Reported Decision : 173 LGERA 215; 76 NSWLR 464 Land and Environment Court of New South Wales CITATION : Hopkins v Palerang Council [2010] NSWLEC 16 This decision has been amended. Please see the end of the judgment for a list of the amendments. APPLICANT: Wilma Lucille Kathryn Hopkins PARTIES : FIRST RESPONDENT: Palerang Council SECOND RESPONDENT: Registrar-General of New South Wales FILE NUMBER(S) : 40722 of 2009 CORAM: Biscoe J KEY ISSUES: COMPULSORY ACQUISITION OF LAND :- by a council for purpose of widening a public road - judicial review challenge to validity - whether proceedings within jurisdiction of Land and Environment Court - whether acquisition for prohibited purpose of re-sale Land Acquisition (Just Terms Compensation) Act 1991, ss 7, 7A, 7B Land Acquisition (Just Terms Compensation) Amendment Act 2009 LEGISLATION CITED: Land and Environment Court Act 1979, s 20(1) Local Government Act 1993, ss 21, 22, 186, 187, 188, 676(1) Roads Act 1993, ss 7, 177, 178, 179 Arnold v Minister Administering the Water Management Act 2000 [2008] NSWCA 338, (2008) 73 NSWLR 196 Arnold v Minister Administering the Water Management Act 2000 [2007] NSWLEC 531, (2007) 157 LGERA 379 CASES CITED: Mac's Pty Ltd v Minister Administering the Local Government Act 1993 [2007] NSWLEC 623, (2007) 155 LGERA 362 Minister for Public Works v Duggan [1951] HCA 29, (1951) 83 CLR 424 R & R Fazzolari Pty Ltd v Parramatta City Council [2009] HCA 12, (2009) 237 CLR 603 Thompson v Randwick Corporation [1950] HCA 33, (1950) 81 CLR 87 DATES OF HEARING: 1 - 2 February 2010 DATE OF JUDGMENT: 10 February 2010 APPLICANT: Ms D Reid SOLICITORS Jack C Herrald LEGAL REPRESENTATIVES: FIRST RESPONDENT: Mr J Ayling SC with Mr A Hyam SOLICITORS Commins Hendriks SECOND RESPONDENT: No appearance JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES BISCOE J 10 February 2010 40722 of 2009 HOPKINS v PALERANG COUNCIL & ANOR JUDGMENT 1 HIS HONOUR: The applicant, Wilma Hopkins, claims by way of judicial review that the respondent Palerang Council's compulsory acquisition of part of her rural land purportedly for the purposes of widening a public road is invalid because in fact it was acquired for the purpose of re-sale contrary to a statutory prohibition. 2 There is a preliminary issue as to whether this Court has jurisdiction over the proceedings. 3 In my opinion, the application should be dismissed because this Court does not have jurisdiction nor was the acquisition for the purpose of re-sale. BACKGROUND 4 The applicant owns rural land known as 311 Rossi Road, Rossi, NSW. The land comprises two adjacent lots divided by Galvins Creek and by a section of a Crown road reserve. 5 Galvins Creek Road, as it has historically been used, lies partly over the Crown road reserve and partly over a track on the applicant's land. The track forms a loop above and joining a section of the Crown road reserve. In this way, for many years, the track functioned informally as a road giving access to a number of properties. The evidence suggests that the road diverted over the track from the Crown road reserve to avoid difficult terrain. The track was maintained by the council but the maintenance ceased when notice was given to the council by the applicant's solicitors in December 2007 that access to the council for this purpose was denied: see [8] below. 6 The council wishes to provide trafficable access for the owners of the other properties. It therefore proposes to re-route Galvins Creek Road south of most of the track, over an unused portion of the Crown road reserve and to widen that portion by an adjacent portion of the applicant's land which it compulsorily acquired in November 2009: see [16] below. 7 On 8 May 2007 the council wrote to the applicant proposing the establishment of a new council public road over the track on her property and closing of the unused portion of the Crown road reserve. The applicant did not agree to this proposal. 8 In December 2007 the council issued a notice to the applicant advising of an intention to carry out maintenance work on the track on her property. Later that month the applicant's solicitor replied stating that she would not consent to the council entering to maintain the track. 9 On 19 February 2008 the council wrote a letter to the applicant's solicitor with an alternative proposal for acquisition of a portion of the land adjacent to the unused Crown road reserve. The letter stated: "Whilst it remains Council's preference to continue with the road in its current alignment it is prepared to consider your client's suggestion to develop a new road over the existing crown road reserve located at the southern boundary of Lot 75 DP 754910. As part of this consideration, Council would seek a more modest acquisition of your client's property by way of road widening, similar to that shown on the attached map. The purpose of this acquisition would be to both preserve, as much as possible, an existing stand of advanced trees within the current crown road reserve and also correct an encroachment of an existing building associated with an adjacent property. The proposal has the added advantage in that it minimises the extent of new road construction in that it at least permits some use of the existing private track." 