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[2025] NSWLEC 103
General information, not legal advice.
Land and Environment Court (NSW)
2025-09-15
Pritchard J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 4) [2025] NSWLEC 103
Hearing dates: 3-6 March and 15 April 2025
Date of orders: 15 September 2025
Decision date: 15 September 2025
Jurisdiction: Class 3
Before: Pritchard J
Decision: The Court orders that compensation under Part 3 Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act) for the compulsory acquisition of the freehold interest of The Eddie Arnott Corporation Pty Limited (ACN 118 151 170) in Lot 7 in Strata Plan 65054, known as Shop 1A, 5 Hunter Street, Sydney, is in the amount of $1,102,000.00 plus statutory interest payable under ss 49 and 50 of the Just Terms Act.
Catchwords: COMPULSORY ACQUISITION OF LAND — compensation — freehold claim and leasehold claim — market value — special value — disturbance — joint occupancy
Legislation Cited: Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 66, 54-59
Interpretation Act 1987 (NSW) s 30
Real Property Act 1990 (NSW) ss 41, 42, 53
Retail Leases Act 1994 (NSW) s 16
Cases Cited: Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; (2020) 243 LGERA 102; [2020] NSWCA 165
Attard & Ors v Transport for NSW [2014] NSWLEC 44
Azkanaad Pty Ltd v Galanos Bros Pty Ltd [2008] NSWCA 185
Barkat v Roads and Maritime Services [2019] NSWCA 240
Baxton v Kara [1982] 1 NSWLR 604
Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29
Bradshaw & Anor v Pawley [1980] 1 WLR 10
Chan v Cresdon Pty Ltd (1989) 268 CLR 242; [1989] HCA 63
Chaudry v Liverpool City Council [2008] NSWLEC 251
City of Parramatta Council v Sydney Metro [2024] NSWLEC 23
Commonwealth v Milledge (1953) 90 CLR 157
Croghan v Blacktown City Council (2019) NSWLR 757; [2019] NSWCA 248
De Battista v Transport for New South Wales [2014] NSWLEC 39
Denshire v Roads and Maritime Services (2017) 229 LGERA 118; [2017] NSWLEC 181
Dial a Dump Industries v RMS (2017) 94 NSWLR 554; [2017] NSWCA 73
Dibb v Transport for NSW [2024] NSWCA 157
Dillion v Gosford City Council (2011) 184 LGERA 179; [2011] NSWCA 328
Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111; [1995] 1 All ER 846
El Boustani v The Minister administering the Environmental Planning and Assessment Act 1979 (2014) 199 LGERA 198; [2014] NSWCA 33
G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234
Hayes v Gunbola Pty Ltd (1986) 4 BPR 9247
Hoy v Coffs Harbour City Council [2014] NSWLEC 1217
Hua v Hurstville City Council [2010] NSWLEC 61
Jackmain (a pseudonym) v The Queen (2020) 102 NSWLR 847; [2020] NSWCCA 150
Kemp v Lumeah Investments [1983] 3 BPR 97175
Kostas & Anor v HIA Insurance Services Pty Ltd and Another (2010) 241 CLR 390; [2010] HCA 32
Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544
Marroun v Roads and Maritime Services [2012] NSWLEC 199
Marshall v Snowy River Shire Council (1994) 7 BPR 14,447
Monti v Roads and Maritime Services (No 4) [2019] NSWLEC 11
Morley v Perpetual Trustee Co Ltd [1968] 2 NSWLR 372
Olde English Tiles Australia Pty Ltd v Transport for New South Wales [2021] NSWLEC 90
Olde English Tiles v RMS (2022) 108 NSWLR 503; [2022] NSWCA 108
Roads & Traffic Authority of New South Wales v Blacktown City Council [2007] 1 NSWCA 20
Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41
Roads and Traffic Authority (NSW) v McDonald (2010) 79 NSWLR 155; (2010) 175 LGERA 276; [2010] NSWCA 236
Rocco Fraietta v Roads and Maritime Services [2017] NSWLEC 11
Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243
Spencer v Commonwealth (1907) 5 CLR 418
Sydney Metro v C&P Automotive Engineers (2024) 115 NSWLR 122; [2024] NSWCA 186
Sydney Metro v G&J Drivas (2024) 113 NSWLR 429; (2024) 258 LGERA 197; [2024] NSWCA 5
The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12
The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 2) [2025] NSWLEC 17
The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 3) [2025] NSWLEC 18
The Trustee for Whitcurt Unit Trust v Transport for NSW [2021] NSWLEC 82
Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56
Watson v Anor v Delaney & Anor [1991] 22 NSWLR 358
Texts Cited: Butt’s Land Law (7th Ed, Lawbook Co)
Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (5th ed)
Category: Principal judgment
Parties: The Eddie Arnott Corporation Pty Ltd (Applicant)
Sydney Metro (First respondent)
Imad Arnaout (Second respondent)
Representation: Counsel:
A Hemmings and C Novak (First respondent)
Solicitors:
Ashurst (First respondent)
I Arnaout appeared in person (Applicant and second respondent)
File Number(s): 2023/58530
Publication restriction: Nil
JUDGMENT
The participation of the applicant and the second respondent in the proceedings
Issues
Outcome
Relevant factual background
The acquisition
The applicant and the second respondent
The public purpose
The acquired land
Parent site and parent building: 5 Hunter Street
Location
Relevant planning controls
Relevant legislation and legal principles
Just Terms Act
Retail Leases Act 1994 (NSW)
Real Property Act 1990 (NSW)
Evidence
The evidence of the applicant and the second respondent
Sydney Metro’s evidence
The evidence of Dr Arnaout
Sydney Metro’s submissions in relation to the evidence of Dr Arnaout
Conclusions in relation to the evidence of Dr Arnaout
The claim of joint occupancy: “me and myself and I”
Applicant’s freehold claim
Market value of the applicant’s claim in relation to a freehold interest in Lot 7
Relevant principles
Applicant’s freehold claim for market value
Characteristics of the acquired land
Comparable sales evidence
Highest and best use of the acquired land at the acquisition date
Capitalisation of net rentals methodology
Comparable rentals adopted by the Court
Outgoings for Lot 7 adopted by the Court
Lease period adopted by the Court
Comparable sales adopted by the Court
Court adjustments to comparable rentals FR4 and FR6
Court adjustments to comparable sale FR4
Court calculations of the market value of Lot 7
Applicant’s claim for special value in relation to a freehold interest in Lot 7
Relevant principles
Applicant’s freehold claim for special value
Conclusion in relation to the applicant’s freehold claim for special value
Disturbance losses in relation to the applicant’s freehold claim
Relevant principles
Applicant’s general claim for disturbance loss
Section 59(1)(a): legal costs reasonably incurred
Section 59(1)(b): valuation fees of a qualified valuer reasonably incurred
Section 59(1)(c): financial costs reasonably incurred in connection with the relocation
Section 59(1)(d): stamp duty costs reasonably incurred
Section 59(1)(f): any other financial costs reasonably incurred
Dr Arnaout’s leasehold claim
Whether Dr Arnaout, the second respondent, had a compensable interest in land
Market value of Dr Arnaout’s claim in relation to a leasehold interest in Lot 7
Dr Arnaout’s claim for special value in relation to a leasehold interest in Lot 7
Dr Arnaout’s claim for disturbance in relation to a leasehold interest in Lot 7
Second respondent’s general claim for disturbance loss
Section 59(1)(a): legal costs reasonably incurred
Section 59(1)(b): valuation costs reasonably incurred
Section 59(1)(c): financial costs reasonably incurred in connection with relocation
Section 59(1)(f): other financial costs reasonably incurred - claim for “rental difference”
Conclusions
Orders
By Class 3 application filed on 21 February 2023, the applicant, The Eddie Arnott Corporation Pty Ltd (ACN 118 151 170) (the applicant), brought proceedings pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act) objecting to the amount of compensation offered by Sydney Metro (the first respondent) for the compulsory acquisition of its freehold interest in land comprising Lot 7 in Strata Plan 65054, known as Shop 1A, 5 Hunter Street, Sydney (the acquired land) (the freehold claim). The date of acquisition was 2 September 2022 (the acquisition date).
The acquired land, known as Shop 1A, 5 Hunter Street, was in the lower ground level of what was known as the Hunter Connection, and had been used for the purpose of a dental practice by the second respondent, Dr Arnaout. The acquired land formed part of the “Hunter Arcade” retail arcade. The parent building at 5 Hunter Street included a retail stratum (Strata Plan 65054) known as the Hunter Arcade, and an office tower stratum (Strata Plan 71068). The parent building had a primary frontage along the southern alignment of Hunter Street, a secondary frontage along the eastern alignment of George Street, and a tertiary frontage to De Mestre Place. Wynyard railway station is situated to the west of the parent building and was accessed via a pedestrian tunnel beneath George Street.
In the period leading up to and of the hearing, as well as following the hearing, I have been considerably assisted by Acting Commissioner Kempthorne. This judgment is, of course, my own as judicial valuer.
1. Compensation order regarding Freehold interest in the land including stamp duty.
2. Compensation order regarding City Dental Practice Business relocation on a “like for like” basis.
3. Compensation orders regarding respective Losses Attributable to Disturbances.
4. Compensation order regarding Freehold special value.
Annexed to the Class 3 application were, amongst others, the following documents:
a schedule of losses attributable to disturbance in the amount of $715,405.79 (with the amount for several items identified as “to be advised”); and
a copy of an unregistered lease agreement between the applicant and Dr Imad Arnaout in relation to the acquired land, executed on 22 August 2022, being 11 days prior to the date of acquisition, executed between the applicant and himself as second respondent on 22 August 2022 and purporting to commence on the earlier date of 18 July 2021 (the 2022 l****ease).
On 21 July 2023, the applicant filed in the freehold claim “Points of Claim and Updated Schedule of Losses Attributable to Disturbances”, seeking compensation in the amount of $7,473,977.79 (said to be plus GST whenever applicable/required), comprising:
Market value (s 55(a)): $2,150,000.00
Special value (s 55(b)): $4,501,000.00
Disturbance (s 55(d)): $822,977.79 Plus GST whenever applicable/required (with the quantum for several items “to be confirmed”).
On 29 November 2024, the Court made orders pursuant to s 25(2) of the Land and Environment Court Act 1979 (NSW) (LEC Act) joining Dr Imad Arnaout as second respondent to the proceedings in relation to his claimed leasehold interest in the acquired land (the leasehold claim), and made orders in relation to the pleadings in the freehold claim, amended pleadings in relation to the leasehold claim, and lay evidence and expert evidence to be relied upon by the applicant and the second respondent in the proceedings.
On 16 December 2024, the applicant filed a document titled “The Applicant’s Amended Points of Claim for the Freehold Interest” (the amended points of claim (freehold)), seeking compensation in the amount of $6,046,494.27 (said to be plus GST whenever applicable/required) comprising:
Market value (s 55(a)): $2,150,000.00
Special value (s 55(b)): $3,561,000.00
Disturbance (s 55(d)): $335,494.27 (with the quantum for several items “TBA”).
Also on 16 December 2024, the second respondent filed a document titled “Dr Arnaout’s Joinder Points of Claim – City Dental Practice Leasehold” (points of claim (leasehold)). The claimed interest in land is the unregistered 2022 lease.
Dr Arnaout, the second respondent and sole director of the applicant, claims compensation in the amount of $1,294,003.23 (plus GST whenever applicable/required), comprising:
Special value (s 55(b)): $436,800.00
Disturbance (s 55(c)): $857,203.28
Dr Arnaout, in closing submissions titled “Applicant’s and Second Respondent’s Closing Submissions” filed on 14 March 2025 after the conclusion of the hearing (the applicant and the second respondent's closing submissions), increased the amount of compensation the applicant and the second respondent seek, the applicant to an amount of $6,051,252.56 and the second respondent to an amount of $1,337,505.23.
The procedural history is set out in my earlier interlocutory decisions: The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12, The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 2) [2025] NSWLEC 17, and The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 3) [2025] NSWLEC 18. In summary, the procedural history is as follows.
At a second pretrial mention on 25 February 2025, Dr Arnaout appeared for the applicant and the second respondent (himself), and replied to a question from the Court as to whether their expert town planner Mr Haskew and expert valuer Mr Sanidas would be made available for cross-examination at the hearing. Dr Arnaout confirmed that they would not be made available, notwithstanding that their reports had been filed and served.
Also at the second pretrial mention, the Court made rulings in relation to the objections of the first respondent, Sydney Metro, to the affidavit of Dr Imad Arnaout filed on 18 February 2025 (the 18 February 2025 affidavit). That evidence concerned the negotiation process pursuant to s 10A of the Just Terms Act for acquisition by agreement before the initiation of the compulsory acquisition process. I did not allow that material to be admitted into evidence. [1]
On 28 February 2025, the applicant and the second respondent filed and served a notice of motion seeking to vacate the hearing listed to commence on 3 March 2025 (the notice of motion). I determined to refuse the application to vacate the hearing. My reasons were published in The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 2). [2]
At the commencement of the hearing on 3 March 2025, the applicant sought to rely upon the report of David Haskew, town planner, dated 2 April 2024 (the Haskew report) in support of its freehold claim. The applicant and the second respondent sought to rely upon the report of John Sanidas, valuer, dated 13 June 2024 (the Sanidas report) in support of their respective freehold and leasehold claims. Sydney Metro objected to the admission of the two reports in circumstances in which neither expert would be made available for cross-examination and their evidence would not be capable of being tested. Also, neither expert had been made available for joint conferencing.
On 4 March 2025, the second day of the hearing, I delivered an ex tempore judgment declining to admit the Haskew report and the Sanidas report into evidence in circumstances in which the experts were not made available for cross-examination and had not participated in joint conferencing: The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 3). [3]
The applicant filed and served the following evidence upon which it sought to rely at the substantive hearing:
affidavit of Dr Imad Arnaout dated 5 August 2024 (the 5 August 2024 affidavit) which was 605 pages in length;
expert valuation report of John Sanidas dated 13 June 2024; and
expert planning report of David Haskew dated 2 April 2024.
As indicated above, I declined to admit the reports of Mr Sanidas and Mr Haskew into evidence.
The second respondent, Dr Arnaout, filed and served the following evidence upon which he sought to rely at the substantive hearing:
a document titled "Lay Evidence for City Dental Practice Leasehold Filed Under Joinder Related Orders" dated 24 January 2025, and which was 19 pages in length; and
a document titled "Expert valuation Evidence for City Dental Business Leasehold Interest Filed Under Joinder Related Orders" dated 24 January 2025, which annexed the valuation report of Mr Sanidas dated 13 June 2024.
The applicant and the second respondent filed and served the 18 February 2025 affidavit of Dr Arnaout in which Dr Arnaout said: “this is a concise and updated version of my previous Affidavit, and as such it is to be read instead of my preceding Affidavits, please.” The 18 February 2025 affidavit was 630 pages in length, with three pages of annexures. As indicated above at [14], on 27 February 2025, I declined to admit this affidavit into evidence: The Eddie Arnott Corporation Pty Ltd v Sydney Metro. [4]
Neither the applicant nor the second respondent participated in the preparation of the Court Book, Tender Bundle or Evidence Book. The Court Book, Tender Bundle and Evidence Book were prepared by Sydney Metro with a copy of each provided to Dr Arnaout. Dr Arnaout attended Court without copies of these documents as he said they were “too heavy”. The result was that Dr Arnaout was at times unable to follow proceedings, and Sydney Metro had to provide copies of relevant documents to him.
Dr Arnaout did not give evidence in chief. He was required for cross-examination on the third day of the hearing on 5 March 2025.
Throughout the preparation of the matter and at the hearing, Dr Arnaout changed his submissions in relation to the comparable sales and comparable leases upon which the applicant and the second respondent relied. At the pre-trial mention on 17 February 2025 and before I declined to admit the report of Mr Sanidas, in relation to the freehold claim the parties relied on the comparable sales the subject of expert evidence from the valuers, Mr Sanidas and Ben Masters for Sydney Metro. As at 17 February 2025, the parties relied on the following three common comparable sales:
As at 17 February 2025, the applicant also relied upon the following six comparable sales:
At all relevant times, the eight comparable sales relied upon by Sydney Metro were as set out below at [106]-[107].
At the mention on 17 February 2025, Dr Arnaout changed his position in relation to whether the Court should conduct a site inspection of the comparable sales relied upon by the applicant. His final submission was that there should not be a site inspection:
HER HONOUR: You consider that it would be‑‑
ARNAOUT: And relevant.
HER HONOUR: Relevant for the Court to conduct a view of the comparable sales relied upon by each of the parties.
ARNAOUT: Yes, please.
…
HER HONOUR: … If I make an order that there be a view, you must understand that it needs to be conducted with a minimum of comment by any of the parties. I'm just taken to each of the comparable sales, and then they can be referred to by the experts in their evidence. I don't need any evidence at all ‑ I wouldn't, if I make a direction that there be a view – [accept] any evidence on the inspection. Do you understand that?
ARNAOUT: I do.
HER HONOUR: So you make a submission that there be a view during the hearing?
ARNAOUT: I need to get a legal advice on this.
…
HER HONOUR: No, what is the normal practice of the Court when there is a view, is one of the parties ‑ I assume Sydney Metro ‑ would prepare a schedule of order of the properties to be visited, and a timetable to ensure that matters proceed efficiently. And that the Court gets taken to each of those comparable properties. Ms Hemmings prepares ‑ you don't think it would be useful?
ARNAOUT: No, not really …
…
ARNAOUT: I accept if these comparable properties are within this Wynyard Station CBD locality, and nowhere else. Otherwise, it would confuse the Court‑‑
HER HONOUR: No, I'm not taking your selective view of properties. If I take a view, I will be taken to each of the comparable properties relied upon by each of the experts.
ARNAOUT: Yes, please.
…
HER HONOUR: Do you seek to have the Court take a view?
ARNAOUT: No.
…
HER HONOUR: … I won't take evidence on the view you will be able to make your written opening submissions no longer than ten pages in length, you will be able to make a short opening address, and it will be recording in the transcript. But the Court does not hear evidence outside the courtroom.
ARNAOUT: Thank you. Thank you, your Honour, thank you. I ‑ now I can give you an informed reply, and it's a very simple reply: no, I'd like it ‑ I'd like not to do so, please.
HER HONOUR: Very well. That's your submission, it wouldn't be useful.
