Taxpayers foot multimillion dollar legal bill after settlement in case against Liberal Planning Minister Matthew Guy

TAXPAYERS are facing a multi-million-dollar legal bill, with a case against Planning Minister Matthew Guy expected to be settled out of court today.

Victorian Planning Minister Matthew Guy

TAXPAYERS are facing a multi-million-dollar legal bill, with a case against Planning Minister Matthew Guy expected to be settled out of court today.

Landowner Carley Nicholls sued Mr Guy after he repealed a rezoning decision that affected a housing subdivision proposal in Ventnor, on Phillip Island.

In a statement filed in the Supreme Court, Ms Nicholls claimed Mr Guy had been influenced by pressure from his party, rather than by planning considerations, when he backtracked on his original decision to rezone the area from rural to residential.

Ms Nicholls claims that she agreed to purchase the property after being assured by the minister's office that the rezoning would go ahead.

Over the past four years the rezoning dispute has put the State Government under increasing pressure and even attracted the attention of celebrity protester Miley Cyrus.

In late September 2011, Mr Guy decided not to proceed with the rezoning.

Ms Nicholls wanted the court to order the minister to reinstate his initial rezoning decision, claiming the land would be worth significantly less than the purchase price of $2.65 million.

Last night the case, which was to be heard this morning, was in the final stages of settlement, with the figure believed to be more than $2 million, including legal costs. Settling out of court means senior state and federal MPs will avoid a courtroom appearance.

Greens MP Greg Barber said Mr Guy was trying to avoid embarrassment.

"He is using taxpayers' money to buy himself out of a spot of political embarrassment that he himself created," Mr Barber said.

Opposition planning spokesman Brian Tee said this was a low moment in Victorian planning, and could have a big impact on confidence and jobs.

He also called on Premier Denis Napthine to reveal the extent of the government payout.

"The Premier needs to come clean and tell Victorians how many millions of dollars of taxpayers' money has been paid so that Mr Guy and other Liberal luminaries can avoid being forced to front up to the Supreme Court," he said.

A spokeswoman for Mr Guy explained that the case "was in the final stages of settlement" and would not comment further.