Desane Properties Pty Limited v State of New South Wales

[2018] NSWSC 553

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:	Desane Properties Pty Limited v State of New South Wales [2018] NSWSC 553
Hearing dates:	26, 27, 28 February 2018, 1, 5, 6, 7, 8 March 2018; Inspection Date: 2 March 2018
Decision date:	01 May 2018
Jurisdiction:	Equity - Commercial List
Before:	Hammerschlag J
Decision:	The proposed acquisition notice given by the second defendant to the plaintiff on 26 May 2017 is of no statutory effect.
Catchwords:	PUBLIC LAW – COMPULSORY ACQUISITION OF LAND – Land Acquisition (Just Terms) Compensation Act 1991, s 15 – Roads Act 1993, ss 177(1) and (2)(b) – validity of proposed acquisition notice –departure from Ministerially approved form – validity of approved form – requirement to state public purpose of acquisition – improper purpose – whether proposed acquisition notice issued for ulterior purpose; HELD proposed acquisition invalid for statutory non-compliance. If otherwise not invalid, it would be invalid because it was issued for improper purposes.
Legislation Cited:	Roads Act 1993 (NSW) Land Acquisition (Just Terms Compensation) Act 1991(NSW) Interpretation Act 1987 (NSW) Competition and Consumer Act 2010 (Cth), Schedule 2 Transport Administration Act 1988 (NSW) Fair Trading Act 1987 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Land Acquisition (Just Terms Compensation) Amendment Act 2016 No 59 (NSW) Land Acquisition Act 1955-1957 (Cth)
Cases Cited:	Forrest & Forrest Pty Ltd v Wilson (2017) 91 ALJR 833 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603 Clissold v Perry (1904) 1 CLR 363 Nintendo Co Ltd v Centronics Systems Pty Ltd (1994) 181 CLR 134 Watson’s Bay & South Shore Ferry Co Ltd v Whitfeld (1919) 27 CLR 268 Cudgen Rutile (No 2) Pty Ltd v Chalk [1975] AC 520 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 Mabo v Queensland (No 2) (1992) 175 CLR 1 Wik Peoples v Queensland (1996) 187 CLR 1 Western Australia v Ward (2002) 213 CLR 1 Nicholas v Western Australia [1972] WAR 168 New South Wales Aboriginal Land Council v Minister Administering Crown Lands Act (2016) 91 ALJR 177 Plaintiff M68/2015 v Minister for Immigration and Border Protection (2016) 257 CLR 42 Jones v Commonwealth (1963) 109 CLR 475 The Baptist Union of NSW v Georges River Council (2017) 221 LGERA 373 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor [2018] HCA 4 Roads and Transport Authority of NSW v Perry (2001) 52 NSWLR 222 Deputy Commissioner of Taxation v Gruber (1998) 43 NSWLR 271 Jones v The Commonwealth of Australia [No 2] (1965) 112 CLR 206 Tinker Tailor Pty Ltd v Commissioner for Main Roads (NSW) (1960) 105 CLR 334 Samrein Pty Ltd v Metropolitan Water, Sewerage and Drainage Board (1982) 56 ALJR 678 LHRC v Deputy Commissioner of Taxation (No 3) (2015) 326 ALR 77 Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 Hampton Court v Crooks (1957) 97 CLR 367 Jones v Dunkel (1959) 101 CLR 298 Fuller-Lyons v New South Wales (2015) 89 ALJR 824. Minister for Public Works v Duggan (1951) 83 CLR 424 Alusta Pty Ltd v Duncan [1973] 2 NSWLR 182 Taluja v Ardino [2001] NSWSC 566 Austereo Ltd v Trade Practices Commission (1993) 41 FCR 1
Texts Cited:	F A R Bennion, Statutory Interpretation (2nd ed, 1992, Butterworths)
Category:	Principal judgment
Parties:	Desane Properties Pty Limited - Plaintiff State of New South Wales - First Defendant Roads and Maritime Services - Second Defendant Sydney Motorway Corporation - Third Defendant
Representation:	Counsel: R. Merkel QC with D. Pritchard SC and D. Krochmalik - Plaintiff J. Marshall SC with S. Kanagaratnam - First Defendant J.R. Clarke SC with H. El-Hage - Second Defendant S. Free - Third Defendant   Solicitors: Levitt Robinson Solicitors - Plaintiff NSW Crown Solicitor - First Defendant Hunt & Hunt - Second Defendant Ashurst Australia - Third Defendant
File Number(s):	2017/243774

table of contents

What this case is about

Facts

The Property

Westconnex – Stage 3

Dealings Between Desane and RMS, and related matters, leading up to the PAN

The PAN

After the PAN

Legislation and Other Instruments

The Roads Act

The Just Terms Act

The Approved Form – S 15(A)

The Interpretation Act

The Hearing

Formal Invalidity of The PAN

Departure from the Approved Form

Public Purpose

Invalidity for Improper Purpose

The Parties’ Contentions

Initial Observations

Findings

Reasoning

Misleading or Deceptive Conduct

Conclusion

Judgment

what this case is about

1. WestConnex is the name given to six motorway projects that together are proposed to link Sydney’s West and South-West with the Sydney airport and Port Botany precincts. WestConnex comprises three stages.

2. Stage 1 is the widening and extension of the M4 Motorway between Parramatta and Homebush, and the extension of it to Haberfield by construction of two new tunnels from Homebush to a new interchange at Haberfield. Construction of this stage is underway. The widening and extension to Homebush have been completed, and tolls are being collected.

3. Stage 2 is the duplication of the M5 East Motorway by the construction of two tunnels from Kingsgrove to St Peters, and the construction of an interchange at St Peters, and an upgrade of the King Georges road interchange. Construction of this stage is underway.

4. Stage 3 is sometimes referred to as the M4-M5 Link. It comprises two sub-stages.

5. Stage 3A is the construction of a ‘mainline’ tunnel connecting the new part of the M4 at Haberfield (part of Stage 1) to the interchange at St Peters (part of Stage 2).

6. Stage 3B has become known as the Rozelle Interchange. It entails the construction of an interchange comprising underground tunnels, and the construction of road connections allowing traffic, including that passing through the mainline tunnel, to connect with Victoria Road, the City West Link, the Anzac Bridge and the M4 and M5 as extended under Stage 1 and Stage 2. It is also intended to provide a point of connection to a proposed future harbour crossing described as the Western Harbour Tunnel (WHT), which will provide a link to the Northern beaches (WHTBL). The Rozelle Interchange would, by all accounts, be an engineering endeavour of exceptional complexity.

7. Planning approval is being sought for Stage 3. There is no final design for it, only a Concept Design which was issued in May 2017. The overall proposed structure of WestConnex is shown in the following figure which forms part of the Concept Design.

8. Desane, the plaintiff, a subsidiary of a public listed company, owns a valuable commercial property at 68-72 Lilyfield Road Rozelle (the Property).

9. Roads and Maritime Services (RMS), the second defendant, is a corporation and NSW Government agency constituted under the Transport Administration Act 1988 (NSW). Under s 13A(1) of the Interpretation Act 1987 (NSW) (Interpretation Act), RMS has the status, privileges and immunities of the Crown.

10. The Roads Act 1993 (NSW) (Roads Act) makes provision with respect to the roads of New South Wales.

11. Section 171(1) of the Roads Act provides that RMS may acquire land for any purposes of that Act.

12. The Land Acquisition (Just Terms Compensation) Act 1991(NSW) (Just Terms Act) is an Act relating to the acquisition of land on just terms by authorities of the State.

13. The Just Terms Act contains provisions for the acquisition of land, by compulsory process, for a public purpose.

14. References to sections are, unless the context otherwise indicates, to sections of the Just Terms Act.

15. The compulsory acquisition process is preceded by the necessity for the land to be affected by a proposal for its acquisition by an authority of the State. There is provision for a minimum period of negotiation for acquisition by agreement before initiation of the compulsory acquisition process.

16. The formal compulsory acquisition process is commenced by an authority of the State giving to the owner of land a proposed acquisition notice (PAN), of its intention to acquire the land by compulsory process. If, after a PAN is given, there is no negotiated outcome, the land may be compulsorily acquired by Gazetted acquisition notice. Compensation is payable.

17. On 26 May 2017, RMS purported, under cover of a letter of that date, to give Desane a PAN for the Property.

18. Desane argues that the PAN is of no effect because:

1. it fails to comply with the requirements of the Just Terms Act;

2. there was in existence no sufficiently formed proposal for acquisition by RMS for the purposes of the Roads Act;

3. if there was a sufficiently formed proposal for the purposes of the Roads Act, RMS had an improper purpose in giving the PAN because, in truth, it was actuated by the purpose of using the Property for open space and green parkland, which is not a purpose of the Roads Act.

19. Additionally, Desane argues that RMS was carrying on a business and, in trade or commerce, engaged in conduct which is misleading or deceptive or likely to mislead or deceive in contravention of s 18(1) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law)[1] because by the PAN and its covering letter, it misrepresented that the Property was required by it, for a public purpose, when in truth it was not required or not required at that time. It seeks orders restraining RMS from acting on the PAN.

    1. s 18(1) provides: ‘A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’ The Fair Trading Act 1987 (NSW) s 36 has the effect of binding RMS (the Crown in right of this jurisdiction) to s 18(1) of the Australian Consumer Law so far as it carries on a business.

facts

20. To facilitate an understanding of the factual circumstances underlying this dispute, I have ordered the facts into two parallel chronologies, one concerning the WestConnex project itself and the other concerning the relationship and dealings between Desane and RMS in relation to the Property. This, I think, more readily enables appreciation of the circumstances about WestConnex as a project at any particular point in time, and of when and how the dealings between Desane and RMS relevantly intersect with those circumstances.

21. I have had regard to the entirety of the extensive factual material in evidence, but have only recited those facts which I consider are necessary to demonstrate why I have made the findings I have made.

The Property

22. Desane develops and manages real property. It acquired the Property in 1997 for $2.2 million and spent around $7 million improving it. The Property is at the intersection of Gordon Street and Lilyfield Road, Rozelle.

23. The Property abuts the now disused Rozelle Rail Yards. Both tracts of land are within approximately 189 hectares of land and waterways now known as the ‘Bays Precinct.’ Under the Bays Precinct Sydney Transformation Plan, [2] this area is earmarked for redevelopment for use as housing, public space and employment. A preliminary assessment in December 2015 by UrbanGrowth to the Department of Planning & Environment (Department of Planning) identified the area, including the Property, as a proposed State Significant Precinct. Since 19 April 2016, the area has been designated as such a Precinct. One effect of such a designation is that changes to zoning and planning controls can be made through a State Environmental Planning Policy approved by the Minister for Planning, bypassing local council processes.

    2. Published by UrbanGrowth NSW Development Corporation, which is responsible for promoting economic development of growth areas of metropolitan Sydney.

24. In 2014, Desane engaged architects to prepare a planning proposal for the rezoning of the Property.

25. In June 2015, it lodged a proposal with the Department of Planning, to re-zone the Property from Port and Employment to B4 Mixed Use, which would 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. Desane has developed apartments nearby.

26. By all accounts, the Department of Planning neglected to progress the application. At a meeting with representatives of that Department on 31 May 2016, an apology for mishandling it was given to Desane.

WestConnex – Stage 3

27. Sydney Motorway Corporation (SMC), the third defendant, was established in 2014 by the NSW Government to act as the financing entity for WestConnex. SMC is owned by the Government. In October 2015, SMC became responsible for the financing, construction and delivery of WestConnex. RMS remained the Government roads agency acting on behalf of the Government as the agency commissioning WestConnex.

28. In October 2017, after failure of a process to find a suitable design and construction tenderer for Stage 3B, responsibility for delivering Stage 3B was transferred to RMS.

29. From about August 2014, SMC carried out design work, technical investigation, planning and cost-benefit analysis. Designs of Stage 3B were prepared by SMC and reviewed and assessed by RMS.

30. SMC prepared a Project Implementation Plan in October 2015, which it revised in November 2015. [3]

    3. Portions of these documents have been redacted for public interest immunity reasons. They do not include any detailed designs.

31. In November 2015, the Government published an updated Strategic Business Case for WestConnex. It included a proposal for the Rozelle Interchange, which would have necessitated use (and destruction) of the Property.

