Telado Pty Ltd; CFT No. 8 Pty Ltd v Sydney Metro [2025] NSWLEC 42 | Case summary | Zoe

NSWNSWLEC

Telado Pty Ltd; CFT No. 8 Pty Ltd v Sydney Metro

[2025] NSWLEC 42

Land and Environment Court (NSW)|2025-05-08|Before: Duggan J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2025-05-08

Before

Duggan J

Catchwords

COMPULSORY ACQUISITION – objection to compensation –
determination of public purpose – highest and best use –
disturbance
– determination of compensation

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Catchwords

COMPULSORY ACQUISITION – objection to compensation –determination of public purpose – highest and best use –disturbance– determination of compensation

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Telado Pty Ltd; CFT No. 8 Pty Ltd v Sydney Metro [2025] NSWLEC 42

Hearing dates: 21, 22, 23, 24, 25, 28, 29, 30 and 31 October 2024; 1, 4, 7, 8, 11 and 12 November 2024

Date of orders: 08 May 2025

Decision date: 08 May 2025

Jurisdiction: Class 3

Before: Duggan J

Decision: See orders at [221]-[224]

Catchwords: COMPULSORY ACQUISITION – objection to compensation – determination of public purpose – highest and best use – disturbance – determination of compensation

Legislation Cited: Electricity Network Assets (Authorised Transactions) Act 2015 (NSW)
Energy Services Corporations Act 1995 (NSW)
Environmental Planning and Assessment Act 1979 (NSW), Pt 3A
Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 42, 49, 50, 55, 56, 59, 66, 71A, Pt 3 Div 4
Transport Administration Act 1988 (NSW), ss 3, 38A, 38B, 38C, 38D, Sch 1 Pt 2 cl 3, Sch 1 Pt 3 cl 11
Sydney Local Environmental Plan (2012), cll 6.21D, 6.21E

Cases Cited: Boland v Yates Property Corporation Pty Ltd [1999] HCA 64; (1999) 74 ALJR 209; (1999) 167 ALR 575 Coffs Harbour City Council v Noubia Pty Ltd [2024] NSWCA 19; (2024) 258 LGERA 351 G&J Drivas Pty Ltd v Sydney Metro [2023] NSWLEC 20; (2023) 256 LGERA 319 Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWCA 292; (2024) 262 LGERA 24 Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWLEC 39 oOh!media Fly Pty Limited v Transport for New South Wales [2024] NSWCA 200; (2024) 261 LGERA 273 Roads and Traffic Authority (NSW) v Mosca [2006] NSWCA 159; (2006) 146 LGERA 335 Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5; (2024) 113 NSWLR 429; (2024) 258 LGERA 197 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259; (2008) 82 ALJR 489; (2008) 170 LGERA 345 Yates Property Corporation Pty Ltd (in Liq) v Darling Harbour Authority (1991) 24 NSWLR 156; (1991) 73 LGRA 47

CFT No. 8 Pty Ltd (CFT 8) is the Applicant in proceedings 2022/00391937 and Telado Pty Ltd (Telado) is the Applicant in proceedings 2022/00391925 (together, the Applicants). The Applicants are constituent entities with common directors that form part of the Coombes Property Group (CPG).
CFT 8 was the owner in fee simple of 28 O’Connell Street, Sydney (28 O’Connell) and Telado was the owner in fee simple of 48 Hunter Street, Sydney (48 Hunter) (together, the Acquired Land).
On 2 September 2022 (the Date of Acquisition), Sydney Metro (the Respondent or Sydney Metro) compulsorily acquired the Acquired Land by notice in the NSW Government Gazette. That notice provided that such acquisition was made “under the provisions of the Land Acquisition (Just Terms Compensation) Act 1991 as authorised by section 38C and clause 11 of Schedule 1 of the Transport Administration Act 1988 for the purposes of the Transport Administration Act 1988.”
On 8 December 2022, the Respondent offered CFT 8 compensation in respect of 28 O'Connell in the sum of $128,082,003 as determined by the Valuer-General under s 42(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act), comprising $127,500,000 for market value and $582,003 for losses attributable to disturbance.
On 23 December 2022, the Respondent offered Telado compensation in respect of 48 Hunter in the sum of $49,582,003 as determined by the Valuer-General under s 42(1) of the Just Terms Act, comprising $49,000,000 for market value and $582,003 for losses attributable to disturbance.
On 29 December 2022, by the filing of Class 3 Applications, the Applicants objected to those amounts of compensation pursuant to s 66 of the Just Terms Act, contending for compensation for market value in the following amounts:
CFT 8: $203,680,917.04, later amended to $320,235,616; and
Telado: $71,017,921.96, later amended to $110,964,384.
The Acquired Land had a combined total land area of 1,022m2, comprising the constituent land areas of:
28 O’Connell with a land area of 759m2; and
48 Hunter with a land area of 263m2.
Prior to acquisition:
28 O’Connell comprised a 14-storey commercial office and retail building, originally completed in 1974, with various refurbishments and building upgrades completed since then. It was purchased by CFT 8 in September 2016; and
48 Hunter comprised a commercial building, originally completed in 1961, with various refurbishments and building upgrades completed since then. It was purchased by Telado in December 1991.
The Acquired Land was situated at the corner of Hunter and O’Connell Streets in the Sydney CBD. To the north, the Acquired Land adjoined 33 Bligh Street (33 Bligh St) and to the east of the Acquired Land was 37 Bligh Street (37 Bligh). 33 Bligh St was acquired by the Respondent on 5 November 2021 and 37 Bligh was acquired by the Respondent on 2 September 2022.
Prior to its acquisition, 33 Bligh St was owned by Alpha Distribution Ministerial Holding Corporation, a Ministerial Holding Corporation constituted for the purposes of the Electricity Network Assets (Authorised Transactions) Act 2015 (NSW). 33 Bligh St was subject to a long-term lease and sublease to various entities collectively referred to as Ausgrid, a statutory corporation established under the Energy Services Corporations Act 1995 (NSW) (Ausgrid). As from August 2017 until the date it was acquired, 33 Bligh St had been occupied and used by the Respondent for construction purposes.
Prior to its acquisition, 37 Bligh was a strata title building comprising retail and commercial offices with multiple strata owners.
The Acquired Land and adjoining site of 33 Bligh St are represented below:

Fundamental to the success of the Applicants’ case is that 33 Bligh St was available to be redeveloped in combination with the Acquired Land. To this end, the Applicants contended that the acquisition of 33 Bligh St by the Respondent was to be disregarded by operation of s 56(1)(a) of the Just Terms Act. The gravamen of this submissions is that:
The value of the Acquired Land was decreased by the acquisition of 33 Bligh St, it being no longer available for a combined redevelopment with the Acquired Land; and
Such decrease in value of the Acquired Land was caused by the carrying out of the public purpose for which the Acquired Land was acquired – the public purpose being the same purpose as that for the acquisition of 33 Bligh St.
Should the public purpose for which 33 Bligh St was acquired not be the same public purpose as the acquisition of the Acquired Land issues arise as to the manner in which 33 Bligh St was to be treated in so far as its availability for a combined redevelopment with the Acquired Land absent the operation of s 56(1)(a) of the Just Terms Act.
Section 56(1)(a) of the Just Terms Act is directed to a consideration of an increase or decrease in the value of the Acquired Land caused by the carrying out of, or the proposal to carry out, the public purpose for which the Acquired Land was acquired. The facts of this case indicate that if 33 Bligh St was available for a combined redevelopment a hypothetical purchaser would have paid more for the Acquired Land than if the combined redevelopment was not available (the quantum of such increase is disputed). Therefore, it is necessary to determine whether the acquisition of 33 Bligh St was acquired as part of the relevant public purpose to which s 56(1)(a) is directed.
Contrary to the Applicants’ case, the Respondent contended that 33 Bligh St was acquired for a separate and different public purpose such that the acquisition of 33 Bligh St was not to be disregarded. The consequence being that, as at the Date of Acquisition, 33 Bligh St would not have been available for a combined redevelopment proposal and the highest and best use of the Acquired Land was for the use being carried out on that date.

