The NSW Land and Environment Court has rejected a claim for compensation for disturbance, reinstatement costs or special value on the basis that the applicant only had a limited leasehold interest and did not own critical infrastructure.

Snapshot

  • The owner of a golf driving range business sought compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act) for the fit-out costs of a new golf driving range facility, relocation costs and lost profits.
  • The NSW Land and Environment Court rejected the claim on the basis that the applicant only had a short-term leasehold interest in the land and did not own the critical infrastructure required for the business.
  • This case highlights the importance of focusing on the nature of the acquired interest in compulsory acquisition cases.

Facts

The Trustee for Whitcurt Unit Trust (Whitcurt) conducted a golf driving range business at Tempe. The Inner West Council (Council) owned both the land and the critical infrastructure required for the business, such as nets, lights and buildings. Whitcurt occupied the land under an expired unregistered lease terminable on two months’ notice.

After the Sydney Gateway Project was announced, Whitcurt successfully tendered for a licence to establish a golf driving range at Campbelltown. Under the licence, Whitcurt would construct the new facility at its expense.

Transport for NSW (TfNSW) then compulsorily acquired the Tempe land. Whitcurt appealed the Valuer-General’s determination of compensation to the Land and Environment Court.

The claim

Whitcurt and TfNSW agreed that Whitcurt was entitled to compensation for legal and valuation costs.

In addition, Whitcurt claimed compensation for:

  • fit-out of a new facility at Campbelltown;
  • ancillary relocation costs (such as advertising); and
  • loss of profits during relocation.

Whitcurt claimed these amounts in the alternative as disturbance (ss 55(d) and 59(1)(c)), equivalent reinstatement (ss 55(a) and 56(3)) or special value (ss 55(b), 57)).

Decision

The Court held that Whitcurt was not entitled to any compensation beyond the agreed legal and valuation costs.

Pain J first dismissed Whitcurt’s claim for disturbance under ss 55(d) and 59(1)(c):

  • Whitcurt was not entitled to the fit-out costs because it only had a limited leasehold interest and did not own the critical infrastructure required for the business.
  • The ancillary relocation costs did not arise — as the costs of the critical equipment were not claimable, whether the business could relocate was in doubt.
  • As the fit-out and relocation costs were not compensable, it was difficult to see how relocation and therefore loss of profits could arise. Pain J did not find it necessary to decide whether loss of profits is claimable under s 59(1)(c) as a matter of law.

Her Honour then dismissed Whitcurt’s alternative claims, in each case on the basis of Whitcurt’s limited interest.

Implications

This case highlights the importance of focusing on the acquired interest in compulsory acquisition cases. If the interest is a limited one (such as a lease terminable at will on short notice), then the acquiring authority will only need to pay compensation for that limited interest, which could have a nil or nominal value.

If you have any questions about what this case means for you, please do not hesitate to get in touch with us.

By Peter Briggs, Partner, Daniel Webster, Senior Associate and Zhongwei Wang, Solicitor

Peter Briggs
Peter Briggs
Partner, Sydney
+61 2 9225 5155
Daniel Webster
Daniel Webster
Senior Associate, Sydney
+61 2 9225 5556

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Peter Briggs
Peter Briggs
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Rebecca Davie
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Daniel Webster
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Tom Dougherty
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