32. The Business Case discloses that WestConnex is financed using ‘limited-recourse project financing’ and a ‘sale of business’ model, which includes a State entity holding equity in special purpose vehicles created to deliver the project and limited-recourse private sector debt finance against future toll revenue to fund a significant portion of construction costs. The Business Case refers to the inevitable need for the acquisition of property to deliver the project. It states that:

A detailed design is not dictated for tenderers. Instead, tenderers compete on final design, allowing optimisation of tunnel route, depth, intersection design, construction approach and property impacts.

One of the key features of this approach is that the environmental impact assessment for each stage is undertaken after, rather than prior to, awarding of the contract. This is necessary given the final design is not confirmed until the tender process is completed.

33. In January 2016, RMS published a State significant infrastructure application report for the M4-M5 Link. [4] The report states that the M4-M5 Link was a component of the program of works proposed to be delivered as a series of projects, each subject to a stand-alone planning assessment and approvals process in accordance with the requirements of Environmental Planning and Assessment Act1979 (NSW) (EP&A Act). References to the EP&A Act are to as it stood at the time.

    4. Addenda to this report were published in September 2016 and March 2017.

34. The report records that, as the proponent, RMS had formed the view that the impact of the M4-M5 Link is likely to significantly affect the environment. It records that the M4-M5 Link project is declared to be State significant infrastructure under the EP&A Act and is subject to Part 5.1 of that Act. This requires the preparation of an Environmental Impact Statement (EIS) and the approval of the Minister for Planning for the proposal. The report states that key components of the project include a new road interchange at Rozelle within the disused Rozelle Rail Yard, to provide connections to the re-aligned City West Link, Victoria Road and the Anzac Bridge. The report records that the final interchange design will be determined as part of the design development process. It records that construction of the project is to occur over a period of around four years and that it will require ancillary facilities during construction, including, but not limited to, construction compounds, sedimentation basins, concrete batching plant, pre-cast yards and stock piles. It states that the location and size of the ancillary construction facilities will be developed as part of determining the preferred project design and will be assessed in the EIS for the project.

35. On 23 March 2016, RMS, represented by Ken Kanofski, its Chief Operating Officer – later Chief Executive, and SMC, represented by its Chief Executive, Dennis Cliche, signed a non-legally enforceable Memorandum of Understanding (MOU) in connection with Stage 3.

36. Under the heading ‘Property’, the MOU includes the following:

RMS will acquire all the temporary and permanent land required for the Project. During the Development Phase, SMC will provide RMS of details of potential land requirements (Lot and DP) to the extent these are known.

RMS and SMC will work together to identify any land requirements that are "strategic" in nature - that is, will be required under any plausible scenario for the delivery of Stage 3. RMS may seek Government approval to commence the acquisition process for Strategic Land in 2016/17.

Except for Strategic Land, RMS expects that property acquisition will not commence until a Preferred Tenderer is selected, or comfort is otherwise obtained that the property will in fact be required.

37. Where I refer to persons by their last name, I intend no disrespect.

38. On 24 March 2016, Peter Jones of SMC, the Project Director for the M4-M5 Link portion of WestConnex, sent a written briefing to Cliche concerning property acquisition strategy.

39. The Briefing includes the following: [5]

    5. Significant portions of the briefing have been redacted for public interest immunity reasons.

1. Strategic land acquisition - Rozelle Goods Yard (Attachment A)

Strategic land acquisition comprises four elements:

1.   Acquisition of private commercial properties required for WHT

2.   Consolidation of existing land titles held by multiple NSW Government agencies into a single title and transfer of that title to RMS at nil consideration

3.   Funding allocation to facilitate the termination of commercial leasehold arrangements within Rozelle Goods Yard currently managed by Sydney Harbour Foreshore Authority (SFHA)

4.   Funding allocation to enable early works (scheduled to commence Q1 2017) within the Rozelle Goods Yard post property acquisition and leaseholder termination

RMS is the responsible agency in respect of title consolidation and title transfer including negotiation with relevant NSW Government Agencies (emphasis added).

2. Primary land acquisition

A number of properties are required to enable project construction sites and compounds to be established for team mobilisation, stockpiling of materials, vehicles loading bay etc. The project will also have to acquire properties for operational infrastructure as a result of the proposed alignment, tunnel portals, ventilation outlets and other operational facilities.

40. WHT is the proposed future under harbour connection between the Rozelle Interchange and North Sydney. Jones gave evidence that, at the time of the briefing, it was envisaged that portals for WHT would involve destruction of the Property. Later, however, the proposed portals were moved away from the Property to be more under the geographical feature known as Balmain Hill. That aspect of the overall design – such as it is – no longer directly involves or impacts the Property. The acquisition of the Property for that purpose thus later ceased to be strategic as envisaged in the briefing. More is said of this later.

41. Attachment A to the Briefing covers the Property.

42. On 1 April 2016, Kanofski sent a briefing for endorsement to the Minister for Roads, Maritime and Freight and to the Secretary for Transport NSW, seeking approval for RMS to commence acquisition procedures for privately-owned and commercial/industrial sites south of Lilyfield Road for the Rozelle Interchange.

40. A Government Cabinet Submission dated 18 April 2016, entitled ‘WestConnex Stage 3 (M4-M5 Link) – Strategic Property Requirements at Rozelle’ [6] , includes the following:

    6. A significant portion of this Submission has been redacted for public interest immunity reasons.

3.18 Acquisition of these properties at this stage is recommended by RMS on the following grounds:

•   Design development by RMS indicates that there is no feasible scenario for providing connectivity for the Western Harbour Tunnel other than by use of this land.

•   Experience at the St Peters lnterchange indicates the desirability of integrated construction of the interchange in order to minimise community disruption and optimise value for money.

•   It is expected that the land will be fully utilised for construction purposes as one means of minimising impacts on other land (e.g. Glebe lsland/ White Bay).

•   Proposals are being advanced by the current owners for the redevelopment of these properties for residential use, and it is preferable that early certainty is given to the affected landowners in order to manage potential future compensation risks.

•   Early commencement of acquisition promotes the opportunity to acquire privately owned properties by negotiated agreement.

3.19 lt would be possible to defer the Western Harbour Tunnel enabling works and not deliver them alongside M4-M5 Link construction. However, this would constrain options development for the Rozelle lnterchange and could lead to a sub-optimal design and is not recommended.

3.20 Accordingly RMS is seeking access to an allocation of $- million, in FY16/17, from either the Consolidated Fund or the $- billion Rebuilding NSW reservation for WestConnex Northern and Southern Extension and Western Harbour Tunnel. This would allow for the Rozelle Interchange to be developed in an integrated fashion. RMS and SMC agree that these properties are required for the efficient construction of the interchange, including provision for the Western Harbour Tunnel.

44. On or about 27 April 2016, the Expenditure Review Committee, a sub-committee of the NSW Cabinet, approved funding for the acquisition of properties, including the Property, required for Stage 3.

45. On 25 May 2016, approval to commence acquisition of four commercial properties, including the Property, was given within RMS.

46. On 31 May 2016, RMS sent a letter to SMC confirming that RMS had obtained Government approval to commence acquisition processes for the ‘core site of the proposed Rozelle Interchange.’

47. On 2 June 2016, RMS opened an acquisition file.

48. On 29 June 2016, Peter Dunkin, then Chief Executive of RMS, sent a Briefing to the Minister for Roads, Maritime and Freight headed ‘Strategic property acquisitions at Rozelle Rail Yard.’ The Briefing note recorded:

Commencing property acquisitions now preserves the option to accelerate M4-M5 Link by allowing early works to be undertaken in 2017

The Rozelle Rail Yard will be used for the construction of the motorway infrastructure required for the M4-M5 Link including provision of connections to the WHT.

Commencing land acquisition negotiations for the future Rozelle Interchange site by the end of June 2016 preserves the option to accelerate the M4-M5 Link delivery and maximises the opportunity for owners to negotiate an agreed settlement with RMS, rather than through compulsory acquisition. Under the accelerated program, the M4-M5 Link would open to traffic in 2022.

Remediation works will be commenced at Rozelle in the first quarter of 2017. Planning documents are also expected to be on display in the same period.

49. It seems that in this, and later documents, reference to the Rozelle Rail Yards is sometimes, loosely, intended to encompass not only the Yards themselves but adjoining privately owned land.

50. In July 2016, SMC released a document headed ‘Community update’ inviting the public to attend a community ideas session to ‘share your ideas and feedback on what you would like us to consider in designing and building the M4-M5 Link.’ It stated amongst others:

As a result of this early investigations and design work (sic), some key principles for the project can be confirmed:

•   an interchange is planned within the Rozelle Rail Yard – this would not require residential property acquisition in Lilyfield Road or on City West Link, but will require acquisition of some commercial properties

•   we plan to build most of the Rozelle Interchange in tunnel and cover it, creating new green space for the local community – up to five times the size of Easton Park

51. Apparently, by this time, there had been created, amongst the multiplicity of designs, one which included a proposed additional underground link between the Anzac Bridge and the Iron Cove Bridge via the Rozelle Interchange.

52. On 7 July 2016, SMC published a document entitled ‘Q&As M4-M5 Link.’ It includes the following:

Why choose a tunnel over surface roads?

•   The Rozelle Interchange concept design includes a tunnel to the Iron Cove Bridge. This will reduce traffic on Victoria Road by almost 50% and motorists will bypass six sets of traffic lights

•   The Rozelle Interchange tunnel will improve travel time and reliability for bus services, business, personal and freight journeys

•   It will improve local access for local residents to key public transport services including light rail and Sydney Metro as well as improved bus services on Victoria Road

•   It will also provide opportunities for urban renewal and reprioritise surface streets for, cyclists, public transport users and pedestrians

•   It will provide up to 10 hectares of new land, connect the neighbourhoods of Annandale and Rozelle via pedestrian and cycle bridges, and provide a green link between Bicentennial Park and Easton Park.

Project Design

How deep will the tunnels be?

•   The tunnel design, including depth, will not be able to be confirmed until a preferred contractor has been appointed. This is expected in 2018…

Why are you using the Rozelle Rail Yards for the interchange?

•   By delivering the M4-M5 Link through an underground tunnel and locating the Rozelle Interchange at the disused Rozelle Rail Yards, we are minimising property impacts.

•   By using the Rozelle Rail Yards, there is a great opportunity to turn this land into much needed green space, open to the community for its use.

Is this the final design?

•   We are continuing to develop and refine the design of the M4-M5 Link.

•   Our technical investigations are continuing and consultation period will result in further changes and improvements to the design.

When will the design be finalised?

•   Pending project approval, the final M4-M5 Link design will be confirmed when a preferred contractor has been appointed. This is expected in 2018.

53. Then, at a meeting on 21 July 2016, the Cabinet agreed [7] that the M4-M5 Link would deliver 10 hectares of ‘park ready’ land on the western half of the Rozelle site, and noted that the remainder of the site would include significant further additional open public space as part of the WHT. The Cabinet submission defined ‘park ready’ to include:

•   Construction of podium and land-bridges to connect regraded land

•   Structural and architectural treatments

•   Capping and drainage

•   Pedestrian and cyclist pathways

•   General soft landscaping and planting.

7. This appears from an email sent by an Adviser in the Office of the Premier on 27 July 2017 to various persons associated with WestConnex.

54. On 21 July 2016, the Government issued a media release titled ‘New inner west park and tunnel link announced’ (the media release). The timing and contents of this release play a not insignificant role in the case. It is reproduced in full:

A large stretch of new parkland will provide significant green space for Sydney’s inner west and an underground connection will be built to take traffic off congested Victoria Road, under the new details of the concept design for the WestConnex interchange at Rozelle.

Premier Mike Baird and Minister for Roads Duncan Gay revealed the details of the interchange, which will be built largely under the disused former Rozelle Rail Yards. This will allow for the majority of the interchange to be grassed over with a new large park and returned to the community.

“This will be a game-changer,” Mr Baird said. “What is currently an inaccessible eyesore will be reborn as parkland, with the potential for cycle ways, playgrounds and sporting grounds.

“Up to 10 hectares of new parkland will connect Annandale and Rozelle via pedestrian and cycle links and also provide a green link between Easton Park and Bicentennial Park.”

