Land Acquisition (Miscellaneous) Amendment Bill

Second Reading

The important bill that I have introduced today amends the Land Acquisition Act 1969. The act governs the acquisitions of land by approved authorities. Generally, this means a government agency undertaking to acquire land for various road or infrastructure projects. A special act of parliament is required to authorise compulsory acquisitions of land, and the special act also designates the relevant authority for the purposes of that act.

The act outlines the procedures to be followed in acquisitions and also provides statutory authority for compensation to be paid to persons whose properties are being acquired. The act is committed to the portfolio of the Attorney-General; however, operationally, the Department of Planning, Transport and Infrastructure (referred to here as DPTI) takes carriage of significant state land acquisitions affecting multiple parties for the purposes of delivering large-scale infrastructure projects. Some examples here are the work undertaken on the Torrens to Torrens road project, or the Northern Expressway.

The amendments to the act contained in the bill have originated from several sources. Firstly, in 2015 the parliamentary Select Committee on Compulsory Acquisition of Properties for North-South Corridor Upgrade (which I will refer to as the select committee) was formed to examine the compulsory acquisition of properties for the north-south corridor under the former Labor government. The select committee handed down its report in June 2017.

Of the recommendations in the report, six were legislative. All legislative changes were accepted by the government and recommended for implementation. There were also a number of non-legislative policy and operational changes recommended in the report. The majority of these policy-related changes were also already part of DPTI's processes or have since been implemented at the departmental level.

There are also a number of amendments in the bill that address ongoing issues that commonly arise during land acquisitions, as well as significant amendments to clarify the position of the act in relation to acquisitions of underground land. The amendments arising out of the select committee recommendations are briefly as follows:

  • section 23(1) has been amended to require that both an authority and a claimant must negotiate in good faith during compensation negotiations;
  • an amendment to oblige claimants to respond to an offer of compensation within six months of the date of acquisition. An additional provision has also been added to allow a claimant to apply for an extension of the time to respond to the authority. If no response is received, the offer reverts to the authority and no longer accrues interest. This right to compensation is not affected by the reversion;
  • an amendment to introduce a solatiumpayment to the compulsory acquisition process. A solatium payment compensates a person for non-financial disadvantage or loss resulting from the need to relocate the person's principal place of residence. This payment applies to residential owner-occupiers who are losing their principal place of residence due to the acquisition. The payment will be 10 per cent of the assessed market value of the property or $50,000, whichever is the lesser amount;
  • an allowance of $10,000, payable in advance, to cover professional fees for claimants who own their properties has been introduced. The balance of any further reasonably incurred fees will be paid at the conclusion of a matter; however, this will assist claimants with up-front fees (most likely to be legal fees). The dollar figure will be prescribed in the regulations, but it is intended that it be $10,000;
  • introduction of a compulsory settlement conference before court proceedings can be commenced. A conference must be convened if requested by the claimant, and must be held prior to court proceedings being commenced. The cost of the conference is to be borne by the authority. An offence has been introduced if a person fails to follow a direction of the conference coordinator, with a maximum penalty of $2,500. The qualifications of the conference coordinator will be prescribed; and
  • an amendment defining 'professional costs'. The current act only deals with the payment of legal costs; however, the inclusion of non-legal professional fees, such as property valuers and accountants, will provide guidance to these professional industries and any acquiring authority to ensure that only reasonable fees are reimbursed. The full list of professional fees that can be reimbursed will be prescribed by regulation.

I advise members that other reforms include:

