowoffersmustbemadeandwhenandhowpossessionmaybetaken.Particularcareneedstobetakenbyallpartiesinthisregard,asfailuretocomplywiththelegislationcanresultinpenaltiesagainsttheacquiringauthorityoranacquisitionprocesshavingtobeabandoned or recommenced.

Below is a brief outline of the main procedures which apply. This outline should not beusedasasubstitutefortheLACAct,whichshouldbereadcarefullybeforeanyacquisitionprocedurebegins.

LandtobereservedundertheplanningschemeBeforethecommencementoftheacquisitionprocess,thelandmustfirstbereservedunder a planning scheme. Generally, this will involve a planning scheme amendment to applyaPublicAcquisitionOverlaytotheland.Thereareanumberofexceptionstothisrequirement.

TheprocessforreservinglandandtheexceptionstothisrequirementaresetoutinChapter6.2-PublicAcquisitionOverlay.

ServiceofNoticeofIntentiontoAcquireANoticeofIntentiontoAcquiremustbeservedoneachpersonwithaninterestintheland,exceptincaseswheresection7oftheLACActspecifiesthatanoticeisnotrequired.

Inthecaseofaproposedacquisitionofarentedhouseonwhichthereisamortgage,theauthoritymustservetheregisteredowner,mortgageeandtenantwithaNoticeofIntentiontoAcquire,aspersonswithaninterestintheland.

Thenoticemustbeintheprescribedform(Form1)andbeaccompaniedbyaprescribedstatement.Thisstatement(Form4)isclearlysetoutandisahelpfuldocumenttobothacquiringauthoritiesandthosewhoselandmaybeacquiredoraffectedbytheacquisition.

LACA s. 5

LACA ss. 6, 7, 8; LAC Regs r. 7,10, Schedule 2 forms 1, 4

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TheNoticeofIntentiontoAcquirehasthreemajorfunctions:

• itisthefirstformalnotificationoftheauthority’sintentiontoacquireaninterestintheland(afterthereservationintheplanningscheme,ifapplicable)

• it prevents carrying out of improvements on the land without consent of the authority

• itprovidesanopportunityfortheauthoritytoelicitinformationfromthepersonservedaboutthelandandotherinterestedparties.

AcopyoftheNoticeofIntentiontoAcquiremustalsobeservedontheresponsibleauthority under the planning scheme in which the land is situated, as well as the council(wherethesediffer).AnoticemustalsobelodgedwiththeRegistrarofTitlesinaccordance with a prescribed form under the Transfer of Land Act 1958.

TheNoticeofIntentiontoAcquiredoesnotconstituteanofferorabindingagreement.ItmaybeamendedorcancelledatanytimebeforepublicationoftheNoticeofAcquisition.Itdoesnotbindtheauthoritytoproceedwiththecompulsoryacquisition.AtanytimebeforethelapsingorcancellationoftheNoticeofIntentiontoAcquire,orthepublicationoftheNoticeofAcquisition,theauthoritymayacquireaninterestbyagreement with the owner.

TheNoticeofIntentiontoAcquirelapsessixmonthsaftertheserviceofthatnoticeif the authority has not acquired an interest, or an extension to the period of its operationhasnotbeenmutuallyagreed.

The acquiring authority can ask the council or responsible authority for certain information.Forexample,itmayseekinformationonthezoningorpossibleuseordevelopmentofthelandinordertoassistwiththeassessmentofcompensation.

PublicationofNoticeofAcquisitionAnauthorityformallyacquiresthelandbypublishinganoticeintheGovernmentGazette.Unlessagreedinwritingbetweentheparties,orunlesstimeisvariedundersection106oftheLACAct,theauthoritymustnotacquirethelanduntiltwomonthsafterserviceoftheNoticeofIntentiontoAcquire.GiventhataNoticeofIntentiontoAcquireexpiresaftersixmonths,thisgenerallymeansthatanacquiringauthorityhasaperiodoftwotosixmonthsinwhichtocompleteitsacquisitionfollowingtheNoticeofIntentiontoAcquire.

