7 August 2024

Under the Land Acquisition (Just Terms Compensation) Act 1991,¹ almost any government authority is entitled to compulsorily acquire an individual’s land, so long as that land will be used for the public purpose. Apart from having to demonstrate the public purpose for which the land is proposed to be used, the government authority is also required to pay just compensation to the landowner for the acquisition.

Recently, in the matter of Keller v Blacktown City Council,² Council acquired the applicants’ land (Land) for the purpose of drainage infrastructure. In so doing it failed to adequately compensate the applicants for the Land and paid well below market value. 

The applicants commenced proceedings in the Land and Environment Court during which, Council argued that the Land was heavily constrained including the following:

1. Flooding: Council argued that approximately 90% of the Land was flood prone whilst the applicants successfully established that less than 10% of the Land was flood prone. Council overstated the constraint with the use of out-of-date information that was ultimately rejected by the court.
2. Zoning: Council argued that due to the Land’s flood liability, it would likely be zoned E2 or E4, making the theoretical construction of a dwelling on the Land unlikely. However, the applicants successfully established that the Land, absent the public purpose, would have been zoned R2, making the theoretical construction on the Land of not only a dwelling, but a duplex possible. Once again, the constraint was overstated.
3. Valuation: As a result of the above constraints, Council attributed a below market value to the Land and offered the applicants total compensation in the sum of $558,300. Shortly before the court hearing, Council tendered evidence to support a valuation of $360,550.

The court found in favour of the applicants and awarded a total compensation of $700,550, a sum about 25% larger than Council’s best offer. Further, the applicants received both an order for ordinary costs and indemnity costs.

Mersal & Associates specialise in property acquisition matters. If your Council is seeking to acquire your property we can ensure you achieve a fair price. Contact us today to arrange an appointment.