Save Leamington Avenue Submission on Land Acquition and Transport

SAVE LEAMINGTON AVENUE (SLA)[1]

NSW Long Term Transport Master

Plan Discussion Paper

April 2012

A Long Term Transport Master Plan is an essential step in delivering effective transport solutions for the people of NSW. This is particularly so for the Sydney metropolitan area given the failings of transport planning over many decades.  Effective transport planning is key to ensuring economical prosperity and community wellbeing for the people of NSW. 

Whilst an effective Long Term Transport Master Plan must identify the detailed transport objectives and outcomes sought to be achieved, it is equally important that the plan identify the means by which those objectives and outcomes will be achieved. In other words, the ‘how’ is as important as the ‘what’.

Ultimately the measure of success of the Long Term Transport Master Plan will not only be whether specific transport projects are delivered, but also the manner in which those projects are implemented. 

Failure to consider the manner in which transport planning is undertaken will mean there is a real risk the community will not be accepting of the plan, with the consequent risk that the plan itself is not delivered: the ends do not always justify the means.  

The ‘how’ includes: 

• ensuring genuine, meaningful and transparent consultation and public participation in the transport planning process;
• integrating transport and land use planning processes so that precious transport resources are targeted to the areas of greatest need;
• making it mandatory for all transport corridors to be identified in environmental planning instruments (EPIs) at the earliest opportunity; 
• ensuring people’s right to know about transport decisions which affect them is enshrined as a fundamental principle underpinning transport and planning laws; and
• undertaking urgent reforms to the compulsory acquisition laws to ensure transport planning does not deliver unfair or unjust results for those adversely affected by transport decisions.  

Whilst the NSW Long Term Transport Master Plan Discussion Paper appropriately focuses on the key transport objectives sought to be achieved[2], there is no mention in the Discussion Paper of how Government intends to deal with those who are adversely impacted by transport decisions.

The recent experience of residents of the ‘Pines Estate’ Newtown in saving their homes from acquisition and demolition provides an excellent example to Government of ‘how’ not to do it.  The SLA experience serves as a timely reminder that without community acceptance, transport proposals will inevitably fail.

If lessons are not learnt from the SLA experience the same could occur time and time again as the NSW Long Term Transport Master Plan is implemented. Indeed similar problems are already apparent in the current planning process for the North West Rail Link (NWRL) – being the ‘biggest transport infrastructure project since work on the Sydney Harbour Bridge started 90 years ago’[3].

2.0          THE SLA EXPERIENCE

The Pines Estate, comprising Leamington Avenue, Holdsworth, Pine and Wilson Streets, Newtown, adjoins the largely disused, Government owned, North Eveleigh site.  

In December 2008 a concept plan was approved for North Eveleigh which provides for a $550 million redevelopment of the10.7 hectare site, comprising residential, commercial, retail and open space areas[4].  The concept plan also identifies that the site will accommodate rail infrastructure. 

In early June 2010, residents of the Pines Estate received an anonymous flyer advising their homes had been identified for possible compulsory acquisition by Railcorp.

This was to make way for the City Relief Line (CRL) - a key component of the Western Express Project (WEP), one of the main transport proposals contained in the Metropolitan Transport Plan, ‘Connecting the City of Cities’, released by the former Government in February 2010.  The CRL was proposed to commence by way of dive tunnel located on the North Eveleigh site.

The flyer identified 34 homes as being affected[5]. This was the first time the residents had been informed their homes may be compulsorily acquired to make way for the CRL.

A few days later an article in the Sydney Morning Herald reported:

‘Just 2 months after the NSW Government spared the heritage suburbs of Pyrmont and Rozelle by dumping the CBD Metro, another historic precinct is under threat from another controversial transport plan’[6].  

Reflections by one of the residents show the devastating impact of hearing the news in this way:

‘My heart sank when I saw a picture of my house under the newspaper heading “Rail tunnel plan threatens historic homes”. It is hard to describe how surreal the feeling was reading this article traveling on the train to work. The enormity of the moment was overwhelming’.         