The new tunnelled connection to the Iron Cove Bridge will be built within the existing WestConnex budget as part of the Rozelle Interchange and motorists will be able to travel through the tunnel from the Iron Cove Bridge to the Anzac Bridge or onto other sections of the WestConnex network, via the interchange.

Mr Gay said the intersection will be an incredible engineering feat and thanked the engineers who have been working to refine the designs of the Rozelle Interchange and its connections, meaning it will not add any additional cost to the project. 

“The new tunnel connection is a wonderful addition to WestConnex which won’t cost a cent more and will reduce traffic volumes on Victoria Road by nearly half,” Mr Gay said.

Federal Minister for Urban Infrastructure Paul Fletcher said the Turnbull Government had supported WestConnex with $1.5 billion in grant funding and a $2 billion concessional loan.

“WestConnex will bring huge benefits to millions of commuters which is why we have been pleased to work so closely with the Baird Government in seeing this project through to completion,” Mr Fletcher said.

The project requires a section of Victoria Road to be widened, meaning 27 properties will unavoidably need to be acquired.

“We wish a single property didn’t need to be acquired and we are committed to ensuring everyone affected by acquisitions is treated with dignity and compassion,” Mr Gay said.

Local residents will benefit from improved pedestrian access to the existing light rail at Rozelle Bay, and from future Rapid Transit on Victoria Road.

Design is progressing for the M4-M5 Link which will connect the M4 East at Haberfield with the New M5 at St Peters, providing twin underground tunnels with three lanes in each direction.

The M4-M5 link will carry an estimated 105,000 trips every day and will provide a western bypass of the CBD.

The Government will be seeking feedback from the community on the concept design for the interchange.

55. That day, the Government supplied to ABC News the below artist’s impression (the artist’s impression) of what the Rozelle interchange will look like:

56. It is not in issue that the Property lies within the depicted parkland area.

57. On 26 July 2016, the Cabinet:

(i) approved by the M4-M5 Link tunnel realignment and revised underground Rozelle Interchange that will deliver around 10 hectares in a ‘park ready’ solution over the top of the road infrastructure at the western half of the Rozelle site;

(ii) noted the Western Harbour Tunnel Final Business Case will include options for the provision of significant further additional public open space at the Rozelle site

58. On 28 July 2016, Jones wrote to Leichardt Municipal Council giving an update on the M4-M5 Link project. Amongst others, he wrote:

At our meeting I mentioned we are continuing with our critical geotechnical and investigation works to inform the early design for the project, including the connections at Rozelle and Camperdown. We have been working with your officers to coordinate this work and reduce the impacts on your local residents.

From this early investigative works we can now confirm the following:

•   The Rozelle interchange will be located at the site of the disused Rozelle Rail Yards meaning there will be no residential property acquisition on Lilyfield Road or on City West Link. To accommodate this design there will be the need to acquire some commercial properties on Lilyfield Road and Roads & Maritime Services are in discussions with the relevant owners.

59. In July and August 2016, SMC conducted a communication and engagement program with communities that would be impacted by the M4-M5 Link, including the Rozelle Interchange. It then published a Community feedback report which stated that suggestions would be considered as part of the design process. Thereafter, SMC’s project team continued to develop the design for the M4-M5 Link, including the design of the Rozelle Interchange.

60. In September 2016, RMS lodged an addendum to the State significant infrastructure application report, which amended the Stage 3 application by adding the link to the Iron Cove Bridge. The addendum contained no detailed designs. The addendum stated that since preparation of the report in January 2016, the preliminary design development and traffic modelling has informed further refinement of the design in the form of a tunnel connection from the southern abutment of the Iron Cove Bridge to the proposed Rozelle Interchange. The report states that the temporary use of Easton Park [8] would be required to construct the dive and cut and cover tunnel portals to connect the surface roads at the Rozelle Interchange to the Iron Cove Link tunnel.

    8. Easton park (which is referred to in the media release) is a recreational facility, which includes sporting fields, bounded by Denison Street, Lilyfield Road and Burt Street Rozelle. It is south-west of the Property and within easy walking distance.

61. On 17 October 2016, UrbanGrowth wrote to SMC about a Concept Design, which was then apparently in existence (but which does not appear to be in evidence). UrbanGrowth wrote, amongst others:

The proposed current concept design addresses some of the UrbanGrowth NSW considerations such as public realm (open space) as outlined in the Cabinet approved Bays Precinct Transformation Plan.

…

SMC is following the direction to achieve maximum amounts of usable open space within the Rail Yard. Whilst UrbanGrowth NSW desires residential development within the Rail Yards, it is considered that open space provided on the site will provide significant amenity and recreation opportunities for future Bays Precinct tenants and residents (emphasis added).

62. In November 2016, RMS published a review of environmental factors for Site Management Works, not directly connected with WestConnex, which it proposed to carry out at the Rozelle Rail Yards. That review includes the following statement:

Roads and Maritime is soon to be the sole owner of the Site and as such needs to appropriately manage the environmental and safety issues at the Site. Roads and Maritime propose to use the land in the future for the separate WestConnex M4-M5 Link project (M4-M5 Link project) if that project is approved by the NSW Minister for Planning (subject to separate assessment and determination as an environmental impact statement (EIS) under Part 5.1 of the EP&A Act). The site management works which comprise this proposal do not form part of the M4-M5 Link project. Should the M4-M5 Link project not proceed the proposal would enable other potential future developments at the Site (emphasis added).

63. On 7 November 2016, Kanofski briefed the Minister for Roads, Maritime and Freight and the Secretary for Transport NSW as to ‘Strategic property acquisitions at Rozelle Rail Yard.’ The briefing referred to the fact that RMS had commenced the acquisition of strategic property at the Rozelle Rail Yard and that acquisition would start before planning documents for the M4-M5 Link were placed on public display and on a shortened acquisition timeline of less than 18 months. The briefing stated:

Further, it is noted planning documents for M4-M5 Link (sic) are expected to be on display in late Q1 2017. These property acquisitions will therefore commence prior to planning documents being on public display. It is also anticipated that finalising project planning approval may not have been completed within the timeframe necessary for completion of any necessary compulsory acquisitions of required lands. This issue may increase the likelihood of adverse media articles and political representations

64. In evidence is an AECOM (technical and environmental advisers, infrastructure designers and planners, retained by SMC or RMS) drawing captioned ‘M4-M5 Link option 4259 plan’ dated 8 November 2016 for the Rozelle Interchange. The design does not directly impact the Property. [9]

    9. Drawing M4M5-IFD-20-4259-RD-1001.

65. On 15 December 2016, SMC gave a presentation to RMS about the Rozelle Interchange and Iron Cove Link. The presentation included interim reference designs, including ones where tunnelling goes through parts or edges of the Property.

66. In March 2017, RMS lodged a further addendum to the State significant infrastructure application report, which sought to amend it by refining the Rozelle Interchange design and removing Easton Park from the scope of the project.

67. At this time, proposed designs had two tunnel ramps going through the Property. Also being considered were various optional designs for moving the location of the WHT and M4-M5 tunnels. Options then being considered directly affected the Property.

68. On 31 March 2017, RMS briefed the respective Ministers for Roads, Maritime and Freight and for WestConnex on ‘Upcoming compulsory acquisition of properties required for WestConnex M4-M5 Link Project, Western Harbour Tunnel Beaches Link (WHTBL) and Rozelle Rail Yard site management.’

69. Attachment A to the briefing identifies the properties to be acquired, including the Property. It states:

Rozelle Interchange/ Lilyfield Road

The Rozelle Interchange site is located within the disused Rozelle Rail Yards. The site provides sufficient space for construction of both the mainline tunnels and interchange. Access to the City West Link can be provided from the site and would be a preferable access point to Lilyfield Road.

70. The description of the Property in the attachment is accompanied by the following comment, ‘this property is required for WHTBL enabling works.’

71. On 3 April 2017, Ismet Huseyin, Technical Lead WHTBL, wrote a memorandum to Doug Parris, Deputy Project Director WHTBL within RMS, setting out emerging construction site requirements within the Rozelle Rail Yard site to deliver the WHT. Amongst others, it recorded:

• that the WHT site location and configuration as presented in the final business case had changed significantly following subsequent major amendments to the SMC design for the Rozelle Interchange;

• recent design development by SMC had sought to reduce the interface between WHT and SMC construction activities by moving the WHT ramps further to the west;

• the current configuration of the Rozelle Interchange, as presented by SMC, did not provide acceptable traffic performance at the WHT/The Crescent/City West Link intersection, and that the WHT team was currently developing options to address this performance issue;

• at that stage it appeared likely that the preferred WHT option would have different permanent and temporary footprints within the Rozelle site than was currently proposed in the SMC design; and

• the SMC design for the Rozelle Interchange and WHT design was still developing. The WHT team would continue to liaise with SMC to refine these requirements as both designs develop.

72. The memorandum had a number of attachments, including a Rozelle Interchange updated Reference Design which does not directly impact the Property, except for a sliver identified as a utilities corridor (which I assume to be on the surface) and a proposed WHT site plan (subject to Rozelle Interchange design development) which does not impact the Property in any way.

73. Parris sent the memorandum to Daniel Powrie, RMS Project Director WestConnex Stage 3, and others on 4 April 2017.

74. On or about 13 April 2017, AECOM produced final reference designs. Amongst them is a design for the Interchange which shows the only surface impact on the Property as being the use (which I assume to be on the surface) of a sliver of it at its edge for a utilities corridor. [10]

    10. Drawing M4M5-SHT-21-4000-GT-53022.

72. In May 2017, SMC released a Concept Design for Stage 3, which was reviewed by RMS prior to publication. As to the design of the Rozelle Interchange, it says:

Our technical investigations are continuing and public consultation on this design will result in further changes and improvements. The information provided in this document includes a number of locations currently being considered as potential construction sites. Sydney Motorway Corporation and Roads and Maritime Services will continue to assess these sites and investigate alternative locations.

The Environmental Impact Statement (EIS) process will involve further consultation prior to assessment by the Department of Planning and Environment. Pending project approval, the final M4-M5 Link design will be confirmed in 2018.

76. Under the heading ‘We are listening’, the Concept Design states:

Feedback has already helped shape the design of the M4-M5 Link. Key changes that have been influenced by your feedback include:

…

•   consideration of the western end of the Rozelle Rail Yard corridor as a potential tunnel construction site

…

We are now seeking feedback on the concept design from the community and other stakeholders. You will have a number of opportunities to find out more about the concept design and share your feedback with us prior to the assessment of the EIS.

77. In a section entitled ‘Construction’, it says:

The Rozelle Rail Yards will be used as the main construction site for the M4-M5 Link (refer to Figure 12.2). Construction activities will include launching the tunnelling machines, stockpiling and removal of extracted material, workforce carparking, offices and amenities, as well as infrastructure required to support the construction of the tunnels such as sedimentation ponds.

We are looking at options to move all heavy construction traffic directly onto City West Link. The final heavy vehicle movement routes will be detailed in the Environmental Impact Statement (EIS), which will be released for public

consultation in mid-2017.

Construction at the Rozelle Rail Yards site will run from 2018 to 2023. If the project is approved, tunnelling activities would be 24 hours a day, seven days a week and work would largely be underground or within acoustic sheds where they are at surface. Truck movements would occur 24 hours a day, seven days a week.

78. On 3 May 2017 the Governor approved a recommendation made by the Minister for Roads, Maritime and Freight that the Property be acquired by compulsory process. The Minute Paper for the Executive Council is produced below.

79. On 12 May 2017, the NSW Government published a press announcement referring to the release of the Concept Design. It announced that it was to proceed with the sale of at least a 51% stake in SMC to help fund the final stage.

80. On 26 May 2017, RMS gave the PAN to Desane.

81. On 19 June 2017, the Government published a Notice seeking registrations of interest from tenderers for the design and construction of the Rozelle Interchange, including the design of:

•   an interchange at Rozelle providing connections from the Main Tunnel Works to the surface road network at City West Link, Victoria Road and Anzac Bridge, and providing provision for connections to the future Western Harbour Tunnel;

•   up to 10 hectares of new public open space located at the site of the disused Rozelle Rail Yards;

…

82. There was only an expression of interest from one consortium, which expression was apparently heavily caveated. The Government considered a tender process with only one tenderer to be unsatisfactory, and it was not proceeded with.

