[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
Source
Original judgment source is linked above.
Catchwords
[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
Love v Roads Corporation (2014) 200 LGERA 76[2014] VSCA 30
Melino v Roads and Maritime Services (2018) 98 NSWLR 625[2018] NSWCA 99
Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566[2006] HCA 50
Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 75[2020] NSWCA 241
Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279[2019] NSWCA 41
Roads and Traffic Authority (NSW) v Mosca (2006) 146 LGERA 335[2006] NSWCA 159
Travel Compensation Fund v Robert Tambree t/as R Tambree and Associates (2005) 224 CLR 627
[2005] HCA 69
Turner v Minister of Public Instruction (1956) 95 CLR 245
[1956] HCA 7
Walker Corp Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259
[2008] HCA 5
Wallace v Kam (2013) 250 CLR 375
Judgment (13 paragraphs)
[1]
Background
At the date of acquisition, 19 March 2021, the acquired land had been improved by a two-storey mixed-use office and retail complex known as "Greenway Plaza", and parts of the site were leased to and occupied by tenants.
Development consent had been granted by the Parramatta City Council in December 2018 for the erection of a 25-storey tower on the site fronting Macquarie Street and a four-storey tower fronting Church Street, with a common ground floor retail podium and basement. The gross floor area totalled some 39,000m2. The respondents had taken steps to seek an additional consent to increase the height of the tower fronting Church Street which would increase the gross floor area by some 7,000m2 (Church Street Tower Extension). The Council had not yet determined that issue. It was common ground that the highest and best use of the site at the relevant time was as a development site for a mixed commercial/retail development.
At the date of acquisition no physical works had been undertaken upon the acquired land for the erection of the approved buildings. The respondents contend that they had undertaken other non-physical steps to progress the development of the approved building, including by starting to prepare detailed drawings for the Church Street Tower Extension. The respondents had also entered into two leasing agency agreements for the marketing and future leasing of the proposed buildings.
The respondents' awareness of the Sydney Metro West project, and its influence on their plans, was as follows:
1. Mr Coombes, a director of the second respondent, became aware of the project around the time it was first announced in November 2016. He was not initially concerned that it might impact the site.
2. Mr Coombes was aware that from around early 2018 Sydney Metro began issuing notifications of work for the project, including in the Parramatta CBD. On 28 May 2018 he received such a notification, being for some geotechnical investigation work in a lane immediately adjacent to the site. He then became concerned whether this might imply that some or all of the site might be acquired for the project. He discussed this with his colleagues in the respondents. They decided not to change any aspect of their own project because there was still a significant degree of uncertainty about whether the land would be affected.
3. In February and March 2019, based upon reports of the location of Sydney Metro's geotechnical investigations, Mr Coombes came to have "suspicions" that Sydney Metro would likely seek to acquire some or all of their site in order to build a metro station. After consideration, the respondents agreed not to abandon the development of the land but to reduce expenditure on their proposals in various ways, including not undertaking a design competition that the council had required in relation to the proposed Church Street Tower Extension and discontinuing the preparation of detailed drawings for the expanded building (this being the Discontinue Decision).
4. On 21 October 2019 a director of the first respondent received a phone call from a representative of Sydney Metro who stated that the whole site would be acquired by it for the Sydney Metro West project. The respondents decided then to cease all activities on their development proposal (this being the Stop Work decision).
In October 2021 a compensation notice was issued, based upon a valuation by the Valuer-General, which offered to pay the amount of $145,611,457, consisting of $145 million in market value pursuant to s 55(a) of the Act, and $611,457 in disturbance pursuant to s 55(d) of the Act.
The respondents commenced proceedings in the Court below objecting to the amount of compensation offered. They claimed compensation for the market value of the acquired land in the amount of $200 million, and disturbance in the amount of some $12 million. Sydney Metro contended that the appropriate valuation was $119,523,613.
[2]
Does market value take account of the steps not taken by the respondents?
[3]
The primary judge's decision
It was not in dispute that Sydney Metro had power to effect the acquisition of the respondents' land pursuant to the Transport Administration Act 1988 (NSW). What was in dispute was the appropriate valuation. There were matters of fact and law at issue between the parties in this regard.
The key legal issue with respect to market value related to the significance of the Discontinue and Stop Work Decisions, in circumstances where the primary judge found that but for those decisions the market value of the land as at the date of acquisition would have been higher than it was. The question, which turned on construction of ss 54-56 of the Act, was whether the market value of the acquired land should be determined taking into account the anticipated progression of the development of the site in circumstances where such progression did not occur because of the two decisions (see the judgment at [24]). Sydney Metro disputed that the respondents were entitled to compensation for work not actually done as at the date of acquisition. Her Honour resolved the issue in favour of the respondents' arguments:
[92] … I find that the provisions of the Just Terms Act do not preclude a claim for a decrease in the value of the Acquired Land caused as a consequence of the carrying out of the Public Purpose where such decrease relates to actions not undertaken where the undertaking of such actions would have produced in an increase in the value of the Acquired Land as at the Date of Acquisition. In this case, that may include actions not taken that are not (or would not have been) physically manifested on the Acquired Land.
The case was conducted on the basis that the public purpose for which the respondents' land was acquired by Sydney Metro was its undertaking the Sydney Metro West project (noted at [154]).
The primary judge found that the Discontinue Decision was reasonable as, having regard to the information available at the time, the prospect of acquisition of some or all of the land was a real risk, although "not a likely certainty" (at [156]). As regards the Stop Work Decision, her Honour found, unsurprisingly, that for the respondents to have continued progressing their development proposal despite having been told that the land was to be acquired "would have been inexplicable in the circumstances" (at [169]). Her Honour found that both decisions were caused by the proposal to carry out the public purpose (at [161] and [170]).
[4]
Legislative provisions
Section 37 of the Act sets out the right to compensation in relation to interests in land which have been compulsorily acquired by a relevant authority:
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 by the authority of the State which acquired the land.
The term "authority of the State" is defined in s 4(1) to mean Ministers, statutory bodies representing the Crown, councils under the Local Government Act 1993 (NSW), and any other authority authorised to acquire land by compulsory process.
Sections 54-56 are in a Division headed "Determination of amount of compensation". They address the entitlement to compensation, matters to be considered in determining the amount of compensation, and the notion of market value:
54 Entitlement to just compensation
(1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land.
(2) If the compensation that is payable under this Part to a person from whom native title rights and interests in relation to land have been acquired does not amount to compensation on just terms within the meaning of the Commonwealth Native Title Act, the person concerned is entitled to such additional compensation as is necessary to ensure that the compensation is paid on that basis.
55 Relevant matters to be considered in determining amount of compensation
In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division) -
(a) the market value of the land on the date of its acquisition,
(b) any special value of the land to the person on the date of its acquisition,
(c) any loss attributable to severance,
(d) any loss attributable to disturbance,
(e) the disadvantage resulting from relocation,
(f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
56 Market value
(1) In this Act -
market value of land at any time means 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, and
(b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and
(c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.
(2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition.
(3) If -
(a) the land is used for a particular purpose and there is no general market for land used for that purpose, and
(b) the owner genuinely proposes to continue after the acquisition to use other land for that purpose,
the market value of the land is taken, for the purpose of paying compensation, to be the reasonable cost to the owner of equivalent reinstatement in some other location. That cost is to be reduced by any costs for which compensation is payable for loss attributable to disturbance and by any likely improvement in the owner's financial position because of the relocation.
[5]
The competing constructions
As noted, the dispute is as to whether the market value of the acquired land should be determined taking into account the anticipated progression of the development of the site in circumstances where such progression did not occur because of the two decisions taken by the respondents. The focus of the dispute was and is on what is sometimes called the "statutory disregard" in s 56(1)(a), namely that the notion of market value is to be assessed "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".
Her Honour treated this in substance as raising an issue of "but for" causation. She stated at [117] that:
the enquiry required by s 56(1)(a) is not the hypothetical sale to the hypothetical purchaser but rather a determination, in the circumstances of this case, as to what stage the particular development by these Applicants would have reached but for the proposal to carry out the Public Purpose.
As explained, the primary judge found as a matter of fact that (a) the respondents would have done certain things but for having become aware of the possibility of their site being acquired, and (b) that if they had done those things the market value would have been higher as at the date of acquisition. Her Honour thus found that causation was made out in a "but for" sense and, on her view of the correct construction of the provisions, that was enough. The respondents supported this construction.
Sydney Metro submitted that ss 55 and 56(1)(a) do not direct a court to look beyond the actual state of the acquired land as at the date of acquisition. It said:
Section 56(1) is a definitional provision that operates with respect to the phrase market value where appearing in s 55(a). It requires that any increase or decrease in the value of the land caused by the public purpose to be disregarded.