The Applicants contended that the two stated metro projects for the acquisition of 33 Bligh St were in fact a single public purpose, namely for the provision of a metro and therefore, the acquisition of both the Acquired Land and 33 Bligh St should be disregarded by operation of s 56(1)(a) of the Just Terms Act for the purposes of determining market value.
The Applicants relied upon a construction of the enabling legislation, the TA Act, to assist in the determination of the public purpose. In considering the TA Act it was to be noted that:
The power conferred on the Respondent to acquire land was in wide terms: s 38B(4);
The general power to acquire land was expressed broadly without reference to any particular purpose. It was to be considered by reference to the objects of Sydney Metro, which objects were generally expressed by reference to “metro” infrastructure and not to particular projects: s 38A;
The functions of the Respondent referenced a singular “metro”: s 38B(2)(a) and (b); and
The term “metro” was not limited to a particular project or component of an overarching system: s 3.
Taken together, the provisions of the TA Act established a single overall power and function which indicated the single public purpose and did not support a limitation of the public purpose to a single project or component part of the broader metro.
Further, the facts do not support a finding that the two projects comprised separate parts of the public purpose, rather, the opposite, as:
The covering letter to the PANs, whilst referring to two projects, references a single public purpose: see [47(14)] above;
The announcement of Metro West on 14 November 2016 identified as a project within the broader metro network: see [47(2)] above;
On 14 December 2020, the decision to acquire 33 Bligh St merged the two projects. In fact, if the purposes were to be divided, the briefing note demonstrates that the acquisition of both the Acquired Land and 33 Bligh St was for the Metro West “public purpose”: see [47(8)] above;
The business case for Metro West converted the 33 Bligh St proposed acquisition status from a leasehold to freehold. The business case related to Metro West, and it demonstrated that the freehold acquisition of 33 Bligh St was precipitated by Metro West rather than Metro CSW: see [47(5)] above;
The commencement of acquisition letter sent to Alpha Distribution Ministerial Holding Corporation (see [47(10)] above) referenced an acquisition for the public purpose as a metro network, rather than any notion of dividing the projects. In addition, the acquisition of 33 Bligh St was said to ensure certainty of occupation for Sydney Metro past November 2021 and allow an access point without reference to any particular project; and
As part of the same letter there was a heading “Sydney Metro (Projects)”. The narrative identified the agency’s responsibility of Sydney Metro being the relevant public purpose. The narrative then splits into “four core Project components”, that is, each of the identified core projects were projects within the overall public purpose.
For each of those reasons, the Applicants contended that the public purpose was the single public purpose of the provision of the metro network, comprising, in part, Metro West and Metro CSW.

In determining the scope of the relevant public purpose the principles to be applied, as identified above, highlight that there are no strict rules for determining the public purpose at the appropriate level of generality, however, factors to be taken into account may include the degree of continuity and consistency of various elements of what is proposed and done, and fairness to both the claimant and the acquiring authority.
In the application of the relevant principles to the facts of this case, it is apparent that whilst there is a broad metro network that network is made up of a number of different lines (together with future proposals subject to investigation). Each of the lines provide separate stations and destinations, they do not interlink. Whilst it is described as a metro network it is apparent that each part of the network provides for the meeting of different demands for transportation in different localities. To the extent that the different lines may appear as operating as a single line, it is also apparent that the line was constructed as distinct parts of the network, for example, the termination of the Metro City line at Chatswood and its continuation on as the North West line: see The Sydney Metro Network (Exhibit 1).
With reference to the two components of the metro network, the subject of these proceedings, Metro West and Metro CSW, it is also to be observed that:
The two lines do not intersect;
The two lines do not share a station;
For the purposes of the movement of travellers between the two lines some common or interconnecting pedestrian infrastructure has been provided; and
The two lines were conceived at different times and were constructed at different times, albeit with some overlap in timing.
Having regard to the factors identified above, in this case, identifying the public purpose as the metro network as a whole is too broad to describe it as the public purpose for which the Acquired Land (or 33 Bligh St) was acquired. The distinct lack of consistency and continuity in the design, approval and construction of the two projects speaks to a separation of the public purpose by reference to each of the two projects, namely Metro West and Metro CSW. To cast the public purpose at the broad level of the metro network requires a disregard of the process of acquisition which indicated different decision-making and distinct acquisition processes for the timing and approval for each project.
In undertaking an assessment of the public purpose whilst it is relevant to consider the enabling legislative provisions there is no warrant that such provisions dictate the scope of the public purpose, there being a distinction between power and purpose: see Goldmate CA at [73].
The enabling legislation provides the Respondent with broad powers and functions in the context of the equally broad objects as provided for in the TA Act as they relate to the Respondent. In that context, the provisions speak of a metro network as a single enterprise. However, such provisions do not dictate the scope of such network. The elements of the network remain at the discretion of the Respondent (subject to approval and funding) and the timing and extent of the network is also left to the Respondent. Therefore, I consider that the legislative provisions, whilst relevant, do not dictate an overarching single public purpose of the metro network as a whole.
As to the terms of the PANs and the letter accompanying the PANs I do not accept that the PANs or the letter accompanying the PANs identifies a single public purpose. It is apparent when comparison is made between the PANs and letters sent to the Applicants and the PANs and letter sent to 33 Bligh St that the representation of the term “public purpose” for 33 Bligh St was linked to the identification of the two separate elements of the network described by reference to the separate and distinct project forming part of the whole, whereas the Acquired Land has a reference solely to Metro West.
To the extent that the reporting and approval documents were raised as being relevant to this determination, I consider that these documents identify the separation of the parts of the network into identifiable separate parts, by reference to a project name. To that extent, those documents support a construction of the public purpose as, in this case, two identifiable separate parts operating independently within the broader context of the overall metro network. Whilst in some documents (see, for example at [(47(8)] above) the impacts of Metro West and Metro CSW are identified as overlapping, I do not accept that such treatment identifies a “merging” of the two public purposes. Rather, such treatment is a recognition of two parallel purposes. A merging of the two projects would be indicated by the two projects being subsumed into a single enterprise, that did not occur.
Having regard to the lack of consistency and continuity between Metro West and Metro CSW, the facts of this case warrant the finding that, albeit part of the larger metro network, the public purpose for the acquisition of 33 Bligh St was for the two distinct and separate purposes of Metro West and Metro CSW.
For the above reasons, I determine that:
The public purpose of the acquisition of the Acquired Land was for the purposes of the Metro West; and
There were two distinct public purposes of the acquisition of 33 Bligh St. The public purposes for the acquisition of 33 Bligh St were for Metro West and Metro CSW.
The consequence of my finding above is that for the purposes of s 56(1)(a) of the Just Terms Act the acquisition for Metro West is to be disregarded and the acquisition of Metro CSW is not to be disregarded.
The disregarding of Metro West requires a determination of what the circumstances would have been absent the Metro West, but with Metro CSW. The Respondent contended that 33 Bligh St would be unavailable for the combined redevelopment. The Applicants contend that such an outcome is not certain.
The Applicants contended that if the acquisition for Metro CSW was not to be disregarded there would be no relevant impact upon the highest and best use of the Acquired Land for a combined redevelopment in conjunction with 33 Bligh St. The Applicants contention relies upon making certain factual findings, I will address these factors below.

The Court should accept the clear statement in the PANs for 33 Bligh St (at [47(14)] above) that the freehold of 33 Bligh St was required to facilitate Metro CSW. There is no warrant to go behind the clear evidence in the PANs, to determine the purposes for which the land at 33 Bligh St was acquired.
If the Court were to look behind the PANs, a consideration of the long history of Sydney Metro's engagement with 33 Bligh St does not support a finding that there would be no acquisition. That is, as follows:
In 2016, 33 Bligh St was initially identified for freehold acquisition as part of the Metro CSW. However, negotiations pivoted to a construction lease in favour of Sydney Metro over 33 Bligh St. On 8 August 2017, the construction lease was entered into. At that point in time in 2017, a construction lease with options extending to November 2021 was considered to be sufficient. That early estimate later proved to be inadequate;
The acquisition of the freehold in 33 Bligh St was once again contemplated by Sydney Metro around mid-2019, this time for the then proposed Metro West. The briefing note prepared for the Chief Executive dated 30 November 2020 (see [76(7) above] identified that Metro CSW would require ongoing occupation of 33 Bligh St beyond the current November 2021 construction lease expiry date; and
33 Bligh St was said to be a “critical path activity for delivery of both Projects”.
The Court should accept the explanation given in a briefing note for the Chief Executive: the acquisition of 33 Bligh St would provide Sydney Metro with the certainty it required for the construction of Metro CSW.
Any acquisition of the freehold of 33 Bligh St should be taken to be for an unlimited time. There is no evidence to support a finding that 33 Bligh St would be released back into the open market at the end of 2024 even if the acquisition was limited to construction purposes as:
Sydney Metro has powers that include redevelopment – the contemplation of redevelopment of 33 Bligh St as part of Metro CSW was identified in 2016: see [76(3)] above;
The Respondent’s dealing with “surplus” metro land had not demonstrated a pattern of release back on the open market; and
As at the Date of Acquisition, any uncertainty as to whether the Respondent would retain 33 Bligh St at the conclusion of construction would operate against an assumption of its availability in 2024 and therefore, also operate against the hypothetical sale of the Acquired Land being undertaken on the highest and best use of the Acquired being a combined redevelopment with 33 Bligh St.
Metro West was not the “true motivating element” of the acquisition of the freehold of 33 Bligh St. To accept the Applicants’ position would require the Court to engage in a fact-intensive counterfactual exercise to consider what Sydney Metro would have done if 33 Bligh St were not acquired for the purpose of Metro West. That would be a speculative exercise.

