Transport for NSW caught short-changing landowners in bombshell court decision

A landmark decision could cost the government hundreds of millions of dollars with the High Court ruling Transport for NSW has been short-changing property owners when acquiring land for major infrastructure projects.

NSW Premier Chris Minns and Treasurer Daniel Mookhey, who said it was too early to say how the legal ruling would impact the cost of delivering new infrastructure. Picture: Gaye Gerard

Transport for NSW has been short-changing property owners when compulsorily acquiring land for major infrastructure projects, pushing through “low-ball” compensation payments based on “spurious” legal principles.

A bombshell court decision could now blow a hole in the budget worth hundreds of millions of dollars, with the state government agency forced to rethink how it values land it wants to seize to build new roads.

A handful of land acquisitions worth more than $700m could be impacted, after the High Court blocked Transport for NSW (TfNSW) from appealing a landmark legal judgment.

The saga began in April 2021, when TfNSW moved to acquire 14 hectares of land in Luddenham from developer Goldmate Property to build the new M12 motorway.

The land was part of 31 hectares Goldmate purchased four months earlier for $33m.

While TfNSW argued it only needed to pay $4m in compensation to acquire the land, Goldmate argued it was worth $55m.

TfNSW ultimately won a legal battle in the Land and Environment Court, in a ruling which drastically impacted the value of compensation offered to other landowners.

Goldmate challenged the judgment, with the Court of Appeal last year overturning the original decision, which it said was based on errors of law.

Urban Taskforce chief executive Tom Forrest said: “TfNSW has sought to overcome its own budgetary difficulties associated with blowouts and costs by low-balling their offers to landowners.” Picture: Jonathan Ng

TfNSW tried to take the case all the way to the High Court, arguing that if the Court of Appeal decision stood, it would be forced to revisit some $727m worth of land acquisitions.

The High Court threw out that application earlier this year, in a move Urban Taskforce chief executive Tom Forrest likened to the iconic movie The Castle.

The arguments related to how courts valued land acquired by the government to build infrastructure.

“TfNSW has sought to overcome its own budgetary difficulties associated with blowouts and costs by low-balling their offers to landowners, and they’ve been called out by both the Court of Appeal and the High Court of Australia,” Mr Forrest said.

Mr Forrest said the agency was caught out “trying to trick people into taking a lower amount of compensation under an unlawful interpretation of the act”.

One Western Sydney resident whose land was later acquired for the Aerotropolis told The Daily Telegraph that, following the original Goldmate judgment, TfNSW drastically cut the amount of money it was willing to pay for his property.

The court decision means TfNSW will be forced to revisit $727 million worth of land acquisitions. Picture: Tim Hunter.

The resident did not wish to be identified because he is still fighting for higher compensation.

He said that when the Court of Appeal threw out the original Goldmate decision, the compensation he was offered for his land doubled.

In an interview ahead of Tuesday’s budget, Treasurer Daniel Mookhey said it was too early to say how the legal ruling would impact the cost of delivering new infrastructure.

“We’re still evaluating the judgment and what the consequences of the judgment means,” he said.

“We need to do the work to see what potential acquisitions may have been impacted in the past and whether or not it has issues going forward too.”

Mr Mookhey suggested the government may need to look at reforming legislation governing compulsory acquisitions to fix the problem.
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Originally published as Transport for NSW caught short-changing landowners in bombshell court decision