The money payable to an owner of real estate where the real estate is compulsorily acquired or where the provisions of a planning scheme result in a fall in value. The Commonwealth and hence the ACT government must provide compensation on “just terms” under the Constitution whereas the states are not so bound. The relevant act is the Lands Acquisition Act 1989.

Compensation theory is well developed in Australia following a large number of court cases this century largely concerned with the compulsory taking of freehold land for public works. Each state has similar legislation providing the payment of compensation based on the valuation concept of special value to the owner. Since the Crown is the ultimate sovereign for all beneficial title (that is, excluding native title) it does not have to pay any compensation for the compulsory taking back of its land (hence the term resumption). At state level, compensation is only paid because of special legislation that enables its payment. The Commonwealth on the other hand, is different as it must pay adequate compensation (just terms) under s51(31) of the Constitution.

Australian compensation law has developed from the Lands Clauses Consolidation Act 1845(UK). It is largely because of the different social and economic backgrounds compared with the 19th Century United Kingdom, that Australian legislation has over a long time, evolved into a more acceptable form of compensation for Australian conditions. At the time of the UK Act, land acquired, was mainly tenanted as the incidence of owner occupation in mid 19th Century was very low. Land at that time represented an investment and therefore, the consequence of compulsory acquisition for the owner was little more than a change in the mode of investment. Not until recently, has Australian legislation favoured the owner occupier rather than the investor (Else Mitchell, 1974, 2).

The compulsory acquisition of land for public works involves the dilemma of competing interests. On the one hand is the public need and expectation of modern and efficient services such as roads, schools, hospitals, and recreation facilities, and on the other hand, are dispossessed owners who expected peaceful occupation of their freehold land "forever". Therefore, a good compensation system is one that:


The State is the Crown and ultimate sovereign, and therefore, on the compulsory taking of land; resumes land. That is, it takes back what it already owns. On the other hand, the Commonwealth has to acquire land as it does not inherently own land. The state's authority to resume is an element of its sovereign power:

In other words, a state passed by a sovereign parliament is equally within the legal rights of the legislature whether it nakedly confiscates property and takes it upon terms of payment more or less. That is the position in the UK, and the right flows from the sovereignty of parliament, and does not depend for its defence upon the doctrine called eminent domain"   NSW v Commonwealth (1915) 20 CLR 54, 77.

Although the states have the power to pass laws resuming land without paying compensation, the common law has insisted because of this great power, that any resumption must be exercised carefully. A statute will not be read as authorising the compulsory taking of property without compensation unless that intention is clearly expressed   C J Bur/and v Metropolitan Meat Industry Bd (1968)120 CLR 400, 406.


There are two stages to the resumption of land:

the decision making process

the resumption process.


The authority formulates its needs and policy objectives in relation to particular public works that will require land acquisition or resumption. This is an internal administrative matter about which most legislation is silent. Generally, the authority has determined that the resumption is essential to the success of the works at hand.


Generally, under Australian law, some land (no matter how little) must be taken to allow a claim for compensation. However, in the UK and Canada, action has been taken to sever the nexus between the acquisition of land and a right to claim for Injurious Affection. There have been attempts to follow these examples in Australia.

The Nevill Report argued that a claim for injurious affection should be extended to owners of property over which no land has been taken:

The committee can see no justification for maintaining this dichotomy in Western Australia. Compensation for injurious affection is not compensation for land resumed (the Public Works Act provides elsewhere (s63) for that ) it is compensation for the discomfort or inconvenience caused by public works to neighbouring land owners: it makes no sense to restrict the right to claim to persons who have had land resumed." (Nevill Report (WA) 1987).

The main reason that this has not happened is a practical one; how far should injurious affection extend? However, the right to claim for any injurious affection should be extended at least, to the adjoining owners.

Since compensation is a "once only" lump sum payment, the dispossessed owner may obtain compensation for a public work that may never eventuate. This was the case in Commonwealth v Morison (1972)127 CLR 32 where 22 800 was paid to M for Injurious Affection that never eventuated because of a change in plan.


Although the process varies, state by state, typical steps in the resumption process are:


The appropriate minister publishes a Notice of Intention to resume in the Government Gazette. The notice must at least include the place where interested persons may inspect a plan of the land, a statement of the nature of the work and a description of the land required. After the Notice of Intention no person is allowed to enter into a transaction affecting the land without the written consent of the minister.


The minister publishes the Notice of Intention in a local newspaper and serves a copy on the owner and occupier, if any. The minister delivers a copy to the Land Titles Office and registers a caveat on title.


Within a certain period (for example, 30 days) any person with an interest in the land can serve the minister with written objection to the proposed resumption. The minister may allow the objector to make representations.


After hearing the objections and if the minister agrees, the Notice of Intention can be cancelled or amended in the Government Gazette.


Where no objections are received or the objections are not sufficient to make the minister change his/her mind, the land is declared resumed for the relevant public purpose by a further notice in the Government Gazette. Such notice can be annulled or amended within a certain period for example, 90 days.

Immediately the land is vested in the Crown (upon gazettal) all existing estates or interests are converted into claims for compensation. Therefore, the Crown obtains a "clean" title.


The minister must serve on the owner(s) of the land and occupier(s), a copy of the Notice of Resumption.


The LTO records and vests the land in the name of the Crown.

See compensation principles