The High Court of Australia has recently narrowed the scope of factors to be disregarded in determining compensation in land acquisition matters.
The effects on value of the proposal by a New South Wales acquiring authority (Sydney Harbour Foreshore Authority) to carry out the purpose for which it acquired land, namely foreshore open space, (which is a factor generally disregarded both at common law and by statute, the Victorian and NSW provisions being similar) were held in Walker Corporation Pty Limited v. Sydney Harbour Foreshore Authority [2008] HCA 5 not to include effects of the planning strategies of another authority (in this case the local council) which had commenced prior to and continued after the commencement of the acquiring authority's scheme for the development of the land subsequently acquired for a public purpose (public open space).
This was so despite the presence of a 'unity of purpose displayed by the two arms of [in this case, local and NSW State] government'.
The proceeding has now been remitted by the High Court to the trial Court for compensation to be calculated taking into account the effect on value caused by the local council's planning strategies.
For acquiring authorities this means that the courts will not necessarily allow prior but related actions by other public authorities affecting property value (either positively or negatively) to be ignored as being part of the purpose of acquisition.This occurs even where a degree of 'unity of purpose' of the acquiring authority and the other public authority can be shown.
In appropriate matters, this has particular relevance to the form of instructions to be given to valuers assessing compensation to be paid to land owners whose land is acquired for a public purpose.
David Brahe
Managing Partner
03 96295551
dbrahe@ghb.com.au
Andrew Gunter
Senior Associate
03 96295551
agunter@ghb.com.au