Themap,whichformspartoftheNoticeofAcquisition,mustbesurvey-accurate(unlessthewholeofatitleisbeingacquired)andmustdescribepreciselywhatisbeingacquired.Thenoticemustbeintheprescribedform.

AninitialofferofcompensationmustbemadewithinfourteendaysofpublishingaNoticeofAcquisition.Therefore,theacquiringauthorityshouldensurethatitisreadytomakeanofferofcompensationbeforeitpublishestheNoticeofAcquisition.

EffectofNoticeofAcquisitionWhenaNoticeofAcquisitionispublishedintheGovernmentGazette,theinterestinthelanddescribedinthenoticefreestheauthorityofallmortgages,encumbrances,licencesandcharges.Publicutilityeasementrightsarepreservedunlessspecificallyacquired.Thismeansthat,fromthedateofpublication,theacquiringauthorityownstheland,evenifcompensationhasnotbythenbeenassessedorpaid.

LACA ss. 9, 10

LACA ss. 11, 14, 15, 18

LACA s. 16

LACA s. 9(2); LAC Regs r. 12

LACA ss. 19, 20, 106; LAC Regs r. 16, Schedule 2, form 7

LACA s. 31(2)(a)

LACA s. 24

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AcopyoftheNoticeofAcquisitionintheprescribedformandastatementofrightsandobligationsmustbeservedwithinfourteendaysofthedateofacquisition.ThisappliestoeveryonewhoreceivedtheNoticeofIntentiontoAcquireand,wheretherewasnoNoticeofIntentiontoAcquire,oneachpersonhavinganinterestimmediatelybeforethedateofacquisition.

AcopyoftheNoticeofAcquisitionmustalsobepublishedintheprescribedforminanewspapergenerallycirculatingintheareainwhichthelandissituated.

SubdivisionandtitlearrangementsforacquiredlandIfpartofalotisacquired,aplanofsubdivisionmustbesubmittedtothecouncilafterthe land is acquired. The plan will serve to re-describe the land acquired and any remainingland,aswellastomakeanyrequiredalterationstoeasements.Aspecialprocess is laid down in the Subdivision Act 1988forcertificationoftheseplans.

EntryintopossessionThe authority cannot take possession of land used as a principal place of residence orbusinessuntilthreemonthsafterthedateofacquisition,exceptwithGovernorinCouncil’scertificationorbyagreementwiththeclaimantandtheconsentoftheministeradministeringthespecialAct.Theauthoritymayenterthelandaftergivingsevendayswrittennoticeofitsintentiontotakepossessiontothepersoninoccupationofthatland.

CompensationforacquisitionApersonwhoseinterestinlandhasbeendivestedordiminishedthroughaNoticeofAcquisition,hasarighttoclaimforcompensation.Apersonwhomakesorisentitledtomakeaclaimforcompensationisknownasaclaimant.

ThefirstofferofcompensationTheauthoritymustmakeanofferofcompensationtoeveryclaimantwithinfourteendaysofthedateofacquisitionorwithinafurtherperiodapprovedbytheministeradministering the special Act or with the agreement of the claimant.

Theofferistobeafairandreasonableestimateofthecompensationpayableandbeaccompaniedbyacertificateofvaluationusedbytheauthorityinmakingitsoffer.TheauthorityistohaveregardtoavaluationoftheValuerGeneralorregisteredvaluer.Theofferistobeaccompaniedbystatementsexplaininganydifferencebetweenthesumofferedandthevaluationandsettingouttheclaimant’srightsandobligations.

Ifnoofferismadetoapersonentitledtocompensation,thatpersonmaymakeaclaimwithintwoyearsafterthedateofacquisition.TheLACActsetsouttheprocedurestobe followed in these circumstances.

ResponsebyclaimantAclaimantistorespondwithaNoticeofAcceptanceoraNoticeofClaim,intheprescribedform,withinthreemonthsoftheofferbeingserved.Iftheclaimantfailstoserveanoticeontheauthority,theclaimbecomesadisputedclaimandcanbereferredtotheLandValuationDivisionoftheVictorianCivilandAdministrativeTribunal(VCAT)ortheSupremeCourt.Iftheamountofcompensationofferedisnotdisputedbytheclaimant,theamountofferedisbindingontheauthority,unlesstheauthoritycandemonstratethatinformationcontainedintheoffer,andrelieduponbytheauthority,was incorrect.