10 On 16 December 2008 the council registered a deposited plan which is titled, "Plan of land proposed to be acquired for the purposes of the Roads Act 1993". 11 On 5 March 2009 the council resolved to compulsorily acquire the applicant's subject land "under the Land Acquisition (Just Terms Compensation) Act 1991 for the purposes of the Roads Act 1993". 12 On 17 June 2009 the Minister for Local Government approved the council giving "a proposed acquisition notice in respect of the land under s 178(2) of the Roads Act 1993". 13 On 3 August 2009 the council gave the applicant a proposed acquisition notice, as required by the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act). It described the land by reference to the deposited plan to which I have referred earlier. It said that the acquisition was for "a public purpose". It did not identify the statute which empowered the acquisition. 14 In October 2009 the applicant commenced these proceedings challenging the lawfulness of the council's proposed acquisition notice and seeking an injunction to restrain the council from taking any further steps to compulsorily acquire the land. The applicant obtained an interlocutory injunction to that effect. 15 In November 2009 consent orders were made discharging the interlocutory injunction and giving directions towards a final hearing. At that time it was anticipated that the council would proceed with the compulsory acquisition and that the final hearing would be concerned with the validity of the compulsory acquisition. That is what eventuated. 16 On 27 November 2009, pursuant to the procedures in the Land Acquisition (Just Terms Compensation) Act, the council acquired the applicant's land by publishing a notice of compulsory acquisition in the NSW Government Gazette. Under the council's name, the notice was headed "Roads Act 1993". The notice said that the acquisition was "for the purposes of widening a public road". MERITS 17 The merits of the acquisition are irrelevant to the legal issues, but in order to understand what is driving the litigation it is necessary to appreciate that the parties see the merits of the acquisition through different lenses. 18 The applicant is disgruntled by the acquisition because her neighbour to the south of the Crown road reserve, who has a much larger piece of land than the applicant, has constructed a shed and planted trees, which are now well established, on part of the unused Crown road reserve allegedly without council approval, and the council has preferred the compulsory acquisition of her land to provide trafficable access instead of using the Crown road reserve and removing the unauthorised shed and trees. The applicant thinks this is unfair because, as she sees it, the neighbour is thereby deriving a benefit from his allegedly unauthorised conduct and the council is deriving a benefit in not having to remove the unauthorised objects, whereas she has done no wrong but has been deprived of part of her land. The applicant also complains (in closing submissions) that the acquisition includes a relatively small severed piece of her land between the proposed new alignment of the road and the neighbour's land to the south which could have been avoided if the proposed new road alignment had been re-routed a little to make it adjoin the Crown road reserve. The applicant suggests that as a practical matter this severed piece is likely to be used by her southern neighbour who will thereby also derive a benefit. 19 On the other hand, the council's unchallenged evidence is that to change the course of the existing road to the alignment of the Crown road would cause the council great difficulty and expense; that the acquisition will enable the council to straighten the alignment of the road and maintain the same road width as the existing road reserve; that the acquisition will incorporate part of the existing track into the proposed new road thus lessening the length of the road to be constructed and saving costs; and that the council decided that this was the most practical option given that the only other option was to make use of the existing Crown road requiring demolition of the shed and removal of a number of large trees. JURISDICTION 20 It is common ground that this Court has jurisdiction if the land was acquired under the compulsory acquisition power in the Local Government Act 1993 but not if it was acquired under the compulsory acquisition power in the Roads Act 1993. The applicant submits that the acquisition was made under the compulsory acquisition power in both Acts and therefore this Court has jurisdiction under the Local Government Act. The council submits that it was made only under the power in the Roads Act and therefore there is no jurisdiction. 