Sydney Metro v G&J Drivas Pty Ltd

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.