LACA s. 22; LAC Regs r. 16. 17. Schedule 2, forms 7, 8

LACA s. 23

SA s. 35

LACA s. 26

LACA s. 30

LACA s. 31

LAC Regs r. 19, Schedule 2, form 10

LACA s. 37

LACA ss 33-35, 80; LAC Regs r. 20, 21, Schedule 2, form 11

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Authority’sreplytoclaimTheauthoritymustreplytoaNoticeofClaimwithinthreemonthsofreceivingit.Thisisdonethroughastatementinwriting(Form13).Theauthoritymayadmitaclaiminwholeorpart,proposetovaryapreviousoffer,orrejecttheclaimandrepeatitsoffer.

IftheauthorityfailstoreplytotheNoticeofClaimwithinthreemonths,itisdeemedtohaverejectedtheclaimandtohaverepeateditsoffer.Theclaimthenbecomesadisputed claim.

Iftheauthorityofferstoincreaseorvaryitsfirstoffer,theclaimantmustacceptorrejecttherevisedofferwithintwomonthsofreceivingit.Iftheauthorityrejectstheclaim by the claimant, the claim becomes a disputed claim.

TimeIn certain circumstances the LAC Act allows for an extension or shortening of the periodsforresponseandreplies.Italsoprovidesthatcertaintimelimitsapplyingtoclaimantsdonotexpireuntilsevendaysaftertheauthorityhasadvisedthepersoninwritingoftheeffectofthatexpiration.

Howiscompensationassessed?TheprinciplesformeasuringthecompensationpayableontheacquisitionofaninterestinlandaresetoutintheLACAct.Thecompensationpaidgenerallytakesintoaccount the following:

• the market value of the land acquired

• anylossesattributabletoseveranceorasaresultofdisturbance

• anyenhancementordepreciationinvalueoftheinterestoftheclaimantandinother land adjoining or severed from the acquired land

• legal,valuationorotherprofessionalexpensesincurred

• any special value to the claimant

• anypreviouspaymentforlossonsalecompensationorotherformsoffinanciallosscompensationpayments

• the use to which the property was put at the date it was compulsorily acquired

• thepaymentofcompensationforanyintangibleandnon-pecuniarydisadvantagesresultingfromtheacquisition,knownas’solatium’.

The assessment of the precise amounts to be paid is made on the basis of independent valuationadvicecombinedwithapracticalevaluationofotherlossesoccasionedbytheacquisition,togetherwithfeesandexpenses.ItisimportanttonotethattheLACActprovidesforthepaymentofinterestoncompensationagreeduponbythepartiesorawarded by the Court.

Whathappensifplanningcompensationhasbeenpreviouslypaid?Ifanauthorityisacquiringaninterestinapropertyforwhichplanningcompensationunder Part 5 of the Planning and Environment Act 1987 has already been paid, the amountofcompensationforthecompulsoryacquisitionisreducedbya‘prescribedamount’. This amount is calculated in accordance with a formula set out in the LAC Act, whichtakesaccountofthetimingandpaymentofthepriorcompensation.

LACA s. 36; LAC Regs r. 24, Schedule 2, form 13

LACA ss. 106, 107

LACA ss. 41 – 45

LACA s. 53

LACA s. 41(5), (7)

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AdvanceofcompensationWhenanofferofcompensationof$5,000ormoreisservedonaclaimant,theclaimantmayrequiretheauthoritytoadvanceanamountequaltotheamountofcompensationofferedinrespectoftheclaimant’sinterest.

TheAuthoritymustmaketheadvancewithinonemonthofreceivingthenoticerequiring the advance.

DisputeEithertheacquiringauthorityorclaimantmayapplytoVCATfordeterminationof a disputed claim, or refer a disputed claim to the Supreme Court of Victoria for determination.

6.2 PublicAcquisitionOverlay

6.2.1 Whatisreservedland?

A planning scheme may designate land as being reserved for a public purpose. Land reservedforfuturecompulsoryacquisitionisidentifiedbyincludingthelandinaPublicAcquisitionOverlay.