It is clearly directed to any change in value of the land required to be valued by s 55(a) that might have been caused by the public purpose. It does not, on any reading of the text, authorise or require a modification of the operation of s 55(a) so that it would provide compensation for the value of the acquired land in anything other than its actual state at the date of acquisition.
It argued that s 56(1)(a) did not require the Court to take into account physical changes to the state of the land which had not in fact occurred as at the date of acquisition.
[6]
Text and context
Section 56(1)(a) involves a causation inquiry: the court is to disregard 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 in question. Here, the immediate causes of the found decrease in value of the Parramatta site were the Discontinue and Stop Work Decisions made by the respondents. Those decisions were caused by the suspicion (for the Discontinue Decision) then knowledge (for the Stop Work Decision) that Sydney Metro would move to acquire the site. The relative loss of value found by the primary judge - or, more strictly, the failure to increase in value - was thus indirectly caused by the possibility of acquisition, where the subsequent acquisition was itself a consequence of the public purpose of Sydney Metro undertaking the Sydney Metro West project. In that sense, there is a "but for" causal link between the public purpose and the relative loss in market value of the kind found by the primary judge.
Establishing causation in a legal context typically involves attribution of legal responsibility. It is "always purposive": Comcare v Martin (2016) 258 CLR 467; [2016] HCA 43 at [42]. Assessing legal causation commonly involves considerations beyond a purely factual "but for" inquiry: see eg Travel Compensation Fund v Robert Tambree t/as R Tambree and Associates (2005) 224 CLR 627; [2005] HCA 69 at [28]-[29] and [45]-[49]; Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19 at [11]. In terms of identifying the further considerations which may apply to limit the attribution of causal responsibility, where the causation requirement is established in a statutory regime "notions of 'cause' … are to be understood by reference to the statutory subject, scope and purpose": Allianz Australia v GSF Australia (2005) 221 CLR 568; [2005] HCA 26 at [99]; also Comcare v Martin at [42].
Here, the issue is the drawing of a link of attribution between a possible cause (the actual or proposed carrying out of the public purpose) and an effect (an increase or decrease in value of the land) for the purpose of determining a legal result (the calculation of market value for an acquired property as at the date of its acquisition). The question then arises as to whether the Parliament should be understood to have intended that the legal result depend simply upon a "but for" analysis, and, if so, "but for" what exactly?
[7]
Purposive considerations
Section 3(1) sets out the objects of the Act, which include the following:
(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 …
The primary judge appeared to attribute some significance to the reference in paragraph (a) to market value being "unaffected by the proposal", saying that this indicates "an intention that the relevant impacts on value - however they may arise - are not to affect the determination of compensation" (at [101]). No doubt the paragraph does allude to s 56(1)(a) but it does not indicate what sorts of effects of the proposal are to be taken into account. If anything, the paragraph militates slightly against the respondents' construction by referring to being unaffected by the proposal rather than by the acquisition (echoing the point made above at [40]).
Of more significance is paragraph (b), which refers to ensuring "compensation on just terms". That intention is further manifest by s 54(1) of the Act, which provides that the amount of compensation to which a person is entitled "is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land" (emphasis added). It is that which is the "dominant test": Leichhardt Council v Roads & Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353 at [37]. As has been said in a related context, "[c]ompensation prima facie means recompense for loss": Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 75 at 571; [1947] HCA 58. A key purpose of the Act thus is to provide just recompense for loss. Obviously there is room for argument as to what just recompense may be. In one significant respect, however, the respondents' construction leads to a result which clearly is not just, nor a recompense for loss.
A consequence of the respondents' construction is that they, and other claimants in their position, will obtain compensation on the premise that things were done in relation to or on the land by the date of acquisition which were not in fact done. If those things had occurred in fact then the owners would in general have had to expend money for them to occur. The owners would only obtain the net benefit of the increase in value after accounting for the costs of obtaining that increase. Yet on the respondents' construction the authority would be obliged to pay that nominal market value without the owners having had to expend the money. Both parties submitted that it was not consistent with the Act to provide for some netting off process, given that the provisions require the payment of market value (as defined) disregarding the relevant increase or decrease in value. Neither party, for example, argued that s 61 had any role to play in this regard. As the primary judge put it, the "analysis does not give rise to the requirement for an accounting of expenses as it looks to the land value and not the net value to the owner" (at [105]).
[8]
Case law
The parties could not identify any cases directly addressing the matter at issue. They each referred to various cases which had addressed relevant principles, albeit in the main addressed to other statutory schemes. These cases throw limited light on the issue.
Sydney Metro started by giving some emphasis to the "Point Gourde principle" which s 56(1)(a) was said to manifest, referring to the Privy Council's decision in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565. The High Court was unsurprisingly critical of a similar argument in Walker, saying that it "is the terms of [the] legislation that are determinative and it is not to be assumed that they reproduce or attempt to reproduce an understanding of 'principles' derived by way of gloss" on other statutory schemes (at [47]; see also at [31] and [35]); note further RD Miller Pty Ltd v Roads and Maritime Services NSW (2020) 103 NSWLR 234; [2020] NSWCA 241 at [154]-[156].
Sydney Metro referred to Turner v Minister of Public Instruction (1956) 95 CLR 245; [1956] HCA 7. That case involved consideration of s 124 of the Public Works Act 1912 (NSW), which required that compensation be assessed according to the value of the resumed lands at the time of publication of notification of the resumption, "without reference to any alteration in such value arising from the establishment of railway or other public works upon or for which such land was resumed". It was later said in the High Court that that provision "states in statutory form a principle which had been developed in the cases independently of express statutory provision": Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196; [1978] HCA 28, at 205, referring to Point Gourde.
Dixon CJ said the following in Turner (at 268, citation omitted):
That value was necessarily affected by all the advantages which the land possessed and these might be a matter of future or even contingent enjoyment. Future advantages or potentialities must not be excluded. At the same time the value of these things must be assessed according to the condition of the land as it stood at the time of resumption: "it is the present value alone of such advantages that falls to be determined". You must not notionally bring what is only potential into actual being and value it as if it existed.
On its face the last sentence, in particular, militates against the respondents' case here. Similarly, Williams and Kitto JJ each said, by reference to earlier authority, that "it is the possibilities of the land and not its realized possibilities that must be taken into consideration" (at 281 and 288). The land at issue in Turner had the potential for subdivision but at the time of acquisition no steps had been taken to subdivide it. The High Court upheld the finding of the Full Court that "the only sale that could be considered is a sale of the land as it was at the date of resumption, that is un-subdivided, but having the clear potentiality that it was fit for subdivision" (see at 269). However, the issue did not turn on what steps the owner would have taken but for learning of the proposed resumption. Thus the Court was not considering the issue at hand, let alone doing so by reference to the current statutory text and context.
[9]
Conclusion
Textual and contextual considerations point away from the respondents' construction in that the causal question needs to be directed to the effects on the value of the land of the authority carrying out or proposing to carry out the public purpose, not the effects of the proposed acquisition. It strains reasonableness of attribution for there to be causal significance to the free choices of the owners in response to the possibility or certainty of acquisition. The respondents' construction moves away from the central concern of s 56(1)(a).
Importantly, purposive considerations point against their construction, in particular the fact that their construction would enable former owners in their position - being a position which is far from unique - to obtain a windfall gain.
The cases to which the parties referred offered something to either side, but ultimately do not address the question at hand.
Weighing these factors together, the respondents' construction is not the better understanding of the intended operation of s 56(1)(a) of the Act. An increase or decrease in value caused only by choices made by an owner prior to the date of acquisition in relation to the land, being choices made because of the possibility or certainty of the land being acquired, are not the types of effects on value which can be regarded as having been caused by the actual or proposed carrying out of the public purpose for which the relevant authority is acquiring the land. Section 56(1)(a) does not require that the land be valued on a hypothetical basis as if such choices had not been made. Her Honour erred in concluding to the contrary. The grounds of appeal relating to assessment of market value should thus be upheld.
