Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWCA 292 | Case summary

Court of Appeal (NSW)|2024-11-27|Before: Gleeson JA, Adamson JA, Preston CJ, Duggan J

Solicitors: Colin Biggers & Paisley (Appellant) Clayton Utz (Respondent) File Number(s): 2024/173655 Decision under appeal Court or tribunal: Land and Environment Court Jurisdiction: Class 3 Citation: Goldmate Property Luddenham No. 1 Pty Ltd v Transport for NSW [2024] NSWLEC 39 Date of Decision: 19 April 2024 Before: Duggan J File Number(s): 2022/161771

HEADNOTE [This headnote is not to be read as part of the judgment] On 30 June 2021, Transport for NSW (the respondent) compulsorily acquired part of a property owned by Goldmate Property Luddenham No 1 Pty Ltd (the appellant) located near the Western Sydney Airport site at Badgerys Creek. The property was acquired pursuant to the respondent's power under s 177 of the Roads Act 1993 (NSW), which enables it to acquire property for the purposes of that Act. The acquired property was to be used for the M12 motorway, but was part of a broader State Government infrastructure plan in response to the announcement of the airport. Proceedings were commenced in the Land and Environment Court to determine the amount of compensation payable to the appellant for the acquisition pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Act), which Duggan J (the primary judge) determined to be $9,761,480, including $9,523,500 for market value under s 55(a) of the Act, and $100,000 for injurious affection to the portion of the property retained by the appellant under s 55(f). Relevantly to the assessment of compensation, the "market value" of an acquired property is defined in s 56(1)(a) of the Act as "the amount that would have been paid for the land … disregarding … any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired" (emphasis added). The primary judge identified the respondent's public purpose in acquiring the property as being in furtherance of the broader infrastructure plan, rather than being confined to the construction, operation and maintenance of the M12. Accordingly, the increase in value of the property which resulted from it being rezoned as part of the broader plan was required to be disregarded from the market value assessment. The appellant appealed from the primary judge's assessment of compensation on the ground that her Honour misinterpreted s 56(1)(a). It submitted that the public purpose in that section was limited by the scope of the respondent's power to acquire land under the Roads Act and could only be a purpose for which the Roads Act provided. The Court held (Adamson JA, Gleeson JA agreeing and Preston CJ of LEC agreeing with additional reasons), allowing the appeal: (1) An acquiring authority's public purpose in acquiring certain land (as the term is used in s 56(1)(a)) must fall within the public purpose or purposes for which the acquiring authority has power to acquire land, as contained in the legislation which empowers the acquiring authority to do so: at [71] (Adamson JA). Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5, applied. (2) In this case, the only identified relevant purpose under the Roads Act for which the respondent was authorised to acquire the property was to carry out road work for a freeway. The respondent was not empowered by the Roads Act to acquire land for purposes which included wider objects, such as to promote economic development in the area of the Western Sydney Airport. The primary judge's finding that the public purpose in s 56(1)(a) included the broader purpose for which the property was acquired was therefore legally erroneous: at [73]-[75], [77] (Adamson JA). Walker Corporation, distinguished. R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12; Roads and Traffic Authority v Perry (2001) 52 NSWLR 222; [2001] NSWCA 251; Barkat v Roads and Maritime Services [2019] NSWCA 240; Sydney Metro v G & J Drivas Pty Ltd (2024) 113 NSWLR 429; [2024] NSWCA 5; Coffs Harbour City Council v Noubia Pty Ltd (2024) 258 LGERA 351; [2024] NSWCA 19, considered. (3) Textual and contextual considerations, both of which emphasise the particular power of an acquiring authority to acquire land, support this construction of s 56(1)(a): at [82], [84]-[86], [88]-[93] (Preston CJ of LEC).

JUDGMENT

GLEESON JA: I agree with the orders proposed by Adamson JA for the reasons her Honour gives. I also agree with the additional reasons of Preston CJ of LEC.
ADAMSON JA: Goldmate Property Luddenham No 1 Pty Ltd (the appellant) was the registered proprietor of property located about 4km north of the Western Sydney Airport site at Badgerys Creek. On 30 June 2021, Transport for NSW (the respondent) compulsorily acquired part of the property. The appellant claimed compensation pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Act). As no agreement as to the amount of compensation could be reached, the appellant commenced proceedings in the Land and Environment Court (the Court below) in its Class 3 jurisdiction: s 19(e) of the Land and Environment Court Act 1979 (NSW).
On 19 April 2024, Duggan J (the primary judge) determined the amount of compensation to which the appellant is entitled to be $9,761,480, which comprised $9,523,500 for the market value of the acquired portion of the property (the Land) under s 55(a) of the Act; $100,000 for injurious affection to the portion of the property retained by the appellant (the Residue Land) at the date of acquisition under s 55(f) of the Act; and $137,979.78 for disturbance under s 59(1)(a) and (b) of the Act.
As the proceedings were Class 3 proceedings, an appeal to this Court lies only on a question of law: s 57(1) of the Land and Environment Court Act.
The appellant appeals on two grounds which are, in substance, as follows: 1. the primary judge erred in her Honour's interpretation of s 56(1)(a) of the Act in finding that the public purpose for which the Land was acquired for the purposes of that section could be other than the purpose identified in the notice of acquisition, which nominated the Roads Act 1993 (NSW) as the source of the respondent's power to acquire the Land; and 2. the primary judge erred by asking the wrong legal question when assessing the injurious affection to the Residue Land.

The primary facts

On 5 November 2020, the appellant became the registered proprietor of Lot 26 in a Deposited Plan in Luddenham, for which it paid $33,056,500. Lot 26 was a battle-axe block and the only road access was through the "handle" part. It was, and remained until the respondent acquired it, vacant land. Before 1 October 2020, it was zoned "RU2 Rural Landscape" under the provisions of the Penrith Local Environmental Plan 2010 (Jt [12]). On that day, most of Lot 26 was re-zoned Enterprise (ENT) under the provisions of State Environmental Planning Policy (Western Sydney Aerotropolis) 2020 (SEPP Aerotropolis), other than a small part in the northwestern corner that was zoned Environment and Recreation.
On 19 March 2021, the respondent issued a Proposed Acquisition Notice (the PAN) to the appellant which stated that the Land was to be acquired "for the purposes of the Roads Act … in connection with the construction, operation and maintenance of the M12 Motorway". The PAN enclosed a copy of the proposed Deposited Plan which would subdivide Lot 26 and neighbouring land into various lots of which Lot 2 (which comprised the Residue Land) would be retained by the appellant; Lot 7 (the Land) would be acquired from the appellant; and Lot 12 (neighbouring land) would be acquired from its owner who was not the appellant (Jt [6]).
On 16 April 2021, the new Deposited Plan was registered.
On 30 June 2021 (the acquisition date), the respondent acquired the Land by publication of an acquisition notice in the Government Gazette. The effect of the acquisition was to cause the Residue Land to become landlocked. However, the respondent indicated its intention to construct a road which would provide access to it (Jt [9]).
The SEPP Aerotropolis identified part of Lot 26 as "Outer Sydney Orbital (Under Consideration)" (OSO). Although the OSO had been under consideration for some time, its potential location on Lot 26 had not been identified until the SEPP Aerotropolis (Jt [13]). This is relevant to ground 2 of appeal.