In light of the finding above that Metro CSW was a separate public purpose and not to be disregarded for the purposes of s 56(1)(a) of the Just Terms Act, it is necessary to determine what effect such an assumed circumstance would have on the Acquired Land and 33 Bligh St as at the Date of Acquisition.
The fundamental element of the Applicants’ case is that absent Metro West the Acquired Land would not be acquired, and 33 Bligh St would only be required for construction purposes and if so, required only for a limited period until 2024. Such a contention, however, is predicated upon viewing the utility of 33 Bligh St through the lens of what in fact occurred with both Metro West and Metro CSW being undertaken at the relevant time. The lens is contrary to what s 56(1)(a) of the Just Terms Act requires, which is the disregard of the impact on value caused by Metro West. In the circumstances of this case, that involves disregarding the necessity for freehold acquisition for Metro West and determining what would likely have been the situation if that acquisition had not occurred.
Prior to the conception of Metro West, the scope of the Metro CSW was identified in around 2016. At that time, 33 Bligh St had been identified as being necessary for both construction and operation of Metro CSW. The operational needs related to the provision of pedestrian access to and from 33 Bligh St to Martin Place Metro station to facilitate the efficient distribution of customers into the CBD north. In addition, such considerations also took into account future opportunities for over station development of 33 Bligh St: see [76(1)(c)-(d)] above.
The considerations relating to freehold acquisition and design at 33 Bligh St took into account the fact that Ausgrid had an existing approval that provided for substation infrastructure. The evidence suggests a desire to ensure the capacity to provide such infrastructure, together with the operational requirements of Metro CSW. The evidence discloses that the Respondent wished to negotiate an outcome that would meet both requirements. The material produced at that time indicates the construction needs were pursued as immediately required whilst the operational needs remained under consideration. As was indicated at [47(5)] above, the construction of pedestrian access had been assessed and proposed to be included within the scope of Metro CSW. There is no evidence that suggests such a decision was abandoned or that the need identified was otherwise overcome.
The acquisition of the Construction Lease and its subsequent renewal was focused on the construction needs. The evidence does not indicate that the operational requirements were abandoned. With the introduction of Metro West, the operational design of the northern CBD Metro CSW and Metro West raised parallel considerations. It is apparent that the pedestrian access for Metro CSW was integrated into an interchange to serve both Martin Place station and Hunter Street station. The parallel needs gave rise to different considerations than if Metro CSW was being constructed absent Metro West.
Once the Hunter Street station for Metro West was identified on 33 Bligh St, that pedestrian access to Martin Place station became part of the Metro West and was no longer referenced as part of Metro CSW. If Metro West is to be disregarded, it follows then so is the Hunter Street station. The question therefore remains: what would be the operational requirements of Metro CSW?
Absent Metro West, there is no evidence that would support a finding that the operational needs for the separate pedestrian access point at 33 Bligh St would have changed. There remained a need for underground pedestrian access. 33 Bligh St retained its features that initially rendered it as desirable as the appropriate location. In addition, as at the Date of Acquisition, Ausgrid had determined that it no longer required the introduction of the substation infrastructure thereby removing the necessity to design the operational requirements of Metro CSW to facilitate such infrastructure.
Even if the acquisition was limited to construction purposes, I do not accept that such purpose would be limited in time to 2024. The references to 2024 related solely to the construction of those parts of Metro CSW that excluded the pedestrian access – as the 2024 date was identified once Metro West came into consideration. There is no evidence as to how much longer 33 Bligh St would be required to be occupied in order to facilitate the pedestrian access. Absent evidence of construction timing for such works, I am unable to place a fixed period on any construction programme except to find that it would extend beyond the anticipated 2024 period.
For those reasons, I find that absent Metro West the freehold acquisition of 33 Bligh St would have been acquired for the purpose of Metro CSW. Such acquisition of the freehold would not be limited in time.

It is common ground that in the application of the Just Terms Act the Acquired Land must be valued in the condition in which it existed at the Date of Acquisition with regard to its potential for redevelopment: Yates Property Corporation Pty Ltd (in Liq) v Darling Harbour Authority (1991) 24 NSWLR 156; (1991) 73 LGRA 47 at 175-176*;* Roads and Traffic Authority (NSW) v Mosca [2006] NSWCA 159; (2006) 146 LGERA 335 at [15]. Where the land has the potential to be rezoned in a way that will affect its value that factor will be taken into account in the valuation process, just as it is a factor were the property to have been sold on the open market on the relevant day: Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5; (2024) 113 NSWLR 429; (2024) 258 LGERA 197 at [43] (Drivas CA) per (Kirk JA).
What was in dispute was whether, as at the Date of Acquisition, absent the public purpose, the highest and best use of the Acquired Land would have been a combined redevelopment with 33 Bligh St facilitated by a planning proposal process to permit such development being completed or the completion of such process being sufficiently imminent, such that the Acquired Land would be valued having regard to the potentiality created by such a process.
The Applicants contended that, but for the acquisition of the Acquired Land, the Acquired Land together with 33 Bligh St would have been the subject of a planning proposal to achieve a redevelopment yield reflected in what was described in the evidence as the “Refined Grimshaw Scheme” (Refined Grimshaw Scheme). As a consequence of the application of s 56(1)(a) of the Just Terms Act, the failure to achieve approval of the planning proposal is to be disregarded and the market value of the Acquired Land is to be determined on the basis of the highest and best use of the Acquired Land being that reflected in the Refined Grimshaw Scheme.
The Refined Grimshaw Scheme was an architectural scheme prepared by Grimshaw Architects on or about December 2022. The key features of the Refined Grimshaw Scheme were that it:
Comprised the redevelopment of both the Acquired Land and 33 Bligh St;
Comprised an L-shaped tower of 64 levels above ground and 3 basement levels to a building height of RL 253.58m;
Proposed a FSR of 29.06:1; and
Proposed a development of a premium grade commercial/retail development.
It was common ground that the Refined Grimshaw Scheme had been prepared for the purposes of supporting the Applicants’ claims for compensation and ultimately as evidence in these proceedings and had not, at any time, been prepared for the purposes of submission to the Council (or any other consent authority) in support of any planning proposal or development application. The purpose of the preparation of the Refined Grimshaw Scheme was to demonstrate what the highest and best use of the Acquired Land would have been had the Acquired Land not been acquired by the Respondent.

