Anderson v Commissioner of Highways (No 2)
[2018] SASC 121
•31 August 2018
SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division: Civil)
ANDERSON v COMMISSIONER OF HIGHWAYS (NO 2)
[2018] SASC 121
Judgment of The Honourable Justice Parker
31 August 2018
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - POWERS OF ACQUISITION
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - PROCEEDINGS FOR COMPENSATION - SOUTH AUSTRALIA
The Commissioner of Highways acquired certain land in which the claimant has an interest within the meaning of s 6 of the Land Acquisition Act 1969 (SA) (‘the Act’). The claimant contends that he is entitled to the payment of compensation on account of a personal injury that he claims to have suffered arising from the acquisition of the subject land.
A ‘question arising in the course of negotiations’ was referred to the Court under s 23C of the Land Acquisition Act 1969 (SA). In substance, the question referred to the Court is: is a personal injury of the nature suffered by the applicant compensable as loss arising under s 22B of the Act as qualified by the principles of compensation set out in s 25 of the Act?
Held, per Parker J:
1. Compensation under the Act does not extend to compensation for personal injury arising from an acquisition (at [86]).
2. The right to be compensated for severance, disturbance and injurious affection, or any other newly identified ground, is based upon the acquisition of the interest in property held by the claimant rather than the administrative processes which surround that event (at [90]).
Land Acquisition Act 1969 (SA) ss 3, 6, 10, 11, 12, 12A, 12B, 15, 16, 17, 22B, 23A, 23C, 25, 27, 30; Acquisition of Land Act 1967 (Qld) s 20; Land Acquisition and Compensation Act 1986 (Vic) s 44; Land Acquisition (Just Terms Compensation) Act 1991 (NSW) s 60, referred to.
Anderson v Commissioner of Highways [2018] SASC 13; Commissioner of Highways v George Eblen Pty Ltd (1975) 10 SASR 384; McInnes v Commissioner of Highways (1992) 78 LGERA 410; Marshall v Director General, Department of Transport (2001) 205 CLR 603; Commissioner of Highways v Tynan (1982) 53 LGRA 1; Todorovic v Waller (1981) 150 CLR 402; Sotirianakos v Commissioner of Highways [2018] SASC 16; South Australian Land Commission v Bletas (1978) 77 LSJS 344; March v City of Frankston (No 1) [1969] VR 350; Secretary to the Department of Economic Development, Jobs, Transport and Resources v Driver [2015] VCAT 813; Roads Corporation v Love (2010) 31 VR 451; Bailey v Derby Corporation [1965] 1 All ER 443; Patterson v British Colombia (Minister of Transportation and Highways) (1997) 62 LCR 89; Brewarrana Pty Ltd v Commissioner of Highways (1973) 4 SASR 476; Boland v Yates Property Corp Pty Ltd (1999) 167 ALR 575; Mitsui v City of Hamilton (1984) 30 LGR 46; Zobel v Municipality of Metropolitan Toronto (1969) 1 LCR 139; Owners of Dredger Liesbosch v Owners of Steamship Edison [1933] AC 449; Lagden v O’Connor [2004] 1 AC 1067; Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269; Bronzel v State Planning Authority (1979) 21 SASR 513; Lucas v The Chesterfield Gas & Water Board [1909] 1 KB 16, considered.
ANDERSON v COMMISSIONER OF HIGHWAYS (NO 2)
[2018] SASC 121
PARKER J: The Commissioner of Highways has acquired certain land in which the claimant has an interest within the meaning of s 6 of the Land Acquisition Act 1969 (SA) (the Act). The parties are negotiating about the claimant’s entitlement to compensation. The claimant contends, and the Commissioner denies, that he is entitled to the payment of compensation on account of a personal injury that he claims to have suffered arising from the acquisition of the subject land. For the reasons that follow, I find that compensation is not payable.
As a result of the disagreement between the parties, the claimant has referred “a question arising in the course of negotiations” to the Court under s 23C of the Act. In substance, the question referred to the Court is:
Is a personal injury of the nature suffered by the applicant compensable as loss arising under s 22B of the Act as qualified by the principles of compensation set out in s 25 of the Act?
On 16 February 2018 I published a ruling where I found:[1]
… that the interests of justice would be best served by answering, as a preliminary point, the question of whether or not personal injury is compensable under the Act to the extent that the injury does not arise from the fact that the acquisition has been effected without the consent or against the will of the applicant.
[1] [2018] SASC 13 at [47].
If the claimant were to persuade the Court that his contention is correct, this would apparently be the first occasion in Australia and in comparable jurisdictions where a finding was made that compensation is payable for personal injury arising from the compulsory acquisition of land.
Background
It is convenient to adopt the background information that I included in the ruling dated 16 February 2018:[2]
[5]For many years the parents of the applicant owned a home on Main South Road at Bedford Park (‘the Property’). The Property has been compulsorily acquired by the Commissioner for the purpose of undertaking major road works. Compensation has been paid to the applicant’s parents and they have moved to another home in a nearby suburb.
[6]The applicant is now aged 43 years. From 1980 to 2002 he resided with his parents at the Property and operated home businesses from that address. From 2002 to 2009 the applicant resided elsewhere in Adelaide but still attended at the Property on a daily basis for the purpose of conducting his home businesses. The applicant married in 2007 but separated in November/December 2015. In 2009 the applicant resumed living at the Property with his wife and two children and continued to conduct his business activities at and from the Property. The two businesses conducted by the applicant have been described as a vending machine business and a blind cleaning business.
[7]The applicant contends that during the period from July 2014, being about the time that the Commissioner notified the applicant and his parents of the proposed acquisition, until May 2016 the applicant suffered from an adjustment disorder with post-traumatic stress disorder type symptoms including anxiety, mental stress, forgetfulness, insomnia, depression, feelings of hopelessness and helplessness and suicidal ideations. The applicant further contends that this injury was caused by factors other than the acquisition process being made without his consent or against his will. The latter contention is of particular importance given that s 25(1)(g) of the Act provides that, in determining compensation, no allowance shall be made on account of the fact that the acquisition is effected without the consent, or against the will, of any person.
