The eagerly-awaited decision in Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWCA 292 was handed down this week, with the Appellant successful in seeking to have the first instance decision of the Land & Environment Court set aside and the matter remitted to the lower Court for redetermination.

The primary issue for the Court of Appeal was defining the scope of the “public purpose” for the purposes of s 56(1)(a) of the Land Acquisition (Just Terms Act) 1991 – a consideration that can (and in these proceedings, did) have a material bearing on the quantum of compensation payable for the market value of acquired land. Under that provision, the determination of market value is to be undertaken by disregarding “any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired”.

At first instance, Duggan J was asked to determine “whether (her Honour) should find a narrow or a broad public purpose”; that is, whether the public purpose was the M12 (as the Applicant contended) or a broader purpose generally directed at the facilitation and realisation of the Western Sydney Aerotropolis (as the Respondent contended). At [51], her Honour found in favour of the acquiring authority. As a result, despite claiming just over $55m for market value, the Applicant was awarded around $9.5m.

On appeal, the Appellant contended that her Honour had erred in interpreting s 56(1)(a) and the way in which the public purpose is to be defined in the application of that provision. The Appellant maintained that the M12 was the public purpose for which the land was acquired.

In considering the question, Adamson JA (with whom Gleeson JA agreed and Preston CJ of the LEC generally agreed) set out a four-step process by which the question would be answered (at [71]):

The proper construction of s 56(1)(a) of the Act, when read in light of the authorities, of which Walker Corporation is the leading case, an assessment of market value under s 56(1)(a) of the Act requires the following steps to be taken:

1.      the identification of the acquiring authority;

2.      the identification, by reference to the empowering legislation, of the public purpose or purposes for which the acquiring authority (identified in (1) above) has the power to acquire land;

3.      the identification of the acquiring authority’s public purpose in acquiring the land, which must fall within the purpose or range of purposes identified in (2) above; and

4.      the determination of the question, which is one of fact, whether there has been any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, identified in (3) above (any such increase or decrease is to be disregarded).

At [73], the Court held (emphasis added):

In the present case, the respondent is the acquiring authority (step (1)). As to step (2), the respondent’s power to acquire the land derives from s 177 of the Roads Act. The only purpose in the Roads Act which was identified as supporting the acquisition was s 71: namely, to carry out road work. There is a distinction between power and purpose; however, the respondent’s power to acquire land is constrained by the purpose of the acquisition. The respondent could not point to any source of power to acquire land for any broader purpose than that for which the Roads Act provided. Thus, its purpose in acquiring the land, being the sole statutory purpose authorised, was to carry out road work for the M12 (step (3).

Accordingly, ground (1) of the appeal was made out, the first instance determination was set aside, and the matter was remitted to the LEC for redetermination.

As it stands, the decision is likely to have significant ramifications for land acquisitions in Western Sydney, where large amounts of land has been and is being acquired by government authorities for various public projects.

Beatty Hughes & Associates are experts in compulsory acquisition law in NSW. If you would like to discuss the above decisions, or another matter pertaining to land acquisition in Australia, Please feel free to get in touch.

By Timothy Allen