On the Register means on the money: VPA rights may be compensable in NSW compulsory acquisitions

The Supreme Court of NSW has held that a voluntary planning agreement registered under section 7.6 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) can be a compensable interest in land for the purposes of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act).

The decision in City of Parramatta Council v Transport for NSW [2026] NSWSC 294 considered whether there had been a jurisdictional error in the assessment of a "registered interest" and the decision not to issue a compensation notice, before determining the question of a compensable "interest in land".

Background: the land, the light rail, and the voluntary planning agreement

As part of the expansion of the Sydney light rail network, Transport for NSW (TfNSW) compulsorily acquired a parcel of land on Hill Road, Wentworth Park. That land was subject to a voluntary planning agreement (VPA) entered into in November 2021 between the landowner, developer, and the City of Parramatta Council.

Under the VPA, the developer was required to dedicate parts of the land to the Council once certain works were completed, though the VPA imposed no obligation on the developer to carry out those works. The VPA was registered on the title to the land pursuant to section 7.6 of the EPA Act.

Following the acquisition in May 2024, the Council lodged a compensation claim with the Valuer General. Both the Valuer General and TfNSW denied that the Council held an interest in the acquired land within the meaning of the Just Terms Act and rejected the claim. On this basis, TfNSW did not issue a compensation notice to Council as required by section 42 of the Just Terms Act. The Council sought judicial review of those decisions in the Supreme Court.

Over the jurisdictional threshold

The threshold issue before the Court could determine the substantive dispute, was whether the existence of a "registered interest in land" under section 42(2)(a) of the Just Terms Act is a jurisdictional fact, being an objective precondition that must actually exist before a decision-maker may lawfully exercise a statutory power. Justice Campbell answered in the affirmative.

His Honour held that the question of whether a former owner had a registered interest in the land does not afford subjectivity or a reasonable difference of opinion - an interest is either registered, or it is not; it either appears on the Register, or it does not. It was not for TfNSW to go behind the Register and form its own view about whether a recorded interest is actually an "interest in land." This is to be contrasted with the potentially subjective requirements in section 42(2)(b) and (c), which contemplates where a party was in lawful occupation of the land; and where a party, to the actual knowledge of the acquiring authority, had a compensable interest in the land.

Accordingly, TfNSW's jurisdictional fact error gave rise to judicial review of the decision to deny the Council compensation.

From registration to an interest in land

Having answered the jurisdictional question, Justice Campbell turned to consider the substantive issue: did the Council's rights under the registered VPA constitute an "interest in land" for the purposes of the Just Terms Act?

The Council's primary submission had the recognisable benefit of simplicity. It argued that the Torrens system is a system of title by registration. By registering the VPA on the folio, a legal interest was brought into existence; not a common law interest, but one created by statute.

TfNSW advanced multiple arguments against the Council's proposition, drawing on the nature of registration, the categories of legal interests at common law, the proper characterisation of rights under a planning agreement, and questions of alienability and sufficiency of recording.

In finding that the Council held a legal interest in land under limb (a) of the statutory definition, Justice Campbell engaged with each argument in turn:

• Registration creates a statutory interest: While the categories of legal interests at common law are closed, Parliament may alter the general law through legislation. The interest in question was not a creature of the common law but of statute, giving rise to a statutory legal interest.

• The nature of the right matters: TfNSW relied on Huntlee Pty Ltd v Sweetwater Action Group Inc [2011] NSWCA 378, in which the Court of Appeal held that a planning agreement conferring a right to payment of development contributions did not create a proprietary interest, but a right in personam, being a debt. Here, registration did not of itself create a proprietary interest, but the Council's right under its VPA was to the transfer of the land itself by dedication — a right in the land, even if contingent.

• The VPA was a "dealing": TfNSW contended that the VPA was not a "dealing" under the Real Property Act 1900 because it was not an immediate conveyance relating to the disposition, devolution or acquisition of land. The Court rejected this argument, holding that the statutory definition does not require a document to provide for the immediate disposition of land. Although contingent, the VPA plainly "relates to" the disposition of land authorised by sections 7.4 and 7.6 of the EPA Act.

• Alienability: TfNSW argued that the Council's interest was not capable of alienation because assignment was effectively limited to other planning authorities. Justice Campbell acknowledged that limitation, but held that the fact that assignment is restricted to a particular class does not render an interest incapable of alienation. Moreover, as a species of property created by statute, it is not essential that all general law attributes of property are present. However, his Honour made no clear finding as to whether alienability is a relevant characteristic of a limb (a) legal interest, as was found by the Court of Appeal in Dial A Dump Industries Pty Ltd v Roads and Maritime Services (2017) 94 NSLWR 554 with respect to a limb (b) interest.

• Sufficiency of recording: TfNSW argued that the VPA was insufficiently recorded on the folio. The Court held that the Registrar-General has discretion over noting statutory interests and the explicit reference to "Planning Agreement pursuant to Section 7.6" was sufficient to disclose the type of interest involved.

In short, registration, taken with clauses requiring dedication of land, gave the Council a legally cognisable, proprietary interest in the land. That interest survived to the point of acquisition and was sufficient to attract compensation under the Just Terms Act.