Property Development: Should Councils Be Liable for Loss? 2

Wednesday, August 10th, 2016
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A frustrated couple met me recently complaining that their dreams and plans were shattered by their local council. Thinking it is best to weigh up the events on a factual basis, I asked for the history of their proposed development. This is their story.

Mr and Mrs M bought a 600 square metre block with a 16.5-metre frontage. The rear yard faced north, making it ideal for the open space. Their plan was to build their dream home which would be a part of a duplex. They would live in one of the dwellings and decide whether to hold or sell the second dwelling at a later stage. They might use the second for Mrs M’s child care business.

The land had an old weatherboard cottage in a poor state of repair. The street was very typical of streets with 1960s style of dwellings with little development.

The site was a mere 20-minute tram ride to the city, with schools and strip shopping within walking distance. The land was zoned Neighbourhood Residential with no minimum lot size nor any variation to the schedule. The couple were professionals; he was an engineer with plans to start his consultancy practice from his home office while she was to further develop her child minding business after acquiring all the licenses. This new home would be their stepping stone to a great future. They were currently renting and their lease would lapse in 12 months. Six to nine months to get a planning approval, 10 months to build was the time line they had relied on.

The site criteria made the land ideal for a duplex style dual occupancy. After submitting the Town Planning Application, council’s planning officers began dragging their heels. The request for further information (RFI) finally arrived (beyond the 28 days allowed under the Planning Act) making it indirectly clear that two crossovers and a duplex style development would not be supported.

The owners responded to all the information requested in the RFI but kept the development as a duplex. Things started to drag on from this point. There was a rumour this council would no longer allow a block of land to have more than one crossover (driveway) irrespective of the site width. There is at least one other council which has adopted a similar policy but allows two crossovers if the site width meets their minimum standard.

The application was finally advertised and received no objections!

That being the case, the planning officer assessing the application could form a decision under delegation, which means the application would not be referred to the councillors. And the application went way beyond the 60 days council has to make a decision after the last RFI was responded to.

Mr M took matters into his own hands and approached the local councillor to exert some gentle pressure on the planning department. He had had enough. It was almost 18 months since he had applied to council. That decision caused some friction and council swiftly refused the application for the duplex mostly on neighbourhood character grounds.

By this time, their business ventures were put in cold storage and they had to find new rental accommodation. This is when I got involved. The couple applied to VCAT for a review of council’s decision. Six months later the very experienced VCAT member set aside council’s decision and granted a permit for the duplex.

The member rightfully noted:

“With respect to the neighbourhood character issues raised by the council, I acknowledge that side by side and boundary to boundary construction is not a feature of development in this neighbourhood.

“As I have previously discussed however, the character of this area is in transition. Increasingly medium density housing is becoming part of the character of this neighbourhood. In assessing this proposal’s response to neighbourhood character, I am required to be satisfied that the development is respectful of the neighbourhood’s character. I am not required to be satisfied that the proposal replicates a character that exists at a point in time.”

The proposal before me is similarly proposed on a block of land that provides for northern orientation. The side by side response enables both units to have good northern orientation and makes efficient use of the site.

It would appear the same council has been a repeat offender on similar type of applications.

I recall another council had been a repeat offender till the VCAT member warned it that, should the trend of refusing continues, VCAT would award costs against the council in question.

And what about the costs, time wasted, frustration and inability to lead normal lives the property owners underwent? Is there a dollar figure one should put against these inconveniences and losses?

Would penalties put council officers on a level playing field? After all, if a person is wrongfully convicted of a crime by the police, compensation usually follows. Or if a government department acted inappropriately, costs could be awarded. So why not councils? After all, they too are local government.

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  1. John Sands

    I guess on your last point, Sawarup, you do have a point.

    Whilst councils who behave properly and respond to everything in a timely manner should not be penalised, those who unduly drag their feet and/or otherwise do not act in good faith should perhaps be subject to some form of penalty.

    • Swarup Dutta

      Well said. There are many Councils who are professional in their approach and do the right thing through collaboration. After all a refusal is a burden for all the parties.