Commissioner of Highways v Farmer No 2 Pty Ltd; Commissioner of Highways v M & B Farmer Nominees Pty Ltd

The Commissioner of Highways (the appellant) compulsorily acquired land from M & B Farmer Nominees Pty Ltd and Farmer No 2 Pty Ltd (the respondents) for the construction of the Northern Expressway. The parties agreed on monetary compensation for the acquisition and that interest was payable on this sum. They also agreed on non-monetary compensation, which involved the transfer of surplus land back to the respondents. The dispute concerned whether interest was payable on this non-monetary compensation. The appeals were heard by Gray, Kelly, and Nicholson JJ of the Supreme Court of South Australia.

The central legal issue before the Court was whether section 33 of the Land Acquisition Act 1969 (SA) entitled the respondents to claim interest on the value of the non-monetary compensation they received, namely the transfer of surplus land back to them. This required the Court to interpret the meaning of "compensation" as defined in the Act and to consider whether non-monetary compensation was to be treated as a component of, or separate from, monetary compensation for the purposes of calculating interest.

The Court reasoned that the Land Acquisition Act establishes a scheme for full compensation to landowners, which can include both monetary and non-monetary components by agreement. However, the definition of "compensation" in section 6 of the Act primarily refers to monetary amounts, including the purchase price of land bought by agreement. While the Act permits non-monetary compensation to be agreed upon, the Court found that the statutory framework did not extend the entitlement to interest, as provided by section 33, to the value of such non-monetary compensation. The Court distinguished between compensation as a monetary sum and the provision of non-monetary benefits, concluding that interest was only payable on the former.

The appeals were allowed.