New South Wales Ministerial Corporation v Barnett

The New South Wales Ministerial Corporation appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales concerning the valuation of land resumed for public purposes. The respondent, Mr. Barnett, was the owner of the land.

The primary legal issue before the Court of Appeal was whether the Supreme Court had erred in its assessment of the market value of the resumed land, specifically in relation to the application of section 124 of the *Public Works Act 1912* (NSW). This section provides for compensation to be assessed on the basis of the market value of the land at the date of resumption, without regard to any increase in value attributable to the proposed public work. The Court also considered whether the Supreme Court had correctly applied the principles of valuation in determining the "special suitability" of the land for a particular purpose.

The Court of Appeal found that the Supreme Court had made an error in its valuation by failing to adequately consider the potential for the land to be developed for a purpose that was not directly related to the public work for which it was resumed, but which nonetheless enhanced its market value. The Court affirmed that compensation should reflect the best price obtainable on the open market, considering all lawful uses to which the land could be put, provided that such uses were not speculative or dependent on the resumption itself. The principles of valuation, including the consideration of "special suitability," were re-examined, with the Court emphasising that such suitability must be inherent in the land and not created by the public project.

The appeal was allowed, and the matter was remitted to the Supreme Court for redetermination of the compensation payable to the respondent.