ARNAOUT: Yes …
ARNAOUT: Your Honour, just a quick note. Last time, this Honourable Court mentioned site inspections.
HER HONOUR: Yes, that’s not happening.
ARNAOUT: Yes, I’m aware of that, your Honour, but there is one particular kind request about a different site inspection which is to do with - because you mentioned the commissioners, and I can’t remember the name, but you mentioned commissioner - if it is possible for this honourable Court to site inspect the interconnected subway linking Wynyard Station to various - like, to Hunter Arcade and the Hunter Connection, please, because now, Wynyard Place is all operational and Hunter Arcade is not there anymore, and it’s closed. So if this honourable Court could help make a site inspection of this particular arcade, because I’ll be bringing with me some materials about this particular subway system if I may
At a listing on 27 February 2025, Sydney Metro agreed to a site inspection of Wynyard station as proposed by Dr Arnaout on 25 February 2025, provided that Dr Arnaout did not purport to give valuation evidence on the inspection.
On the first day of the hearing on 3 March 2025, an inspection of the site of the acquired land and its surrounds was undertaken in the company of Dr Arnaout, the first respondent’s representatives, and Mr Masters. The Court was shown the entrance to Hunter Connection at the end of Hunter Arcade where the escalators that went down to the basement level of Hunter Connection had previously been located. The Court was also shown the Hunter Street construction site where another entrance to access the acquired land had been located. The Court walked to George Street and Mr Masters identified where the George Street entrance to Hunter Arcade had previously been situated. The Court finally attended Tenko Mori Ramen House in Wynyard station where another entrance to Hunter Arcade had previously been located.
At the hearing on 5 March 2025 and after I had declined to admit the evidence of Mr Sanidas, Dr Arnaout sought to provide a list of comparable sales for the freehold claim and comparable leases for the leasehold claim:
APPLICANT: Thank you, your Honour, for providing me with this chance. For the same reasons mentioned by Ms Hemmings, the applicant would like to provide to this honourable Court a list of comparable sales for the leasehold ‑ for the freehold and comparables for the freehold. The reason for the leasehold and for the freehold, they are the same reason primarily because of the - Mr [Sanidas’] report not being allowed to be used as evidence based on the - on your judgments and the reasons in your honourable - your Honour’s judgments.
APPLICANT: As I mentioned, the applicant and the second respondents are endeavouring to make this case as close as possible to being a just, quick and cheap resolution. That’s why my, my only request, humble request, from this honourable Court instead of providing comparable sales, I just want to put one particular - which I mentioned earlier, one particular sale that’s very important and that the shop right across from the applicant’s shop. If that can happen, then I won’t be relying on the other comparable sales which I was planning to submit to this honourable Court according to equal opportunity
APPLICANT: Just to save everyone's time, I'm not going to follow that path because these folios are not on the lower level connected directory with Sydney Metro, sorry, with Wynyard Station. The only point I'd like to mention is that the only shop that's comparable and the closest shop to the applicant's lot at lot 7, Shop 1A, is lot 8, which is the sushi shop …
Finally, the applicant submitted in the applicant and the second respondent's closing submissions that “the best comparable sale for a particular property is the property itself then the one next to it then the closest then the next and so forth”. The applicant sought by way of submission to introduce new evidence of comparable sales. This included:
“The Sushi Shop at Hunter Arcade/Lot 8”, “The 2 nail shops at Hunter Arcade / Lot 2 and Lot 3”, and “the Siam Orchid Thai Massage shop” which had received a “development application approval for a dental clinic on 2 June 2021”. These comparable sales appeared to have been selected by Dr Arnaout without reference to any relevant expert.
“Category A sales data”, including further references to various properties not in evidence, such as “Circular Quay shop”, “Burger shops at number 2 Bridge Street Region Arcade”, and “Shope H6 (Lot 22) 7-13 Hunter Street”, which document appeared to have been drafted by Dr Arnaout.
“Category B sale data” which was submitted to be “Direct Sale Comparisons from page 22 of the 1st JSA Valuation Report”. This appeared to be a reference to the comparable sales from the Sanidas report which I had previously excluded as evidence in the proceedings.
“Direct Sale Comparisons from page 22 of the 1st JSA Valuation Report filed with the Applicant’s Class 3 Claim Application” which also sought to reintroduce evidence of Mr Sanidas which had been excluded.
At the conclusion of the fourth day of the hearing on 6 March 2025 (which had been listed as the final day), it was agreed by Dr Arnaout and Sydney Metro that the matter be listed for a further half day on 15 April 2025 for the purpose of oral submissions in closing. I made orders and directions in relation to the filing and service of written submissions ahead of the final hearing date. The following exchange is recorded in the transcript:
HER HONOUR: So I will make the following directions. The applicant and second respondent to file and serve written closing submissions by Friday 14 March 2025. The first respondent to file and serve written closing submissions by Friday [21] March 2025. Applicant and second respondent to file and serve written closing submissions by Friday [28] March 2025. The matter listed on Tuesday 15 April 2025 for half a day … for short oral address. That means there will be an expectation that the parties will cooperate to ensure that the matter is completed within half a day.
HEMMINGS: Please the Court.
APPLICANT: Your Honour, just a final thing for the housekeeping. My reply, what number of pages?
HER HONOUR: Yes, that would normally be ten pages. Often a reply is--
APPLICANT: For each?
HER HONOUR: No, for both.
APPLICANT: For both, okay. All right, thank you.
HER HONOUR: Very well. The Court thanks all parties for their assistance. We'll adjourn.
ADJOURNED TO TUESDAY 15 APRIL 2025
1. The applicant and second respondent to file and serve closing submissions of 50 pages in total for both claims by Friday, 14 March 2025.
2. The first respondent to file and serve closing submissions of 50 pages in total for both claims by Friday, 21 March 2025.
3. The applicant and second respondent to file and serve submissions in reply of 10 pages in total for both claims by Friday, 28 March 2025.
4. The matter be listed for part heard hearing on Tuesday, 15 April 2025.
On the same day, Dr Arnaout replied confirming receipt.
On 14 March 2025, Dr Arnaout filed the applicant and the second respondent's closing submissions of 50 pages plus 16 pages of annexures.
On 21 March 2025, Sydney Metro filed a document titled “First respondent’s outline of closing submissions” of 49 pages plus an 11 page schedule.
On 28 March 2025, Dr Arnaout filed a folder containing a document titled “The Applicant’s and Second Respondent’s Submissions in Reply” and annexures A to E8. The document was 22 pages in length (excluding annexures), single-sided, with small spacing and narrow margins, meaning that some text appeared to have been cut off on the right-hand margin. I rejected the filing of this document and granted leave to the applicant and the second respondent to file and serve submissions in reply in accordance with order (3) made on 6 March 2025 by Wednesday, 2 April 2025 at 4pm. That is, that the submissions in reply be 10 pages in total for both claims.
On 3 April 2025, Dr Arnaout filed a document in reply titled “The Applicant’s and Second Respondent’s Submissions in Reply” of 18 pages plus 19 pages of annexures which included undated photographs and diagrams of unknown provenance with commentary, screen shots of emails, copies of correspondence, and extracts from bank statements (the applicant and the second respondent’s submissions in reply dated 3 April 2025).
Dr Arnaout did not attend Court on 15 April 2025 for closing submissions. My chambers asked registry to telephone Dr Arnaout using the telephone number on the Court file. Registry advised my chambers that there was no answer, and that a voicemail had been left. Chambers also sent an email to Dr Arnaout at 10:13am on 15 April 2025, confirming the time and location of the listing for closing submissions.
In relation to the applicant’s freehold claim:
the market value of the acquired land as at the acquisition date (2 September 2022) pursuant to s 55(a) and s 56 of the Just Terms Act;
whether the applicant has made out a claim for special value, including properly identifying quantum, pursuant to s 55(b) and s 57 of the Just Terms Act;
insofar as the claim is for losses attributable to disturbance pursuant to s 55(d) and s 59(1) of the Just Terms Act:
(a) the quantum of compensation pursuant to s 59(1)(a) and (b); and (b) whether the applicant is entitled to claim compensation at all under s 59(1)(c) to (f), and if so its quantum.
In relation to the second respondent’s leasehold claim:
a threshold issue as to whether the second respondent, Dr Arnaout, had a compensable interest in land within the meaning of the Just Terms Act. In the event that he did not have a compensable interest in land, then that finding would be dispositive of all claims advanced by him under s 55 of the Act;
if I be wrong in relation to the threshold issue, the market value of the Dr Arnaout’s leasehold claim;
again if I be wrong in relation to the threshold issue, whether Dr Arnaout has made out a claim for special value, including identifying quantum, pursuant to s 55(b) and s 57 of the Just Terms Act; and
again if I be wrong in relation to the threshold issue, insofar as the claim is for losses attributable to disturbance pursuant to ss 55(d) and 59(1) of the Just Terms Act, whether Dr Arnaout is entitled to claim compensation at all under s 59(1)(a), (c) or (f), and if so in what quantum.
In determining those issues, the Court is required to consider a claim of “joint occupancy”. The applicant and the second respondent in effect assert that the applicant (as corporate trustee) occupied Lot 7, the acquired land, as its “management office”, jointly with Dr Arnaout’s dental surgery. Findings in this regard are relevant to the Court’s consideration of:
the applicant’s entitlement to special value, financial costs in connection with relocation, and stamp duty costs in connection with relocation; and
the second respondent’s entitlement to special value.
It will also arise to determine Dr Arnaout’s reliability as a witness.
I will then address the claim of joint occupancy before turning to consider each of the applicant’s freehold claim and the second respondent’s leasehold claim.
In relation to the joint occupancy claim, I am not satisfied, on the balance of probabilities that the applicant and the second respondent have established the claim; that is, either that the applicant is entitled to special value, financial costs in connection with relocation and stamp duty costs in connection with relocation, or that the second respondent is entitled to special value.
In relation to the applicant’s freehold claim, I have determined that the applicant is entitled to compensation in the amount of $1,070,000.00 for the market value of the acquired land plus statutory interest payable under ss 49 and 50 of the Just Terms Act.
I have not accepted the applicant’s claim for special value in relation to its freehold interest in the acquired land.
Whilst I find that the applicant’s claim for advice sought from three different law firms is excessive, I am satisfied that the applicant has obtained at various points in time some advice in connection with the compulsory acquisition of its land, and have determined to allow the applicant an amount of $10,000 for legal costs pursuant to s 59(1)(a) of the Just Terms Act.
I have determined to allow the applicant an amount of $22,000 for valuation fees pursuant to s 59(1)(b) of the Just Terms Act.
By letter dated 30 July 2021, Sydney Metro provided to the applicant notice of its intention to acquire the acquired land.
On 11 May 2022, the Sydney Metro issued a proposed acquisition notice (the PAN) to the applicant in respect of the freehold interest in the acquired land pursuant to s 11 of the Just Terms Act.
On 2 September 2022, by notice published in NSW Government Gazette No 405, Sydney Metro compulsorily acquired the whole of the acquired land in accordance with the Just Terms Act, as authorised by s 38C and cl 11 of sch 1 to the Transport Administration Act 1988 (NSW).
On 21 November 2022, the Valuer General of NSW issued a property valuation report for the applicant's freehold interest in the acquired land. Section 5.1 of the Valuer General’s property valuation report stated that the acquired land was “understood to be owner occupied and has therefore been assessed on the basis of Vacant Possession”.
On 21 November 2022, the Valuer General determined compensation for the applicant’s freehold interest in the acquired land pursuant to s 41 of the Just Terms Act in the amount of $1,350,934.66, comprising:
Market value (s 55(a)): $1,000,000.00
Disturbance (s 55(d)): $350,934.66
On 30 November 2022, Sydney Metro offered the applicant the sum of $1,350,934.66 pursuant to s 42 of the Just Terms Act in relation to the applicant’s freehold interest in the acquired land.
The applicant is a corporate trustee. The second respondent Dr Arnaout is the sole director/secretary of the applicant. The second respondent operates a business registered with Australian Business Number (ABN) 12 963 259 763.
In 2006, the applicant became the registered proprietor of the freehold interest in the acquired land.
On 22 August 2022, the second respondent entered into the 2022 lease with the applicant for Lot 7.
The 2022 lease as executed provided for the following:
the permitted use of the acquired land was dental surgery with or without medical, pharmaceutical and allied health business/es;
the 2022 lease commencement was backdated to 18 July 2021;
the term of the 2022 lease was for five years with an option to renew for a period of five years;
the commencing rent was $41,600 per annum gross;
there was provision for annual rental increases of 0.5% on the anniversary of the 2022 lease commencement date;
Clause 10.7 provided in relation to licences, concessions and possession as follows:
10.7 The lessee can sub-let, grant a licence or concession, share or part with the possession of the whole or any part of the property or mortgage or otherwise charge or encumber the lessee’s estate or interest in this lease only with the written consent of the lessor which can be refused in the lessor’s absolute discretion.
12.3 When this lease ends, unless the lessee becomes a lessee of the property under a new lease the lessee must –
12.3.1 return the property to the lessor in the state and condition that this lease requires the lessee to keep it in (including any obligation to decorate under clause 7.3.3); and
12.3.2 have removed any goods (unless otherwise directed by the lessor to the extent that the lessor has any security interest) and anything that the lessee fixed to the property and have made good any damage caused by the removal.
Anything not removed becomes the property of the lessor who can keep it or remove and dispose of it and charge to the lessee the cost of removal, making good and disposal.
As previously noted, the acquired land was located on the lower ground floor of the retail arcade known as "Hunter Arcade".
The acquired land was the whole of Lot 7 in SP65054. The acquired land had a freehold stratum area of 36m2. The diagram below is an extract of Strata Plan 65054 which identifies the lower ground floor level of the retail arcade and the location of Lot 7, the acquired land, on that lower ground floor level:
The acquired land had a unit entitlement of 33 units (or 3.33%) out of a total unit entitlement for Strata Plan 65054 of 1000 units.
As at the acquisition date, the acquired land was fitted out as a dental surgery and was serviced with air conditioning and water.
Prior to the acquisition date, the acquired land had been used for the purposes of a dental business by the second respondent, Dr Arnaout.
The land commonly known as 5 Hunter Street, Sydney, was identified as Lot 1 in DP 701166 (the p****arent s****ite), and had a site area of between 741.6m2 and 747.8m2. The aerial photograph below, extracted from the report of Sydney Metro’s town planning expert Mr Stuart McDonald, dated 29 August 2024 (the McDonald report), shows the location of the parent site:
The parent site had been subdivided into two stratum lots, lot 1 and 2 in DP 1024157. Lot 1 in DP 1024157 was further subdivided by the registration of Strata Plan 65054. Lot 2 in DP 1024157 was further subdivided by the registration of Strata Plan 71068.
As at the acquisition date, the parent site comprised two strata plans:
Strata Plan 65054, the retail arcade commonly referred to as “Hunter Arcade” which consisted of 14 lots.
Strata Plan 71068, a 13 storey office tower which consisted of 62 strata lots and was commonly referred to as “Leda House”.
The image below shows the subdivision of Strata Plan 65054 and Strata Plan 71068, looking from the Hunter Street elevation, extracted from the report of Sydney Metro’s valuer Ben Masters, dated 4 October 2024 in relation to the applicant’s freehold claim (the Masters freehold report):
At the acquisition date, there was a building on the parent site which is estimated to have been constructed between 1973 and 1980 (the p****arent b****uilding).
The parent building had a gross floor area (GFA) estimated to be between 9,860.3m2 and 9,945.78m2 and a floor space ratio (FSR) of 13.3:1.
Sydney Metro was unable to identify any document that specifically calculates the GFA of the parent building in accordance with the definition of GFA under the Sydney Local Environmental Plan 2012 (SLEP 2012).
The parent building was demolished for the purposes of the project.
As at the acquisition date, there were numerous State and local planning controls and policies which applied to the acquired land, including
SLEP 2012; and
Sydney Development Control Plan 2012.
As at the acquisition date, under SLEP 2012, the parent site was:
zoned B8 Metropolitan Centre;
identified on the Height of Buildings Map as:
(a) partly having a permissible maximum building height of 235m; and (b) partly within “Area 3”.
Pursuant to cl 4.3 of SLEP 2012, the parent site had a permissible maximum 235m height limit over the northern part of the land. The southern part of the land, including the George Street frontage, had no numerical height limit. The southern part of the land permissible maximum height was determined by the sun access plans that extend over the parent site. On sites less than 1,000m2, the permissible maximum building height was limited to 55m or less.
The parent site was within the “Tower Cluster Area” to which the tower cluster provisions of SLEP 2012 applied.
The SLEP 2012 Locality and Site Identification Map, overlaid with an outline of the parent site, extracted from the McDonald report, is shown below:
In accordance with cl 4.4 of SLEP 2012, the parent site had a base FSR of 8:1, and pursuant to cll 6.3 and 6.4 of SLEP 2012 an additional FSR of up to 6:1 for “accommodation floor space”. This end of journey floor space cannot be more than the amount of floor space that can be achieved by applying a FSR of 0.3:1 to the building.
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.
37 Right to compensation if land compulsorily acquired
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.
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.
49 Interest on compensation
(1) Interest is payable (subject to subsection (2)) on any amount of compensation under this Part from the date the land is acquired until the payment is made. Any such interest becomes part of the amount of compensation payable.
(2) Interest under this section is not so payable on any amount of compensation paid into a trust account under this Part or into the Consolidated Fund by the authority of the State. However, money earned from the investment of any such trust account becomes part of the compensation concerned.
50 Rate of interest on compensation
(1) The rate of interest payable on any payment of compensation under this Part is such rate as the Treasurer may from time to time determine by notification published in the Gazette.
(2) Different rates of interest may be determined under this section.
(3) The Treasurer is to have regard to the rates of interest paid by banks when determining rates of interest under this section.
(4) Rates of interest determined under this section apply even though the compensation is payable under an order of a court.
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.
Note—
See also the Electricity Supply Act 1995, section 44(4) and the Energy and Utilities Administration Act 1987, section 15(4).
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.
57 Special value
In this Act—
special value of land means the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land.
59 Loss attributable to disturbance
(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.