  • the introduction of a valuer's conference, which must be held if requested by either party. This conference generally only involves the professional valuers for each party and is intended to allow for the valuers to address any factual issues involved in their respective property valuations—for example, discrepancies in the boundaries of the property that has been valued, agreement on the value of fixtures, etc. This conference occurs early in the process of compensation negotiations and is of great assistance in resolving factual issues;
  • an amendment to require that compensation moneys must be withdrawn from the Supreme Court Suitors' Fund within 24 months. The suitors' fund sits within the Supreme Court and is used to hold moneys for litigants, in a similar manner to a trust account. If the moneys are not withdrawn, they revert to the authority and will no longer accrue interest. It does not affect the claimant's right to compensation;
  • an amendment to allow offers of compensation to be varied up or down. Where offers are increased, the bill allows for the excess to be paid directly to the claimant. If the authority wishes to vary an offer down, they will be required to apply to the court for an order to do so, with new information that was not previously known to the authority;
  • an amendment to provide that for parties with an interest not exceeding $10,000 (the dollar figure will be prescribed) payment can be made directly to the claimant without the requirement for moneys to be paid into the Supreme Court Suitors' Fund. This amendment will save on administrative costs and time associated with withdrawing the money, leading to improved outcomes for the dispossessed tenants;
  • an amendment has been introduced to allow the authority to determine the rent to be paid by claimants if they remain on the premises following the expiry of the three-month grace period following acquisition. The rent must not exceed a reasonable market rate for the property;
  • an amendment to expressly provide that the authority can make a payment to a tenant whose interest in land is subject to acquisition but is not readily able to be purchased by agreement prior to the acquisition. The act does not currently allow payments to be made, for example, to tenants prior to serving a notice of acquisition, except with an exemption being sought from Treasurer's Instructions. The issue generally arises when dealing with the holder of a subsidiary interest in land, the subject of a notice of intention to acquire. As the land has not yet been acquired, there is no damage and no compensation payable under section 25 of the act. This amendment will allow the authority to negotiate and make a payment to an interest holder in advance of the formal acquisition, paid on the same basis as for land which is compulsorily acquired. This allows for more flexibility in the process and would also allow easy claims to be finalised early on, providing more certainty for claimants; and
  • an amendment to place a statutory obligation on the landowner to disclose persons with an interest in the land and the nature of their interest. This will allow both regular acquisitions and underground acquisitions. DPTI have encountered issues in past acquisitions where landlords have refused to disclose the names and contact details of tenants, which can delay claims for an extended period of time. Often this has happened with unscrupulous landlords who have tenants paying cash and no registered bonds with the Consumer and Business Services for residential tenancies, or who have too many tenants or are otherwise not complying with their legal obligations as a landlord/proprietor. This amendment will ensure that landlords are obligated to supply the details of their tenants so that DPTI and other acquiring authorities can ensure compensation is paid to those who are properly entitled to it. A criminal offence with a maximum penalty of $5,000 has been introduced for a failure to provide this information without a reasonable excuse.

Finally, some of the most important amendments in this bill relate to acquisitions of underground land. A new set of provisions will be inserted into the act to clarify the position in relation to compensation for underground acquisitions and create a modified procedure for dealing with underground acquisitions. The act is currently silent on the question of compensation for underground acquisitions, which causes legal and operational confusion.

In South Australia, landowners also own the underground parts of their land with no limit as to depth and, therefore, an acquisition needs to take place in order to tunnel under private property, but it is not always necessary to acquire the surface and structures. This is not to be confused with the rights to minerals, of course, underground.

The act will be amended to provide that no compensation will be payable for underground acquisitions, as landowners will not suffer any detriment or loss of enjoyment of their land. A modified notification procedure has also been created, removing the need for DPTI to serve a notice of intention to acquire. A notice of acquisition will instead be served at the time of acquisition. This will apply only where the underground part of the land will be acquired.

New South Wales and Western Australia both have provisions in their equivalent legislation that provides that no compensation is payable for underground acquisitions and, therefore, the new provisions of our act are in keeping with the position in other jurisdictions.

The amendments that relate to the underground acquisitions are vital for the next stages of the government's north-south corridor infrastructure projects. Clarification of the procedures for underground acquisitions allows the government to explore options for the remaining sections of the corridor that involve tunnelling, which allows the possibility of vastly improving road infrastructure with a minimum of disturbance in built-up areas.

I thank members of the select committee who sat to provide us with a report and a number of these recommendations, and I commend the bill to the house. I further seek leave to insert the explanation of clauses in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Land Acquisition Act 1969

4—Amendment of section 6—Interpretation

This clause amends the definition of compensation to provide that payments made under Part 4 Division 4 (other payments inserted by this Bill) do not constitute compensation for the purposes of the Act.