The Act

A person whose land has been compulsorily acquired is entitled to "such amount as, having regard to all relevant matters under [Part 3 of the Act], will justly compensate the person for the acquisition of the land": s 54(1) of the Act.
Section 3(1) relevantly provides that the objects of the Act are: "(a) to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and (b) to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale …"
Section 4 of the Act, which is relevant to s 56(1)(a) (see below), defines "public purpose" as meaning "any purpose for which land may by law be acquired by compulsory process under this Act."
Section 8 provides: "8 Act to prevail over other Acts relating to acquisition of land This Act prevails, to the extent of any inconsistency, over the provisions of any other Act relating to the acquisition of land by an authority of the State."
Section 15 sets out the particulars required to be included in a proposed acquisition notice, relevantly requiring the notice to "specify the authority of the State proposing to acquire the land": s 15(b). As this Court noted in Coffs Harbour City Council v Noubia Pty Ltd (2024) 258 LGERA 351; [2024] NSWCA 19 (Noubia) at [61] (Payne JA), s 42 of the Public Works Act 1912 (NSW), the predecessor to the Act, required the public purpose of the acquiring authority to be stated. The Act contains no such requirement.
Section 19(1) provides for the mechanism of acquisition by an authority of the State that is authorised to acquire land by compulsory process, stating that the authority may declare "by notice published in the Gazette, that any land described in the notice is acquired by compulsory process." Section 20(1)(a) states that the effect of publication of an acquisition notice in the Gazette is that the land described in the notice is "vested in the authority of the State acquiring the land".
Section 37 sets out a landowner's right to compensation if their land is compulsorily acquired as follows: "An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part [Part 3] by the authority of the State which acquired the land."
Section 55 of the Act provides that: "[i]n determining the amount of compensation to which a person is entitled, regard must be had to the following matters only … (a) the market value of the land on the date of its acquisition, … (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."
"Market value" is defined in s 56(1) as meaning: "the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid) - (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired … …"

The Roads Act

Section 7(1) of the Roads Act provides that the respondent is the roads authority for all freeways. Section 7(5) provides that "[a] roads authority has such functions as are conferred on it by or under this or any other Act or law."
Section 48 provides that "[t]he Minister may, by order published in the Gazette, declare to be a freeway any main road that is designed to facilitate the movement of motor traffic" and that, on publication, the respondent becomes the owner of the land on which the freeway is situated. Section 53 provides that, in certain specified circumstances, the Minister may declare any public road or other public work to be a State work.
Section 71 of the Roads Act provides that "[a] roads authority may carry out road work on any public road for which it is the roads authority and on any other land under its control." The Dictionary in the Roads Act defines "road work" as follows: "road work includes any kind of work, building or structure (such as a roadway, footway, bridge, tunnel, road-ferry, rest area, transitway station or service centre or rail infrastructure) that is constructed, installed or relocated on or in the vicinity of a road for the purpose of facilitating the use of the road as a road, the regulation of traffic on the road or the carriage of utility services across the road, but does not include a traffic control facility, and carry out road work includes carry out any activity in connection with the construction, erection, installation, maintenance, repair, removal or replacement of a road work."
Section 177(1) of the Roads Act confers power on public authorities, including the respondent, to acquire land as follows: "(1) The Minister, TfNSW or a council may acquire land for any of the purposes of this Act. (2) Without limiting subsection (1), the Minister, TfNSW or a council may acquire - (a) land that is to be made available for any public purpose for which it is reserved or zoned under an environmental planning instrument, or (b) land that forms part of, or adjoins or lies in the vicinity of, other land proposed to be acquired for the purpose of opening, widening or constructing a road or road work. (3) Without limiting subsection (1), TfNSW may also acquire land that it proposes to declare to be TfNSW development land." (Emphasis added.)

The identification of the public purpose of the acquisition

The primary judge found that the NSW Government's "public purpose" in acquiring the Land was as follows (Jt [42]): "Having regard to the evidence, I find that, at all material times, the purpose of the NSW Government was to carry out the broad intention of the WSIP [Western Sydney Infrastructure Plan] which included traffic and transport infrastructure together with the rezoning of certain areas as part of a coordinated State Government response to the announcement of the WSA [Western Sydney Airport] in 2014 and continuing. I also find for the same reasons that the actions of TfNSW in acquiring the land for the purposes of the M12 was in the furtherance of that purpose. The goal for the acquisition of the M12 was not merely to provide vehicular movements to and from the WSA but also to make provision for transport related to the intended land use changes which would facilitate commercial, employment and industrial uses around the WSA to leverage the economic opportunities provided by the WSA. Each element had to work in concert, or the goal (the purpose of such works) would not be achieved. To paraphrase the language in Perry at [100], the actions were a continuous and consistent action to give effect to such purpose."
The primary judge rejected the appellant's submissions that the public purpose ought be confined to the construction, operation and maintenance of the M12 and said: "48 I understand these submissions to be contending that it would not be reasonable to attribute a purpose, other than the narrow purpose of the construction, operation and maintenance of the M12, to the determination of public purpose in this case, as to do so would permit the consideration of an indirect rather than direct consequence. I have accepted that, as a matter of principle, the consequence to which s 56(1)(a) of the Just Terms Act is directed are direct and not indirect consequences. In applying the constraints of that principle to the facts of this case, I have found that the M12 and the acquisition of land to facilitate the M12 was broader than merely a road to facilitate vehicular movements. The broader purpose included coordinated and combined actions which included the rezoning of the land for commercial, industrial and employment purposes to facilitate such broader purpose. As a natural consequence, the public purpose did include the rezoning of land around WSA and therefore any such rezoning was a direct consequence of the public purpose. 49 In considering the scope or range of the public purpose - recognising that it is to be determined at the appropriate level of generality having regard to the principles of reasonableness and fairness - I accept the Respondent's characterisation that a broader public purpose for which the land was acquired is appropriate and there are no matters of reasonableness or fairness that would warrant a narrower characterisation. 50 To the extent that the State or TfNSW was the mechanism by which an element of the public purpose was to be achieved does not operate to limit the scope of the broader underlying goal. 51 Having regard to the evidence that there was a unified goal that characterised the actions subsequent to the announcement of the construction of the WSA, that goal was to facilitate the operations of the WSA and to facilitate commercial, industrial and employment uses around the WSA to leverage the economic opportunities provided by the WSA. This was the public purpose (Public Purpose)."
The primary judge's identification of the broader public purpose had consequences for her finding of the market value of the land (s 55(a)), the assessment of which must disregard any increase or decrease in the value of the Land caused by the carrying out, or proposal to carry out, the public purpose for which the Land was acquired (s 56(1)(a)). Her Honour said: "53 … Thus, the causal question needs to be directed to the effects on the value of the land of the carrying out (or proposal to carry out) the public purpose, not to the effects of the proposed acquisition on the particular land. 54 In this case, having regard to my finding above as to the Public Purpose the rezoning of the land was an integral part of the Public Purpose. The change in the zoning of the Acquired Land to ENT from its previous RU2 zoning was 'caused' by the Public Purpose in that the increase in value was an increase for which the carrying out of the Public Purpose was relevantly directly responsible. 55 As to the Acquired Land, the evidence of the valuers was uncontroversial. If the Acquired Land was zoned ENT, it would be worth more than if it was zoned RU2 (even taking into account any future potential for upzoning of the land not related to the Public Purpose). Therefore, on the evidence, I find that the zoning of the land as ENT caused an increase in the value of the Acquired Land and the Residue Land that must be disregarded as required by s 56(1)(a) of the Just Terms Act. 56 Consequently, by operation of s 56(1)(a) of the Just Terms Act, it is to be disregarded in the determination of market value."
Thus, on her Honour's interpretation, the market value of the Land was to be assessed as if it were zoned RU2 rather than ENT because the increase in its market value due to the re-zoning was a consequence of the proposal to carry out the purpose for which the Land was acquired.

The OSO affected land

The primary judge found that the OSO Affected Land was neither part of, nor caused by, the public purpose of the acquisition (Jt [57]). Her Honour said, at [122]: "The evidence discloses that the location of the OSO has not yet been fixed. It is identified in the SEPP Aerotropolis as 'Outer Sydney Orbital (Under Consideration)'. Further, it has not been designated as land reserved for a road in the SEPP Aerotropolis or any other planning instruments. The evidence discloses that the OSO was the subject of consideration independent of the M12. The proposed location of the OSO had varied over time. The current location at the Date of Acquisition had been nominated after its previous location had been abandoned due to the fact that it had impacted upon residential properties. The inference to be drawn is not that the M12 dictated the location of the OSO, but rather the particular features of the land rendered it more suitable than other identified locations."

