Transport for NSW v Eureka Operations Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56
Hearing dates: 3 December 2021
Decision date: 12 April 2022
Before: Leeming JA at [1];
White JA at [16];
Preston CJ of LEC at [57].
Decision:

1. Appeal dismissed with costs.

2. Cross-appeal allowed with costs.

3. Remit proceedings to the Land and Environment Court to be redetermined having regard to the extension of the term of the respondent’s leasehold interest to 2 February 2029 subject to the possibility of earlier termination as explained in the reasons of Preston CJ of LEC.

Catchwords:

LAND VALUATION — compulsory acquisition – partial acquisition of land – lease of land – lease to operate service station and convenience store business – compensation payable – market value of acquired land – decrease in value of residue land - before and after approach to determine compensation – appropriate valuation method – assessment of diminution in cash flow of business– whether valuation method available – whether valuation methodology accepted by primary judge raises question of law – agreement for term of lease to be extended – equitable term of lease – compensation to be determined having regard to equitable term of lease

Legislation Cited:

Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 37, 55, 56

Land and Environment Court Act 1979 (NSW) ss 25, 5.

Uniform Civil Procedure Rules 2005 (NSW) rr 51.8, 51.17, 51.41.

Cases Cited:

Almona Pty Ltd v Roads and Traffic Authority (NSW) (2008) 160 LGERA 375; [2008] NSWLEC 112

Barkat v Roads and Maritime Services [2019] NSWCA 240

Brock v Roads and Maritime Services (2012) 191 LGERA 267; [2012] NSWCA 404

Chan v Cresdon Pty Ltd (1989) 168 CLR 242; [1989] HCA 63

Dockrill v Cavanagh (1944) SR (NSW) 78

Gosford Shire Council v Green (1980) 48 LGRA 201

Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378

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

Lenz Nominees Pty Ltd v Commissioner of Main Roads (2012) 186 LGERA 58; [2012] WASC 6

Maloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252

Marshall v Director-General, Department of Transport (2001) 205 CLR 603; [2001] HCA 37

Merlino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251

Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2006] NSWCA 314

Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; [1985] HCA 14

Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41

Roads and Traffic Authority (NSW) v Collex Pty Ltd (2009) 165 LGERA 419; [2009] NSWCA 101

Roads and Traffic Authority (NSW) v Damjanovic (2006) 146 LGERA 403; [2006] NSWCA 166

Roads and Traffic Authority (NSW) v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236

Roads and Traffic Authority (NSW)…

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Details
Case
[2022] NSWCA 56
Decision Date

CaseChat Overview and Summary

Transport for NSW (the acquiring authority) appealed and Eureka Operations Pty Ltd (the lessee) cross-appealed from a decision of the Land and Environment Court concerning compensation payable for the compulsory acquisition of part of a leased property. The property was used by Eureka Operations for a service station and convenience store business. The dispute centred on the valuation of the acquired land and the diminution in value of the remaining land (the residue), and specifically, the appropriate methodology for assessing compensation.

The primary legal issues before the Court of Appeal were whether the Land and Environment Court had erred in its valuation methodology, particularly concerning the assessment of the diminution in cash flow of the business, and whether the court had correctly considered an equitable term of the lease for its extension. The appeal also raised a question of law regarding the valuation method adopted by the primary judge.

The Court of Appeal, in its reasoning, considered the "before and after" approach to valuation, which involves assessing the value of the land before the acquisition and then its value after the acquisition, including the value of the residue. The court determined that the primary judge's valuation methodology, which included an assessment of the diminution in cash flow of the business, was permissible. However, the court found that the primary judge had erred by not adequately accounting for an equitable term of the lease, which provided for an extension of the lease until 2 February 2029, subject to certain termination provisions.

Consequently, the Court of Appeal dismissed Transport for NSW's appeal but allowed Eureka Operations' cross-appeal. The proceedings were remitted to the Land and Environment Court for redetermination of the compensation, with specific regard to the extended lease term.

Orders

Orders of the court

1. Appeal dismissed with costs.

2. Cross-appeal allowed with costs.

3. Remit proceedings to the Land and Environment Court to be redetermined having regard to the extension of the term of the respondent’s leasehold interest to 2 February 2029 subject to the possibility of earlier termination as explained in the reasons of Preston CJ of LEC.

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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