Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (No 2)

The appeal concerned the assessment of just terms compensation under the *Land Acquisition (Just Terms Compensation) Act 1991* (NSW) following the compulsory acquisition of land by the Sydney Harbour Foreshore Authority. The dispute centred on whether the land, zoned for industrial use, should have been valued as if it were zoned for residential use, and whether the zoning authority's decision to maintain the existing industrial zoning, in light of a potential future public purpose, constituted part of the "proposal to carry out the public purpose" for the purposes of the Act.

The primary legal issue before the Court of Appeal was to determine the correct approach to valuing the land, specifically whether the trial judge erred in valuing the land on the assumption that a rezoning to residential use had occurred, rather than assessing the prospect of such a rezoning from the perspective of a hypothetical purchaser. This involved considering whether the refusal to rezone, or the decision to maintain the existing zoning, was itself part of the acquiring authority's proposal to carry out the public purpose for which the land was acquired.

The Court of Appeal allowed the appeal, finding that the trial judge had erred by valuing the land on the assumption that rezoning had occurred, rather than assessing the chance of rezoning and any decline in value attributable to statutory considerations. The Court clarified that the refusal of a council to rezone, or the decision to maintain existing zoning, would only be considered part of the "proposal to carry out the public purpose" if it was a step in that proposal or if the council was acting in concert with the acquiring authority. The matter was remitted to the Land and Environment Court for a redetermination of the market value of the land.