Infrastructure plays a vital role in our long term prosperity, it creates and connects communities, it facilitates trade and commerce, it unlocks land for development, and it is integral to our daily life. As noted in the Autumn 2016 edition of Envisage, infrastructure is the lifeblood of a modern economy. With that in mind it is easy to see how the identification and planning for future infrastructure has the potential to significantly affect the value of surrounding land.
When land is resumed for infrastructure, there are several important decisions which are directed at ensuring that an owner is neither advantaged nor disadvantaged by the resumption. Although the decisions all have a slightly different effect, they are often referred to as the "Pointe Gourde principle" and involve the principle that any increase or decrease in the value of the land resumed that has arisen from the carrying out of the purpose for which the land is resumed (or the proposal to carry out that purpose) is to be ignored in valuing the land resumed.
The "Pointe Gourde principle" takes its name from the well-known case of Pointe Gourde Quarrying & Transport Co Ltd v SubIntendent of Crown Lands (Trinidad) [1947] AC 565, which is a decision of the Privy Council. In that case, Lord MacDermott said at page 572 that:
"It is well settled that compensation for compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying that acquisition."
The Pointe Gourde principle was applied in reverse in the cases of Melwood Units Pty Ltd v Commission for Main Roads (1979) AC 426 and Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196. The substance of the Pointe Gourde principle in reverse is that where the ultimate resumption of land is part of a scheme to take the subject land for a public purpose, planning restrictions which are part of that "scheme" should be disregarded when valuing the land that is taken.
In assessing the value of the land taken, it is therefore incumbent upon claimants and constructing authorities to carefully consider the "scheme" underlying the resumption so as to ensure that when determining the value of land taken they do so as if the land were not affected by the resumption "scheme".
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