5—Amendment of section 7—Application

This clause puts beyond doubt that a special Act that authorises the compulsory acquisition of land will be taken to authorise the acquisition of underground land.

6—Amendment of section 10—Notice of intention to acquire land

This clause removes the requirement that a notice of amendment be served in the same way as the notice of intention to acquire the land. It also clarifies that a notice of amendment does not constitute a new notice of intention to acquire land for the purposes of the Act.

7—Insertion of section 10A

This clause imposes an obligation on an owner of land who is given a notice of intention to acquire land to notify the Authority of any other person who, to the owner's knowledge, has an interest in the land to which the notice of intention to acquire land relates, and the nature of that interest.

8—Amendment of section 12A—Right of review

This clause extends the period in which the South Australian Civil and Administrative Tribunal has to complete its proceedings from 14 days to 21 days.

9—Amendment of section 15—Acquisition by agreement etc

This clause removes the requirement that a notice of a decision not to proceed with acquisition be served in the same way as the notice of intention to acquire the land.

10—Amendment of section 16—Notice of acquisition

This clause changes the time period after which the Authority may publish a notice of acquisition in relation to land from being 3 months after the last occasion on which a notice of intention to acquire land was given to 3 months after the first occasion on which any notice of intention to acquire land was given.

11—Substitution of heading to Part 4

This clause amends the heading to Part 4 to include reference to other payments contained in inserted Part 4 Division 4.

12—Amendment of section 22B—Entitlement to compensation

This clause amends section 22B to provide that only persons with an interest in land that is capable of alienation are entitled to compensation. This requirement has not been extended to interests consisting of native title.

13—Amendment of section 23—Negotiation of compensation

Section 23(1) currently provides that the Authority must negotiate in good faith in relation to compensation. This clause broadens subsection (1) by providing that claimants must also negotiate in good faith.

This clause also introduces a valuers conference into the statutory scheme. The Authority must convene a valuers conference on the request of the claimant, or may do so of their own volition at any other time. The purpose of the valuers conference is to determine a valuation, if possible, with which both valuers agree, and to determine other agreed facts and issues of contention.

14—Amendment of section 23A—Offer of compensation and payment into court

This clause amends section 23A to allow the Authority to not make an offer of compensation when it gives notice of the acquisition of land in certain circumstances, being if the Authority is of the view that the amount of compensation is unable to be determined or in any other circumstances prescribed by the regulations.

The Authority is also given an ability to vary an offer of compensation in this clause. The Authority may increase the offer by notice to the person who received the original offer. Alternatively, if after making the original offer, the Authority becomes aware of information that negatively affects the value of the land, the Authority may apply to Court for an order that the offer be decreased. This clause also provides for the manner in which the difference between the original offer and the offer as varied will be paid back to the Authority or to the claimant, as the case may be.

15—Insertion of sections 23AB and 23AC

Inserted section 23AB requires a person to whom an offer of compensation is made to respond to the offer within 6 months, or within such other period as may be specified by the Authority on application of the person. If, on application, the Authority refuses to specify a longer period in which the person has to respond, the person may refer the matter to Court for review.

If the person does not respond within the prescribed period, the money which was paid into Court under section 23A will revert back to the Authority (though this reversion will not affect the person's entitlement to that compensation). Once this has occurred, the claimant will not be entitled to any interest that accrues on the money so reverted.

Inserted section 23AC provides money that has been paid into Court under section 23A as an offer of compensation to a person must be withdrawn by the person within 24 months after the money is last paid into Court. If the money is not withdrawn by the person within this period of time, the money will revert back to the Authority (though this reversion will not affect the person's entitlement to that compensation). Once this has occurred, the claimant will not be entitled to any interest that accrues on the money so reverted.

16—Insertion of section 23BA

Inserted section 23BA provides that upon the application of the claimant a settlement conference must be convened by the Authority before a matter is referred to Court under section 23C (and may otherwise take place on the volition of the Authority). A number of requirements apply in relation to a settlement conference including the appointment of a conference coordinator. A coordinator has the power to give directions for the purposes of a settlement conference, and an unreasonable failure or refusal to comply with a direction will amount to an offence. The conference is to be conducted on a without prejudice basis.

