GW & KM Gorlick Industries Pty Ltd v Sunwater

GW & KM Gorlick Industries Pty Ltd v Sunwater involved a claim for compensation following the resumption of land by Sunwater for the Bundaberg Irrigation Project. The resumed land, previously used for growing sugar cane, included a dam intended for irrigation. After the resumption, the land was deemed suitable only for rural residential purposes. The key issue was whether the potential for irrigation, despite lacking lawful authority, should be considered in assessing compensation.

The claimant argued that the hypothetical purchaser would consider the reasonable expectation of continued irrigation use based on previous licensing and the owner's actions. The claimant contended that the potential for legitimising the use should be factored into the valuation, despite the lack of current or pending authorisation. Conversely, Sunwater asserted that the illegality of the works must be disregarded as a matter of law, and a hypothetical purchaser would not account for such speculative potential. The Court had to determine whether the presence of excavation works and a pump, existing without lawful authority, could be considered in the compensation assessment.

The Court considered legal principles that the resumed property should be valued with all its potential, including foreseeable future advantages. It noted that the burden of proving the possibility of lifting restrictions rested on the person asserting such potential. The Court found that the potential for irrigation should be considered in the compensation assessment, irrespective of the lack of current or pending authorisation. It was not decisive that the works were constructed without lawful authority, as the hypothetical purchaser's expectations should guide the valuation. The potential value, if any, could only be assessed with relevant evidence.

The Court ordered that the preliminary question be answered by considering the potential use of the resumed land for irrigation purposes in determining compensation, despite the absence of current licences at the date of resumption. The further hearing of the appeal was adjourned for a future date.