83. A further expression of interest process was initiated in January 2018. The time for lodgement of expressions of interest has not yet expired. The process is apparently proceeding.

84. On 3 July 2017, Kanofski directed a briefing paper to the respective Ministers for WestConnex and Roads, Maritime and Freight in connection with the possibility of RMS considering temporary leasing arrangements for properties to be acquired. He identified four private properties, including the Property, as being required to be acquired for M4-M5 Link work adjacent to the Rozelle Rail Yards. Amongst others, the Briefing states:

Topic: Request for Roads and Maritime to consider temporary leasing arrangement rather than permanent acquisition for 68-72, 80-84 and 92-94 Lilyfield Road.

Analysis: Properties at 68-72, 78, 80-84 and 92-94 Lilyfield Road, Rozelle are required to be acquired to construct the M4-M5 Link. The owners of 68-72 and 80-84 Lilyfield Road have requested that Roads and Maritime Services consider a temporary leasing arrangement rather than permanent acquisition of the property (Attachment A). These requests have been responded to by Roads and Maritime Services (Attachment A). No formal representations have been made from the two other property owners on this issue.

The property owners who were seeking the lease alternative had assumed these properties could be avoided by the M4-M5 project and/or that the land could be reinstated once the project is completed. Unfortunately, this is not the case and these properties are required for essential project work, including the relocation of utility services and major infrastructure construction.

The M4-M5 Link infrastructure will occupy most of the sub-surface of the land, albeit that landscaping will be provided to mitigate visual impacts. Ultimately, the final infrastructure will need to be determined by the successful Design and Construct tenderer.

Due to these significant engineering issues, it is not expected that there will be any residual land available post construction. If there is any residual land, it will be offered back to the previous owner in accordance with the Just Terms Compensation Act 1991 (Just Terms Act). As such, Roads and Maritime is unable to consider the owners request to consider temporary leasing arrangements instead of acquisition.

Key issues

Acquisition of private property for the M4-M5 Link and its use during construction

Four private properties are required to be acquired for M4-M5 Link work adjacent to Rozelle Rail Yard. A map of the properties is provided at Attachment B.

Address	Owner	Current Use
68-72 Lilyfield Road, Rozelle	Desane	Property management company
78 Lilyfield Road, Rozelle	Spiros Papafotiou	Boarding house
80-84 Lilyfield Road, Rozelle	Gillespies Cranes	Crane Hire Yard
92-94 Lilyfield Road, Rozelle	A W Swadling	Timber and Hardware Yard

Roads and Maritime issued a Proposed Acquisition Notice (PAN) for the freehold properties and is currently seeking the Ministers approval to shorten the negotiation period for the tenants (Attachment C - M17/0281/A2) to meet the current timeframe to provide vacant possession. There are 15 tenants which have an interest in the four properties.

The proposal of alternative arrangements including leasing the properties does not provide for vacant possession or removal of the tenants. Roads and Maritime also needs to demolish the existing structures and buildings.

These sites are required to complete the M4-M5 Link, works include:

•   Construction of major infrastructure, including tunnelling for roads, cross passages and ventilation, ventilation buildings and air intakes, provision of water management facilities; also the end state parkland provides flood management, and

•   Utilities services need to be identified and relocated including power infrastructure, telecommunications infrastructure, Rail switching station power supply, Substations and transformers.

85. Over 2016 and 2017 numerous design options for the Rozelle interchange were prepared by AECOM.

86. On 14 July 2017, AECOM produced a substantial volume entitled ‘Final reference design/ Rozelle Interchange/ Drawings.’ Various design options are still under active consideration, some of which reflect the Property as not being intersected by the Rozelle Interchange and others which do. Some designs have tunnels which do not travel under the Property. At least one such drawing, [11] dated 13 April 2017, shows a portion, albeit a minor one, of the Property being used for a utilities corridor. At least one other drawing makes it clear that further geotechnical investigations should be undertaken to examine the possibility of moving the drive tunnel portal to the East. [12]

    11. Drawing M4M5-SHT-21-4000-GT-53022.

    12. Drawing M4M5-SHT-21-4000-ST-52151.

87. On 15 August 2017, the Minister declared WestConnex to be critical State significant infrastructure.

88. Under Part 5.1 of the EP&A Act, a person is not to carry out development that is State significant infrastructure unless the Minister has given approval. [13]

    13. EP&A Act s 115W.

89. The Minister may approve or disapprove the carrying out of State significant infrastructure or may approve it with such conditions as the Minister determines. [14] The Minister has not made a determination.

    14. EP&A Act s 115ZB.

90. Stage 3 cannot proceed unless planning approval is granted by the Minister for Planning. Nor can any activity [15] be carried out until approval is granted. [16]

    15. within the meaning of EP&A Act s 110.

    16. EP&A Act s 115T.

91. On 18 August 2017, RMS published and lodged the EIS for Stage 3. On the subject of the design of the Rozelle Interchange, it says:

The delivery mechanism for the design and construction of the M4-M5 Link differs from the approach adopted for the M4 East and New M5 projects. For the M4 East and New M5 projects, a design and construction contractor was appointed early and had direct input into the design development, environmental impact statement (EIS) preparation and construction planning for those projects. This meant that the EIS for the M4 East and New M5 projects assessed the construction contractor’s design. For the M4-M5 Link project, design and construction contractors would be appointed to undertake the detailed design and construction planning following determination of the application for project approval, should it be approved.

This means the detail of the design and construction approach presented in this EIS is indicative only based on a concept design and is subject to detailed design and construction planning to be undertaken by the successful contractors. The intent of the concept design for the project is to provide a sound and clear basis for refinement during the detailed design to a standard required to minimise impacts of the permanent infrastructure as much as possible.

92. This approach differs from that taken with Stages 1 and 2. There, the design and construction tenderer was selected before planning approval and was involved in formulating the final designs used in the planning approval process.

93. The EIS contains the following section:

Rozelle Rail Yards

The Rozelle Rail Yards site is bounded by City West Link to the south, Lilyfield Road to the north, Balmain Road to the west and White Bay to the east. The Bays Precinct Transformation Plan identifies the former rail yards as providing an opportunity for mixed housing as well as public spaces and employment uses. The Bays Precinct Transformation Plan also identifies the potential for opportunities provided by the redevelopment of the Rozelle Rail Yards for integration and connection of communities to the north and south through the creation of public open space and improved connections between Lilyfield and the waterfront.

While the project is consistent with The Bays Precinct Transformation Plan vision for the creation of new open spaces, provision of new pedestrian and cyclist links, connecting communities and the acknowledgment of the rail heritage of the area, it is inconsistent with the Plan with respect to the development of the Rozelle Rail Yards for mixed housing and potentially also for employment uses.

The reasons for the project being inconsistent with this vison (sic) can be attributed to the nature of the project and the geographical area required for its construction and operation and also the commitment made by the NSW Government (announced in July 2016) that the project would deliver up to 10 hectares of new open space and active transport links for the community.

Should the project not proceed, the Rozelle Rail Yards would likely be developed in accordance with The Bays Precinct Transformation Plan, including the provision of public spaces, employment uses and mixed housing (emphasis added). [17]

17. A similar statement appears later in the EIS under the heading ‘Land use/ transport integration and opportunities.’

94. The EIS also contains a section entitled ‘Rozelle civil and tunnel site.’ It states that ‘the Site would be predominately located on disused land that forms part of the Rozelle Rail Yards.’ It goes on to state:

The site would also use land adjacent to Lilyfield Road and Gordon Street at Rozelle that is currently occupied by commercial and industrial properties. These properties would be acquired for the project and demolished to facilitate construction of the Rozelle interchange…

95. An indicative site layout is incorporated. The Property is within the civil and tunnel site. This time it is shown as an area for light vehicle parking. An extensive list of key construction activities to be carried out at, and supported by, the Rozelle civil and tunnel site is included.

96. In about August or September 2017, SMC produced Urban Design Guidelines to ensure that the urban design of the project was ‘not a retrospective layer on top of a road design.’ One of the guidelines essential criteria is specified as

Create 9 hectares of open space: deliver a minimum of 9 hectares of public open space within the Rozelle Rail Yards surface site that comprises active and passive recreation uses, hard and soft landscaping, pedestrian and cycle routes and water features…

97. On 13 September 2017, SMC produced a drawing [18] outlining the components of public open space that contribute to the 10 hectares of parkland. The drawing shows the entirety of the Property as useable public space. Areas for motorway operational facilities shown on the drawing do not impact the Property.

    18. Drawing M4M5-IFD-21-4000-RD-19091.

98. On 22 September 2017, Kanofski provided a written briefing to the respective Ministers for WestConnex and Roads, Maritime and Freight, entitled ‘M4-M5 Link Interface with Bays Precinct Masterplan.’ The Briefing stated, amongst others:

Analysis: Roads and Maritime and Urban Growth, in consultation with Sydney Motorway Corporation (SMC), the Department of Premier and Cabinet and the office of the Minister for WestConnex have agreed to a number of principals for a development of the New Rozelle Park and the surrounding areas. These are detailed below. Attachment A outlines how the 10 ha of green space committed to by Government will be achieved.

Key issues

Interface between M4-M5 Rozelle Interchange Project and Urban Growth Bays Precinct Masterplan

Roads and Maritime and Urban Growth in consultation with SMC, the Department of Premier and Cabinet and the office of the Minister for WestConnex have agreed the following.

1.   Roads and Maritime will make relevant arrangements to designate Urban Growth as the entity that will have responsibility for the New Rozelle Park post M4-M5 Rozelle Interchange completion (potential staged handover)…

…

3.   The final design of the New Rozelle Park must include 10 hectares of green space as agreed by Cabinet and outlined in the M4-M5 Environmental Impact Statement. The formal design will be in compliance with the M4-M5 Planning Approval and managed by Roads and Maritime (as Proponent)

…

8.   If the preferred design for the WestConnex M4-M5 Link works does not result in the final motorway and utilities footprint being within the agreed ‘permanent land take area’, Roads and Maritime will work (sic) include a priced option in the final contract prior to execution, that provides for utilities to be relocated outside the development area as part of the works by the Stage 3B contractor (emphasis added).

99. On the same day, the NSW Government called for registrations of interest for the purchase of 51% of SMC.

100. On 31 October 2017, the responsibility for delivering Stage 3B was transferred from SMC to RMS.

101. In February 2018, RMS published a Response to Submissions and Preferred Infrastructure Report in relation to Stage 3. Amongst others, it says:

A4.1.1 Use of remaining project land

Rozelle Rail Yards

Submissions indicated there may be some confusion around the future use of the remaining project land at the Rozelle Rail Yards (being the Rozelle interchange) and how it is consistent with The Bays Precinct Transformation Plan (UrbanGrowth NSW 2015), which is discussed throughout the EIS including in Chapter 3 (Strategic context and project need), Chapter 7 (Consultation), Chapter 14 (Social and economic) and Appendix O (Technical working paper: Landscape and visual impact) of the EIS.

The Bays Precinct Transformation Plan identifies the potential for opportunities provided by the redevelopment of the Rozelle Rail Yards for integration and connection of communities to the north and south through the creation of public open space and improved connections between Lilyfield and the waterfront. The Bays Precinct Transformation Plan also identifies opportunities for the development of the Rozelle Rail Yards for mixed housing and potentially also for employment uses. This has been considered during the development of the concept design of the Rozelle interchange.

As described in section 3.1.12 of the EIS, the project is consistent with The Bays Precinct Transformation Plan vision for the creation of new open space, provision of new pedestrian and cyclist links, connecting communities and the acknowledgment of the rail heritage of the area. However, the project is inconsistent with The Bays Precinct Transformation Plan with respect to the proposed development of the Rozelle Rail Yards for mixed housing and potential employment uses.

The reasons for the project being inconsistent with elements of the vision for the future development of the Rozelle Rail Yards outlined in The Bays Precinct Transformation Plan can be attributed to the nature of the project and the geographical area required for its construction and operation and also the commitment made by the NSW Government (announced in July 2016) that the project would deliver up to 10 hectares of new open space and active transport links for the community at the Rozelle Rail Yards.

Should the project not proceed, the Rozelle Rail Yards would likely be developed in accordance with The Bays Precinct Transformation Plan, including the provision of public spaces, employment uses and mixed housing (emphasis added).