TheobjectivesofthePublicAcquisitionOverlayinclude‘toreservelandforapublicpurpose and to ensure that changes to the use and development of land do not prejudicethepurposeforwhichthelandistobeacquired’.ThePublicAcquisitionOverlayindicatesthat,forthepurposeoftheLACAct,anylandincludedintheOverlayisreservedforapublicpurpose.Thissatisfiestherequirementinsection5ofthatActthatanauthoritycannotcommencetoacquiretheland‘unlessthelandhasbeenfirstreserved by or under a planning instrument for a public purpose’.

This use of the term ‘reserved’ in this context is quite separate from its use in other legislation,suchastheCrown Land (Reserves) Act 1978 (where provision is made for Crown land to be reserved for certain purposes, and for its management) or the Subdivision Act 1988, which refers to land being set aside as a reserve.

6.2.2 WhyislandincludedinaPublicAcquisitionOverlay?

If land is to be compulsorily acquired, it must in most cases be ‘reserved’ under the planningschemethroughitsinclusioninaPublicAcquisitionOverlaybeforetheacquisitionprocesscancommence.

LandmaybeincludedinaPublicAcquisitionOverlaywellinadvanceofitsproposedacquisition.Thereisoftenaperiodofmanyyearsbetweentherecognitionthatanareawillbeneededforapublicpurposeandtheactualacquisitionofthatland.Forexample,thePublicAcquisitionOverlayisoftenappliedtolanddesignatedforfutureroads or freeways. While the relevant road authority may not wish to formally acquire thelanduntilthefinalroadalignmenthasbeenapprovedandprojectfundingisavailable,theidentificationofthelandatanearlystageassiststheaffectedlandownersand others in the vicinity to make informed decisions about the use and development of their land.

LACA s. 80

PEA s. 6(2)(c)

CLRA s. 4; SA s. 24(2)

LACA s. 5(1)

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Earlyreservationenablescontroloftheuseanddevelopmentoflandthatwilleventually be acquired, so that the acquiring authority is not faced with the need to compensate owners of buildings and works constructed on that land once the need foritsacquisitionhasbeenrecognised.WherelandissubjecttoaPublicAcquisitionOverlay,allfurtheruse,developmentorsubdivisionofthelandwillgenerallyrequireaplanningpermit.Permitapplicationsmustbereferredtotheacquiringauthority.

Ownersoflandcanalsoplanintheknowledgethatthelandisproposedforeventualacquisitionandcan,insomecases,becompensatedforsubsequentloss.Compensationispayableonlywhenalossoccurs(forexample,therefusalofaplanning permit on the ground that the land is required for a public purpose).

6.2.3 IsaPublicAcquisitionOverlayalwaysrequired?

Thereareanumberofexemptionstotherequirementthatlandtobecompulsorilyacquiredmustfirstbe‘reserved’underaplanningschemethroughitsinclusioninaPublicAcquisitionOverlay.Theseexemptionsapplyinthefollowinginstances:

• iftheinteresttobeacquiredisforaminorwideningordeviationofaroad;and

x the total value of interests to be acquired is less than 10 per cent of the value of the unencumbered freehold interest in the allotment; and

x less than 10 per cent of the area of an allotment is to be acquired

• ifaneasementistobeacquiredandtheacquisitionofthateasementdoesnotreduce the value of the unencumbered freehold interest by more than 10 per cent

• iftheGovernorinCouncilhascertifiedthatreservationisunnecessary,undesirableor contrary to the public interest

• iftheauthorityisnotrequiredtoserveaNoticeofIntentiontoAcquirebecauseofsection7(1)(a)or(b)oftheLACAct–forexample,anordinarymarketpurchase

• ifadeclarationisinforceundersection172(2)oftheAct

• Ifthelandhasbeendeclaredspecialprojectlandundersection201IoftheAct.

6.3 Planningcompensation

6.3.1 Whatisplanningcompensation?

Apartfromcompensationpayableasaresultoftheactualacquisitionofland,Part5oftheActcreatesarighttointerimcompensation(knownas‘planningcompensation’).This occurs in certain limited circumstances stemming from the proposed future use of the land for public purposes.