Ground 1: the identification of the public purpose in s 56(1)(a) of the Act

The question of law which arises from ground 1 is whether the identification of the public purpose of the acquiring authority (in this case, the respondent) within the meaning of s 56(1)(a) of the Act is: 1. to be determined solely by reference to the statute which authorises the acquiring authority to acquire the subject land (as the appellant contended); or, 2. a question of fact to be determined, if need be, by the primary judge (as the respondent contended).

The appellant's submissions

Mr Walker SC, who appeared with Mr Hale SC and Mr Waterson for the appellant, submitted that although the wording of the PAN was not determinative of the respondent's purpose in acquiring the property, the respondent's purpose under s 56(1)(a) must fall within its power to acquire property as conferred by the Roads Act. Thus, he submitted that because the only purpose for which the respondent could acquire property was, as provided for in s 177 of the Roads Act, "for any of the purposes of the Act", its public purpose could only be one for which the Roads Act provided. Mr Walker submitted that the only relevant source of power was the respondent's power in s 71 of the Roads Act "to carry out road work on any public road for which it is the roads authority and on any other land under its control". Thus, he submitted that the purpose in s 56(1)(a) of the Act could be no wider than this purpose. He submitted that, if it were otherwise, the acquisition would be beyond the respondent's power since it would not be authorised by the Roads Act.
Accordingly, although Mr Walker accepted that there was a conceptual distinction between power and purpose, he submitted that if, as in the Roads Act, the power was constrained by the nature of the purpose for which the power was conferred, the "public purpose" of the acquisition in s 56(1)(a) could not go beyond a purpose for which the legislation authorised the respondent to acquire land.
Mr Walker relied on Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 (Walker Corporation) in support of the following propositions, which he submitted were part of the ratio decidendi: 1. the identification of purpose in s 56(1)(a) is to be determined by reference to the applicable legislation (in this case, the Roads Act and the Act) ([35]); 2. the "market value disregard" in s 56(1)(a) "looks to the public purpose for which the Land might by law be acquired by the [acquiring authority] by compulsory process under the [legislation which authorised the acquisition] and to 'the proposal' to carry it out", which is the proposal of the acquiring authority ([53]); and 3. the "market value disregard" in s 56(1)(a) reflects "a policy to require a disregard only of that increase or decrease … in value for which the resuming authority is responsible" ([54]).
Mr Walker submitted that s 56(1)(a) of the Act ought be interpreted as if it read: "… any increase or decrease in the value of the [acquired] land caused by the carrying out of, or the proposal to carry out, the purpose for which the land was by law acquired by compulsory process under this Act." (Emphasis added to indicate the gloss for which the appellant contended.)
Mr Walker submitted that the ratio of Walker Corporation required this Court to allow the appeal. He accepted that if the appeal were allowed, the matter ought be remitted to the primary judge to determine the market value of the Land by correctly applying the s 56(1)(a) disregard. As ground 2 was an alternative ground, it did not need to be determined if he was successful on ground 1.

The respondent's submissions

Mr Hutley SC, who appeared with Mr Astill and Mr Khadra on behalf of the respondent, submitted that identification of the respondent's purpose in acquiring the appellant's property was a question of fact and that the primary judge's findings as to the respondent's purpose were "clear and unsurprising" and open on the evidence. He submitted that, as neither ground gave rise to a question of law, this Court had no power to intervene.
Mr Hutley submitted that it was significant that s 56(1)(a) refers to "the public purpose for which the land was acquired" rather than, for example, the public purpose of the acquiring authority. He contended that the use of the passive voice in the section is apt to leave open the possibility that there will be more than one acquiring authority for different parcels of land which, together, are to comprise a single public purpose. He also submitted that there was an important distinction between power and purpose and that limits on the acquiring authority's power to acquire land ought not be applied to its purpose in so doing since the latter was a question of fact in any given case.
Further, Mr Hutley submitted that ground 1 did not arise since the primary judge found not only that the relevant public purpose in s 56(1)(a) was the State's purpose in furthering the commercial, employment and industrial uses of the land surrounding the Western Sydney Airport, but also that the respondent's purpose in acquiring the Land for the M12 was for the furtherance of these uses. Mr Hutley submitted the result would be the same irrespective of whether the broad interpretation of "public purpose" in s 56(1)(a) for which the respondent contended or whether the narrower interpretation for which the appellant contended were accepted.
Mr Hutley also relied on s 8(b) of the Interpretation Act 1987 (NSW) which provides that a reference to a word or expression in the singular ought be read as including the plural. Thus, he submitted that although "public purpose" in s 56(1)(a) is expressed in the singular, it ought not be assumed that there is only one public purpose to be contemplated, since an acquisition might serve a number of public purposes as in the present case where the overall proposal involves a comprehensive development of a large area in conjunction with the Commonwealth's construction of the Western Sydney Airport. He submitted that the economic and social benefits to the State of New South Wales of developing the surrounding area are plain and can readily be seen as promoting various public purposes which may be expressed at varying degrees of generality and "the public ends sought to be achieved by the [respondent] could be legally…to bring about a road consistent with the objects of the State". He submitted that the conclusion that there can be more than one public purpose for any particular acquisition weighs in favour of the respondent's construction.
Mr Hutley contended that Walker Corporation supported the respondent's argument that the respondent's purpose in acquiring the Land could be the same as the State's purpose of developing the area and relied on the High Court's finding at [10] that, in that case, although the Sydney Harbour Foreshore Authority (the Foreshore Authority) was the acquiring authority, there was no relevant distinction between its purpose and that of the State. He argued that "the purpose of the authority can be the embodiment of the purpose of the State Government." He referred to s 13A of the Interpretation Act, which provides that a NSW Government agency (which, by reason of s 3C of the Transport Administration Act 1988 (NSW), includes the respondent) "has the status, privileges and immunities of the Crown."
Mr Hutley referred to powers conferred on the respondent by the Roads Act in addition to its power to carry out road work pursuant to s 71 (such as its powers under s 61 to construct and maintain "State works", which have been declared as such by the Minister under s 53, or, under s 54, to recommend that such a declaration be made; or, s 48, with respect to freeways which have been declared as such by the Minister). However, these additional powers were advanced in support of his submission that the acquisition was intra vires, which was made in response to a submission which he understood the appellant to be making that the acquisition was ultra vires. As it was common ground that the acquisition of the land for the purposes of the M12 Motorway was within the respondent's power, it is not necessary to address these additional powers further.
As is evident from the summary above, the primary judge accepted the respondent's submission that the words "public purpose" in s 56(1)(a) ought not be construed so as to be restricted to the public purpose identified in the instrument which granted the public authority power to acquire the land. Her Honour accepted the respondent's submission that the identification of the public purpose was an issue of fact. This approach led to her Honour's findings of an expansive purpose, with the result that the ENT re-zoning was regarded as the result of the acquisition and therefore to be disregarded in the assessment of market value.

