Sydney Metro v G&J Drivas Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5
Hearing dates: 16 November 2023
Date of orders: 1 February 2024
Decision date: 01 February 2024
Before: Payne JA at [1];
Kirk JA at [2];
Griffiths AJA at [125]
Decision:

(1) Appeal allowed.

(2) Cross-appeal dismissed.

(3) The orders made by the Land and Environment Court on 29 May 2023 are set aside.

(4) The matter is remitted to the Land and Environment Court for compensation to be assessed according to law.

(5) The respondents/cross-appellants are to pay the costs of the appellant/cross-respondent on the appeal and cross-appeal.

Catchwords:

COMPULSORY ACQUISITION — Compulsory acquisition of land — Compensation — Construction of s 56(1)(a) of Land Acquisition (Just Terms Compensation) Act 1991 (NSW) — Determination of market value — Decrease in land value claimed to be caused by public purpose — Statutory disregard — Owners advised of acquisition 17 months prior to acquisition and slowed then stopped development work — Issue of causation to be understood in statutory context — Strain on causal attribution where choices made by owners — Causal issue is re effects of public purpose not of acquisition — Potential for windfall to owners — Effects on value caused only by choices by owners because of possibility of the land being acquired not within s 56(1)(a)

COMPULSORY ACQUISITION — Compensation — Disturbance — Construction of s 59(1)(f) of Land Acquisition (Just Terms Compensation) Act 1991 (NSW) — Stamp duty and mortgage costs only claimable as disturbance under ss 59(1)(d) and (e)

Legislation Cited:

Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 3-4, 10, 13-14, 37, 54-56, 59, 61

Land Acquisition and Compensation Act 1986 (Vic) s 43(1)(a)

Land and Environment Court Act 1979 (NSW) s 57(1)

Local Government Act 1993 (NSW)

Public Works Act 1912 (NSW) s 124

Transport Administration Act 1988 (NSW)

Cases Cited:

All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289

Allianz Australia v GSF Australia (2005) 221 CLR 568; [2005] HCA 26

Blacktown City Council v Fitzpatrick [2001] NSWCA 259

Blacktown City Council v Lasseter [1996] NSWCA 51

Bob Brown Foundation Inc v Commonwealth (2021) 283 FCR 225; [2021] FCAFC 5

Coleman v Power (2004) 220 CLR 1; [2004] HCA 39

Comcare v Martin (2016) 258 CLR 467; [2016] HCA 43

Council of the City of Ryde v Azizi [2019] NSWSC 1605

CSR Limited v Eddy (2005) 226 CLR 1; [2005] HCA 64

Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) (2000) 108 LGERA 417; [2000] NSWLEC 139

Griffith City Council v Polegato (1990) 20 NSWLR 696

Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196; [1978] HCA 28

Kostas v HIA Insurance Services Pty Limited (2010) 241 CLR 390; [2010] HCA 32

Leichhardt Council v Roads & Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353

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Details
Case
[2024] NSWCA 5
Decision Date

CaseChat Overview and Summary

Sydney Metro appealed to the Court of Appeal of New South Wales against a decision of the Land and Environment Court concerning compensation payable to G&J Drivas Pty Ltd for the compulsory acquisition of land. The dispute centred on the assessment of compensation, specifically the market value of the acquired land and claims for disturbance.

The Court of Appeal was required to determine two primary legal issues. First, it had to consider the proper construction and application of section 56(1)(a) of the *Land Acquisition (Just Terms Compensation) Act 1991* (NSW), which mandates a statutory disregard for decreases in land value caused by the proposed public purpose for which the land is being acquired. This involved determining whether the decrease in value claimed by the landowners, which they attributed to their decision to slow and then stop development work after being advised of the acquisition 17 months prior, fell within the statutory disregard. Second, the Court had to consider the scope of disturbance compensation under section 59(1)(f) of the Act, specifically whether stamp duty and mortgage costs were recoverable under that provision.

On the first issue, the Court of Appeal reasoned that section 56(1)(a) concerns the effects of the public purpose itself on the land's value, not the effects of the landowner's choices made in response to the prospect of acquisition. It held that where a landowner makes choices that affect the value of their land due to the possibility of acquisition, the resulting decrease in value is not a decrease caused by the public purpose within the meaning of the statutory disregard. The Court found that the Land and Environment Court had erred in its application of section 56(1)(a) by failing to properly distinguish between the effects of the public purpose and the effects of the owners' voluntary decisions. Regarding the second issue, the Court determined that stamp duty and mortgage costs were not claimable as disturbance under section 59(1)(f), but rather under sections 59(1)(d) and (e) respectively.

Consequently, the Court of Appeal allowed Sydney Metro's appeal, dismissed G&J Drivas Pty Ltd's cross-appeal, and set aside the orders of the Land and Environment Court. The matter was remitted to the Land and Environment Court for compensation to be assessed according to law, and G&J Drivas Pty Ltd was ordered to pay Sydney Metro's costs of the appeal and cross-appeal.

Orders

Orders of the court

(1) Appeal allowed.

(2) Cross-appeal dismissed.

(3) The orders made by the Land and Environment Court on 29 May 2023 are set aside.

(4) The matter is remitted to the Land and Environment Court for compensation to be assessed according to law.

(5) The respondents/cross-appellants are to pay the costs of the appellant/cross-respondent on the appeal and cross-appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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