[2] Ibid at [5]-[7].
The relevant provisions of the Act
The relevant provisions of the Act are as follows:
3—Object of this Act
The object of this Act is to provide for the acquisition of land on just terms.
6—Interpretation
…
interest in land means—
(a) a legal or equitable estate or interest in the land; or
(b) an easement, right, power, or privilege in, under, over, affecting, or in connection with, the land; or
(c) native title in the land;
…
22B—Entitlement to compensation
Subject to this Act, a person is entitled to compensation for the acquisition of land under this Act if—
(a) the person's interest in land is divested or diminished by the acquisition; or
(b) the enjoyment of the person's interest in land is adversely affected by the acquisition.
…
23C—Reference of matters into court
(1) The Authority or a claimant may refer a question arising in the course of negotiations into Court.
(2) On the reference of a matter into the Court, the Court may—
(a)if of the opinion that the question should be the subject of further negotiation—adjourn the matter to allow further negotiation to take place; or
(b) make any order necessary to resolve the question.
(3) In particular—
(a)if there is a dispute about whether the claimant is interested in the subject land, or the nature of the claimant's interest—the Court may, subject to subsection (4), declare whether the claimant has an interest in the subject land and, if so, the nature of the interest; and
(b)the Court may make orders for compensation that the Court finds to be justified on the claim; and
(c)the Court may make other orders that may be just in the circumstances of the case.
…
25—Principles of compensation
(1) The compensation payable under this Act in respect of the acquisition of land shall be determined according to the following principles:
(a)the compensation payable to a claimant shall be such as adequately to compensate him for any loss that he has suffered by reason of the acquisition of the land; and
(b)in assessing the amount referred to in paragraph (a) of this section consideration may be given to—
(i) the actual value of the subject land; and
(ii)the loss occasioned by reason of severance, disturbance or injurious affection; and
(c)compensation shall be fixed as at the date of acquisition of the land; and
(d)where the claimant's interest in the subject land was liable to expire or be determined, any reasonable prospect of renewal or continuation of the interest must be taken into account; and
(e)any special suitability or adaptability of the land for any purpose shall not be taken into account if it could be applied to that purpose in pursuance only of statute, or if the suitability or adaptability is peculiar to the purposes or requirements of a particular person or of any Governmental or local governing authority but any bona fide offer to acquire the land made before the passing of the special Act shall be taken into account; and
(f)where the value of the land is enhanced by reason of its use, or the use of any premises on the land, in a manner that may be restrained by any court, or is contrary to law, or is detrimental to the health of any persons, the amount of that enhancement shall not be taken into account; and
(g)no allowance shall be made on account of the fact that the acquisition is effected without the consent, or against the will, of any person; and
(h)no allowance shall be made for any enhancement or diminution in the value of the land in consequence of—
(a) the passing of the special Act; or
(b) the acquisition under this Act of any other land; or
(c)any proposed or expected development of the land after its acquisition; and
(i)where the land is, and but for acquisition would continue to be, devoted to a particular purpose, and there is no general demand or market for land devoted to that purpose, the compensation may, if reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement; and
(j)allowance shall be made in favour of the Authority for any enhancement in value of land adjoining the subject land in which the claimant is interested by reason of development of the land after its acquisition, but in no case shall the claimant be liable to make any payment to the Authority in respect of such enhancement in value; and
(k)where a notice of intention to acquire land has been served upon a person interested in the land, any sales, transactions, arrangements, licences or approvals effected or obtained with respect to the land, and any improvements to the land effected, after service of the notice, shall not be taken into account unless it is proved that they were effected or obtained bona fide.
(2) The reference to loss in subsection (1)(a) extends, in the case of acquisition of native title, to diminution, impairment or other adverse effect on native title that results or will result from the acquisition project.1
(3) Subject to subsections (1) and (2), the total compensation payable for the acquisition of native title must not exceed the amount that would be payable for the acquisition of an estate in fee simple in the relevant land.
(4) A reference in this section to a claimant is limited to a claimant who is entitled to compensation.2
Notes—
1 Compare section 51(1) of the Native Title Act 1993 (Cwth).
2 See section 22B.
These provisions must be read in light of the machinery for acquisition set out in the Act. Part 2 of the Act contains detailed provisions applicable to a proposal to acquire land. In essence, the scheme is that the Authority (i.e. the person authorised by a special Act to acquire land, in this case the Commissioner) must give notice under s 10 of their intention to acquire. A person who has an interest in the subject land may require the Authority to provide an explanation of the acquisition scheme in accordance with s 11. A person who has an interest in the subject land may object to the proposed acquisition under s 12 and if that objection is unsuccessful they may apply to the South Australian Civil and Administrative Tribunal for a review under s 12A. While it is not relevant here, native title parties have an additional right to object under s 12B.
The actual acquisition of land occurs under Part 3 of the Act. Section 15 provides for an authority to acquire the subject land by agreement at any time after it has given notice of intention to acquire the land. Section 16 provides that an Authority may, at least three months after the last notice of intention to acquire was given but before the acquisition period ends, publish a notice of acquisition in the Gazette. Most importantly, on publication of the Gazette notice, s 16(2) operates to vest the land in the Authority. Thus, the actual act of acquisition, being the vesting of the subject land in the Authority, occurs upon publication of the Gazette notice. Section 17 provides for the Registrar‑General to endorse the acquisition upon the Certificate of Title. Special arrangements apply under s 17 where native title land is acquired.
The claimant’s contentions
The claimant notes that, prior to the publication of my ruling on 16 February 2018, the Commissioner modified his position so as to accept that he held a relevant interest in the subject land within the meaning of the definition in s 6(1) of the Act. On that basis he asserts that he has an entitlement to compensation in accordance with s 22B of the Act. In other words, the claimant contends that his interest in the land has been divested or diminished by the acquisition and his enjoyment of that interest in the land is adversely affected by the acquisition.