102. It also says:

The delivery mechanism adopted for the M4 East and New M5 projects is different to the approach for the M4-M5 Link. For the M4 East and New M5 projects, a design and construction contractor was appointed early (prior to the EIS being publicly exhibited) and therefore had direct input into the design development, EIS preparation and construction planning for those projects.

103. A design and construction tenderer has yet to be selected. The final design, structure, route and location of the Rozelle Interchange has yet to be determined.

DEALINGS BETWEEN DESANE AND RMS, AND RELATED MATTERS, LEADING UP TO THE PAN

104. Felice (also known as Phil) Montrone OAM and Riccardo (also known as Rick) Montrone are directors of Desane.

105. Both gave evidence and were cross-examined. They are truthful witnesses.

106. As referred to earlier, the Property is in the ‘green space’ announced by the Government on 21 July 2016 and depicted in the artist’s impression.

107. Rick Montrone says that the first time Desane was informed that the Property was located in proximity to WestConnex Stage 3 was on 26 July 2016 when Desane’s planning consultant Elise Crameri of AFP Corporation was sent a document by the Department of Planning, under cover of a letter in connection with Desane’s re-zoning application, showing this. Not surprisingly, Rick Montrone felt a sense of grievance at becoming aware of this important development in this way, after a public announcement.

104. On 27 July 2016, the Montrones and others met with representatives of RMS, including Steven (Steve) Brien who held a position described as Senior Communication and Stakeholder Engagement Lead for the Motorways development branch of RMS.

105. Rick Montrone says that Brien was asked why RMS was interested in the Property and what it would be used for, to which Brien responded:

We can’t give you exact details at this stage. However, the site would be used for a variety of uses including truck access, warehousing, site office or concrete batch plant during construction.

110. Rick Montrone says that the following exchange occurred between Crameri and Brien:

Crameri:    Where will the property lie in relation to the proposed infrastructure? Why is it that the property is actually needed, can you provide us plans or details of the proposed road infrastructure?

Brien:    We cannot provide details on the tunnel network, nor can we tell you at this stage if a tunnel would be going directly underneath the property.

Crameri:    The acquisition needs to be related directly to the intended use of the land otherwise the site should be excluded.

Brien:    We don’t have details of tunnel networks. We are only here to let you know that your property is required for the project.

111. Phil Montrone says he suggested, as an alternative to acquisition, RMS leasing the Property on a short or long term basis during construction and returning it to Desane at the end.

112. Brien gave evidence and was cross-examined. Inconsistently with his position as the person charged with communication with Desane, but consistently with his apparent inability to furnish meaningful responses to the questions asked of him at the meeting, he was vague as a witness. There were some variances between his evidence and that of the Montrones. I prefer their evidence, but nothing material turns on the differences.

113. On 29 July 2016, Phil Montrone wrote to the Hon. Duncan Gay MLC, Minister for Roads, Maritime and Freight. He wrote, amongst others:

We understand that various proposals for the road network are being prepared by RMS and therefore it may be possible, with some minor revisions to the infrastructure plans, to avoid the outright acquisition of our Property. We understand that vast areas of public land are available in the vicinity of our Property and as a result, we request that other options be fully considered by the NSW Government prior to settling on a proposal that requires the acquisition of our Property.

114. On the same day, Phil Montrone also, by email, requested a meeting with the Minister.

115. The Minister never replied. No meeting took place.

116. On 1 August 2016, Crameri, on behalf of Desane, wrote to the Department of Planning to request expedition of the rezoning application.

117. On 11 August 2016, the Department of Planning wrote to Crameri, relevantly:

On 21 July 2016, the Government announced that the WestConnex interchange at Rozelle is to be constructed largely underground and beneath the Rozelle railyards and adjoining land, to enable the surface area to be rehabilitated and new parkland to be created. The 68-72 Lilyfield Road site is located within this area.

…

In light of the Government’s position, at this stage I consider that it is not suitable to progress the proposal via any recommendation to the Minister for Planning to amend the deemed SEPP until you have advice from NSW Roads and Maritime Services. I would be happy to meet with you again if required to discuss this matter further.

118. On 16 August 2016, Beverley Magpayo of RMS emailed Tony Dixon, Parris and Brien, all of RMS, about Desane:

Let me know as well once you’ve spoke to Matt [19] re:

Is there going to be any residual land available?

Construction work details & what permanent structures will sit on their land?

Depending on the answers to my above questions, this will be the justification as to why their proposal of entering into a lease or hand back of residual land, partial acquisition is not possible.

19. Apparently Matt Brook of SMC.

119. Dixon replied, amongst other things:

We have spoken with Matt regarding the Desane Group Property at 64 – 72 Lilyfield Road, Rozelle and can confirm his response that:

•   The property is required for the Project

•   The requirement, while not yet fully detailed, is expected to be for permanent infrastructure

•   There will not be residual land remaining following completion of the Project

•   Noting again that design is not yet finalised, the expectation is that the land will be used to site access ramps as well as a connection between M4M5 Link and the planned HarbourLink project.

120. On 23 August 2016, Gary Chan, RMS Manager Valuations and Acquisitions, wrote to Phil Montrone:

Dear Mr Montrone,

Property acquisition — Introduction and next steps

Roads and Maritime Services recently contacted you about the WestConnex M4—M5 Link which will link the extended M4 Motorway at Haberfield to the New M5 Motorway in St Peters.

As discussed at the meeting, the proposed route for the project has been researched at length and will unfortunately require the acquisition of the property owned by you at 68-72 Lilyfield Road in Rozelle. Specific details of the property proposed for acquisition are shown over the page.

The purpose of this letter is to confirm that, if you wish, you can commence the acquisition process now.

Steve Brien from our Community Engagement team will be your personal contact point throughout the process and can be contacted at any time on [phone] or [email protected].

I have been advised that you have met with Steve Brien from our Community Engagement team and Davendra Chandra from our Valuations and Acquisitions team and that you would now like to receive an offer from Roads and Maritime.

I have attached some additional information to help you engage a solicitor and qualified valuer and outline the next steps. Also enclosed are two copies of the Roads and Maritime Services Land Acquisition Information Guide which explain the acquisition process in greater detail.

If you have any questions at any time, please call Steve on [phone] or

[email protected].

If your solicitor or valuer have any specific questions about the technical aspects of the valuation and acquisition process, they can also contact Davendra Chandra on [phone] or at [email protected].

Yours sincerely,

Gary Chan

Manager Valuations and Acquisitions

121. On 25 August 2016, Desane released information to the ASX concerning RMS’ proposal to acquire the Property.

122. On 24 January 2017, Phil Montrone emailed Parris of RMS seeking a meeting to discuss RMS’ expression of interest in acquiring the Property.

123. On 10 March 2017, RMS offered Desane $21,489,259.00 for the Property.

124. On 10 April 2017, Awindra Prasad, RMS Manager Valuations and Acquisitions, wrote to Desane relevantly:

As you are aware, Roads and Maritime Services has been in contact with the registered proprietor of 68-72 Lilyfield Road, Rozelle NSW 2039 since August 2016 regarding the WestConnex M4-M5 Link Project (Project) which will link the extended M4 Motorway at Haberfield to the new M5 Motorway in St Peters.

The proposed route for the Project has been researched at length and will unfortunately require the acquisition of the property at 68-72 Lilyfield Road, Rozelle over which Desane Group Holdings Ltd had a sublease which commenced on 1 April 2013…

In order to meet the anticipated construction requirements, Roads and Maritime Services now intends to commence negotiations with a view to reaching agreement on the amount of compensation payable to Desane Group Holdings Ltd as soon as practicable.

125. On 13 April 2017, RMS wrote to Phil Montrone.

Dear Mr Montrone

LOCAL GOVERNMENT AREA OF LEICHHARDT. WEST CONNEX STAGE 3 (M4-M5 LINK). ACQUISITION OF THE WHOLE OF LOT 1 IN DEPOSITED PLAN 746891 BEING THE WHOLE OF PROPERTY KNOWN AS 68-72 LILYFIELD ROAD, ROZELLE FROM DESANE PROPERTIES PTY LIMITED

I refer to previous correspondence in this matter and in particular to Roads and Maritime Services' (Roads and Maritime) letter of offer dated 10th March 2017.

Roads and Maritime would prefer to reach agreement with you for the purchase of the subject land by contract and transfer. However, Roads and Maritime's program for construction work for the WestConnex Motorway Stage 3 (M4-M5 Link) at Rozelle requires possession of the subject land as soon as possible.

Accordingly, to ensure that timely possession of the land is achieved for roadwork, if a binding agreement on the terms and conditions of purchase is not reached within 21 days of the date of this letter, it will be recommended to the Minister for Roads, Maritime and Freight that you be given a Proposed Acquisition Notice (PAN) in accordance with the provision of the Land Acquisition (Just Terms Compensation) Act 1991.

If you are given a PAN, and the subject land is not acquired by Roads and Maritime by agreement or contracts have not been exchanged within 90 days of date of the PAN (or a shorter period by agreement or approved by the Minister) the subject land will be compulsorily acquired under the provisions of the aforesaid Act.

If the subject land is compulsorily acquired, Roads and Maritime's offer for purchase will be deemed then to be withdrawn and your interest in it will automatically vest in Roads and Maritime upon the gazettal of the acquisition and will be converted into an entitlement to be paid compensation as determined by the Valuer General.

Our Reference: SF2016/110767

(b) Vacant possession to be given on completion.

(c) The purchase to include all fixed floor coverings, light fittings, blinds/curtains and all prime costs items as inspected.

(d) The vendor is to leave the property clean both internally and externally.

(e) Prior to settlement the vendor to supply RMS with a tax invoice showing an amount of $1,953,569 for the GST component.

The conditions outlined above are subject to exchange of formal contracts, and upon receipt of your acceptance, contract documents will be prepared and forwarded to your solicitor by Roads and Maritime solicitor.

Your early advice of acceptance would be appreciated.

If you find that the offer of compensation is not acceptable, you may submit an independent valuation report in support of your claim.

In the meantime if you have any queries or wish to discuss this matter then please telephone me on [phone]. You can also contact your case manager, Steve Brien at any time on [phone].

Yours sincerely

Davendra Chandra

Senior Acquisitions Officer

Infastructure Property

Roads and Maritime Services

126. On 3 May 2017, the Governor approved the compulsory acquisition of the Property.

127. On 4 May 2017, Desane and its lawyers met RMS and its lawyers. The meeting was tense. Dealings continued but no resolution was reached.

128. On 22 May 2017, Powrie wrote to Phil Montrone:

Dear Mr Montrone

WESTCONNEX MOTORWAY STAGE 3 (M4-M5 LINK) AND PROPOSED ACQUISITION OF 68-72 LILYFIELD ROAD, ROZELLE FROM DESANE PROPERTIES PTY LIMITED (DESANE)

I refer to the above Property and your telephone call to Doug Parris on 17 May 2017. Doug Parris is no longer involved with the WestConnex M4-M5 Link Project (Project). He has passed your queries to me as the Project Director, M4-M5 Link, RMS.

I confirm that your Property is required by Roads and Maritime Services (Roads and Maritime) for the Project. As you may be aware, the route of the Project has been identified and the Property is a key site within the Rozelle Interchange, key features of which were announced by the former Premier in

July 2016.

I understand that Roads and Maritime commenced negotiations to acquire the Property in August 2016, and an offer for the purchase of the Property was made on 10 March 2017. I am advised that your solicitor, Addisons Lawyers and advisors are responding to that offer shortly.

I am further advised that Roads and Maritime gave you notice on 13 April 2017 that the compulsory acquisition process will shortly commence. Notwithstanding this process, Roads and Maritime is committed to continue the negotiation process with Desane in relation to purchasing the Property by

agreement.

The Project's planning approval process commenced in January 2016 with lodgement of the State Significant Infrastructure Application Report. The concept design for the Project was released on 12 May 2017. The Project's Environmental Impact Statement (EIS) is expected to be exhibited in mid-

2017. You are encouraged to participate during the exhibition and provide your comments during the EIS process. The compulsory acquisition process will run in parallel with the Project's planning process, with vacant possession of the Property required by 15 December 2017.