One further point should be addressed. As noted above at [43], Sydney Metro conceded that in circumstances where a rezoning would have occurred or development consent would have been obtained but for the actual or proposed carrying out of the public purpose, then the absence of the rezoning or development consent could and should be disregarded in assessing market value. Sydney Metro's version of the appropriate dividing line related to whether what would have been done involved physical changes to the land. That delimitation does not properly recognise that the issue being addressed is a causal one. The limitation is better expressed by saying that increases or decreases in value caused only by choices made by the owner because of the proposed acquisition are not to be disregarded pursuant to s 56(1)(a). In general, it is the fact of possible acquisition which is of concern to the owner, not the actual or proposed carrying out of the public purpose itself. That does not mean that the likelihood of a rezoning or development consent being obtained by the date of acquisition but for the actual or proposed carrying out of the public purpose is necessarily to be ignored, even though doing so may have involved taking account of steps that would have been taken by the owner. That is so because a step in the causal analysis in such cases may be that any application for rezoning or for consent would likely have been refused because of the public purpose. Thus the public purpose itself in such a case has causal significance in the analysis beyond steps the owner would or would not have taken because of the proposed acquisition.
[10]
The cross-appeal relating to the nominal construction contract
The primary judge held at [231] that but for the Discontinue and Stop Work Decisions the respondents would, by the date of acquisition, have entered into a construction contract for the proposed building. The respondents' usual form of construction contract contained a clause enabling them to novate/assign the contract to a third party at their option. The respondents submitted that this contract would itself have added to the value of the site, because it would have saved the prospective purchaser some 4.5 months in proceeding with the development. That time saving had material monetary value, they said, given the amount of capital involved in buying, developing and exploiting the site.
The primary judge rejected the respondents' argument. The respondents complain in the cross-appeal that her Honour erred in so doing. Her reasons were as follows:
[241] There was no evidence adduced that would indicate an increase in market value of the Land by the existence of a construction contract or if such increase did exist the quantum of any such increase. On that basis, I am unable to establish on the facts of this case that the mere presence of the construction contract would affect market value. As a matter of general principle, I do not accept that the mere presence of a construction contract where such contract was not transferred to the purchaser would increase market value. The contractual benefits are personal to the parties and there is no guarantee that such a bargain would be available to the hypothetical purchaser. To the extent that it is suggested that a purchaser would pay more as they know that there is a contract which can be novated, I do not consider that such value represents a component of market value. Any price attributed to any advantages from the Applicants' let tender that may flow to the purchaser through novation or otherwise would comprise a premium paid for a benefit not associated with the interest in the land, and as such is not to be taken into account in the determination of market value.
The primary judge thus gave three reasons for rejecting the argument: (1) there was no evidence there would be an increase in market value from having such a construction contract; (2) as a matter of general principle - implicitly meaning tendency in fact as opposed to legal principle - her Honour did not accept that such an increase should be inferred; and (3) even if there was such a benefit, she did not regard it as being part of the value of the respondents' interest in land.
[11]
Disturbance
Section 55(a) of the Act provides that in assessing compensation regard must be had to "any loss attributable to disturbance". That notion is then explained in s 59(1):
In this Act -
loss attributable to disturbance of land means any of the following -
(a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land,
(b) valuation fees of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land),
(c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs),
(d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired),
(e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage),
(f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.
The primary judge found that the compensation payable to the respondents for disturbance pursuant to s 55(d) of the Act was $10,819,388.85. One component of that - $182,845.00 for valuation costs pursuant to s 59(1)(b) of the Act - was not disputed on appeal. Another component not disputed was for legal costs reasonably incurred by the respondents, awarded pursuant to s 59(1)(a) of the Act. What was disputed was the remainder, ordered pursuant to s 59(1)(f) of the Act, relating to "stamp duty on replacement land; legal fees on purchase of replacement land; and loan establishment fees" (quoting [418]). By far the most significant of these integers was stamp duty, and the focus of argument was on that component.
The judgment does not disclose how the stamp duty amount was calculated, but her Honour appears to have contemplated that it would be calculated by reference to the market value determined for the land acquired (see at [418]). It appears to have been assumed that the replacement land would cost exactly the same amount as the market value of the site. The subsequent orders recording the precise numbers were made by consent, without any additional reasons being given by the primary judge.
[12]
Conclusion
It follows from the above that the appeal should be upheld in relation to both the market value and disturbance aspects of the respondents' compensation claim. The cross-appeal should be dismissed. It was not disputed that the matter would have to be remitted if the appeal was upheld.
It was not submitted that costs in this Court should not follow the event: note United at [67]-[68] and [122]-[123]. That should occur for both the appeal and the cross-appeal. The costs order made in the proceeding below should be set aside, but costs should then be a matter for the Land and Environment Court to determine at the conclusion of the remitted proceeding.
The orders of the Court should be as follows:
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.
GRIFFITHS AJA: I agree with Kirk JA.
[13]
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: 01 February 2024
[2006] HCA 50
Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 75; [1947] HCA 58
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
RD Miller Pty Ltd v Roads and Maritime Services NSW (2020) 103 NSWLR 234; [2020] NSWCA 241
Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41
Roads and Traffic Authority (NSW) v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159
Travel Compensation Fund v Robert Tambree t/as R Tambree and Associates (2005) 224 CLR 627; [2005] HCA 69
Turner v Minister of Public Instruction (1956) 95 CLR 245; [1956] HCA 7
Walker Corp Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5
Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19
Woollams v The Minister (1957) 75 WN (NSW) 103
Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156
Category: Principal judgment
Parties: Sydney Metro (Appellant)
G & J Drivas Pty Ltd (First Respondent)
Telado Pty Ltd (Second Respondent)
Representation: Counsel:
N Hutley SC with M Astill (Appellant)
A Galasso SC with L Waterson (First and Second Respondents)
Solicitors:
Clayton Utz (Appellant)
Hughes and Associates (First and Second Respondents)
File Number(s): 2023/0111636
Publication restriction: Nil
Decision under appeal Court or tribunal: Land and Environment Court of New South Wales
Jurisdiction: Class 3
Citation: [2023] NSWLEC 20
Date of Decision: 13 March 2023
Before: Duggan J
File Number(s): 2021/307473
HEADNOTE
[This headnote is not to be read as part of the judgment]
The appellant is a State statutory corporation which is in the process of building a new metro train line between the Sydney CBD and Westmead. The respondents jointly owned a large and valuable block of land in the Parramatta CBD which they planned to develop. In February or March 2019 the respondents decided to slow development planning work on the project because they came to suspect that their site would be compulsorily acquired. In October 2019 they decided to stop work on the project when they were informed that their site would be compulsorily acquired. That acquisition occurred in March 2021.
A controversy arose as to the compensation payable by Sydney Metro to the respondents pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Act). The primary judge in the Land and Environment Court determined that the market value of the land payable pursuant to s 55(a) of the Act was some $179 million, in part based upon the finding that, but for their two decisions, the respondents would have continued undertaking their development project which would have increased the value of the land. Her Honour considered that the absence of increase in market value because of the two decisions was to be disregarded pursuant to s 56(1)(a) of the Act. The primary judge also found an amount of some $10.8 million was payable for disturbance pursuant to ss 55(d) and 59(1)(f) of the Act relating to stamp duty costs, legal fees and loan establishment fees in acquiring a replacement site.
Sydney Metro appealed and the respondents brought a cross-appeal. There were three key issues for determination:
(i) whether the primary judge erred in concluding that market value was to be assessed taking into account what would have occurred at the site but for the respondents' decisions to slow and then stop development;
(ii) under the cross-appeal, whether the primary judge erred in excluding from consideration of market value the advantages of the likelihood (but for their two decisions) of the respondents having entered a construction contract for their proposed development, which could have been novated to a hypothetical purchaser;
(iii) whether the primary judge erred in allowing the respondents' disturbance claim for supposed stamp duty costs, legal fees and loan establishment fees in acquiring a replacement site.
The Court upheld the appeal and dismissed the cross-appeal (per Kirk JA, Payne JA and Griffiths AJA agreeing) holding as follows:
As to issue (i):
(1) Section 56(1)(a) involves a causation inquiry. The court is to disregard 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 in question. Establishing causation in a legal context typically involves attribution of legal responsibility. It is always purposive. Assessing legal causation commonly involves considerations beyond a purely factual "but for" inquiry: [32]-[33].
Comcare v Martin (2016) 258 CLR 467; [2016] HCA 43; Travel Compensation Fund v Robert Tambree t/as R Tambree and Associates (2005) 224 CLR 627; [2005] HCA 69; Wallace v Kam (2013) 250 CLR 375; [2013] HCA 19, Allianz Australia v GSF Australia (2005) 221 CLR 568; [2005] HCA 26, referred to.