The claimant acknowledges that his entitlement, if any, to compensation must be determined in accordance with the principles set out in s 25. He submits that the use of the phrase “for any loss that he has suffered by reason of the acquisition of the land” in s 25(1)(a) creates a cause and effect relationship. He notes that Wells J held in Commissioner of Highways v George Eblen Pty Ltd that s 25(1)(a) should be read broadly.[3] The claimant also relies upon an observation by Wells J in George Eblen that the use of the word “may” in s 25(1)(b) indicates that the heads of compensation stated in s 25 are not intended to be exhaustive.[4] The claimant also observes that a statement of principle made by Wells J in Eblen was adopted by the Full Court in McInnes v Commissioner of Highways.[5]After referring with approval to the observation made by Wells J in Eblen the Full Court added:[6]
What is clear is that the loss which attracts compensation is that which is suffered ‘by reason of the acquisition of the land’. There must therefore be a relevant cause and effect.
[3] (1975) 10 SASR 384.
[4] Ibid at 390.
[5] (1992) 78 LGERA 410 at 412, Olsson J, King CJ and Mullighan J agreeing.
[6] Ibid.
In that light the claimant submits that s 25(1)(b) does not limit what is compensable under s 25(1)(a). However, the claimant notes that the converse position applies under certain of the subsequent paragraphs of s 25(1) in so far as those paragraphs limit the scope of compensation in respect of any loss under s 25(1)(a). The claimant submits that, but for the enactment of those limitations, compensation would be payable on account of any loss suffered by an interested person even though that loss related to matters such as the illegal use of the land or its use for an impermissible purpose. Where the Parliament intended that compensation be limited, it has enacted a specific prohibition.
The claimant places particular reliance on s 25(1)(g). This provides that “no allowance shall be made on account of the fact that the acquisition is effected without the consent, or against the will, of any person”. In the claimant’s submission, that exclusion or limitation implicitly recognises that the compensable loss claimable under the Act, but for the inclusion of s 25(1)(g), would include loss in the nature of mental stress or anguish caused by the compulsory acquisition of land. In other words if s 25(1)(g) had not been enacted, a loss arising from acquisition of the land without a person’s consent would be compensable. In that context the claimants submits that it is important that mental stress, anxiety and disturbance are often compensated in personal injury claims. Such loss is often described as non-economic loss and is said to sound in general (i.e. non-pecuniary) damages.
The second observation made by the claimant about s 25(1)(g) is that it only excludes non-economic loss arising out of a mental injury in circumstances where that injury arises as a consequence of the acquisition being effected without the consent or against the will of the person. However, paragraph (g) does not exclude non-economic loss arising out of a mental injury if that injury arises from factors other than those referred to in paragraph (g).
The claimant contends that if personal injury losses are not compensable under s 25(1) then s 25(1)(g) would be otiose. The claimant relies upon the expressio unius principle of statutory interpretation. The claimant contends that the Parliament has turned its mind to compensation for loss from mental injury and has only excluded it in limited circumstances. That is said by the claimant to support his contention that all other categories of loss resulting from personal injury are compensable if they satisfy the relevant causation principles.
The claimant contends that such an interpretation is consistent with the statutory object expressed in s 3 that land be acquired on just terms. It would be most unusual if “just terms” did not include compensation for loss arising from personal injury caused by the acquisition of land. In the claimant’s submission such an interpretation would be repugnant to the statutory object as it would result in acquisition other than on just terms.
A further submission by the claimant is that there is a principled reason for not reading any limitation into the words “any loss” used in s 25. The claimant draws support from observations made by Gaudron J in Marshall v Director General, Department of Transport concerning the interpretation of s 20 of the Acquisition of Land Act 1967 (Qld). [7] Section 20 sets out the principles to be observed in determining compensation for compulsory acquisition of land in Queensland. Her Honour stated:[8]
The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed of all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.
[7] (2001) 205 CLR 603.
[8] Ibid at 623 [38].
The claimant takes issue with the submission by the Commissioner that the words “any loss” in s 25(1)(a) are restricted to loss of an economic nature and places particular reliance upon the observation by Wells J in Commissioner of Highways v Tynan that:[9]
The general principle underlying the assessment of compensation made by this Court in pursuance if its duty under subs. (3) of s. 23 and par. (a) of s. 25 is that the claimant is to be “adequately” “compensate[d]” “for any loss he has suffered by reason of the acquisition of the land”. It is necessary, when discharging that duty, always to bear in mind that the claimant has been deprived, not just of the parcel of land, as it were, in a vacuum, but of a parcel of land in circumstances of occupation and use, both contemporaneous and prospective. It is, speaking generally, those attendant circumstances that may be of special importance to the claimant. He has lost something that has an objective market value, and he as lost, too, something that once formed an integral part of his life – his personal life or his business life or, it may be, both.
[9] (1982) 53 LGRA 1 at 5.
The claimant observes that Wells J also stated in Tynan that the principles to be applied in assessing compensation where the loss or the burden arising from the acquisition is more or less recurrent and more or less predictable, are not dissimilar to the principles governing the assessment of damages in tort as discussed by the High Court in Todorovic v Waller.[10]
[10] (1981) 150 CLR 402.
The claimant also refers to the discussion by Blue J in Sotirianakos v Commissioner of Highways concerning the assessment of compensation.[11] Blue J held that s 25 manifests a clear legislative intention that events subsequent to the acquisition are not to be taken into account in assessing the actual value of the subject land. However, that position is to be “contrasted with that in respect of disturbance (or other consequential loss), in which case the disturbance necessarily arises after the date of acquisition.”[12] The claimant also relies upon certain observations made by Wells J in South Australian Land Commission v Bletas (see paragraph [52]-[53] below).[13]
[11] [2018] SASC 16, at [76]-[102].
[12] Ibid at [91].
[13] (1978) 77 LSJS 344.
The claimant’s counsel referred in some detail to the fact that s 44 of the Land Acquisition and Compensation Act 1986 (Vic) allows for a claimant to receive solatium up to 10% of the market value of the property for non-pecuniary or intangible disadvantages. Courts and tribunals in Victoria have found that the disadvantages that may be taken into account are distress, disruption, inconvenience, annoyance, nuisance, trouble and worry as a result of the acquisition process.[14] In March v City of Frankston (No 1), Barber J explained “solatium” to be:[15]
… an expression apt to describe an award of some amount to cover inconvenience and in a proper case distress caused by compulsory taking. It is quite inapt to describe an amount awarded for provable loss to which the claimant is entitled.
