His Honour Justice Beasley of the Land and Environment Court has handed down his decision in Nicolaou v Minister for Education and Early Learning1, applying the Court of Appeal’s approach in Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales2 and providing further guidance on identifying the public purpose of a compulsory acquisition.
HWL Ebsworth Lawyers acted for the Minister for Education and Early Learning who had compulsorily acquired the Applicants’ land for the purposes of a school in Box Hill. The Applicants argued the acquisition was for a broader public purpose which had the effect of decreasing the value of other land owned by them.
The Court accepted the Minister’s identification of the public purpose and calculation of disturbance losses in determining the compensation amount payable to the Applicants.
Background
This case concerned the compulsory acquisition of land owned by the Applicants at 50 Terry Road, Box Hill (Acquired Land) under the Education Act 1900 (Education Act). The Applicants retained ownership of a residue portion of the parent parcel, located at the rear of the Acquired Land (Residue Land).
The Applicants commenced proceedings in the Land and Environment Court objecting to the amount of compensation offered by the Minister for the compulsory acquisition of the Acquired Land, pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act).
The (not so broad) Public Purpose
Whilst the market value of $27 million was agreed between the parties, the Applicants’ claim also included an amount of approximately $2.9 million in compensation for a decrease in value of the Residue Land said to have been caused by the carrying out, or proposal to carry out, the public purpose for which the Acquired Land was acquired. As in the Goldmate proceedings, identification of the public purpose was the primary issue in dispute.
The Applicants contended that the public purpose for which the Minister acquired their land was not only to provide a public school (as the Minister contended), but to provide a school which had recreational land at its rear (the Residue Land).
They claimed that this broader public purpose caused the RE1 (Public Recreation) zoning of the Residue Land, which in turn decreased its value on the basis it would otherwise have been zoned for residential purposes.
In arguing this broader purpose, the Applicants sought to rely upon a number of State and local government strategic planning documents and decisions, as well as communications between various government employees concerning zoning decisions and the co-location of open space and recreational land in the Box Hill area.
The Court rejected the Applicants’ approach, finding that:
- the Minister’s power to acquire land under the Education Act did not extend to a power to acquire land for the purposes of merely providing public open space in a local government area;
- the zoning decisions in relation to the Acquired Land and Residue Land were those of the Planning Minister, not the Minister for Education and Early Learning;
- the co-location of open space and recreation facilities is not evidence of a decision or purpose of the Education Minister, nor can it be seen to be related to that Minister’s public purpose for acquiring the Acquired Land. It is merely a function of a normal planning process; and
- the fact that the school is adjacent to land zoned for public open space, which may in the future be used by students of the school, did not make this part of the proposal to carry out the public purpose of the school.
Disturbance Losses and s61(b)
The Applicants were also unsuccessful in pressing their claim for disturbance losses in the order of $1.5 million relating to stamp duty and other financial loss. These claims failed as they were dependent on the Court finding that the public purpose of the acquisition had caused the Residue Land to be zoned RE1 when it would otherwise have been zoned R3 Medium Density Residential.
The decision considers, and reinforces, the operation of s61(b) of the Just Terms Act which precluded the Applicants’ claims for disturbance losses as the Minister had assessed compensation on a higher value than that reflected by the current use of the Land.
Expert Witness Code of Conduct
The Court’s judgment also highlighted a number of failures in relation to the compliance with the Expert Witness Code of Conduct by the Applicants’ experts and legal representatives which are a salient reminder to those practising in the jurisdiction.
This article was written by Danielle Le Breton, Partner, Louise McAndrew, Special Counsel and Vanessa Samaras, Solicitor.
1 Nicolaou v Minister for Education and Early Learning [2025] NSWLEC 56
2 Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales [2024] NSWCA 29