(2) Subject to the regulations, a reference in this section to a qualified valuer is a reference to a person who—
(a) has membership of the Australian Valuers Institute (other than associate or student membership), or
(b) has membership of the Australian Property Institute (other than student or provisional membership), acquired in connection with his or her occupation as a valuer, or
(c) has membership of the Royal Institution of Chartered Surveyors as a chartered valuer, or
(d) is of a class prescribed by the regulations.
60 Disadvantage resulting from relocation
(1) In this Act—
disadvantage resulting from relocation means non-financial disadvantage resulting from the necessity of the person entitled to compensation to relocate the person’s principal place of residence as a result of the acquisition.
(2) The maximum amount of compensation in respect of the disadvantage resulting from relocation is $75,000.
Note—
Schedule 1A provides for the amendment of this section to enable the maximum amount of compensation to be increased by regulation and for the automatic indexation of the maximum amount in line with inflation.
66 Objection against amount of compensation offered
(1) A person who has claimed compensation under this Part may, within 90 days after receiving a compensation notice, lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority of the State.
(2) If any such objection is duly lodged, the Land and Environment Court is to hear and dispose of the person’s claim for compensation.
(3) A person who does not lodge an objection within the 90-day period and who is taken to have accepted the offer of compensation under section 45 may nevertheless lodge an objection under this section, but the Land and Environment Court is not to hear and dispose of the person’s claim for compensation unless satisfied that there is good cause for the person’s failure to lodge the objection within that period.
(4) If the Land and Environment Court decides that the amount of compensation payable (without the addition of interest) does not exceed by more than 10% the amount of compensation offered by the authority of the State, the Court may cancel or reduce the amount of interest that has accrued under this Act in respect of the compensation since the institution of the proceedings.
16 Certain leases must be registered
(1) If a retail shop lease is for a term of more than 3 years or if the parties to the lease have agreed that the lease is to be registered, the lessor must lodge the lease for registration in accordance with the Real Property Act 1900 within 3 months after the lease is returned to the lessor or the lessor’s lawyer or agent following its execution by the lessee.
Maximum penalty—50 penalty units.
(2) The 3-month period within which a lease must be lodged for registration is to be extended for any delay attributable to—
(a) the need to obtain any consent from a head lessor or mortgagee (being delay not due to any failure by the lessor to make reasonable efforts to obtain consent), or
(b) requirements arising under the Real Property Act 1900 that are beyond the control of the lessor.
(3) For the purposes of this section, the term of a retail shop lease includes any term for which the lease may be extended or renewed at the option of the lessee.
Note.
For example, a retail shop lease is for a term of more than 3 years if it is for a term of 1 year with an option to renew for a further term of greater than 2 years.
(4) This section does not affect the operation of the Real Property Act 1900.
41 Dealings not effectual until recorded in Register
(1) No dealing, until registered in the manner provided by this Act, shall be effectual to pass any estate or interest in any land under the provisions of this Act, or to render such land liable as security for the payment of money, but upon the registration of any dealing in the manner provided by this Act, the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such dealing, or by this Act declared to be implied in instruments of a like nature.
(2) (Repealed)
42 Estate of registered proprietor paramount
(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except—
(d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected—
Provided that—
(i) The term for which the tenancy was created does not exceed three years, and
…
53 Land under the provisions of this Act—how leased
(1) When any land under the provisions of this Act is intended to be leased or demised for a life or lives or for any term of years exceeding three years, the proprietor shall execute a lease in the approved form.
(2) (Repealed)
(3) A right for or covenant by the lessee to purchase the land therein described may be stipulated in such instrument, and in case the lessee shall pay the purchase money stipulated and otherwise observe the lessee’s covenants expressed and implied in such instrument, the lessor shall be bound to execute a transfer of the said land to such lessee.
(4) A lease of land which is subject to a mortgage, charge or covenant charge is not valid or binding on the mortgagee, chargee or covenant chargee unless the mortgagee, chargee or covenant chargee has consented to the lease before it is registered.
(5) Subsection (1) does not apply in relation to land the subject of a social housing tenancy agreement within the meaning of the Residential Tenancies Act 2010.
Sydney Metro relied on the following expert reports:
the McDonald report (town planning);
the Masters freehold report (valuation); and
the Masters leasehold report (valuation).
The Evidence Book prepared by Sydney Metro filed on 26 February 2025 included the following additional documents relied upon by the applicant and the second respondent:
the 5 August 2024 affidavit of Dr Imad Arnaout;
lay evidence for City Dental Practice Leasehold (with annexures) dated 24 January 2025; and
“Expert Valuation Evidence for City Dental Business Leasehold Interest Filed Under Joinder Related Orders” dated 24 January 2025 (adduced by the second respondent).
Sydney Metro also prepared a Court Book filed on 26 February 2025 which included, relevantly:
the Class 3 application filed on 21 February 2023;
the applicant’s amended points of claim (freehold) dated 16 December 2024;
the second respondent’s points of claim (leasehold) dated 16 December 2024;
Sydney Metro’s amended points of defence (freehold) dated 23 December 2024;
Sydney Metro’s points of defence (leasehold) dated 23 December 2024;
Sydney Metro’s objections to evidence dated 14 February 2025;
Sydney Metro’s amended table of comparable sales dated 14 February 2025 and Sydney Metro’s amended table of comparable sales – leasehold interest dated 18 February 2025 (together, Sydney Metro’s tables of comparables).
The Tender Bundle filed by Sydney Metro on 7 February 2025 included the following categories of documents:
ASIC and Australian Business Register searches and documents, and title searches;
acquisition correspondence and notices;
environmental planning instruments and related documents;
sale and rental documents; and
notices to produce issued to the applicant and the second respondent dated 3 February 2025 (the notices to produce).
Sydney Metro also relied on documents provided by Dr Arnaout on 4 March 2025 in response to the notices to produce dated 3 February 2025, which became Exhibit J in the proceedings (Exhibit J).
Sydney Metro had previously accepted that the applicant was entitled to recover some of the legal costs and valuation fees claimed under s 59(1)(a) to (b) of the Just Terms Act, subject to receiving sufficient evidence that those costs had been reasonably incurred. However, in light of the deficiencies in the evidence put before the Court, Sydney Metro only accepted a claim of $22,000 for valuation fees (noting that the position was is “in itself a concession given the evidence”).
Sydney Metro also sought to rely on its tables of comparables. The tables of comparables in relation to the applicant’s freehold claim were as follows:
Sydney Metro’s table of comparables in relation to the second respondent’s leasehold claim were as follows:
Sydney Metro submitted that there were significant difficulties with the evidence of Dr Arnaout. At best, Dr Arnaout in his evidence in cross-examination “sought to obfuscate the factual foundation relevant to the Court’s assessment of the claims”. Indeed, Dr Arnaout gave “unclear and apparently inconsistent evidence on matters central to the claims”.
Further, Sydney Metro submitted, Dr Arnaout, on behalf of the applicant and himself as second respondent, had a “propensity to make serious, baseless allegations both in the course of being cross-examined and also in oral and written submissions before the Court”. The applicant and the second respondent also filed and served bank records some of which Dr Arnaout subsequently accepted in cross-examination had either been interfered with or in respect of which he could not say how they had been prepared.
The “well documented” evidence that Dr Arnaout deposed to as having existed, and referred to over 442 times in the 5 August 2024 affidavit, including references in paragraphs ultimately rejected by the Court, was subsequently said to be contained in the bundle of documents filed on 4 March 2025, being Exhibit J. Sydney Metro submitted that a critical analysis of Exhibit J would lead the Court to conclude that the existence of “well documented” evidence was a “fiction”.
Further, Sydney Metro submitted that in cross-examination Dr Arnaout was initially unable to answer a simple question relating to the address of a property in North Sydney that he said had been recently purchased. The reason given was that he was “not good with addresses and numbers”, and that he would have to “refer to [his] paperwork”. This begs the question, it was submitted, as to how Dr Arnaout was able to swear the 5 August 2024 affidavit “asserting various financial states of affairs in the absence of documents being before him if he is in fact ‘not good with numbers’ as he claims.”
In the absence of corroborating documentary evidence, Sydney Metro submitted that the Court should treat Dr Arnaout’s evidence and his asserted beliefs in the existence of various states of affairs with a degree of circumspection.
For the following reasons, I have found Dr Arnaout to be an unreliable witness, both in the proceedings in which he appeared for the applicant and in the proceedings in which he appeared for himself as second respondent.
He did not make his experts available for joint conferencing or cross-examination, but sought himself to give evidence both from the bar table and in the witness box in relation to matters which ought properly to have been the subject of expert evidence.
During the hearing, from the bar table and in the witness box and after I directed him that the Court would not consider “any further evidence from the bar table or in a[n] affidavit in relation to the s 10A process”, on the first day of the hearing on 3 March 2025, Dr Arnaout referred to matters which were the subject of negotiation of acquisition by agreement, pursuant to s 10A of the Just Terms Act before the initiation of the compulsory acquisition process, and hence irrelevant to the matters for determination by the Court (emphasis added):
APPLICANT: Yes. Because I was reiterating what happened in s 10A and I'm saying - I was saying that there was no legal representation for most of it - of the s 10A, only the last two months when Sydney Metro caused an - a unilateral breakdown in the negotiation process and cancelled two appointments, or at least one appointment locked in--
…
COMMISSIONER: So prior to you moving out of lot 7 or at the time you were moving, what did you remove from the premises?
A. Is it time?
COMMISSIONER: Yes.
A. I removed the removable chattels, everything that I could remove. I had an agreement with Mr Apple(?) who was my, my, acquisition manager. He told me that we're going to pay for all of the fixed equipment, but you can dismantle some of them.
HEMMINGS: Commissioner, I object to this. This is without prejudice negotiations during the 10A.
…
APPLICANT: Commissioner, I'm referring to a valuation that's happened already and there are offers, not during the proceedings because I'm not meant to talk about this, there were offers from Sydney Metro during section 10A--
HEMMINGS: 27 Willis Street, Lansvale?
A. Yes. I have to reiterate that there is a confusion in the way the question is asked because it's ill-informed question on all the information—
HER HONOUR: You can't speak to counsel like that
…
HEMMINGS: So, in other words, this big picture never to sell, buy and hold property investment strategy is, in other more conventional terms, probably called a property investment strategy?
A. It would be if you, if you mentioned it that way, but it's buy and hold never to sell property investment property, property investment for my own businesses, which I've said already four times already, but you seem to omit that.
…
HEMMINGS: Which out of those photographs is the office which was occupied at the acquisition date by‑‑
A. It is‑‑
HEMMINGS: ‑‑by the Eddie Arnott Corporation?
A. It is the photograph that’s still in here but the remaining photograph of the same room that you have removed it to ask me this question. I’m glad you left one of them. It’s image 20.
HEMMINGS: The side room?
A. Yeah, that Mr Masters was instructed to remove the remaining of - pictures of.
HEMMINGS: Please, Dr Arnaout.
A. You’re misleading the Court another time.
HEMMINGS: No, I’m not misleading the Court.
A. Yes, you are. Yes, you are.
HEMMINGS: --just for the record, so we press all of the objections which are in the schedule, and effectively they're either relating to s 10A matters, they relate to without prejudice negotiations, or they make allegations against Sydney Metro and, particularly, their conduct during the 10A process, which is not only an irrelevant consideration but improper when there's no evidence to support it.
APPLICANT: Objection.
HER HONOUR: You don't get to object. It's Ms Hemmings' opportunity to address the Court. You had an uninterrupted opportunity to address the Court on your motion application. It is now Ms Hemmings'--
APPLICANT: Thank your Honour. I'll wait for my turn.
…
HEMMINGS: … There is a central issue of dispute between the applicant and the first respondent, and that is the applicant's assertion that market value is to be determined on a like-for-like replacement basis, and that's firmly rejected by the first respondent and we deal with--
APPLICANT: Objection, your Honour.
HER HONOUR: Ms Hemmings is making her opening submissions.
…
HEMMINGS: … Despite allegations repeated today in opening submissions, there is no evidence that the lease which is attached to the class 3 application was provided to Sydney Metro or to the valuer general prior to the acquisition date.
APPLICANT: Objection, your Honour.
HER HONOUR: That is a submission, Dr Arnaout, which Sydney Metro is entitled to make having regard to the evidence. If you can, in due course, take the Court to evidence which contradicts what Ms Hemmings has said, you will have the opportunity in due course. This is Ms Hemmings’ opening.
…
HEMMINGS: … an invoice for a downloadable form from the Law Society isn’t evidence of a lease giving forth an interest in land.
APPLICANT: Objection, your Honour.
Dr Arnaout made repeated references to well documented evidence and facts, without taking the Court to any material in relation to such evidence and facts, including referring to “well documented regular rental payments I was regularly making over the whole duration of the 16 years … to the company” [5] . In particular, he referred numerous times to well documented evidence to support:
a lease between the applicant and the second respondent;
rental payments from the second respondent to the applicant; and
the payment of invoices for legal costs and other disbursements.
However, Dr Arnaout provided little, if any, reliable documentary evidence in relation to these matters.
On a number of occasions, Dr Arnaout disregarded rulings made by the Court. For instance, he continued to make submissions and give evidence concerning matters which were the subject of negotiation of acquisition by agreement pursuant to s 10A of the Just Terms Act, despite the Court’s direction not to do so. Dr Arnaout included comparable sales in the applicant and the second respondent’s closing submissions, despite the Court’s direction on the third day of the hearing on 5 March 2025 that his comparable sales would not be included in evidence, and my decision excluding the applicant and the second respondent’s expert valuation report in The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 3). Dr Arnaout interrupted Sydney Metro’s counsel despite direction from the Court to refrain from doing so. Likewise the applicant and the second respondent’s closing submissions referred to comparable sales which had been excluded from evidence. [6]
In the applicant and the second respondent’s closing submissions, there were numerous notations of TBA (to be advised). [7] The Court was not advised of the matters the subject of those notations.
The Court, as judicial valuer, is left in a position where it is unable to attach little, if any, weight to Dr Arnaout’s evidence in the absence of corroborating documentary evidence. Dr Arnaout was given the opportunity by the Court and Sydney Metro to be heard, but declined to give evidence in a manner that abided by the Court’s directions, rulings and admonitions.
There next arises first for the Court to determine the claim of “joint occupancy”. The claim of joint occupancy is relevant to my consideration of:
the applicant's entitlement to special value, financial costs in connection with relocation, and stamp duty costs in connection with relocation; and
the second respondent's entitlement to special value.
In effect, the applicant and the second respondent assert that the applicant (as corporate trustee) occupied Lot 7 as its “management office” jointly with that of Dr Arnaout's dental surgery pursuant to an agreement between the applicant and the second respondent whereby the applicant occupied a small part of Lot 7 to conduct its business affairs, whist the second respondent, Dr Arnaout, conducted his dental practice.
Dr Arnaout referred to this joint occupancy arrangement during the hearing variously as:
the well documented joint occupancy;
the well documented joint occupancy model;
the joint occupancy agreement;
the joint occupancy leasehold; and
the shared occupancy model.
Neither the applicant nor the second respondent provided any documentary evidence of a lease during the period of 16 years which the applicant owned Lot 7 (apart from the 2022 lease signed on 22 August 2022). Likewise, neither the applicant nor the second respondent provided any documentary evidence of regular rental amounts paid by the second respondent to the applicant during the period of 16 years (apart from the purported hand notated bank statements attached to the applicant and the second respondent’s closing submissions in reply dated 3 April 2025 which in the main I ruled to be inadmissible). Dr Arnaout did not provide any documentary evidence in relation to the space said to have been occupied by the applicant occupied in Lot 7 under the variously referred to (joint) (shared) occupancy (model) (agreement) (leasehold).
Sydney Metro submitted that the position advanced by the applicant and the second respondent in relation to joint occupancy appeared to involve the following steps:
the applicant (as corporate trustee) entered into a lease with the second respondent granting Dr Arnaout the exclusive use of the premises; and
Dr Arnaout, pursuant to cl 10.7 of the 2022 lease, with the consent of the lessor and the lessee, “shared occupancy of the leasehold” with the applicant.
Sydney Metro submitted that:
the Court would not make a finding of “joint occupancy” on the basis of the evidence;
in the alternative, if the Court were to find that there was some form of incidental occupancy, it was so minor as to be de minimis, and would be disregarded; and
the nature of the alleged joint occupancy was at best a licence terminable at will.
I find that the evidence in relation to the question of joint occupancy was mostly in the nature of mere assertion by Dr Arnaout, and at its highest as stated at paragraph [186(n)-(p)] of the 5 August 2024 affidavit as follows:
n. The consent of the Lessor to the lessee, pursuant to the Terms including Clause 10.7 of the Lease, as the Lessor Consent.
o. The consent of the Lesse [sic] to create this Shared Occupancy with the Applicant pursuant to the Terms including Clause 10.7 of the Lease, as the Lesse [sic] Consent.
p. The Shared Occupancy of the Leasehold between Dr. Imad Arnaout and the Applicant based on the Lessor Consent, and the Lesse [sic] Consent pursuant to the Terms including Clause 10.7 of the lease executed on 22/8/2022 between The Eddie Arnott Corporation Pty Ltd and Dr. Imad Arnaout in relation to the Property at Shop 1A, Lower Ground, Hunter Arcade, 5 Hunter Street, Sydney NSW 2000, also known as Lot 7, as the Shared Occupancy of the Leasehold.
I find that the evidence of the applicant and the second respondent in relation to the question of joint occupancy was, at best, inconclusive. There was no documentary evidence recording the terms on which the applicant was permitted to occupy the acquired land for a period of 16 years, or at all. As elicited in cross-examination, Dr Arnaout said that “it was a verbal consent between me and myself and I” (emphasis added). There was also a conflict between Dr Arnaout’s reliance on cl 10.7 of the 2022 lease, as well as statements by Dr Arnaout that the applicant had been “financially inactive over the last sixteen years, and as such has been using the Trust Tax File Number for its role as Trustee, as per yearly communication with the Australian Taxation Office.” That position in relation to financial inactivity was repeated several times in the course of cross-examination. Notwithstanding that oral evidence, the applicant and the second respondent persisted in their closing submissions in asserting that the applicant occupied the acquired land for purposes which included “preparing all the documents related to the applicant's BAS's and Tax Returns over a sixteen years period.”