As to the Council’s actions, the Applicants relied upon the content of Council’s letter at [118(33)] above. It was contended that by the date of that letter the Council was communicating a clear statement that the prospect of Council approving a planning proposal on the Acquired Land and 33 Bligh St was by that time “dead” because of the public purpose. This position was reinforced and entrenched by 8 June 2021 by the Council after the referral of the PSI Concept to the DAP: see [118(39)] above.
The evidence of Mr Coombes was that, absent the compulsory acquisition of the Acquired Land, the amalgamation and redevelopment of the Acquired Land with 33 Bligh St via a site-specific planning proposal would have been the most advantageous development to CPG. His uncontested evidence was that CPG would have continued to actively pursue this development if it had not been for the compulsory acquisition of the Acquired Land: see [118(48)] above.
In view of the fact the that the CSPS required best endeavours to amalgamate sites with adjoining owners and prove to the City of Sydney that such endeavours had been made, Mr Jahn's email to Mr Coombes of 15 August 2016 stating that “best outcome would be to amalgamate with the Ausgrid site(s) to the north”, and his repeated requests of Mr Coombes that CPG should exhaust amalgamation options with adjoining owners to best achieve the objectives of the CSPS, indicated that the prospect of the Applicants obtaining a planning proposal for development that did not include the amalgamation of adjoining land was slim. Accordingly, the Applicants would have pursued such amalgamation to permit it to open up the increased value afforded by the planning proposal and the amalgamation such as was developed in the Refined Grimshaw Scheme.
Mr Coombes describes March 2020 as representing a pivot point for CPG in the redevelopment of the Acquired Land, in that he was no longer solely focused on pursuing the amalgamation of the Acquired Land with 33 Bligh St and/or 37 Bligh and instead shifted CPG's focus to pursuing the USP scheme with Mirvac and Ausgrid. He deposes to the reasons for making the Pivot Decision in his Primary Affidavit and Supplementary Affidavit: see [118(26)-(27)] above.
The evidence demonstrated that, more than two years before the Acquired Land was compulsorily acquired (in September 2022), the landowners, being CPG, Mirvac and Ausgrid (of 33 Bligh St) had lodged a USP for the utilisation (and amalgamation) of the Acquired Land and 33 Bligh St (and 37 Bligh). The USP was CPG’s attempt to embrace and exploit, and thereby manage the risks presented by the same public purpose for which its Acquired Land was eventually resumed. The Applicants did not contend that the USP represented the highest and best use of the Acquired Land but that the Court should draw three things from the fact of the USP:
The USP was substantively a representation of the amalgamation and redevelopment of adjoining lands all benefiting from the same liberal planning controls expressly designed to encourage amalgamation and tall towers in this part of the CBD;
The USP was compelling evidence of the significant degree of participation and co-operation between CPG, Mirvac and Ausgrid in which they were all participating (and the parties did not perceive a need for a formal written agreement between those parties in advance of the USP being submitted to NSW Government), evidencing a clear intention and commitment by those parties to amalgamate and redevelop the Acquired Land and 33 Bligh St (together with 37 Bligh); and
There was enthusiastic support from NSW Government and Sydney Metro/TfNSW for the amalgamation and redevelopment of sites in this part of the CBD.
Because of the significant degree of co-operation between the parties concerning what was, in substance, a proposal to amalgamate adjoining lands, the Court should be satisfied that there was a high likelihood, if not inevitability, that, absent the public purpose, there would have been a co-operative arrangement in place between the landowners of the Acquired Land and 33 Bligh St demonstrated ultimately by the USP, which was put in train many years before the acquisition of the Acquired Land.
Had CPG not shifted its focus to the USP scheme from March 2020, then the Court should conclude from that date until the Date of Acquisition, CPG, Mirvac and Ausgrid would have continued to collaborate and pursue amalgamation and redevelopment of the Acquired Land together with 33 Bligh St. This is supported by the significant amount of time and cost the Applicants had devoted and incurred, and the material progress that had been made in pursuing an amalgamated redevelopment of the Acquired Land over several years up until the Pivot Decision and in pursuit of the USP after the Pivot Decision.
The clear evidence as to the prospect of amalgamation absent the public purpose was that by March 2020 the uncontested evidence established that CPG already had:
A number of productive communications with Mr Jahn and others within Council regarding Council's support for the Acquired Land to be amalgamated with one or more adjoining properties, including 33 Bligh St (referred to in pars 58(a), 58(c), 62 and 68(a) of Mr Coombes’ Primary Affidavit);
A clear understanding of the CSPS, which created powerful incentives for owners of, amongst others, the Acquired Land and 33 Bligh St, to amalgamate and redevelop those sites into larger, taller and more valuable towers using more liberal FSR controls so as to realise those larger developments;
Requested the preparation of and reviewed indicative architectural concepts in May and June 2019 by Bates Smart, for the amalgamation of the Acquired Land and 33 Bligh St which gave CPG an appreciation of the likely scale and realisable FSR of an amalgamated redevelopment;
Been communicating with Mirvac since August 2019 about working together to amalgamate the Acquired Land and 33 Bligh St, as referred to above including:

In the light of the above, it is reasonable to assume that, absent Metro West and the pursuit of the USP scheme the Applicants, Ausgrid and Mirvac would have similarly all promptly agreed around March 2020 to co-operate as they had in fact co-operated in connection with the USP and pursue an amalgamated redevelopment of the Acquired Land and 33 Bligh St.
Had CPG not prioritised and focused the Applicants’ efforts on the USP scheme from the Pivot Decision, the above steps would most likely have resulted in the design and delivery of a scheme for the Acquired Land and 33 Bligh St with the same or a similar gross floor area to the Refined Grimshaw Scheme, which was conceptually similar to the design of the eastern precinct (without the station and 37 Bligh). The Applicants would have sought to amalgamate and redevelop the Acquired Land with the land controlled by Ausgrid at 33 Bligh St and over which Mirvac had contractual rights.
There was no reason to believe that, but for Metro West and the compulsory acquisition of 33 Bligh St, the put and call option being negotiated between Mirvac and Ausgrid would not have been concluded, in which case, CPG would have dealt solely with Mirvac regarding the amalgamation and redevelopment of the Acquired Land and 33 Bligh St. In those circumstances, the Court did not need evidence from Ausgrid as to what its attitude would have been at the Date of Acquisition to amalgamation of the Acquired Land and 33 Bligh St absent the public purpose. In fact, the Court could readily infer from the contemporaneous evidence (through its participation in the USP) that Ausgrid was supportive of the broader amalgamation, and, absent the USP, the evidence of the agreement reached between Mr Coombes and Mr Lowry demonstrated that the Court could also comfortably infer that Ausgrid and CPG would have pursued an amalgamation of the Acquired Land and 33 Bligh St.
It was accepted that no planning proposal was in fact lodged with Council. It was also accepted that the USP involved a wider portion of land (it included 37 Bligh), and other lands (it involved the site at the corner of Hunter and George Streets). However, it was the fact of the speed with which the USP was created and the work done in relation to it, factually, that demonstrated the probability of a planning proposal being prepared within the timeline of figure 25 of Ms Swan's evidence at Annexure B.
Thereafter, from 2019, well before the announcement in May 2021 that the Acquired Land was going to be compulsorily acquired, and before 33 Bligh St was acquired in November 2021, CPG, Mirvac and Ausgrid had begun to co-operate for the purposes of preparing and submitting the USP in response to rumours that a Metro station was coming in the vicinity of Hunter and Bligh Streets. The USP provided for the amalgamation and utilisation of the Acquired Land and 33 Bligh St (together with 37 Bligh) for a redevelopment that provided for the delivery of the Metro stations and left to that consortium the land above the stations for redevelopment.
The NSW Government, including the Respondent, was supportive of the USP from April 2020, and on 24 December 2020, the USP was formally lodged with the Department of Premier and Cabinet. Both Mirvac and Ausgrid were closely involved in the development and lodgement of the USP with the Department of Premier and Cabinet.
The combined effect of the NSW Government’s support for the USP and Council’s position was that there was no prospect that any application for rezoning and potential redevelopment of the Acquired Land and 33 Bligh St would have been supported and would likely have been refused because of the public purpose.
Absent the public purpose, the prospect that a combined redevelopment proposal would have been approved by the Date of Acquisition (or would be imminent and certain) was clear from the actions of the Applicants, Ausgrid and Mirvac in the preparation of the USP. There was no reason to suggest that the co-operation and speed with which they acted collectively to prepare the USP would not be reflected in another combined redevelopment proposal such as the Refined Grimshaw Scheme.
The consideration required by s 56(1)(a) of the Just Terms Act was a causal consideration. The scope of the operation of s 56(1)(a) was identified in Dri**vas CA per Kirk JA at [88]-[89].
By contrast to the position in Drivas CA, CPG did not put a case that, as at the Date of Acquisition, the Acquired Land would have been in any different physical state. That is, the Applicants do not state that any decision taken or not taken would have altered the character of the Acquired Land on 2 September 2022.
Rather, the Applicants’ case is wholly consistent with the decisions of the Court of Appeal. The Applicants’ case still involves valuing the land “as it is” on the Date of Acquisition. As Kirk JA observed in Drivas CA that s 56(1)(a) of the Just Terms Act may also require the valuation to proceed on the basis, relevantly, that the land would, in fact, have been rezoned as at the Date of Acquisition – that is, so that rezoning was certain, not just a potentiality – if it was established on the facts that rezoning would have occurred, but for the public purpose beyond steps the owner (alone) would, or would not have taken because of the proposed acquisition. The likelihood of a rezoning being obtained by the Date of Acquisition but for the actual or proposed carrying out of the public purpose is not to be ignored where “any application for rezoning or for consent would likely have been refused because of the public purpose” (Drivas CA at [89]).
As the evidence has demonstrated, it was the public purpose, not any decisions of the Applicants, that caused the decrease in value of the Land. This was demonstrated by the alternate values for the land that establish a lower value as at the Date of Acquisition if nothing had previously been done in terms of a planning proposal, as against the scenario where it is assumed that a portion of that course had been undertaken.
It is demonstrative of the Drivas CA [89] effect on value being caused, not by the rational decisions of a dispossessed landowner, but by the actions of a government entity. To use the language of Drivas CA, the public purpose itself had causal significance in this case, in that it led Council to conclude that it would not support a planning proposal for redevelopment of the Acquired Land and 33 Bligh St beyond any steps that CPG would or would not have taken because of the proposed acquisition.
Therefore, it would be consistent with Drivas CA at [89] (and the other authorities) for the Court to award compensation on the assumption, absent the public purpose, there were reasonable prospects, in fact a likelihood, that the Acquired Land and 33 Bligh St would have been rezoned prior to the Date of Acquisition or that the rezoning was imminent.

