compensation for partial interests

david hornby


A sitting tenant has an interest in the acquired land and therefore, can claim compensation for the value of that lost interest. Where the tenant is paying rent below market rent he/she will have a more valuable interest than an equivalent tenant paying market rent only. Where the tenant is paying market rent, the only claim for compensation is for disturbance (Keogh v Housing Commission [1969] VR 809). The possibility or probability that a lease will be renewed cannot be considered in assessing compensation as the right is "too remote" from the real estate (Minister v NSW Aerated Water & Confectionary (1916) 22 CLR 56). This problem is recognised in the South Australian Land Acquisition Act:

S25(d) where the claimant's interest in the subject land was liable to expire or be determined, any reasonable prospect of renewal or continuation of the interest must be taken into account.

The effectiveness of such a clause will depend very much on the court's interpretation of "reasonable prospect" and how such a nebulous concept can be proved with evidence of facts.


A mortgagee has an interest in the mortgaged land and therefore, will receive a Notice of Resumption (except in Western Australia). The mortgagee applies for discharge of the mortgage debt from the compensation award. If the mortgagee can establish additional loss as a result of the resumption then a claim for compensation can be made under the normal provisions.