21 On the applicant's argument, the compulsory acquisition was pursuant to s 186 of the Local Government Act, the land was acquired for the purpose of re-sale contrary to s 188(1), and this Court has jurisdiction to grant relief pursuant to s 676(1). The Local Government Act relevantly provides: " 186 For what purposes may a council acquire land? (1) A council may acquire land (including an interest in land) for the purpose of exercising any of its functions. (2) Without limiting subsection (1), 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 which forms part of, or adjoins or lies in the vicinity of, other land proposed to be acquired under this Part. … 187 How does a council acquire land? (1) Land that a council is authorised to acquire under this Part may be acquired by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1991. (2) A council may not give a proposed acquisition notice under the Land Acquisition (Just Terms Compensation) Act 1991 without the approval of the Minister. 188 Restriction on compulsory acquisition of land for re-sale (1) A council may not acquire land under this Part by compulsory process without the approval of the owner of the land if it is being acquired for the purpose of re-sale. 676 Functions of the Land and Environment Court (1) If the Land and Environment Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach." 22 Section 186(1) refers to a council's "functions". Under the Local Government Act a council has the functions conferred or imposed under that Act or any other Act or law: ss 21, 22. Therefore, the applicant submits, the "functions" referred to in s 186(1) include functions under the Roads Act. Road widening is a function of a council as a roads authority under the Roads Act. Therefore, the applicant submits, the council was empowered by s 186(1) to acquire the applicant's land for that purpose. 23 On the council's argument, the compulsory acquisition was pursuant to s 177 of the Roads Act, and this Court has no jurisdiction because there is no provision in the Roads Act similar to s 676 of the Local Government Act and the list of matters over which the Court has jurisdiction in class 4 proceedings set forth in s 20(1) of the Land and Environment Court Act 1979 does not mention the Roads Act or the Just Terms Act. The Roads Act relevantly provides: " 7 Roads authorities (1) The RTA is the roads authority for all freeways. (2) The Minister is the roads authority for all Crown roads. (3) The regulations may declare that a specified public authority is the roads authority for a specified public road, or for all public roads within a specified area, other than any freeway or Crown road. (4) The council of a local government area is the roads authority for all public roads within the area, other than: (a) any freeway or Crown road, and (b) any public road for which some other public authority is declared by the regulations to be the roads authority. (5) A roads authority has such functions as are conferred on it by or under this or any other Act or law. 177 Power to acquire land generally (1) The Minister, the RTA or a council may acquire land for any of the purposes of this Act. (2) Without limiting subsection (1), the Minister, the RTA 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. 178 Procedure for acquiring land (1) Land that is authorised to be acquired under this Division may be acquired by agreement or by compulsory process in accordance with the Land Acquisition (Just Terms Compensation) Act 1991. (2) A council may not give a proposed acquisition notice under the Land Acquisition (Just Terms Compensation) Act 1991 without the approval of the Minister. 179 Restriction on compulsory acquisition of land for resale (1) Land may not be acquired by compulsory process under this Division without the approval of the owner of the land if it is being acquired for the purpose of re-sale. (2) However, the owner's approval is not required if the land forms part of, or adjoins or lies in the vicinity of, other land acquired at the same time under this Division for a purpose other than the purpose of re-sale or if the land is proposed to be RTA development land." 24 It can be seen that ss 186 – 188 of the Local Government Act are very similar to ss 177 – 179 of the Roads Act but that there is no provision in the Roads Act similar to s 676(1) of the Local Government Act which empowers this Court to grant relief. 