Thesecircumstancesarisewheretheowneroroccupieroflandhassufferedfinancialloss as the natural, direct and reasonable consequence of:

• the land being reserved for a public purpose under a planning scheme (it has been includedinaPublicAcquisitionOverlay)

• a proposed amendment to a planning scheme to include the land in a Public AcquisitionOverlay

PEA ss. 98, 99, 106

LACA s. 5(2), LAC Regs r. 6(a)

LACA s. 5(2), LAC Regs r. 6(b)

LACA s. 5(3)

LACA s. 5(4), 7

LACA s. 5(4A)

LACA s. 5(4B)

PEA s. 98

PEA s. 98(1)(a)

PEA s. 98(1)(b)

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• adeclarationbytheministerthatthelandisproposedtobereservedforapublicpurpose

• the access to the land being restricted by the closure of a road by a planning scheme, or

• a refusal by the responsible authority to grant a permit to use or develop the land on the ground that the land is or will be needed for a public purpose.

Themostcommonformofcompensationariseswherelandisdesignatedforfutureacquisitionwellinadvanceofitactuallybeingacquired,andwhereaffectedlandowners are unable to use or develop the land fully during the intervening period becauseofthe‘blight’whichthePublicAcquisitionOverlayplacesovertheland.

Aclaimforcompensationalsoarisesifanowneroflandhassufferedfinanciallossasthe natural, direct and reasonable consequence of:

• theamendmentofaplanningschemetoremoveanyreservationovertheland(thatis,toremoveaPublicAcquisitionOverlay);

• the lapsing of an amendment which proposed to include the land in a Public AcquisitionOverlay;or

• thecancellationofadeclarationbytheministerwhichhadindicatedthatthelandwas proposed to be reserved for a public purpose.

ThetimeatwhichtherighttoclaimcompensationarisesissetoutintheAct.Ingeneralterms,therighttocompensationarisesatthetimealossissuffered–forexample, when the land is sold at a lower price than would have been expected had thelandnotbeenincludedinaPublicAcquisitionOverlay.

Apersoncannotclaimcompensationiftheplanningauthorityhasalreadyboughtorcompulsorilyacquiredtheland,oraconditiononapermitprovidesthatcompensationisnotpayable.Acompensationclaimmayalsoberejectedifthefinanciallossisofaminornature.Generally,apersondoesnothavearighttoclaimcompensationifthepersonwasnottheowneroroccupierofthelandatthetimetherighttocompensationarose.

6.3.2 Compensationforfinancialloss

Compensationispayableifitcanbeshownthatlandhassoldatalowerpricethanwouldreasonablyhavebeenexpectedifthelandhadnotbeenaffectedbyitsinclusion,orproposedinclusion,inaPublicAcquisitionOverlay.Withafewexceptions,tobeeligibletoclaim‘lossonsale’compensation,theownermustgivetheplanningauthority60daysnoticeinwritingoftheirintentiontosellthelandandmusthavebeentheownerofthepropertyatthetimethePublicAcquisitionOverlay(orpriorreservation)firstcameintoeffect.

CompensationarisingfromapermitrefusalTherighttoclaimcompensationforlossordamagearisingfromtherefusalofanapplicationforapermitisestablishedinthefollowingcircumstances:

• when the permit is refused by either the responsible authority or VCAT on the basis that the land is required for a public purpose

PEA s. 98(1)

PEA s. 98(1)(d)

PEA s. 98(2)

PEA s. 107(1)

PEA s. 99

PEA s. 98(3), 103, 108

PEA s. 98, 106, 108(2)

PEA s. 99

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• when the permit is refused on the basis that the land may be required for a public purpose,thatis,itisnotyetincludedinaPublicAcquisitionOverlaybutthereisreasonable evidence that the land will need to be acquired for public purpose in the future

• when the responsible authority:

x failstograntapermitwithintheperiodprescribed(forthepurposesofsection79 of the Act), or

x grantsapermitsubjecttoanyconditionwhichisnotacceptabletotheapplicant, and

x VCATdisallowsanapplicationforreviewofeitherthefailureorconditionontheground that the land is, or may be, required for a public purpose.