Barber J also stated in March that solatium covered “only the imponderables which are not specifically provable.”[16] The claimant also referred to the judgment of Osborn J in Roads Corporation v Love[17] where his Honour had referred with approval to the statement made by Barber J in Mayberry v Melbourne and Metropolitan Board of Works[18] that solatium is payable as compensation for the compulsory nature of the acquisition.
[14] March v City of Frankston (No 1) [1969] VR 350; Secretary to the Department of Economic Development, Jobs, Transport and Resources v Driver [2015] VCAT 813 at [88]-[89].
[15] [1969] VR 350 at 356.
[16] Ibid at 358.
[17] (2010) 31 VR 451 at [776].
[18] (unreported, Supreme Court of Victoria, Barber J, 8 June 1970) at 16.
The claimant also observes that s 60 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) provides for the payment of compensation in respect of non-financial disadvantage resulting from the need to relocate the person’s principal place of residence as a result of the acquisition.
The claimant summarises his argument with the submission that the words of the Act do not provide a principled basis to limit the meaning of the words “any loss” in s 25(1)(a) in the manner contended by the Commissioner. The only limitation on these words is to be found in the express wording of the Act. Furthermore, the test of causation is to be interpreted in accordance with ordinary common law causation principles.
The Commissioner’s submissions
The essence of the contentions advanced by the Commissioner is that the only “loss” compensable under the Act is a detrimental disadvantage of an economic nature that directly arises from the claimant’s former legal relationship with the subject land having been divested or diminished or otherwise adversely affected by the acquisition. For that reason, the statutory right to compensation does not extend to loss in the nature of a personal injury.
The Commissioner has informed the Court that it has not been possible to identify any Australian case that has considered whether or not personal injury is compensable under compulsory acquisition legislation. That is also the case in the United Kingdom. However, in Bailey v Derby Corporation the Court of Appeal dismissed a claim for disturbance based upon the inability of the claimant to transfer his business to other premises due to his ill health.[19] However, his ill health was not caused by the acquisition.[20]
[19] [1965] 1 All ER 443.
[20] Ibid at 445, Lord Denning MR.
The Commissioner refers to several Canadian cases where claims for compensation for personal injury or other non-pecuniary losses occasioned by the acquisition of land have been rejected. The Commissioner places particular reliance upon the decision of the Court of Appeal for British Columbia in Patterson v British Columbia (Minister of Transportation and Highways) where the Court held that although the words used in the relevant statute might be interpreted so as to encompass non-pecuniary losses, the legislature had not intended to incorporate non-pecuniary damages akin to damages for nuisance into the legislation.[21]
[21] (1997) 62 LCR 89 at [47]-[48], Prowse J, Macfarlane and Finch JJ agreeing.
The Commissioner also refers to the statement by Douglas Brown in Land Acquisition that in Australia and New Zealand it “would seem that the courts are not prepared to assess … pain, or nervous shock or suffering, under separate heads or as part of a claim for disturbance”.[22]
[22] (Butterworths, 1st ed, 1972) at 244. This remark is absent in the most recent edition of this book: Gary Newton and Christopher Conelly, Land Acquisition (LexisNexis Butterworths, 7th ed, 2017).
The Commissioner acknowledges that despite the novel nature of the claimant’s claim for compensation on account of personal injury, the answer depends upon a proper construction of the legislation. Thus, the matter is to be resolved by reference to the text, context and evident purpose of the Act. Consistently with that submission, the Commissioner has advanced detailed contentions concerning the interpretation of the Act. The Commissioner advances ten specific contentions (some of which have several limbs) in support of his preferred interpretation. I have considered those contentions below.
In that light the Commissioner submits that if the Parliament had intended to extend compensation so as to cover losses of a different nature, it is to be expected that it would have made express provision.
The essence of the submissions advanced by the Commissioner is that the personal injury said to be suffered by the claimant is not a detriment or disadvantage of an economic nature that directly arises from his former legal relationship with the subject land having been divested or diminished or otherwise adversely affected. The Commissioner also states that by analogy, to the extent that a claim at common law for economic loss may flow from a personal injury, this is insufficient for a compensation claim under the Act, because the claim arises from the personal injury and not the direct legal relationship between the claimant and their interest in the land. Thus, the claim does not fall within the proper scope of s 25(1)(a) of the Act.
The Commissioner also notes that the claimant has alleged that his personal injury was caused by the acquisition process, that being a series of events that occurred between July 2014 and May 2016. For that reason, the claimant’s claim does not focus upon the only relevant legal event, that being the point at which his interest in the land was divested or diminished or otherwise adversely affected. The claimant cannot properly base his claim on the administrative processes and other events that may have surrounded the taking of his interest in the land.[23] Thus, the Commissioner submits that if the Court finds that the claimant can pursue a claim for personal injury, his claim should be reformulated so as to limit it only to the relevant legal event, that being the taking of his interest in the land. The Commissioner submits that if the claim is not limited in that way, it should be dismissed.
Consideration
[23] Mitsui v City of Hamilton (1984) 30 LGR 46 at 58.
Observations concerning the interpretation of the Act
It is of fundamental importance that the entitlement to compensation upon the acquisition of land is derived entirely from the Act. While there is a great deal of judicial authority as to the meaning of the terms used in the Act, and the similar provisions found elsewhere, the task of the Court is to determine whether the present claim for compensation is covered by the legislative scheme. For that reason, close attention must be paid to the terms of the Act. While cases decided in other jurisdictions under different legislation may provide some guidance, because the entitlement to compensation depends upon the precise terms of the Act, a cautious approach must be taken to cases decided elsewhere.
The right to compensation for the acquisition of land under the Act arises solely under s 22B. That statutory entitlement arises if either the person’s interest in land is divested or diminished by the acquisition or if the enjoyment of their interest in land is adversely affected by the acquisition. The clear focus of s 22B is upon compensation in respect of interests in land as such.