(2) The text and context of the Act point away from the respondents' construction of s 56(1)(a). The assessment of market value is to be undertaken as at a particular date, being the date of acquisition. The causal question needs to be directed to the effects on the value of the land of the actual or proposed carrying out of the public purpose rather than to the effects of the proposed acquisition of the particular land: [37]-[39]. The public purpose here did not itself directly cause the relevant effect on the value of the land. Rather, it was the two decisions of the respondents. Further, the respondents were acting in response to the possible acquisition of their land, regardless of the nature of the purpose for which it was being acquired. It strains the reasonableness of legal attribution for the free choices of the owner, responding to the proposed acquisition as opposed to the public purpose itself, to affect the amount that the acquirer has to pay: [40].
Walker Corp Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5; Woollams v The Minister (1957) 75 WN (NSW) 103; Roads and Traffic Authority (NSW) v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159, considered.
(3) A key purpose of the Act is to provide just recompense for loss. A consequence of the respondents' construction is that they, and other claimants in their position, will obtain compensation on the premise that things were done in relation to or on the land by the date of acquisition which were not in fact done. The potential for significant, unjust over-compensation on the respondents' construction militates strongly against it being accepted: [49]-[59]. The broad intent behind s 56(1)(a) is to compensate the owner fairly for having their land taken from them, as if the land had been sold at the date of acquisition by a willing but not anxious seller to a willing but not anxious buyer: [63]-[64].
Leichhardt Council v Roads & Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353, Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 75 at 571; [1947] HCA 58, considered.
(4) In this context, an increase or decrease in value caused only by choices made by an owner prior to the date of acquisition in relation to the land, being choices made because of the possibility or certainty of the land being acquired, are not the types of effects on value which can be regarded as having been caused by the actual or proposed carrying out of the public purpose for which the relevant authority is acquiring the land. Section 56(1)(a) does not require that the land be valued on a hypothetical basis as if such choices had not been made: [88].
As to issue (ii)
(5) The fact that the respondents would have entered into a construction contract but for the decisions to slow then stop work is an example of an effect on market value caused only by steps the owner chose not to take because of the proposed acquisition. Such effects are not to be disregarded pursuant to s 56(1)(a) of the Act. In any event, the respondents' arguments raised questions of fact rather than law: [90]-[94].
As to issue (iii):
(6) Section 59(1)(f) should be interpreted so as not to subvert the limitations contained within the earlier paragraphs: [109]. There is no apparent reason why the Parliament would have been concerned to cap the amounts recoverable for stamp duty and financial costs in connection with the discharge of a mortgage when the claimant had relocated (or proposed to do so), under ss 59(1)(d) and (e), but not in circumstances where the claimant had not relocated. The precise monetary limitations stated in pars (d) and (e) imply that stamp duty and mortgage costs can be claimed only in the circumstances and to the extent set out in those paragraphs: [114]. The respondents' claim for stamp duty and mortgage costs under par (f) cannot be maintained: [115]-[121].
Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41; Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 99; Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50; Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) (2000) 108 LGERA 417; [2000] NSWLEC 139; Blacktown City Council v Fitzpatrick [2001] NSWCA 259, considered.
Her Honour found that each of the decisions "caused a decrease in the value of the Acquired Land" as at the date of acquisition as compared to what the value would have been but for those decisions (at [162] and [172]). She held at [231] that, but for those decisions, by the time the property was acquired on 19 March 2021 the applicants would have done the following:
(1) Completed design competition and obtained development consent for the Expanded Building;
(2) Called for tenders for the demolition and construction of the Expanded Building and entered into a construction contract with the successful tender;
(3) Continued to market with a view to obtaining tenant precommitments and as at the Date of Acquisition, the Applicants would have obtained some tenant precommitment;
(4) Completed the demolition of the existing building;
(5) Obtained the necessary [Aboriginal Heritage Impact Permit] and s 140 approval for the heritage investigations and commenced and completed all necessary heritage investigation; and
(6) Commenced at least in a preparatory stage the earthworks and basement retention work, however, these works would not have been completed as at the Date of Acquisition;
Within the timeframes identified in the Applicants' chronology at Annexure A.
The primary judge found that obtaining development consents, carrying out of demolition work, and completion of the heritage investigations, all would have increased the value of the site (at [233]). They added certainty both as to what development could be undertaken at the site and when that could occur. Those steps thus would have reduced development risk.
However, the primary judge considered the issue was different in relation to entry into a construction contract, which she did not accept affected market value (at [241]), this being the issue the subject of the cross-appeal.
Each side had put on evidence from expert valuers, who had applied different valuation methodologies. Sydney Metro contended that a direct comparison approach, looking to sales of land with similar development potential, was the appropriate methodology. The respondents contended for a residual land value approach (RLV). However, Sydney Metro's expert accepted that if the building was assumed to be under construction as at the date of acquisition - which was the effect of her Honour's legal and factual findings - then an RLV-type approach was appropriate, and her Honour proceeded accordingly (at [263]). Various factual disputes relating to the correct market valuation remained, which her Honour resolved, and which are not challenged on appeal.
Relevant terms are defined as follows in s 4(1) of the Act:
acquisition of land means an acquisition of land or of any interest in land. …
interest in land means -
(a) a legal or equitable estate or interest in the land, or
(b) an easement, right, charge, power or privilege over, or in connection with, the land. …
land includes any interest in land. …
public purpose means any purpose for which land may by law be acquired by compulsory process under this Act.
Section 61 of the Act makes particular provision for value assessed on the potential of land:
If the market value of land is assessed on the basis that the land had potential to be used for a purpose other than that for which it is currently used, compensation is not payable in respect of -
(a) any financial advantage that would necessarily have been forgone in realising that potential, and
(b) any financial loss that would necessarily have been incurred in realising that potential.
There are reasonable arguments that can be made both ways. Sydney Metro's arguments tended to ignore the fact that s 56(1)(a) involves asking a causal question. It also gave somewhat excessive emphasis to case law about past statutory regimes. And seeking to downplay the significance of s 56(1)(a) as merely "definitional" adds little if anything to analysis when the main work that s 56(1) does is to fill out the nature of the head of compensation listed in shorthand in s 55(a), and the two provisions must be read together. That being said, in my view the construction put by the respondents and adopted by the primary judge is not the better construction of the provisions. Nor, however, do I consider Sydney Metro's construction to be quite correct. The appropriate construction is set out below at [88]-[89]. It is appropriate to begin with the text and context of the provision before turning to consider purposive issues.
The assessment of market value is to be undertaken as at a particular date, being the date of acquisition. That is so because s 55(a) refers to "the market value of the land on the date of its acquisition", and s 56(1) says that market value of land "at any time means the amount that would have been paid for the land if it had been sold at that time". The words "at that time" refer back to the date of acquisition as identified in s 55(a). The words "at any time" simply reflect the fact that the statutory notions are to be applied from time to time in relation to particular land.
What is being assessed is the market value of the "land" that is acquired, which includes any interest in land (see the definitions in s 4(1), quoted above at [24]).
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.
That understanding is reinforced by the fact that s 56(1)(a) talks of the carrying out of, or the proposal to carry out, that public purpose. It is the acquiring authority which is carrying out, or will carry out, that public purpose. The first of those possibilities arises where the authority is already carrying out the public purpose when the land is acquired. That was the case here: the public purpose was Sydney Metro's undertaking of the Sydney Metro West project, which extended well beyond the respondents' land and had already commenced. In other cases the authority will only commence carrying out the public purpose at some time after the land in question has been acquired. Either way, attention is directed to the effect that the authority's actions in carrying out the public purpose involving the land (now or in the future) has had on the value of the land as at the date of acquisition.
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 of the particular land. That focus on what has been caused by the actual or proposed carrying out of the public purpose stands in contrast to losses attributable to disturbance, which involve costs or fees of various kinds incurred in connection with the acquisition (see s 59(1) which is quoted below at [95]). And, as explained, the relevant actor who is doing the carrying out of the public purpose is the authority acquiring the land, not the owner. As the High Court said in Walker Corp Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at [54], 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".
The respondents' construction does not sit well with these aspects of the text. The public purpose here - the undertaking of the Sydney Metro West project - did not itself directly cause the relevant effect on the value of the land. Rather, it was the two decisions of the respondents. Further, those decisions were not taken in response to the public purpose itself. The respondents were acting in response to the possible acquisition of their land, regardless of the nature of the purpose for which it was being acquired. Thus the effect on the value of the land was two stages removed from Sydney Metro's carrying out of the public purpose. It involved independent decisions of the owners, in a freely chosen (if entirely rational) response to the possibility that their land would be acquired, where that acquisition was occurring in order for Sydney Metro to continue carrying out the public purpose. It strains the reasonableness of legal attribution for the free choices of the owner, responding to the proposed acquisition as opposed to the public purpose itself, to affect the amount that the acquirer has to pay.
