Rea v Director-General, Department of Main Roads

The case of Rea v Director-General, Department of Main Roads, involved a claim for compensation for the resumption of certain lands by the Director-General, Department of Main Roads, under the Acquisition of Land Act 1967. The claimants sought compensation for the lands which were resumed for future road purposes, including compensation for disturbance. The court had to decide on the appropriate method of valuation and the appropriate compensation amount for the resumed lands. Two methods of valuation were proposed by the valuers for the respective parties: a hypothetical subdivision approach and an aggregated existing lots approach. The court ultimately adopted the aggregated existing lots approach, as it was seen to be more direct and less speculative than the hypothetical subdivision approach.

The court considered various factors in determining the appropriate method of valuation, including the planning impacts, the market value of the land, and the commercial viability of the hypothetical subdivision. The court concluded that the hypothetical subdivision approach was not commercially viable due to the higher development costs and longer development period in the "after" situation. The court found that it was unlikely that the current owners would be prepared to sell the balance of the land in the "after" situation for an amount of only $132,000.

Based on the aggregated existing lots approach, the court determined that compensation in the sum of $350,000, plus disturbance, was appropriate. Following further discussions, both parties agreed that an amount of $7,000 for disturbance in full and final settlement was appropriate. The court also ordered interest to be paid on the compensation amount from various dates up until the final payment of compensation was made.