1

IN THE SUPREME COURT OF VICTORIA No of 2012 COMMON LAW DIVISION VALUATION COMPENSATION AND PLANNING LIST

Between

Carley Elizabeth Nicholls Plaintiff

Mathew Guy, Minister for Planning and Community Development for the State of Victoria First defendant

Department of Planning and Community Development Second Defendant

1. The Plaintiff is the purchaser of land from John Francis Kennedy Cadogan and Pauline Beverley Morton (The Vendors) described in Certificate of Title Volume 11242 Folio 406 (The land) pursuant to contract dated the 11th May 2011 (the contract).

2. The contract was subject to the following special condition (the special condition):

“This contract is subject to the purchaser’s approval of a due diligence study, which the purchaser will undertake to complete within 16 weeks of the vendor’s signing the contract. The purchaser must notify the vendors in writing if the purchaser does not want to proceed by the expiration of the 16 week period”

3. The First Defendant is the lawfully appointed Minister of the Department for Planning and Community Development (the Department) of the State of Victoria (the Minister) and as such possesses the powers and responsibilities conferred on the Minister by the Planning and Environment Act 1987 of the State of Victoria (the Act) and in particular the powers and responsibilities conferred by Sections 20(4) and 36(1) of the Act.

4. The Second Defendant has the responsibility of administering the Act and undertaking all acts, actions or activities necessary for administering the Act and implementing the exercise of the powers and responsibilities of the Minister.

5. Prior to entering into the contract the Vendors had applied to the Minister in the manner and circumstances hereinafter described requesting him to exercise his authority pursuant to section 20(4) of the Planning and Environment Act 1987 (the Act) to rezone the land from its existing designation of farm land to residential one.

6. On entering into the contract, the vendors assigned their interest in the aforesaid application to the Plaintiff and thereafter, with the knowledge of the Defendants the application to the Minister was conducted by and on behalf of the Plaintiff.

7. On or about the 8th September 2011 the Minister pursuant to the powers conferred upon him by Section 20(4) of the Act approved an amendment C125 to the Bass Coast Planning Scheme whereby the land was rezoned from rural to residential 1 (the Approval) and on the same date signed and forwarded a letter addressed to the consultants for the Plaintiff formally advising of the Approval (the letter).

8. Upon receipt of the formal advice from the Minister of the Approval the purchaser exercised her right pursuant to the special condition resulting in the contract becoming unconditional.

9. Subsequently and prior to the 21st September 2011 the Minister directed that the Approval be gazetted in the government gazette of the State of Victoria on the 22nd September pursuant to Section 36(1) of the Act.

10. In the event, the Approval has not been gazetted and has not yet come into effect. 11. On the 10th day of October 2011 the Minister advised the consultants to the Plaintiff in

writing that he had repealed the Approval.

2

12. The Plaintiff is adversely affected by the purported repeal of the Approval and the failure to gazette the Approval.

13. The Plaintiff seeks a declaration that the Approval was a proper exercise of the power conferred upon the Minister by Section 20(4) of the Act and a further declaration that the Minister and/or the second Defendant are in breach of Section 36(1) of the Act and a further declaration that the Minister and or the Second Defendant publish the Approval in the government gazette pursuant to Section 36(1) of the Act so that upon publication the Approval will come into effect.

Particulars a. In 2009 the then Minister for Planning appointed a panel (the Panel) to investigate

and make recommendations in relation to the Structure plan C88 Amendment of Bass Coast Council.

b. The Panel heard evidence at Cowes in late September and early October 2009. c. The Panel acknowledged that the Structure Plan should identify land suitable to

accommodate future growth for 15 years and accepted evidence that there was only sufficient residential land within the Cowes Town Boundary for 8-11 years.

d. As at the date of the Approval there had been no increase in the supply of residential land within the Cowes Town Boundary since the Panel hearing.

e. The Vendors, through their consultants, made submissions to the panel to have the land included in the town boundary.

f. The Panel accepted that the land “has a history that envisaged its ultimate residential development; the land does not have any infrastructure or climate change impact constraints, would not add a level of land supply that would be inconsistent with the Clause 14.01 and would not be visible from the beach in front of the Shearwater colony ......we believe conceptually the proposal to include the Cadogan land does not constitute a linear expansion of the urban settlement”.

g. In relation to the land Melbourne Water submitted to the Panel that “This site is relatively small with an upstream catchment area that is less than 0 hectares, drainage for this site is to the Councils satisfaction. This site is well above existing and potential high storm tide levels. The majority of the site is above 15.0 metres AHD. There is good grade through the lower area of the site (1 in 20) and the site contains no Melbourne Water drains”.

h. Despite that finding the Panel recommended against the land being included in the town boundary but did recommend that other land which was not adjacent to existing infrastructure and involved a transaction with the local golf club which itself is threatened by projected flooding and salinity be included.

i. Aggrieved by the outcome of the Panel hearing on the 28th March 2011 the Vendors by their planning consultants appealed to the Minister to intervene pursuant to Section 20(4) of the Planning and Environment Act 1987 in relation to the Bass Coast Planning Scheme as it related to the district of Cowes on Phillip Island and to include the Ventnor land within the town boundary of Cowes as residential land (the Appeal).