Walker Corporation

Because of the emphasis placed on Walker Corporation, I will consider its relevance to the appeal first. It will also be necessary to address decisions of this Court, to which the parties referred, most of which have been handed down after Walker Corporation.
In Walker Corporation, the company (Walker) held an option to buy land on Sydney Harbour. Soon after the State government announced its intention to acquire the land to create a public park, the company exercised its option and exchanged contracts. The Foreshore Authority eventually acquired the land by compulsory processes "for the purposes of the Sydney Harbour Foreshore Authority Act 1998 (NSW)".
Section 12(1) of the Sydney Harbour Foreshore Authority Act conferred the functions on the Foreshore Authority: "(a) to protect and enhance the natural and cultural heritage of the foreshore area, (b) to promote, co-ordinate, manage, undertake and secure the orderly and economic development and use of the foreshore area, including the provision of infrastructure, (c) to promote, co-ordinate, organise, manage, undertake, secure. provide and conduct cultural. educational, commercial, tourist, recreational, entertainment and transport activities and facilities."
Section 17(1) of the Sydney Harbour Foreshore Authority Act provided that the Foreshore Authority may acquire land for the purposes of that Act by agreement or by compulsory process in accordance with the Act.
At the time of the acquisition, the land was zoned industrial. The local council had maintained the industrial zoning for several years before the announcement to prevent residential development because it anticipated that the land would be acquired by a public authority for use as a public park.
The High Court considered that the words in s 56(1)(a) of the Act indicated that "the proposal to carry out the public purpose … for which the land was acquired" was a reference to the acquiring authority's proposal and purpose and not the proposal or purpose of some other entity, such as the local council. Thus, while the local council's maintenance of the zoning as industrial had decreased the value of the land (because it would otherwise have been residential), the Foreshore Authority had no such purpose or proposal. Its purpose in using its functions in s 17(1) to acquire the land was to create a public park. Although the High Court accepted that there was no relevant distinction between the proposal and purpose of the Foreshore Authority and that of the State, it found that the Foreshore Authority was not, and could not, as a matter of logic, be, responsible for the proposal and purpose of the State before it, as the acquiring authority, came into existence. The High Court emphasised the importance of the statutory wording in s 56(1)(a) of the Act in coming to this conclusion.
Thus in Walker Corporation, the objection to attributing the council's purpose in refusing to re-zone the land to the Foreshore Authority was twofold: first the council was not the Foreshore Authority and although the purpose of the Foreshore Authority could be equated to the purpose of the State, it could not be equated to the purpose of the council; and second, the Foreshore Authority was incapable of having a purpose before it came into existence. These consequences flowed, as the High Court found, from the use of the definite article in s 56(1)(a) of the Act ("the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired [by the acquiring authority]").

Fazzolari v Parramatta City Council

In R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 (Fazzolari), a local council purported to acquire land from its owner pursuant to a power conferred on it by s 186 of the Local Government Act 1993 (NSW) which authorised it to acquire land for the purpose of exercising any of its functions. However, s 188(1) prohibited acquisitions by the council without the consent of the owner if the land was being acquired for the purposes of re-sale. The proposed acquisition notice identified the purpose of the acquisition as "a public purpose, namely the Civic Place Development". The question arose whether the land was being acquired for the "purpose of re-sale". The Court found the acquisition was unlawful because it was for such a purpose and the owner had not provided consent.
Although the plurality (Gummow, Hayne, Heydon and Kiefel JJ) in Fazzolari observed that the purposes of the acquisition could be expressed at different levels of generality, the issue in determining whether s 188(1) was engaged was whether the acquisition could be characterised as an acquisition for the purposes of re-sale (whatever its other purposes). The plurality said at [97]: "… The compulsory acquisition of the land by the Council is an acquisition for which the Council must pay monetary compensation. The disposition of the land by the Council to Grocon is a disposition in return for the money and money's worth which the development agreement obliges Grocon to provide. That disposition is properly called a 're-sale'."
It may be accepted, as was said in Fazzolari, that purposes can be expressed at different levels of generality. However, the question of characterisation in that case did not depend on the level of generality with which the purpose was expressed but rather on whether at least one of the purposes of the acquisition was re-sale. If it was, the council had no power to acquire the land without the owner's consent.
The Court drew a distinction between functions and purpose where it noted at [93] that "[t]o ask which function or functions of the Council would be being exercised if the Council acquired [the land] does not assist in deciding whether, under s 188(1), the acquisition was for the purpose of re-sale." However, I do not regard Fazzolari as supporting the respondent's submission that the "question of whether an acquisition is within power is entirely different to the question of the purpose being served". In that case it did not matter what function or power the council was exercising to acquire the land since the contest did not turn on whether the council would otherwise have had power to acquire the land under s 186 of the Local Government Act, but on whether s 188(1) applied. However, to the extent to which the distinction is relevant to the present appeal, it serves to emphasise the importance of the wording of the statute which is said to authorise the acquisition.

Roads and Traffic Authority v Perry

Roads and Traffic Authority v Perry (2001) 52 NSWLR 222; [2001] NSWCA 251 (Perry) was decided before Walker Corporation. In Perry, this Court was concerned with whether the purpose of the acquiring authority was limited to the final alignment of a road for which land was acquired, or whether it included earlier potential alignments. The acquiring authority's powers of acquisition were, as in the present case, derived from the Roads Act. Handley JA noted at [6]: "It was common ground that the land taken provided 478,000 m³ of fill for the project, principally for the embankment from the north bank of the Bellinger River across the flood plain. It came from excavation for a 3-lane carriageway through Perry's Hill which allowed for a future dual carriageway."
Handley JA also said, of the identification of the acquiring authority's purpose, for the purposes of s 56(1)(a) of the Act: "64 The identification of the scheme which underlay this acquisition requires the evaluation of complex events which occurred over 4½ years and questions of degree are involved. It would be relevant to consider whether a separate contract was let, and construction work started at the southern end of the Raleigh Deviation before the planning for the Perry's Hill extension had either commenced or been completed and before the decision was made to acquire the land taken. It would also be relevant to consider whether or not the planning and construction work for the Raleigh Deviation and the Perry's Hill extension were interrelated and not severable in time, location, contractual arrangements or otherwise. This Court cannot make findings on these questions. 65 Bignold J found that the land taken was acquired for the principal purposes of building the highway deviation through the claimant's land and obtaining a supply of fill (at [160]). However this finding did not determine whether the scheme which underlay the acquisition was a single scheme for the enlarged Raleigh Deviation or a separate Perry's Hill scheme. The particular purposes, in the sense of the uses to which particular land will be put, do not exclude the wider public purpose to be served by the acquisition. If so it is this wider public purpose, scheme or project which underlay the acquisition, which governs the operation of s 56(1)(a). 66 The resumption of land in the middle of a substantial extension to an existing railway or highway will be for the public purpose of that scheme or project as a whole, and not just for whatever part of it is to be constructed on that land. Section 56(1)(a) would fail to achieve its evident purpose if the Court could award compensation for an increase in value due to the construction of the new railway or highway up to the boundaries of the land resumed and only had to ignore the proposal as it directly related to that land." (Emphasis added.)
Hodgson JA said: "99 In a case such as the present, it is necessary to determine what is the public purpose for which the claimant's land was acquired, including the appropriate level of generality at which the purpose should be identified. In this case, at the most general level, the purpose could be identified as the upgrading of the Pacific Highway between Sydney and the Queensland border; and there are other possible identifications, including the Raleigh Deviation generally, or particular versions of the Raleigh Deviation, or the extension of the Raleigh Deviation to Perry's Hill. 100 I do not think there are any clear rules determining how the relevant purpose or the appropriate level of generality is to be determined. Factors to be taken into account would, in my opinion, include the degree of continuity and consistency of various elements of what is proposed and done, and fairness to both the claimant and the acquiring authority. In the present case, I think it unlikely that the relevant public purpose could be as wide as the upgrading of the Pacific Highway between Sydney and the Queensland boarder; while on the other hand, assuming there have been a number of versions of the Perry's Hill extension, I think it unlikely that the public purpose could be as narrow as just the last of those versions. The public purpose could be as wide as the Raleigh Deviation generally, encompassing all the variations of that project including all versions of the Perry's Hill extension, or it could be somewhat narrower. 101 However the public purpose is identified, it seems clear that the value of the claimant's property as a source of stone for the respondent's road building activities, leaving aside that public purpose, can at best be in terms of a chance that the respondent would undertake some such scheme in the area as would require the stone. The trial judge's failure to approach the matter on that basis is sufficient on its own to justify the upholding of the appeal." (Emphasis added.)
The respondent accepted that the facts of Perry (and the single judge decisions to which reference was made) did not require the Court to look beyond the identity of the acquiring authority. However, it submitted that Perry was "consistent with the position that the power that authorises an acquisition is not determinative of its purpose".
The respondent relied on the passages highlighted in the extracts from Perry above as supporting its contention that it was open to the primary judge to have regard to the wider purpose of the proposal for which the Land was acquired. I do not accept this submission. Although there were, as Handley and Hodgson JJA observed, various ways of describing the acquiring authority's purpose, depending on the level of generality chosen, each of the descriptions fell within the authority's power to acquire land under s 177 of the Roads Act, having regard to the terms of s 71, which empowered it to carry out road work. The "narrow" purpose in that case (the construction of the Raleigh Deviation) and the broader scheme (its extension to Perry's Hill or a Perry's Hill scheme in its own right) were both highway projects. Thus, the issue which arises in the present case - whether a public purpose which was not within the purpose or range of purposes which the Roads Act authorised the respondent to have could be a public purpose under s 56(1)(a) of the Act - was not germane in Perry, with the consequence that the statements regarding the level of generality cannot properly be read as supporting the respondent's contention.