Residents’ alarm was further heightened when it was discovered:

●      the homes identified for possible acquisition formed part of the Pines Estate Heritage Conservation Area[7] and the Hollis Park Urban Conservation Area[8]; 

●      the Planning Minister approved the concept plan for redevelopment of the North Eveleigh site without consulting affected residents about the potential acquisition implications – this was despite engineering plans forming part of the concept plan clearly indicating properties in the Pines Estate may require demolition;  

●      the WEP/CRL had never been identified in any EPI as a potential rail corridor nor had any other steps having been taken by Transport NSW (TNSW) to alert property owners and prospective purchasers of the proposal;

●      15 properties had been sold in Leamington Avenue and the adjoining streets between 2007/08 - 2010, with innocent purchasers completely unaware of their fate, whilst Transport authorities had knowledge of the possibility of compulsory acquisition since as early as 2007; 

●      despite this knowledge, Railcorp was also routinely approving residents’ development applications[9] and allowing residents to commence costly renovations in complete ignorance of the financial risks they faced in the event the properties were acquired;          

●      as a result of information then in the public domain, property owners came under a legal obligation to make full disclosures to prospective purchasers about the threat of acquisition. This was despite owners not being entitled to any protection under the Land Acquisition (Just Terms Compensation) Act 1991 (Land Acquisition Act) at that point in the process[10].

After a concentrated and highly successful community campaign, the Government announced in August 2010 that feasibility/investigative studies, which were only agreed to be undertaken as a result of the SLA campaign, revealed there was “no engineering or design basis to acquire the properties”.

Despite this, residents of the Pines Estate still do not have confidence their homes are safe from acquisition and demolition:

• whilst the WEP may be gone, the CRL remains very high on the Transport agenda (indeed the CRL will be a crucial component of any rail proposals for the Sydney Metropolitan area given the projected increases in congestion levels on the City Circle)[11];
• despite a change of Government, it is still the same Transport bureaucracy that residents are dealing with: despite numerous requests since 2010, TNSW refuses to provide information detailing the results of the investigative studies which concluded the CRL can be wholly accommodated on the North Eveleigh site without the need for acquiring any neighbouring properties[12];
• without such information, residents cannot meaningfully participate in the planning process for the North Eveleigh site nor ensure appropriate steps are taken by TNSW and the Sydney Metropolitan Development Authority to set aside sufficient land on the North Eveleigh site to accommodate the CRL and associated construction sites before the land is sold off to private developers;  

The SLA campaign was recognized by the Planning Institute of Australia in 2011, with SLA receiving a commendation in the ‘Hard Won Victory’ category at the annual ‘Planning Excellence Awards’.

The SLA experience raises serious questions about why a community campaign of the size and scale undertaken by SLA was necessary to achieve outcomes that should have been the result of a proper planning process?  What would the result have been if the local community did not have the resources or perseverance to orchestrate such a campaign?

3.0          THE IMPORTANCE OF IDENTIFYING TRANSPORT CORRIDORS IN EPIs

One of the key issues identified during the SLA campaign was the failure of Government to identify the CRL as a transport corridor in an EPI.  

EPIs are the key means by which people can be informed about future development proposals which affect their land. Indeed, the conveyancing process recognizes this by requiring a s.149 certificate to accompany any contract for the sale of land. 

Section 149 certificates are intended to indicate the ‘true status’ of the land, having regard to the planning matters specified in Schedule 4 of the Environmental Planning and Assessment Regulation 2000 . This includes, amongst other things, whether an EPI makes provision for the compulsory acquisition of the land.

Prospective purchasers rely on the s.149 certificate to inform themselves about any possible ‘affectations’ on title.  The s.149 certificate is also important for the vendor, given the vendor disclosure obligations that apply under the conveyancing process.  Failure by the vendor to make relevant disclosures can give rise to a breach of contract, entitling the purchaser to rescind the contract. 

