Traditionally, compulsory acquisition of land entitles an owner of an interest in land to compensation. However, acquisition of sub-stratum land may result in no compensation or limited compensation being payable by an acquiring authority. The compensation payable in respect of sub-stratum acquisition varies in each state and territory. In NSW, the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) andTransport Administration Act 1988 (NSW) regulate compensation for the compulsory acquisition of substratum interests in land. Under these Acts, a landowner’s entitlement to compensation for tunnel and rail infrastructure facility acquisitions does not arise until it can be established that the surface of the overlying soil is disturbed, or the support of that surface is destroyed or injuriously affected by the construction of the relevant public infrastructure.

Current litigation before the NSW Land and Environment Court, involving substratum acquisitions for the Sydney Metro project, is expected to clarify clear whether these circumstances capture the detrimental impacts on the development potential of the land above and acquired stratum or are limited to impacts on the overlying land in its present condition.

As sub-stratum acquisitions become more frequent in urban areas, it is likely that there will be increases in and refinement of the jurisprudence on the existing regimes as they apply to these types of acquisitions. Advice on this evolving area of law is important where there is a potential for detrimental impacts on above ground land uses.

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