Pfeiffer Nominees Pty Ltd v Chief Executive, Department of Transport and Main Roads
When land is compulsorily acquired under the Acquisition of Land Act 1967, the owner of an estate or interest in the land is entitled to be paid compensation. Compensation is the value of the estate or interest on the date the land is taken.1 The ‘value’ is the price a willing purchaser would pay to an owner willing to sell: Spencer v the Commonwealth (1907) 5 CLR 418.
Compensation does not, however, include any ‘increase in value which is entirely due to the scheme underlying the acquisition’.2 This is referred to as the Pointe Gourde principle which is derived from Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands.3 In that case, land was acquired for a limestone quarry to be used to establish a nearby naval base. Compensation could not include the increase in value which resulted from the need for the limestone for the base.
Similarly, a resuming authority cannot, by its project of resumption, destroy the development potential of land and then resume on the basis that the destroyed potential had never existed.4 Therefore any decrease in value entirely due to the resumption scheme should also be disregarded in calculating the value of resumed land.5
However, problems often arise in defining the scope of the scheme.6
This difficulty was highlighted in a recent decision of the Court of Appeal in Pfeiffer Nominees Pty Ltd v Chief Executive, Department of Transport and Main Roads.7
In that case, the court was required to identify the scheme for the purpose of calculating compensation payable for the resumption of part of the applicant’s land to upgrade the Captain Cook Highway.
A limited access declaration was made in respect of the land in 1983 under the now repealed Main Roads Act 1920-1979. The effect of a limited access declaration is to prevent direct access from the land to the highway without consent. The land was resumed in 2007. The landowner claimed that compensation should be assessed disregarding the effect of the limited access declaration.8 The chief executive said that what had to be assessed was the actual value of the land, affected as it was by the limited access declaration.
The Land Court found that a scheme of the sort embraced by the Pointe Gourde principle had been in place since the declaration of the affected section of the highway as a limited access road referring to it as ‘the “scheme” created by the declaration.’9 Accordingly, the court found that access restrictions were to be disregarded in assessing compensation for the resumed land. In other words, as the scheme underlying the resumption in 2007 included the limited access declaration made in 1983, compensation was assessed disregarding any decrease in value attributable to the limited access declaration.
On appeal by the chief executive, the Land Appeal Court considered that while a ‘limited access declaration scheme’ existed, which was to restrict ribbon development and multiple access points onto the highway, the resumption, which was to facilitate road widening and the construction of roundabouts, was not part of it. Therefore, the land was to be valued taking into account the declaration. In other words, as the scheme underlying the resumption in 2007 did not include the limited access declaration made in 1983, compensation was assessed taking into account any decrease in value attributable to the limited access declaration.
On appeal by the landowner, the Court of Appeal considered that the ‘scheme’ for resuming the land was not created by the making of the declaration as the land was not resumed to further a purpose for which the declaration had been made. It was resumed to upgrade a highway.11
The Court further found while the limited access declaration and the resumption might be part of a ‘scheme’ for the ongoing upgrading of the Captain Cook Highway, this was not a scheme which attracted the application of the Pointe Gourde principle as:
- there was no evident unfairness in compensating the applicant according to the actual value of the land taking into account the limited access declaration; and
- if the scheme were identified as ‘the ongoing construction and upgrade of the highway’ it would be necessary to disregard the effect of all of the scheme and not just one component of the scheme, namely the declaration.11
As the Pointe Gourde principle did not apply, the Land Appeal Court was correct in allowing the appeal and ordering that the land was to be valued taking into account the declaration.
Both the Land Court and the Land Appeal Court observed that the upgrade and maintenance of a major highway may be the subject of a number of separate projects which do not become a scheme simply because they relate to the same section of road or because they fall within a broad commitment to provide adequate roads for the people for Queensland.12
 Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands  AC 565, 572.
 Melwood Units Pty Ltd v Commissioner of Main Roads  AC 426, 434.
 Kirby P in Haigh v Minister Administering the National Parks and Wildlife Act 1974 (1994) 85 LGERA 143, 149-150
 Pfeiffer Nominees Pty Ltd v Chief Executive, Department of Transport and Main Roads  1 Qd R 210,  referring to Waters v Welsh Development Agency 1 WLR 1304. 1315 - 1316.
 Ibid  to .
 Ibid 
 Ibid  to 
The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.
Published: 21 September 2020
Author: Principal Lawyer, Annette Mackenzie