If you have any further queries in relation to the Project generally please do not hesitate to contact Faye Woodward, Personal Manager Acquisitions directly on 0412 436 121, or if you have a question in relation to the valuation of the Property please contact Davendra Chandra, Senior Acquisitions Officer on 8849 2167.

Yours sincerely

Daniel Powrie

Project Director, WestConnex Stage 3

THE PAN

129. On 26 May 2017, RMS served the PAN on Desane under cover of the following letter:

RMS reference: SF2017/066064; RO SF2016/110767

Ms Samantha Webb

T. 8843 3134

Proposed acquisition of Lot 1 Deposited Plan 746891, for the whole of 68-72 Lilyfield Road, Rozelle, from Desane Properties Pty Limited (registered proprietor) and Commonwealth Bank of Australia (mortgagee) for WestConnex Stage 3 M4-M5 Motorway Link

_____________________________________________________________

Dear Sir/Madam

Proposed acquisition notice

I refer to Roads and Maritime Services's previous correspondence regarding the need to acquire the subject land and start the compulsory acquisition process if agreement was not reached.

As agreement has not been reached at this time, I am required to give you notice that this land will be compulsorily acquired in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 after 90 days unless it is purchased by negotiation before then. Further details are provided in the attached proposed acquisition notice. I have also given a copy of this notice to Miles Corporation Pty Ltd.

The Act also requires Roads and Maritime Services to give notice of the proposed acquisition to the owners of other interests in the land. Accordingly, I have given a notice and a claim for compensation form to Commonwealth Bank of Australia (the bank), for its interest in the land by mortgage AH343884.

Roads and Maritime Services would prefer to reach agreement on the terms and conditions for purchase and exchange contracts with you. However, if this is not achieved by 25 August 2017, a notification of compulsory acquisition will be placed in the Government Gazette on or about 1 September 2017.

The Valuer General will then determine the amount of compensation for your interest in the land and any prior offers to purchase the land will be withdrawn. I will write to you again once the Valuer General's determination is made.

To enable prompt payment of compensation, please complete the attached claim for compensation form and return it to the address shown at the bottom of the page by 31 July 2017. To further facilitate this process, you can ask the bank to join in the same claim by inserting the bank's name beside yours on the first page of the claim form and asking the bank to provide its endorsement on pages 3 and 4. I have recommended this to the bank and suggested that you may contact your bank representative directly to discuss.

If you would like to discuss the land acquisition process, please call Samantha Webb, Compulsory Acquisitions Administrator, on 02 8843 3134 or Davendra Chandra, Senior Acquisitions Officer, on 02 8849 2167.

Copies of this letter and attachments have been sent to your solicitor, Addisons.

Yours sincerely

K Durie

Manager, Compulsory Acquisition & Road Dedication

Roads and Maritime Services                 Argyle Street. Parramatta NSW 2150 I PO Box 973, Parramatta CBD NSW 2124 I DX 28555

130. It is appropriate to set out the full text of the PAN:

LAND ACQUISITION (JUST TERMS COMPENSATION) ACT, 1991

FORM 1

SECTION 11

Proposed Acquisition Notice

TO:    Desane Properties Pty Limited 68-72 Lilyfield Road

ROZELLE NSW 2039

1.   Roads and Maritime Services requires the whole of your interest in the land located at Rozelle, for a public purpose. A full description and title details of the land are in the attached schedule.

2.   Roads and Maritime Services intends to compulsorily acquire this land by acquisition notice published in the Government Gazette. That notice will appear in the Government Gazette not less than 90 days after the giving of this notice unless the land is acquired by Roads and Maritime Services prior to that date by negotiated purchase.

3. The acquisition notice will extinguish your interest in the subject land, or part of the land so described, and will convert that interest into a claim for compensation. The acquisition notice will vest the land in Roads and Maritime Services freed of all interests. Section 55 of the Land Acquisition (Just Terms Compensation) Act 1991 states the following matters to be considered in the determination of the compensation due to you namely:

(a)   the market value of the land on the date of its acquisition;

(b)   any special value of the land to the person on the date of its acquisition;

(c)   any loss attributable to severance;

(d)   any loss attributable to disturbance;

(e)   the disadvantage resulting from relocation;

(f)   any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

4.   To assist in the determination of compensation payable you are requested to fill in the attached claim for compensation form and return it to the address shown on the attached claim form not later than 31 July 2017.

5.   If you do not return the notice of claim the Valuer General will value your interest without the benefit of your assistance.

6.   When the land is compulsorily acquired you will receive an offer of compensation generally within 45 days of the date of the publication of the acquisition notice in the Government Gazette.

Page 2

FORM 1

7.   If you accept the offer, payment will generally be made to you within 28 days of your acceptance and receipt by Roads and Maritime Services of completed documents.

8.   If you refuse to accept the offer you have a right to object to the Land and Environment Court.

9.   The issue of this notice does not exclude the possibility of agreement with you for acquisition of the land by negotiated purchase. In this regard you should contact Mr Davendra Chandra, Senior Acquisitions Officer at Roads and Maritime Services' Parramatta office, telephone number [phone].

SCHEDULE

Lot 1 Deposited Plan 746891, being the whole of the land in Certificate of Title 1/746891.

K Durie

Manager, Compulsory Acquisition & Road Dedication Roads and Maritime Services

PO BOX 973

PARRAMATTA CBD NSW 2124

26 May 2017

(RMS Papers: SF2017/066064; RO SF2016/110767)

LAND ACQUISITION (JUST TERMS COMPENSATION ) ACT, 1991

FORM 2

SECTION 39

Claim for Compensation

To:   The Manager, Compulsory Acquisition & Road Dedication

Roads and Maritime Services

PO BOX 973

PARRAMATTA CBD NSW 2124

From: Desane Properties Pty Limited

68-72 Lilyfield Road

ROZELLE NSW 2039

1.   Description of land

Lot 1 Deposited Plan 746891, being the whole of the land in Certificate of Title 1/746891.

2.   What is your interest in this land?

□   Registered Proprietor      □ Mortgagee

□   Lessor            □ Licensee

□   Lessee            □ Other

□   Residential Tenant

3.   If you ticked box "other" provide full details here of your interest in the land.

4.   Are you aware of any other persons or corporations that may have an interest in this land?

Tick appropriate box

□   Yes

□   No

Page 2

FORM2

5.   If you ticked the YES box in 4, provide here full details including name, address, nature and extent of interest.

217. The requirement in the Approved Form and the statement in the PAN that the land is required ‘for a public purpose’ clearly does not suffice. It is not a statement of the purpose. The recipient is left to guess.

218. The bland descriptor ‘a public purpose’ has the additional vice that that term is defined in the Just Terms Act to mean any purpose for which land may by law be acquired by compulsory process under this Act, [33] which covers a very wide field of operation. As Menzies J remarked in Jones at p 488; it could be speculatively implied that this could be any one of a number of purposes.

     33. Just Terms Act, s 4(1).

219. The recipient’s state of knowledge otherwise is immaterial; Deputy Commissioner of Taxation v Gruber (1998) 43 NSWLR 271 at 275. A covering letter, whatever its terms, does not cure the difficulty.

220. To follow the Approved Form is to fail to comply with the requirements of the Just Terms Act.

221. It is not necessary to consider the level of detail which a PAN must provide as to the public purpose. However, it is to be observed that in Jones the acquisition notice stated the public purpose as the ‘Australian Broadcasting Commission at Ripponlea, Victoria.’ This was held not to be a statement of public purpose. Later, in Jones v The Commonwealth of Australia [No 2] (1965) 112 CLR 206, the High Court considered a subsequent acquisition notice Gazetted by the Commonwealth, which described the public purpose as the ‘the provision of broadcasting and television studios and offices for the Australian Broadcasting Commission in accordance with the Broadcasting and Television Act 1942-1962.’ This description was held to be meet the requisite degree of definition. Earlier, in Tinker Tailor Pty Ltd v Commissioner for Main Roads (NSW) (1960) 105 CLR 334 (Tinker Tailor), albeit in a slightly different statutory context, a description ‘for the purposes of the Main Roads Act 1924-1925’ was held to suffice.

222. Desane conceded, presumably on the basis of Tinker Tailor, that a description in a PAN ‘for the purposes of the Roads Act 1993 no 33’ would have sufficed. The concession has no field of operation in this case because the PAN does not extend even to that level of detail and no challenge was made to the efficacy of the 3 May 2017 Governor’s approval.

223. I think that there is detectable tension between Tinker Tailor on the one hand and Jones and Jones (No 2) on other as to the level of specificity required in the description of public purpose. The test applied in Jones was whether there was sufficient formulation to be specifically considered by the Governor-General as a public purpose and approved as such. Where the statute in play (such as the Roads Act here) comprehends a range of possible uses which could be a public purpose, it seems to me that a significant question arises as to whether a description which refers merely to the purposes of the Roads Act is specific enough to be considered as disclosing a public purpose and approved as such. This question is one which may arise in the not too distant future and may ultimately be thought to be appropriate for consideration by the High Court.

224. I conclude that the PAN of no statutory effect for failure to state the public purpose for which the Property is to be acquired.

invalidity for improper purpose

262. Having determined, for reasons explained earlier, that the PAN is invalid, it is not necessary to determine whether, if the PAN were not otherwise invalid, it would be invalid for the reason that it was given for a purpose beyond and extraneous to the power relied on by RMS to give it.

263. However, it is appropriate to deal with these questions because they entail making primary factual findings, including findings by inference; Fuller-Lyons v New South Wales (2015) 89 ALJR 824.

THE PARTIES’ CONTENTIONS

264. Desane puts that RMS’ dominant purpose was to acquire the Property to create open space and green parkland, which purpose was improper because it is not one for acquisition under the Roads Act.

265. Desane puts that as at the date of the PAN the state of uncertainty with respect to any purpose of RMS to use the Property as a construction site was so uncertain as not to qualify for the description of a proposal for acquisition of land, within the meaning of ss 10(1) and 10A of the Just Terms Act, for any of the purposes of the Roads Act. [34]

     34. In its written argument, RMS describes this as Desane’s no purpose case.

266. The two contentions are closely connected because if there was no legally cognisable purpose to use the Property as a construction site, RMS’ only legally cognisable purpose would have been to create open space and green parkland. Also, if there is more than one purpose, the relative strength (or weakness) of each is a relevant factor in assessing the dominant position (or otherwise) of each such purpose. The less defined, or the more flimsy, the purpose, the weaker its influence.

267. As to the absence of any proposal for acquisition for the purposes of the Roads Act, Desane points to the following facts:

• it was in contemplation, and had been from as early as November 2016, that the project might not proceed

• by 3 April 2017, the WHT site location and configuration, which had been the strategic reason and rationale for acquisition referred to in the 24 March 2016 briefing of Jones to Cliche, had changed significantly and the design was to change by moving the WHT ramps further to the West

• there was no planning approval and activities cannot be carried out without it

• there was no final design

• no design and construct tenderer had been selected

• no process was on foot to find such a tenderer

• there would be no final design until one was produced by a design and construct tenderer who was prepared to produce it and construct according to it

• since mid-2016, RMS had articulated differing and sometimes inconsistent purposes for which it has said it intends to use the Property, including permanent infrastructure, major infrastructure construction, truck access, warehousing, site office, concrete batch plant during construction, road corridor, dive cut and cover portal, light vehicle parking, utility diversion, relocation of utility services and water retention

• RMS was unable to tell Desane the precise way the Property was to be used as a construction site, and provided Desane varying and inconsistent information about this.

268. Desane argues that RMS’ improper purpose should be inferred, principally, from:

• the Government’s publicly stated commitment on 21 July 2016 to provide not less than 10 hectares of open space and green parkland in an area which included, and required, the Property

• the contemplation, as evidenced by statements in the Stage 3 EIS and response, that if Stage 3 does not proceed, the Property is to be redeveloped as part of the Bays Precinct Transformation Plan, including provision of public spaces, employment uses and mixed housing

contrasted with

• the lack of any final design for Stage 3B

• the lack of planning approval for Stage 3B

• the uncertainty of the precise use, if any, to which the Property is to be put in connection with construction of Stage 3B

• the lack of certainty that Stage 3B will proceed at all.

269. It was not in issue that an acquisition of land by RMS for the purpose of creating open space and green parkland in its own right or to be redeveloped as part of the Bays Precinct Transformation Plan are not purposes of the Roads Act.