CompensationforclosureofaroadCompensationforfinanciallosssufferedasthenatural,directandreasonableconsequence of access to land being restricted by the closure of a road by a planning scheme can become payable once the relevant provision of the planning scheme comesintooperation.

CompensationforremovaloramendmentofaPublicAcquisitionOverlayAnauthoritymaybecomeliableforcompensationarisingfromanamendmentofaplanningschemetoremoveaPublicAcquisitionOverlay.Anauthoritycouldalsobeliableforcompensationduetothelapsingofanamendmentforaproposedoverlay,orthecancellationofaMinisterialdeclarationindicatingthatthelandwasrequiredforapublicpurpose.However,insuchinstances,itmaybemuchmoredifficultforanaffectedownertosubstantiatedirectfinancialloss.

6.3.3 Whoisresponsibleforthepaymentofcompensation?

Theclaimforcompensationismadeagainsttheplanningauthoritywherelandhasbeen reserved for a public purpose under a planning scheme; where land is shown asreservedforapublicpurposeinanoticeofamendment;orwheretheMinisterhasmadeadeclarationundersection113.Theclaimismadeagainsttheresponsibleauthorityinthecaseofaclaimrelatingtoarefusalbytheresponsibleauthoritytogrant a permit on the ground that the land is, or will be, needed for a public purpose.

However,anotherauthoritymaybecomeresponsibleforthecompensation.Usually,thisistheauthorityresponsibleforhavingthePublicAcquisitionOverlayplacedoverthelandandwhichwillultimatelyacquireit.Forexample,theRoadsCorporationmayrequire the responsible authority to refuse to grant a permit in an area covered by a PublicAcquisitionOverlayforafuturefreeway.TheRoadsCorporationwouldthentakeresponsibilityforanyconsequentialcompensation.

6.3.4 Howisplanningcompensationassessed?

TheActreferstosection37andparts10and11oftheLACActinrelationtothedeterminationofcompensation.Theauthorityhasthreemonthstorespondtoaclaimwhich it can reject or admit in part.

Generally,thecompensationisassessedona‘beforeandafter’basis.Thismeansthe

PEA s. 98(2), 99(a)

PEA s. 99(a)

PEA ss. 98(1)(d), 99

PEA s. 107

PEA ss. 98(1), (2), 109

PEA s.105

PEA s.104

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differencebetween:

• thelandvalueatthedateonwhichtheliabilitytopaycompensationfirstaroseifithadnotbeenaffected;and

• theactualvalueofthelandatthedateonwhichtheliabilitytopaycompensationfirstarose.

For‘lossonsale’compensation,thismeansobtainingvaluationadviceatthedateofthe sale. The valuer should consider the worth of the property as though the Public AcquisitionOverlaydidnotexist,ascomparedwithitsvaluewhenencumberedbytheoverlay.Oftentheencumberedvaluewillequalthesalepriceactuallyachieved,providedthateveryeffortwasmadetoobtainthebestpriceontheopenmarket.

InadditiontocompensationassessedonthedifferencebetweenthevalueofthepropertyunencumberedandencumberedbythePublicAcquisitionOverlay,theauthoritymayalsobeliablefortheclaimant’slegal,valuationandothercostsreasonablyincurredinestablishingtheclaim.Further,ifaresidenceisaffected,compensationmaybepayableforanyintangibleandnon-financialdisadvantages(beingaconsolationpaymentsimilartothepaymentofsolatiuminacompulsoryacquisitionmatter).Thisamountmustbenomorethan10percentofthecompensationotherwisepayable.

Claimsforfinanciallossarisingfromtherefusalofapermitshouldbeassessedatthedatetherighttocompensationarises,thatisthedateofrefusalofthepermitorthedateoftheTribunal’sdecision–whicheverisapplicable.Assessmentsoftheencumbered and unencumbered value of the property should be made as at that date.Aswithlossonsalecompensation,additionalamountsmaybepayableforcostsincurredbytheclaimantandanyintangibleandnon-financialdisadvantagesarisingwhen a residence is involved.

