Gregory Ross, an Accredited Specialist in Government and Administrative Law and a Partner at Eakin McCaffery Cox Lawyers, reflects on a recent case involving major transport infrastructure project WestConnex, which he says was somewhat of an embarrassment for the Government: public relations-wise, commercially and legally.
Plus ça change, plus c’est la même chose: The Difference between being within Power and for a Proper Purpose
When you have been doing Government related legal work as long as I have, the cyclicality of issues in Government and the reality of the French maxim “Plus Ca Change, Plus Ca Meme Chose” comes home to roost.
The decision in April 2018 in Desane Properties Pty Limited v State of New South Wales NSWSC 553 (the Desane Decision) brought those words back to my mind. The decision is something of an embarrassment for Government, both public relations wise, commercially and legally.
The case involved a challenge to a compulsory acquisition under the Land Acquisition (Just Terms) Compensation Act 1991, by the roads authority in connection with certain freeway works to the inner west of Sydney with the land in question being at Rozelle.
The works in question are but a part of a much larger complex of freeway works being organised by the State government but effectively built by the private sector.
Under the Roads Act 1993, Section 177 [Endnote 1] the authority has power to compulsorily acquire land in connection with relevant road related projects where a consensual negotiated purchase arrangement cannot be completed.
The roadway projects in question have been the subject of much public and political discussion and refinement which led to a certain fluidity and uncertainty in intentions of the roads authority at the time that it gave the notice of intention to acquire under the Land Acquisition (Just Terms) Compensation Act 1991.
Within Power v Proper Purpose
The Court concluded that the particular piece of land was actually intended, long-term, for use as parks and gardens adjacent to the roadworks but that, at the relevant time, its intended use was not sufficiently roadworks related to be a valid compulsory acquisition purpose, having regard to the terms of the acquisition power of the roads authority under the law.
The power to acquire for road purposes was not doubted but the purpose of the particular acquisition was found to be for “parks and gardens”, not road purposes.
In coming to this conclusion the Court cited the old case of Samrein Pty Limited v Metropolitan Water, Sewerage and Drainage Board (1982) 56 ALJR 678 at 679 which clearly lad down the law in 2982.
That case laid down the principle that an attempted exercise of power by the Crown or a statutory authority, otherwise within the broad terms of power held, can be voided if a challenged purpose was not the sole purpose of the acquisition but a major motivation not amounting to a proper purpose.
In the Desane decision, the court said “it will be an abuse of RMS’ powers of the ulterior purpose is a substantial purpose in the sense that no attempt would have been made to acquire the land if it did not been desired to achieve the unauthorised purpose”. [Endnote 2]
As noted above, the decision amounts to a significant embarrassment for Government. It is not simply losing and possibly being exposed to a higher claim for compensation on the particular acquisition (and the Court required the parties to come back to Court with draft Orders to resolve the matter), but, in the context of ever increasing outsourcing of functions to the private sector, the case highlights the tension between going to market too soon, with no fixed idea of what is to be built, and the Law’s requirement for relative certainty of purpose when exercising a compulsory acquisitions power.
The case reinforces the need for practitioners advising Government (including both State Agencies and NSW Local Government), that, when considering any exercise of power by such an authority, particularly a compulsory acquisitions power, to examine the facts to compare the actual purpose of the acquisition with the source of power and its precise wording at the time of exercise to ensure compliance with both the letter and spirit of the Law.
1. 177 Power to acquire land generally.
(1) The Minister, RMS or a council may acquire land for any of the purposes of this Act.
(2) Without limiting subsection (1), the Minister, RMS or a council may acquire:
(a) land that is to be made available for any public purpose for which it is reserved or zoned under an environmental planning instrument, or
(b) land that forms part of, or adjoins or lies in the vicinity of, other land proposed to be acquired for the purpose of opening, widening or constructing a road or road work.
(3) Without limiting subsection (1), RMS may also acquire land that it proposes to declare to be RMS development land.
2. Hammerslag J Desane Properties Pty Limited v State of New South Wales  NSWSC 553 at paragrapgh 282.
Gregory Ross has been a Partner at Eakin McCaffery Cox Lawyers since 2010 and was Special Counsel at the firm between 2001 and 2008. Prior to his return as Partner he was Special Counsel at Shaw Reynolds Bowen & Gerathy and has had a part-time appointment with the Independent Commission Against Corruption.
Gregory’s legal practice reflects his many years of legal, commercial, policy and probity experience in NSW and beyond. As an Accredited Specialist in Government and Administrative Law, Gregory advises government bodies to develop legislation, contracting and process arrangements.
He also leads the firm’s Intellectual Property practice, advising on issues including copyright, licensing, trademarks and confidentiality agreements. He advises on contracts with entities and enforcement of IP rights in India.
Contract Gregory at Ross@eakin.com.au