Question 1
An owner's land is gazetted for compulsory acquisition to permit the widening of an arterial road. At the date of the notice he had granted a registered lease of the property to a manufacturing tenant with eleven years still to run, and the property was subject to a bank's registered mortgage securing a balance of some $900,000. The tenant has written asking what will become of its lease, and the bank has written asking what will become of its security. The owner had assumed the acquisition was a matter between himself and the State alone.
Consider the following statements.
- (i) The acquisition brings the owner's interest to an end.
- (ii) The tenant's leasehold interest is likewise affected.
- (iii) The bank's security is affected.
- (iv) Only the owner's interest is affected, the others being unconnected with the State's purpose.
- A. (i) and (iv)
- B. (i), (ii) and (iii)
- C. (ii), (iii) and (iv)
- D. (i), (ii), (iii) and (iv)
Show the answer and full explanation
Answer: B
The rule. Compulsory acquisition affects every interest in the land — the owner's, the tenant's and the lender's alike.
Why B is correct. (i), (ii) and (iii) hold. (iv) is false.
The other options.
- A and D carry the false (iv).
- C drops the correct (i).
Exam note. The State takes the land, not one person's share of it. Everyone with an interest is affected.
Compulsory acquisition affects every interest in the land →
Question 2
A row of six shophouses is to be acquired for a new rail line. The Collector has held his inquiry, made his award, paid the compensation and taken possession of the site, and hoardings have gone up. One of the owners, who traded there for thirty-one years, considers the sum awarded far too low against what he has seen paid elsewhere in the district. He has, however, already banked the money and moved his business to rented premises in the next street. A neighbour who went through the same process a decade ago tells him that by taking the cheque and handing over the keys he gave up any right to argue about the figure, and that pursuing it now would only cost him more.
Which statement is correct?
- A. He gave up the right to argue when he accepted the compensation money.
- B. He may still pursue the amount; payment and possession do not end that right.
- C. He gave up the right to argue when he handed over possession of the site.
- D. He may pursue the amount only if he had refused possession at the time.
Show the answer and full explanation
Answer: B
The rule. Compensation for compulsorily acquired land may be pursued through the statutory appeal process. Accepting payment and giving up possession of the site do not bring that right to an end.
Why B is correct. He may still pursue the amount.
The other options.
- A and C each treat one of his two acts as a surrender of the right, and between them they cover the whole of the instinct that taking the money must settle the matter.
- D invents a precondition of refusing possession, which would put a claimant to a choice the statute does not force on him.
Exam note. Two separate things are happening: the land changes hands and the amount is disputed. The first proceeds regardless of the second, which is precisely why the second survives it.
Compensation for compulsorily acquired land may be pursued through the statutory appeal process →