Case Update: Scope of Council Powers in relation to Compulsory Acquisition

Best Hooper
11 June 2021

Manor Central Nominees Pty Ltd v Wyndham City Council [2021] VSC 92

This case concerns the compulsory acquisition of land by Council for the purposes of an easement under the Local Government Act 1989 (Vic) (LGA).

The key takeaways from the decision are as follows:

1. Council’s ability to compulsorily acquire land under the LGA is a power that is extremely broad;
2. The key to ascertain whether a decision has been made for a public purpose is to determine what is the motivating purpose of the decision.

Facts

This case involved the registered proprietor of a large block of land in Wyndham Vale, Manor Central Nominees Pty Ltd. The land is located in the town centre of Manor Lakes and an ongoing issue had been Council’s desire for there to be a road provided on this land to secure access between Wyndham Vale railway station and the growing residential area on the north-eastern side of Ballan Road.

Options available to secure this outcome could have been via an amendment to the Planning Scheme, either by completing a review of the Development Plan (which had been created in 1996 and not updated since 2002), or by the inclusion of a structure plan for Manor Lakes Town Centre. Notwithstanding these options, Council took a different approach and decided to commence an acquisition of a carriageway easement over the property using their powers pursuant to section 187 of the LGA.

Section 187(1) of the LGA provides as follows:

(1) A Council may purchase or compulsorily acquire any land which is or may be required by the Council for or in connection with, or as incidental to, the performance of its functions or the exercise of its powers.

Council served a Notice of Intention to acquire the easement on Manor Central Nominees Pty Ltd and later the acquisition was published in the Victorian Government Gazette, pursuant to section 19 of the Land Acquisition and Compensation Act (Acquisition Act). This effectively vested in the council a carriageway easement over a strip of land 26 meters wide, between Ballan Road and Wyndham Vale railway station on Armstrong Road.

The owners sought judicial review of the decision to serve the Notice of Intention on two grounds as follows:

1. Under s 5(1) of the Acquisition Act Council could not commence to acquire the land because it had not been first reserved by or under a planning instrument for a public purpose, and the land was not ‘prescribed land’ for the purposes of s 5(2) of the Acquisition Act meaning no exemption to s 5(1) applied.
2. The Decision was made for the improper or ulterior purpose of creating a public road across the Property and this was pre-empting the outcome of an ongoing planning process for the Manor Lakes Town Centre.

First ground – was the land ‘prescribed land’ and exempt from section 5(1)?

Section 5 of the Acquisition Act states that:

 The Authority must not commence to acquire any interest in land under the provisions of the special Act unless the land has been first reserved by or under a planning instrument for a public purpose.

Subsection (1) does not apply in respect of prescribed land or land in a prescribed class of land.

Prescribed land or land in a prescribed class of land is defined in Regulations 6(a) and 6(b) of the Land Acquisition and Compensation Regulations 2010 (Vic):

Land not requiring reservation

The following classes of land are prescribed for the purposes of section 5(2) of the Act—

(a) land to be acquired for a minor road widening or the deviation of a road if the land is only part of an allotment and—

1. the area of the land to be acquired is less than 10 per cent of the total area of the allotment; and
2. the total value of the interest to be acquired is less than 10 per cent of the value of the unencumbered freehold interest in the total area of the allotment;

 (b) land over which an easement is to be acquired if the acquisition of that easement will not reduce the value of the unencumbered freehold interest in the allotment by more than 10 per cent.

The Plaintiffs argued that an “easement” as defined in regulation 6(b) was not relevant for current purposes (and should be read down), submitting that because regulation 6(a) states “minor road widening or deviation of a road” and the only circumstances in which a carriageway easement could be acquired is for minor road widening purposes. In essence, it was argued because the road widening was not minor (26 metres in width), this meant neither regulation 6(a) or 6(b) should apply.

Richards J dismissed this argument and found that one very common form of easement is a carriageway easement or right of way and this was included in regulation 6(b). If this form of easement was to be excluded from regulation 6(b), it would have been simple enough to do it expressly. This finding makes clear that land captured by the exemption in s 5(2) includes all forms of easements.

Second ground – Purpose of the acquisition and the scope of s 187 of the Local Government Act

 The Plaintiffs argued the purpose of the acquisition was improper and went beyond the scope of Council’s power to acquire the easement under section 187 of the LGA. They said Council did not acquire the land for the purposes of a suitable carriageway easement between Ballan Road and Armstrong Road for access purposes in relation to Wyndham Vale station. Instead their purpose was to:

1. create an east-west public road across the Property, linking Ballan Road and Armstrong Road;
2. prevent the land from being developed, or from being the subject of planning permission allowing its development; and
3. predetermine the outcome of the structure planning and related planning scheme amendment processes that the Council intended to pursue in respect of the Property

Richards J found that the power in section 187 is extremely broad and enables Council to acquire any land that is or may be required for any of its functions or powers. At paragraph 37, he said:

37. The Council’s powers were similarly broad. It had power to do all things necessary or convenient in connection with the achievement of its primary objective of endeavouring to achieve the best outcomes for the local community having regard to the long term and cumulative effects of decisions.

The Plaintiffs relied on evidence to demonstrate that Council’s true purpose was to avoid going through the process required to reserve the land for a public purpose in the Wyndham Planning Scheme. At paragraph 57 Richards J discussed the motivating purpose of the acquisition:

 57. One consequence of the acquisition is that an east-west public road will be a given in future strategic planning for Manor Lakes Town Centre. Another is that the plaintiffs cannot contest the need for, or location of, the road through the planning scheme amendment process under Pt 3 of the Planning Act. Yet another is to preclude any development of the land that is not consistent with the easement. I would not infer, however, that any of these were substantial purposes of the Council, in the sense that the Council would not have acquired the easement but for those purposes. Its motivating purpose was simply to secure public access across the Property between Ballan Road and Wyndham Vale station, at the earliest possible time.

Richards J went on to state that even if the Council had the broader purpose to acquire the land in anticipation of an amendment to the Planning Scheme, the purpose of acquisition would still have been within the scope of the power.

Key takeaway

This decision is a reminder of the wide scope of section 187 of the LGA. Council can acquire any land that is or may be required for any of its functions or powers, which themselves are wide-ranging. In this case, despite not having reserved the land under a planning instrument and despite the plaintiffs contending the Council was ‘pre-empting a planning outcome’, the decision was still within the scope of the LGA.

In our view, the key to answering the question “what is the public purpose for the purposes of acquisition” is to ascertain the motivating purpose to determine whether a decision has been validly made under the LGA. Given the wide scope of the power under section 187 there are many purposes which could be found to be valid, including anticipation of an amendment to the Planning Scheme.

However, this does not in any way prevent Council from paying adequate compensation for any compulsory acquisition but demonstrates the limited protection of s 5(1) of the Acquisition Act and reflects the broad scope and purpose for which a Council can acquire land for the purposes of an easement under the LGA.

Conclusion

Should you have any questions relating to this article or Land Acquisitions generally, please do not hesitate to contact our office on 9670 8951.

This article was prepared by Jack Curnow, Graduate Lawyer, Best Hooper

The full judgment can be found at: https://www.lawlibrary.vic.gov.au/library-services/digital-library/judgments/manor-central-nominees-pl-manor-commercial-company-pl-v-1