[+] Heworth Launches $100m Claim Against State Agency

State government agency Transport for New South Wales was under the microscope today [February 5] at a Land and Environment Court hearing. The state government agency is being taken to court by Heworth Holdings Group company Grand Rozelle Pty Ltd for close to $100 million in compensation associated with the delay of the Balmain Leagues Club development. While it is early in proceedings, the crux of Heworth’s claim surrounds Transport for NSW’s compulsory acquisition of the site. The timeline While the agreed-upon timeline of events will be thrashed out in court over the next 12 to 18 months, the initial motion hearing laid out the basic milestones of the case. Grand Rozelle Pty Ltd, one of Heworth’s associated companies, submitted a development application for the Balmain Leagues Club site at 152 Victoria Road after acquiring it in 2018 . Projected to cost around $135 million, it would enable the development of the home of the Balmain Tigers and deliver a 28,000sq m mixed-use complex including an initial 173 apartments, designed by architects Scott Carver. ▲ Modifications have since been made to the original Victoria Road site DA, which will provide the new home of the Wests Ashfield Leagues Club. Heworth was aware at the time that Transport for NSW had interest in the site, and there was a possibility that the agency might compulsorily acquire the site. Later, during the development application and development control process, Transport for NSW also reportedly lodged objections with regards to vehicular access via Victoria Road. The agency reportedly suggested that the Victoria Road access should be for private and service vehicles only, with a side entrance for residents, which had not in historic development applications been an issue, according to Heworth’s legal counsel. Following submission of the initial DA, the development application was approved by Sydney Eastern City Planning Panel in 2020 . Three years had lapsed between the initial acquisition of the site by Heworth and a proposed acquisition notice (PAN), which was not issued until October 2021. The notified purpose of the acquisition was for the construction and maintenance of the Western Harbour tunnel, the Land and Environment Court was told on Monday, February 5 . ▲ Heworth lodged amendments to its approved DA last year reducing apartments from 167 to 147 but increasing the number of two and three bedroom apartments. Nine months later, however, Transport for NSW issued a rescission of the acquisition, giving up its claim on the site in July 2022. The decision followed a suspicious fire that gutted the site in May 2022, with Heworth claiming it had asked Transport for NSW to prevent public access to the site back in March of that year but had received no response from the agency . Heworth claims that this back-and-forth delayed the start of their Balmain Leagues Club site redevelopment, with construction costs, financing and holding costs adding up all the while. The Case The initial motion hearing today [February 5] of what Justice Nicola Pain called a “complicated case” over a site “well-known” to the courts, laid out the evidence required by both sides to further their cases and outlined initial arguments and timelines. At the hearing, it was also suggested that this was one, if not the, first case under Section 70 of the Land Acquisition (Just Terms Compensation) Act 1991 . This section outlines the compensation allowed to the landowner upon the rescission of an acquisition notice based on damages “actually incurred or suffered by that person [landowner] as a direct consequence of the compulsory acquisition and its rescission”. Legal counsel from both sides agreed that given it was one of the first cases, given the rarity of such a recscission, there would be “vast debate” about the definition of costs and damage actually incurred as a direct result of the compulsory acquisition and rescission. “Every part of the section will be in dispute,” the court was told. ▲ The Rozelle Village development is located around a public plaza and was originally valued at $400 million. Transport called evidence requirements from Heworth “overbroad”, although Judge Pain noted that much documentation should have already been submitted from Transport for NSW. Transport for NSW could not comment on today’s proceedings, and Heworth Holdings Group head of property Christopher Walsh offered a short statement to The Urban Developer. “This matter is before the court and we are confident that the court will find in favor of our fair and reasonable claim for compensation,” Walsh said. Preliminary works for the Heworth project began last year, five years after the site was first acquired and two since it was approved. Compulsory acquisition investigated In 2022 there was a major Parliamentary enquiry into the acquisition of land in relation to major infrastructure projects. In a foreword to the report, committee chair and legislative council chair Abigail Boyd said that “we are still hearing of heavy-handed approaches by acquiring authorities”. “Troublingly, acquiring authorities seem to have forgotten that they are dealing with real people,” she wrote. “People who have invested their time, money, effort and energy into building a home for their family or a business.” The report recommended that the NSW Government establish an independent review of the land acquisition process, and specifically highlighted the projects that were examined during the inquiry, including that of the Balmain Leagues Club. ▲ Apartments at the Rozelle Village launched to market in 2023 and Heworth expected "significant demand" for the iconic site which has been derelict and closed to the community for more than 10 years. Whether the outcomes of this report will be implemented is another matter, given that it was the latest in a series of similar reports (the Russell Review in 2014 and the Pratt Review in 2016) and the chair admitted that “not all recommendations were adopted” in those cases. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Heworth Launches $100m Claim Against State Agency

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