6.3.5 Whatifagreementcannotbereachedastotheamountsofcompensationpayable?

VCATwilldetermineclaimswheretheamountindisputeisnotmorethan$50,000.(The‘amountindispute’isthedifferencebetweentheauthority’sofferandtheamount claimed, rather than the overall amount of the claim). If the amount in dispute ismorethan$50,000,theclaimantmaychooseeithertheSupremeCourtortheTribunal.Iftheclaimantdoesnotexercisethisoptionwithinonemonthofbeingaskedto do so, the authority may choose the forum.

IftheSupremeCourtissatisfied,ontheapplicationofeitherparty,thataclaimraisesquestionsofunusualdifficultyorofgeneralimportance,itdeterminesadisputedclaim.

The LAC Act provides that the Supreme Court or the Tribunal may award costs as it thinksproper,takingintoaccountacomparisonbetweentheamountofcompensationawardedandthatofferedbytheauthority;theconductoftheparties,thefailureoftheclaimanttogiveadequateparticularsofhisorherclaimortoprovidesupportingmaterialwhenrequested,orexcessiveclaimoranundulylowoffer.

PEA s.101; PEA s.100

PEA s.100; PEA s.101

LACA s. 91

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6.3.6 Cancompensationberecovered?

TheActspecifieswhenandhowtheauthoritycanrecoverfromtheownercompensationthattheauthorityhaspreviouslypaid.Forexample,previouslypaidcompensationmayberecoveredfromthecurrentownerintheeventthattheoverlayisremovedortheproposedoverlaylapsesortheAttorney-General’sdeclarationiscancelled.

Wherelandoverwhichplanningcompensationhasbeenpaidissubsequentlyacquired,theacquiringauthorityreducesthecompensationpayableontheacquisitiontotakeintoaccounttheinterimplanningcompensationalreadypaid.Thisavoidsanygaporoverlapinthecompensation.Theformulaforvaryingthecompensationonthisbasis is set out in the Act.

Anycompensationthatisrepayablebecomesachargeontheland.

Compensationmustberegisteredonthetitle.TheauthoritymustuseForm16underthePlanningandEnvironmentRegulations2015tonotifytheRegistrarofTitlesoftheamountofcompensationpaid.

6.4 Planningcompensationchecklist

Tochecktheeligibilityofaclaim � Whatpersonorauthorityisliabletopaycompensation?(Planning and Environment

Act 1987, s. 109.)

� Hastheclaimbeenmadewithinthespecifiedtimes?(Planning and Environment Act 1987, s. 107.)

� Hastheclaimbeenreceivedafteranyoftheeventsspecifiedins.99ofthePlanning and Environment Act 1987?

� Wastheclaimanttheowneroroccupierofthelandatthetimetherighttoclaimcompensationfirstarose?(Planning and Environment Act 1987, s. 108)

� Doesapermitprovidethatnocompensationispayable?

Processingaclaim � Isthesizeoftheclaimsuchthatitmayberejectedunders.103ofthePlanning and

Environment Act 1987?

� Hascompensationpreviouslybeenpaid?(Planning and Environment Act 1987, s. 102)

� Istherearesidenceandaretherenon-financialdisadvantageswhichwillaffecttheamountofcompensationpayable?(Planning and Environment Act 1987, s. 100)

� Hasthecompensationbeendeterminedaccordingtotheproceduresunders.37ofthe Land Acquisition and Compensation Act 1986?

� Istheamountofcompensationinaccordancewiththelimitsprescribedins.104ofthe Planning and Environment Act 1987?

� HasthestatementofcompensationpaidbeenlodgedwiththeRegistrarofTitles?(Planning and Environment Act 1987, s. 110)

� AnauthoritywhichhadpreviouslypaidcompensationunderthePlanning and Environment Act 1987 may recover that payment from another authority that has subsequently compulsorily acquired the land. (Planning and Environment Act 1987, s. 110).

PEA ss. 110, 111; PE Regs r. 48, 49, Schedule 1, forms 16, 17

Documents

ACQUISITION & COMPENSATION - Planning · ACQUISITION & COMPENSATION 6 Contents 6.1 Public land acquisition ... the land, except in cases where section 7 of the LAC Act specifies that