In Drivas CA the Court of Appeal held that the statutory disregard in s 56(1)(a) of the Just Terms Act involves a causation test that is not necessarily satisfied only by establishing “but for” causation. The Court found that the owners’ decisions to slow down then abandon development plans were “independent decisions of the owners, in a freely chosen (if entirely rational) response to the possibility that their land would be acquired” (Drivas CA at [40]). 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” (Drivas CA at [39]).
The critical purposive consideration in the Court of Appeal’s view was that if the acquired land were valued on the basis as if “things were done in relation to or on the land by the date of acquisition which were in fact not done”, then the dispossessed owner would obtain a “windfall” by receiving compensation for steps having been taken which otherwise would have cost money (Drivas CA at [51]-[52]). There is no reason in principle to treat planning steps (such as obtaining of development consent or, more relevantly to this case, progression of a planning proposal) any differently from physical steps on the land such as demolition or construction. In either case, the dispossessed owner is “getting compensation for costs not actually expended” (Drivas CA at [52]).
The Court of Appeal also noted that, “[i]n 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” (Drivas CA at [89]). Contrary to the Applicants’ submissions, the delimitation is not whether what would have been done would have involved physical changes to the land (Drivas CA at [89]).
Drivas CA at [43] noted Sydney Metro's concession that s 56(1)(a) of the Just Terms Act might require the valuation to proceed on the basis that the land would in fact have been rezoned as at the date of acquisition if it was established on the facts that that would have occurred but for the public purpose. As the Court of Appeal made plain in oOh!media, that issue did not arise for consideration in Drivas CA.
The appellant in oOh!media contended that the market value of its interest in land should be assessed on the basis that development which had not been undertaken at the date of acquisition had been undertaken. Following Drivas CA, the Court of Appeal held that s 56(1)(a) of the Just Terms Act does not require the Court to disregard changes in value of the kind at issue for which the claimant is responsible, even where the claimant is acting in rational response to the proposed acquisition of the authority. It held that it is “the land as it is on the date of acquisition which is valued in such cases, not the land as it would have been development had been undertaken which was not pursued because of the proposed compulsory acquisition” (oOh!media at [60]).
The relevant distinction in both Drivas CA and oOh!media is not between steps which physically affect land (such as carrying out development) and those which do not (such as obtaining or attempting to obtain planning approvals), the Court of Appeal in oOh!media noted that the only material factual difference between that case and Drivas CA was that, in G&J Drivas Pty Ltd v Sydney Metro [2023] NSWLEC 20; (2023) 256 LGERA 319 (Drivas), the claimant was more advanced with its development plans, whereas in oOh!media no development consents had yet been obtained. The Court of Appeal expressly noted that the fact that the project was even less developed in oOh!media did not provide the appellant in with a stronger claim to apply the statutory disregard (oOh!media at [58]).
Section 56(1)(a) of the Just Terms Act reflects a policy to require a disregard only of the increase or decrease in value for which the resuming authority is responsible. It does not require the Court to disregard changes in value for which the claimant is responsible, even where the claimant is acting in rational response to the proposed acquisition of the authority. It does not permit the Court to disregard a strategic decision by an applicant to pursue one planning option over another.
This Court is bound by the Court of Appeal, and the Court of Appeal’s approach to such evidence is patently clear. The Acquired Land in this case must be valued as it was as at the Date of Acquisition. It is not open to value the Acquired Land on some other basis, such as assuming that an agreement existed between the Applicants and neighbouring landowners, that development applications or planning proposals would have progressed further or otherwise. The Applicants’ approach which asks this Court to value the Acquired Land having regard to the hypothetical planning steps that were not in fact taken by the Applicants must be rejected. The simple “but for” test proposed by the Applicants does not accord with Drivas CA.
Applying the facts of this case to the pleaded suggestion of the application of the statutory disregard in s 56(1)(a) of the Just Terms Act the Applicants contend that, this Court should disregard the Pivot Decision made by CPG in March 2020 to focus on the USP, and embark on a process of determining what the Applicants would have done absent that public purpose prior to the Date of Acquisition.
In this scenario, the Applicants contended that the USP should be used as an indicator or “effectively a proxy” to demonstrate that CPG, Mirvac and Ausgrid would have taken steps to amalgamate the Acquired Land and 33 Bligh St and would have worked together to lodge a planning proposal to that end. This scenario invites the Court to assume that instead of working together on the USP, the Applicants, Mirvac and Ausgrid would have worked together on a proposal to redevelop the Acquired Land and 33 Bligh St, rather than any other redevelopment proposal.
On this basis, the Applicants contended that the Acquired Land should be valued at the Date of Acquisition as if the planning proposal for the Refined Grimshaw Scheme would either have been approved and gazetted, or that approval and gazettal would have been imminent; the design competition would have been close to completion, and an early works development application for the proposed development would be under assessment by the Council. The Court should reject such scenario as:
It is directly contrary to Drivas CA and oOh!media. Section 56(1)(a) of the Just Terms Act does not permit this Court to disregard independent decisions made by the Applicants in a freely chosen response to the possibility that the Acquired Land would be acquired. Such a decision “breaks the chain of causation” between the public purpose and the change in value of 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; and
The Pivot Decision was a response by CPG to the possible acquisition of the Acquired Land. It was an attempt by CPG to avoid that compulsory acquisition and to enable it to retain development rights in the Land: see [118(27)] above.
In an attempt to distinguish the present situation from Drivas CA, the Applicants suggest that the Pivot Decision was a decision that, although taken by the relevant landowners, was caused by third parties. A proper analysis of the facts demonstrates that the role of these third parties did not come close to having a causative effect in a way that might be relevant under s 56(1)(a) of the Just Terms Act. Those third-party stakeholders are twofold:
There is the Department of Premier and Cabinet or the “whole of Government” and “if necessary, specifically, the Respondent” who are said to have “accepted” the USP in April 2020. That “acceptance, from as early as April 2020 and continuing through to the date of acquisition” was said to have “either diverted the attention of the Applicants (and the owners of the interests in 33 Bligh)” or alternatively “perpetuated a circumstance in which anything other than the USP… was to be pursued”; and
There was the Council which is alleged to have told Mr Coombes in August 2020 that his land was affected by the acquisition and “so effectively go away”.
As to the role of the Department of Premier and Cabinet or the “whole of Government”, the Court would reject the suggestion that it was Sydney Metro who “accepted” the USP through the “whole of Government”. The Department of Premier and Cabinet should not be equated with Sydney Metro. As the High Court has made clear in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259; (2008) 82 ALJR 489; (2008) 170 LGERA 345) (Walker), it is only the increases or decreases in value for which the resuming authority is responsible that are to be disregarded under s 56(1)(a) of the Just Terms Act.
It would be wrong to characterise the Department of Premier and Cabinet as taking independent steps related to the carrying out of the public purpose such as to amount to a break in the chain of causation. The USP was an avenue actively pursued by CPG and Mirvac with the ultimate aim of garnering the support of Sydney Metro (and Ausgrid). CPG and Mirvac were the driving force behind the USP. The Applicants place paramount importance on one very early-stage meeting between CPG, Mirvac and representatives of the Department of Premier and Cabinet and either Sydney Metro or TfNSW in April 2020, approximately a month after the Pivot Decision. At that meeting, as set out above at [118(29)], a Sydney Metro representative is said to have made a positive remark about CPG and Mirvac being “ahead of the game”, but the ultimate outcome of that meeting was that the Department of Premier and Cabinet was unable to justify the proposal being unique at that point in time. A positive remark made at the very early stages of the lengthy USP process, with many future decisions to be made by NSW Government if the USP were to have any chance of proceeding, is insufficient to amount to a break in the causal connection between the USP and the choices made by CPG and Mirvac because of the possible acquisition of the Acquired Land and 33 Bligh St in the sense explained by Drivas CA.
There is, therefore, no warrant to disregard the Pivot Decision under s 56(1)(a) of the Just Terms Act because of the very limited involvement of the Department of Premier and Cabinet and Sydney Metro or TfNSW in attending a preliminary meeting and giving an equivocal response.
The role of Council is irrelevant to the statutory disregard. It was not the acquiring authority. The remarks in Walker apply with full force: it is the actions of the resuming authority, not the Council, which are to be disregarded under s 56(1)(a) of the Just Terms Act.
Even if the actions of the Council were relevant the factual premise underlying the Applicants’ argument is incorrect. The Council did not tell CPG to “go away” in August 2020. August 2020 was some months after the Pivot Decision in March 2020. CPG continued to engage with the Council concerning the PSI Concept until mid-2021.
Further, there are significant problems in using the USP as a “proxy” for what the parties would have done had they not pursued the USP. The incentives, risks and motivations for the parties would have been very different. The USP process does not provide a safe foundation for the Court to draw the inference that the parties “would” have diverted the efforts directed in the USP to a planning proposal for the Acquired Land together with 33 Bligh St and 37 Bligh and that the “timeline does not change”.
The motivation of the parties in pursuing the USP were twofold:
Mr Coombes gave evidence that the USP scheme with the metro station underneath “would be significantly more valuable than a redevelopment without the metro station”. The financial incentives for pursuing such a redevelopment of the Acquired Land together with 33 Bligh St and 37 Bligh absent the metro station would, therefore, have been very different; and
Mr Coombes also gave evidence that the USP was entered into in the context of concerns about whether the Acquired Land would or would not be compulsorily acquired for the Metro West. The USP in this context was a way to “better control or mitigate the effects of, or risks to, the development potential and ongoing value of the Land…”. In other words, at the relevant points in time around 2019 to 2020, the parties were incentivised to enter into the USP as a means of retaining development rights in the Acquired Land, and to do so quickly at pains of losing all development rights in the Acquired Land. Absent the very real possibility of compulsory acquisition of the Acquired Land and 33 Bligh St, the parties would have had less incentive and less urgency in working together to amalgamate the Acquired Land together with 33 Bligh St and 37 Bligh.
Once the Pivot Decision was made in March 2020, the plan was to present preliminary designs and schemes to NSW Government and Ausgrid in early April 2020 (that is, one month later). Such haste would not have been needed absent the USP and the imperatives for putting forward the USP. That is clear on the facts. Prior to the Pivot Decision, CPG had not moved with utmost haste in investigating other options (such as amalgamation with 37 Bligh). Shortly after acquiring the CFT 8 property in 2016, CPG undertook a staged soft refurbishment of some floors. Almost a year after purchasing CFT 8, Mr Coombes began investigating amalgamation options with 37 Bligh, including the purchase of airspace rights. Those investigations and discussions took place over a number of years. It was only in 2019 that CPG began to pursue the PSI Concept. This lack of haste reflects the reality when no timing imperative existed, and rental income was being derived from the properties on the Acquired Land (as had been the case for the Telado property since 1991). As Mr Coombes noted, CPG held a long-term redevelopment and asset owning perspective.
To the extent it is suggested that the designs in the USP can be used as a “proxy” for a development such as the Refined Grimshaw Scheme because “all that’s being carved out is 37 Bligh”, there is simply no evidence as to the similarities between the USP and the Refined Grimshaw Scheme. Only very high-level documents concerning the USP are in evidence. The Court should not accept that they “operate as a proxy for the planning proposal in terms of what is required in a planning proposal”. There is no evidence as to the necessary similarity between the two schemes that would be necessary to draw such a conclusion.
The Court should infer that, concerns held by CPG and Mirvac about the location of the metro station and possible compulsory acquisition of the Acquired Land and 33 Bligh St added a time imperative for the pursuit of the USP. There is no basis upon which the Court could draw an inference that the parties would have taken the same steps at the same time in relation to amalgamation options absent the possibility of compulsory acquisition of the Acquired Land. The Court should reject the USP as a “proxy” for what would have occurred had the USP not been pursued.
The evidence does not support the drawing of an inference that CPG, Mirvac and Ausgrid would have worked together on a scheme such as the Refined Grimshaw Scheme in the absence of the USP. The evidence does not suggest that CPG would have pursued amalgamation with 33 Bligh St as at the date of the Pivot Decision or at all. There is only limited evidence concerning what Mirvac and Ausgrid would have done and their attitudes towards an amalgamation of 33 Bligh St with the Acquired Land. CPG called very limited evidence from a Mirvac representative (Mr Waters) and no evidence from Ausgrid. The drawing of inferences as to the likely positions of these entities is entirely speculative.
As to CPG, it was pursuing in parallel a planning proposal with the Council relating to the redevelopment of the Acquired Land only. That reflects the draft status of the CSPS in 2019 and 2020, and the hope or expectation of CPG that the Tower Cluster Area provisions of the CSPS would apply to land greater than 1,000m2, that is, the Acquired Land. The contemporaneous documents suggest that CPG pursued this option until at least April 2021 and that it considered that amalgamation with 33 Bligh St had been explored extensively and was not considered a realistic outcome in the foreseeable future. The Court should therefore draw the inference that CPG would have continued investigating this option and continued in its attempts to persuade the Council that there were “amalgamation constraints” in relation to both 37 Bligh and 33 Bligh St, as it in fact did (repeatedly) notwithstanding the Pivot Decision.
As to Mirvac, a related entity had held a call option in relation to 33 Bligh St until May 2021 under a Put and Call Option Agreement (as amended and novated). It only entered into a heads of agreement with Ausgrid in May 2021. The heads of agreement concerned the USP, which Ausgrid agreed to support subject to reaching agreement on the “Standalone Price” with Mirvac (the Standalone Price being the exercise price if 33 Bligh St were to be acquired by Mirvac prior to entering into a binding agreement to amalgamate the site with neighbouring properties). It provided Mirvac with an exclusive due diligence period of nine months. If the USP is to be disregarded, then this heads of agreement would also need to be disregarded. Even if not disregarded, without any agreement as to the Standalone Price it cannot be used to draw an inference that Mirvac would have reached the requisite agreement with Ausgrid as to the exercise price of the option following its period of exclusive due diligence. As other evidence in these proceedings demonstrated, it can take parties years to agree as to matters such as prices and value sharing mechanisms.
There are further problems with drawing inferences about Mirvac’s willingness to engage with CPG about a potential amalgamation absent the metro station. It is far from certain that Mirvac would have agreed to pursue an amalgamation of the Acquired Land and 33 Bligh St. The Court should be extremely cautious before drawing an inference that Mirvac would have done so based only on evidence of a high-level conversation in around September 2019 between Mr Coombes and a representative of Mirvac noting that, if Mirvac secured the airspace rights to 33 Bligh St, it intended “to discuss amalgamation opportunities with the Applicants”. Mirvac did not acquire those airspace rights and those amalgamation opportunities were not further discussed.
As to Ausgrid, Mr Coombes held one very high level and vague discussion with Mr Lowry about possible amalgamation in June 2019: see [118(20)] above. Ausgrid was not an active participant in the USP process. It did not sign the USP which was ultimately lodged. It did not participate in design workshops or attend meetings with the Department of Premier and Cabinet. It expressed some hesitation about going “too far down the USP process”. There is no basis on which the Court could infer that it would have collaborated with CPG from March 2020 in relation to an amalgamation between the Acquired Land and 33 Bligh St absent the metro station.
For the foregoing reasons, even if the Court were to disregard the USP process, it would not conclude that CPG and Mirvac and/or Ausgrid would immediately have pursued a planning proposal for an amalgamated redevelopment of the Acquired Land with 33 Bligh St.