17—Amendment of section 23C—Reference of matters into court

This clause amends section 23C to provide that a claimant must apply to the Authority to convene a settlement conference before referring a matter to Court under that section. The clause also requires that once convened, the claimant take part in the conference.

18—Substitution of section 24—Entry into possession

Section 24 of the Act is substituted by this clause to change the manner in which the Authority can enter into possession of land where an interest in possession has been acquired under the Act in relation to that land. This clause removes the requirement for the Authority to obtain agreement from the relevant claimant as to the terms on which it will enter into possession of the land, and provides that the Authority may enter into possession on a date fixed by the Authority, being no sooner than 3 months after acquisition has taken place. The Authority is required to notify the person who is in occupation of the land of the date on which the Authority will take possession. This will not be required where the relevant land is vacant, in which case the Authority may enter into possession from the date of acquisition of the land.

The occupier has the ability to apply to the Authority to fix a later date, and if the Authority refuses to do so the occupier may refer the matter to Court.

The Authority may enter into possession of the land at an earlier time either upon agreement with or application of the relevant occupier, or if the occupier vacates the land prior to the date specified in the notice.

A person who remains in occupation of land after the date specified by the Authority will be taken to occupy the land pursuant to a tenancy, the terms and conditions for which (including the amount of rent payable) are to be determined by the Authority.

This clause also proposes to insert new section 24A, which provides that the Authority may apply to the Court for certain orders.

19—Insertion of section 25A

This clause provides a mechanism by which the Authority may increase the amount of compensation payable to a person by 10% of the market value of the land or $50,000 (or such other amount as may be prescribed by the regulations), whichever is the lesser. This increase in compensation is available to a person who owned and occupied the acquired land and whose principal place of residence was acquired.

20—Insertion of Part 4 Divisions 3 and 4

Inserted Part 4 Division 3 provides a mechanism by which the Authority may make a payment of compensation directly to the claimant where the amount of compensation is under a prescribed amount, rather than paying the amount into Court.

Proposed Part 4 Division 4 inserts several payments that may be made by the Authority to the claimant depending on the circumstances. Inserted section 26B provides for payments relating to professional costs to persons who are owners and occupiers of land to which a notice of intention to acquire land has been given. Under this proposed section, the Authority has discretion to pay a person an amount or amounts of money towards payment of their professional costs relating to an acquisition of land (or a proposed acquisition). In determining any subsequent payment under this section, the Authority will take into account any other amount paid under this section.

Inserted section 26C allows the Authority to make payments to residential tenants after a notice of intention to acquire land is given to the tenant but before the relevant acquisition occurs. A residential tenant who accepts a payment under this section will not be entitled to further compensation under the Act in relation to their interest as a tenant. Conditions may be attached to a payment under this section with which the residential tenant must comply; in the event of non-compliance the payment made under the section will become a debt owing to the Authority.

Under inserted section 26D, the Authority may pay transfer costs to a person who was an owner of certain land (the whole of fee simple land) that was acquired under the Act and who purchased land to replace that land. A person must apply to the Authority to receive this payment.

21—Insertion of Part 4A

Inserted Part 4A relates to the acquisition of underground land. Much of the Act is disapplied to the acquisition of underground land, and, as such, section 26F provides for the way in which underground land is to be acquired. The Authority may acquire the land by publishing a notice of acquisition in the Gazette at any time, and must thereafter, as soon as is reasonably practicable, give notice to the person who was the owner of the land. A person is not entitled to compensation for the acquisition of underground land under this Part.

Section 26G imposes an obligation on persons from whom underground land has been, or may be, acquired to notify the Authority of other interests in the underground land.

22—Amendment of section 36—Costs

This clause amends section 36 to provide that the Court, in making an order for costs, may take into consideration a failure on the part of the Authority or the claimant to negotiate in good faith.

Debate adjourned on motion of Hon. S.C. Mullighan.