This article considers select cases from the NSW Land and Environment Court and the NSW Court of Appeal in 2025 and the outlook for 2026. 

[Disclaimer: Colin Biggers & Paisley acted for the Appellant, Goldmate Property Luddenham No. 1 Pty Ltd] 

"Public Purpose" cases in 2024  

A number of important decisions were handed down in the last year which considered how the public purpose of an acquisition is to be determined and how the statutory disregard in section 56(1)(a) applies when determining compensation for "market value".  

Goldmate in the Court of Appeal  

Less than a week after publishing our 2024 review article, the Court of Appeal handed down its decision in Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales (2024) 116 NSWLR 233; [2024] NSWCA 292, which has developed the law on this issue further.  

As we discussed in our article reporting on the Court of Appeal's decision (available here), the judgment was significant for two key reasons: 

• Firstly, the Court of Appeal found the "composite" public purpose found by the primary judge was legally erroneous. The Court of Appeal emphasised the need for there to be an alignment between the acquiring authority's power to acquire land and the public purpose of the acquisition.  

• Secondly, the Court of Appeal outlined a clear four-step process to determine market value compensation under section 56(1)(a) of the Act and the proper application of the statutory disregard.  

Goldmate High Court appeal and remitter  

Further developments in the long running Goldmate case took place this year.  

Special leave to appeal the Court of Appeal's decision was refused by the High Court in April 2025: [2025] HCADisp 68. This confirmed the correctness of the Court of Appeal's decision.  

Judgment in the remitter of the Goldmate decision is currently reserved, after a hearing in November 2025. The remitter has attracted a high degree of interest given the outcome will affect other cases in the Court system, particularly for major infrastructure acquisitions in the Aerotropolis.   

UPG 72 Pty Ltd v Blacktown City Council [2025] NSWLEC 29 

The decision in UPG was the first case to apply the Court of Appeal's decision in Goldmate and the four steps outlined by Adamson JA. Pepper J's judgment in UPG was delayed whilst the parties awaited the decision in Goldmate.  

The UPG case involved the compulsory acquisition by Blacktown Council of a 2.025-hectare parcel zoned SP2 (drainage). The Valuer-General initially awarded approximately $2.5 million, but the Council argued for zero compensation during litigation. The landowner claimed about $7 million. Ultimately, $1.2 million was awarded. 

The Court accepted UPG's argument on the scope of the public purpose of the acquisition, finding that the public purpose was to construct a drainage channel and create habitat for the Green and Golden Bell Frog. In doing so, the Court rejected the public purpose contended for by the Council which bore a striking similarity to the style of TfNSW's argument in the Goldmate litigation. In this regard, the Council argued the public purpose was "that of the NSW Government" which includes the release of precincts identified in the Growth Centres SEPP for urban purposes "as part of a coordinated State Government response to the announcement of urban release in Western Sydney" (see [137]). However, that type of rolled up or composite public purpose was rejected by the Court of Appeal in Goldmate. 

The Court then considered what the zoning of the acquired land would have been when the public purpose (construction of a drainage channel and creation of habitat for the Green and Golden Bell Frog) were disregarded.  

UPG submitted it would have been zoned R2, because the release of the Riverstone Precinct cannot be assumed not to have occurred (see [162]). The Council submitted the acquired land would have been zoned rural, or Environmental E2 (see [161]).  

Pepper J ultimately decided the acquired land would have been zoned primarily Environmental E2 because of the Green and Golden Bell Frog habitat it provided, with a small 500 sqm portion zoned R2 Residential land, sufficient enough to enable a single dwelling entitlement (see [174]). The parties' valuers had jointly agreed that if this scenario applied, then the market value compensation would be $1.2 million (see [219]). Compensation was determined accordingly.  

Telado v Sydney Metro; CFT No. 8 Pty Ltd v Sydney Metro [2025] NSWLEC 42 

The case of Telado concerned the acquisition of 28 O'Connell Street and 48 Hunter Street for the Metro West project in September 2022. The acquired land comprised two commercial buildings. 

Telado argued that the statutory disregard needed to encompass the acquisition of the adjoining land at 33 Bligh Street, which had been acquired for Metro West and Metro City South West (each a separate project). This approach was necessary in order to support Telado's claim that the highest and best use of the acquired land was for development with the adjoining 33 Bligh Street as a single development site. Telado submitted that the public purpose of the acquisition was the single public purpose of the provision of the metro network, comprising both Metro West and Metro City Couth West. See [48] - [52].  