Sydney Metro argued that the Discontinue and Stop Work Decisions made by the respondents did not lead to a decrease in the value of the land, but just meant that an increase in the value of the land that otherwise would have occurred (by reducing development risks) did not occur. Arguably this point illustrates that the way s 56(1)(a) has been applied is removed from its central concern. However, I do not place significant weight on it. As Hardie J noted in Woollams v The Minister (1957) 75 WN (NSW) 103 at 107, where the public purpose is being pursued during a period where realty prices are increasing then "the depreciating effect on value of the public work may not be to reduce value in terms of money but to retard the inflationary process and thus diminish the increase in value that would otherwise take place".
The argument to which Sydney Metro gave most emphasis was that the respondents' construction focuses not on the land that was actually acquired but on the land in a state that it might have been on the date of acquisition if different choices had been made. Here, the primary judge found that but for the two decisions, not only would development consent have been obtained for the Church Street Tower Extension but the existing building would have been demolished and earthworks and "basement retention work" would have commenced (at [231]). In those respects the site would physically have been different.
There is not as much force in this argument as submitted by Sydney Metro. It has been said for this statutory scheme, as for previous schemes, that "the land must be valued at the relevant date in its existing condition with all its potentialities as potentialities": Roads and Traffic Authority (NSW) v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159 at [15]. Thus, for example, where the land has the potential to be rezoned in a way that will affect its value, that will be taken into account in the valuation process, just as it would have been a factor were the property to have been sold in the open market on the relevant day. As Sydney Metro emphasised in its submissions, that still involves valuing the land as it is on the date of acquisition. Sydney Metro also accepted that s 56(1)(a) might require the valuation to proceed on the basis that the land would in fact have been rezoned as at the date of acquisition - ie so that rezoning was certain, not just a potentiality - if it was established on the facts that that would have occurred but for the public purpose: see eg Council of the City of Ryde v Azizi [2019] NSWSC 1605 at [52]-[53]. Sydney Metro further accepted that where it was established that development consent would have been obtained but for the public purpose then that, too, could be taken into account in assessing the market valuation. None of these situations, it says, involve assessing the land in a theoretical physical state that it would have been in at that date but for some prior decisions of the owner.
However, as the primary judge noted (at [95]), the other paragraphs in s 56 arguably provide some contextual support for the respondents' construction, in that they also involve the disregarding of aspects of the state of the land when acquired. Sydney Metro accepted that s 56(1)(b) may have this effect in directing that the market valuation disregard any increase in the value of the land caused by the carrying out by the acquiring authority, before the land is acquired, of improvements for the public purpose for which the land is to be acquired. That might occur, for example, if the owner has permitted the authority to undertake some works on the land to be acquired in anticipation of the acquisition. Sydney Metro sought to turn the provision to its advantage, submitting that this was an express exception to the principle of valuing the land as it was. In the end, these arguments tend to neutralise each other - what one side says is an express exception to the general principle the other side says is an illustration that no such general principle should be accepted. Section 56(1)(b) addresses a distinct topic and throws little light on the meaning of s 56(1)(a).
As for s 56(1)(c), that requires the disregarding of any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. That may also require disregarding of the actual condition of the land (eg if a development on the land was undertaken contrary to law). But again it addresses a distinct mischief. These other two paragraphs of s 56(1) illustrate that the respondents' construction of s 56(1)(a) is a plausible one, but otherwise do not advance analysis.
Overall, for the reasons explained above at [35]-[40], textual and contextual considerations point away from the construction put by the respondents and accepted by the primary judge. Contrary to the respondents' submission, a rejection of their construction does not involve reading words of limitation into s 56(1)(a). That submission wrongly assumes that the language of "caused by" in that provision can only mean "but for" causation in the broadest conception of that phrase. Rather, as explained above, the issue is what that invocation of causation means in this statutory context.
For completeness, I note that the respondents made extensive oral submissions about aspects of the valuation evidence. Those submissions cannot affect resolution of the issue at hand which is one of statutory construction.
Her Honour said that the "facts of this case may produce this perceived 'windfall', however, that consequence will not necessarily follow in all cases as the factors that influence the land value will vary depending upon the facts of each case" (at [105]). There is nothing merely perceived about the windfall. The respondents put to this Court that the amount in question here - ie the amount that they would have had to spend to have done the things they would have done but for the two decisions - was some $8 million. Whether or not that is the correct figure, it suffices to prove the point. As the respondents accepted in oral argument, the construction adopted by the primary judge could involve "getting compensation for costs not actually expended". That is not recompense for loss.
Overly generous compensation in one case might be of limited value in construing the Act. But the primary judge erred in suggesting that this would be a rare consequence. Her Honour said that, pursuant to the scheme of the Act, "it is intended that there be a fixed, relatively short, time period between the notice of acquisition and the acquisition itself" (at [103]). She said at [106] that this case was "extremely unusual" in the length of time between the respondents being notified of the intended acquisition (in October 2019) and the acquisition being effected (in March 2021).
Section 10A(2) of the Act provides that the authority of the State "is to make a genuine attempt to acquire the land by agreement for at least 6 months before giving a proposed acquisition notice". The six month requirement is only a minimum period, albeit one which can be shortened or lengthened by agreement, or by Ministerial decision in circumstances of urgency or the like, pursuant to ss 10A(3) and (4). Only after the expiration of that period can the State authority issue a proposed acquisition notice, which itself gives between 90-120 days notice of the actual acquisition (a period which again can be shortened by agreement or Ministerial decision): ss 13-14. Thus in general there will be at least 9 months between the start and the completion of the acquisition process for any particular land. That is large enough of a gap materially to affect decisions taken in relation to the land.
In any case, there are reasons why the longer time gap of the kind at issue here may not be unusual. The Discontinue Decision, which was taken some two years before the acquisition date, was based upon the respondents' rational suspicions that the site would likely be acquired by Sydney Metro (see above at [10(3)]). Rational suspicions, or even near certainty, may arise well before any notice of acquisition is provided. Many proposed public purposes are telegraphed well in advance of any particular acquisition taking place. The more significant the proposal the more likely it is that there will have been feasibility studies, environmental impact assessments and the like, along with general public discussion of the possibility of some such project proceeding. Here, Mr Coombes of the second respondent became aware of the Sydney Metro West project in November 2016, over four years before the date of acquisition. And he developed his suspicions about the site being acquired because of geotechnical investigations being undertaken by Sydney Metro.
Sydney Metro gave examples of significant periods of notice drawn from the case law. Woollams concerned the development of Warragamba Dam. The development of that dam had been foreshadowed in 1941, approved in 1946, and a map of properties that would be inundated was published in 1948, but the resumption of the land in question did not occur until 1954. In Mosca the public purpose was the development of part of the M7 motorway, linking the M2 and M5 motorways. The RTA published its initial design proposal and route investigation study in 1994, an environmental impact statement was exhibited in October 2000, and the land in question was resumed in October 2002.
Such examples illustrate that not infrequently there will be significant delays between an owner learning or coming rationally to suspect that their land will be acquired and the acquisition taking place. Indeed, the object of the Act identified in s 3(a) refers to the land affected by a proposal for acquisition by an authority of the State being "eventually acquired". In Walker, at [53], the High Court approved the proposition that this reference indicates that "the proposal might predate by a significant period the acquisition of the land in question".
The longer the window the more likely it is that the owner will step back from implementing any development plans that they had with respect to the land. And in so doing, on the respondents' construction, they may come to obtain a windfall as if their plans had come to some degree of fruition without having had to expend the funds for that to occur. Sydney Metro gave the example that if, here, the time delay had been greater between the Discontinue Decision and the date of acquisition then the respondents' proposed building development could nominally have been completed by that date, in which case it suggested the respondents would have been entitled to some $600 million compensation without actually having incurred the costs of construction (see the judgment at [77]). Whether or not that figure is accurate, there is no reason to doubt that for the respondents to have completed the building development would have cost them a great deal, and the completed building would have been worth a very substantial amount.
The potential for significant, unjust over-compensation on the respondents' construction militates strongly against it being accepted. The primary judge said that if the Parliament had not intended such results then "it could have made provision to exclude such elements in the determination of market value such as has been done, by way of example, in s 61" (at [104]). That statement tends to presuppose that the natural construction of the text of s 56(1)(a) favours the respondents' construction, such that some express provision to the contrary was required to overcome that construction. As explained above, the text in fact tends to point against the respondents' construction.