Section 25 sets out the principles of compensation. Section 25(1)(a) requires that the compensation shall be such as to adequately compensate the claimant for any loss suffered by reason of acquisition of the land. In assessing what is adequate compensation, s 25(1)(b) provides that consideration may be given to “(i) the actual value of the subject land; and (ii) the loss occasioned by reason of severance, disturbance or injurious affection.” I have emphasised the words “any loss” and “may” as their inclusion forms an important part of the claimant’s submissions.
The subsequent nine paragraphs of s 25(1), enumerated as (c) to (k), contain specific directions about the assessment of compensation. Some of those provisions preclude a particular fact or matter being taken into account in the assessment of compensation (see paragraphs (e), (f) (h), and (k)) and others require or permit particular matters to be taken into account that may operate to the benefit of a claimant (see paragraphs (d) and (i)). As previously noted, s 25(1)(g) provides that when assessing compensation “no allowance shall be made on account of the fact that the acquisition is effected without the consent, or against the will, of any person”. Section 25(1)(c) deals with timing by providing that “compensation shall be fixed as at the date of acquisition of the land.” However, that limitation does not apply to the assessment of loss under any of the heads in placitum (ii) of s 25(1)(b).[24]
[24] Commissioner of Highways v George Eblen Pty Ltd (1975) 10 SASR 384 at 391-392, Wells J; Sotirianakos v Commissioner of Highways [2018] SASC 16 at [85], Blue J.
Each of the matters that must be taken into account under paragraphs (d) to (k) of s 25(1), save for paragraph (g), are directed at the assessment of compensation for the actual value of the land. The provisions limit or extend the circumstances in which economic loss is compensable. None of those provisions can be construed as referring in any way to a loss that is not founded upon either the actual value of the subject land or the economic loss occasioned by reason of severance, disturbance or injurious affection. I therefore reject the claimant’s contention that, if paragraphs (d) to (k) of s 25(1) had not been enacted, compensation would be payable on account of any loss whatsoever suffered by an interested person.
The claimant submits that the words “any loss” in s 25(1)(a) and also “may” in s 25(1)(b) operate so as to extend the right to compensation to cover loss in the form of personal injury suffered by reason of the acquisition of land. He supports that submission by reference to various dicta of Wells J that appear in a series of cases decided under the Act. Before considering those authorities, it is necessary to consider briefly the meaning of the words “severance, disturbance or injurious affection” as they appear in s 25(1)(b)(ii).
Compensation is paid for injurious affection where the activities to be carried out upon the land that has been acquired will cause a diminution in the value of the land that has not been acquired.[25] This head of compensation is clearly concerned with the effect of acquisition upon the property value of the land remaining in the hands of the claimant.
[25] Marshall v Director-General, Department of Transport (2001) 205 CLR 603 at [20], Gleeson CJ, Gummow, Kirby and Callinan JJ, with Gaudron and Hayne JJ agreeing, and at [44]-[46], McHugh J.
The principles governing payment of compensation for severance are closely connected to those relating to injurious affection. Under the head of severance, compensation will be payable for any depreciation in the value of the land retained by the owner that is caused by the acquisition. The important point is that the payment of compensation for severance, as with compensation for injurious affection, is based upon the diminution in the value of the claimant’s land that has not been acquired. Personal injury is clearly not relevant to the assessment of compensation for severance or injurious affection.
The third head of compensation referred to in s 25(1)(b)(ii) is disturbance. In Boland v Yates Property Corp Pty Ltd, Callinan J adopted with approval the definition of disturbance that appeared in a report of the Australian Law Reform Commission.[26] The definition stated that disturbance “cover(ed) economic losses which result naturally, reasonably and directly from acquisition. It may include such items as removal expenses, costs of necessary replacement of furniture and fittings, legal and other costs of purchasing [an alternative site] and loss of local goodwill”.[27] Callinan J stated that he would add to that definition a statement that compensation for disturbance may not be available if the claims are too remote.[28]
[26] (1999) 167 ALR 575 at 655 [294].
[27] Australian Law Reform Commission, Lands Acquisition and Compensation, Report No 14 (1980) [241].
[28] (1999) 167 ALR 575 at 655 [295].
A very similar catalogue of the type of losses compensable as disturbance was provided by Bray CJ in Brewarrana Pty Ltd v Commissioner of Highways where his Honour referred to:[29]
[s]uch matters as the cost of purchasing a comparable property, increased rent, removal expenses, diminution in value of fixtures on a forced sale, loss of goodwill in relation to a trade conducted on the subject land, loss of profits during re-establishment of a business on another site and the like.
[29] (1973) 4 SASR 476 at 484.
As with the payment of compensation for severance or injurious affection, it is clear that disturbance covers economic loss that a claimant may suffer due to acquisition. Because of the potential breadth of the matters that might be compensable as disturbance, the requirement that the loss must not be too remote may assume greater significance as compared to severance or injurious affection.
While compensation for personal injury is clearly not covered by the heads of injurious affection and severance, because the boundaries of what may be compensable as disturbance are less clearly defined, it might appear that the notion of disturbance could extend to personal injury suffered by reason of the acquisition of land. Some support for that position might possibly be drawn from the observation by Bray CJ in Brewarrana that “disturbance has always been understood to relate to the disruption of or interference with some business or process of living or some other activity carried on or proposed to be carried on on the subject land”.[30]
[30] Ibid at 484 (emphasis added).
I consider that Bray CJ would not have intended the words “process of living … carried on on the subject land” to extend the right to compensation to cover psychiatric injury. I hold that view for two reasons. First, the issue in Brewarrana was the assessment of compensation for economic loss that a property developer claimed to have suffered due to the acquisition of land held for the purpose of subdivision and sale. There was not the slightest connection with a claim for personal injury. Secondly, the words used by his Honour must be considered in light of the long history in this State and in other comparable jurisdictions whereby the assessment of compensation was concerned with addressing financial losses suffered by a claimant in their capacity as the holder of a relevant interest in land. If Bray CJ had intended to adopt a radically different interpretation so that personal injuries were recognised as being compensable, I consider that his Honour would have carefully analysed the position and arrived at a clearly stated conclusion.