Sydney Metro argued the public purpose was limited to the Metro West project only, being the project the subject land was acquired for. Based on this characterisation, 33 Bligh Street would not be available for a hypothetical redevelopment of the subject land, because 33 Bligh Street had been acquired for Metro City South West. See [53] - [56].  

The Court decided the issue in favour of Sydney Metro, finding that there were two distinct purposes for the acquisition of the adjoining 33 Bligh Street (Metro West and Metro City South West). The consequence of this was to only disregard Metro West for the subject acquisition. This triggered a determination of what the circumstances would have been absent the Metro West - the result being that 33 Bligh Street would be unavailable for the combined redevelopment. This meant the highest and best use of the subject land was its current use, without a capacity for development in conjunction with 33 Bligh St. See in particular [57] - [70].  

The Court also applied the decision of Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5 and found that the decisions made by the landowners to not pursue a planning proposal, or an unsolicited proposal with the NSW Government, were not caused by the public purpose and were therefore not to be disregarded. See in particular [172] and [153] - [191]. 

Putting to one side the complexity of the issues in Telado, the case is also noteworthy for the quantum involved.  

$200 million for market value compensation was ultimately awarded by the Land and Environment Court and apportioned to the two claimants on a pro rata land size basis (based on the combined 1,022 sqm).  

As the below figures demonstrate, the outcome for each claimant was considerably higher than what the Valuer-General had determined:  

Although the contested legal issues were ultimately resolved in Sydney Metro's favour, the Applicants nevertheless achieved through the Court process a significant increase in compensation compared to the Valuer-General's determination.  

This year saw two key decisions on the costs of litigating compulsory acquisition cases. These are important given our anecdotal experience where acquiring authorities look for opportunities to pursue costs in these types of cases.   

Both decisions provide comfort to dispossessed landowners in resumption and uphold the conventional proposition that the acquiring authority is required to pay the costs of the dispossessed landowner, provided the dispossessed landowner conducts the litigation reasonably. 

UPG 72 Pty Ltd v Blacktown City Council (No 2) [2025] NSWLEC 77 

UPG No 2 was a costs decision following the substantive judgment (discussed above). The costs decision arose because Pepper J made an order that the Council was to pay UPG's costs of the proceedings unless an alternative costs order was applied for within 14 days. The Council then filed a notice of motion seeking a split costs order, being that: 

• the Council only pays the Applicant's costs until the first day of the hearing; and 

• each party to pay its own costs from that point onwards.  

In summary, the Council's argument for doing so was because UPG's claim substantially failed and the amount awarded by the Court was less than 50% of the Valuer-General's determination. The Council contended that it was not reasonable for UPG to continue the proceedings after the joint expert reports were finalised.  

The Court declined to make the alternative costs order and the Council's motion was dismissed with costs. Pepper J did not consider that the findings of the joint expert reports rendered the litigation pointless.  Her Honour observed that the issues raised were arguable, the evidence contestable and the proceedings conducted efficiently. Her Honour further noted that UPG secured more than the zero-compensation sought by the Council and therefore achieved some success in the litigation (see [38]–[46]). 

Telado Pty Ltd; CFT No 8 Pty Ltd v Sydney Metro (No 2) [2025] NSWLEC 124 

Similarly, Telado No 2 was a costs decision, which followed the substantive judgment (discussed further above).   

Duggan J declined to grant the costs order sought by Sydney Metro, which was that Telado should pay its own costs for the part of the case where it was unsuccessful, which was a departure from the ordinary course for litigation of this kind. Sydney Metro submitted that the dispossessed owner had failed on all major points and significant costs had been incurred by the parties in dealing with those points at the hearing, which was unreasonable.  

Her Honour found at [39] that the lack of success in discharging the evidentiary onus was not a proxy for unreasonableness. In her judgment, Duggan J confirmed long standing principles that appeals against the determination of compensation for a compulsory acquisition are not "ordinary litigation" and a dispossessed owner is entitled to access the Court to present an arguable and organised case (see [44]).  

The decision should therefore give comfort to dispossessed owners in complex acquisitions where there are intensive costs involved in discharging the evidentiary bonus to substantiate their claims. 