j. On the 11th May 2011 the Vendors assigned their interest in the Appeal to the Plaintiff and thereafter with the knowledge of the Defendants the Appeal was conducted on behalf of the Plaintiff;

k. In the process of the Appeal The Plaintiff through her consultants provided the following material to the officers of the Minister:

1. Explanatory report; 2. Ecology Partners advice in relation to environmental issues; 3. Carter Keck advice on land availability and economics;

3

4. Draft development overlay; 5. Ventnor infrastructure servicing report from Sinclair Knight Mertz; 6. Phillip Island Flora and Fauna assessment report; 7. Concept plan; 8. 1971 Subdivision plan; 9. Traffic and car parking report;

l. In particular the aforesaid documents indicated that there are now only five years of residential supply of land within the Town Boundary of Cowes;

m. The Appeal proceeded through multi levels of the Department of Planning which was already in possession of the Panel report and which included a summary of all objections to the rezoning of the land;

n. In or about July of 2011 an officer of the Second Defendant sought and obtained legal advice as to the Minister’s responsibilities pursuant to Section 20(4) of the Act;

o. In this process the Minister or a person on his behalf contacted the CEO of the Bass Coast Shire Council to determine whether the Council was opposed to the amendment and the CEO indicated that Council had no objection;

p. On the 8th day of September 2011 the Minister wrote to the Mayor of Bass Coast Shire Council advising her that he had exercised his power pursuant to section 20(4) of the Act to rezone the land and approved amendment C125 to the Bass Coast Planning Scheme as residential one and include it in the Town boundary of Ventnor and apply relevant Overlay planning controls to the site and that the amendment would come into effect when notice of its approval is published in the Victoria Government Gazette.

q. By virtue of section 36(1) of the Act it was and is mandatory for the Minister and or the second Defendant to publish notice of the Approval in the Victoria Government Gazette.

r. On or about the 20th September 2011 Anna Batters of the office of the Minister contacted Fiona Shecten, the consultant to the Plaintiff and informed her that the Minister’s approval would be published in the Victorian government gazette on the 22nd September 2011.

s. The Approval has not been published in the Victorian government gazette and on the 28th October 2011 the Minister caused the General Counsel for the Department to write a letter to the legal representative of the Plaintiff stating as follows: The Minister validly repealed amendment C125. Amendment C125 will not, therefore, be gazetted”.

14. In the alternative the Plaintiff claims that in the event that the Minister was authorised in law to repeal the Approval without proceeding to the publication of the Approval in the Gazette (which is denied) a declaration is sought that the decision to repeal was an abuse of the Rule of Law, against the laws of natural justice, offensive to the legislative process, biased, politically motivated and not in the best interest of Victoria or that part of Victoria known as Ventnor and should be overturned.

Particulars

(a) On the 10th October 2011 the Minister wrote to the agents for the Plaintiff advising that he had decided to repeal his decision to rezone the land (the Repeal) and stated as his reason “My decision on this matter is in response to further discussions that I have held with the Bass Coast Shire Council, in particular on the strategic planning initiatives that Council has undertaken”;

4

(b) In fact, no such discussions occurred between the Minister and the Bass Coast Shire Council subsequent to the discussion between the Minister and the Mayor of the Bass Coast Shire Council on the 16th September described in paragraph (j) hereinafter and the Repeal;

(c) The Appeal was supported by extensive technical reports from experts in different areas of planning including environment, traffic, land economics, infrastructure and land use;

(d) The Appeal involved an extensive process of evaluation at seven different levels of the Department of Planning including The head of the Traralgon office, The Assistant Director of Planning, The Director of Planning and the Executive Director of Planning before submission to the Minister and his approval;

(e) During the process of evaluation officers of the Department sought and obtained additional information from the consultants to the Plaintiff;

(f) In 2009 the Panel had investigated and reported amongst other issues on that of land availability in Cowes and whether or not there was a necessity to extend the town boundary and the panel took submissions in relation to the land including objections both from the Council and local citizens and this information including the views of the Council was available to the Minister when making his decision of the 8th September 2011;

(g) The Panel had identified the land as suitable for residential development; (h) As at the 8th September 2011 all of the information including Council strategy

and policy relative to the issue of the rezoning of the Ventnor land as well as all the views of all objectors, was available to the Minister;

(i) On or about the 9th September 2011 the Minister advised the Mayor of the Bass Coast Council (the Mayor) of the Approval;

(j) On the 16th September 2011 in an interview between the Mayor and the Minister broadcast on ABC radio, the Mayor outlined the views of the Bass Coast Council and put forward her objections to the Approval and the Minister replied to those objections indicating that they were groundless and that the Approval was appropriate in the context of the necessity for affordability of land in the area;

(k) On the 20th September 2011 Anna Batters on behalf of the Minister advised the agents for the Plaintiff that the Approval would be published in the Victorian government gazette on the 22nd September 2011;

