Leichhardt Council v Roads and Traffic Authority (NSW)

The Court of Appeal of New South Wales considered a dispute between Leichhardt Council (the appellant) and the Roads and Traffic Authority (NSW) (the respondent) concerning the compulsory acquisition of land. The core of the disagreement lay in the determination of the market value of the acquired land, specifically whether a statutory constraint on the land's alienation in the hands of the Council should reduce its valuation.

The primary legal issue before the Court was whether the rule established in *Corrie v MacDermott*, which dictates that a vendor cannot claim a higher price for land by reason of a statutory restriction on its sale, applied to the valuation of land compulsorily acquired under the *Land Acquisition (Just Terms Compensation) Act 1991* (NSW). The Court was required to determine if the market value, as defined by the Act, should be assessed without regard to the statutory constraint that prevented the Council from selling the land.

The Court reasoned that the *Land Acquisition (Just Terms Compensation) Act 1991* mandates the determination of market value as if the land were being sold on the open market, free from any encumbrances or restrictions that would diminish its value. It held that the statutory constraint on the Council's ability to alienate the land was precisely such a factor that should not operate to reduce the compensation payable. Consequently, the Court allowed the appeal in part, setting aside the Land and Environment Court's judgment regarding the market value assessment and remitting the matter for redetermination of the market value without reduction for the statutory constraint. The respondent was ordered to pay the appellant's costs of the appeal.