Transport for NSW Caught Shortchanging Landowners in Bombshell Court Decision

As reported in the Daily Telegraph on Tuesday, the High Court of Australia recently refused leave to hear Transport for NSW’s application to set aside the Court of Appeal’s decision in Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWCA 292.

Following the green-light for the construction of the Western Sydney Airport, Transport for NSW started acquiring land in the region for the construction of the proposed new M12 motorway which would link the new airport with the existing M7 motorway in a process that has impacted hundreds of property owners.

In 2020, Goldmate (the landowner of the relevant land) purchased 31 acres of land in Luddenham for around $33 million.  In 2021, Transport for NSW issued a notice to acquire 14 hectares of this land for the proposed M12 motorway. At the same time, the land was rezoned from rural land to Enterprise under the provisions of State Environmental Planning Policy (Western Sydney Aerotropolis) 2020. This zoning changed significantly increased the value of the previously rurally-zoned land.

In valuing the 14 acres it was to acquire (and for which it was required to pay just compensation to Goldmate), Transport for NSW argued that the purpose of the acquisition was part of the broader Western Sydney Airport development and thus any uplift in value of the land due to the fact it was in proximity to the new airport (including its new zoning) should be disregarded. On that basis, it valued the acquired land at $4m.

Goldmate’s position was that the acquisition was for the construction of the M12 – not the airport. Whilst the road was to link the new airport with the M7, Transport for NSW’s power to acquire the land was for the purpose of roads and did not extend to wider objectives like the economic development of the Western Sydney Airport region. On that basis, it valued the acquired land at $55m.

There is a long-standing principle (and legislative requirement) which requires that in valuing acquiring land, any increase or decrease in the value of the land as a result of the public purpose for which the land was acquired must be disregarded. The question to be determined was – what was the public purpose?

In the initial Land and Environment Court decision, the judge determined that Transport for NSW’s public purpose in acquiring the parcel of land as part of the larger infrastructure plan around the construction of the Western Sydney Airport, rather than being confined to the construction, operation and maintenance of the M12. As such, the increase in value of the property which resulted from the rezoning had to be disregarded, and the value of the land was assessed at $9m.

Goldmate appealed this decision to the Court of Appeal, which unanimously decided that the judge in the Land and Environment Court had made an error in finding that the public purpose included the broader infrastructure plans surrounding the construction of the new airport. The Court made it clear that the public purpose must fall within the public purpose or purposes for which Transport for NSW (or any acquiring authority) has power to acquire land.

In this case, Transport for NSW’s power to acquire the land was contained in the Roads Act 1993 – meaning the public purpose could only be for the construction of the M12. It had no power to acquire land for other purposes (such as the wider development of the Western Sydney Airport) and therefore, the increase in value due to the rezoning should not have been disregarded.

Transport for NSW immediately lodged a special leave application to the High Court of Australia. This application was refused, leaving the decision in the Court of Appeal standing.

As reported by the Daily Telegraph, part of Transport for NSW’s argument in seeking leave to have the matter heard before the High Court was that it could be ‘forced to revisit some $727m worth of land acquisitions”. This indicates that there are potentially hundreds of landowners who were the subject of a similar argument by Transport for NSW when land was acquired for the M12, who were potentially not offered just compensation for that acquisition.

With infrastructure projects in and around Sydney currently booming (for example, the Sydney Metro as well as the aforementioned new Western Sydney Airport and associated infrastructure projects) the NSW Government is in the process of acquiring land from hundreds of landowners. The implication of the Goldmate decision is ground-breaking, and reinforces that landowners who have been approached by the Government to have their land acquired should seek legal advice to ensure that they receive just compensation.

Hones Lawyers are experienced compulsory acquisition specialists. Our team is uniquely positioned to guide you through the legal, valuation and strategic aspects of the compulsory acquisition process.

If your property is subject to acquisition and you want to secure the highest possible compensation, contact Hones Lawyers today for a free 15 minute consultation with one of our land acquisition experts