In relation to the joint occupancy claim, the area said to have been occupied by the applicant was variously described by Dr Arnaout, including as a “large office”. Ultimately, however, his evidence was that the “large office” was a “shared office” and, at its highest, involved:
the use of a couple of shelves in a shared filing cabinet;
the use of “two deep shelves” in a shared storage cabinet;
a small desk area with computer (and hard drives and digital files attached to the computer); and
a space underneath the desk area in which a box storing documents was also located.
The effect of Dr Arnaout’s evidence ultimately was that any joint occupancy was de minimis. [8] The minimal nature of the use of the premises by the applicant was highlighted in Dr Arnaout’s oral evidence as follows:
Q. How much of the acquired lot was attributable to the joint occupants?
A. The joint occupants took a very, very, like a very, very small percentage because even the desk was shared between both of us, and these two locations for the cabinets were shared as well. So the amount of the shared property for the dental practice is most of it. It's just got the desk where it has the computer for the company and their documents shared like in their cabins there.
Q. So the joint occupancy, what proportion in your mind would the joint occupancy occupy, for want of a better description--
A. Yes.
Q. --in the acquired lot, please?
A. I can't put a percentage on it, but I can say that it is minimal compared to the dental surgery. But it was occupancy and that's what it was. I'm trying to relay the same picture there is to describe it how it was without overemphasizing any particular situation.
…
Q. Is it 1%, is it 5%, is it 2%?
A. I really can't put a figure because it needs a qualified person to put a figure, but I can say it's minimal.
….
Q. Did you differentiate in your tax returns--
A. Yes.
Q. --what percentage of lot 7 was in joint occupants?
A. Yes. In my tax return, to make it easier, I have got incentives for allowing the company, and those incentives were the company paying overheads like for the body corporate and all of these overheads that you really usually are for the tenants to pay. So the company was making these payments in exchange for having the offers, if I may say. That's how my accountant recommended at the time, it's been going on for 16 years.
Q. So it's been going on for 16 years but there's no percentage split in your tax returns?
A. When it comes to the actual overheads, the company paid all of the overheads. And I put my tax return for my own surgery, which was completely different with a different accountant than the Eddie Arnott Corporation's tax return in trust for the trust, because the Eddie Arnott Corporation is financially inactive.
I cannot find there to have been some form of agreement for the applicant to occupy the acquired land jointly with the second respondent for a period of 16 years, or at all. Any permission to do so, if it existed, was purely personal, and terminable at will. That is not an interest upon which a claim for special value or for loss attributable to disturbance can be advanced. [9]
For the following reasons, I am not satisfied, on the balance of probabilities, that the applicant occupied or otherwise used the acquired land as a property investor:
First, the applicant was a corporate trustee which holds investment property on behalf of a trust.
Second, at all times between the incorporation of the applicant on 2 February 2006 and the acquisition date on 2 September 2022, the principal place of business of the applicant was the residential address of Dr Arnaout, being 27 Willis Street, Lansvale NSW 2166. So far as a property investor may be described as conducting business, Dr Arnaout's evidence was that this occurred at 27 Willis Street:
Q. I asked you what is the business which is undertaken by the applicant at 2 Willis Street Lansdale [27 Willis Street, Lansvale]?
A. Exactly what we've been informing the ATO, Australian Taxation Office that this is the type of business that this particular company is for, which is the buy and hold, never to sell, property investments, short form, property investment.
Q. You can see that, at the bottom of the page, there is writing which says "B3 special purpose company. The change is" and there is a box that's checked. The word "superannuation" is crossed out. It has "trustee company" and, in brackets, "not engaged in business activities." Is that your writing, or is that the writing of your assistant?
A. No. That's the writing of my practice manager, but on my own instructions. These words are on my own instructions, and I've got explanation but I'll wait for your questions first. It's all, the explanation is already in the affidavit.
Fourth, the 2022 lease identified the address for service of notices to the lessor as 27 Willis Street, Lansvale NSW 2166.
Fifth, subsequent to the acquisition, the principal place of business of the applicant remained the residential address of Dr Arnaout at 27 Willis Street, Lansvale.
Central to the claim that the applicant was a property investor that occupied or otherwise used the acquired land was that the applicant occupied a portion of the acquired land to manage the applicant's financial and administrative affairs, including storing, accessing and using receipts and ledgers, bank statements, profit and loss statements, Australian Tax Office and ASICS [sic] documents, accountancy documents, preparing and lodging the applicant's Business Activity Statements, preparing the applicant's tax return documents, book keeping etcetera. Dr Arnaout did not explain how the applicant could be undertaking activities such as the lodgement of Business Activity Statements and annual tax returns consistently with a statement in the 5 August 2024 affidavit that the applicant had “been financially inactive over the last sixteen years, and as such has been using the Trust Tax File Number for its role as Trustee, as per yearly communication with the Australian Taxation Office”. Dr Arnaout reasserted the position in relation to financial inactivity in cross-examination when he was asked about the administrative tasks said to have been undertaken by the applicant on the acquired land:
Q. Most of them are financial tasks?
A. Yes.
Q. They're related to the Eddie Arnott Corporation's tax obligations?
A. For the trust, because Eddie Arnott Corporation is financially inactive, and the tax department is aware of it, so all of the activities are for the trust.
Q. Does the Eddie Arnott Corporation have an ANZ access account?
A. ANZ - Eddie Arnott Corporation has a lot of bank accounts, and I really - Suzanne would tell me in a blink which account this is, but from memory, I think it was--
19. … the L&E Court acts as a judicial valuer. In that capacity, the L&E Court is not confined to accepting the case of one party or the other, and may use the evidence adduced in the proceedings to make its own assessment of the compensation payable for compulsory acquisition. That assessment will often lie somewhere between the evaluations contended for on behalf of the parties. As a general rule, in determining compensation, any doubt should be resolved in favour of a more liberal estimate of value.
20. The market value of land for the purposes of s 55 of the Just Terms Act is to be determined on the highest and best use of the land. Accordingly, the L&E Court must approach the task of determining compensation by determining the most profitable potential use of the land in question.
21. The parties to the hypothetical sale contemplated by s 56(1) are to be assumed to be fully informed and to have made all proper inquiries. The land must be valued at the relevant date in its existing condition with all its potentialities. The parties to the hypothetical sale are also assumed to be perfectly acquainted with the land and cognisant of all circumstances that might affect its value. In the absence of available market evidence, the L&E Court, as judicial valuer, must make the best guess that can be made. Events subsequent to the date of acquisition are ignored except in so far as they may be relevant as confirmation of foresight.
(citations omitted)
Pursuant to s 56(1) of the Just Terms Act, the market value of land is determined by reference to what a willing purchaser would pay and what a not unwilling vendor would receive for the land. [11] Of particular relevance in the present proceedings, this determination is made objectively and does not depend on the subjective views or preferences of the owners or of persons interested in the land from time to time. [12]
The test as reflected in s 56(1) of the Just Terms Act was formulated by the High Court in Spencer v Commonwealth [13] (the Spencer test). The effect of the Spencer test is that in assessing the value of acquired land, the basis of valuation should be the price that a willing purchaser would at the date of acquisition have paid to a vendor not unwilling, but not anxious, to sell.
Determination of the “highest and best use” of land requires consideration of planning and other controls, together with the circumstances of the land. [14] In doing so, it is preferable to have regard to sales that share the same designation for future use as their development potential under that designation will be embedded in their sale price. [15] It is only where there are no sales which are directly comparable that either a "top down" or a "bottom up" approach is commonly used. [16]
The applicant and the second respondent’s closing submissions appear to address the applicant’s freehold claim for market value, [17] maintaining a claim for market value in the amount of $2,150,000 + “TBA” (being a $2,000,000 valuation with a $150,000 uplift for “signages value”, and additional claims relating to attributes of the acquired land remaining “TBA”).
Sydney Metro maintained its position, supported by the valuation evidence of Mr Masters, that the market value of the freehold claim was $890,000. The primary valuation method applied by Mr Masters was the capitalisation of net income, with a direct comparison approach applied as a secondary check. Applying the capitalisation of income approach, Mr Masters opined that the market value of the acquired land was $890,000. Applying the direct comparison approach, as a check method, he identified a value of $900,000. Accordingly, Mr Masters’ opinion was that the freehold claim for market value was $890,000. He did not change that opinion in cross-examination by Dr Arnaout.
The applicant’s submissions in relation to market value were of limited assistance to the Court. Dr Arnaout did not engage with the evidence before the Court, and with the exception of a reference to “Lot 3 (shop 1) 195 Macquarie Street” which partly equated to Mr Masters Sale 7 – for Lots 3 & 4, Agricultural House), he sought to introduce new evidence of comparable sales during the course of the hearing and in the applicant and the second respondent's closing submissions.
In so far as the applicant made submissions in relation to the evidence that Mr Masters gave in cross-examination, those submissions either misconceived Mr Masters’ evidence or otherwise did not assist the applicant’s case as they attempted to introduce new evidence of comparable sales.
Mr Masters identified the features of the acquired land that he took into account for the purpose of his valuation, including location, exposure, and size. This included an assessment that the exposure of the acquired land was limited.
As noted previously, the Court undertook a site inspection and was able to view areas surrounding the acquired land. In addition, Mr Masters’ report contained three videos which showed the acquired land and its immediate surrounds prior to demolition. Video 2 (“Lot 07 Hunter Arcade”) and video 1 (“Wynard Tunnel to Hunter Arcade”) were played to the Court in their entirety. The first few seconds of video 3 (“5 Hunter Street”) were also played. Mr Masters gave evidence explaining what was shown at various points in the videos. Mr Masters identified the predominant pedestrian path of ingress and egress through Hunter Arcade (described by Mr Masters as an “ant trail”) which informed his valuation opinion, and he commented on the exposure of the acquired land as follows (emphasis added):
WITNESS: Another couple of meters. Just there please. So this is now in the Hunter Connection building, your Honour. I just recall a comment on our site inspection on Monday, we were standing on Hunter Street near the construction hoarding. There was - I don't remember who the comment was from, but there was a comment about some escalators going down and that 40 was in the Hunter Connection building. The escalators and a set of stairs in the Hunter Connection building were actually just to the left there of those tables and chairs and that was a single-—
…
A. Just to the left there. That came down from the Hunter Street footpath. There was a set of stairs and there was a single—
…
A. Escalator. In the morning peak hours, it would be travelling upwards out of the Hunter Connection and in the afternoon and evenings it would be reversed so that the foot track could travel down the escalator. The point I wanted to make was the main pedestrian ant trail is a common terminology used in valuation in real estate, commercial real estate. People traveling from and to Wynyard Station would use this particular arcade, Hunter Arcade and Hunter Connection, with the main exit points and entry points, the two sets of escalators we have spoken about, but the one out of view here on the left and also the one we saw in the same video earlier today as we progress down to the right-hand side there.
I accept, as submitted by Sydney Metro, that any criticism of Mr Masters by Dr Arnaout that he had disregarded the uni-directional operation of the escalators at various times throughout the day was unfounded.
Mr Masters, when asked by Dr Arnaout about egress of the local, residential and working community from Hunter Arcade, said as follows (emphasis added):
A. In my experience in working in the Sydney CBD as a valuer in commercial real estate since, well, full time 2007 but part time 2006. The main thoroughfare between Wynyard Station and the exit points are through the Hunter Arcade here and the two sets of escalators which I have mentioned. I never used the stairs that Mr - beg your pardon, that Dr Arnaout referred to. And in fact, it was quite unclear to most people prior to my involvement, prior to our involvement with Sydney Metro some four years ago, where Hunter Arcade started and stopped and where Hunter Connection started and stopped. The stairs from the Hunter Street footpath area, which Dr Arnaout is referring to, are set back quite some distance from the main building alignment and footpath and pedestrian traffic flow. Whereas the Hunter Connection ingress and egress to the basement level via the escalators I mentioned was in my experience the main ingress and egress point in that locality.
Contrary to the applicant and the second respondent’s closing submissions, [18] Mr Masters did not give evidence to the effect that Hunter Arcade and Hunter Connection “comprised the complete spectrum of retail establishments that make up the commercial retail sale market of such type of small shops located on the eastern side of Wynard Station and George Street.” The valuation task for Mr Masters was to value the subject property, Lot 7, absent the public purpose, and not to undertake some broader comparative analysis of the availability of “small shops” in the area.
Likewise, contrary to the applicant and the second respondent’s closing submissions, [19] Mr Masters’ opinion was not that the acquired land had “excellent exposure”. Rather, when asked in cross-examination to make certain factual assumptions as to the position of a viewer relative to a given shop front, Mr Masters said that the resulting perspective would be described as “excellent exposure”. Mr Masters clarified his evidence in re-examination as follows:
Q. When you answered “lot 7 had excellent exposure”, was that based upon particular assumptions that were put to you for that conclusion?
A. Yes. That was with the assumption that you were standing near, directly in front of it and were looking directly at that lot.
Q. Do you think it's viable from a valuation point of view to compare a shop to the closest shop to it in the same complex and in the same arcade, in terms of valuation, or to compare it to some, another shop further away? Which one is more logical and feasible from an expert valuation point of view?
A. This comparable, after the subject property itself, is similar size, in a similar location, with similar attributes.
In any event, there was no evidence before the Court in relation to the valuation of Lot 8.
In relation to the applicant and the second respondent’s closing submission at [325], the quotation attributed to Justice Robson in Rocco Fraietta v Roads and Maritime Services [21] (Fraietta) is not to be found in his Honour’s reasons. Moreover, I am not required to decide whether and to what extent it is appropriate to take into account sales to an acquiring authority as there was no evidence of any such sales here. In any event, as Sydney Metro submitted, sales to an acquiring authority must be treated with caution. The potential that sales to an acquiring authority may not be properly reflective of what would be achievable on an open market basis was referred to be Robson J in Fraietta at [98]. Whether a given sale price was lower or higher than a market value which would have been obtained on the open market will depend on the circumstances of a given case. Whilst in Fraietta the Court found that the purchase price paid by an acquiring authority was a depressed price, in other cases the Court has recognised that the price paid by an acquiring authority may be enhanced. [22]
Ultimately, the weight to be afforded to sales sought to be relied upon by parties is discretionary, and where a sale does not meet the Spencer test in s 56(1) of the Just Terms Act, such a sale is likely to be afforded less weight by the Court. [23]
…there is an unspecified additional market value based on the highest and best use of the Lot being for redevelopment and attracting a premium which would be paid by a developer for the Lot as a first or second step towards amalgamating it with and adjacent lot for redevelopment of respective sites.
In contrast, Sydney Metro contended that based on the evidence of its town planner Mr McDonald, the acquired land had no development potential, and its highest and best use was as a dental surgery or an alternative personal services or retail use.
I have determined to reject any theory of latent redevelopment potential for the following reasons.
First, the town planning evidence of Mr McDonald was that the highest and best use of the acquired land was the dental surgery use, or an alternative personal services or retail use. Neither the acquired land nor SP 65054 had development potential in and of itself as the stratum was limited in height. As Sydney Metro submitted, any development potential at the acquisition date was speculative, uncertain, uncosted, risky and not available in the near future, medium or long term to attribute a value to such potential in determining market value.
Second, in assessing the claim for latent redevelopment potential, I am unable to accept the evidence of Dr Arnaout in the 5 August 2024 affidavit, expressed at a high level of generality, that at unspecified times the owners corporation of SP 65054 was approached by agents acting for developers to “investigate whether the owners wished to sell their freeholds ‘collectively’ by private treaties” or “secure several offers to sell [the owners] shops to a developer”. Again, claims by Dr Arnaout of “well documented evidence” and that a real estate agent had “respective developing study regarding the redevelopment potential of the land where the Lot is located” were of no assistance. Mr McDonald's opinion, which I accept, was that any such negotiations would not in any event be relevant to what he would advise a willing, but not anxious purchaser of the acquired land.
Third, there was no evidence of any uplift in the market value of the acquired land based on the alleged latent development potential. [25]
As judicial valuer, I agree with Mr Masters that the best approach to assess the freehold market value of Lot 7 is based on recent market transactions. I also agree that the appropriate valuation methodology to assess the freehold market value of Lot 7 is the capitalisation of net market rentals. As applied to the valuation of the applicant’s freehold claim for market value here, using an orthodox application of the four step approach in Marroun v Roads and Maritime Services [26] (accumulation, analysis, adjustment, and application), and applying established valuation principles, the capitalisation of net rentals methodology involves the following steps:
noting the area of Lot 7 (36m2);
noting the physical characteristics of Lot 7, including its irregular shape, location, sight lines, signage and adopting a lease term for Lot 7 (adopting a lease term for Lot 7 based on market evidence);
calculating the outgoings for Lot 7, as set out at [166]-[169] below;
accumulation of comparable gross face rentals;
analysis of each gross face rental on a rate per m2 per annum basis by dividing each gross face annual rental by its lettable area;
a review of the lease of each comparable gross face rental to derive any incentives as a percentage of the gross face rentals payable over each comparable lease period;
adoption of the most relevant comparable rentals;
direct comparison of the most relevant comparable rentals to Lot 7 on a rate per m2 per annum basis by making appropriate adjustments for the different characteristics (physical characteristics and lease provisions) between them;
adoption and application of a suitable gross face rental per m2 per annum for Lot 7;
multiplication of the adopted gross face rental rate per m2 per annum by the area of Lot 7 to derive a gross face annual rental for Lot 7;
deduction of the calculated outgoings for Lot 7 from the gross face annual rental to derive the net face annual rental for Lot 7;
accumulation of comparable sales;
analysis of the comparable sales to derive a rate of return or capitalisation rate by dividing the sale prices by their corresponding net annual rentals;
adoption of the most relevant comparable sales;
direct comparison of the most relevant comparable sales with Lot 7 by making appropriate adjustments for the differences between them (physical characteristics and lease provisions);
adoption and application of the rate of return or capitalisation rate referred to in [160(13)] above for Lot 7;
capitalisation of the net face annual rental to derive a market value for Lot 7 (prior to a market based incentive being taken into account); and
deduction of a market based incentive from the market amount to derive a market value for Lot 7.
Mr Masters’ rental evidence and adjustments for direct comparison are set out in the tables reproduced at [107] above.
I find that lease numbers FR1, FR2 and FR3 have lease commencement dates which are too remote from the date of acquisition. I have therefore disregarded them.
Lease numbers FR5 and FR7 are shops which are located on the ground floor of their respective buildings. I find that ground floor shops are dissimilar to lower ground floor shops and require too many adjustments for the purposes of direct comparison. I have therefore disregarded them.