(l) On or about the 21st September 2011 it was announced on ABC radio that the Minister had reversed his decision but no formal notification of that reversal had been communicated to the Plaintiff or her consultants;

(m) On the 27th September 2011 in the cafe Zet at Cowes at a meeting of the Phillip Island branch of the Liberal party the Federal member for the region Mr G Hunt addressed the meeting and said that he was responsible for persuading the Minister to repeal his decision;

(n) At that meeting the said Hunt said words to the effect that i. He had been approached by Mr John Dade, the President of the local branch

of the Liberal party to intervene and that he, the said Hunt, should not attend the meeting unless he had persuaded the Minister to alter his opinion;

ii. The said Hunt said words to the effect that subsequent to the aforesaid deputation he visited the land and decided that it was inappropriate for residential development;

iii. The said Hunt then persuaded the Minister to repeal his approval;

5

iv. That as a result he believed he would not be on the Minister’s Christmas card list;

(o) On or about the 30th September 2011 the Plaintiff’s husband, Mr J Hopkins had a conversation with the said Hunt in which Hunt admitted that he was not familiar with any of the extensive documentation and material submitted to the Minister in relation to the land; that he had visited the land and decided that it was not suitable for residential development ; that he had indeed contacted the Minister to persuade him to repeal his decision and that he had written to both the Premier Mr Baillieu and another member of Parliament by the name of Louise Asher urging both the said Ballieu and the said Ahser to intervene and stop the rezoning;

(p) That the website of Gossard Point MOB recorded its thanks to Tony Holland and his wife for intervening on its behalf to stop the rezoning;

(q) That subsequently the name of Tony Holland has been deleted from the web site of the said Gossard Point MOB;

(r) That apart from telephone calls and emails from politicians acting on behalf of the Phillip Island Branch of the Liberal party and people who had already recorded their objections in the 2009 Ministerial Panel hearing which objections had already been reported to the Minister no further planning material of substance was presented to the Minister sufficient to repeal the Approval;

(s) The Minister without notice to the Plaintiff secretly attempted to repeal the Approval on or about the 21st September 2011 and only notified the Plaintiff of this on the 10th October 2011, thereby denying the Plaintiff the opportunity to respond to the concerns that allegedly influenced the Minister to repeal the Approval;

(t) In the event, the original decision of the Minister to rezone the land was appropriate and in the best interest of the Ventnor region of Victoria and the decision to repeal the Approval was biased as a result of political influence and was not related to the best interests of Victoria or that part of Victoria known as the Ventnor land;

(u) It was as a result of political pressure rather than Council strategic initiatives that persuaded the Minister to attempt to repeal the aforesaid approval;

(v) As late as the 12th January 2012 it was reported in the “Age” newspaper that a spokesman for the Minister stated that the Minister stood by the rationale of the original decision to rezone.

15. In the alternative both Defendants have negligently caused damage to the Plaintiff

Particulars (a) The contract was subject to the special condition aforementioned which

conferred the right upon the Plaintiff to make the contract unconditional no later than the 8th September up to which time the Plaintiff could withdraw from the contract on forfeiture of the deposit of $5000.00;

(b) The vendors assigned to the Plaintiff their rights and interest in the Appeal as aforesaid;

(c) In providing material to the department in relation to the Appeal the officers of the Department were advised of the fact that the 8th September was a critical date in that the Plaintiff had to make a decision by that date as to whether or not to commit herself unconditionally to the contract;

(d) Specifically in a telephone conversation between the husband of the Plaintiff, James Hopkins and an officer of the Second Defendant, Meg Bartell on the 30th

6

August 2011, the said Bartell was advised that the Plaintiff had to make a decision by the 8th September whether or not to commit herself to an unconditional contract and in the conversation made it clear to the said Bartell of the urgency of the matter;

(e) Further similar phone calls were made to the said Bartell on the 31st August 2011, the 1st September and the 2nd September 2011;

(f) In the conversation with the said Bartell on the 30th August aforesaid she indicated that the papers were on the Minister’s desk and she would draw the urgency of the situation to his attention;

(g) On the 8th September 2011, the said Bartell left a message on the voice mail of the said Hopkins at approximately 6.00 PM and read part of the letter to the voice mail box and indicated that the Minister had signed the letter;

(h) Later that evening the said Bartell phoned the said Hopkins again to inquire as to whether he had received her earlier message that the Minister had approved the rezoning;

(i) On the 20th September 2011 an officer of the Department in the name of Anna Batters advised the Plaintiff through her advisers that the Approval would be gazetted on the 22nd September.

(j) The Plaintiff acting on the advice of the officers of the Minister and of the Second Defendant proceeded to enter into an unconditional contract for the purchase of the land;

(k) On the 10th October 2011 the Minister advised the Plaintiff through her advisers that he had repealed the Approval and that the Approval would not be gazetted;

(l) In the event that the Court does not grant the Plaintiff the declarations aforementioned the value of the land will be worth significantly less than the purchase price of $2.65 million.

(m) And the Plaintiff claims damages.

Louis A Coutts Monday, 16 January 2012