270. RMS argues that there was a proposal for acquisition for the Property to be used as part of a roads construction site.

271. It argues that the Property adjoins or lies in the vicinity of other land which is proposed to be acquired for the purpose of opening, widening or constructing a road or road work as contemplated by s 177(2) of the Roads Act.

272. It argues that although the specific intended use of the Property may have changed over time as the design of Stage 3B evolved, the designs which ‘were eventually settled on by RMS all encompassed the use of the Property.’ It puts that it has throughout been contemplated that there would be a construction site encompassing the Property, which site would facilitate construction of various aspects of road works not limited to any one particular aspect of Stage 3B or the WHT. It argues that the construction site is at least in the vicinity of the Property and, at a minimum, includes the railway land that adjoins the Property.

273. It points to:

• documents including the 18 April 2016 Cabinet Submission, the 7 November 2016 Kanofski briefing, 31 March 2017 briefing, and the 3 May 2017 Minute, which refer to construction purposes, construction sites, site management and roadworks program, which it says ‘tends to negate’ the proposition that the acquisition for parkland was a dominant purpose

• the existence of various designs (including in the Concept Design) which, if implemented, would affect the Property

• the commencement of site management works at the Rozelle Rail Yard at or about the time of the letter to Desane dated 22 March 2017.

274. It argues that:

• the evidence about the use of the Property as parkland establishes that that use is all part and parcel of the road construction;

• the Property is to be used to build the underground interchange and when it is fully constructed there will be parkland above it;

• the proposal is to use the Property (above and below ground) as part of a construction site for five years to allow the construction of the Rozelle Interchange;

• even after the construction period is over, the Property will continue to be used for purposes of the Roads Act. The sub-stratum will be used for tunnels and various parts of the sub-stratum and the surface will be used for roads infrastructure;

• the parkland use of the surface is compatible with any of the design solutions of the underground infrastructure; and

• the 10 hectare park is inextricably bound up with the road component of the Rozelle Interchange.

INITIAL OBSERVATIONS

275. A number of initial observations are appropriate.

276. RMS’ power under s 177(1) of the Roads Act is defined by reference to purposes; Tinker Tailor at p 342.

277. Sections 10(1) and 10A(1) of the Just Terms Act refer to a proposal for acquisition.

278. In Minister for Public Works v Duggan (1951) 83 CLR 424 at 445, the High Court agreed with a remark made by Roper CJ in the Court a quo that if the proposal is so ill defined that the resumption might be effected for purposes which are proper or for purposes which are improper, then the proposal is improper at that time.

279. In Alusta Pty Ltd v Duncan [1973] 2 NSWLR 182 at 184 Street CJ in Eq adopted observations made by Helsham J in D.N.T Properties Pty Ltd v Knox (unreported 15 September 1972) that the word ‘proposal’, in the context of a clause in a sale contract which referred to a proposal for re-alignment, widening or siting of a road by a competent authority, meant an intention which has been given force by adoption of a resolution by some other process which gives the intention some operative effect; see too Taluja v Ardino [2001] NSWSC 566 at [37].

280. At the time it gave the PAN, RMS’ purposes for acquisition had to be sufficiently formulated to be the subject of a proposed acquisition and approval of the Governor and to be specifically considered by the Governor as a public purpose. The purposes must be those of RMS.

281. A statutory power must be used only for the purposes for which it is given. In this case, the power to acquire is for the purposes of the Roads Act. The requirement to give the PAN is imposed by the Just Terms Act. In this case, the power to give a PAN is likewise to be exercised only for the purposes of the Roads Act.

282. If RMS’ purpose in giving the PAN (as part of the process of acquiring the Property) was an ulterior one, there will be an ostensible, but not a real, exercise of the power. The attempted exercise of power will be vitiated even if the ulterior purpose was not the sole purpose of the acquisition. It will be an abuse of RMS’ powers if the ulterior purpose is a substantial purpose in the sense that 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.

283. Whether a power is exercised for an improper purpose is a question of fact; LHRC v Deputy Commissioner of Taxation (No 3) (2015) 326 ALR 77 at 111-112.

284. Evidence is to be assessed according to the ability of a party to bring it; Hampton Court v Crooks (1957) 97 CLR 367 at 371-372. RMS, but not Desane, is fully able to bring direct evidence of RMS’ own purposes, intentions and motivations.

285. RMS did not call any person who, on its behalf, or functioning as its executive organ, had the avowed purpose. It did not call the person who signed the PAN. Instead, it called only witnesses who were either not in a position to, or did not, provide direct evidence on that topic. It may be inferred that it took a forensic decision to do so.

286. No resolution of the RMS Executive disclosing purpose was put in evidence.

287. RMS called Peter Gemell, RMS’ acting Executive Director Motorways at the time of the PAN. Gemell reported to the Chief Executive. He sat on the Executive, which consisted of the Chief Executive, Chief Financial Officer, the Chief of Staff, Office of the Chief Executive, and up to seven Executive Directors. According to Gemell, the Executive sets the strategic direction and oversees the operations of RMS.

288. No person who was a guiding mind of RMS gave evidence that without the presence of the purpose of providing open space and green parkland, the acquisition of the Property would nevertheless proceed. The absence of such evidence does not, of course, establish improper purpose, but an inference is to be drawn that the evidence of such persons would not have assisted RMS; Jones v Dunkel (1959) 101 CLR 298.

289. An improper purpose will not lightly be inferred. Where the subject matter of the decision falls squarely within the terms of the statutory provision, then, in the absence of evidence establishing improper purpose or evidence displacing all possible permitted purposes, it must be accepted, simply because of the absence of such evidence, that the decision was made for a purpose for which such decisions might properly be made; Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 671-672 per Gaudron J.

290. The subject matter of the decision is the acquiring of land. This subject falls squarely within the terms of s 177(1) of the Roads Act, which empowers RMS to acquire land for any of the purposes of the Act. The purposes of the Roads Act include carrying out road work. RMS is the roads authority for all freeways.

FINDINGS

291. I make the following findings.

292. As at 26 May 2017, RMS had, and still has, the contemplation that if the construction of the Rozelle Interchange eventually goes ahead, the Property will be used in some or other yet to be identified way or ways as a construction site in connection with that construction.

293. RMS’ intentions are ill defined. They may never be realised. The Concept Design envisages construction activities consisting of launching the tunnelling machines, stockpiling and removal of extracted material, workforce carparking, offices and amenities, as well as infrastructure required to support the construction of the tunnels such as sedimentation ponds. Given all of the imponderables and uncertainties, these are no more than possibilities. The question is whether there is sufficient definition of the intended use to support the existence of a proposal for acquisition for the purposes of the Roads Act, as at the date of the PAN. If more is required than the general use as a construction site without any specification of particular uses there is insufficient definition. However, I consider that general use as a construction site is sufficient to sustain the existence of a proposal in the present context.

294. In contrast to its somewhat amorphous purpose for acquiring the Property to be used as a construction site, from at least 21 July 2016 RMS has had the unqualified and fixed purpose to acquire the Property to provide 10 hectares of open space and green parkland as publicly committed to by the Government. The PAN was given to effectuate that purpose. That purpose is ulterior to the purpose for which the PAN could properly have been given.

295. I find that absent the purpose to provide the open space and green parkland, the PAN would not have been given and the acquisition would not have proceeded.

REASONING

296. The first significant reference to the acquisition of the Property appears to be in March 2016 when SMC identified it as a strategic land acquisition for WHT.

297. The Cabinet Submission dated 18 April 2016 recommended acquisition on the basis that there was then no feasible scenario for providing connectivity for WHT other than by use of this land. On this footing, the Cabinet approved funding for the acquisition of the Property.

298. By this time, various designs had been bought into existence but feedback was being sought from the public. No WHT final business case had been published.

299. There appears to have been no suggestion at this time that the provision of open space and green parkland, comprehending the Property or at all, was part of RMS’ purpose. To the contrary, designs in existence at this time contemplated the destruction of the Property for tunnel portals.

300. RMS’ acquisition file was opened on 2 June 2016 and the Minister was briefed on 29 June 2016 about the commencement of property acquisitions.

301. The parkland and public open space idea appears to have made its debut in mid-2016. The idea was clearly seen as pivotal, so much so that it warranted a dedicated Government announcement with an artist’s impression on 21 July 2016. The announcement referred to the space as ‘park ready.’

302. It is not in dispute that the green space in the artist’s impression covers the Property.

303. The announcement referred to the area to be made into parkland as an ‘inaccessible eyesore.’

304. I suspect that Desane would have taken issue with this description of the Property. Acquisition to eliminate an inaccessible eyesore would, I think, not be a purpose contemplated by the Roads Act.

305. Manifestly, construction, and its implications, of the Rozelle Interchange is a matter of public importance and sensitivity. So too is the provision of public open space and green parkland, especially in the context of a significant infrastructure project which may be thought to be controversial.

306. On 26 July 2016, the Cabinet approved a tunnel re-alignment and revised Rozelle Interchange that would deliver around 10 hectares in a park ready solution over the top of the road infrastructure at the Western half of the Rozelle site and noted that the WHT Final Business Case would include options for the provision of significant further additional public open space at the Rozelle site.

307. The 7 November 2016 Kanofski briefing to the Minister recognised that property acquisitions would commence before planning documents were placed on public display and before planning approval, which may increase the likelihood of adverse media articles and political representations.

308. The November 2016 review of environmental factors for Site Management Works, made reference to the possibility of the M4-M5 Link project not proceeding.

309. Design of the Rozelle Interchange had not yet even reached concept stage. It was far from certain that the Rozelle Interchange would proceed, and the form it might ultimately take and the footprint it might cover were speculative.

310. Yet, the Government made a public and unequivocal commitment to provide 10 hectares of open space and green parkland, in an area which included the Property.

311. To use the words of the erstwhile Premier of this State, this was ‘a game-changer.’ The game had changed because the provision of public open space had become a driver for the design of the Rozelle Interchange and for the acquisition of the Property.

296. Consistently with this, Kanofski’s briefing to the Ministers on 22 September 2017 states that the final design of the ‘New Rozelle Park must include 10 hectares of green space as agreed by Cabinet and outlined in the M4-M5 Environmental Impact Statement.’ It also states that if ‘the preferred design for the WestConnex M4-M5 Link works does not result in the final motorway and utilities footprint being within the agreed ‘permanent land take area’, Roads and Maritime will work (sic) include a priced option in the final contract prior to execution, that provides for utilities to be relocated outside the development area as part of the works by the Stage 3B contractor.’ Kanofski was not called.

297. Critically, if the Property turned out not to be required as a construction site, it was still going to be available to meet the public commitment.

298. Thus, RMS contemplated that the Property might not be in the final motorway and utilities footprint because of the necessity to use it to provide open space, for which purpose it would nevertheless be acquired.

299. It is not necessary to divine whether the Rozelle Interchange will one day proceed. Despite its complexity and the many imponderables, including finding someone to design and construct it and finding someone to buy the Government’s 51% stake of SMC to fund it, Powrie’s view was that it will.

300. What is significant is that RMS intends to acquire the Property even if the Rozelle Interchange does not go ahead, and thus has a purpose to acquire the land even if the Roads Act is to play no role.

301. Any purpose of RMS under the Roads Act lacks the degree of significance for RMS that without it the acquisition would not proceed.

302. By contrast, the acquisition will nevertheless proceed even if any purpose under the Roads Act becomes incapable of realisation. An acquisition in those circumstances would be to provide open space and green parkland or to develop it under the Bays Precinct Transformation Plan. These are not purposes of the Roads Act.

303. Supportive of the conclusion that the parkland had become a driver is the following evidence given by Jones:

(T 274.43-275.20)

Q.    The first time you provided an underlying design to achieve this pretty picture was five months later, correct?

A.    So I understand the point here. No. We produced - we've had a number of designs, which I'm sure you've seen through here, in terms of the underlying road infrastructure. They all result in a surface treatment. This surface treatment is as applicable to that design at that point in time as it is to the design six months later, as it will be in a year's time as Roads and Maritime Services go through the solution. It's about how you leave a site when you've completed the road

Q.    I don’t mean to be offensive and I'm not aware of any designs before 21 July 2016 which show a design solution to achieve this outcome?