The Applicants’ case is not suggesting that the Council’s actions were a proposal to which the reduction in value could be attributed (as was the case in Walker) but that due to the existence of the proposal of the Respondent, that is the public purpose, the Council would not approve any application for the combined redevelopment of the Acquired Land in conjunction with 33 Bligh St.
Having regard to the actions of the Council upon which the Applicants rely, a finding that the Council was going to refuse any application relating to the Acquired Land or its development in conjunction with adjoining land by reason of the public purpose has not been established on the evidence. The two specific letters from the Council do not support such a finding.
As no direct evidence has been adduced that Council expressed such a position, the Applicants rely upon the drawing of an inference that such was the position of the Council. To enable such an inference to be drawn from that conversation and correspondence there must be objective facts which would support the drawing of such inference. Absent such objective facts, what is being put is mere conjecture.
Having regard to the correspondence either alone or in conjunction, it is not apparent that the Council’s position would be refusal as a consequence of the public purpose. The first letter (see [118(33)] above) made detailed assessment of the merits of the PSI Concept as prepared by the Applicants. The Council indicated that it was inviting the Applicants to consider the observations relating to the merits and provide further information in any later submission. The letter identifies merit considerations. The reference to the Sydney Metro was a factual observation and was not a request for the application to be withdrawn or an invitation to assume that further applications would be rejected, instead, it was a request to be kept informed.
The second letter (see [118(39)] above) was the Council progressing the application for consideration by the DAP. That panel considered and again made merit assessment of the proposed PSI Concept. The reference to the Metro was not an indication of a position of refusal, but rather an invitation to resubmit a proposal that addressed the concerns raised by the DAP, in the event that: if the opportunity to proceed remains, we encourage you to continue working with the City to refine your proposal to meet the Central Sydney Planning Framework.
Neither letter, either expressly or impliedly, indicated that due to the public purpose the Council would not proceed to consider any application. Such a finding is also consistent with the broader context of the PSI Concept, including the conversations with Mr Jahn and the Applicants’ responses to the correspondence. There is no evidence of the conversations with Mr Jahn (or any other Council officer) that indicate that an application would be refused due to the public purpose. To suggest that the Council was influenced by the public purpose to refuse any application for a planning proposal on the Acquired Land is patently inconsistent with the Council’s actions where it: considered the application made; assessed the merits of the application; and referred the application for consideration by the DAP. Further, after the issue was first raised with Mr Coombes in the first letter, the Applicants pursued the PSI Concept denouncing any impact, at that time, of a public purpose on the determination of the PSI Concept: see [118(35)] above.
On the evidence, at no time did the Council refuse or discourage the making of a planning proposal for the Acquired Land. Further, at no time did the Council refuse or discourage the making of a planning proposal for the redevelopment of the Acquired Land in conjunction with 33 Bligh St as no such proposal was ever raised with the Council for consideration. Notwithstanding the Council’s clearly stated preference that to support a development proposal in excess of the base planning controls the Acquired Land should be amalgamated with adjoining land, at no time did the Applicants pursue such approach. Such a position is significant in light of the Applicants’ conclusion at [119(3)] that the prospect of an approval absent amalgamation was futile.
What is apparent from the interactions with the Council was that Council’s reluctance to endorse the planning proposal related to its assessment that on merit the development on the Acquired Land alone at such a density could not be supported. Such factors were unrelated to the public purpose.
The failure of the Applicants to pursue any application for a planning proposal – either in the form of the Updated PSI Concept or in conjunction with 33 Bligh St – was caused by the decisions taken by the Applicants independent of the proposal to carry out the public purpose. That is, the public purpose had no causal significance in the failure to take the steps necessary to obtain the support of the Council and obtain a rezoning of the land by pursuing a planning proposal. Such actions by the Applicants are not to be disregarded by operation of s 56(1)(a) of the Just Terms Act: see Drivas at [59].
For those reasons, there is no evidence that would justify, on balance, a finding that the Council had determined to reject any application on the Acquired Land alone or in conjunction with adjoining land due to the public purpose.