I consider lease numbers FR4 and FR6 provide the best rental evidence as these are shops in lower ground floor locations in reasonable proximity to Lot 7, and have commencement dates close to the date of acquisition.
However, I consider that Mr Masters did not place adequate weight on, or make appropriate adjustments for the following:
the benefit of the exclusive area immediately to the front of Lot 7, that is the area measuring 2.765m by 2.0m (an area of 5.53m2) at the front of the lot, as depicted on the historical title search for SP 65054 dated 1 September 2022 (the exclusive use area);
the benefit of the location of Lot 7 as part of pedestrian subways from Pitt and Hunter Streets under George Street to Wynyard railway station;
the benefit of the applicant owned fitout in Lot 7 which included the specialised equipment utilised by the second respondent; and
the benefit of the signage of the second respondent above the lower ground floor lift lobby and in Hunter Street.
Mr Masters adopted in his calculations of value outgoings totalling $9,442.00, as summarised in the table below. His valuation assumed payment of outstanding outgoings, if any, would be settled prior to the hypothetical sale of the subject site:
I do not consider that Mr Masters has adequately allowed for typical outgoings in the capitalisation methodology he has applied as in orthodox valuation methodology capitalisation is based on a period of 100 years.
Applying orthodox valuation practice, it is general practice to adopt a vacancy factor during the period of 100 years, as some vacancy would reasonably be expected during that period. Accordingly, in addition to outgoings totalling $9,442.00 adopted by Mr Masters, I have adopted a vacancy factor of 2.5% of the gross face annual rental (being a conservative figure) on the basis that during the period of 100 years some vacancy would reasonably be expected.
Similarly, I have adopted a repairs and maintenance factor of 2% of the gross face annual rental on the basis that during the period of 100 years some repairs and maintenance within Lot 7 would be necessary.
Mr Masters’ freehold evidence and adjustments are set out above in the table reproduced at [106].
I consider that Mr Masters’ sales FR1, FR2 and FR3 with dates in 2018 and 2020 to be too remote from the date of acquisition and therefore to require too many adjustments for the purposes of direct comparison. I consider that sales, FR5, FR6, FR7, and FR8 which require assumed rentals do not represent market tested rentals, and have therefore disregarded them.
I have adopted sale FR4 as the most comparable with Lot 7. I do not consider that Mr Masters made appropriate adjustments for the differences between Lot 7 and sale FR4 for:
the benefit of the exclusive area attached to Lot 7;
the benefit of the location of Lot 7 as part of pedestrian subways from Pitt and Hunter Streets under George Street to Wynyard railway station;
the benefit of the applicant owned fitout in Lot 7 which included the specialised equipment utilised by the second respondent; and
the benefit of signage as it existed at the date of acquisition.
| Rental Number | Lease Start Date | Area m2 | Analysed Gross Face Rental Rate $psmpa | Location & Part of Subways % | Signage % | Size & Shape % | Time % | Exclusive Area % | Lessor Fitout % | Total % | Adjusted Gross Face Rental Rate $psmpa | | FR4 | June 22 | 60.0 | 1,500 | +2.5 | +5.0 | -7.5 | 0.0 | +2.5 | +10.0 | +12.5 | 1,687.50 | | FR6 | Feb 22 | 37.6 | 1,330 | +5.0 | +5.0 | 0.0 | +2.0 | +2.5 | +10.0 | +24.5 | 1,655.85 |
| Sale Number | Sale Date | Area m2 | Analysed Net Face Equivalent Yield % | Location & Part of Subways % | Signage % | Size & Shape % | Time % | Exclusive Area % | Lessor Fitout % | Total % | Adjusted Cap’n Rate % | | FR4 | July 22 | 60.0 | 5.73 | -0.25 | -0.125 | -0.25 | 0 | -0.125 | -0.50 | -1.25 | 4.48 |
Area of Lot 7 = 36m2
Adopted gross face rental rate $1,670 per m2 per annum
36m2 x $1,670/m2 per annum = $60,120.00
Less
Adopted outgoings = $9,442.00
Vacancy factor of 2.5% of gross face rent per annum = $1,503.00
Repairs and maintenance of 2% of gross face rent per annum = $1,202.40
Total d****eductions = $12,147.40
Net face annual rental = $47,972.60
Adopted capitalisation rate 4.48%
Multiplier of 100 divided by 4.48 = 22.32
Net face annual rental of $47,972.80 multiplied by 22.32 = $1,070,816.96
Less adopted incentives of 5% of gross face annual rent
5% x $60,120 = $3,006.00
Market value = $1,067,810.96
Adopt $1,070,000.00
Pursuant to s 55(b) of the Just Terms Act, regard must be had to any special value of the land on the date of its acquisition, informed by s 57 which provides that special value of land means the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land.
It has been held that in determining the meaning and scope of ss 55(b) and 57, the Court should exercise caution to ensure that it applies the words of s 57, and not expressions of meaning from cases considering the meaning in different contexts and prior to the introduction of s 57 in the Just Terms Act. [27]
The approach to consideration of special value under the Just Terms Act was recently explained by Robson J in City of Parramatta Council v Sydney Metro [28] at [251]-[260]. His Honour at [251] noted that the statutory language is wide, and that “where it exists, [it] usually relates to a special factor or attribute relating to the land and which the dispossessed owner is in a unique position to exploit.” [29]
Sydney Metro submitted that a consideration of special value under s 55(b), in light of s 57, within the context of the Just Terms Act as a whole (including ss 37 and 54(1)), requires an assessment of the following:
Whether there has been a “use of the land”, as at the date of acquisition, by the person entitled to compensation. [30] A finding that there was no use of the land as at the date of acquisition can be determinative of whether there has been entitlement to special value under ss 55(b) and 57. [31]
Whether there has an identified advantage.
Whether the identified advantage is to the person entitled to compensation and not too remote. [32]
Whether the identified advantage must in some way be incidental to that person's use of the land on the date of acquisition. [33]
Whether the identified advantage is ordinarily one which the person entitled to compensation was uniquely positioned to enjoy. [34]
Whether the financial value of the identified advantage must be positive, and it is insufficient for the identified “advantage” to have had the effect of reducing market value. [35]
Whether the purported advantage must be “‘in addition to market value’ such that where the claim only relates to an inherent characteristic of the land, the value of which is captured in the land's market value, special value compensation will not be available: Denshire at [89]-[93]; Monti v Roads and Maritime Services (No 4) [2019] NSWLEC 11 at [155]”. [36]
Whether there has been a loss of the claimed special value and that loss is a consequence of the acquisition, not some other intervening event: Just Terms Act s 54(1).
Further, Sydney Metro submitted that an assessment of special value is in respect of “the land” which has been divested, extinguished or diminished by an acquisition: Just Terms Act, s 37. That is, a consideration of special value must relate to a recognised interest in land which has been acquired, and not some other interest. For example, claimed special value of a use under a permissive occupancy terminable at will, not being accepted as an interest in land, would not suffice.
The parties were in dispute in relation to a claim for special value by both the applicant and the second respondent. The applicant claimed $3,561,000 for special value and the second respondent $436,800 for special value. Sydney Metro disputed any entitlement to special value in either the freehold or the leasehold claim.
The essence of the applicant's special value claim [37] appears to be that the market value of the acquired interest in land was insufficient to purchase a new property within the CBD, and hence because the applicant could not find new CBD premises for the same purchase price as the market value of the acquired interest, the land must have some special value not captured within the market value.
The advantage upon which the applicant's freehold claim for special value appears to have been founded was described as the “Owner Occupier Financial Structure” and a joint use of the premises by the applicant as owner of the freehold interest and the second respondent as owner of a leasehold interest. I have considered and dismissed the parties “joint occupancy” claim at [123]-[137] above.
The freehold claim for special value appears to have been predicated upon the need for both the applicant and the second respondent to relocate on a “like for like” basis. That is notwithstanding that a separate claim for special value (albeit advanced on a different basis) is also sought in the leasehold claim. In his points of claim (leasehold), Dr Arnaout claimed special value as he had “a capacity to exclusively or perhaps most exclusively exploit such land…in his [l]easehold interest capacity”. Dr Arnaout said his claim for special value, in addition to leasehold relocation costs and disturbances was based on the Just Terms Act “criteria and terminology, whereby a Specific formula* is also used to guide calculation of special value quantum” (emphasis in original), which he described as calculating the costs of advertising new premises including setting up a “conservative budget” for promoting the dental business at the new location, while at the same time reasonably accounting for the sixteen year operation of City Dental Practice at its previous location.
Sydney Metro submitted that the Court should exercise care in ensuring that claims advanced on behalf of two “separate legal entities” are not conflated. In respect of the underlying factual foundation of the applicant’s special value claim, predicated on the need for relocation and “like for like”, Sydney Metro submitted that the second respondent's dental business had been extinguished. As such there was no relocation. There would, at best, be the establishment of a new dental business.
I find, as submitted by Sydney Metro, that the replacement value of a freehold interest held by the applicant for investment purposes did not constitute special value within the meaning of the Just Terms Act, and that there was no financial value of any advantage in addition to market value to the applicant incidental to its use of the acquired lot. Further, I am unable to accept the applicant’s freehold claim for special value because of a devised “owner occupier financial structure” in light of the evidence that the applicant holds two other investment properties, and Dr Arnaout’s evidence that “the applicant holds another property for the same reason to do with the financial strategy…”.
Also relevant to consideration of the applicant’s claim for special value, I am not satisfied, on the balance of probabilities, that the applicant used the acquired land as at the acquisition date. A finding to that effect is determinative of its special value claim. In particular, I find as follows:
The applicant is a property investor.
The applicant does not have an Australian Business Number and is not engaged in trade.
On the applicant and the second respondent's case, the second respondent held a leasehold interest over the entirety of Lot 7. Under the terms of the lease, Lot 7 was only permitted to be used for the purpose of a “[d]ental surgery with or without any medical, pharmaceutical and allied health business/es.” A separate use (other than a de minimis one), described variously by Dr Arnaout as “the Applicant's Office” the Applicant's “Management Office” and an “administration office” by the applicant to administer property (or properties) (noting Dr Arnaout's evidence, given for the first time in cross-examination as to the ownership of other properties) of a trust held for investment purposes is not within the scope of the permitted use under the 2022 lease. I would not infer that the second respondent conferred an entitlement on the applicant (or that the applicant occupied the acquired land) contrary to the terms of the lease.
Immediately prior to the acquisition date, Lot 7 was used for the purpose of a dental surgery.
The use of Lot 7 for the purpose of a dental surgery was carried out by the second respondent, not the applicant.
The applicant cannot rely upon the second respondent's use of Lot 7, the second respondent being a different legal person, to support its claim.
Lot 7 was not occupied by the applicant. If I be wrong in dismissing the “join occupancy” claim, and the lot was jointly occupied by the applicant and the second respondent, then any occupation by the applicant was of a trivial de minimis nature which I would disregard.
Further, if I be wrong and the applicant used the land as an investment to provide retirement and other benefits, there was nothing about the use of land as an investment which would not be captured within market value. There was no special value in addition to market value. [38]
Finally, the applicant quantified the asserted financial value as the difference between the freehold market value of the acquired land, and the “average market value of small CBD retail shop”. That is, the applicant sought to be put in funds so that it might purchase a new freehold investment property within the CBD with a market value of $5,561,000. I do not accept the applicant's methodology in relation to the claimed financial advantage for the following reasons:
First, it was a figure which Dr Arnaout appears to have arrived at himself and which was unsupported by any expert evidence.
Second, it appears to apply an average m2 value for small retail shops (unsupported by expert valuation evidence), and to apply that average to an area (41.5m2) which is greater than that which was acquired. The process of averaging sales evidence was inconsistent with established valuation principles. [39]
Third, the methodology was not referable to comparable properties, but to the cost of a property with better attributes that that which was acquired: street level shopfront as opposed to basement level.
For the foregoing reasons, I do not accept the applicant’s freehold claim for special value.
Each paragraph of s 59(1)(a) to (f) of the Just Terms Act is directed to a consideration of costs incurred by persons entitled to compensation in connection with the compulsory acquisition of the land. Notwithstanding the absence of an express reference to “those persons” in s 59(1)(f), that paragraph is to be interpreted on the same basis. [40] Accordingly, for the purpose of s 59(1)(f), the actual use to be considered is that of persons entitled to compensation for an identified interest in land.
Also, the costs must be reasonably incurred. In the context of s 59(1)(c), the Court of Appeal (Tobias JA, Giles and Macfarlan JJA agreeing) has held that for claimed costs not yet actually incurred, the court must be persuaded on the balance of probabilities that those costs will be incurred in the future. [41] That principle must be equally applicable to s 59(1)(d) in which the same language of “reasonably incurred” is used.
In relation to disturbance, the first respondent, Sydney Metro, annexed to its written closing submissions two schedules, being “Schedule 1 – Table of Disturbance (Applicant Freehold Claim)” and “Schedule 2 – Table of Disturbance (Second Respondent Leasehold)”. The two schedules are reproduced as Annexure A to this judgment (the first respondent**’s** disturbance schedules). They provide detail in relation to, and reasons for accepting some and rejecting others of the applicant’s disturbance claims. I deal with these particular disturbance claims below
However, the applicant also made a general, non-particularised claim for disturbance loss under s 55(d) of the Just Terms Act for:
five exclusive use signages [unquantified];
exclusive use area [unquantified];
inaccurate valuation [unquantified];
mobile phone signal coverage [unquantified];
buyers agent [unquantified].
In relation to this general claim, the applicant neither identified the paragraph in s 59(1) upon which it relied, nor quantified the claim. It also made a claim for five exclusive use signs as part of the market value claim which was quantified in paragraph [40] of the amended points of claim (freehold) for $150,000. Sydney Metro submitted that the claim for signage was not substantiated on the evidence and otherwise noted that there was double dipping in that both the applicant and the second respondent made a claim for this item of disturbance.
Sydney Metro’s valuer Mr Masters was asked about signage by Dr Arnaout and said:
Q. Yes. Please elaborate.
A. Those signs that are attached to the subject property, or the property being valued generally, would be considered. Signage that is not attached and does not have exclusive use permissions would not be considered.
A. Those signs that are attached to the subject property, or the property being valued generally, would be considered. Signage that is not attached and does not have exclusive use permissions would not be considered.
COMMISSIONER
Q. Can you just, for practicality - so the signs attached to the premises, do you mean the one above the entry to lot 7?
A. Well, in fact, Commissioner, that one is not legally attached to lot 7 itself, but it does form part of the exclusive use area that's approximately 5 square metres out the front of lot 7. That's bylaw 15 of the strata plan. There are no other bylaws in the strata plan which refer to any other exclusive use areas for lot 7, nor any other signage for lot 7.
Q. You answered "yes and no." Which signs do attach, or did you take into consideration, in your assessment of lot 7, please?
A. At folio 907, Commissioner, image number 9--
Q. But that one above the - you said the one above the entry door--
A. Forms part of the exclusive use area because the boundary to lot 7 finishes at the glass doors there where that blue line is. The City Dental practice sign, the red and white one above, is on the pelmet which forms part of the exclusive use area. That one was considered. The other signs that Dr Arnaout referred to, I could not find permissions in the bylaws or any strata plans attaching their exclusive use to lot 7.
I have had regard to the registered by-laws for SP 65054, and am satisfied that a review of those by-laws confirms the accuracy of Mr Masters’ evidence as to the absence of any relevant permission in the by-laws in relation to signage.
In relation to the claim described as for “mobile phone signal coverage at Hunter Arcade”, Sydney Metro submitted that the applicant was not entitled to additional compensation for that claim, the services available to land being a characteristic of land taken into account as part of market value. Moreover, it was unclear as to how the applicant would be incurring a cost for its mobile phone signal coverage, and there was in any event no evidence quantifying any such cost.
In answer to a question from the Court in relation to mobile phone signal coverage, Mr Masters said as follows:
Q. I think the question that flows from what Dr Arnaout is putting to you is if you had known that lot 7 had a mobile phone signal and internet connectivity, would that have made a difference to your valuation?
A. No. Those types of rectifications are quite straight-forward, as I understand it, your Honour, and not too costly. So, there's really no affectation in my opinion.
I am satisfied that the applicant’s general claim for a buyer’s agent is duplicated in the claim advanced in the amended points of claim (freehold) in [44] under the heading “Section 59(c) & (f)”. It would appear that the applicant is attempting to seek recovery twice for the same claim. [42] Accordingly, I address the claim in relation to a buyer’s agent at [226] below. In relation to the matters the subject of the applicant’s general claim for disturbance loss under s 55(d), I am satisfied that the claim in relation to “five exclusive use signages” was not substantiated on the evidence, was not quantified, and would, in any event, not have been the subject of any relevant permission in the by-laws. The sign above the entry to Lot 7 which formed part of the exclusive use area would be taken into account in the market valuation, as Mr Masters confirmed. The “mobile phone signal coverage” was likewise not substantiated on the evidence and not quantified. Accordingly, I disallow the applicant’s general claim for disturbance loss under s 55(d).
Sydney Metro's position was that the only limbs of disturbance loss available to the applicant in the circumstances were those under s 59(1)(a) to (b). In so far as claims were made under s 59(1)(c) to (d), they were submitted to fail at the outset because there was no relocation of the applicant. The claim under s 59(1)(f) was also submitted to fail at the outset for the reason that there was no actual use of the land by the applicant.
The applicant and the second respondent’s closing submissions appear to raise a claim on behalf of both the applicant and the second respondent for legal costs of the proceedings generally, [43] not only a claim for legal costs reasonably incurred by the person entitled to compensation in connection with the compulsory acquisition of the land under s 59(1)(a) of the Just Terms Act.
The applicant claimed the following compensation said to be pursuant to s 59(1)(a): [44]
Slater and Gordon (Court Order/ The Supreme Court of Victoria) ……..$75,000
Barrister .................................................................................................... (N/A)
Holding Redlich................................................................................ $6,955.30*
Stacks Law Firm ............................................................................. $10,000.00*
WKA Legal/ cost may not be final and may be subject to adjustment). $10,000**
Court Fees ...................................................................................... $10,072. 75
Printing Costs/Officeworks ................................................................. $5013.56
Court Related attendance City Parking .............................................. $1,894.86
Petrol/ Re Court attendance and other Compulsory Acquisition related matters)………………………………………………………………………... (TBA)
The applicant and the second respondent provided invoice evidence in relation to some of these claims.