Each of the matters listed by Callinan J in Boland v Yates Property Corp and by Bray CJ in Brewarrana constitutes a form of economic loss suffered by a claimant in their capacity as a holder of a relevant interest in land. There is nothing in either list to suggest that disturbance extends to personal injury.
The Canadian authorities
Because there is a dearth of other authority, the Commissioner has referred in his submissions to several Canadian decisions. For the same reason, the only Australian textbook dealing with compulsory land acquisition that cites any authority for the view that compensation is not payable for personal injury relies upon a Canadian authority. Marcus Jacobs QC in the Law of Compulsory Land Acquisition[31] cites the decision of Judge Moore of the Ontario County Court in Zobel v Municipality of Metropolitan Toronto as authority for the principle that disturbance damages are not allowed for psychiatric injury.[32]
[31] (Thomson Reuters, 2nd, 2015) at 605 [25.410].
[32] (1969) 1 LCR 139 at 152.
In Zobel the land owner asserted that he had developed a mental illness as a result of the acquisition of his land. Judge Moore found that there was no evidence to support the alleged mental illness. More significantly, his Honour also stated that such damage would be too remote to entitle the plaintiff to compensation.
My brief online research has established that the Ontario County Court no longer exists. I infer from its title that its place in the Ontario judicial hierarchy may have been broadly equivalent to the District Court of South Australia, although I cannot be sure about that. That is not important as the observation by Judge Moore that the alleged loss was too remote was obiter. It was also no more than a one line statement made without any analysis. Moreover, as the Commissioner has pointed out, remoteness of loss is a causation issue. As such it is a separate matter to the question whether personal injury is compensable under the Act. Accordingly, Zobel provides no assistance.
The Commissioner seeks to draw support from the decision of the Court of Appeal for British Columbia in Patterson v British Colombia (Ministry of Transportation and Highways).[33]Part of the appellants’ land had been acquired for a highway widening scheme. The issue was whether the appellants were entitled to non-pecuniary damages for what they described as “personal losses” based upon nuisance, loss of privacy, increased cleaning costs and the loss of use and enjoyment of the amenity of their property.
[33] (1997) 62 LCR 89.
Prowse JA, with Macfarlane and Finch JJA agreeing, referred in Patterson to the Second Reading Speech where the Attorney General for British Columbia had referred to a statement by the Law Reform Commission that “an expropriated owner is entitled to economic reinstatement; that is, he is entitled to be put back in the same economic position that he was in prior to the expropriation.”[34] Prowse JA, with Macfarlane and Finch JJA agreeing, held that “the concept of indemnification is consistent with the principle of economic reinstatement referred to by the B.C. Law Reform Commission, but it does not accord with an award of damages for non-pecuniary damages such as are claimed here.”[35] Prowse JA further observed in Patterson that although the statutory words “reasonable personal… losses” could be interpreted to encompass non‑pecuniary losses, she was not persuaded that the legislature intended to provide compensation for non-pecuniary damages. If that had been intended, her Ladyship considered that the legislature would have addressed the matter more directly.
[34] Ibid.
[35] Ibid at [46].
The Commissioner has also referred to the decision of the Ontario Municipal Board in Mitsui v City of Hamilton.[36] The facts in Mitsui were that the claimant resided on the subject land and also carried on business there. The land was acquired for an urban redevelopment scheme. The claimant refused to vacate the premises upon the acquisition taking effect. After 12 months a County Court judge issued a warrant for possession and the claimant was then forcibly removed by the Sheriff with the assistance of police. He sought damages for physical and emotional suffering and loss of enjoyment of life. The Board (chaired by Mr Diplock QC) rejected the claim because the medical evidence did not establish that the claimant’s psychiatric illness was caused by the expropriation alone. The Board referred to several earlier Canadian decisions, including Zobel, where claims for psychiatric illness said to arise from compulsory acquisition had been rejected due to a lack of evidence. The Board found that the medical evidence failed to distinguish between mental disturbance arising from the forcible removal of the claimant from the property and the expropriation that had occurred one year earlier.
[36] (1984) 30 LCR 46. The website of Environment and Land Tribunals Ontario states that the Ontario Municipal Board became the Local Planning Appeal Tribunal in early 2018. The website states that the Ontario Municipal Board was an independent quasi-judicial administrative tribunal that made decisions on planning issues and other matters, including compensation for land acquisition.
The Commissioner submits that the significance of Mitsui lies in the distinction drawn between the act of appropriation and subsequent events. I will return to that issue.
The various dicta by Wells J
The claimant places considerable reliance upon the observations made by Wells J in South Australian Land Commission v Bletas[37] and in Commissioner of Highways v George Eblen Pty Ltd.[38]In Eblen Wells J made the following observation concerning s 25(1): [39]
Paragraph (b) mentions certain traditional heads of compensation, but the appearance of the word “may” makes it clear that the stated heads are not intended to be exhaustive; those that are explicitly referred to must, I think, subject to qualification imposed by the context, be accorded the meanings respectively that have been developed over the years by courts when fixing compensation with respect to each.
[37] (1978) 77 LSJS 344.
[38] (1975) 10 SASR 384.
[39] Ibid at 390.
Wells J also observed in Bletas that:[40]
The dominating principle is stated in paragraph (a) of s. 25 … Broadly speaking, that loss falls under two headings: first of all, there is the actual value of the land taken, which must be fixed as at the date of acquisition; and then there are other losses which are occasioned by reason of the taking and which may be placed under the headings of severance, disturbance, injurious affection, or any other loss. The categories, however, are not closed.
[40] (1978) 77 LSJS 344 at 347.