As noted above, in the case of the Pines Estate residents, people selling their properties came under a legal obligation to make full disclosures to prospective purchasers about the possibility of compulsory acquisition.  This was despite the CRL proposal never having been identified in an EPI and there being no protections under the Land Acquisition Act at that point. This effectively rendered the properties valueless and property owners in legal and financial limbo.

There is currently no statutory requirement for transport corridors to be identified in EPIs.  This is essential to ensure people can make informed decisions about property related matters e.g. deciding whether to buy or sell property or invest resources in renovations.   People should not be in a position where they are blindly entering into major financial commitments, without knowledge of the financial risks involved.

Where transport corridors are identified in EPIs, the purposes for which the land may be used should be clearly identified.  Land should not be identified for a ‘public purpose’ (e.g. rail corridor) if it is in fact intended to be used for other, non-public purposes (e.g. private residential, retail or commercial development).  This is because where land is identified for a ‘public purpose’, special planning privileges usually apply e.g:

• more generous permissibility provisions;
• relaxation of planning controls and development standards that might  otherwise apply;
• public authority entitlements to compulsorily acquire land.

Where Government owned land (or land that may potentially be owned by Government as a result of compulsory acquisition) is intended to be used for non-public purpose, the EPI should appropriately reflect this.  The same planning controls should apply to that land as applies to other land intended to be used for those same purposes.  In other words, the special privileges applying to public purpose land should not apply. 

4.0          NEED FOR URGENT REFORM OF COMPULSORY ACQUISITION LAWS

The SLA experience also illustrates the inadequacies of the current compulsory acquisition laws in NSW. 

Compulsory acquisition is a necessary part of the transport and planning system.  However, unless there are reforms to the compulsory acquisition laws to deliver fairer, more equitable outcomes, it is very unlikely the community will accept increased levels of compulsory acquisition by the State. This will significantly impact on the effective implementation of the NSW Long Term Transport Plan, once it is adopted.

The key areas of concern are:

• property owners/occupiers need to be adequately and fairly compensated when compulsory acquisition is required;
• compulsory acquisition powers under any act should only be enlivened where transport corridors have been identified in EPIs and land reserved exclusively for the intended transport purpose (this is not currently the case);
• zoning of publicly owned land for non-public purposes (e.g. private residential, retail or commercial development) should not give rise to a right to compulsorily acquire land; and
• compulsory acquisition should only ever be pursued as a last resort.

Sydney is not alone in dealing with the inevitable problems arising from the lack of adequate transport planning. At the same time as the SLA campaign was underway, hundreds of property owners in Victoria also found out their properties were to be acquired through media reports, rather than through formal notification by transport authorities (see attached ABC Radio National, Law Report, transcript dated 19.10.10 which mirrors the experience of the Pines Estate residents).

The Land Acquisition Act is outdated legislation that does not reflect the ever increasing need for Government to consider compulsory acquisition. Reforms to the Act are urgently required as it is one of the least generous compensation acts in the country.  For example:

(a)          losses incurred before people are served with a Proposed Acquisition Notice are not recognized nor compensable (this is particularly important in circumstances where the acquisition does not in fact proceed, as happened in the case of the Pines Estate residents);

(b)          the Act does not recognise the impact on people who are not acquired but who are adversely affected by the acquisition of neighbouring properties;

(c)          there is no requirement to acquire land that is not directly needed for the proposal – this is despite the fact that the remaining/adjoining land may be adversely affected by the acquisition (be it loss in value and/or loss of amenity); 

(d)          the ‘market value’ at the time of acquisition, being the basis upon which compensation is currently calculated, may not reflect the owners’ actual losses arising from the acquisition e.g. the market value of a property which is partly demolished as a result of renovations, may not be a reasonable basis on which to determine compensation entitlements; 

(e)          the Act does not provide for ‘reinstatement’ costs e.g. in circumstances where there is no equivalent stock in the surrounding area, people may be forced to move out of the area altogether because the compensation payable is insufficient to purchase an equivalent property in the same location; 

