You cannot always get what you want: The dissatisfied acquiring authority and the stringency of the law

The proliferation of urban and infrastructure development across Sydney has seen varying and new pressures placed on Councils.

Among them, a rise in the frequency of costly and technical compulsory acquisitions.

Such acquisitions can easily lead to disputes about the fair value of the property being acquired. Under s66 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act), dispossessed landowners who are dissatisfied with the Valuer General's determination of compensation may appeal to the Land and Environment Court (LEC).

Acquiring authorities (such as Councils), on the other hand, have no equivalent rights of challenge should they be dissatisfied with the Valuer General's determination.

But that doesn't mean they have no rights of challenge at all.

If the acquiring authority - which we'll assume is a Council from this point - can establish jurisdictional error, a determination may be challenged and the Court may set aside what is an administrative decision.

So, what constitutes a jurisdictional error? Typically, it means the decision maker (in this case, the Valuer General) has taken into account irrelevant considerations, or has failed to consider relevant material which they were required to consider, or has failed to comply with relevant legislative requirements. Decisions made unreasonably or based upon an irrationality may also be set aside.

The bar for unreasonableness is set high. It must be demonstrated that no reasonable person acting lawfully would have arrived at that conclusion.

We consider these general principles further below.

What determines whether a consideration is irrelevant? Section 55 of the Just Terms Act makes that clear by stating that "regard must be had to" each of the following, and only the following, in determining the amount of compensation to be paid. They are:

the market value of the land on the date of its acquisition any special value of the land on the date of its acquisition any special value of the land to the person on the date of its acquisition any loss attributable to the severance any loss attributable to disturbance the disadvantage resulting from relocation; and any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. If it can be established that a mandatory consideration was ignored, the determination of compensation may be invalidated. The same applies if...