Landmark Compulsory Acquisition Case

Australians Love the classic movie “The Castle” for the quirky antics of the Kerrigan Family, and the timeless one liners…

Lawyers love “The Castle” for the surprisingly accurate interpretation of Section 51(xxxi) of the Australian Constitution.

Recently, the Supreme Court of New South Wales was asked to consider the right of the NSW Government to compulsorily acquire land held by a Developer in Roselle. The team at Duffy Elliott Lawyers reviewed the decision of the Court to see what grounds the Developer relied upon in their challenge, was it the “Vibe”, or would be that “a man’s home is his castle” or would the Supreme Court simply “Tell him he’s dreamin”…

The Case

Desane Properties Pty Limited v State of New South Wales [2018] NSWSC 553

The Facts

The plaintiff developer owned a commercial property situated at 68–72 Lilyfield Road Rozelle, NSW.

  1. Developer lodged a proposal with the Department of Planning, to re-zone the property to permit the development of residential apartments, retail and commercial space. The proposal envisaged some 200 apartments, retail and commercial space and a 90 place childcare centre.
  2. The Department of Planning neglected to progress the application. It later advised that it could not proceed with the application as the second defendant, the Roads and Maritime Services (RMS), had plans to acquire the property as part of the WestConnex Motorway project.
  3. The site location, configuration and design of the Motorway project had been varied throughout the years to accommodate various stakeholder input. There was conjecture as to whether the property was to be used as part of a roads construction site for the project (as asserted by RMS) or whether it was only to be acquired for the purposes of creating open space and green parkland (as asserted by the developer).
  4. RMS offered the developer $21,489.259 for the property. This offer was well below the $100m amount the developer claimed it could have made if it was able to proceed with its plan to develop the property.
  5. When the developer and RMS could not reach agreement on an appropriate price for the property, the RMS gave the developer a Proposed Acquisition Notice. The PAN stated that the property was being compulsorily acquired for a public purpose but didn’t state what that purpose was.

The Grounds of Developer’s Challenge

In order to stop RMS’ compulsory acquisition of the property, the developer argued before the court that the Proposed Acquisition Notice was invalid because:

  • it failed to comply with the requirements of the Land Acquisition (Just Terms Compensation) Act 1991 as it did not conform to the Approved Form
  • it failed to identify the public purpose for which the property was required
  • there was in existence no sufficiently formed proposal for acquisition by RMS for the purposes of the Roads Act 1993. Even if there was a sufficiently formed proposal for the purposes of the Roads Act, RMS had an improper purpose in giving the Proposed Acquisition Notice because, in truth, it was actuated by the purpose of using the property for open space and green parkland, which was not a purpose of the Roads Act.

Decision

The court held that RMS could not compulsorily acquire the property as the Proposed Acquisition Notice was invalid.

The decision illustrates that the Court will be unforgiving where the government has not strictly complied with the requirements of the relevant provisions of the Land Acquisition (Just Terms Compensation) Act 1991.