Whilst Mr Coombes and the Applicants refer to a Pivot Decision, the relevance of such decision and the extent of this decision to the matters for determination remain unclear.
First, the Pivot Decision was described at [118(27)] above as a shifting of focus. The shifting of focus was not an abandonment of the planning proposal for the Acquired Land but rather the introduction of a “parallel” proposal comprising the USP. Whilst Mr Coombes considered the financial benefits of the USP warranted its pursual, he never abandoned or disengaged from the planning proposal. Such is apparent from the effort that was expended upon by the planning proposal after the Pivot Decision: see [118(30)-(31)], [118(33)], [118(35)], [118(37)] and [118(39)] above.
Secondly, it seemed to be suggested that the apparent support for the USP had an effect upon the pursuit of the planning proposal in that it shifted focus. Again, such is inconsistent with the contemporaneous evidence. It is apparent that there were two projects underway in the period from March 2020, but as identified above, each project was pursued. CPG remained actively engaged with the planning proposal whilst also engaging with the USP.
To the extent relevant, I also reject the suggestion that the apparent support of the USP was a causal connection in the Pivot Decision such that the pivot, if it had any impact on value, was to be disregarded under s 56(1)(a) of the Just Terms Act. The contended encouragement by Government Departments (including the acquiring authority) for the USP is not borne out on the evidence as having a causal connection. The USP was a proposal developed by the Applicants and their partners – not a proposal invited by the Government or the acquiring authority. The meeting to which the Applicants derive the notion of “encouragement” was a preliminary meeting in the process of the unsolicited proposal. Such a positive remark at such an early stage of the process cannot be found to be one upon which the Applicants can rely as inferring a causal link between its actions and the public purpose. The USP process, as it developed in this case, was wholly caused by the decision-making of the Applicants and not caused by the proposal to carry out the relevant public purpose.
Further, as any pivot to the USP, such decision was made independently of any Council position. As Mr Coombes deposed, his decision was motivated by identifying a potential solution to maintain CPG's valuable development rights above any proposed metro station: see [118(27)] above.
At the time the USP was developed there had been no identification of the location of any potential Metro West station. Mr Coombes deposed that the USP was in fact an invitation to provide the station on the USP land, a position not reflective of the proposal for the public purpose yet identified by the Respondent. He did so to increase the value of the Acquired Land, not in response to a reduction in the value of the Acquired Land.
The Applicants’ pivot was to exploit the uncertainty of the possible acquisition to invite its land to be included in the public purpose for the resultant financial benefit. Such decision was not caused by the carrying out of, or the proposal to carry out, the public purpose rather it was an independent decision made by the Applicants.
For those reasons, I find the Pivot Decision, on any construction, is not to be disregarded pursuant to s 56(1)(a) of the Just Terms Act.

