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Desane wins landmark case against NSW compulsory acquisition

Posted on 1 August 2018
Source:  Australian Property Journal

ASX-listed Desane Group has successfully fought off the New South Wales government in the Supreme Court, in a landmark ruling over the compulsory acquisition of its prized site.

The Supreme Court of NSW decision paves the way for Desane to move forward with plans for a $100 million, 200-apartment mixed-use project at a Rozelle property that the Roads and Maritime Services authority had sought to compulsorily acquire.

Justice Hammerschlag found yesterday that the proposed acquisition notice over the Rozelle property by the RMS was of no effect, and that the RMS had no defined purpose for the acquisition of the property.

The RMS had offered the developer $18.4 million in compensation for the 5,274 sqm 68-72 Lilyfield Road property, which it said was required as part of the Westconnex M4-M5 Link project that includes an interchange in the inner-western suburb.

Desane rejected the proposal, and took the matter to court in August after RMS refused its $100 million compensatory claim and Premier Gladys Berejiklian declined to meet over the matter.

It had lodged a formal masterplan and rezoning plan for the site in the middle of 2015, which also includes 1,800 sqm of retail and commercial floor space.

"If a land owner compulsorily to be dispossessed is entitled to know precisely what the land is needed for a public purpose, that entitlement must stem from elsewhere," Justice Hammerschlag said.

"An authority of the State does not have open slather. If the compulsory processes under the Just Terms Act are to be invoked, they must be invoked in the mode which the grant of power imposes."

Early in the hearing, the Supreme Court ordered the NSW government, RMS and Sydney Motorway Corporation disclose documents to Desane that had been created the beginning of 2016, which included the contemplated uses of the property.

Desane chairman, Professor John Sheehan AM said the RMS told Desane it had to "urgently" acquire the property, and that the NSW government, RMS and Sydney Motorway Corporation's "latest stated use for the property, as per their own published documents indicate that our property will not be required as part of the WestConnex road structure".

Justice Hammerschlag had also refused to hear an application brought by the NSW government to remove itself from proceedings.

In a statement released after yesterday's decision was handed down, Sheehan said, "From day one, Desane questioned the true purpose of RMS' proposed acquisition of our Rozelle property."

"His Honour found that the RMS' intentions were 'ill-defined. They may never be realised' and the PAN consequently had no effect and this landmark decision reaffirms that Government and its agencies cannot attempt to acquire private property without a proper reason and public purpose."

Sheehan said Desane would now progress its current application for a rezoning of the Rozelle site.