Sydney Metro submitted that the applicant and the second respondent misrepresented its position in relation to costs. In relation to the applicant's claim, Sydney Metro had never adopted a position that legal costs during the period of negotiations under s 10A of the Just Terms Act were not claimable at all. Rather, and consistent with the statutory regime, Sydney Metro’s position was that the applicant was required to provide probative evidence in order for the Court to be satisfied that the legal costs were reasonably incurred. In so far as the applicant made a claim for costs associated with obtaining advice from three different law firms in connection with the compulsory acquisition and prior to the commencement of the proceedings, such a claim was excessive and not reasonably incurred within the meaning of s 59(1)(a). Further, legal costs of proceedings are not awarded under the Just Terms Act, but are separately determined pursuant to s 98 of the Civil Procedure Act 2005 (NSW). There is, Sydney Metro submitted, no rule that costs follow the event. [45] However the owner of an interest in land which has been acquired “should usually be entitled to recover the costs of the proceedings, having acted reasonably in pursuing the proceedings and not having conducted them in a manner which gives rise to unnecessary delay or expense.” [46]
I find that the following legal costs claimed by the applicant are not costs reasonably incurred “in connection with the compulsory acquisition of the land” within the meaning of s 59(1)(a) of the Just Terms Act:
“Slater and Gordon (Court Order/ The Supreme Court of Victoria)” for costs incurred for proceedings in the Supreme Court of Victoria;
Holding Redlich in relation to which no schedule of costs was provided and there is insufficient evidence to support the claim;
Stacks Law Firm in relation to which no schedule of costs was provided and there is insufficient evidence to support the claim;
WKA Legal in relation to which no schedule of costs was provided and there is insufficient evidence to support the claim;
Court fees, the claimed costs appearing to relate to filing fees in the court in these proceedings, and hence not costs in connection with the compulsory acquisition of the land;
Printing costs/Officeworks, appearing to be the costs of printing undertaken by a self-represented litigant and there is insufficient evidence to support the claim; and
Court related attendance/city parking, the claimed costs relating to parking by a self-represented litigant on 10 June 2023 after the commencement of the proceedings, and hence not costs in connection with the compulsory acquisition of the land.
Whilst I find that the applicant’s claim for advice sought from three different law firms is excessive, I am satisfied that the applicant has obtained at various points in time some advice in connection with the compulsory acquisition of its land. I will allow the applicant an amount of $10,000 for legal costs pursuant to s 59(1)(a) of the Just Terms Act.
- JSA Valuation Report (Section 10A)……………………………………. $22,000
- JSA Expert Statement of Evidence………………………………………. $27500
- JSA Court attendance and related appearances, ................................... (N/A*)
- Expert valuation Report Re: Market value adjustments in relation to the following (a and b) items: ......................................................……………..(N/A*)
Including but not limited to expert analysis and comments on:
a. Commercial retail market study Re: Small retail shops availability at the Freehold CBD Locality next to Wynyard Station, George and Hunter Streets ................................................................................................................. (N/A*)
b. The Open Foot Traffic Network of Subterranean Interconnected Retail Arcades* which makes up the interconnected underground subway leading to and from Wynyard Station…………………………………………………….(N/A*)
- Special value related Expert Reports ..................................................... (N/A*)
In relation to the claim for “JSA Expert Statement of Evidence”, the claimed costs appear to relate to the preparation of expert evidence for the purpose of these proceedings, and hence are not costs in connection with the compulsory acquisition of the land.
As set out at [105] above, Sydney Metro has accepted a claim of $22,000 for valuation fees of a qualified valuer reasonably incurred in connection with the compulsory acquisition of the land, submitted to be in itself a concession in light of the state of the evidence. I will allow the applicant an amount of $22,000 for valuation fees pursuant to s 59(1)(b) of the Just Terms Act.
In the applicant and the second respondent’s closing submissions, the applicant appears to claim compensation in the amount of $126,816.09 for the following costs under s 59(1)(c) of the Just Terms Act ($77,616.09 of which are claimed under both s 59(1)(c) and 59(1)(f)):
storage costs (unquantified);
employee costs (unquantified in the amended points of claim, but quantified in closing submissions as $49,200);
buyers agent for future purchase of a replacement property (quantified in the closing submissions as $60,000);
conveyancing (quantified in the closing submissions as $2,500);
financial advice related to compulsory acquisition (quantified in closing submissions as $5,000);
accounting advice related to compulsory acquisition (quantified in the closing submissions as $3,500); and
costs described as “town planning report/HDC Planning” (quantified in the closing submissions as $6,616.09).
In their closing submissions, the applicant and the second respondent addressed the applicant's claim for relocation costs. That claim was predicated upon the “joint occupancy model”, and relocation on a “like for like basis.” I have addressed, and dismissed, the posited “joint occupancy model” at [123]-[137] above.
Again, further detail in relation to these items of claimed disturbance, and Sydney Metro’s consideration of them is set out in the first respondent’s disturbance schedules.
In relation to s 59(1)(c), which provides as a loss attributable to disturbance “financial costs reasonably incurred in connection with the relocation of those persons, there is no temporal limitation as to when the financial costs, reasonably incurred, must be incurred. Accordingly, whilst a claimant need not have relocated by the time the Court determines compensation, they must prove that they genuinely intend to do so. In The Trustee for Whitcurt Unit Trust v Transport for NSW (Whitcurt) [48] Pain J, in considering a claim under s 59(1)(c) for a relocation that had not yet occurred, said at [110] as follows:
The Applicant has not satisfied all limbs of the threefold test from Shun Fung at 854-855 for the reimbursement of relocations costs, being:
(a) the claimant must genuinely intend to relocate;
(b) relocation must be practically possible; and
(c) relocation must be reasonable in the circumstances.
I accept that some caution is required in considering the threefold test referred to in Whitcurt. In Sydney Metro v C&P Automotive Engineers [49] (C & P Automotive) the Court of Appeal referred to the decision of Pain J in Hua v Hurstville City Council [50] , and held that “the questions posed in Shun Fung [51] are not helpful in the proper construction of s 59(1)(c) of the Just Terms Act”(footnote added). [52] Nonetheless, Sydney Metro did not cavil with the proposition that a claimant for relocation costs need not have relocated at the time compensation is determined.
In assessing a claim for relocation, it is necessary to consider who owns what chattel and fixtures as part of assessing the nature of the interest in land where the compensation sought is for relocation. [53] The importance of proper identification of interests, particularly in the context of an acquisition where there are separate lessor and lessee interests, was recently reiterated by the Court of Appeal in C&P Automotive. In particular, Payne JA said at [62]:
The High Court in TEC Desert explained at [25] that the law respecting "tenant's fixtures" concerns the rights of persons who have limited interests (such as leases for a term) to sever and remove from the land what admittedly are fixtures. Unless and until that right of severance and removal is exercised, the fixtures form part of the realty. The Court in TEC Desert quoted C Harpum, S Bridge and M Dixon, Megarry & Wade, The Law of Real Property (7th ed, 2008, Sweet & Maxwell) at p 1072 [23-010] with apparent approval to this effect:
"Prima facie, all fixtures attached by the tenant are 'landlord's fixtures', i.e. must be left for the landlord at the end of the lease. But important exceptions to this rule have arisen, and fixtures which can be removed under these exceptions are known as 'tenant's fixtures'. This expression must not be allowed to obscure the fact that the legal title to the fixture is in the landlord until the tenant chooses to exercise his power and sever it. The tenant may do so only during the tenancy or (except in cases of forfeiture or surrender) within such reasonable time thereafter as may properly be attributed to his lawful possession qua tenant." (Footnotes omitted.)
The Just Terms Act does not provide for relocation to "like-for-like" premises. It does not guarantee that the relocation premises will have the same fixtures. The statute is neutral about the quality of the replacement premises.
Sydney Metro submitted that the applicant’s claim under s 59(1)(c) fails at the threshold because the applicant did not occupy the acquired land, and therefore there has been no relocation of the applicant as a consequence of the acquisition. [55] As observed by Payne JA in C&P Automotive at [74],“‘Relocation’ as a matter of ordinary usage means the act of moving something or someone from one place to another.”
As I have found in relation to the postulated “joint occupancy” model, the applicant did not occupy the acquired land. It was occupied by the second respondent. If I be wrong, and Lot 7 was occupied by the applicant, I would dismiss its claim for relocation costs for the following reasons:
Any occupation by the applicant was of a trivial, de minimis, nature which I would disregard.
I would not be satisfied, on the evidence, of any genuine intention by the applicant to relocate, nor that any relocation would have been reasonable given that the applicant owns at least two other investment properties. In July 2024, the applicant became the registered proprietor of Unit 3/255 Pacific Highway, North Sydney. Apparently, as Dr Arnaout testified, Unit 3/255 Pacific High was purchased to reproduce “the same owner-occupier financial structure, joint, joint occupancy”. However, it was also his evidence that, as at the date of acquisition, the Pacific Highway property was vacant. Moreover, the applicant itself identified its principal place of business as 27 Willis Street, Lansvale, the residential address of Dr Arnaout.
In relation to the unquantified claims for storage costs, there was no evidence sufficient to prove that the applicant incurred any such costs. The evidence of Dr Arnaout was to the effect that the second respondent, not the applicant, incurred a storage fee in renting part of Unit 4, 575 Woodville Road, Guildford, owned by the applicant.
In relation to the claim for “employee costs”, I am not satisfied, on the balance of probabilities, that any such costs, if incurred by the applicant, even if the applicant were found to have occupied the acquired land, can have been incurred in connection with its relocation. Again, there was no evidence of any relocation of the applicant. Secondly, as at the acquisition date, Ms Echkintana was employed by the second respondent as his practice manager, and not by the applicant. Thirdly, the costs claimed appear to have nothing to do with any relocation, but rather to be a claim for some form of administrative assistance in conducting these proceedings. Dr Arnaout gave the following evidence in relation to the role of Ms Echkintana:
Q. She's an employee of the Eddie Arnott Corporation, is that correct?
A. At the moment she does get paid by me and by the Eddie Arnott corporation. At the moment, since gazettal day, to assist the Eddie Arnott Corporation first when it was an applicant, and still is, and preparation for my case for the dental business and the joint leasehold as well.
In relation to the claim for a buyer’s agent and conveyancing costs, I cannot be satisfied, in the absence of any evidence, that the applicant has incurred such costs or as to the reasonableness of the amounts claimed.
In relation to accounting advice, relating to compulsory acquisition, and costs described as “town planning report/HDC Planning”, I am likewise unable to be satisfied, in the absence of any evidence, that the applicant has incurred such costs or as to the reasonableness of the amounts claimed.
Section 59(1)(d) of the Just Terms Act makes provision for loss attributable to disturbance to include 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).
An essential element of s 59(1)(d) is that there be a relocation. A helpful summary of cases in which there has been consideration of the meaning of relocation in that context was undertaken by Robson J in Fraietta at [169]-[170] as follows (emphasis added):
169 Sections 59(1)(d) and 59(1)(e) of the Just Terms Act refer to "relocation", which has been considered by a small number of authorities. Whilst there is no authoritative decision on what is meant by relocation, the following findings have been made by this Court:
1. in McBaron v Roads and Traffic Authority of New South Wales (1995) 87 LGERA 239 at 248, Talbot J found that the applicant was entitled to stamp duty for the relocation of a dairy farm;
2. in Kirela Pty Limited v The Minister administering the Environmental Planning and Assessment Act 1979 (No. 2) (2004) 132 LGERA 90; [2004] NSWLEC 68 ('Kirela') at [14], Cowdroy J found that because the applicant had not relocated its business, it was not entitled to compensation under s 59(1)(d) of the Just Terms Act;
3. in Bezzina Developers Pty Ltd v Leichhardt Municipal Council (2006) 146 LGERA 249; [2006] NSWLEC 175 at [112] , Talbot J found that a claim pursuant to s 59(1)(d) of the Just Terms Act was not maintained because "no physical activities [were] to be relocated" as a result of the acquisition; and in Speter at [87]-[89] , it was found that because the applicants did not operate the business that occupied the acquired property, and held the acquired property simply as an investment to be rented by that business, the applicants' investment had not been relocated as a result of the acquisition.
4. in Speter at [87]-[89], it was found that because the applicants did not operate the business that occupied the acquired property, and held the acquired property simply as an investment to be rented by that business, the applicants’ investment had not been relocated as a result of the acquisition.
170 Relocation requires, necessarily, that something be relocated. The intention to purchase a replacement property alone is insufficient, unless something is also relocated, whether it be a person, a business or physical objects. As noted above, the applicant has not personally been relocated. Whilst certain physical items on the property have been relocated, this has occurred without the need for the applicant to purchase another property or take out another mortgage, whatever his intentions may be. I therefore find that there has been no relocation that would enliven any requirement to compensate the applicant pursuant to ss 59(1)(d) and 59(1)(e) of the Just Terms Act.
Fraietta was recently cited with approval by the Court of Appeal in C&P Automotive at [110], albeit in the context of relocation for the purposes of s 59(1)(c) of the Just Terms Act.
I find that the applicant’s claim for stamp duty costs must fail. That is because the applicant did not occupy Lot 7. It held Lot 7 as an investment property. Therefore, there has been no relocation of the applicant as required by s 59(1)(d). [56]
Whilst the applicant did not advance a claim for stamp duty costs under s 59(1)(f), to the extent that it be necessary to decide, any such claim would be unavailable. In Sydney Metro v G&J Drivas [57] (Drivas), the Kirk JA (Payne JA and Griffiths AJA agreeing) held at [109], [115]-[120] that s 59(1)(f) cannot be relied upon to subvert the limitations otherwise identified in s 59(1)(d). [58]
Section 59(1)(f) provides for loss attributable to disturbance to include 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.
As set out at [215] the applicant claims compensation totalling $77,616.09 under both s 59(1)(c) and s 59(1)(f).
Sydney Metro submitted that the applicant’s claim insofar as it sought to rely on s 59(1)(f) was contrary to law and ought be rejected. That was submitted to be because there was no "actual use" of the acquired land by the applicant. The evidence demonstrated that it was a passive investment to provide superannuation benefits. [59]
I find there was no evidence sufficient to prove, on the balance of probabilities, any use of Lot 7 by the applicant that could entitle it to compensation under s 59(1)(f). There was no evidence that the applicant itself occupied the land or conducted any business activities from it. The applicant cannot rely upon the second respondent's use of Lot 7, being a different legal person, to support a claim pursuant to s 59(1)(f). Indeed, as Sydney Metro submitted, the circumstances are one step removed from the claim which was rejected in Alexandria Landfill Pty Ltd v Transport for NSW [60] (Alexandria Landfill). In that case, the Court of Appeal held that the mere fact that land used by a subsidiary of a holding company which was the freehold owner of the land in question did not establish actual use of the land for the purpose of s 59(1)(f). [61]
In relation to the second respondent’s leasehold claim, it arises first to address the threshold issue of whether the second respondent, Dr Arnaout, had a compensable interest in land, within the meaning of the Just Terms Act, which was compulsorily acquired by Sydney Metro. In this respect, Dr Arnaout relied on the unregistered 2022 lease which was executed on 22 August 2022 between the applicant and himself and which was for a period of five years with a further five year option.
The proper identification and determination of whether there is an interest in land is fundamental to the operation of the statutory regime under the Just Terms Act. That is because the entitlement to compensation is only conferred on an owner of an interest in land within the meaning of s 4 of the Act. Section 4 defines “interest in land” to mean (a) a legal or equitable estate or interest in the land, (b) or an easement, right, charge, power or privilege over, or in connection with, the land.
The meaning of “interest in land” has been considered by the Court of Appeal in relation to a variety of purported interests in land, in particular in Olde English Tiles v RMS (Olde English Tiles) [62] . In Olde English Tiles, Basten AJA (Ward P, Gleeson and Mitchelmore JJA, Preston CJ of LEC agreeing) held that the holder of a bare licence or permission to occupy land, terminable at will by the owner, has no foundation or interest on which to build a claim for compensation for losses for disturbance under s 59 of the Just Terms Act. A review of the authorities undertaken by Basten AJA establishes that a permissive occupancy, terminable at will by the registered owner of the land, and dependent for its continuation on the personal relationship between the occupier and the owner, is not a relevant (compensable) interest in land for the purpose of the Just Terms Act. [63]
In relation to paragraph (a) of the definition of “interest in land” in s 4, I am not satisfied that the executed lease, being unregistered and for a period greater than three years, is a legal interest in land. That is because s 16(1) of the Retail Leases Act provides that if a retail shop lease is for a term of more than 3 years, the lessor must lodge the 2022 lease for registration in accordance with the Real Property Act within 3 months following its execution by the lessee. [64] As Sydney Metro submitted, the 2022 lease was never registered, and the applicant in its 16 years of ownership of Lot 7 had never registered a lease on title.
In relation to paragraph (b) of the definition of “interest in land” in s 4, Sydney Metro submitted that an unregistered executed lease may be capable of constituting an equitable interest, but whether that is so will depend upon whether the agreement underlying the instrument is specifically enforceable. [65] Determination of whether the discretionary remedy of specific performance would be granted in respect of the underlying agreement is complex and fact specific, such facts being peculiarly within the knowledge of the applicant and the second respondent.
As submitted by Sydney Metro, specific performance will not ordinarily be ordered unless:
there is a valid and enforceable contract at law at a time when the order is sought which, in turn, includes whether there was an intention to create legal relations; [66]
the party seeking the relief is ready, willing and able to comply with the terms of the lease; [67] and
there has already been a payment of rent under the agreement or otherwise the situation of non-payment of rent has been remedied before specific performance will be granted. [68]
In Chan & Anor v Cresdon Pty Ltd [69] (Chan v Cresdon) the plurality (Mason CJ, Brennan, Deane and McHugh JJ) said at 252-253:
For present purposes these authorities establish two propositions. First, the court's willingness to treat the agreement as a lease in equity, on the footing that equity regards as done what ought to be done and equity looks to the intent rather than the form, rests upon the specific enforceability of the agreement. Secondly, an agreement for a lease will be treated by a court administering equity as an equitable lease for the term agreed upon and, as between the parties, as the equivalent of a lease at law, though the lessee does not have a lease at law in the sense of having a legal interest in the term.
