Your guide to compulsory acquisition Contents Introduction Introduction 1 This guide has been prepared to assist land owners, tenants, businesses and licence holders affected by compulsory land acquisition and seeks to: What is compulsory acquisition? 2 »» explain some of the processes associated with compulsory land acquisition What is an acquiring authority? 3 »» explore some of the types of compensation What rights does an acquiring authority have? 3 »» highlight legal obligations Can I stop a compulsory acquisition? 3 »» advise how Hunt & Hunt can assist Three stages of compulsory acquisition 4 The aim of this document is to provide an overview of the compulsory acquisition process and to outline the avenues and options available to: Stage 1 – Early planning 6 »» those who are involved in a compulsory acquisition Stage 1 facts 7 »» those who think they may be affected by a future compulsory acquisition How Hunt & Hunt can help 7 Stage 2 – Identifying future acquisitions 8 What is the impact of a PAO? 8 Stage 2 facts 8 How Hunt & Hunt can help 9 Stage 3 – Acquisition process commences 10 Who can claim? 10 What am I entitled to? 10 Compensation 12 Resolving Claims 12 Stage 3 facts 13 How Hunt & Hunt can help 13 Can I deal with this myself? 14 Acquisition timeline 16 Glossary and Legislation 18

Compulsory acquisition experience 20 The information contained herein is intended to provide general information in summary form, current at the time of publication. It does not constitute legal advice or a substitute for legal advice and should not be relied upon as such.

Hunt & Hunt | Compulsory acquisition | Page 1 What is an acquiring authority? Can I stop a compulsory What is compulsory An acquiring authority is a body that has acquisition? been granted power to acquire land for Generally, it is not possible to stop a a specific purpose pursuant to the Land compulsory acquisition. However, in acquisition? Acquisition and Compensation Act 1986. some instances concerns raised about an An acquiring authority could be: acquisition have led to a different outcome. In simple terms, it is the compulsory purchase of all or part of your land by a government or Examples include the Western Highway »» VicRoads statutory authority. It often affects land owners, tenants, businesses and licence holders. project and more recently the East West »» A rail authority Link proposal. In these cases, appropriate »» A government department questions were raised and variations were Common examples include: »» A services company (e.g. water, power, etc.) made to the infrastructure projects. »» A municipal council »» A family home acquired to build a Other examples of compulsory acquisition Our partners have previously acted for new road can include easements on your land which What rights does an acquiring groups that form opposition to proposed »» A tenant’s rental property acquired to allow some access to your property and the authority have? infrastructure developments. Some examples widen a road placement of overland / underground: The ‘Acquiring Authority’ is granted planning include unChain St Kilda (in relation to the »» A cattle farmer’s property acquired to »» Electrical transmission towers / lines permission by the government to mark St Kilda Triangle development) and Lower build a new freeway »» Water / sewerage pipes certain properties for future acquisition so Our Tracks Incorporated (in relation to the »» Part of a vineyard acquired for a water »» Gas pipelines they can be used for a public purpose. proposed Sky Rail Project). easement »» Access roads »» A restaurant business acquired for The acquiring authority can acquire: Before the acquisition process commences, »» Other infrastructure a revitalised town centre the acquiring authority may approach you »» All of your land »» A house and business acquired for with a request to reach an agreement for the »» Some of your land a new airport runway sale of the affected land (i.e. to buy the land »» The right to use some or all of your land from you rather than taking it). The process (e.g. an easement) may be referred to as voluntary purchase. Structures or developments situated on the This option may be beneficial to you, land (including houses, gardens and sheds) however it is advisable to ensure that you may also be acquired. are aware of all your rights and obligations before making a decision.