Barkat v Roads and Maritime Services

In Barkat v Roads and Maritime Services [2019] NSWCA 240 (Barkat), the acquiring authority, the Roads and Maritime Services, acquired the land from the claimants (Mr and Mrs Barkat) pursuant to the Roads Act for the purpose of the WestConnex Project ([22]).
Landcom, a developer, had published a draft strategy, the draft Parramatta Road Urban Transformation Strategy (PRUTS) which preceded the WestConnex project, which the Barkats argued foreshadowed the imminent rezoning of the acquired land for a more valuable use and which was not caused by the WestConnex project ([23]-[24]). The acquiring authority submitted that the draft PRUTS formed part of the body of strategic documents connected with the public purpose of WestConnex, such that the increase in value of the land caused by the rezoning must be disregarded ([26]). The primary judge rejected the Barkats' submission and found that "the draft PRUTS was inextricably connected with the WestConnex Project which was the public purpose for which the [acquired land] was acquired" ([32]).
The Barkats appealed, arguing that the WestConnex project was not sufficiently causally linked to the imminent rezoning under the draft PRUTS ([69]). This Court dismissed the appeal on the basis that it was open to the primary judge to find that "... but for the WestConnex Project, the draft PRUTS would not have existed" and that "... demonstrated a causal nexus between the WestConnex Project and the draft PRUTS" ([79], [80]).
The respondent in this Court relied on Barkat to support the proposition that it was not necessary for the purpose of the acquisition to correspond with a purpose for which the acquiring authority was authorised to acquire the land. Mr Hutley contended that the draft PRUTS was, in effect, equivalent to the wider development of the area surrounding Western Sydney Airport in the present case and that both had a causal connection with the re-zoning.
Mr Walker submitted that this Court in Barkat approached the matter on the orthodox basis that the public purpose of the acquisition, the WestConnex project, was a purpose authorised by the Roads Act. He submitted that the causation question which arose on appeal - whether the draft PRUTS was caused by the WestConnex - was an entirely separate question, which arose once the acquiring authority's purpose had been determined and that nothing in the case is "capable of displacing" the approach for which the appellant contends. In the alternative, he submitted that Barkat could not override Walker Corporation.
As neither party submitted that this Court's decision in Barkat was wrong, this Court (constituted by three judges) must proceed on the basis that Barkat was correctly decided. As Barkat concerned the question of causation (step (4) above) - namely, whether the increase in the value of the land was caused by the public purpose - it is distinguishable from the present case in any event. Accordingly, its correctness does not arise.

Sydney Metro v G & J Drivas Pty Ltd

In Sydney Metro v G & J Drivas Pty Ltd (2024) 113 NSWLR 429; [2024] NSWCA 5 (Drivas), Kirk JA (Payne JA and Griffiths AJA agreeing) said at [37]: "What is being disregarded, pursuant to s 56(1)(a), is any increase or decrease in the value of the land, as at the date of acquisition, by the identified cause. The identified cause is the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. Pursuant to s 4(1), the notion of 'public purpose' is defined to mean 'any purpose for which land may by law be acquired by compulsory process under this Act'. That definition focuses attention on the purpose of the acquiring authority, for it looks to the purpose for which the land was acquired. Thus attention is directed to what the authority is going to use the land for."
This statement of principle supports the appellant's submission that the public purpose of the acquiring authority derives from the relevant statute and is not a question of fact to be determined at large. It is not necessary to recite the facts of Drivas since they are not germane to the present appeal (as they concerned the dispossessed owners' conduct with respect to the acquired land in advance of the acquisition).

Coffs Harbour City Council v Noubia Pty Ltd

The appeal in Noubia was allowed as this Court found that the primary judge had erroneously applied s 56(1)(a) of the Act to an acquisition which was not a compulsory acquisition. At [63] Payne JA said, after referring to Hodgson JA's dicta about generality in Perry: "There will be cases where the appropriate level of generality for framing the public purpose may turn on the degree of continuity and consistency of various elements of what is proposed and done. Examples drawn from decided cases in which this factor may have been important include RTA v Mosca, where the public purpose was the development of part of the M7 motorway, linking the M2 and M5 motorways, rather than individual steps in developing the motorway. The recent case of Sydney Metro is also likely such a case, where the public purpose was agreed to be the building of the Metro, rather than any of its component parts."
It is significant that none of the examples given by Payne JA in [63] of Noubia as to the framing of the public purpose of the acquiring authority go beyond the road network of which the acquired land was to form part, in cases where the acquiring authority was a road authority and derived its power to acquire land from the Roads Act or its equivalent (the acquiring authority in Sydney Metro was authorised by the Transport Administration Act to acquire any land in the context of its statutory functions of operating a metro and delivering services in connection with the operation of the metro (s 38B)).
Further, Payne JA drew the clear distinction between identification of public purpose and causation (which is a question of fact) in the following passage at [57]: "Section 56(1)(a) might require the assessment of market value to proceed on the basis that the land would in fact have been rezoned as at the date of acquisition, if it was established on the facts that a rezoning would have occurred but for the giving effect to the public purpose for which the land was acquired: see for example, my acceptance of this construction of s 56(1)(a) in Council of the City of Ryde v Azizi [2019] NSWSC 1605 at [52]-[53]. In such a case, a decrease in value of the land acquired could be shown to be caused by the giving effect to the public purpose for which the land was acquired."
The acquiring authority in Noubia was the local council. The power of a local council to acquire land derives from s 186(1) of the Local Government Act, which provides that "[a] council may acquire land … for the purpose of exercising any of its functions". Councils have service, regulatory, ancillary, revenue, administrative and enforcement functions. For example, s 24 of the Local Government Act provides: "A council may provide goods, services and facilities, and carry out activities, appropriate to the current and future needs within its local community and of the wider public, subject to this Act, the regulations and any other law."
Because of the extent of its functions, and therefore its broad power to acquire land, a local council has a wider range of public purposes for which it can acquire land than a road authority such as the respondent where the only authorised public purpose is, in substance, to carry out road work (because of the limitations in ss 71 and 177 of the Roads Act). This difference may explain why less judicial attention has been given to the identification of the public purpose in cases where the local council is the acquiring authority, in contrast to cases where the acquiring authority is a road authority.