As a final aside on the issue of costs, we also foreshadow that the remitter judgment in Goldmate will also need to deal with a costs claim by TfNSW for an interlocutory dispute before the final remitter hearing. TfNSW claimed costs for an aborted motion where Goldmate sought to reopen evidence regarding the collocation of the Outer Sydney Orbital with the M12 (for which the land was acquired), due to evidence given following the initial hearing by TfNSW's Chief Transport Planner at a Parliamentary Inquiry.  

In The Eddie Arnott Corporation Pty Ltd v Sydney Metro (No 4) [2025] NSWLEC 103 (The Eddie Arnott Corporation Pty Ltd), a dispossessed owner (who was self-represented) saw two claims for special value refused.  

The case concerned the acquisition of a ground floor shop used as a dental practice in the former Hunter Connection. Eddie Arnott Corporation (a corporate trustee) was the owner of the strata lot and held a freehold claim. Dr Arnaout operated a business from the land and held a leasehold claim. 

Notably, each claimant made an unsuccessful claim for special value: 

• The company's special value claim of $3.5 million was based on the premise that the company could not find replacement CBD premises for the same purchase price as the market value of the acquired interest. The Court found that the replacement value of a freehold interest held for investment purposes did not constitute special value within the meaning of the Just Terms Act. See [185] - [193].  

• Dr Arnaout's special value claim for $436,000 was based on his use of the premises as a dental business. The Court dismissed the claim for three reasons. Firstly, because the identified financial advantage appeared to be the historical use of the premises. Secondly, because the loss of the future use of the leasehold would be captured in the market value of that interest. Thirdly, because the financial advantage claimed was not based on any expert evidence. See [254] - [259].   

Unfortunately for Dr Arnaout, the Court found him to be an unreliable witness. The Court also decided not to admit the applicant's expert town planning and valuation evidence, as the expert witnesses were not made available for cross-examination. These matters became detrimental to the case. It is therefore difficult to fully evaluate the implications of the Court's findings on special value given the fundamental issues with the case that was before the Court.  

The Court ultimately held the Dr Arnaout's unregistered lease did not amount to a compensable interest in the land. In summary, this was because the lease itself was not enforceable. His special value claim was nevertheless considered in case the Court was wrong about the threshold question of whether there was a compensable interest in the land.  

The company was ultimately awarded $1,070,000 for market value, plus $32,000 for legal and valuation costs.  

The company is now pursuing an appeal to the Court of Appeal. 

Moving into 2026, we conclude with some observations.   

Firstly, we are seeing continued momentum for infrastructure projects in the renewable energy space and we expect to see more rural acquisitions move through the acquisition process and into the Courts.  

Secondly, with the initial buzz of the Land Acquisition Review fizzling out, we are not expecting any major changes to the legislation to arise. Final recommendations are expected to be considered by Government in 2026, but no precise timeframe has been committed to.  

Thirdly, we observe that the case law interpreting this 34 year old piece of legislation continues to develop. Given our expectation that only modest changes to the legislation might occur, case law will be important in the years ahead in terms of both the application of the legislation to novel property interests but also in terms of increasing property values where minor percentage differences in valuations can involve large quantitative differences to the tune of millions of dollars.  

Finally, as many practitioners have observed, the Court of Appeal decisions over the last 6-7 years have significantly narrowed the scope of what dispossessed owners can claim where that scope exceeds the market value of their interest land. Cases like Roads and Maritime Services v United Petroleum Pty Ltd [2019] NSWCA 41 and Sydney Metro v C & P Automotive Engineers Pty Ltd [2024] NSWCA 186 have limited the disturbance head of compensation and cases like Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5 will place a stop on claims for loss of value associated with applicant's ceasing development work on land marked for acquisition.  

If there is to be any change to the trajectory set by the above cases that have favoured acquiring authorities, we see that occurring in the area of special value, even though the decision in The Eddie Arnott Corporation at face value suggests otherwise. In particular, there will come a time where a dispossessed owner with significant interests at stake will explore whether the special value head of compensation might be utilised in a manner similar to that eluded to by Basten JA in Roads and Maritime Services v United Petroleum Pty Ltd [2019] NSWCA 41 at [102] and in Roads and Maritime Services v Allandale Blue Metal Pty Ltd [2016] NSWCA 7 at [36] and following these decisions narrowing the scope of disturbance claims.