Page 2 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 3 Three stages of compulsory acquisition

There are three stages to the acquisition process: Stage 1. A public reservation is proposed (usually for infrastructure projects). Various plans and feasibility studies are undertaken to determine whether and how to proceed. Stage 2. A reservation in a planning scheme is usually made by placing a Public Acquisition Overlay or Project Area Designation (PAO for convenience) over the relevant portion of land. Stage 3. When the proposed project is ready to proceed, the acquiring authority will commence with the acquisition (this may be a number of years after the placement of the PAO). Then, the formal acquisition process and your claim will proceed. 1 1 Early planning

Identifying 2 future acquisitions

Acquisition process commences 3 PAO

Page 4 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 5 Stage 1 facts How Hunt & Hunt can help Stage 1 – »» Depending on the size of the proposed »» We can help you determine how the project, this stage can take a number proposed project may impact you of years »» We are experienced in preparing or Early planning »» Well advised action may enable assisting clients to raise objections. We can objections to be raised or alternative identify some of the unexpected long term This early planning phase is usually undertaken in the background and may be without outcomes to be sought impacts of raising these issues to avoid the knowledge of potentially affected owners. Planning commences when a project is »» The acquiring authority may contact reducing or affecting your (future) claim conceptualised, and involves a number of feasibility studies and plans. It may involve public you to negotiate plans for the proposed »» Whether or not you have been contacted consultation to determine the future of the project. acquisition by the acquiring authority, we can provide »» It can involve a number of planning and advice regarding your potential claim The planning phase ends when a decision is made about whether to continue to the next zoning issues in addition to potential and the advantages and drawbacks of a stages. Sometimes the decision is made not to proceed at all. compulsory acquisition of property negotiated acquisition »» You may not be aware that a property »» If involved at this early stage, we can could be affected assist you in making decisions about selling or improving your property »» We can maintain open lines of communication to inform you of developments and what you can expect in the following acquisition stages »» We can review any proposed agreement with the acquiring authority as it may affect you in the future »» We explain and manage the entire process for you, so you can choose your level of involvement

Page 6 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 7 How Hunt & Hunt can help Stage 2 – Identifying »» We are able to determine if your property is affected by a PAO »» We can make enquiries about anticipated future acquisitions project outcomes and timelines »» We can work with you to assess your Once the feasibility of the project has been Stage 2 facts available options and possible future determined and the intention is to proceed, »» You may not be aware that a PAO impacts the acquiring authority usually places a affects a property you own, rent, or are »» We can assist in the identification of your ‘Public Acquisition Overlay’ (PAO) over the interested in relevant compensation claims properties affected by the project. »» A prospective purchaser or financial »» We are adept at providing advice about A PAO is a planning control which identifies institution holding security may become the effect of other parties’ potential an area of land for future potential aware of a PAO compensation claims compulsory acquisition. A PAO does not »» A PAO may be in place for many years »» We can maintain open lines mean that the land will definitely be acquired, (even decades) before being acted upon. of communication enabling but that it may be acquired in the future. Some PAOs may never be acted upon us to keep you abreast of »» Sale of an affected property may trigger a It is not mandatory for the acquiring developments and inform you compensation claim authority to notify landowners personally about what you can expect in »» Refusal of a planning permit for about a PAO over their property until the the following acquisition stages an affected property may trigger a next stage of the acquisition. »» We are well placed to review compensation claim any proposed agreement with What is the impact of a PAO? »» Any compensation payments are noted the acquiring authority as it may on title and can affect future landholders It may affect the purchase or sale of a affect you in the future property or restrict your ability to develop the »» We explain and manage the land. Therefore, the PAO may affect: entire process for you, so you can »» The value of the land upon sale choose your level of involvement »» An owner’s ability to sell the land »» An owner’s ability to obtain planning permission for the land »» The intended use of the land »» A purchaser’s ability to claim compensation when the land is acquired

