Lands Acquisition Act 1989

This section applies where the Commonwealth is liable to pay compensation to a claimant under this Part in respect of the acquisition of a mortgage interest.

The claimant is entitled to payment by the Commonwealth of interest on the amount representing principal included in the compensation at the lowest rate (whether for prompt payment or otherwise) provided for by the mortgage from the day of the acquisition until the day on which the compensation is paid or, where payment is delayed through a default or delay of the claimant, until the day on which the compensation would have been paid but for the default or delay.

For the purposes of subsection (2), if:

the Minister made an offer of compensation to the claimant;

the claimant rejected the offer; and

the amount of compensation determined under this Part is less than the amount of the offer;

If, on the day following the end of the period of 3 months that commenced on the day of the acquisition or any succeeding period of 3 months, the interest payable to the claimant under subsection (2) in respect of the period has not been paid, this Part has effect as if, on that day, the amount of compensation payable were increased by the amount of the unpaid interest.

If the principal under the mortgage was not repayable (with or without notice) on the day when interest ceases to be payable under subsection (2), the claimant is also entitled to be paid by the Commonwealth:

the costs of the claimant of re‑investing the amount representing principal included in the compensation; and

if a loss of interest may reasonably be expected on the re‑investment, having regard to the rate of interest secured by the mortgage and the rate of interest obtained on the re‑investment—a reasonable allowance for loss of interest until the day on which the principal would have been repayable.

Interest is not payable to the claimant on the whole or any part of the compensation payable otherwise than in accordance with this section.