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Planning and Environment | Industry Update

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As you are most likely aware, McCarthy Durie Lawyers practises not only in the Planning and Environment Court jurisdiction but also has a great deal of experience in the Land Court jurisdiction.

One of the continuing areas of argument in resumption cases is in relation to the requirement for the resuming authority (usually the Local Authority or DTMR) to pay ‘fair and reasonable compensation’ based on ‘the highest and best use of the land’.

The Acquisition of Land Act 1967, specifically, the compensation provision in Section 20 (2), simply reads: “… (2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken…”. Here is a link to an industry article on the topic that I produced recently: Cleggco. Section 20 does not use the specific words ‘highest and best use’ but that principle is long-accepted law in Australia deriving from the leading High Court case Spencer v. The Commonwealth (1907) 5 CLR 418 which introduced the concept of ‘fair value’ in interpreting the Commonwealth’s compensation provisions on compulsory acquisition of land. ‘Fair value’ has been accepted in all compensation case to mean fair value based on the highest and best use available to the land owner. If you are looking for more reading on the subject, the recent Queensland Court of Appeal case Moreton Bay Regional Council v. Caseldan Pty Ltd will be of interest. As you will see, the concept of ‘highest and best use’ is a given in our resumption compensation cases. Here is a link to the case: Queensland Judgments.

Quite apart from the contentious issues of ‘fair and reasonable’ and ‘highest and best use’, there is often serious argument about the impact on value of changes to planning scheme provisions and the need to take account of any enhancement of the value of any adjoining land owned by the claimant but also taking account of reduced value caused to any remaining land (eg where only part of the land is taken, as is often the case), and also taking into consideration any increase or reduction in value caused by the authority’s exercise of statutory powers eg where the land has been affected in value because the authority has over a long period announced its intention to resume. A classic example of this is where the State or local authority has publicly announced its intentions for a road widening but then taken several years to actually issue the Notice or then take the land – the property price will have no doubt reduced in the interim because a buyer will be alert to the proposed taking. The High Court has long recognised that the resuming authority can’t be prejudiced by the enhanced value, or otherwise take advantage over the landowner because of the reduced value, caused by the planning scheme changes which eventually lead to the resumption. This is known as, respectively, the Pointe Gourde and the Pointe Gourde (in reverse) principle. The principles of that Privy Council case have been constantly affirmed by the high Court, starting with the San Sebastian case (1978) 140 CLR 196..

A very interesting recent consideration of these issues occurred in the Queensland Court of Appeal decision in Pfeiffer Nominees Pty Ltd v. Dept Transport and Main Roads [2019] QCA 101. Here’s a link to the case: Queensland Judgments. Briefly, the landowner held a commercial development which was constrained in its access and egress by a Limited Access Declaration, the purpose of which was to make safer use of the Captain Cook Highway by limiting traffic access and egress to and from the land. The LAD was imposed in 1983. In 2007, the DTMR resumed the land for road widening purposes. The landowner demanded compensation based on a value ignoring the Land Access Declaration, arguing that the LAD was simply part of the ‘planning scheme’ which resulted in the eventual resumption. The Land Court at first instance agreed applying the Pointe Gourde (in reverse) principle. The Land Appeal Court and then the Court of Appeal overturned that decision on the basis that the LAD was simply a measure imposed for safety of road users and was not part of the ‘planning scheme’.

If you have any questions in relation to any aspect of land resumptions, we are happy to assist.


Ian Neil | Director

Richard Duhig | Senior Associate

07 3370 5100

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