Page 8 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 9 Market value – the amount that would have been paid to the claimant upon sale at Stage 3 – Acquisition the date of NOA (subject to strict legal and valuation guidelines). process commences Special value – where the property has a greater financial value to the claimant than The third stage of a compulsory acquisition acquiring authority may not be entitled to take the market is willing to pay. requires the acquiring authority to make possession of the affected land immediately. Loss attributable to severance – the reduction contact with you and begin the formal The process for compensation follows. in market value of the claimant’s other acquisition process. interests in the acquired property, or the The Land Acquisition and Compensation Act Who can claim? claimant’s interests in other related-use land. 1986 contains a process for the acquiring Those entitled to claim compensation Enhancement or depreciation – increase authority to follow. include: or decrease in the value of the claimant’s The formal acquisition process usually »» Landowners adjoining or severed land due to the project’s commences when the acquiring authority »» Tenants purpose. »» Businesses issues affected parties with a ‘Notice of Loss attributable to disturbance – the »» Licence holders Intention to Acquire’ (NOIA). financial losses suffered by the claimant as a »» Usually any person or entity with consequence of the NOIA or the NOA. The NOIA informs you that your land is an interest in the land intended to be acquired within 2-6 months. Solatium – any non-financial disadvantages The NOIA is accompanied by information that What am I entitled to? such as the ‘emotional impact’ of the details your entitlements as an affected party, Some of your entitlements may include: acquisition. Solatium is capped at 10% of such as your right to obtain independent legal the market value of the property. »» Market value and expert advice. »» Special value The NOIA also imposes obligations on the »» Loss attributable to severance affected land, which may restrict your ability to »» Enhancement/depreciation in value of the alter the land without the acquiring authority’s claimant’s interest in adjoining/severed permission. For example, if you intend to build land a shed on the affected land, you may need to »» Loss attributable to disturbance seek written permission prior to construction. »» Solatium Following the NOIA, a ‘Notice of Acquisition’ »» Legal, valuation and professional expenses (NOA) is issued. A NOA is the formal necessarily incurred notification that the affected land now belongs »» Capital Gains Tax rollover to the acquiring authority, however the »» Stamp Duty reimbursement »» Conveyancing

Page 10 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 11 Compensation Resolving claims Stage 3 facts How Hunt & Hunt can help You are entitled to seek an advance of any As the majority of claims seek more than the »» Formal acquisition usually commences »» We discuss your personal circumstances initial offer made by the acquiring authority acquiring authority’s initial offer, negotiations when the NOIA is issued to each affected and entitlements on a private and if the initial offer is in excess of $5,000. can ensue to settle the claim. party confidential basis (protected by legal Payment of an advance does not affect your »» The NOA is usually issued within 2-6 privilege) The acquiring authority may organise a right to seek further compensation. months. When the NOA is issued, the »» We assist with the early identification of valuers’ conference to better understand your acquiring authority owns the affected land issues to maximise your claim You may instruct your lawyer to advise on the valuation assessment. »» Within 14 days of the NOA, the acquiring »» We explain and manage the entire process benefits or disadvantages of requesting the In most cases, your final compensation authority will provide an initial offer of for you, so you can choose your level of advance. payment is made by reaching agreement with compensation involvement Usually, your lawyer will engage the necessary the acquiring authority. »» The compensation process can be »» We can engage independent expert experts to assist in quantifying your claim. expedited if required. However, in most advisors at arm’s length Should you be unwilling to accept the Such experts may include valuers of property, cases claimants prefer to obtain additional »» We explain the legal impacts of acquiring authority’s last negotiated offer, you business and agribusiness. Sometimes your time to allow full exploration of the documents which you will be required to may elect to dispute your claim and refer it to situation may require other experts, for claim and to ensure all entitlements are sign, taking into account possible future the Victorian Civil and Administrative Tribunal instance, town planning advisors can be considered impacts which are not always expected (VCAT) or the Supreme Court of Victoria. engaged to assess the land’s highest and best »» We ensure that the acquiring authority use (development potential). acts appropriately, explaining your rights and obligations »» We conduct valuation and settlement conferences and negotiations, as required »» We can provide additional services such as taxation advice, conveyancing etc.

