The land in question, in Mackenzie Street, has been reserved for medical purposes since 1980 but has been the subject of a claim by the Karuah Local Aboriginal Land Council since April 2004.

The council had opposed the claim because it felt there may well be a future need to build a doctor's residence or medical facilities in the long term and that it would be foolish to have to buy land at a later date for that purpose. However, the NSW Department of Health has now indicated that it has no interest in the land and the Crown Solicitor's Office has advised the council that a significant amount of evidence would be required to defeat the claim in the Land and Environment Court.

In a report to the council, community services manager Andrew Braybrook said that only about 20 per cent of the evidence needed to confirm future community use of the land was available and for that reason, the council should withdraw its objection.

He said it appeared there was a very good chance that the Minister would be unsuccessful in defending his refusal of the land claim and that the land would subsequently be transferred to the Land Council. The council had not objected to Aboriginal land claims over adjoining blocks of land.