The observations made by Wells J in the cases referred to by the claimant must be considered in light of the issue that the Court was being called upon to decide. The issue in Eblen was the operation of the requirement in s 25(1)(c) that compensation is to be fixed as at the date of acquisition of the land. Part of the land occupied by the claimant’s service station and car sales business was acquired for road widening. The Commissioner of Highways conceded that the disruption caused by the acquisition made it necessary to reconstruct the buildings on the site and to carry out certain other works. The issue before the Court arose because the claimant had not begun his rebuilding program and his claim was based upon a projected program. The costs of that program had risen considerably since the acquisition.[41] Wells J held that s 25(1)(c) did not preclude the Court from treating likely future events that were causally linked to the acquisition as constituting compensable loss, just as the common law principles for assessing damages did not preclude the Court from awarding compensation for future loss of profits or earnings.[42] On that basis Wells J held that compensation should be assessed upon a reinstatement basis.
[41] Inflation in Australia was particularly high in 1974, being the year that the acquisition occurred.
[42] (1975) 10 SASR 384 at 393.
The entire focus of the judgment in Eblen was upon what was necessary to provide the claimant with adequate financial compensation for the losses and expenses that he had incurred or would incur by reason of the acquisition of his land. There was no suggestion by Wells J that the claimant would be entitled to compensation for non-pecuniary losses that were not directly and immediately associated with the acquisition of his land.
I do not consider that the analogy drawn by Wells J between the assessment of damages at common law and the breadth of the words used in s 25(1)(b) was intended to extend the operation of the compensation provisions in the Act to cover personal injury said to arise from the acquisition. On my reading, his Honour was simply making the point that when determining adequate compensation, the categories of indirect or consequential economic loss arising from or connected with the use of land as land are not closed.
The judgment of Wells J in Commissioner of Highways v Tynan is illustrative of the latter proposition.[43] There were belts of trees on the frontage of the claimants’ farm. The Commissioner of Highways acquired the land upon which the trees were located so as to realign a major highway. The claimants contended that this land had a special value as it provided shelter for sheep, assisted in weed control and reduced the risk of grass fires being caused by passing motorists. There was some evidence demonstrating the particular benefit derived by the claimants’ farming business from the presence of the trees that were to be cleared by the Commissioner. The observations by Wells J in Tynan upon which the claimant relies (see [17] above) were made in the context of giving recognition to the special value of the acquired land because the trees had a significance in the claimants’ farming operation that went beyond the ordinary market value of the land. Wells J awarded modest compensation in recognition of that special value to the claimants.
[43] (1982) 53 LGRA 1.
I do not consider that the passages from the judgment of Wells J in Tynan support the claimant’s contention that “any loss” extends to personal injury. In my view, the analogy drawn by Wells J with common law claims was simply directed at the means used to assess compensation where it was asserted that property had a special value. On my reading, his Honour did not suggest that the losses compensable in a land acquisition case were the same as those recognised in a common law claim.
I also do not consider that the claimant’s case is advanced by the observations of Wells J in South Australian Land Commission v Bletas (see [52]‑[53] above). While Wells J referred to “any other loss” in addition to severance, disturbance and injurious affection, his Honour was simply stating in general terms the orthodox principles applicable to the assessment of compensation. There was nothing said by his Honour to suggest that personal injury was compensable under the Act.
In Brewarrana Wells J observed that: [44]
… you take the owner’s land as you find it, with all its potentialities as land; you do not take the victim’s indigence as it is or the owner’s financial arrangements or profit-making adventures in which the land happens to be fulfilling a role, as they are.
Bray CJ and Walters J adopted the same approach.[45]
[44] (1973) 4 SASR 476 at 502 (emphasis in original).
[45] Ibid at 485, Bray CJ, and at 491, Walters J.
The approach adopted by the Full Court in Brewarrana to the assessment of consequential or indirect loss of the type referred to by Wells J was strongly influenced by the decision of the House of Lords in Owners of Dredger Liesbosch v Owners of Steamship Edison.[46] There it was held that the plaintiff's susceptibility to financial loss due to its lack of resources should not increase the damages payable. Thus, the plaintiff could not recover the additional costs of hiring a substitute dredger when its own was lost due to the defendant’s negligence. Its lack of funds was either too remote or a separate cause of loss. This decision was overruled in Lagden v O'Connor.[47] A wrongdoer must take an impecunious victim as they find them.
[46] [1933] AC 449.
[47] [2004] 1 AC 1067.
Regardless of whether or not the revised approach to the assessment of property damage at common law applies in Australia,[48] that does not derogate from the force of the observation by Wells J that the award of compensation must focus upon providing just compensation for the acquisition of an interest in land rather than the characteristics of the person who has been dispossessed.
[48] That issue was not referred to in the party's submissions, other than in passing.
Accordingly, the observation made by Wells J in Brewarrana (see paragraph [60] above) reinforces my view that his Honour’s dicta in Eblen, Tynan and Bletas were not intended to suggest that a personal injury would be compensable under the Act. His Honour was not asked to address that question in any of those cases. As I have already indicated in relation to the remarks made by Bray CJ in Brewarrana, if Wells J had intended to state that personal injury was compensable I firmly consider that his Honour would have conducted a careful analysis and expressly stated his conclusion.
Care must be taken to avoid reading observations made in judgements as if they were the terms of a statute. The words used by a judge must be considered in the context of the proceedings before the Court. I reject the claimant’s submission that the words used by Wells J provide any support for his contention that personal injury is compensable.
The legislative scheme
I turn to the various contentions advanced by the Commissioner concerning the legislative scheme. The first such contention is that the meaning of the word “claimant” in s 25(1)(a) is expressly limited by s 25(4) to a person who is entitled under the Act to compensation. Section 22B provides that a person is entitled to compensation if their interest in land is divested or diminished by the acquisition or their enjoyment of their interest is adversely affected by the acquisition. Although the concept of an “interest” in land is defined in broad terms in s 6(1), the Commissioner contends that the concept is limited to specified legal relationships between a person and the subject land.
Thus, the Commissioner submits that the entitlement to compensation does not arise from the fact that a person may have enjoyed the land in an emotional or non-legal sense but instead depends upon the person having a legal relationship with the land. That, in the Commissioner’s submission, further suggests that the ordinary meaning of the word “loss” in s 25(1) is a detriment or a disadvantage caused by the claimant’s legal relationship with the land having been divested or diminished or otherwise adversely affected. Such a detriment or disadvantage is said by the Commissioner to be naturally a loss of an economic nature connected with the ownership of land.
