Davis v Commissioner for Main Roads

The High Court of Australia heard an appeal in *Davis v Commissioner for Main Roads*. The dispute concerned the appellant's claim for compensation for land resumed by the respondent for the purpose of constructing a public road. The core of the disagreement lay in the valuation of the resumed land and the compensation to be awarded.

The central legal issue before the Court was the proper method for assessing compensation for the compulsory acquisition of land, particularly in circumstances where the land had potential for development that was not yet realised. The Court was required to determine whether the "potential use" of the land, as distinct from its existing use, should be taken into account when assessing its market value for compensation purposes.

The Court reasoned that compensation for resumed land should reflect its market value at the date of resumption, considering all circumstances that a willing purchaser would take into account. This includes not only the land's current use but also any potential for its use that would enhance its value. The judges applied the principle that the potential for development, if it was a real and not merely speculative possibility, was a factor that a hypothetical purchaser would consider, and therefore should be reflected in the compensation awarded. The Court found that the unimproved value of the land, as determined by the respondent, did not adequately account for this potential.