In the recent case of Springfield Land Corporation (No. 2)
Pty Ltd v Queensland  HCA 15, the High Court considered
the situation where land is compulsorily acquired, and the carrying
out of the works or purpose for which the land was acquired brings
about an increase in the value of other land owned by the claimant,
which adjoins or is severed from the land acquired. In order to
determine whether there has been any such increase, how is the
"purpose" for which the land was acquired determined?
The facts of the case briefly were that a large residential
development was planned for Springfield, near Ipswich in
Queensland. A major road was to be constructed as part of the
development, and under an agreement made in about 1999, land was
set aside, free of compensation to its owners (the claimants) for
that purpose. Some years later the road alignment was altered
slightly, and as a result, some of the land previously set aside
was returned to the claimants and a relatively small amount of
additional land was acquired. The parties agreed that the
compensation payable for the additional land was to be assessed as
if it had been compulsorily acquired under the Acquisition of
Land Act 1967 (Qld) (the Act).
The Act requires that when compensation for acquired land is
assessed, account must be taken, by way of set-off, of any
enhancement in the value of land owned by the claimants which
adjoins, or is severed from, the land acquired, which is brought
about by the carrying out of the purpose for which the land was
The central question in the case was: what is the purpose for
which the additional land (ie the additional land for road
realignment) was acquired?
The High Court decided (by a majority of four to one) that a
broad view should be taken of the purpose, which in this case was
the extension of the transport corridor west of the Springfield
town centre. It was accepted that the adjoining land of the
claimants would derive an enhancement in value as a result of the
development of the transport corridor, far in excess of the value
of the additional land acquired (which was agreed at approximately
A$1.5 million), with the result that no compensation was payable
for the acquisition of the additional land required for road
The Court rejected the narrower view that the purpose for
acquisition of the additional land was to effect a realignment of a
previously designated road corridor, which itself would cause no
enhancement of the value of the adjoining land owned by the
This case is not concerned with the Pointe Gourde
principle. That principle states that in valuing the land acquired,
account is not taken of any increase in value brought about by the
carrying out of the scheme for which the land was acquired. This
case deals with adjoining or severed land, not the land actually
All Australian states and the ACT have statutory provisions
substantially similar to the provision in the Queensland Act which
was considered in this case.
In approaching negotiations for compensation for compulsorily
acquired land, both government authorities and landowners need to
be aware that a broad approach should be taken in defining the
purpose for which the land is acquired, as this will have a bearing
on whether the value of any adjoining land owned by the landowner
has been enhanced, and this in turn may affect the amount of
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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