Consideration of ground 1

The proper construction of s 56(1)(a) of the Act, when read in light of the authorities, of which Walker Corporation is the leading case, an assessment of market value under s 56(1)(a) of the Act requires the following steps to be taken: 1. the identification of the acquiring authority; 2. the identification, by reference to the empowering legislation, of the public purpose or purposes for which the acquiring authority (identified in (1) above) has the power to acquire land; 3. the identification of the acquiring authority's public purpose in acquiring the land, which must fall within the purpose or range of purposes identified in (2) above; and 4. the determination of the question, which is one of fact, whether there has been any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, identified in (3) above (any such increase or decrease is to be disregarded).
This appeal turns on steps (2) and (3), it being accepted that if the appeal is allowed, the matter must be remitted to the Court below for determination of step (4) (which was the step in issue in Barkat). I accept Mr Walker's submission that Walker Corporation stands for the propositions set out above in [32].
In the present case, the respondent is the acquiring authority (step (1)). As to step (2), the respondent's power to acquire the land derives from s 177 of the Roads Act. The only purpose in the Roads Act which was identified as supporting the acquisition was s 71: namely, to carry out road work. There is a distinction between power and purpose; however, the respondent's power to acquire land is constrained by the purpose of the acquisition. The respondent could not point to any source of power to acquire land for any broader purpose than that for which the Roads Act provided. Thus, its purpose in acquiring the land, being the sole statutory purpose authorised, was to carry out road work for the M12 (step (3)).
It may be accepted that a road, even with a dead-end, provides a means of getting from A to B and its presence has an effect, which may include an economic and social effect on what lies on either side of it between A and B. The generality with which the acquiring authority's public purpose in making the acquisition can be articulated in this context depends on the wording of the relevant legislation. Unlike, for the Foreshore Authority in Walker Corporation, the respondent in the present case was not empowered to act for purposes which included wider objects (such as "to promote, co-ordinate, manage, undertake and secure the orderly and economic development and use of the foreshore area, including the provision of infrastructure", as conferred by s 12(1)(b) of the Sydney Harbour Foreshore Authority Act). The respondent's purpose, as expressly provided by the Roads Act, was, like that of the acquiring authority in Barkat, the somewhat prosaic one of carrying out road work.
Barkat supports this conclusion since, in that case, the acquisition was made by the Roads and Maritime Services (the respondent's predecessor) pursuant to the Roads Act. As referred to above, the purpose of the acquisition in Barkat was for the WestConnex project, which was a project to build roads and therefore plainly within ss 71 and 177 of the Roads Act. The subsequent question - whether the "increase or decrease in the value of the land was caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired" - was decided as a matter of fact. As the primary judge's finding in Barkat was held to be open to the primary judge ([85]), this Court dismissed the appeal.
I accept the appellant's submission that the Act requires that the relevant purpose identified in step (3) above, be the purpose by reference to which the causation question in s 56(1)(a) of the Act is to be answered. To do otherwise, would create legislative incoherence as well as uncertainty. The expression "public purpose" is defined in s 4 of the Act as "any purpose for which land may by law be acquired by compulsory process under this Act." The definition is to be read into s 56(1)(a) of the Act, in order to give effect to it: Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 at [84] and [103] (McHugh J).
The primary judge's finding of fact as to the purpose of the acquisition of the land for the M12 was legally erroneous. Her Honour's enquiry as to the wider background of the acquisition was irrelevant because the respondent's purpose, for the purposes of s 56(1)(a) of the Act, was constrained by the terms of the Roads Act and could not amount to a public purpose as that term is defined in s 4 of the Act. Thus, her Honour erred in steps (2), (3) (and, therefore, (4)) above.
Accordingly, ground 1 has been made out.
It was common ground that, in this event, the matter ought be remitted to the Court below in order that the market value of the Land could be assessed on the correct legal basis. The remitter is limited to the determination of market value pursuant to s 55(a) of the Act, applying the proper interpretation of s 56, as no other integer has been successfully challenged.

Ground 2: the impact on the Residue Land of the OSO

Ground 2 was an alternative ground to ground 1 and therefore does not arise. However, if it arose, I accept the respondent's submission that ground 2 seeks to challenge factual findings made by the primary judge as to the impact on the Residue Land of the OSO and therefore does not fall within this Court's jurisdiction on appeal by reason of the limitation in s 57(1) of the Land and Environment Court Act.