…
…the references in the earlier cases to specific performance should be understood in the sense of Sir Frederick Jordan's explanation adopted by Deane and Dawson JJ. in Stern v. McArthur (56):
“‘Specific performance in this sense means not merely specific performance in the primary sense of the enforcing of an executory contract by compelling the execution of an assurance to complete it, but also the protection by injunction or otherwise of rights acquired under a contract which defines the rights of the parties’: ...‘Chapters on Equity in New South Wales’, Select Legal Papers, 6th ed. (1947), p. 52, n.(e).”
The plurality in Chan v Cresdon identified other factors which may be taken into consideration in determining whether to award or refuse specific performance, including a failure to register the underlying agreement. [70]
I cannot be satisfied that Dr Arnaout had a relevant equitable interest in land capable of being the subject of an order for specific performance. His evidence in cross-examination was generally unsatisfactory in relation to the unregistered lease executed between the applicant and himself on 22 August 2022 (after the service of the PAN on 11 May 2022 and shortly before the acquisition on 2 September 2022). That is so notwithstanding attempts by Dr Arnaout to provide unsworn evidence by way of submissions. [71] The only lease produced to the Court was that executed on 22 August 2022. The leasehold interest commenced on the date of execution. Notwithstanding that the 2022 lease was backdated, it does not operate retrospectively as an interest in land. However, as a contractual matter, a lease may stipulate that the payment of rent is required from a period earlier than its date of execution. [72]
The facts relevant to whether the discretionary remedy of specific performance would be granted in relation to the underlying agreement reflected in the 2022 lease are peculiarly within the knowledge of the applicant and the second respondent. For the following reasons, I am not satisfied that the bare assertion by Dr Arnaout as to the payment of rent to the applicant is sufficient to establish a relevant interest in land within the meaning of the Just Terms Act:
The bare assertion by Dr Arnaout as to the payment of rent is contradicted by other evidence. For example, whilst Dr Arnaout made various assertions in relation to the existence of earlier leases and conduct, the evidence was silent in relation to the 2022 lease. At its highest, Dr Arnaout’s evidence was that “well documented leasehold rental payments to the Applicant landlord” and that the payments of which “were regularly deposited into the Company’s bank account as opposed to only having respective ledgers entries.” [73] These statements appear to relate to an earlier period in time (rather than 11 days prior to the acquisition date), and there is a conflict between that evidence and later statements by Dr Arnaout that the applicant had “been financially inactive over the last sixteen years, and as such has been using the Trust Tax File Number for its role as Trustee, as per yearly communication with the Australian Taxation Office.” [74] The assertion of financial inactivity was repeated several times in the course of cross-examination.
There was no documentary evidence which established the payment of any rent in accordance with the 2022 lease. The existence of a partial trust tax return for the financial year 1 July 2021 to 30 June 2022 did not constitute evidence of payment of rent under the (backdated) 2022 lease. That is so for three reasons:
(a) the 2022 lease did not exist during the financial year 1 July 2021 to 30 June 2022 and any payments made during that period were not made under that lease; (b) on the evidence of Dr Arnaout, there was a lease prior to the 2022 lease, and therefore any rental payments during the financial year 1 July 2021 to 30 June 2022 would have been made pursuant to that earlier lease. Given that no documentary evidence of any earlier lease was provided, it may be that rental payments were made pursuant to an informal permission to occupy, lease terminable at will, or similar, however that is insufficient to establish on the balance of probabilities the payment of any rent in accordance with the 2022 lease; (c) the quantum of gross rent ($49,119.00) identified in the extract from the 2022 tax return (for the financial year 1 July 2021 to 30 June 2022) is a different amount from the initial stated rent of $41,600 under the 2022 lease.
Q. You told me earlier in an answer that The Eddie Arnott Corporation has multiple bank accounts?
A. Yes.
Q. You said before the break that the documents of The Eddie Arnott Corporation are now at your home?
A. Some of them are. Some of them are still in retriever( as said) but I just got what - in storage. I retrieved whatever I thought they were the right ones.
Q. Your bank account records would be accessible online, that’s correct?
A. Yes.
Q. In the class 3 application, but there's no leases prior to that?
A. No, no, there was always leases right from the beginning. That's what I mentioned earlier, right from the beginning, but, but there were just the formality leases because it was me and myself. But there was always leases because that's how the structure worked and this is the financial advice that I had from the people, financial advisors who, who structured this for me. They said everything has to be done right and that's what we did, like two separate accounts, everything is separate, had to be separate for the tax department and that's how it was.
(a) the 2022 lease was executed on 22 August 2022, being post the notified date for the end of the PAN period on 18 August 2022, and 11 days prior to the acquisition date; (b) the terms of the 2022 lease required the first month’s instalment of rent to be paid by the commencement date, and each later month’s instalment of rent to be paid in advance. There was no evidence that these terms were complied with; (c) the oral evidence given by Dr Arnaout suggested an approach in which he treated the interests of the applicant corporate trustee and himself as one and the same, with a focus upon financial planning and tax and the creation and enforcement of legal agreements only to the extent that Dr Arnaout thought it convenient to his interests. This is reflected in the approach taken to another investment property owned by the applicant, Unit 4, 575 Woodville Road, Guildford. That property (or at least a part thereof) was rented by Dr Arnaout for a “nominal fee” payable to the applicant, but with no lease agreement in place; (d) the evidence suggested that the dental business was in some financial difficulty (and I infer may not have had a capacity to pay rent), including:
(i) that Hunter Arcade was affected by the acquisition and development of Wynyard Place Arcade by the developer Brookfield, including the closure of the Hunter Arcade’s access point to and from Wynyard station “for well over a year”, and by Covid-19; (ii) Dr Arnaout’s oral evidence that he had not been putting in tax returns “for a while for my personal tax returns. The reason is, since we closed the dental surgery, there was no income”; (iii) that Dr Arnaout’s practice manager Ms Echkintana sometimes made payments from her personal bank account and loaned Dr Arnaout money (“sometimes over $100,000”) to “pay off things”. Some of the bank statements in Exhibit J included payments made from the personal account of Ms Echkintana; and (iv) that Dr Arnaout failed to produce financial statements or tax returns sought under items 1 and 2 of the notices to produce dated 3 February 2025 which would have revealed his capacity to pay rent in accordance with the 2022 lease.
Sydney Metro submitted that evidence of an inability to pay rent may lead the Court to conclude that a party, here Dr Arnaout, was not ready, willing and able to comply with the terms of the 2022 lease and therefore specific performance should not be granted. [78] I draw the inference in light of the matters set out in [246] immediately above that Dr Arnaout was not ready, willing and able to comply with the terms of the lease. Another factor which suggests that specific performance would not be granted includes the failure to register the 2022 lease. That arises to be understood in the broader context that the applicant in its 16 odd years of ownership of Lot 7 had never registered a lease on title.
In the applicant and the second respondent’s closing submissions, Dr Arnaout submitted that he has an interest in land for the purpose of the Just Terms Act by reason of holding a lease which was enforceable under the Retail Leases Act and common law principles. With respect to Dr Arnaout’s reliance on “common law principles”, Sydney Metro submitted that this did not advance his case because in order to establish a common law tenancy, there needs to be agreement for a future lease, entry into occupation, and payment of rent (such payment being calculated as a proportionate amount of a yearly rent, namely the quantum of rent paid for a month must relate to a yearly sum). [79] As set out in the reasons already given, I have concluded that there was no evidence sufficient to prove, on the balance of probabilities, payment of rent under the 2022 lease. Further, if there was a common law tenancy or implied tenancy, then the scope of interest would at best be a tenancy at will determinable on one month’s notice. [80]
For the reasons given, notwithstanding the voluminous affidavit evidence and the evidence of Dr Arnaout from the bar table and in the witness box, I am not satisfied, on the balance of probabilities, that the unregistered lease executed on 22 August 2022 would be specifically enforceable so as to confer on Dr Arnaout an equitable interest in land for the purposes of the Just Terms Act. That is sufficient to dispose of all claims advanced by him under s 55 of the Act.
Having determined that Dr Arnaout has failed to establish any relevant equitable interest in Lot 7, I need not consider the second respondent’s claims for market value of a leasehold claim, for special value in relation to a leasehold interest and for disturbance in relation to a leasehold interest. In case I be wrong in relation to the question of an equitable interest in Lot 7, I will consider each of the claims briefly.
Ultimately, Dr Arnaout did not appear to advance a claim for the market value of his purported leasehold interest in Lot 7 under s 55(a) and s 56 of the Just Terms Act. Rather, the claim appears to have been under s 59(1)(f), variously described as for “rental difference” and “market rent difference”. I address this claim under s 59(1)(f) later in these reasons for judgment.
Nevertheless, Mr Masters assessed the market value of the leasehold interest on the assumption that it constitutes an interest in land for the purposes of the Just Terms Act. Mr Masters’ opinion, on this assumption, was that the market value of the leasehold claim would be $32,933. The valuation methodology in relation to the leasehold claim adopted by Mr Masters was to calculate the net present value (NPV) of the difference between market rent and passing rent on a monthly basis for the remaining lease term. When cross-examined by Dr Arnaout, Mr Masters explained that he had not taken into account the option under the lease, including because there was a market rent review clause which would apply upon the exercise of the option so that there would be no difference between a market rent and passing rent so as to produce a profit rent.
If I have erred in finding that Dr Arnaout has failed to establish an equitable interest in Lot 7, then I would be satisfied as to the soundness of the valuation methodology adopted by Mr Masters in relation to the leasehold claim.
The essence of Dr Arnaout’s special value claim appears to be that there was a special value to him of Lot 7 incidental to his use of the land as a dental practice for a continuous period of 16 years. [81] He also referred to “long-term benefits of the Dental Business to the Financial Structure”. I am unable to assess any such claim as it was unclear whether this was relied upon by Dr Arnaout to support his claim for special value, and if so, how.
It was not in dispute that Dr Arnaout used Lot 7 as a dental surgery as at the acquisition date. However, Sydney Metro's position was that, assuming that the unregistered lease was an interest in land for the purpose of the Just Terms Act, (which, I have held, it was not), there was no financial value of any advantage, in addition to market value, which was incidental to Dr Arnaout’s use of the land under the leasehold interest.
If I be wrong and the unregistered lease was capable of constituting an interest in land within the meaning of the Just Terms Act, I would not be satisfied that Dr Arnaout’s claim for special value satisfies a number of elements of the special value head of compensation in ss 55(b) and 57 for the following reasons.
First, it appears that the identified advantage claimed by Dr Arnaout was a historical use of Lot 7 to operate the dental business for a period of 16 years prior to the acquisition date. I am not satisfied that a claim based on the duration of occupation constitutes special value within the meaning of s 57 which defines special value as the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land. Dr Arnaout did not identify any special attribute of the land which would not be captured in the market value of the leasehold interest (if I had determined the 2022 lease to be a (compensable) interest in land for the purposes of the Just Terms Act).
Second, the interest in land claimed by Dr Arnaout, being an unregistered lease, was executed 11 days prior to the acquisition date. I do not consider, as submitted by Sydney Metro, that there would be a sufficient connection between any advantage incidental to Dr Arnaout’s use of Lot 7 such as would satisfy the requirements of special value. Any advantage would relate to a past period (said to be 16 years prior to acquisition), whereas the claimed leasehold interest (assuming the unregistered lease were specifically enforceable so as to constitute an equitable interest in land) would only have commenced on the date of execution, 11 days prior to the date of acquisition. Any loss of the future use of the leasehold by the dental business post-acquisition would be captured in the market value of that interest in land. Accordingly, there would be no advantage in addition to market value.
Third, the apparent advantage claimed by Dr Arnaout was not the subject of expert evidence. It appears, as submitted by Sydney Metro, that Dr Arnaout devised a methodology whereby he used “certain quotations for marketing, website optimisation etc to come up with a special value figure”. Dr Arnaout explained the justification for this methodology as follows: “there has been two and a half year - well over two-and-a-half years of non-operation of City Dental practice…” That is, the compensation sought would arise by reason of the decision of Dr Arnaout not to relocate, and instead to close the dental business, and by the subsequent effluxion of time. That was, I find, a choice made by Dr Arnaout and non-compensable as special value.
As noted above at [196] in relation to disturbance, Sydney Metro annexed to its written closing submissions the first respondent’s disturbance schedules which included “Schedule 2 – Table of Disturbance (Second Respondent Leasehold)”.
In addition to specific claims for loss attributable to disturbance under s 59(1)(f), Dr Arnaout also made a general, non-particularised claim for disturbance loss under s 55(d) of the Just Terms Act for:
$139,535.92 – “Items listed in Sydney Metro’s expert Report prepared by Colliers”;
$1,235 – Autoclave Service and Calibration;
$880 – Xray inspection by private certifier;
$13,547 – temporary storage;
$27,840 – Cost of replacing outdated dental materials; and
$50,000 – Fully optimised SEO website.
In relation to these items the subject of his general claim for loss attributable to disturbance, Dr Arnaout did not identify the paragraph in s 59(1) upon which he relied. Nor did he provide any evidence sufficient to establish on the balance of probabilities his entitlement to any of these claims.
The second respondent claimed an unquantified amount “TBA” for “Expert Quantity Surveying Report”. [82]
He provided no evidence that he incurred the costs of engaging a quantity surveyor, or that he engaged a quantity surveyor at all. Further, any fees of a quantity surveyor are not compensable under s 59(1)(b) as they would not be the fees of a qualified valuer.
The applicant and the second respondent's closing written submissions appear to address Dr Arnaout’s claim for relocation costs pursuant to s 59(1)(c) of the Just Terms Act at [81]-[157], [217]-[237], [290]-[292], [302]-[304].
It appears that Dr Arnaout seeks compensation under s 59(1)(c) of the Just Terms Act for the following:
items in the QS report - $296,198.08;
items listed in Sydney Metro's expert report prepared by Colliers - $139,535.92;
autoclave service and calibration - $1235;
x-ray inspection by private certifier/EPA Requirement - $880;
temporary storage - $13,547; and
replacing outdated dental materials etc $27,840.
I find none of these items to be compensable under s 59(1)(c) for the following reasons.
First, as at the acquisition date, the dental business was extinguished. Dr Arnaout’s statement in his affidavit dated 28 February 2025 in relation to the “closure of the dental business leasehold upon compulsory acquisition” and “closure of the business upon relocation” was put to Dr Arnaout in cross-examination, and he accepted that the dental practice closed at that time. As the dental practice business had been extinguished, there was no relocation within s 59(1)(c).
Second, the fit out of Lot 7 was evidently affixed to the lot and common property prior to the execution of the 2022 lease. In the ordinary case, fixtures run with the land for the benefit of the freehold owner, unless subject to an exception: C&P Automotive at [60], [62] referring to the decision of the High Court in TEC Desert Pty Ltd v Commissioner of State Revenue (Western Australia). [83] In any event, even if Dr Arnaout were able to prove that he owned the fixtures, that would not assist because the majority of the fit out of Lot 7 by its nature as a fixture, designed for specific premises, could not practically be “relocated”.
Third, whilst Dr Arnaout may have owned fixtures and had an entitlement pursuant to cl 12.3 of the 2022 lease to remove them at the end of the lease, that does not change the position that, as at the date of acquisition, those fixtures formed part of the real property, and legal title vested in the lessor, here, the applicant. Clause 12.3 provided that at the end of the lease: “Anything not removed becomes the property of the lessor who can keep it or remove and dispose of it and charge to the lessee the cost of removal, making good and disposal.”
Fourth, on the assumption that the fit out was owned by Dr Arnaout, either it was capable of being relocated in which case that should have occurred and it would be unreasonable to claim the costs of a new fit out and fixtures, or it was neither feasible nor practicable to relocate the fit out in which case it was not available to be relocated and therefore is not compensable under s 59(1)(c). [84] As Payne JA said in C & P Automotive at [72]:
There is nothing in the text of s 59(1)(c) that permits compensation to be paid for financial costs of replacing assets available for use as an incident of a lease of leased premises if those assets are not available to be moved by the lessee…
Q. That was, you had the total cost, and then you have the closing value after depreciation at
$8,960 in 2012?
A. Yes. That's what it was.
Q. Do you have a depreciation worksheet as at the acquisition date?
A. See, these are very old.
Q. I asked a question. Do you have a depreciation worksheet as at the acquisition date?
A. This is what I've got now at this moment.
Q. So you didn't do any depreciation in your tax returns at any time after 2012?
A. I haven't putting been putting tax returns for a while for my personal tax returns. The reason is, since we closed the dental surgery, there was no income, so that particular--
Q. This was 2012.
A. Yeah, this is long time ago.
Q. This was - you haven't got a depreciation sheet since 2012. The acquisition was 2022. So ten years later. You don't have any depreciation worksheets?
A. Short answer, no, I don't have at the moment, but I have mentioned that over the years I have been investing. It wasn't done all at once, so it's been continuously improving, the decoration and infrastructure and everything.
The applicant and the second respondent submitted that the decision of the Court of Appeal in C&P Automotive should not be followed on the basis that it amounts to a “retroactive application” of a “new legal standard” to an acquisition which occurred at an earlier point in time and should only apply prospectively. I reject that submission for the following reasons:
It misconceives the nature of judicial decision making and appears to apply the presumption that legislative amendments do not affect accrued rights or liabilities. However, that presumption is presently inapplicable as there has been no material legislative amendment to the Just Terms Act in the period between the acquisition date and the present. [85] There is no material difference between the version of the Just Terms Act considered in C&P Automotive and that which applies in these proceedings.
The Court's decision is declaratory of what the law was and is, and does not effect a legislative change to the provisions which were in force at the date of acquisition. [86] A finding that a previous decision or line of authority was incorrectly decided does not constitute a retrospective application of a different legal test. Judicial decisions cannot be limited in their operation so as to only operate prospectively. [87]
In relation to the remainder of the applicant and the second respondent’s closing submissions concerning Dr Arnaout’s claim for relocation costs pursuant to s 59(1)(c), I find as follows.
Contrary to [127], the decision of Pain J in Whitcurt did not address “arguments against retroactivity”, as suggested.
