Compulsory Acquisitions- Case Law Update
By Phillip Leaman
15 June 2021
Caradi Pty Ltd v Secretary to the Department of Transport  VSCA 197 (5 August 2020) an appeal from SECRETARY TO THE DEPARTMENT OF ECONOMIC DEVELOPMENT, JOBS, TRANSPORT AND RESOURCES V. CARADI PTY LTD  VSC 696
The Original Decision
The Authority initially made an offer of $16.15 million as compensation for the market value of the land. Caradi claimed $56 million.
The Court found that the market value of the land was $25.3 million, adopting the evidence of the Authority’s valuers. The valuations conducted on behalf of the Claimant were unduly influenced by the state of the market in the period after the acquisition and commenced from a ‘rear-view mirror’ starting point, as their valuations were undertaken many months after the date of acquisition. Undue weight was put on an incomplete transaction for a property valued at $55.5 million in 2014. Apart from legal costs the Court ordered non-pecuniary loss suffered by way of solatium awarding a nominal sum of $50,000 (the amount claimed was $1.5m). It refused to award compensation for replacement land costs of $3.35m, nor for the economic loss ($1.54m and continuing) as a result of what was claimed to be the consequences of an insufficient offer for the market value of the land at an earlier time, resulting in a lost opportunity to invest in a higher yield asset.
The Court made no award for replacement land costs, which had been claimed as disturbance losses under the LAC Act. The judge found that the applicant had failed to show that steps had been taken towards the purchase of replacement land.
The claimant appealed the decision. Effectively:
- Whether remediation costs had to be deducted or whether a general allowance could be made.
- Whether Valuers considered sufficiently large number of comparable sales
- The Relevance of sales after the date of acquisition in a rapidly rising market
- Whether the Applicant was entitled to replacement land costs.
All appeal points were dismissed.
Para 124- the notion of highest and best use permits a combination of uses. In ISPT, this Court recognised that it was open to the tribunal in that case to find that highest and best use of the subject land extended to a range of potential uses.
That the valuations had considered comparable properties that were the highest and best use but the Court did consider the impact of the estimated remediation costs and considered the timeframe post the acquisition.
As to whether or not there were sufficient comparable properties. The Court relied on Western Australian Planning Commission v Acrus:
“However, a core requirement of the comparable sales method is that the comparable sales be sufficient in volume to justify a deduction or inference as to value. What is sufficient in volume will vary from case to case. Generally, it will require multiple (more than two) sales. In those circumstances it is necessary to consider the comparable sales evidence as a whole in order to assess whether any of the sale prices are out of line with the main body of evidence or whether there are any other conflicts in the evidence.”
The Applicant had not established the replacement land claim and the Court was not convinced that an error of law had been made.
Phillip Leaman has extensive expertise in compulsory acquisitions under the Land Acquisition and Compensation Act 1986 (Vic) and we have acted in various major projects undertaken by the Victorian Government. Under the provisions of the Land Acquisition and Compensation Act, the Victorian Government and other authorities such as councils and water authorities and Vicroads can acquire privately owned land for public purposes, either compulsorily or by negotiation. As compulsory acquisition lawyers based in Melbourne, we can assist clients dealing with compulsory acquisition with all government projects in Victoria including:
- Doncaster Structure Scheme
- Council acquisitions
- Yarra Valley Water and other water authority easement acquisitions and access agreements
- Bell Street, Coburg and Brunswick Voluntary Purchase Scheme.
- North East Link
- West Gate Tunnel Project
- Melbourne Metro Rail Project
- Level Crossing Removal Project
- Charman Road and Park Road Cheltenham Level Crossing Removal and Sky Rail and road relocation project
- Sky Rail and Sky Rail Voluntary Compensation Scheme
- Mernda Rail Project
- Bass Coast Shire Council Acquisitions
We have acted for a significant number of land owners and tenants in various government infrastructure projects and we have been able to achieve excellent outcomes during the compulsory acquisition process for clients. We have also assisted a significant number of property owners who have been eligible for voluntary purchase schemes such as for the east west link, level crossing removal projects and Caulfield to Dandenong sky rail.
If you own a property or a business in the affected areas and may have your property acquired or affected directly, you should obtain advice from us.
If you are part of one of the above projects or any other compulsory acquisition under the Land Acquisition and Compensation Act, our legal costs are recoverable from the relevant authority during the acquisition process up to any Court or Tribunal proceedings being issued.
It is important that you obtain advice from professionals as early as possible to ensure that you maximise the compulsory acquisition compensation for your particular circumstances. We can also assist you with obtaining professional assistance from other experts such as valuers and relocation experts.
Our website has very useful frequently asked questions: Click here to view our Frequently Asked Questions on Compulsory Acquisition.
To check out our flyer on acquisitions, click here Compulsory Acquisition Flyer.
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For advice and assistance please contact Phillip Leaman, an expert compulsory acquisition lawyer. Phillip Leaman is an expert in compulsory acquisition matters and obtaining the best achievable outcomes for his clients.