Digging Deep: A Court Case Study
Shaw Reynolds Lawyers
A Specialist Development, Local Government, Environment and Planning Law Firm
By Ivana Hayman and Alyce Kliese
Ever thought about the ground beneath your property? The Sydney Metro v Expandamesh Pty Ltd [2023] NSWCA 200 case delved into this issue, following a disagreement over Sydney Metro's acquisition of sub-soil land from Expandamesh for constructing underground tunnels.
Background
On October 11, 2017, Sydney Metro acquired the land beneath Expandamesh's property for constructing two underground tunnels as part of the South-Western Metro line project. Expandamesh sought compensation for an alleged decline in property value due to soil subsidence (ground sinking) post-acquisition. Initially, the NSW Valuer General denied any compensation on January 23, 2018. The tunnels were built between March 20 and May 2, 2019, with one of them lying entirely within the acquired area.
Legal Framework
The case pivoted around the interpretation of the Transport Administration Act 1988 (the Transport Act), specifically whether Expandamesh should get compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act) despite their land not being "disturbed" by the tunnel construction about 19 metres below. The Transport Act generally rules out compensation for sub-soil acquisition, except if the surface or its support is notably affected or if any underground works are rendered unworkable or negatively impacted.
Core Issue
The question was whether the underground tunnel construction by Sydney Metro "disturbed" the overlying land owned by Expandamesh, as defined by the Transport Act, thus qualifying them for compensation under the Just Terms Act.
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Judicial Interpretation
In the first instance, the Court evaluated the words used in the Transport Act, emphasising the term "disturbed" among others. It was found that about 1.5mm of soil was "disturbed" due to the tunnel construction, a figure not deemed "trivial" by the Court. The potential future use of the land, especially regarding a proposed 33-level building, was considered to determine the extent of disturbance and consequent compensation entitlement.
On appeal, the Court ruled in favour of Sydney Metro, stating that the level of disturbance didn't warrant compensation. Consequently, the appeal was allowed, and the initial decision was overturned. Each party was instructed to bear their own legal costs.
Key Takeaways
Further Reading