You do not need to handle this situation alone. We are here to help you identify your rights to compensation and manage the process for you.

Page 12 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 13 Can I deal with this myself? Some pitfalls affecting unrepresented or poorly represented claimants: It is possible for you to deal with the acquiring authority directly without involving »» Failing to apply principles from one stage a lawyer. Unrepresented claimants have of compulsory acquisition to the other encountered varying degrees of success. stages, resulting in miscalculations and even a reduction in compensation Compulsory acquisition is a niche area of law as it does not follow typical property law »» Failing to identify the correct application practices. Claimants represented by lawyers of interest as calculations can be complex, with significant experience in this area are particularly noting the differences between better informed about the interplay between settled claims and awarded claims the legislation, case law and practicalities. An »» Overlooking a mortgagee’s rights in intimate knowledge and attention to your relation to advances and payments for particular circumstances allow all possible compensation entitlements to be uncovered. »» Failing to identify when the acquiring The legislation provides for necessary legal authority utilises powers of entry and costs and disbursements to be paid by the powers to temporarily occupy acquiring authority. It is therefore possible to avoid any out of pocket costs and expenses. »» Ignoring the responsibility to mitigate loss, such as agribusiness and business It is advisable for expert valuation, planning destruction/disruption and other necessary advice to be undertaken independently, so it can be effectively relied »» Improving or selling property after the upon throughout the entire process. As such, NOIA, without first clarifying rights and it is important that these experts are engaged obligations directly by your lawyers. »» Overlooking the impacts of personal circumstances including tax implications

Page 14 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 15 Acquisition timeline

»» The Stage 3 process usually commences with the Notice of Intention to Acquire (NOIA) »» The acquiring authority must make an initial offer of compensation within 14 days of the NOA pursuant to the Land Acquisition and Compensation Act 1986 »» The claimant provides their ‘Response to Offer’ (your claim) within 3 months of the initial offer »» The Notice of Acquisition (NOA) will usually be issued within 2 – 6 months of the NOIA of compensation (under some circumstances this time frame can be extended) »» On the date of the NOA, the affected land belongs to the acquiring authority »» The acquiring authority must respond to the claim within 3 months of receipt

1 Early planning

On date of NOA, Within Within 2-6 affected land Within 14 days 3 months, Response to months the belongs to of NOA, offer of the claim the claim is due Identifying future NOIA usually NOA is acquiring compensation (Response to within 3 months 2 acquisitions issued usually issued authority received Offer) is due of receipt

Acquisition process 3 commences

Page 16 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 17 Glossary and legislation

»» “LACA” - Land Acquisition and Compensation Act 1986 (Vic) »» “LACA Regs”- Land Acquisition and Compensation Regulations 2010 (Vic) »» “NOIA” - Notice of Intention to Acquire »» “NOA” - Notice of Acquisition »» “P&E Act” - Planning and Environment Act 1987 (Vic) »» “P&E Regs”- Planning and Environment Regulations 2005 (Vic) »» “PAO” - Public Acquisition Overlay »» There are many ‘Special Acts’ which govern each Victorian Acquiring Authority, such as: – Eastlink Project Act 2004 (Vic) – Electricity Industry Act 2000 (Vic) – Local Government Act 1989 (Vic) – Major Transport Projects Facilitation Act 2009 (Vic) – Pipelines Act 2005 (Vic) – Road Management Act 2004 (Vic) – Water Act 1989 (Vic)

Page 18 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 19 Compulsory acquisition experience