Proposed orders

For the reasons given above, I propose the following orders: 1. Appeal allowed. 2. Set aside: 1. the determination by Duggan J of market value pursuant to s 55(a) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW); 2. the order of 19 April 2024 for determination of the compensation payable to the appellant under Part 3 Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW); and 3. the order for the costs of the proceedings in the Court below. 1. Remit to the Land and Environment Court: 1. the determination of market value pursuant to s 55(a) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) to be determined according to law; and 2. the costs of the proceedings before Duggan J. 1. Order the respondent to pay the appellant's costs of the appeal.
PRESTON CJ of LEC: I have had the advantage of reading in draft the judgment of Adamson JA. I agree that the appeal should be upheld and orders made as proposed. Although I generally agree with the reasons Adamson JA has given for determining that ground 1 has been made out, I wish to add to those reasons an explanation of the textual and contextual indicators that support the appellant's narrower construction, and which are contrary to the primary judge's broader construction, of paragraph (a) of the definition of "market value" in s 56(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Land Acquisition Act). For ease of reference, I will refer to this provision simply as s 56(1)(a).
The appellant's narrower construction of s 56(1)(a) was that the purpose referred to in the phrase "the public purpose for which the land was acquired" must be a purpose for which the particular acquiring authority is authorised by law to acquire land. In the present case, this requires the public purpose for which Transport for NSW (TfNSW) acquired the land to be a purpose under the Roads Act 1993 (NSW) for which TfNSW is authorised to acquire land under s 177 of the Roads Act. The primary judge rejected that narrower construction in favour of the broader construction advanced by TfNSW that permits the purpose for which the land was acquired to be any purpose for which land may by law be acquired by an authority of the State and not just by the particular acquiring authority of TfNSW. On that broader construction of s 56(1)(a), the primary judge found the public purpose for which the land was acquired was that stated in [51]: "Having regard to the evidence that there was a unified goal that characterised the actions subsequent to the announcement of the construction of the WSA, that goal was to facilitate the operations of the WSA and to facilitate commercial, industrial and employment uses around the WSA to leverage the economic opportunities provided by the WSA. This was the public purpose (Public Purpose)."
The finding that this public purpose was the purpose for which TfNSW acquired the land involved misconstruction of s 56(1)(a) of the Land Acquisition Act. The phrase "the public purpose for which the land was acquired" in s 56(1)(a) directs attention to the particular acquisition of land by compulsory process by the acquiring authority, compensation for which is to be assessed under s 55 of the Land Acquisition Act. There are numerous textual and contextual indicators supporting this focus on the particular acquisition of the land by the particular acquiring authority exercising the power under the particular law authorising acquisition of land by compulsory process by that authority.
I will start with the contextual indicators in the statutory scheme for the acquisition of land by compulsory process and the determination of compensation to which a person is entitled for the acquisition of their land. These include: 1. the scope and purpose of the Act being "the acquisition of land on just terms by authorities of the State", as the long title states; 2. the objects in s 3(1)(a) and (b) to ensure compensation on just terms for the owner of land that is acquired "by an authority of the State", including that the amount of compensation will be not less than the market value of the land "unaffected by the proposal" of the authority of the State; 3. the definition in s 4(1) of "authority of the State" as including "any other authority authorised to acquire land by compulsory process"; 4. the definition in s 4(1) of "public purpose" that directs attention to a purpose for which land may "by law" be acquired by compulsory process; 5. the application of the Act to the acquisition of land "by an authority of the State which is authorised to acquire the land by compulsory process" under s 5(1); 6. the statement in s 7(1) that the Act does not empower an authority of the State to acquire land by compulsory process if it does not have the power, apart from the Land Acquisition Act, to acquire the land; 1. the requirement in s 11(1) for the authority of the State seeking to acquire land by compulsory process to give the owner of the land written notice of its intention to do so; 2. the requirement in s 15 for the proposed acquisition notice to specify, among other matters, "the authority of the State proposing to acquire the land"; 3. the process in s 19(1) for "an authority of the State that is authorised to acquire land by compulsory process" to acquire land by declaring in a notice published in the Gazette that the land described in the notice is acquired by compulsory process; 4. the effect of the acquisition notice to vest the land described in the notice "in the authority of the State acquiring the land" (s 20(1)); 5. upon publication of the acquisition notice, the entitlement of the former owner of the land that was acquired to be paid compensation in accordance with Part 3 of the Act by the authority of the State which acquired the land (s 37); 6. the amount of the compensation to which the person is entitled under Part 3 of the Act is to be determined having regard only to the matters in s 55, which are to be assessed in accordance with Division 4 of Part 3 of the Act (s 55); and 7. one of the matters to which regard must be had in determining the amount of compensation is "the market value of the land on the date of its acquisition" (s 55(a)), which is to be assessed in accordance with s 56 of the Act.
The appellant's narrower construction of s 56(1)(a) is consistent, but the primary judge's broader construction of s 56(1)(a) is inconsistent, with these contextual indicators in the statutory scheme. These contextual indicators direct attention to the particular acquisition of land by the particular acquiring authority authorised by the particular law to acquire the land.
I turn to the textual indicators in s 56(1)(a) that also direct attention to the particular acquisition of land by the particular acquiring authority under the particular law.
First, the phrase "the public purpose for which the land was acquired" occurs in the definition of "market value" in s 56(1). That definition sets the method by which the market value of the land that was acquired is to be assessed. As earlier noted, s 55 prescribes that one of the matters to which regard must be had in determining the amount of compensation to which a person is entitled for the acquisition of their land is "the market value of the land on the date of its acquisition" (s 55(a)). The market value of the land is to be "assessed in accordance with this Division." Section 56, in the Division, prescribes the method of assessment of the "market value of land". This method is to be applied in assessing the market value of the particular land that was acquired by compulsory process. The references to "the land" in s 56(1) become, on application of the method to assess the market value of the land, references to the particular land that was acquired by compulsory process.
Second, the phrase "the public purpose for which the land was acquired" in s 56(1)(a), when the method in s 56(1) is applied to assess the market value of the particular land that was acquired by compulsory process, refers to the particular public purpose for which that land was acquired. This follows not only because this is how the method of assessment of the market value of the land is to be applied, but also from the use of the definite article "the" before "public purpose" and the use of the past passive tense in the phrase "the land was acquired". The inquiry demanded is of the particular public purpose for which the particular land was acquired by compulsory process.
Third, the particular acquisition of the land needed to be done by an authority which was authorised by law to acquire land by compulsory process. That is evident from the definition of "authority of the State" in s 4(1) which refers to an authority "authorised to acquire land by compulsory process". An authority is authorised to acquire land by compulsory process if "the authority is authorised by law to acquire land by compulsory process under this Act": see s 4(2)(a) of the Land Acquisition Act. Different laws will authorise different authorities to acquire land by compulsory process. In this case, the acquiring authority of TfNSW is authorised by the Roads Act to acquire land by compulsory process. Hence, although the phrase in s 56(1)(a) does not expressly refer to the authority of the State which acquired the land by compulsory process, it is implicit that "the land was acquired" by the authority which was authorised to acquire land by compulsory process.
Fourth, the term "public purpose" is defined in s 4 of the Land Acquisition Act to mean "any purpose for which land may by law be acquired by compulsory process under this Act". As a definition, this necessarily is expressed in broad terms, not limiting the purpose for which land may by law be acquired to any purpose specified under any particular law. But the definition needs to be read into the statutory provision in which the defined term occurs. Read into the phrase in s 56(1)(a), the definition directs attention to the particular law under which the land was acquired by the acquiring authority and in particular to the public purpose for which the land was by that law acquired by compulsory process by that acquiring authority.
Different laws may specify different purposes. For example, the purposes for which land may be acquired by compulsory process under the Roads Act are different to the purposes for which land may be acquired by compulsory process under planning and environmental legislation, such as the Environmental Planning and Assessment Act 1979 (NSW). But the relevant public purpose in s 56(1)(a) is a purpose for which the particular acquiring authority is authorised by law to acquire the land. Such a purpose not only authorises the acquisition of the land by compulsory process, it also limits the width of the expression in s 56(1)(a) of "the public purpose for which the land was acquired". The public purpose in the expression in s 56(1)(a) cannot include a purpose for which an authority of the State other than the acquiring authority is authorised to acquire land by compulsory process, but instead only includes a purpose for which the acquiring authority is authorised to acquire land.
The context and text of the phrase "the public purpose for which the land was acquired" in s 56(1)(a), therefore, limit its operation to the particular public purpose for which the land in question was acquired by the particular acquiring authority under the law that authorised the acquisition of land by compulsory process. The primary judge's rejection of this construction of the phrase involved misconstruction of s 56(1)(a).
Contrary to the primary judge's finding at [25], the phrase in s 56(1)(a) does not permit a finding of "a composite purpose", involving the bundling together of not only the public purpose for which the acquiring authority acquired the land but also other public purposes of other authorities of the State that did not acquire the land or of the NSW Government itself. The primary judge's findings that bundled together purposes of different authorities of the State and the NSW Government to form a composite purpose of the NSW Government were in error on a question of law. These findings include those in [41], [42] and [52]. These findings impermissibly formulate a rolled-up purpose of the NSW Government that extends far beyond the purpose for which the land was stated in the proposed acquisition notice and the notice of acquisition of land to be, and was authorised by the Roads Act to be, acquired by compulsory process by the acquiring authority of TfNSW, which was for the purposes of the Roads Act.