A.    This was the first time we fully articulated the park solution as what would be left on the surface.

Q.   But what I'm trying to get from you is there is no (sic) - are you aware of any drawings that achieve this outcome at the time it was announced?

A.    This is the first time the park solution was demonstrated through.

Q.    The question is a simple one. Are you aware of any design diagrams that achieve this outcome at the time this photo montage was published?

A.    Any of the underlying engineering we produced all the way through this project will be capable of supporting this solution.

HIS HONOUR

Q.    That's not an answer to the question. I direct you to answer it.

A.    There was no specific design for the park until this date.

(T 276.39-277.30)

Q.   So what happened is this, I put to you. Amongst a variety of possibilities of ongoing consideration in respect of designs you produced, your team produced this picture, correct?

A.    Mm-hmm.

Q.    You gave it to RMS, correct?

A.    Yes.

Q.    RMS then released it to the public, correct?

A.    Yes.

Q.    RMS then came to you and said, "Achieve this," correct?

A.    Certainly once you've been through that process of design and release, that became part of our project scope, yes.

Q.    The answer to my question is a simple yes, isn't it, that is, the RMS releases the pretty pictures to the public, then said to you, "Design us something that fits this pretty picture," correct?

A.    So to answer the question as directly as I can, certainly the park became part of our scope of work, what we were required to do.

Q.    I'm sorry, you're obviously a clever man, much more subtle than I, but you agree, don't you, as a simple proposition, the RMS released this document to the public and then came to you and said, "Achieve this outcome," is that right?

A.    Yes, you can characterise it that way.

Q.    Thank you. From that point in time, you understood this client was insistent on the achievement of a very large area of open space in the inner west of Sydney, correct?

A.    Yes, absolutely.

Q.    You understood that this client had an aspiration to achieve an outcome of this project whereby the inner west of Sydney would be blessed with at least 10 hectares of open space, correct?

A.    That's a result of the project.

Q.    I put it to you RMS didn't care whether it was the result of the project or not.

OBJECTION (CLARKE). QUESTION REJECTED

PRITCHARD: Fair enough, as long as I've put it to someone on his side.

320. The Montrones met Brien and other RMS officers on 27 July 2016. Remarkably (or perhaps unremarkably given the state of design or lack of design of the project), Brien was unable to provide any meaningful information as to how and why the project would impact the Property. At this point, Phil Montrone suggested a lease.

321. Much later, on 3 July 2017, Kanofski briefed the respective Ministers for Westconnex and Roads, Maritime and Freight in connection with this possibility, rejecting it. His briefing was that the M4-M5 Link infrastructure would occupy most of the sub-surface of land, albeit that landscaping would be provided to mitigate environmental impacts. Somewhat contradictorily, he went on to say that the final infrastructure would need to be determined by the successful design and construct tenderer. Desane did not have the opportunity to cross-examine Kanofski.

322. At this time, the Community Feedback Report stated that suggestions would be considered as part of the design process.

323. Attachment A to the 31 March 2017 briefing identifies the Property as required for WHTBL enabling works.

324. Unsurprisingly, or perhaps inevitably, shortly thereafter, the necessity (or desirability) of moving the permanent and temporary footprints of WHT emerged. After all, the presence of tunnel stubs on the Property would not – to say the least – have sat easily with the provision of open space.

325. A Rozelle Interchange reference design, at this time, showed the surface of the Property as being impacted to the extent of a sliver identified as a utilities corridor (this was also the extent of the direct impact in the AECOM designs of 13 April 2017). A proposed WHT site plan also produced did not indicate impact on the Property in any way.

326. Also supportive of the conclusion that the parkland provision had become a driver for the acquisition of the Property are the email exchanges amongst Jones, Kennedy and Powrie in June 2017, in the context of Desane’s request to seek an alternative solution to full scale acquisition, which reflect the fact that without the Property there would be difficulty in meeting the 10 hectare commitment. [35]

     35. See paras 132-134 supra.

327. At the time of the Concept Design, feedback was still being sought from the community and other stakeholders.

328. This fluidity, and the fact that no tunnel portals or significant surface infrastructure on the Property was in the Concept Design, does not sit easily with any of:

• Dixon’s statement to Magpayo in his email on 16 August 2016 that the Property was expected to be needed for permanent infrastructure; [36]

  36. See para 119 supra.

• Chan’s unqualified statement in his letter to Phil Montrone on 23 August 2016 that the proposed route for the project has been researched at length and will unfortunately require the acquisition of the Property owned by you at 68-72 Lilyfield Road in Rozelle; [37]

  37. See para 120 supra.

• the statement by Prasad in his letter to Desane dated 10 April 2017 that the proposed route for the Project has been researched at length and will unfortunately require the acquisition of the Property at 68-72 Lilyfield Road, Rozelle over which Desane Group Holdings Ltd had a sublease which commenced on 1 April 2013; [38]

• the statement by Chandra in his letter to Phil Montrone dated 13 April 2017 that the program for construction work for the WestConnex Motorway Stage 3 (M4-M5 Link) at Rozelle requires possession of the subject land as soon as possible; [39]

• Powrie’s statement in his letter to Phil Montrone dated 22 May 2017 that the route of the Project has been identified and the Property is a key site within the Rozelle Interchange, key features of which were announced by the former Premier in July 2016; [40]

• Blizzard’s arguably sinister email of 1 June 2017 to Magpayo, in the context of light vehicle parking being shown on the Property, that there be an update or notes added showing that there is a cut and cover tunnel construction and utility works occurring in this area; [41] and

• statements attributed by Rick Montrone to Jones said to have been made on 14 June 2017, including that the Property is required as a dive, cut and cover tunnel portal. [42]

  38. See para 124 supra.

  39. See para 125 supra.

  40. See para 128 supra.

  41. See para 131 supra.

  42. See para 135 supra.

329. Kanofski’s statement in the 3 July 2017 briefing paper that, due to significant engineering issues, it was not expected that there would be any residual land available post construction sits uneasily with the public commitment to provide the very same land as open space and green parkland. But, as has been mentioned before, Kanofski did not give evidence.

330. The circumstances as at the date of the PAN, 26 May 2017, were that:

• from as early as November 2016, and at all times thereafter, it was in the contemplation of RMS that the project might not proceed despite its optimism that it would

• on 21 July 2016, the Government made a game-changing public commitment to provide not less than 10 hectares of open space and green parkland, including the Property

• RMS intended to meet this commitment. Its subsequent conduct makes this clear. Amongst others, it agreed with UrbanGrowth and SMC that the final design, which would be managed by it as Proponent, must include 10 hectares of green space

• by 3 April 2017, RMS knew that the WHT site location and configuration had changed significantly and that the design was to change by moving the WHT ramps further to the West. It knew that the original strategic basis for the acquisition of the Property, being WHT tunnel portals, had ceased to exist

• as at 12 May 2017, RMS knew that the Government had proposed sale of part of SMC to help fund the final stage

• there was, to RMS’ knowledge, no planning approval, no final design, no design and construct tenderer and no process on foot to find such a tenderer

• RMS was unable to state for what precise purposes the Property was to be used as a construction site, and provided varying and inconsistent information to Desane about this

• since mid-2016, RMS had articulated differing and sometimes inconsistent purposes for which it has said it intends to use the Property, including permanent infrastructure, major infrastructure construction, truck access, warehousing, site office, concrete batch plant during construction, road corridor, dive cut and cover portal, light vehicle parking, utility diversion, relocation of utility services and water retention.

331. I consider that the inference is properly to be drawn that RMS’ purpose in acquiring the Property, and without which it would not have moved to do so, was (and remains) the provision of open space and green parkland, and that this was its dominant purpose on 26 May 2017, and it remains so.

332. After the PAN, and supportive of this inference:

• on 19 June 2017, the Government published a Notice seeking registrations of interest from tenderers for the design and construction of the Rozelle Interchange

• on 3 July 2017, Kanofski acknowledged that the final infrastructure would need to be determined by the successful design and construct tenderer

• there was ongoing public consultation as to design

• numerous plans have been bought into existence, which do not indicate that the Property will necessarily be effected

• the EIS and response to it reveal RMS’ contemplation that the Project may not proceed, in which event the Rozelle Rail Yards will be developed in accordance with the Bays Precinct Transformation Plan

• Kanofski briefed the Ministers on 22 September 2017 and recorded that the final design of the ‘New Rozelle Park’ must include 10 hectares of green space and that the preferred design may not result in the final motorway and utilities footprint being within the agreed permanent land take area, but the land would still be acquired

• RMS was unable to provide Desane with any meaningful detail on why and how the Property was specifically needed [43]

• the Government sale of part of SMC has apparently not yet happened.

  43. In the context of Phil Montrone’s suggestion that other options be fully considered and seeking to justify rejection of Desane’s lease proposal, on 16 August 2016 Magpayo asked Dixon, Parris and Brien whether there was going to be any residual land available and what construction, work details and permanent structures would sit on the Property. Dixon replied that the Property was required, while not yet fully detailed, for expected permanent infrastructure. Clearly, this was no longer the case at the time of the PAN.

333. RMS’ contemplation that the Property will be used as a construction site is connected, as things stand, with its purpose to provide open space and green parkland. But the provision of open space is not inextricably bound with the road component as RMS would suggest. If the Rozelle Interchange goes ahead, the Property might well first be used as a construction site in some way and then converted into parkland. But if the Rozelle Interchange does not go ahead, RMS will acquire the Property for the Bays Precinct Transformation Plan anyway.

334. Finally, what appears to be the most developed plan at the time of the PAN shows only a use of a sliver of the Property for a utilities corridor. An easement would no doubt have sufficed to achieve this requirement absent the parkland commitment. The same can be said of any works deep beneath the Property. In my view, it is improbable that RMS would have sought to acquire the entirety of the Property (which it currently values at over $20 million) where only a sliver of it would be used, but for its open space and green parkland purpose. RMS has throughout known that Desane wished to negotiate a solution which obviated the necessity for the permanent taking of the whole of the Property.

335. In a case of alleged improper purpose, which is not lightly to be inferred, the absence of any evidence from any relevant guiding mind of RMS as to its purposes provides a layer of comfort that my conclusion, which is adverse to RMS’ interest, is justified.

336. RMS’ contention that the PAN is valid because the Property adjoins or lies in the vicinity of other land proposed to be acquired is unsustainable. First, RMS specifically pleads in its Commercial List Response [44] that its purpose in acquiring the Property is for the purpose of constructing Stage 3 of the WestConnex project and that this is an acquisition for the purposes of the Roads Act. It does not plead that the acquisition of the Property is because it is within the vicinity of other land proposed to be acquired. Second, RMS did not precisely identify the other land proposed to be acquired for the purpose of opening, widening or constructing a road or road work, envisaged in s 177(2)(b) (it could not be the Rozelle Rail Yards because that land had been acquired beforehand). Third, there is no reference in any of the evidentiary material which refers to or discloses any such purpose. Finally, the power given by s 177(2)(b), whether it is part of the power given by s 177(1) or in addition to it, can also only be exercised for purposes of the Roads Act. I have found that RMS was motivated by improper purpose.

     44. See para 68 (e) and (f) of the Second Defendant’s Response to Amended Commercial List Statement.

337. All of the above considerations drive to the conclusion that the PAN would be invalid as having been given for an improper purpose.

MISLEADING OR DECEPTIVE CONDUCT

338. Ultimately, this count, although not formally abandoned, was very faintly argued.

339. Given that the PAN is invalid, relief under the Australian Consumer Law, even if misleading or deceptive conduct were to have been made out, would be of no utility.

340. If the PAN were otherwise valid, the nature and substance of the complaints of misleading or deceptive conduct, even if they were made out, are not such as to warrant any declaratory relief under the Australian Consumer Law.

CONCLUSION

341. The proposed acquisition notice given by the second defendant to the plaintiff on 26 May 2017 is of no statutory effect, and the Court will so declare.

342. The parties are to bring in short minutes reflecting this outcome and finalising the proceedings against the first and third defendants.

343. I will hear the parties on costs, should this be necessary, and on any other issues that need to be resolved.

344. The exhibits are to be returned.

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Schedule (1.44 MB, pdf)

Endnotes

Amendments

01 May 2018 - para 333 - Insert word "go" into last sentence

02 May 2018 - Cover Sheet - Equity Commercial List

Decision last updated: 02 May 2018