Compulsory Land Acquisition for the Suburban Rail Loop Project

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By David Passarella, Partner and Beth Barbour, Lawyer

The State government’s $50 billion Suburban Rail Loop project seeking to deliver a 90-kilometre rail line through Melbourne’s middle suburbs is now in planning and it is understood that construction companies have been requested to express their interest in delivering the project. The Suburban Rail Loop will connect the Frankston to Werribee trainlines, via Melbourne’s Tullamarine airport. There are super hubs proposed to be located at Clayton, Broadmeadows and Sunshine.

Stage One, which is anticipated to commence in 2022, will connect Cheltenham to Box Hill via twin rail tunnels covering 26- kilometres. Six new underground stations will be constructed at Cheltenham, Clayton, Monash, Glen Waverly, Burwood and Box Hill.

Public exhibition and an independent inquiry are to be held late 2021 to mid-2022, with the Minister’s assessment of this project to be provided in mid to late 2022.[1]

Affected Landowners

As part of the delivery of the project, land acquisition will be required. It is expected that this will either take place via voluntary agreement with landowners or by compulsory land acquisition. The usual process of compulsory land acquisition for projects of this nature will be to invoke the Authority’s powers under the Land Acquisition and Compensation Act 1986 (LACA).

For those landowners affected by the project and expected to have their land compulsorily acquired, it is important that they are aware of their rights and obligations under the LACA and particularly what compensation can be legitimately claimed against the Authority.

Landowners should be aware of the following items that may be claimed under Part 4 of the LACA in the event that their land has been compulsory acquired:

  • The market value of the land (Section 41(1)(a) of the LACA) – assessed at the date the notice of acquisition is gazetted, ‘being an amount of money that would have been paid for that interest if it had been sold on that date by a willing but not anxious seller to a willing but not anxious purchaser’[2];
  • Special value (Section 41(1)(b) of the LACA) – the value of any pecuniary advantage in addition to market value which is incidental to ownership or occupation of the land;
  • Severance (Section 41(1)(c) of the LACA) – applying to land which is partially acquired and is payable where there is a reduction in the value of other land used in conjunction with the acquired land which is caused by severance from the acquired land.[3]
  • Loss attributable to disturbance (Section 41(1)(d) of the LACA) – covers any pecuniary loss suffered by the claimant as a natural, direct and reasonable consequence of the acquisition under the LACA (i.e. business loss claim etc).
  • Solatium (Section 44 of the LACA) – covers any intangible and non-pecuniary disadvantages that have resulted from the acquisition which is calculated up to 10% of the market value of the land.

Pursuant to Section 41(1)(f) of the LACA, you are also entitled to reimbursement of any reasonable ‘legal, valuation and other professional expenses’ that are necessarily incurred by reason of the acquisition.

Occupiers of land who have leasehold and other legal/equitable interests may also be entitled to compensation under the LACA.

Legal Issues arising from Underground Tunnelling

It is our understanding that the Suburban Rail Loop Project will include tunnelling under private land holdings which will vary in depth to a maximum depth of 60 meters.[4]

Recently and relevantly, the West Gate Tunnel Project has sparked legal concerns regarding landowner’s rights to compensation for underground works. The Authority for that project has not offered compensation for compulsory acquired land under their properties on the basis that similar projects such as CityLink and EastLink, do not show supporting evidence that property prices have been affected by underground tunnelling.

While we agree that the quantum of compensation is a valuation question based on sales evidence, in our view, a legal entitlement to compensation exists where the project is constructed within the depth of the legal title. This depth can vary between property titles and for Crown land grants issued after 1891, they are generally limited in depth to 15.24 metres (50 feet).[5]

How we can assist?

Our lawyers are experienced in acting for landowners in compulsory land acquisition matters and ensuring claimants are properly compensated. If you would like our assistance, please contact us and we encourage you do so particularly given your reasonable legal costs are reimbursed by the Authority through the compulsory acquisition process.

 

[1] ‘Suburban Rail Loop: Stage One Stations’, Engage Victoria (Web Page) <https://engage.vic.gov.au/suburban-rail-loop-stage-one-stations>.

[2] Land Acquisition and Compensation Act 1986 (Vic) s 40.

[3] Ibid.

[4] ‘Building Suburban Rail Loop: Stage One Fact Sheet’, Victoria’s Big Build < https://s3.ap-southeast-2.amazonaws.com/hdp.au.prod.app.vicengage.files/8216/1155/1327/Building_Suburban_Rail_Loop_Stage_One_Fact_sheet.pdf>.

[5] Land Act 1958 (Vic) s339(1).

For further information, please do not hesitate to contact us.

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