On the evidence of this case, even if the Applicants had established that the Council’s position on redevelopment had been caused by the public purpose, or that the Pivot Decision was caused by the public purpose, I would not find that the Applicants would have pursued the combined redevelopment with 33 Bligh St as at the Date of Acquisition for the reasons that follow.
The first compelling reason is that the Applicants had eschewed amalgamation with adjoining sites at all stages of its dealings with the Council with respect to the redevelopment of the Acquired Land. It is apparent that at each stage of dealing with the Council the Applicants had limited their redevelopment proposals to the Acquired Land as was demonstrated by the following:
The Council first raised the issue of amalgamation prior to the purchase of 28 O’Connell: see [118(8)] above;
The response was to prepare the Concept Assessment and the Crone Concept Study which limited the proposed development to the Acquired Land: see [118(5)-(9)] above. Mr Coombes deposed as to his belief that a redevelopment of the Acquired Land alone would provide a more profitable use than the current use of the Acquired Land: see [118(4)-(9)] above;
Discussions continued with the Council indicating that amalgamation with other sites should be considered: see [118(18)] above; and
The response to Council as a consequence of these discussions was to pursue the development of the Acquired Land and seek to justify why amalgamation was not desirable: see [118(23)(b)] above.
Whilst the Applicants submitted that as at the Date of Acquisition the Applicants had pursued amalgamation and made material progress to achieve amalgamation such that it would continue to do so absent the public purpose (see, for example, at [127] above) such a submission is not borne out on the evidence as:
The Applicants had commissioned studies to identify amalgamation opportunities with 33 Bligh St and 37 Bligh, however, none of the proposals identified in those studies had been developed into a proposal ever submitted to the Council;
None of the amalgamation studies that included 33 Bligh St had been discussed with the owners of 33 Bligh St;
No fruitful discussions had been had with any adjoining owner as to combined redevelopment apart from the USP, for example:

A fundamental aspect of the Applicants’ case was that if the Applicants were to be taken to have been proceeding to achieve a combined redevelopment of the Acquired Land with 33 Bligh St by way of a planning proposal, such planning proposal would have been approved, or an approval imminent, as at the Date of Acquisition. Absent such finding, the Applicants’ case would not have supported a determination of market value on the basis of the combined redevelopment being the highest and best use of the Acquired Land.
The foundation for the Applicants’ case was that a finding would be made that the Applicants and those with an interest in 33 Bligh St would have acted to pursue the planning proposal with the same commitment and speed that was demonstrated in the development of the USP. The Applicants contended that, to that extent, the USP was to be taken as a “proxy” for the Refined Grimshaw Scheme.
On the evidence in this case, I do not accept that the USP can be found to be a proxy for the combined redevelopment of the Acquired Land and 33 Bligh St for the reasons that follow.
The most compelling reason to distinguish the USP from a planning proposal is that the USP was developed to respond to the yet undetermined location of a metro station to serve Metro West. In that context, the USP had to be developed and submitted to the Department of Premier and Cabinet before any definitive decision was made as to the location of any proposed metro station near the Acquired Land. The goal of the USP was to convince the NSW Government to determine the location of such a metro station on the Acquired Land. There was, therefore, an urgency that the USP be prepared and submitted prior to the NSW Government making a decision as to the metro station location.
The state of the relationship between the interest holders was reflective of the state of urgency. First, 37 Bligh, which land formed part of the USP was not a party to the USP. Secondly, Ausgrid although named in the USP had not committed to any proposal. The position of Ausgrid is identified in paragraph 3 of the heads of agreement with Mirvac at [118(38)] above. Thirdly, whilst having executed the heads of agreement, Mirvac had not negotiated any sale from Ausgrid, nor was there any evidence that any steps had been taken by Mirvac to finalise a sale price. Finally, the parties, whilst pursuing the USP had made no agreement as to the commercial arrangements that would need to be put in place to facilitate the construction of the USP if approved.
The Applicants past actions in connection with the PSI Concept planning proposal also speaks against an acceptance that all of the necessary parties would have acted with expedition absent the time imperative that influenced the preparation of the USP. If the PSI Concept proposal is examined, it is revealed that it took around 3 years to develop the first set of architectural plans to be submitted to the Council for consideration. The comments from the DAP indicated that the proposal required further consideration before the Council would support the planning proposal. The expectation that a combined redevelopment proposal would be undertaken in less time is not supported on the evidence.
The Applicants also contended that the Refined Grimshaw Scheme was sufficiently similar to the USP that the Court would find that there would be support for that scheme from 33 Bligh St. I do not accept that submission. I accept the Respondent’s submission that there is simply no evidence to enable a meaningful comparison between the Refined Grimshaw Scheme and the USP. It is not only issues of architecture but also cost and return that would influence a commercial acceptance of the Refined Grimshaw Scheme, there is no evidence as to the impacts of the excision of 37 Bligh and the station components of the USP. Further, from the evidence there is no indication that either Mirvac or Ausgrid have ever considered the Refined Grimshaw Scheme. Mr Waters’ evidence as to a likelihood of continuing discussions with respect to a combined redevelopment (see [118(49)] above) do not refer to the Refined Grimshaw Scheme but are limited to the scheme that it had expended energy and money, namely the USP.
It is submitted that the financial benefits of the Refined Grimshaw Scheme were so obviously apparent that the Court would find that the redevelopment in combination was as good as a foregone conclusion. This submission is difficult to establish on the evidence. First, there has been no separate valuation of 33 Bligh St as at the date of valuation taking into account all of its potentialities including the availability of the Tower Cluster Area benefits. The only evidence of value of 33 Bligh St are based upon statements made by Ausgrid in connection with the compulsory acquisition. The foundation of such valuations is unknown. Absent evidence of value the financial benefit to 33 Bligh St cannot be ascertained.
Secondly, the value that is said be self-evident is derived from the outcome of a necessary commercial arrangement between the parties. The Applicants ask the Court to accept that a commercial arrangement would be resolved consistent with the assumed commercial arrangement relied upon by their valuer, Mr Hillier. However, contrary to the assumption made by Mr Hillier, the evidence discloses that there are a variety of commercial arrangement that are commonly entered into for combined redevelopments of the kind suggested in these proceedings, of which Mr Hillier’s commercial arrangement is only one. In addition, there is no evidence adduced from Ausgrid, the owner of 33 Bligh St or Mirvac as the beneficiary of the put and call option as to whether it would have been prepared to enter into a combined scheme at the commercial arrangement as assumed by Mr Hillier. The terms of any commercial arrangement is critical to the determination of the market value of the Acquired Land is extremely relevant, as absent an agreement on the terms posed by Mr Hillier, the market value of the Acquired Land may vary vastly. Absent evidence of Ausgrid’s commercial requirements, the nature of the commercial arrangement that would be entered into to facilitate the combined redevelopment scheme is pure speculation.
The Court is also asked to accept that such an arrangement would be resolved within a short timeframe – within the time as identified in Ms Swan’s figure 25 at Annexure B which indicates “continued engagement with adjoining landholders” commencing in January 2020 and completed within 10 months. As found above, the evidence does not support that there were any substantive discussions, let alone agreement, between the Applicants and 33 Bligh St as to a combined redevelopment of those sites independent of the USP. Whilst Ms Swan’s timeline indicates that it may be possible for parties to obtain a planning proposal within her identified timeframe such is not enough to substantiate the Applicants’ claim. What is necessary is that the Applicants establish, on the balance of probabilities, that they would have obtained the planning proposal: Noubia at [121]-[122]. For the reasons outlined, the Applicants have failed, on the evidence, to establish such probability.
For those reasons, I find that even if I assume that the Applicants would have pursued a combined redevelopment with 33 Bligh St, I find that such redevelopment proposal would not have been finalised or imminent as at the Date of Acquisition.

Telado Pty Ltd; CFT No. 8 Pty Ltd v Sydney Metro

At a glance

Court

Decision date

Before

Catchwords

Source

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Catchwords

Judgment

TABLE OF CONTENTS

JUDGMENT

Nature of proceedings

Facts

Planning regime

Issues for determination

Highest and best use of the Acquired Land – application of the statutory disregard in s 56(1)(a) of the Just Terms Act

Statutory disregard – s 56(1)(a) of the Just Terms Act

Applicable principles

Public purpose of the acquisition of 33 Bligh St

Evidence

The Applicants’ position

The Respondent’s position

Findings

If Metro CSW is a different public purpose, there was no impact on market value

Evidence

No acquisition of 33 Bligh St; acquisition only for leasehold interest

Applicants’ position

Respondent’s position

Findings

Acquisition of 33 Bligh St causally connected to Metro West and to be disregarded

Applicants’ position

Respondent’s position

Findings

Conclusion on impact of acquisition of 33 Bligh St on availability of 33 Bligh St

Steps that would have been taken absent the acquisition

Principles to be applied

Evidence relating to redevelopment of Acquired Land

Applicants’ position

Respondent’s position

Finding on the statutory disregard in s 56(1)(a) of the Just Terms Act relating to combined redevelopment with 33 Bligh St

Council’s position caused by the public purpose

Pivot to USP

Would combined redevelopment with 33 Bligh St have been pursued?

USP as a proxy?

Availability of 33 Bligh St in the short to medium term

Disturbance

Conclusion

Determination of compensation

Parties

Legislation Cited (7)

Cases Cited (16)