The respondents did identify some possible injustice the other way. They made the point that it was both rational and reasonable for the respondents to have taken the two decisions that they did. Further, it might be thought wasteful of resources, in a way unlikely to have been intended, to require owners to continue undertaking development steps for a project that ultimately is doomed because of the likelihood (or certainty) of acquisition. In some circumstances that might involve a new building being constructed in the knowledge that it would shortly be demolished. They gave another example of a farmer who learned of the proposed acquisition of their farm who then understandably gave up clearing the land of noxious weeds in a way that reduced the value of the land as at the date of acquisition.
These points have some force. That being said, it does not seem likely that in many cases the owner would be in a materially worse position in not doing something on the land to be acquired. That would only occur where an increase in market value would otherwise have occurred, and where that increase materially exceeded the costs of doing the thing in question. Where there is any such difference of substance it is likely to be in relation to highly valuable pieces of land, such as the site here, where for example an increase in development certainty can have a material effect on the market value of the site.
In any case, in my view these points do not outweigh the force of the purposive arguments going the other way. The effect of rejecting the respondents' construction may be that it will be in the interests of some owners to continue undertaking development work on their land even if they suspect or know the land will be compulsorily acquired. That is something that lies within their choice.
This understanding is consistent with what can be inferred to be the general purpose of the statutory disregard provided for in s 56(1)(a). The broad intent is to compensate the owner fairly for having their land taken from them, as if the land had been sold at the date of acquisition by a willing but not anxious seller to a willing but not anxious buyer. Some public purposes will inflate property prices, for example if a new piece of infrastructure, such as a train station, increases the desirability of the area. Other public purposes will depress prices, for example if the new piece of infrastructure is of a type that people do not like living in proximity to, or if the process of acquisition is drawn out in a way that negatively affects the value of comparable properties. As an example of the latter, after it became known that certain valleys would be flooded by the Warragamba Dam it was "only natural there would be few, if any, people wishing to purchase properties in the area", and there was also a degradation in the provision of services and the standard of infrastructure in the valleys (Woollams at 106).
In aiming to provide just recompense for the loss of land compulsorily acquired there is no good reason why an owner should receive the benefit of any increase in the value of the land caused by the public purpose which led to the acquisition. Conversely, it would be unfair to owners to ignore the fact that the value of their land had been driven down (or "blighted") by the public purpose. This intent of just compensation involves disregarding the effects on value of the actual or proposed carrying out of the public purpose. It does not require disregarding the effects of choices made by owners in response not to the public purpose itself but to the fact that their land may or will be acquired.
The primary judge referred at [109] to Woollams, applying s 124 of the Public Works Act in 1957. The relevant issue there was the significance of the deterioration in economic and social conditions in the valleys to be flooded since and because the Warragamba Dam project had been announced (eg the local bus line had stopped running and the prospect of electricity being connected had gone). Hardie J not only held that the effect on the property value of such deterioration was to be ignored but that valuation should occur "on the assumption that those amenities and conditions would have improved during the period under consideration, as they did in other primary producing and tourist areas during the post-war years" (at 109). Here, her Honour considered that the fact that improvements that would have occurred around the subject land could be taken into account, consistently with Woollams, supported the conclusion that improvements the owners would have made to the subject land could be assumed to have occurred. Yet there is a difference between taking account of the general development of an area that would have occurred but for the public works, on the one hand, and taking account of specific decisions taken by the owner in response to the proposed acquisition on the other.
In San Sebastian, in 1978, the High Court considered the significance of planning law restrictions connected to a proposed resumption, with Jacobs J saying (at 206):
Restrictions on land use, so that, explicitly or practically, use is restricted to a use for a public purpose for which the land might be resumed, are commonly imposed as a result of consultation with or direction by the public authority concerned with the carrying out of the particular public purpose. In such a case where there is a direct relationship between the restriction on land use and the proposed establishment of the public works the effect on value of the zoning or restriction ought to be ignored.
His Honour went on to acknowledge that such a causation inquiry may be factually complex.
Subsequently, in Walker (relating to the current Act), the High Court held that land use restrictions imposed by a local council in order to achieve much the same end as the public purpose for which the land was ultimately acquired by a State government authority, but where those restrictions were not causally linked to actions of the acquiring State authority to achieve its proposal, were not to be disregarded under s 56(1)(a) in assessing market value. That decision illustrates clearly that the inquiry being undertaken is a causal one.
The case of Griffith City Council v Polegato (1990) 20 NSWLR 696, addressing the Public Works Act, concerned a site where the owners had obtained development consent to undertake a mixed residential and shop development on essentially vacant land, had undertaken some building work, but then stopped work because they were told that the Council was likely to want to acquire the site. By the time the Council actually resumed the site, three years later, the development had been rendered economically unviable for other reasons relating to the costs of building and general market values in the area. This Court held that the land could not be valued on the basis that the project was viable, as the lack of viability had occurred because of facts independent of the resumption process, even though the development would have proceeded but for the owners having been told of the proposed resumption. On the one hand the case can be argued to support Sydney Metro as it involved ignoring the consequences of a reasonable choice made by the owners to stop development work. On the other hand the case turned on the fact that the loss of value was seen to have occurred by reasons independent of the proposed resumption. The primary judge here considered that the case was neutral as regards the current issue (at [108]). I agree.
In its written submissions Sydney Metro placed some emphasis on this Court's decision in Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156. The case concerned acquisition of land at Darling Harbour for which the owner had by July 1984 obtained development consent and building approval to develop a market. The State authority informed the owner in June 1984 that it was possible that the site would be resumed, and that occurred 11 months later in May 1985. The market was not built in the meantime. This Court upheld the trial judge's rejection of the evidence of two of the owner's experts who had valued the site on the assumption that the market had been built. Handley JA, with whom Kirby P agreed, said that that approach was "contrary to the fundamental principle that what must be valued is the property taken in the condition at which it existed at the date of resumption" (at 175, see also 179).
The primary judge considered the decision to be of little assistance in the determination of the present question (at [113]). I agree. The case concerned the prior legislative scheme; there was no clear factual finding that the market would have been built by the time of acquisition but for the possibility of resumption; it is not entirely clear whether his Honour's discussion was directed to issues of special value to the owner; and there was in any event no detailed consideration of the issue.
The respondents sought to rely on this Court's decision, under another statutory regime, in Blacktown City Council v Lasseter [1996] NSWCA 51. The local council had approved a subdivision for residential purposes on condition that a lot, Lot 14, be dedicated as a public reserve. That left an adjoining lot, Lot 13, landlocked. The owner requested that the council resume Lot 13, which occurred. This Court upheld the trial judge's decision that the land should be valued ignoring the fact that the lot was landlocked, because "the landlock was part of the resumption process" in circumstances where the lot "was always liable and likely to be resumed". The respondents sought to emphasise that this meant a physical aspect of the land as at the date of resumption was being ignored. That is correct, but it did not involve issues of what the owner would or would not have done but for the possibility of resumption. The primary judge was, again, correct to regard the case as turning on its facts and of little assistance here (at [108]).
Sydney Metro invoked this Court's decision in Mosca in 2006, made under the current Act. The development potential of the land in question there had been blighted for some time by the possibility of acquisition for the purpose of the M7 motorway. The trial judge held that this blight had "not only prevented the earlier realisation of its development potential, it had also caused the owner to lose opportunities that earlier development offered" (to quote this Court at [12]). As noted above, Handley JA, speaking for the Court, said that the "basic principle of compensation law is that the land must be valued at the relevant date in its existing condition with all its potentialities as potentialities" (at [15]), citing Turner and Yates, along with an earlier Privy Council decision, in support. As for the lost opportunities, two of those in fact had not been lost, leaving aside the public purpose, and the third had been lost for reasons other than the public purpose (at [16]-[18]).
On its face, the statement of "basic principle" tends to support Sydney Metro's position here. However, Handley JA went on to accept the applicability of the approach taken in Woollams (at [50]-[54]), saying that the trial judge "was therefore entitled to assume that conditions in the Maxwells Creek corridor would have been improved to the extent to which this would have occurred if there had been no [motorway] proposal" (at [55]). His Honour went on to find error by the trial judge in definitively treating the land as though it would have been in a condition that would enable its development potential to be realised, as opposed to making findings of fact as to what would have happened but for the project (at [56]-[59]). It is not clear to what extent his Honour would have been prepared to take account of what might have occurred on the land but for the public purpose. Again, thus, the primary judge in this case did not err in concluding that the decision did not address the issue at hand (at [112]).
I note for completeness that the respondents sought to argue that Mosca was wrongly decided. In light of what I have just said it is not necessary to consider that argument.
