Desane case - Westconnex - Court halts compulsory acquisition of land

What has happened?

On 1 May 2018, the Supreme Court of NSW upheld a challenge brought by Desane Properties Pty Limited (Desane) relating to the proposed compulsory acquisition of its property by NSW Roads and Maritime Services (RMS).

The acquisition was said by RMS to be for the purposes of the "WestConnex Stage 3 M4-M5 Motorway Link." In the proceedings, Desane argued that the Proposed Acquisition Notice (PAN) issued by RMS was invalid because:

  1. it failed to comply with the form requirements of the Land Acquisition (Just Terms Compensation) Act 1991 (JT Act) (Form Challenge); 
  2. it failed to state the public purpose for the acquisition (Failure to State Public Purpose Challenge); and
  3. the authority's purpose for acquiring the property was improper because it was not authorised under the Roads Act 1993 (Improper Purpose Challenge).

Findings by the Court

The Court agreed that the PAN was invalid for each of the first two reasons given by Desane. Had it been necessary to do so, it would have also ruled that the PAN was invalid on the basis of the third given by Desane.

Form Challenge

The JT Act relevantly requires a PAN to be in the form approved by the Minister (Approved Form): see s 15.  

In this case, the form issued to Desane deviated from the Approved Form in several respects. Importantly, the form:

  1. contained a reference to compensation for "disadvantage resulting from relocation" rather than the term used in the Approved Form being "solatium"; and
  2. specified that an offer of compensation would generally be made within 45 days of publication of the acquisition notice in the Government Gazette rather than the 30 days specified in the Approved Form.

The Court held that these deviations were sufficient to render the PAN invalid.

These deviations can be at least partly explained by the fact that the Approved Form has not been updated to reflect the most recent amendments to the terminology and time frames specified in the amended Act. 

In updating the PAN issued to Desane to incorporate those amendments, RMS impermissibly created a form which was no longer in the Approved Form.

Failure to State Public Purpose Challenge

The PAN issued to Desane stated that its land was required "for a public purpose". Desane argued, and the Court agreed, that this was insufficient.

While the JT Act does not expressly state that the particular public purpose must be articulated in a PAN, the Court held that (at [223]) (emphasis added):

"... there is a clear statutory necessary intendment or implication that when an owner of land is informed by an authority of State of its intention to take it, the notice will state the public purpose for which the land is proposed to be acquired. A prescription by regulation or approval by the Minister of a form which does not make provision for this, will, in a substantial way, not serve the purpose for which the power to prescribe or approve a form is conferred."

The Court held that the failure by RMS to specify the particular public purpose for the acquisition in the PAN issued to Desane rendered the form invalid.

Improper Purpose Challenge

Under s 177(1) of the Roads Act, RMS is empowered to acquire land for any of the purposes specified in that Act.

In this case, the Court agreed with Desane that the dominant purpose of RMS in acquiring the land was to provide open space and green parkland rather than a purpose authorised under the Roads Act.

In reaching this conclusion, the Court had regard to its factual finding that the RMS would have proceeded to acquire the land for the provision of the open space and green parkland even if the related road project did not proceed.

Having determined that the PAN was not issued for a purpose authorised under the Roads Act, the Court held that was issued for an improper purpose and so was invalid.

Implications

This case emphasises that the Court will review any attempt by a public authority to interfere with private property rights very strictly. The JT Act imposes important procedural requirements upon authorities seeking to wield their acquisition powers which must be adhered to closely.

At present, there may be on foot numerous PANs issued by acquiring authorities which suffer from some or all of the irregularities identified by the Court issued to Desane. These will need to examined closely and, where necessary, rectified, and the Approved Form will need to be updated.

Further information

For further information on this judgment and its potential implications for you, please contact Marcus Steele, Director, on (02) 8005-1411 or marcus.steele@steelelaw.com.au.