The mere thought makes every property owner shudder – to be notified that their land is going to be compulsorily acquired by a government authority. Even though landowners are compensated for their land that is compulsorily acquired, it often leaves them with a bitter taste. The iconic Australian film The Castle is testament to what can seem a David and Goliath battle between private individuals and government authorities, and also the general reluctance of landowners to allow state or local authorities to interfere with their land.
The compulsory acquisition of land is legislated under the Constitution of Australia and can be carried out at a federal, state, territory and local government level. In Western Australia the Land Administration Act 1997 specifies the grounds on which land may be acquired, the procedures that must be followed, how a dispossessed landowner is compensated, and landowners’ rights of appeal.
Government authorities usually have legitimate grounds for compulsorily acquiring privately owned land, for instance public works such as road widening or other public infrastructure projects, including projects to improve public safety. Compulsory acquisition is also common in rural areas for public projects where there is less existing infrastructure.
There is a general perception that once a government authority decides to compulsorily acquire someone’s land there is little a landowner can do apart from try to negotiate a better compensation deal. But this does not mean that in every instance there are legitimate grounds or that the relevant government authority has followed correct procedures. Landowners should not simply bite the bullet and hand over their land.
In a landmark NSW case earlier this month, an ASX-listed residential development company successfully fought back a compulsory acquisition by the NSW government. Desane Properties owns a valuable 5274-square-metre commercial site in inner-west Sydney that it had earmarked for a $100 million, 200 apartment residential development. The NSW government had sought to compulsorily acquire Desane’s land as part of a motorway project called WestConnex. It was later revealed that the NSW government was considering the site for a car park and in fact had no firm plans to use the land for the motorway project. The NSW Court of Appeal commented that the proposed acquisition notice given to Desane was not effective as it did not clearly identify the public purpose for Desane’s land was going to be acquired.
It marks the first Australian case where an entire compulsory acquisition attempt has been overturned. It also sends a clear message that government authorities must have a legitimate and clear basis for acquiring land – it must be for a public purpose that is disclosed to the landowner. Authorities do not have free reign to acquire privately owned land on a whim. As the Desane case is a NSW judgment under NSW legislation, it does not have direct application in WA. Given the significance of the judgment, however, it may have an impact on how the notice and disclosure of purpose requirements are interpreted under the WA Land Administration Act 1997. As a consequence, government authorities may be held to a higher standard in providing notices of compulsory acquisition.
Unlike Desane, most private individuals do not have the desire or finances to challenge a compulsory acquisition through the courts. So what can a landowner do if they receive a compulsory acquisition notice? The first step is to gather as much information as possible from the government authority about the proposed acquisition. The next step is to consider obtaining professional advice from legal advisors and independent valuers. This will give you a better idea of whether the government authority is following proper procedures and whether you have been offered fair compensation. You are not alone in this process!