Its all for the public benefit – North Sydney Council Awarded $481k for temporary loss of public open space
In the recent case of North Sydney Council v Transport for New South Wales [2024] NSWLEC 100, compensation arising from the acquisition of crown land under section 2.24(3)(b) of the Crown Land Management Act 2016 (CLM Act), was considered judicially for the first time.
About the case
The case involved the compulsory acquisition by Transport for NSW (TfNSW) of leasehold interests over three parkland areas in North Sydney being parts of Cammeray Park (including the Cammeray Golf Course), ANZAC Park and St Leonards Park. The public purpose of the acquisition is to facilitate critical State significant infrastructure being the Warringah Freeway Upgrade and Western Harbour Tunnel project (Project).
Following the acquisition, the Valuer-General determined the amount of compensation in respect of the acquired land as at $35,003, comprising $3 for market value pursuant to section 55 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) and $35,000 for disturbance pursuant to section 59 of the Just Terms Act. North Sydney Council (Council), as the Crown Land Manager, objected to the determination of compensation and appealed to the Land and Environment Court (Court). However, that section did not apply to the assessment of compensation in this case. Rather, the operative provision section 2.24 of the CLM Act applied.
Under section 2.24, the Council made three separate claims. Relevantly the Council claimed $11,547,730 under section 2.24(3)(b) as the amount of loss arising from a reduction in open space resulting in loss of health benefits, reduction in property value and deprivation of use of acquired open space (Public Benefit Claim).
In response to Council’s Public Benefit Claim, TfNSW argued:
- that its obligation to provide a net increase in open space pursuant under the approval for the Project, was a relevant consideration in determination of Council’s claim for compensation;
- the Council had not identified with a degree of precision that there was a reduction in public benefit for losses under section 2.24(3)(b) to arise; and
- the Council was only entitled to compensation if the loss was quantifiable loss, and a loss occasioned to Council as the Crown Land Manager as opposed to an entitlement to compensation for loss experienced by those for whom the Crown land was managed.
Court’s finding
The Court rejected all the above arguments finding that:
- TfNSW’s obligations under the approval for the Project did not affect the determination of compensation;
- in the circumstances of the case where open space has been lost and that open space provides for a generalised use such as recreation, a reduction in the quantum reduces the public benefit; and
- importantly, that on proper construction of section 2.24(3)(b) loss is not limited solely to a loss in the hands of the Crown Land Manager, or a quantifiable financial loss.
Valuing the loss proved to be a difficult task with various methods put forward and rejected by the Court. Ultimately the Court found the appropriate method was to estimate a ‘recreational rental value’ for the acquired land. Applying this methodology, the Court awarded Council total compensation in the sum of $481,813, a far cry from the Valuer-General’s determination of $1 but a further cry from the Council’s original claim of $11,547,730.
Key takeaways
This case not only highlights the complexities in valuing interests in land but also balancing competing public interests, on the one hand the public interests in the Project and on the other, maintaining public open space.
With thanks to Emelia Coe, Graduate, for her contributions to this article.
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