Australia: NSW Supreme Court rules that compulsory acquisition can proceed despite Proposed Acquisition Notices (PAN) not being issued to all owners

The Baptist Union of New South Wales & Anor v Georges River Council [2017] NSWSC 347

A recent decision of the NSW Supreme Court has confirmed that there is no jurisdictional requirement that every person with an interest in land must be issued a proposed acquisition notice (PAN) before the land can be compulsorily acquired.

BACKGROUND:

  1. The first plaintiff, the Baptist Union of New South Wales (Baptist Union), was the registered proprietor of church property at 4-6 Dora Street Hurstville (Land).
  2. The defendant, Georges River Council (Council), issued a PAN on Baptist Union on 6 December 2016. The PAN was unsigned. A signed, amended PAN was issued on 22 March 2017 (Amended PAN).
  3. The second plaintiff, Baptist Churches Property Trust (Trust), claimed to be the legal and beneficial owner of the Land by reason of the Baptist Churches of NSW Property Trust Act 1984 (Property Trust Act). The plaintiffs argued that s 16 of the Property Trust Act had the effect of fully divesting Baptist Union of any legal or equitable interest in the Land, notwithstanding that Baptist Union was the registered proprietor. The Trust did not receive a PAN.
  4. At the time the PAN was issued, the Land was occupied by Connect Church on a month-to-month tenancy. Connect Church, who was not a party to the proceedings, also did not receive a PAN.
  5. The plaintiffs argued that the PAN was void for jurisdictional error because: (i) it purported to notify Baptist Union of an intention to acquire an interest in the Land which was not "held" by Baptist Union; and (ii) it failed to comply with the requirements of ss 11 and 12 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act), as it did not notify any "owners" with an interest in the Land.
  6. The plaintiffs sought various orders which were directed at restraining the Council from acquiring the Land.
  7. The defendant argued that: (i) the PAN was valid; (ii) it was not necessary that a PAN be served on every owner; (iii) the orders sought by the plaintiff were inappropriate and/or could not be granted; and (iv) that the proceedings were commenced out of time by reason of rule 59.10 of the Uniform Civil Procedure Rules 2005 in any event.

THE ISSUES BEFORE THE COURT:

The Court considered the following issues in the proceedings:

  1. Was it appropriate to extend time for commencing the proceedings?
  2. Was service of a PAN on every owner a jurisdictional requirement that had to be met before the acquisition could proceed?
  3. Was the PAN issued to Baptist Union invalid on the basis that Baptist Union did not have an "interest" in the Land?
  4. Was the PAN issued to Baptist Union invalid on the basis that it was unsigned?
  5. Was Council required to serve a PAN on Connect Church on the basis that Connect Church was in lawful occupation of the land (s 12(1)(b) of the Just Terms Act)?
  6. Was Council required to serve a PAN on the Trust on the basis that it had "actual knowledge" of the Trust's interest in the Land (s 12(1)(c) of the Just Terms Act)?
  7. Were the orders sought by the plaintiffs inappropriate or incapable of being granted?

THE COURT'S DECISION:

In relation to each of these questions, the Court held as follows:

  1. Although the proceedings were commenced out of time, it was preferable, in the interests of justice, to determine the issues on their merits. In this case, any potential prejudice to the defendant could be managed by the delivery of the Court's judgment on an urgent basis (at [26]).
  2. Service of a PAN on every owner is not a jurisdictional requirement that has to be met before the acquisition can proceed. The objects, provisions and structure of the Just Terms Act support the conclusion that it was not the purpose of the legislation that an act which breaches s 12 amounts to jurisdictional error. Hence, there was no jurisdictional error in proceeding to gazettal of the acquisition notice having failed to issue a PAN to the Trust (at [67] and [84]).
  3. Baptist Union did have an "interest" in the Land. At the very least, Baptist Union, being the registered proprietor of the land, had a "right, power or privilege over or in connection with the land". It was unnecessary to decide whether s 16 of the Property Trust Act overrode the indefeasibility conferred by s 42 of the Real Property Act 1900 (at [69] and [73]).
  4. In the circumstances, the PAN was not invalid due to the absence of a signature. Section 15 of the Just Terms Act does not require that a PAN be signed. Even if a signature was required, its omission is in the nature of a clerical error or obvious mistake that was remedied by the Amended PAN (at [77]).
  5. Consistent with its earlier findings, the Court held that there would be no jurisdictional error in proceeding to gazettal of the acquisition notice having failed to issue a PAN to Connect Church (at [82]).
  6. The Council did not have actual knowledge of the Trust's interest in the Land. Correspondence over the years of negotiations over the sale of the Land contained various descriptions of the "seller" of the Land. In these circumstances it could not be accepted that the Council had "actual knowledge" of the Trust's interest in the Land (at [83] and [84]).
  7. The Court accepted that the orders sought by the plaintiff were inappropriate or could not be granted (at [58]-[63] and[85]).

SPECIFIC FINDINGS ON SECTIONS OF THE JUST TERMS ACT:

The Court made the findings regarding the following sections of the Just Terms Act:

  • Section 4: A registered proprietor of land has at the very least a "right, power or privilege over or in connection with the land" (at [69]).
  • Section 11: The requirements of s 11 in terms of the persons upon whom a PAN should be served should be read subject to s 12 (at [64]).
  • Section 12: An act done in breach of s 12 does not amount to jurisdictional error (at [66]).
  • Section 15: The provisions of s 15 do not include a mandatory requirement that the PAN be signed (at [74]).
  • Section 16: The power in s 16(3) to correct a "clerical error" or an "obvious mistake" in a PAN extends to signatures (at [76]).
  • Section 33: s 33 supports the conclusion that the validity of an acquisition is not affected by any failure to comply with s 12 of the Just Terms Act (at [51] and [66]).

KEY TAKEAWAYS:

Key takeaways from the decision are that:

  1. it is not necessary for all owners of land to receive a PAN in order for the land to be compulsorily acquired; and
  2. the Just Terms Act is directed towards the prompt and efficient acquisition of land for just compensation, and this includes circumstances where a person has not been notified of the acquisition or the authority was not aware of the person's interest in the land.

The decision is also an illustration of the broader principle that the exercise of a statutory power is not necessarily invalid if it is exercised in breach of a condition on that power. In this case, the Court was satisfied that it was not the intention of the Just Terms Act to prevent an acquisition in circumstances where the notice requirements of s 12 of the Just Terms Act had not been met.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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