Posted on June 14, 2018 by Stuart Simington
WestConnex – Proposed compulsory acquisition notice ruled invalid
A notice for the proposed compulsory acquisition of land (PAN) required under the Roads Act 1993 for the WestConnex project has been ruled invalid by the Supreme Court.
In addition to holding that the proposed acquisition notice failed to meet certain formal requirements, the Court found that the public purpose for the acquisition was invalid because there was a substantial ulterior, but invalid purpose for the acquisition, which was therefore not authorised by the Roads Act 1993.
Desane owned a commercial property at 68-72 Lilyfield Road Rozelle (the Property). Roads and Maritime Services (RMS) had power to compulsorily acquire land under s171(1) of the Roads Act for any purposes of that Act.
RMS purported to acquire the Property in relation to the WestConnex project (Project) commencing, on 26 May 2017, by giving Desane a PAN for the Property.
In Desane Properties Pty Limited v State of New South Wales  NSWSC 553, Desane sought orders restraining RMS from acting on the PAN, arguing that it failed to comply with the requirements of the Land Acquisition (Just Terms Act Compensation) Act 1991 (Just Terms Act) because it:
- was not accompanied by a compensation claim form in accordance with s 39 of the Just Terms Act
- was not in the approved form
- did not specify the public purpose for which the land was required
- was issued for an improper purpose.
The Court agreed with each of the propositions.
PAN was issued for an unlawful ulterior purpose
The Court started from the unremarkable proposition that a statutory power must be used only for the purposes for which it is given. In this case, as the power to acquire the land was for the purposes of the Roads Act 1993, the requirement to give the PAN imposed by the Just Terms Act could likewise only be exercised only for the purposes of the Roads Act.
In that regard, on analysis of the background to the issuing of the PAN, the Court ultimately concluded that that the Property was to be acquired so it could be used in a yet to be identified way as a construction site in connection with the construction of the Project and that this was a valid purpose under the Roads Act.
However, critically, it also found that the RMS had the unqualified and fixed purpose to acquire the Property in order that it would be available to provide 10 hectares of open space and green parkland. This had been a public commitment of the Government in relation to the Project. Absent that purpose, the Court found that the PAN would not have been given and the acquisition would not have proceeded.
If RMS’ purpose in giving the PAN included any substantial ulterior purpose, the PAN would be invalid even if the ulterior purpose was not the sole purpose of the acquisition and there was another valid purpose. An ulterior purpose was held to be a substantial if no attempt would have been made to acquire the land if it had not been desired to achieve the unauthorised purpose; Samrein Pty Ltd v Metropolitan Water, Sewerage and Drainage Board (1982) 56 ALJR 678 at 679.
PAN was invalid for failing to state the public purpose of the acquisition
A PAN is also required to be in a form prescribed by the regulations or approved by the Minister and be accompanied by a claim for compensation form: see ss15 and 39 of the Just Terms Act.
In an important ruling, the Court noted that the approved form did not require the public purpose of the acquisition to be identified but concluded that there is in fact an implied requirement that it do so.
This was because ignorance on the part of the owner of the public purpose for which the land is proposed to be acquired at the stage of receipt of a PAN will put the owner at significant disadvantage in any sale negotiation or contest as to compensation. If an object of the Act was to ensure compensation on just terms, the provision of such knowledge was essential and withholding that information inimical to one of the fundamental objects of the Just Terms Act.
As the then approved form for a PAN did not require identification of the public purpose, the approved form itself did not meet the requirements of the Just Terms Act ! As a result, the Court held that ‘To follow the Approved Form is to fail to comply with the requirements of the Just Terms Act.’
PAN was also invalid for failing to comply with the approved form
The Court also found that the PAN was not in, any case, in accordance with the approved form and in a number of respects:
- of New South Wales was missing in para 1;
- The had been substituted in the PAN for This where it appeared in para 3 of the Approved Form;
- The Approved Form refers in para 3(e) to solatium. Para 3(e) of the PAN instead referred to the disadvantage resulting from relocation;
- Para 6 of the PAN referred to 45 days. The equivalent para in the Approved Form referred to 30 days;
- Para 9 of the Approved Form made provision for the address of the Office of Authority. Para 9 of the PAN identified the contact as an Officer at Roads and Maritime Services’ Parramatta Office;
- The claim for compensation Form 2 (para 1(a)) made provision for the address of the Land but no such address appeared in the PAN at that point
- Para 6(e) of Form 2 made provision for the insertion of an amount of claimed compensation for solatium but Para 6(e) of the PAN mad provision for the insertion of an amount for the disadvantage resulting from relocation.
Of the above, the Court held that the divergences of the PAN from the approved form with respect to solatium and 30 days were substantial non-compliances which would also have lead to invalidity of the PAN.
Further, as a claim for compensation form had not accompanied the PAN was invalid for this reason also.
You can read the full judgment here
As well as following the strict requirements of the approved form for a PAN (once it is corrected), public authorities need to carefully identify the public purpose of any proposed compulsory acquisition to ensure that it is lawful and not affected by any substantial ulterior but unauthorised purpose.