This rolled-up purpose of the NSW Government did not become a permissible purpose by framing the acquiring authority's purpose as being "in furtherance of" the purpose of the NSW Government, as the primary judge did in [42]. The primary judge found that the acquisition of the land by TfNSW for the purpose of the M12 was "part of a coordinated State Government response to the announcement of the WSA in 2014 and continuing" (at [42]). But that did not convert TfNSW's purpose in acquiring the land for the M12 into the broader purpose of the NSW Government. The definition of the public purpose for which the land was acquired under s 56(1)(a) directs attention only to the immediate purpose of the acquiring authority in acquiring the land and not to an overarching, "coordinated goal or purpose" of the NSW Government (the words the primary judge used in [41]).
The construction that the phrase in s 56(1)(a) is limited to the public purpose for which the land was acquired by law by the acquiring authority, and does not permit a rolling-up of that purpose with purposes of other authorities of the State or of the NSW Government itself, is supported by the High Court's decision in Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 (Walker) and this Court's decisions in Sydney Metro v G & J Drivas Pty Ltd (2024) 113 NSWLR 429; [2024] NSWCA 5 (Drivas) and Coffs Harbour City Council v Noubia Pty Ltd (2024) 258 LGERA 351; [2024] NSWCA 19 (Noubia).
In Walker, the High Court accepted as correct the acquiring authority's construction of the market value disregard in paragraph (a) of s 56(1), which linked the proposal to carry out the public purpose for which the land was acquired with that of the acquiring authority and which set aside "anterior discussions or agitations" of public bodies other than the acquiring authority: at [53] and [54]. On the correct construction of s 56(1)(a), the assessment of market value requires "a disregard only of that increase or decrease… in value for which the resuming authority is responsible": at [54]. The High Court's decision is inconsistent with the broader construction of s 56(1)(a) of the primary judge, which rolled-up into one composite purpose the stated purpose under the Roads Act for which TfNSW acquired the land with the purpose of the NSW Government.
In Drivas, this Court held that both s 56(1)(a) and the definition of "public purpose" in s 4(1) focus attention on the purpose of the acquiring authority in acquiring the land: at [37] and [38]. Thus, the causal question raised by s 56(1)(a) is directed to the effects on the value of the land of the carrying out of or the proposal to carry out the public purpose for which the acquiring authority acquired the land: at [39]. Similarly, in Noubia, this Court held that: "In identifying the public purpose for which the land was acquired, it is clear that it is the public purpose of the acquiring authority which is relevant": at [61].
The decisions of this Court in Barkat v Roads and Maritime Services [2019] NSWCA 240 (Barkat) and Roads and Traffic Authority v Perry (2001) 52 NSWLR 222; [2001] NSWCA 251 (Perry) are not to the contrary. On a proper analysis of the decision in Barkat, the question on appeal was not whether proposed planning changes, including potential rezoning of the land, were part of the public purpose for which the land was acquired, but rather whether any increase in the value of the land was "caused by" the carrying out of the public purpose for which the land was acquired of the WestConnex Project. The statements in Barkat relied on by the primary judge, therefore, do not support the primary judge's broader construction of the statutory phrase in s 56(1)(a).
The question on appeal in Perry did involve identification of the public purpose for which the land was acquired, but the error of the primary judge was in failing to identify what was that public purpose. The land was acquired for the purposes of the Roads Act, but the particular purpose was in dispute. There were a number of candidate public purposes, from the general to the specific, for which the land might have been acquired but the primary judge did not identify which one was the public purpose for which the land was acquired. Handley JA, with whom Powell JA agreed, described this error of law as failing to identify "the scheme which underlay this acquisition" (at [53], [56]). That was to use the language of former resumption legislation and of decisions on that legislation, rather than the language of the Land Acquisition Act, an approach that the High Court criticised in Walker in [29]-[35]. Nevertheless, Handley JA held that identification of the scheme which underlay the acquisition was critical to determine what increase or decrease in the value of the land was caused by the carrying out of or the proposal to carry out the public purpose for which the land was acquired (at [64] and [65]). As that had not been done, the proceedings needed to be remitted to the court below to identify the scheme that underlay the acquisition (at [68]). Hodgson JA similarly held that "it is necessary to determine what is the public purpose for which the claimant's land was acquired, including the appropriate level of generality at which the purposes should be identified" (at [99]). The primary judge had failed to do so.
The decision in Perry, therefore, does not support the primary judge's finding in this case that the public purpose for which the land was acquired was not limited to the stated public purpose of the acquiring authority, TfNSW, in acquiring the land for the purposes of the Roads Act, at whatever level of generality is appropriate to describe that purpose, but also included the purpose of the NSW Government.
For these reasons, the primary judge misconstrued s 56(1)(a) of the Land Acquisition Act, which materially affected the primary judge's finding of the public purpose for which the land was acquired.
At the hearing of the appeal in this Court, TfNSW's made an alternative submission if the phrase "the public purpose for which the land was acquired" in s 56(1)(a) were to be limited to a public purpose for which the acquiring authority is authorised by law to acquire land. On that construction, TfNSW submitted the broader purpose of the NSW Government found by the primary judge to be the purpose for which the land was acquired was a purpose for which TfNSW was authorised to acquire the land under the Roads Act. The power of TfNSW to acquire land in s 177(1) of the Roads Act authorises acquisition of land for "any of the purposes of this Act." TfNSW argued that one of the purposes of the Roads Act concerned the power of the Minister under s 53 to declare a public road to be a State work, "which, because of its nature, size, location or importance, the Minister considers should be a responsibility of the State." TfNSW has the exclusive function, as the roads authority for a public road declared to be a State work, to construct and maintain the public road as a State work (see s 61(2) as well as s 71). TfNSW submitted that a central concern of TfNSW is to be involved in the construction of public roads which have characteristics worthy of them being State works. Hence, TfNSW argued, it had power under the Roads Act to acquire the land for the broader purpose of the NSW Government found by the primary judge.
I reject TfNSW's alternative argument. Even if the purpose of declaring a public road to be a State work under s 53 and of constructing and maintaining State works under s 61 be a purpose for which land may be acquired under s 177 of the Roads Act, this was not the broader purpose of the NSW Government found by the primary judge to be the purpose for which the land was acquired. The primary judge's identification of the public purpose in [51], drawing on the earlier findings in [41] and [42], neither expressly nor impliedly stated that the purpose for which the land was acquired by TfNSW was to enable the Minister to declare the M12 road to be a State work under s 53 and to construct and maintain it as a State work under s 61(2). Indeed, there would be no need to exercise the power under s 53 as the M12 was proposed to be declared as a freeway under s 48, so that TfNSW would become the owner of that road (s 48(2)) and the roads authority for the freeway (s 7(1)), with the exclusive function to decide what road work is to be carried out on the freeway (s 61(1)(a)).
TfNSW did not identify any other purpose of the Roads Act that would support the primary judge's finding that the purpose "to facilitate the operations of the WSA and to facilitate commercial, industrial and employment uses around the WSA to leverage the economic opportunities provided by the WSA" (at [51]) was a purpose of the Roads Act for which TfNSW was authorised to acquire land. As articulated by the primary judge, that purpose clearly is not a purpose of the Roads Act for which land may be acquired.
The Western Sydney Airport is on federal land, so that "the operations of the WSA" are federal, not State, matters. TfNSW, as an authority of the State, has no power "to facilitate operations of the WSA" and hence no power to acquire land for that purpose. The land "around the WSA" is State land, but TfNSW has no power under the Roads Act "to facilitate commercial, industrial and employment uses" on land around the WSA. Of course, every road is designed to facilitate the movement of motor traffic, and motor traffic uses the road to access some other land in the vicinity of the road. There might be commercial, industrial or employment uses of the land which may be accessed by the road. But the purpose of construction, operation and maintenance of a road does not thereby become to facilitate the commercial, industrial or employment uses of the land in the vicinity of the road; the purpose remains to facilitate the movement of motor traffic on the road.
The consequence is that although TfNSW has power under the Roads Act to acquire land for the purpose of constructing, operating and maintaining a road, of whatever type or classification, it does not have power under the Roads Act to acquire land for the purpose of facilitating commercial, industrial and employment uses on land accessed from a road.
The upshot is that the public purpose for which the primary judge found the land was acquired (in [51]) was not a purpose of the Roads Act for which land may be acquired under s 177 of the Roads Act. This did not cause TfNSW's acquisition of the land to lack validity. The land was stated in the proposed acquisition notice and notice of acquisition of land to be acquired for the purposes of the Roads Act and in particular "in connection with the construction, operation and maintenance of the M12 Motorway." That clearly is a purpose of the Roads Act for which land may be acquired.
Rather, the primary judge's finding that the purpose for which the land was acquired was not that purpose but instead a broader purpose that is not a purpose of the Roads Act reveals error on a question of law. Whilst identification of the public purpose for which the land was acquired is a factual exercise, it must be undertaken within the constraints of the law that governs the acquisition of land by compulsory process. One of those constraints is that an authority of the State may only acquire land for a public purpose for which land may by law be acquired by compulsory process. In the case of TfNSW, it may only acquire land by compulsory process for any of the purposes of the Roads Act. The primary judge erred in finding that the public purpose for which the land was acquired was a purpose other than any of the purposes of the Roads Act. The primary judge's task, in determining the market value of the land, was to identify a public purpose for which the land was acquired that was a purpose within, not outside, the power of the acquiring authority of TfNSW to acquire land by compulsory process.
For these further reasons, the primary judge erred on a question of law by misconstruing and misapplying the definition of "market value" in s 56(1) of the Land Acquisition Act in determining the public purpose for which the land was acquired. Ground 1 is therefore established. The upholding of ground 1 makes it unnecessary to decide ground 2, which was raised in the alternative if ground 1 was not established. I agree with Adamson JA that if ground 2 were to be addressed, I would find that it is not made out. Any error is one of fact not of law.
I agree with Adamson JA that the primary judge's orders determining the amount of compensation to which the appellant was entitled for the acquisition of the land should be set aside and the proceedings remitted for redetermination of the amount of compensation to which the appellant is entitled in accordance with this Court's reasons. The respondent should pay the appellant's costs of the appeal in this Court. The costs of the proceedings in the court below can be determined by that court on the remitter.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 December 2024

Sydney Harbour Foreshore Authority Act 1998(NSW)

Public Works Act 1912(NSW)

(2024) 258 LGERA 351

(2024) 113 NSWLR 429

Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales

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