25 The applicant cites R & R Fazzolari Pty Ltd v Parramatta City Council [2009] HCA 12, 237 CLR 603. There the High Court held that a local council's power to compulsorily acquire land already vested in the council arose not under s 186(1) of the Local Government Act but under s 7B of the Just Terms Act, which provides that: "An authority of the State that is authorised by law to acquire land by compulsory process in accordance with this Act may so acquire the land even if the land is vested in the authority itself." Subsequently, the NSW Parliament reversed that decision by the Land Acquisition (Just Terms Compensation) Amendment Act 2009 which substituted a new s 7. Subsection 7(2) provides that, "The power of an authority of the State to acquire land under another Act is affected by sections 7A and 7B of this Act. Any such acquisition to which section 7A or 7B applies remains, for all purposes, an acquisition of land under and subject to that other Act" (s 7A relates to native title). The explanatory note to the Bill for the 2009 Amending Act stated in relation to the substituted s 7: "Accordingly, the acquisition is limited to the purposes for which land may be acquired by compulsory process under that other Act and other relevant rights and obligations in that other Act will continue to apply to the authority. In the case of the acquisition of land by councils, the applicable provisions are found in sections 186 to 190 of the Local Government Act 1993 (those provisions will now extend to compulsory acquisitions of native title rights and interests and of roads and other land vested in the council)." 26 Fazzolari is distinguishable, as are the comments in the explanatory note relating to the Local Government Act, because they were not concerned with the acquisition of land for the purposes of widening a public road, as in the present case. 27 As widening of public roads is a purpose of the Roads Act, the council as the roads authority is specifically empowered by s 177(1) of the Roads Act to acquire the applicant's land for that purpose. 28 Prima facie, s 186(1) may appear wide enough to empower a council to acquire land for the purpose of exercising any of its functions under the Roads Act and, therefore, to empower the acquisition of the applicant's land for that purpose. 29 However, the council submits that the Roads Act is the exclusive repository of a compulsory acquisition power for the purpose of the Roads Act when regard is had to the context that both statutes were enacted at the same time in 2003; the fact that public road provisions are all located in the Roads Act; and the absence of any reason for the legislature to have enacted two acquisition power provisions for the purposes of the Roads Act, one under s 177(1) of the Roads Act the other under s 186(1) of the Local Government Act. I accept the submission. 30 In my opinion, the preferable construction is that the reference in s 186(1) to a council's "functions" does not include the functions of a council in its capacity as a roads authority under the Roads Act. Accordingly, the only power to acquire the applicant's land for the purpose of widening a public road was under the Roads Act. 31 If I am in error and there are two sources of power to acquire the applicant's land, it is evident from the terms of the gazetted acquisition notice and the terms of the Minister's approval, that the council chose to acquire the applicant's land under the Roads Act and not under the Local Government Act: see [12] and [16] above. If there are two sources of power, the words of the prohibition in s 188(1) of the Local Government Act that a council may not acquire land "under this Part" and in s 179 of the Roads Act that land may not be acquired by that compulsory process "under this Division" suggest that a council may choose to exercise its power of compulsory acquisition under either one of those statutes. 32 For these reasons, in my opinion, the Court has no jurisdiction over this matter. 33 The applicant's case has foundered on a slippery jurisdictional rock. It is difficult to see why jurisdiction in relation to compulsory acquisition (and perhaps generally) under the Local Government Act and under the Roads Act should be vested in different courts given the similarity of their compulsory acquisition provisions. The legislature might wish to consider whether the Roads Act jurisdiction should also be vested in this Court. RE-SALE 34 As the applicant has failed on the jurisdictional issue it is unnecessary to decide the substantive issue whether the acquisition was for the purpose of re-sale. However, as the substantive issue was fully argued and in case I am in error on the jurisdictional issue, I propose to determine it. That it is open to the Court to take such a course was implicitly accepted by the Court of Appeal in Arnold v Minister Administering the Water Management Act 2000 [2008] NSWCA 338, 73 NSWLR 196. In that case the primary judge summarily dismissed proceedings against the Commonwealth on three grounds: the Court had no jurisdiction to grant the relief sought; the applicant did not have standing to seek the relief sought; and the proceedings disclosed no reasonable cause of action or were frivolous and vexatious (at [5]; and see the primary decision Arnold v Minister Administering the Water Management Act 2000 [2007] NSWLEC 531, 157 LGERA 379). The Court of Appeal held that this Court did have jurisdiction but otherwise upheld the primary judge (there has been an appeal to the High Court where judgment is reserved). 