THE PROPERTY DEVELOPMENT REVIEW
approach, where the Court valued the land’s realistic, hypothetical development potential,” Towson says. But some outcomes from the Barrettcase still hold true, she says, in that compensation for planning blight must be assessed “realistically and fairly”. Under the amendments, developers do not need to wait for acquisition, compensation rights are triggered as soon as the Public Acquisition Overlay is applied, not when it is compulsorily acquired. “Compensation must reflect the land’s true potential — it cannot be reduced to zero simply because the land hasn’t been acquired yet, and the overlay itself cannot be used to suppress value,” Towson says. It also clarified that gains on separate parcels cannot offset a claim on the reserved land, and zero dollar offers won’t stand. Towson says it was important to note that the Court looked at the “real planning and market context rather than entertaining speculative valuations” advanced by the authority. Developers prepare for P&E Amendment Act With the amendments now officially enacted, developers should check their zoning given that the new regime ties compensation to actual zoning, Towson says. Importantly, a low offer should not be accepted at face value. “Barrett confirms that authorities cannot offer nothing and expect landowners to walk away,” Towson says. “Developers should be strategic with permit applications,” Towson says.
Vale since 1981. But in 2010, Public Acquisition Overlays came into effect for the future Regional Rail Link and Outer Metropolitan Transport Corridor. Ten years later in 2020, Barrett submitted plans to develop the land but was refused by the Wyndham City Council. Barrett subsequently made a compensation claim with Transport for Victoria. But the transport infrastructure body did not respond to the claim initially or make any offer of compensation, so Barrett took it to court. The case went to trial in 2025 and a judgement was handed down in March.
Gadens partner Andrea Towson: The Supreme Court case and new planning legislation has changed the rules of the game.
“Critically, the Court held that once a landowner establishes entitlement to compensation, any remaining uncertainty in the valuation is resolved in the landowner’s favour - not the authority’s,” Towson says. “That is a significant shift in practical terms for affected owners. “The Court was also highly critical of the acquiring authority’s initial zero-dollar compensation offer, sending a strong message that authorities must engage early and reasonably when compensation rights arise and that landowners should not be deterred by low or nil opening positions.” But this outcome will be harder to replicate under the new regime, Towson says. P&E Planning Amendment changes The amendment reforms sit within a broader overhaul of Victoria’s Planning and Environment Act 1987, aimed at streamlining approvals and accelerating housing delivery, Towson says. The key changes are that compensation must be tied to a quantifiable loss which can be demonstrated at the time, “not what might have occurred in an ideal scenario”. “[Compensation] will only be assessed on the development actually applied for,” Towson says. In a similar vein, land value will be assessed in reference to its current zoning, not potential future zoning, with no compensation for prohibited uses. “This is a significant narrowing compared to the previous
The 15,000ha Western Grasslands Reserve sits on the volcanic plains of western Victoria.
“Compensation under the new Act will only be assessed on the development actually applied for, so timing and scope matter.” PAOs should be addressed in sales contracts, with special conditions dealing with compensation claims, Towson says. “Without clear contractual provisions, the right to pursue or receive compensation may not automatically follow the land on sale, leaving value on the table for either party.”
September / October 2026 – 9
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