As to [119], the reference to s 61 of the Just Terms Act (special provision relating to market value assessed on potential of land) is unclear, and does not appear to relate to the proposition advanced. In any event, the expression “financial loss” in s 61 does not control the interpretation of s 59(1)(c). [88]
As to [135]-[143], again the reference to s 61 of the Just Terms Act is unclear. To the extent that it is suggested that in El Boustani v The Minister administering the Environmental Planning and Assessment Act 1979 [89] (El Boustani) the Court of Appeal “addressed the issue of whether relocation costs could be adjusted retroactively based on a different case's ruling” and that the Court “rejected the retroactive application”, such suggestion is plainly erroneous. As Sydney Metro accepted at a level of generality, financial costs reasonably incurred for relocation may be claimed. However, there is no absolute entitlement to relocation costs because land has been acquired. The claim must be within the scope of the Just Terms Act which limits the entitlement to compensation to persons who have a relevant compensable interest in land.
As to [152]-[153], [155]-[156], [192], Dr Arnaout has not demonstrated how “unique factors… such as long-term investment, community impact, and specialized operational needs” are financial costs reasonably incurred with the relocation of a person, even one entitled to compensation which I have determined that Dr Arnaout is not.
In closing submissions, Dr Arnaout (at [293]-[294] and [304(II)]) maintained his claim pursuant to s 59(1)(f) for what he described as “rental difference”, seeking compensation in an amount of $352,076.
The basis of this claim is unclear. It was unsupported by expert evidence, and appears to be reliant upon a formula devised by Dr Arnaout with little, if any, relationship with the facts of the case. Whilst not entirely clear, it appears to be a claim for the cost of renting new CBD premises on a “like for like basis”. [90] Section 59(1)(f) provides as a loss attributable to disturbance “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”. I am not satisfied as a matter of statutory construction, or on any sufficient evidence, that the cost of new rental premises is a financial cost within the meaning of s 59(1)(f). As was held by Basten JA in RMS v United [91] at [49]: [92]
The cost of new premises, whether purchased or rented, is not reimbursed as a loss for disturbance of the acquired land or otherwise: it is covered to the extent of compensation for the market value of the compulsorily acquired land. If, on the other hand, the prior use was commercial, the prior owner's interest is again compensated by receiving the market value of its interest in the land. There is no additional compensation for termination of the cash flow from the prior use. Rather, the best available financial return for the commercial use of the land will form the basis of its market value. It will be compensable as such.
In the events that have transpired, the applicant approached the Court for a determination of compensation, and put in issue whether another legal person, namely the second respondent, had an interest in land by reason of the unregistered 2022 lease. Both the applicant and the second respondent have claimed significant amounts of compensation, often without providing any sufficient evidence, or any evidence at all, and at times in relation to same items.
I have determined that the applicant has no entitlement to compensation for special value, or for relocation costs or stamp duty costs as loss attributable to disturbance. The “Owner Occupier Financial Structure” upon which Dr Arnaout relied for the purpose of his separate claim was, as Sydney Metro submitted, primarily a personal relationship, rather than one that related to property. The structure, Sydney Metro submitted, was not dissimilar to that which was described as the “common purpose” in Olde English Tiles Australia Pty Ltd v Transport for New South Wales [93] , and which Duggan J at first instance found gave rise to a personal right, not a proprietary one. [94]
Dr Arnaout has failed to provide sufficient evidence capable of satisfying the Court on the balance of probabilities that he is an owner of a compensable interest in land for the purposes of the Just Terms Act. [95]
In all the circumstances, I have determined that the applicant is entitled to compensation in the amount of $1,070,000.00 for market value (ss 55(a), 56), and $10,000.00 for legal costs and $22,000.00 for valuation fees (ss 55(d), 59(1)(a), (b)). This amounts to total compensation in the amount of $1,102,000.00.
**********
The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12 (Pritchard J).
[2025] NSWLEC 17 (Pritchard J).
[2025] NSWLEC 18 (Pritchard J).
[2025] NSWLEC 12.
Page 196 [502]: Tab A1 EB.
See [29.iv] (page 6), [169] (page 23), [175], [319] (page 44) of the applicant and the second respondent’s closing submissions, and [74] on pages 15 and 16 of the applicant and the second respondent’s closing submissions in reply.
See [304.II.E], [304.II.F], [304.II.G], [304.II.H], [304.II.I], [304.II.J], [304.II.K], [304.II.M], [304.II.N], and [342.E] of the applicant and the second respondent’s closing submissions.
See the 5 August 2024 affidavit at [1086], [1091(h)], [1481(B)] and [1491]-[1492].
Olde English Tiles v RMS (2022) 108 NSWLR 503; [2022] NSWCA 108 (Olde English Tiles) at [46] (Basten JA).
[2019] NSWCA 240.
See Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 436; [1999] HCA 25 (McHugh J); Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259 at 276; [2008] HCA 5 (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ); and Coundrelis v Roads and Traffic Authority of NSW [2008] NSWLEC 72 at [9] (Biscoe J).
The Minister v New South Wales Aerated Water and Confectionary Co Ltd (1916) 22 CLR 56; [1916] HCA 48 (Griffith CJ, Barton, Isaacs, Gavan Duffy, Rich JJ) referred to in Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 at [24] (Basten JA, Ward JA agreeing) and Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353 at [42] (Spigelman CJ, Beazley, Bryson and Basten JJA and Campbell J agreeing).
(1907) 5 CLR 418 at 432 (Griffith CJ), at 144 (Isaacs J).
Willis v Roads and Maritime Services [2015] NSWLEC 165 at [24] (Pepper J).
Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73] (Biscoe J).
Attard & Ors v Transport for NSW [2014] NSWLEC 44 at [69] (Biscoe J).
At [284]-[288], [308]-[325], and [342] (and the applicant’s claim more generally at [273]-[283], [289]).
At [285].
At [286] and [322].
At [319].
[2017] NSWLEC 11 (Robson J).
Dr Arnaout mischaracterised the findings of the decisions he relied upon in the applicant and the second respondent’s closing submissions. See for example, Chaudry v Liverpool City Council [2008] NSWLEC 251 at [28] (Pain J) and Attard & Ors v Transport for NSW [2014] NSWLEC 44 at [66] (Biscoe J).
De Battista v Transport for New South Wales [2014] NSWLEC 39 at [79] (Pain J).
At [308]-[312].
Kostas & Anor v HIA Insurance Services Pty Ltd and Another (2010) 241 CLR 390; [2010] HCA 32 at [90]-[91] (Hayne, Heydon, Crennan and Kiefel JJ).
[2012] NSWLEC 199 at [196]-[197] (Sheahan J).
Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; (2020) 243 LGERA 102; [2020] NSWCA 165 at [166]-[168] (Basten JA), at [380]-[382] (Macfarlan JA).
[2024] NSWLEC 23.
City of Parramatta Council v Sydney Metro at [254] (Robson J).
City of Parramatta Council v Sydney Metro at [259] (Robson J).
Alexandria Landfill Pty Ltd at [169], [171] (Macfarlan JA) at [383] (Basten JA), at [417] (Leeming JA).
Denshire v Roads and Maritime Services (2017) 229 LGERA 118; [2017] NSWLEC 181 at [86]-[88], [100] (Pain J).
City of Parramatta Council v Sydney Metro at [259] (Robson J); Denshire v Roads and Maritime Services at [86], [97] (Pain J).
City of Parramatta Council v Sydney Metro at [254] (Robson J); Whitcurt at [123]-[124] (Pain J).
City of Parramatta Council v Sydney Metro at [247], [256], [260] (Robson J).
City of Parramatta Council v Sydney Metro at [255] (Robson J).
The applicant's special value claim is identified in paragraphs [23]-[39], [44]-[45] of the applicant's amended points of claim (freehold). The claims of the applicant and the second respondent are addressed at various places in the applicant and the second respondent's closing submissions, including at [295]-[302], [305]-[307], [326]-[342].
In Alexandria Landfill Pty Ltd at [161]-[171] (Basten JA) (Leeming and Macfarlan JJA agreeing) a claim for special value was unsuccessful in circumstances where the appellant did not directly use the land and its claim depended on the use of the land by Dial A Dump, to which the appellant referred as its agent. See, for example the 5 August 2024 affidavit at [763]-[766], [837]-[840].
Commonwealth v Milledge (1953) 90 CLR 157 at 161(Dixon CJ and Kitto J); [1953] HCA 6; Roads & Traffic Authority of New South Wales v Blacktown City Council [2007] 1 NSWCA 20 at [54]-[55] (Spigelman CJ, Beazley and Hodgson JJA agreeing).
Alexandria Landfill at [115]-[116] (Basten JA).
Roads and Traffic Authority (NSW) v McDonald (2010) 79 NSWLR 155; (2010) 175 LGERA 276; [2010] NSWCA 236 at [40]-[42], [46] (Tobias JA, Giles JA agreeing at [1], Macfarlan JA agreeing at [146]).
The Just Terms Act does not permit double recovery: see, for example, Alexandria Landfill at [125] (Basten JA). In any event, the applicant and the second respondent's closing submissions no longer referred to “buyers agent” under this non-particularised general claim for disturbance.
At [237(C)], [238]-[249].
The applicant and the second respondent’s closing written submissions at page 49.
Croghan v Blacktown City Council (2019) NSWLR 757; [2019] NSWCA 248 at [17]-[18] (Meagher JA) McCallum JA and Simpson AJA agreeing); Dillion v Gosford City Council (2011) 184 LGERA 179; [2011] NSWCA 328 at [71] (Basten JA, Macfarlan and Handley JJA agreeing).
Dillion v Gosford City Council [2011] NSWCA 328 at [70] (Basten JA, Macfarlan and Handley JJA agreeing).
At page 49 of the applicant and the second respondent’s closing submissions.
[2021] NSWLEC 82.
(2024) 115 NSWLR 122; [2024] NSWCA 186 (Meagher, Payne, Kirk JJA).
[2010] NSWLEC 61 (Pain J).
Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111; [1995] 1 All ER 846.
At [100] (Payne JA).
Whitcurt at [140] (Pain J).
The applicant and the second respondent’s closing submissions at [95], [162], [280(D)(ii)], [284], [293(D)- (E)], [313].
Fraietta at [167]-[168] (Robson J).
Fraietta at [169]-[170] (Robson J).
(2024) 113 NSWLR 429; (2024) 258 LGERA 197; [2024] NSWCA 5.
Citing Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41 (RMS v United) at [14] (Basten JA); Sydney Metro v G&J Drivas at [109], [115]-[120] (Kirk JA, Payne JA and Griffiths AJA agreeing); see also Dibb v Transport for NSW [2024] NSWCA 157 at [168]-170] (Stern JA).
G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234 at [17], [26], [29].
(2020) 103 NSWLR 479; (2020) 243 LGERA 102; [2020] NSWCA 165 (Basten, Macfarlan and Leeming JJA).
Alexandria Landfill at [360]-[361] (Macfarlan JA), see also at [119]-[121] (Basten JA).
(2022) 108 NSWLR 503; [2022] NSWCA 108.
Olde English Tiles at [38]-[46], [76] (Basten AJA, Ward P, Gleeson and Mitchelmore JJA and Preston CJ of LEC agreeing).
Cf other unregistered interests and short term leases: Dial a Dump Industries Pty Ltd v Roads and Maritime Services (2017) 94 NSWLR 554; [2017] NSWCA 73 at [49]-[52] (Beazley P).
Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56 at [10]-[14] (Leeming JA), at [55] (White J), at [153] (Preston CJ of LEC); Chan v Cresdon Pty Ltd (1989) 268 CLR 242 at 248; [1989] HCA 63 (Mason CJ, Brennan, Deane, and McHugh JJ); Marshall v Snowy River Shire Council (1994) 7 BPR 14,447 at 14,449 (Kirby P, Meagher and Powell JJA agreeing).
Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544 at 547D-E (Glass JA, Hope JA agreeing).
Azkanaad Pty Ltd v Galanos Bros Pty Ltd [2008] NSWCA 185 at [67]-[68] (Hodgson JA), at [71]-[74] (Handley JA); Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (5th ed) at [20-115], p 671.
Watson v Anor v Delaney & Anor [1991] 22 NSWLR 358 at 363B (Clarke JA), at 366B-D (Meagher JA); Kemp v Lumeah Investments [1983] 3 BPR 97175 at 9205-9206 (Needham J); Hayes v Gunbola Pty Ltd (1986) 4 BPR 9247 at 9249 (Young J) referring to Dunedin City Corp v Searl [1916] 35 NZLR 145 at 154-5; Baxton v Kara [1982] 1 NSWLR 604 at 610D-F (Cross J).
(1989) 168 CLR 243; [1989] HCA 68.
Chan v Cresdon at 256 (Mason CJ, Brennan, Deane, and McHugh JJ).
For example at [206], [215] of the applicant and the second respondent’s closing submissions.
Butt’s Land Law (7th Ed, Lawbook Co), p. 306 [7.80]; Morley v Perpetual Trustee Co Ltd [1968] 2 NSWLR 372 at 373-374 (Sugerman JA) citing Cadogan (Earl) v Guinness [1936] 2 All ER 29; [1936] 1 Ch 515 at 517-8 (Clauson J); Bradshaw & Anor v Pawley [1980] 1 WLR 10 (Sir Robert Megarry VC).
The 5 August 2024 affidavit at 3.
The 5 August 2024 affidavit at 295 [825].
[2008] NSWCA 185.
It is correct, however, that the majority (Hodgson and Ipp JJA) decided the case on the basis that there was no binding agreement for lease, and therefore Handley AJA’s comments on specific performance were strictly obiter.
See in particular items 1-8, and 14.
Azkanaad at [67]-[68] (Hodgson JA) and at [71]-[74] (Handley JA).
Chan v Cresdon at 248 (Mason CJ, Brennan, Deane, and McHugh JJ); Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544 at 547B-C (Glass JA, Hope JA agreeing at 544F-G); Butt’s Land Law (7th Ed, Lawbook Co) at [7.260].
Because the term of the agreement is limited by reason of s 127 of the Conveyancing Act 1919.
The second respondent's special value claim is identified in paragraphs [39]-[43], [47] (below subparagraph (N)), and [48]-[50] of the second respondent’s points of claim (leasehold).
The applicant and the second respondent’s closing submissions at page 40 [302].
(2010) 241 CLR 576; [2010] HCA 49.
See also C & P Automotive at [110]: “relocation requires something to be relocated. In the case of a business, that includes the assets of the business. That includes chattels belonging to the business and tenant's fixtures.” Also at [115].
The only amendment being the insertion of a notation at the end of s 55: Energy Legislation Amendment (Clean Energy Future) Act 2024 (NSW), Schedule 5, item 5.3.
Although it may be considered to be “in substance acting legislatively”: Jackmain (a pseudonym) v The Queen (2020) 102 NSWLR 847; [2020] NSWCCA 150 at [161] (Leeming JA).
As was held by the High Court in Ha v New South Wales (1997) 189 CLR 465; [2017] HCA 34 per Brennan CJ, McHugh, Gummow, and Kirby JJ at 503-504 (footnotes omitted): “The Court was invited, if it should come to that conclusion, to overrule the franchise cases prospectively, leaving the authority of those cases unaffected for a period of 12 months. This Court has no power to overrule cases prospectively. A hallmark of the judicial process has long been the making of binding declarations of rights and obligations arising from the operation of the law upon past events or conduct. The adjudication of existing rights and obligations as distinct from the creation of rights and obligations distinguishes the judicial power from non-judicial power. Prospective overruling is thus inconsistent with judicial power on the simple ground that the new regime that would be ushered in when the overruling took effect would alter existing rights and obligations. If an earlier case is erroneous and it is necessary to overrule it, it would be a perversion of judicial power to maintain in force that which is acknowledged not to be the law. This would be especially so where, as here, non- compliance with a properly impugned statute exposes a person to criminal prosecution.” The position was more recently explained by Edelman J in Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29 at [95]-[96], referring to Ha v New South Wales: “[95] … Plainly courts do create new rights and obligations as a matter of legal effect by recognising rights or obligations that are different from a previously settled understanding or a previously settled recognition. Less obvious, but nonetheless still involving a creation of new rights and obligations by a court order, is when a party is exposed to a liability, such as to make discovery or to account, and a judicial order creates the duty to do so. [96] The point instead being made in the quoted passage from Ha v New South Wales is that when the legal effect of a judicial decision is to create a substantive right or obligation, a court achieves this by reasoning of legal principle that is "fundamentally different from the enactment of new statutory provisions" because it is explicitly or implicitly based upon an assumption that the right or obligation was "at all relevant times legally correct and an authentic legal rule". In that sense, an obligation to which the order gives effect will be based on a legal duty or liability that is held to have been "existing" at the time of the relevant event as a matter of legal principle.”
RMS v United at [97] (Basten JA, MacFarlan JA agreeing, Payne JA agreeing (subject to one qualification) at [73]).
(2014) 199 LGERA 198; [2014] NSWCA 33 (Beazley P, Gleeson JA and Preston CJ of LEC).
The applicant and the second respondent’s closing submissions at [293](C)-(E)].
(2019) 99 NSWLR 279; (2019) 236 LGERA 389; [2019] NSWCA 41.
See also C&P Automotive at [147]-[151] (Meagher, Payne, Kirk JJA).
[2021] NSWLEC 90 (Court at first instance) (Duggan J).
At [65] (Duggan J).
Olde English Tiles Australia Pty Ltd v Transport for New South Wales at [85] (Duggan J).
The Eddie Arnott Corporation Pty Ltd
Sydney Metro
(2020) 103 NSWLR 479
(2020) 243 LGERA 102
(2019) 269 CLR 333
(1989) 268 CLR 242
(1953) 90 CLR 157
(2017) 229 LGERA 118
(2017) 94 NSWLR 554
(2011) 184 LGERA 179
(2014) 199 LGERA 198
(2019) 100 NSWLR 771
(2020) 102 NSWLR 847
(2010) 241 CLR 390
(2022) 108 NSWLR 503
(2019) 99 NSWLR 279
(2010) 79 NSWLR 155
(2010) 175 LGERA 276
(1907) 5 CLR 418
(2024) 115 NSWLR 122
(2024) 113 NSWLR 429
(2024) 258 LGERA 197
(1995) 87 LGERA 239
(2004) 132 LGERA 90
(2006) 146 LGERA 249
(1999) 199 CLR 413
(2008) 233 CLR 259
(1916) 22 CLR 56
(2016) 212 LGERA 307
(2006) 149 LGERA 439
(1989) 168 CLR 243
(2010) 241 CLR 576
(1997) 189 CLR 465
(2019) 236 LGERA 389