The respondents sought to rely on a decision of the Victorian Court of Appeal in Love v Roads Corporation (2014) 200 LGERA 76; [2014] VSCA 30. The case concerned acquisition of land for the purposes of a freeway bypass. The Victorian legislation was relevantly in much the same terms as the Act. The equivalent of s 56(1)(a), being s 43(1)(a) of the Land Acquisition and Compensation Act 1986 (Vic), used the term "arising from" instead of "caused by", but the former phrase also invokes causation. The owner asserted that but for the freeway bypass he not only would have obtained planning consent for development of a quarry on the subject land but the quarry would have been in operation by the date of acquisition. The public authority conceded that a restricted planning consent for a particular type of quarry would have been obtained. The trial judge found that the owner had not established as a matter of fact that anything beyond that restricted consent would have been obtained, and further was not persuaded that any quarry would have been operating as at the date of acquisition but for the resumption (see at [61]-[63]). The owner failed on appeal to establish any error of law in the trial judge's approach.
The Court of Appeal concluded its discussion of the point by saying this:
[76] Mr Love's case failed because he did not establish the factual basis for it. If he had done so, it would have been necessary to determine whether his case stretched the notion of a "decrease" in value which must be disregarded beyond the limits that the words of the provision may properly bear. Further, if the words of s 43(1)(a) could properly encompass such a case, it would then have been necessary to consider whether such circumstances should be addressed as loss of an opportunity or loss of a chance, as Basten JA has suggested in relation to zoning and planning [in Sydney Harbour Foreshore Authority v Walker Corp Pty Ltd (2005) 63 NSWLR 407; [2005] NSWCA 251 at [92]-[90]], and as is perhaps also suggested in Mosca. This approach has the attraction of consistency with the approach to hypothetical events in the context of damages, as explained by the High Court in Malec v J C Hutton Propriety Ltd [(1990) 169 CLR 638 at 642-3]. No occasion arises on this appeal, however, to determine those issues.
In my respectful view the Victorian Court of Appeal correctly acknowledged in this passage that if it had been necessary for it to address whether the owner could claim in relation to a quarry that he would have built but for the purpose for which the land was acquired, then a question would have arisen as to whether that would go "beyond the limits that the words of the provision may properly bear". That is the very question which has arisen in this case. As for the possibility of adopting a loss of chance approach, neither party here advocated such a method either in this Court or the Court below.
In sum, none of these cases resolve the issue at hand. Sydney Metro can point to the fact that emphasis has been given in cases such as Turner, Yates, Polegato and Mosca to the notion that the focus must be on the land as it existed on the date of acquisition, including with all of its potentialities, but not as though such possibilities have been realised in fact. To some extent that notion militates against taking account of things that could have been done but were not, although it does not address the situation where it is established that certain things would have been done. Conversely, the respondents can point to the acceptance in Woollams and Mosca of the notion that account can be taken of things that would have been done on surrounding land but for the public purpose. The issue here falls between these two notions.
Regardless of those reasons, her Honour's decision on the issue was correct in light of the conclusion reached above. Even assuming that some effect on market value could have been established, the fact that the respondents would have entered into a construction contract but for the two decisions is an example of an effect on market value caused only by steps the owner chose not to take because of the proposed acquisition. Such effects are not to be disregarded pursuant to s 56(1)(a) of the Act.
In any event the attack on her Honour's reasons should be rejected. The first two reasons are linked factual conclusions. The third reason is independent and raises a legal question. The parties only have a right to appeal on questions of law. The respondents can only succeed on their cross-appeal if they can characterise their attack on the first two reasons as involving a question of law. They sought to do so by making the novel submission that "there was 'no evidence' for the primary judge's finding that there was 'no evidence' of an increase in value", citing Kostas v HIA Insurance Services Pty Limited (2010) 241 CLR 390; [2010] HCA 32 at [91]. Even if it is assumed that this might be an error of law (a matter it is not necessary to address), the respondents did not explain, by reference to any factual findings or relevant legal principles, how it was that this ground could be established. They effectively just asserted that the conclusion they supported was obvious. Her Honour rejected that type of argument in her second reason. Their disagreement with that conclusion simply involves disagreeing on an issue of fact. The respondents' attack on the first and second reasons do not raise a question of law. It is unnecessary to address their critique of the third reason.
Her Honour found that there was an "actual use" of the site under s 59(1)(f), relying on Blacktown City Council v Fitzpatrick [2001] NSWCA 259. That use was that the respondents together held the land "for the purposes of a common business of identifying, then acquiring, prime commercial real estate with development potential, undertaking appropriate refurbishment or redevelopment to add value and then actively managing the improved property going forward as a long-term income generating asset" (at [414]). No challenge was made to those findings at [414], which were accepted to be ones of fact.
Her Honour went on as follows:
[415] I am therefore satisfied that the Land was held as part of the stock in trade of the business such that, applying the principles in Fitzpatrick that the Applicants' use of the Land was an actual use of Land for the purposes of s 59(1)(f) of the Just Terms Act and would be entitled to the disturbance they claim for replacing the Land.
In effect, her Honour found that the acquisition of the land removed it from the respondents' portfolio of assets, and the respondents would incur the identified fees in replacing it. I note that her Honour made no express finding that the respondents in fact intended to replace the land. In Fitzpatrick the claimant had actually replaced the land acquired by the time the disturbance claim was determined. However, despite being questioned on the topic, Sydney Metro took no issue on the point.
In oral submissions in this Court Sydney Metro abandoned a challenge to her Honour's conclusion that the respondents' business involved an "actual use" of the land in the sense employed in s 59(1)(f). Sydney Metro's remaining challenges involved three alternative arguments:
1. that Fitzpatrick was distinguishable;
2. that this type of claim was only compensable if it fell within paragraphs (c), (d) or (e) of s 59(1), and it did not;
3. that s 61 applied to preclude recovery here.
Sydney Metro's first argument was rather elusive but involved the proposition that here the respondents' business was to acquire and hold assets for their income producing capacity, sometimes with appropriate refurbishment and redevelopment. In contrast, it said, in Fitzpatrick the claimant's business was a business of trading in land. The claimant in that case had a business of acquiring land, holding it as part of a "land bank", then subdividing it when the time was right in order to resell the land at a profit (see this Court's decision at [24]).
Insofar as this argument is made separately to the second one - and thus assuming for the moment that s 59(1)(f) is capable of applying here - I am unpersuaded by it. That the respondents had no plans to sell the land in due course does not change the fact that they lost a business asset which, it seems, the primary judge implicitly found that they were going to replace. Sydney Metro argued orally that all that had happened was that an investment asset had been resumed, and that with the proceeds the respondents "might invest it in property, they might invest it in shares, and their business is not one which speaks to the reasonableness of assuming it's likely to occur or might be occurred in the way involved". This variant of the argument seemed to suggest that the costs of stamp duty on replacement land were not "reasonably incurred" within the meaning of s 59(1)(f). That ignores the fact that her Honour made an unchallenged finding that the respondents' business involved "identifying, then acquiring, prime commercial real estate …". Their business did not involve investing in shares in Tesla, to use an example given by Sydney Metro. That being so, it is difficult to see why the costs of stamp duty on replacement land would not have been reasonably incurred in the way it was found to be in Fitzpatrick (see at [28] and [34]).
Sydney Metro's second argument raises an issue of statutory construction in relation to s 59(1)(f). The central question here, given the facts and the focus of the parties in argument, relates to stamp duty. Specifically, the issue is whether the stamp duty that the respondents would pay on "replacement land" was a financial cost that might reasonably be incurred as a direct and natural consequence of the acquisition, relating to the actual use of the land (being the use identified above at [98]).
The respondents submitted that this issue of construction had not been raised in the Court below and so could not be raised in this Court. Sydney Metro did not identify particular submissions made below on the issue but submitted that the issue arose on the "pleadings". In its amended points of defence Sydney Metro asserted that the respondents had no entitlement to the claimed compensation. The issue raised here is one of statutory construction. It was necessary for the primary judge to find that the statutory provision extended to the type of compensation claimed, and her Honour implicitly did so. In the circumstances it can be said that the issue raised involves an appeal on a question of law on a point which was sufficiently at issue below.
Both sides agreed that the respondents had not relocated in the sense referred to in pars (c)-(e) of s 59(1). There was no physical movement of any business the respondents themselves conducted on the site to any other site. The parties employed this fact to opposite ends. Sydney Metro argued that stamp duty was only recoverable under s 59(1) if it fell within the category identified in par (d) (and similarly that costs connected to the execution of a new mortgage could only be recovered if they fell within par (e)). In other words, it asserted that par (d) covered the field in relation to the possible recovery of stamp duty expenses as disturbance. Conversely, the respondents argued that because they were not relocating in the relevant sense they were not claiming under par (d), but that paragraph did not exclude the possibility of recovering stamp duty in other types of cases under par (f).