35 The applicant submits that the acquisition was for the purpose of re-sale because (a) her neighbour to the south will benefit in a practical sense in that he will continue to use the part of the Crown land on which there is an unauthorised shed and trees and is also likely to use the severed, relatively small piece of the acquired land south of the proposed realigned road; (b) by reason of those benefits the neighbour will receive valuable consideration, as will the council from the benefit that it will avoid the cost of demolition of the shed and trees on the Crown road reserve it would have incurred if it had been developed as the new road; and (c) the acquisition is unnecessary because the Crown road reserve is more than adequate for the creation of the proposed road: Fazzolari; Thompson v Randwick Corporation [1950] HCA 33, 81 CLR 87; and Minister for Public Works v Duggan [1951] HCA 29, 83 CLR 424. The applicant submits that the concept of "re-sale" in the statutory prohibition should be extended to include this situation. 36 I do not accept the applicant's submission. In my opinion, it extends the concept of "re-sale" beyond the meaning that it is capable of bearing. "Re-sale" would be the purpose of the acquisition if the council's purpose was to dispose of the acquired land (including by way of transfer or declaration of trust) to a third party, such as the southern neighbour, for money or other valuable consideration: Fazzolari at [49] - [50] and [97] – [100]. There is no evidence that that was its purpose. 37 According to the evidence, the council's purpose was to retain the acquired land for the purposes of road widening. It is true that the relatively small, severed piece of the acquired land on the southern side of the proposed new road alignment appears to be surplus to that requirement, but its acquisition is authorised under s 177(2)(b) of the Roads Act or (if applicable) s 186(2)(b) of the Local Government Act. Since it is severed under the proposed realignment, it is unsurprising that the council would acquire it. 38 Thompson and Duggan were decided under an earlier legislative scheme and are distinguishable. Those cases, the legislation under which they were decided and the subsequent history of legislative changes were analysed by me at first instance in Fazzolari under the name Mac's Pty Ltd v Minister Administering the Local Government Act 1993 [2007] NSWLEC 623, 155 LGERA 362 at [253] – [256]. In Thompson a council proposed to resume land for the purpose of road widening as well as additional land for the purpose of re-sale at a profit in order to reduce the cost of road widening. The High Court restrained the resumption. It was held that taking the land needed for the construction of the road was permissible as well as taking land adjoining or in the vicinity, but only if it could be shown that the additional land was necessary or incidental to the main purpose. In Duggan, a council proposed to resume land for parks and roads and additional land for the purpose of subdividing and selling it and applying the proceeds towards the cost of the scheme. It was held that the council was not empowered to acquire the last-mentioned land. 39 It is true, as the applicant says, that the acquisition of the relatively small, severed piece of the acquired land to the south of the proposed road could be avoided if the proposed road were to be realigned so that it bordered the whole of the existing Crown road reserve. But that is to descend into the merits of the acquisition in a way which is not permissible unless it were to be attacked on the high hurdle of Wednesbury unreasonableness, for which the applicant does not contend. If such an attack had been launched, it would have had to overcome the unchallenged council evidence referred to at [19] above. COSTS 40 I accede to the applicant's request that costs be reserved. In that regard, she says that she launched this litigation on the basis that the proposed acquisition was under the Local Government Act and therefore was within the jurisdiction of this Court; and that the council encouraged or acquiesced in that assumption until November 2009 (on the occasion that the interlocutory injunction was discharged) when, according to the applicant, the council first indicated that the proposed acquisition was under the Roads Act. ORDERS 41 The orders of the Court are as follows: (a) the amended summons is dismissed. (b) costs are reserved. Any costs application is to be made within seven days by letter to the Registrar, otherwise there will be no order as to costs. (c) the exhibits may be returned. 25/01/2011 - incorrect section cited - Paragraph(s) 21 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.