(f)           the ‘solatium’ component of compensation (i.e. compensation for non-financial disadvantage resulting from the need to relocate) is grossly inadequate[13] - solatium should be calculated based on a % of market value, as occurs in other states[14];

(g)          compensation under the NSW Land Acquisition Act is calculated in strict compliance with the identified heads of compensation set out in Part 3 of that Act – by contrast, the Commonwealth Lands Acquisition Act 1989[15], requires ‘all relevant matters’ to be taken into account in determining compensation, thereby allowing the special circumstances of each individual case to be taken into account;  

(h)          the Act needs to provide greater flexibility in the timing of acquisition to better reflect the varying circumstances of affected residents – currently a 90 day notice period applies[16], after which, the acquiring authority is entitled to charge the person market rent if they stay in the property beyond the notice period.    

In addition to the above, the compulsory acquisition laws were further undermined in 2006[17] when the owner initiated acquisition provisions of the Environmental Planning & Assessment Act 1979 (EP&A Act) and Land Acquisition were amended so that owners subject to compulsory acquisition clauses in EPIs can now only compel an authority to acquire their property if they are able to demonstrate they are suffering hardship[18].   

Previously, where an EPI reserved land exclusively for a public purpose, the affected owner could compel the acquiring authority to acquire the land at any time, without having to demonstrate hardship. 

Where land is acquired by a public authority and then part is on-sold to a private developer (e.g. as may occur where rail corridors are rezoned to facilitate residential, retail or commercial development), the person whose land is compulsorily acquired should be entitled to a proportion of the uplift in value of the land.   This is only fair because the uplift in value could not have been realized without the person’s land being acquired. The public authority that acquired the property and the subsequent owner of land should not be the sole beneficiaries of the uplift in value where this occurs[19]. 

The Local Government Act 1993 (LG Act) and the Roads Act 1993 (Roads Act) recognise this by placing an express limitation on councils and the RTA being able to compulsorily acquire land for re-sale without first obtaining the approval of the owner[20].   This provides the owner with the opportunity to negotiate a level of compensation outside the constraints imposed by Part 3 of the Land Acquisition Act (which requires compensation based on market value of the property, without regard to the proposed future use of the property).

Whilst this protection is enshrined in the Roads Act and the LG Act (and was upheld by the High Court in R&R Fazzolari Pty Ltd v Parramatta City Council; Mac’s Pty Ltd v Parramatta City Council (2009) 237 CLR 603),  the same can not be said in relation to other public authorities, such as Railcorp, the State Transit Authority, Sydney Ferries and the Transport Construction Authority.  Unlike the Roads Act and the LG Act, the Transport Administration Act 1988 gives these agencies an express power to acquire land for the purpose of re-sale without the approval of the owner[21]. 

5.0          IMPLICATIONS OF THE SLA EXPERIENCE FOR THE NSW LONG TERM TRANSPORT MASTER PLAN

The SLA experience demonstrates a number of significant failings in the current transport planning process which need to be fixed if the NSW Long Term Transport Master Plan is to effectively deliver transport solutions for NSW[22]. 

We need:

•                     Genuine consultation processes:

Current community consultation mechanisms are inadequate -  new, more effective consultation models are needed if community consultation is to have any real meaning and the community is to have any faith in the decision making process.

•                     Proper, integrated transport and land use planning processes:

There is currently a lack of integration between transport and land use planning with planning instruments failing to reflect key transport strategies. 

•                    Transport corridors to be identified in EPIs at the earliest opportunity: 

There should be a statutory requirement for all transport corridors to be identified in EPIs and projects should not be able to be approved until this has been done. The identification of transport corridors should occur at the earliest opportunity in the planning process following meaningful consultation with those likely to be affected.

•                    People’s right to know should be enshrined as a fundamental principle underpinning transport and planning laws:

People have a right to know about planning and transport decisions that affect them, particularly where those decisions impact on property rights – a person’s home is likely to be the most valuable asset they will ever own. People should not find out their homes are to be acquired by reading about it in the paper.