Advising on, and acting in relation to, »» Melbourne Metro Rail Authority and prospective and actual compulsory other Rail Authorities in relation to the Anton Dunhill acquisitions by: Melbourne Metro Rail Project, Regional Partner »» Local councils for public open space, Rail Link Stage 1, Regional Rail Link Stage Head of Property Disputes and Compulsory Acquisitions in Victoria roads and other projects including 2, various Regional Rail Link alliance Ballarat, Banyule, Bass Coast, Brimbank, projects concerned with Regional Rail Contact details Casey, Frankston, Geelong, Glen Eira, Link, level crossing removals, and the T: +61 3 8602 9254 Greater Dandenong, Greater Shepparton, further development of infrastructure, as F: +61 3 8602 9299 Kingston, Melton, Stonnington, Surf well as Westall Railway Station upgrade M: 0413 268 663 Coast, Wellington, Whittlesea, Wyndham »» Level Crossing Removal Authority, E: [email protected] and Yarriambiack including various removals such as »» Road projects (VicRoads and other Caulfield to Dandenong (Sky Rail), St authorities) including the Chandler Albans and others Highway, Craigieburn Bypass, Dingley »» Linking Melbourne Authority including Bypass, Drysdale Bypass, Eastlink, East- Eastlink and East-West Link West Link, E6 / Outer Metropolitan Ring »» Melbourne Airport Road, Geelong Bypass, Hallam Road, »» Government departments in charge Tony Raunic Bill Hazlett Horsham Bypass, Kilmore-Wallan Bypass, of various environment, land, water, Koo Wee Rup Bypass, Melbourne CityLink, Partner Partner transport, planning and infrastructure Palmers Road, Princes Highway Project including the desalination plant at (multiple stages), St Albans, Thompsons Wonthaggi, the desalination pipeline and a Road, Western Highway Project (multiple bus depot at a Westfield shopping centre stages), Westgate Freeway up-grade, Yan Yean Road duplication and numerous »» Gas pipelines created for Esso Australia other road widening projects Resources Pty Ltd »» Water corporations including Barwon »» Electrical transmission lines created for Region, Coliban Region, Gippsland, SPAusnet and United Energy Distribution Grampians Wimmera Mallee, Goulburn »» Western Grasslands Reserves Overlays Valley Region, Lower Murray Urban and including the Werribee Districts Rural, Melbourne, South East, Sugarloaf »» Department of Infrastructure, Energy & Pipeline, Western Region and Yarra Resources (Tas) ValleyMelbourne Metro Rail Authority »» Various Authorities in relation to Public »» Places Victoria (previously the Urban acquisition overlay claims including Renewal Authority) including the loss on sale claims and planning permit Dandenong Revitalisation application refusals

Page 20 | Compulsory acquisition | Hunt & Hunt Hunt & Hunt | Compulsory acquisition | Page 21 Sydney Perth Sydney (City) Culshaw Miller Lawyers Gateway, 1 Macquarie Place Level 1,16 St Georges Terrace Sydney NSW 2000 Perth WA 6000 T +61 2 9391 3000 T +61 8 9488 1300 F +61 2 9391 3099 F +61 8 9488 1395

Sydney (North Ryde) Hobart Level 2, 1 Innovation Road Level 9, 85 Macquarie Street North Ryde NSW 2113 Hobart TAS 7001 T +61 2 9804 5700 T +61 3 6210 6200 F +61 2 9804 5799 F +61 3 6234 3774 Melbourne Darwin Level 26, 385 Bourke Street Level 2, 13 Cavenagh Street Melbourne VIC 3000 Darwin NT 0800 T +61 3 8602 9200 T +61 8 8924 2600 F +61 3 8602 9299 F +61 8 8941 0012

Brisbane Shanghai Nicholsons Solicitors Room 701, Summit Centre Level 12 , 110 Eagle Street 1088 Yan An Xi Road Brisbane QLD 4000 Shanghai China 200052 T +61 7 3226 3944 T +86 21 6249 3543 F +61 7 3221 3756 F +86 21 6249 3545 Adelaide Level 10, 400 King William Street The Australian Member of Interlaw Adelaide SA 5000 T +61 8 8414 3333 F +61 8 8211 7362

For further information please contact Anton Dunhill

T +61 3 8602 9254 F +61 3 8602 9299 M 0413 268 663 E [email protected] www.hunthunt.com.au