Paragraph (f) must be taken to add something to what is covered by pars (a)-(e), otherwise it would be superfluous. That understanding is also manifest in the language of "any other financial costs …", plainly meaning financial costs other than those addressed in (at least) pars (c)-(e). Paragraphs (c) and (e) use the same language of "financial costs". Paragraph (d) does not do so, but stamp duty on a replacement property is a financial cost. So much is illustrated by the fact that par (c) indicates that the type of financial costs addressed in that paragraph does not include stamp duty or mortgage costs, thus accepting that otherwise those notions would fall within the term. However, the respondents did not argue that the construction put by Sydney Metro left par (f) with no work to do.
Each paragraph of s 59(1) requires that the costs or fees in question were reasonably incurred (or that they might reasonably be incurred).
Both sides in this case accepted that par (f) must be construed purposively and in context. In particular, importantly, the respondents accepted that the paragraph could not be interpreted so as to "subvert the limitations contained within the earlier paragraphs", as Basten JA put it in Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41 at [14] (Macfarlan and Payne JJA agreeing at [72] and [72] respectively; see also Preston CJ of LEC at [141]). As his Honour also stated there, it may be necessary to identify those limitations with a degree of precision.
That task involves characterising the topic that is addressed, relevantly in par (d). In particular, does it address stamp duty per se, which may only be claimed in the circumstance outlined in the paragraph (as Sydney Metro argues), or does it instead address stamp duty when claimed in connection with the purchase of land for relocation but without implying any limitation on stamp duty being claimed in other circumstances (as the respondents argue)?
Both sides sought to call in aid the judgments in Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 99 and United. Neither case addresses the precise question at hand. However, Melino involved acceptance of an argument of a similar kind to that put by Sydney Metro here. The trial judge in that case had rejected a claim under s 59(1)(f) for costs of establishing a new loan, and paying interest on the loan, in order to build a replacement farm shed and cattle yards which had been lost from land acquired. That rejection was upheld by this Court. Payne JA, with whom Beazley JA agreed, characterised those costs as of a kind addressed by s 59(1)(e), then said the following:
[110] The words of restriction in s 59(1)(e), that the amount claimed not exceed the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage, apply here. Neither of the amounts claimed as financial costs reasonably incurred in connection with the execution of a new mortgage resulting from the relocation were allowable within the scope of s 59(1)(e).
[111] It would not be a coherent application of s 59 and the tightly drawn constraints imposed by the section, in this case by s 59(1)(e), for a financial cost which is specifically excluded from compensation by that subsection to be allowable under the immediately succeeding par (f). I reject the appellants' submission, based on remarks made by Lloyd J in Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) (2000) 108 LGERA 417; [2000] NSWLEC 139, that s 59(1)(f) is a "catch-all" provision (at [20]). The provision must be read in its context as part of s 59 and in its place part of the tightly drawn constraints imposed by the section.
Thus his Honour treated a claim of a kind that was addressed by par (e) - ie financial costs incurred in connection with a new mortgage - as being exhaustively addressed by that section. That approach is consistent with and supportive of Sydney Metro's arguments here with respect to par (d).
Paragraph (f) has some requirements that are not expressed in par (d): that the costs relate to the actual use of the land, and that they are a direct and natural consequence of the acquisition. The only relevant limitation that par (d) imposes that is not applied by par (f) is that the amount recoverable is capped at the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired. As noted above at [97], it seems that the respondents here in fact calculated their claim on that basis, even though the limitation does not apply to par (f) claims. But no such limitation arises from par (f) itself. Such a limitation is not necessarily implicit in the additional requirements in par (f) that the costs relate to the actual use of the land and are a direct and natural consequence of the acquisition.
The key difficulty with the respondents' characterisation is that there is no apparent reason why the Parliament would have been concerned to cap the amount recoverable when the claimant had relocated (or proposed to do so) but not in circumstances where the claimant had not done so. A claimant who has found it necessary to relocate their residence or their business can reasonably be said to have a stronger claim for compensation than a claimant who, for example, simply wishes to buy a replacement business asset. The precise monetary limitation stated in par (d) implies that stamp duty can be claimed only in the circumstances and to the extent set out in that paragraph. The same point can be made about par (e), which imposes a similar cap to par (d) in relation to the amount that can be claimed in connection with the execution of a new mortgage resulting from a relocation.
The respondents argued that Sydney Metro's construction involves reading the word "only" into par (d), in the sense that stamp duty could only be claimed in the circumstances set out in that paragraph. That is the effect of the construction. However, the type of negative implication at issue here is of a well-recognised kind; affirmative words addressing a topic to a limited extent may, in context, also have negative force in implying that that topic is addressed exhaustively: eg Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50 at [54]-[59], and cases there cited. The issue here is construing what scope the residuary provision in par (f) has in light of the provisions that come before, where it is clear - and not disputed - that that paragraph must be read purposively and in context.
This characterisation of the nature and purpose of pars (d)-(f) arise as a matter of reasonable inference from their terms. It obtains some support from the explanatory note for the Bill of the Act when first enacted (in which s 59 was in materially the same terms). The note refers to "loss attributable to disturbance, including the following: … an amount equivalent to stamp duty on the purchase of land of equivalent value". This statement is consistent with par (d) being meant to address the topic of stamp duty per se. For completeness I note that the Minister's second reading speech did not discuss the issue (Legislative Assembly, 11 April 1991, Hansard, pp 1974-1979).
The respondents submitted that to adopt the construction put by Sydney Metro would effectively overrule this Court's decision in Fitzpatrick. That decision concerned a claim for legal costs and stamp duty incurred in purchasing replacement land (see this Court's decision at [9]), which had been claimed and awarded under s 59(1)(f). In that case the trial judge, Lloyd J, held that stamp duty could not be claimed under s 59(1)(d) because there had been no relocation in the relevant sense: Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) (2000) 108 LGERA 417; [2000] NSWLEC 139 at [19]. However, his Honour upheld the claim under par (f), saying that that paragraph "is wider than the preceding paragraphs" and "is a 'catch-all' provision" (at [20]). The latter statement was specifically disapproved by Payne JA in Melino in the passage quoted above.
The respondents are correct to indicate that, at least in relation to stamp duty, Sydney Metro's argument is inconsistent with Fitzpatrick. However, as McHugh J pithily stated: "Cases are only authorities for what they decide. If a point is not in dispute in a case, the decision lays down no legal rule concerning that issue": Coleman v Power (2004) 220 CLR 1; [2004] HCA 39 at [79]; see further eg CSR Limited v Eddy (2005) 226 CLR 1; [2005] HCA 64 at [13]-[14]; All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 at [45] per Leeming and Payne JJA; Bob Brown Foundation Inc v Commonwealth (2021) 283 FCR 225; [2021] FCAFC 5 at [35] and [79] per Griffiths, Moshinsky and SC Derrington JJ. The argument raised and determined here, relating to the scope of s 59(1)(f) in light of the provision made in the preceding paragraphs, was not raised or determined by this Court in Fitzpatrick. Rather, the matters in issue there were as follows:
[10] On the appeal, there was no issue but that the sums in question had been reasonably incurred, and it was common ground that the expression "the land" in s 59(f) of the Just Terms Act was a reference to the acquired land. Three questions arise. The first concerns the proper meaning in the circumstances of the case of the expression "actual use"; the second concerns the proper meaning in the circumstances of the case of the composite expression "relating to the actual use of the acquired land"; and the third concerns the proper meaning in the circumstances of the case of the expression "a direct and natural consequence of the acquisition".
It is thus not necessary to consider whether Fitzpatrick was plainly wrong in terms of the arguments that it determined. The case simply did not address the question that has arisen here. The significance of pars (c)-(e) was not referred to in this Court's decision. Moreover, judicial exegesis of s 59 did not stop with that case in 2001. In particular, the approach to the section taken by this Court in Melino in 2018 and United in 2019 are important foundations for the step taken here.
The respondents' claim for stamp duty thus cannot be maintained. The same result applies, for the same reasons, in relation to mortgage costs. Sydney Metro's appeal in relation to disturbance costs should be upheld.
It is not necessary to address the s 61 argument (Sydney Metro's third complaint) beyond noting that her Honour's conclusion that that section did not apply depended upon her construction of s 56(1)(a) (see at [416]-[417]), which has now been rejected. At the least, thus, consideration of the potential application of s 61 proceeded on a legally erroneous basis.