•                    Urgent reforms to the compulsory acquisition laws:

People who are adversely affected by transport decisions need to be fairly compensated.  The compulsory acquisition process should not be a mean-spirited one when it comes to people being forced out of their homes. People should be generously compensated when they are being asked to make sacrifices for the greater good of the community. 

Without addressing the current failings of the transport planning process, the SLA experience will be repeated as Government attempts to deliver its transport agenda. 

Indeed the NWRL project, being the most significant transport infrastructure project currently being undertaken by the NSW Government, looks set to repeat a number of the failings illustrated by the SLA experience.  

Planning for the NWRL is well underway with the Environmental Impact Statement (EIS) for the 23 km rail line currently on public exhibition. The EIS indicates the construction works for the NWRL will require the acquisition and demolition of 92 buildings, including 60 residential properties[23]. 

Specific properties have been identified for acquisition and demolition despite the full route of the NWRL still not having been identified as a transport corridor in the relevant EPIs[24] nor the land exclusively reserved for rail purposes.  Without this, affected residents are exposed to the same risks and liabilities experienced by the residents of the Pines Estate.

The Discussion Paper recognises the importance of identifying transport corridors[25]:

Protecting transport corridors is an important planning mechanism to ensure the availability of land for future transport projects… Preserving corridors enables urban development to progressively occur across the city in a way that does not preclude transport options in the future.  

The Premier and Minister for Transport recently announced plans to ‘future-proof North West Sydney’s public transport options’[26] by identifying a transport corridor for the future expansion of the NWRL.   Whilst this is a desirable and appropriate step, it raises some important questions:

• why has the existing route for the NWRL not yet been identified in an EPI?
• in identifying a rail corridor for the future expansion of the NWRL, will the EPI also reserve the land exclusively for rail purposes to ensure the compulsory acquisition provisions under the EP&A Act are enlivened so that affected property owners are not adversely affected?      
• will the Government acquire the properties as and when affected property owners request, rather than waiting until projects are funded and/or subjecting property owners to an unnecessary ‘hardship test’? 

The Minister for Transport recently said in respect of the proposed rail corridor for the future expansion of the NWRL, ‘No land will be acquired at this stage. The land will be zoned for public infrastructure purposes and only acquired when a specific project has been approved in future’[27]. 

If this is the case, how and when will affected property owners be compensated for the consequent reduction in land values once the transport corridor is identified in an EPI?

6.0          CONCLUSION

The success of the ‘NSW Long Term Transport Master Plan’ will be dependent on addressing the current failings of the transport planning process and having due regard to the ‘how’ as well as the ‘what’ of transport delivery. 

Most importantly, as illustrated by the SLA experience, the compulsory acquisition process needs to operate more fairly and transparently if Government expects the community to be accepting of the process. Otherwise there will be increasing community backlash, as occurred with the CRL.  Surely the cost of providing a fair compensation process, be it financially or politically, will be significantly less than the cost of, yet another, failed transport proposal? 

The NSW Long Term Transport Master Plan Discussion Paper proposes the following objectives to underpin future planning for transport in NSW[29]:

• Putting the customer first
• Economic development
• Planning and investment
• Coherence and integration
• Performance and delivery
• Efficiency
• Environmental sustainability
• Social benefits 
• Safety

For the NSW Long Term Transport Master Plan to receive the necessary community support to ensure its successful delivery, it is imperative the plan also have as one of its core objectives: 

• Fairness and Equity.  

This objective requires:

• ensuring people who are adversely affected by transport proposals are informed in a timely manner about decisions which may affect them;
• treating people who are adversely affected by transport proposals fairly and equitably;
• only pursuing compulsory acquisition as a last resort;
• where people’s homes and business premises need to be acquired, justly compensating people for the loss of their properties in recognition of the sacrifices they are making for the greater good of the community; and
• ensuring those who may not be acquired but who are nonetheless detrimentally affected by the compulsory acquisition process, are also fairly compensated. 

The SLA experience should not be repeated in delivering the NSW Long Term Transport Plan.