Section 705 of the Sustainable Planning Act 2009
(SPA) entitles an owner of an interest in land to
be paid reasonable compensation by a local government if, as a
result of a change to the planning scheme or planning scheme
policy, the only purpose for which the land could be used is a
In the decisions of Chong & Yang v Logan City
Council  QCA 12 and  QPEC 12 (Chong's
case) the Planning and Environment Court and the Court of
Appeal had occasion to consider section 705 of the SPA including
the expression "could be used".
The Queensland Court of Appeal (COA) delivered
judgment in Chong's case on 5 February 2016. The COA dismissed
an appeal against the refusal of a claim for compensation ($2.5
million) lodged by the applicants pursuant to section 705 of the
SPA following a change to the zoning of part of their land from an
investigation zone to a conservation zone.
The case related to amendments to the Logan City Council
Planning Scheme which took effect in November 2011. Prior to the
amendments, part of the applicants' land was in a non-urban
zone and the other part in an investigation zone. When the
amendments commenced, the land previously within the investigation
zone was placed in a conservation zone. While the balance of the
land remained in the non-urban zone, that zone was subject to
provisions which differed to those that had applied earlier.
The applicants had a low set residential dwelling lawfully
constructed on the subject land and wanted to subdivide their land
into 11 light industrial lots.
The Planning and Environment Court (PEC), in
refusing the claim for compensation (a decision not disturbed by
the COA), considered it relevant to have regard to the fact that
some code assessable uses were available for the land, including a
food outlet/restaurant if that use was carried out with but
incidental and subordinate to public recreation.
At first instance, the PEC held that the expression "could
be used" in section 705 of the SPA has the connotation of
possibility rather than probability and that evidence of the
prospects of approval of an available use may be relevant and
admissible when interpreting section 705 of the SPA. The primary
judge concluded that if a small scale restaurant was approved and
carried out with, but incidental and subordinate to, the public
park, then it could not be said that the only purpose for which the
land could be used was a public purpose. The PEC considered that
the food outlet/restaurant could operate on a commercial basis and
that its customers would not be limited to users of the public
park. As a result, the PEC was satisfied that the subject land
could be used for a purpose other than only a public purpose (and
other than the purpose for which it was being used when the change
was made) with the subsequent result that section 705 of the SPA
could not be engaged.
The COA held that the primary judge did not make any legal
errors and that the PEC's resolution of the issue was correct.
The COA preferred the view that a restaurant or food outlet
lawfully conducted on the applicant's land could be a use of
the land for a commercial purpose, and not for a public
This case demonstrates that in considering a claim for
compensation under section 705 of the SPA it is relevant to have
regard to the probability of an approval of an available use and
that evidence of the prospects of approval of an available use may
be relevant and admissible. For instance, if evidence showed, on
the balance of probabilities, that such an application would be
likely to be refused, then such a use is illusory and should not be
regarded as a use for which the land might be use.
Care has to be taken not to confuse the word 'purpose'
in section 705 as a synonym for 'use'. The distinction was
explained in Shire of Perth v O'Keefe (1964) 110 CLR
529 at 534 where purpose was described as "the end which
is seen to be served by a particular use of premises".
Here, the use of the land for a restaurant or food outlet was
considered to be a use for a commercial purpose, and not for a
In ascertaining the purpose for which the land could be used,
Chong's case does not alter earlier case law which acknowledges
that section 705 of SPA contemplates that land may be used
concurrently for more than one purpose. Where land can be used for
several purposes, each is to be regarded as a purpose in applying
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