The Commissioner also contends that the use of the words “just terms” in the object of the Act conveys the notion that the legislation is seeking, to use the words of Dixon J (as he then was) in Grace Brothers Pty Ltd v The Commonwealth, to “provide fair and just standards of compensating or rehabilitating the individual considered as an owner of property”.[49] Thus, the Commissioner submits that the evident purpose of the Act is to achieve economic reinstatement following the acquisition of land.
[49] (1946) 72 CLR 269 at 290.
I consider the Commissioner’s submissions to be correct and I reject the contrary submission of the claimant. The Commissioner’s submissions are consistent with the statement of principle made by Wells J in Brewarrana that “you do not take the victim’s indigence as it is or the owner’s financial arrangements or profit-making adventures, in which the land happens to be fulfilling a role, as they are.”[50] His Honour’s observation reflects the fact that the scheme established by the Act is intended to limit compensation to addressing the financial disadvantage caused to a person in their capacity as a holder of an interest in the subject land and does not extend to the payment of damages for personal injury.
[50] (1973) 4 SASR 476 at 502.
Although the Commissioner concedes that the reference in s 25(1)(b) to “severance, disturbance or injurious affection” does not exhaust the meaning of “any loss” in s 25(1)(a), he submits that the reference to the three specific heads of compensation in s 25(1)(b)(ii) strongly support the interpretation of the word “loss” advanced above.[51] As I have already noted (at [37] to [44] above), the three specific heads of compensation are each limited to economic loss related to or arising in the claimant’s capacity as the holder of an interest in land.
[51] South Australian Land Commission v Bletas (1978) 77 LSJS 344 at 347, Wells J.
The Commissioner further contends that the words the “actual value of the subject land” in s 25(1)(b)(i) refer to the economic value of the interest in the land itself, i.e. the market value. Even where there is a “special value” that concept relates to the particular economic value of the land and is fixed by reference to the attributes and specific use of the land. The Commissioner particularly emphasises that the value of the land does not extend to matters that are not referable to a particular attribute of the land or use of the land such as mere subjective affection or emotional involvement.[52] I accept the correctness of those submissions.
[52] Bronzel v State Planning Authority (1979) 21 SASR 513 at 525, Wells J.
A further submission advanced by the Commissioner refers to s 25(1)(g) which provides that no allowance should be made when determining compensation for the fact that the acquisition has been effected without the consent, or against the will, of any person. In contrast to the legislative scheme in some other jurisdictions, one effect of s 25(1)(g) is that in South Australia no allowance is made for solatium.[53] Thus, in South Australia compensation is not paid as “solace for injured feelings”.[54] The Commissioner contends that because s 25(1)(g) excludes compensation for injured feelings or the like this suggests that the words “any loss” in s 25(1)(a) must be limited to loss of an economic nature that is referrable to the legal relationship with the acquired land or the use of that land.
[53] Marcus Jacobs, Law of Compulsory Land Acquisition (Thomson Reuters, 2nd ed, 2015) at 699 [29.35].
[54] See Alan Hyam, The Law Affecting Valuation of Land in Australia (Federation Press, 4th ed, 2009) at 505 citing Shorter Oxford English Dictionary (Oxford University Press, 3rd ed).
The detailed submissions made by counsel for the claimant about the significance of solatium and similar concepts in other Australian jurisdictions were apparently intended to address the submissions made by the Commissioner with respect to s 25(1)(g). I consider that the claimant has correctly submitted that the enactment of s 25(1)(g) does not support the Commissioner’s submission that the words “any loss” in s 25(1)(a) must be limited in the fashion discussed in the preceding paragraph. The various matters listed in paragraphs (d) to (k) of s 25(1) operate to limit or extend what can be taken into account under paragraphs (a) and (b). Those matters do not support the drawing of any inference one way or the other concerning the interpretation of s 25(1)(a).
Counsel for the claimant suggested that, but for the enactment of s 25(1)(g), compensation would be payable for “mental stress, anxiety and disturbance” or “mental stress or anguish”. In my firm view there is a distinction between a recognised mental illness, such as anxiety or depression, and an emotional reaction, even a very strong reaction, to an adverse event, such as distress, anguish or annoyance, that does not involve a clinical condition. In this context, the use of the generic term “stress” is not helpful.
In my view, s 25(1)(g) operates to exclude liability to pay compensation on account of either a recognised illness or an emotional reaction if either of those states arise from the fact that the acquisition occurred without consent. In those jurisdictions where the assessment of compensation recognises solatium, or similar principles, a relatively small payment may be made in recognition of the distress caused by the acquisition without any need to establish the existence of a clinical condition. I consider that s 25(1)(g) is intended, as the Commissioner submits, to preclude the payment of compensation on such a basis in South Australia. The enactment of s 25(1)(g) does not establish that if this provision had not been enacted compensation would be payable for personal injury caused by an acquisition.
The Commissioner also notes that s 23A(1) requires an Authority to make an offer to make payment of a specified amount to the person or persons whom it believes to be entitled to compensation for the acquisition. He submits that although it may not always be possible for the Authority to assess at the date of acquisition the amount of compensation properly payable, loss of an economic nature that is referrable to the legal relationship with the land or its use is far more likely to be ascertainable as at the date of acquisition as compared to compensation for non-economic loss which may only become evident well after the acquisition. That is said to support the contention that compensation is restricted to economic loss.
In my view, the obligation imposed upon an Authority by s 23A(1) provides some support for a finding that the legislative scheme is restricted to loss of an economic nature that is referrable to the legal relationship with the acquired land or the use of that land. If personal injury was intended to be compensable it can be expected that the Act would have included the administrative machinery necessary to deal with such claims, e.g. by conferring appropriate investigative powers.
The Commissioner also notes that the powers conferred upon an Authority by s 27(1) and s 30 to enter land and to inspect records are directed at assessing loss of an economic nature. I do not consider that this submission advances the Commissioner’s case. While it is correct that the particular statutory powers are directed at the assessment of economic loss, rather than personal injury, the conferral of these powers does not support the contention that personal injury is not compensable under the Act. The position is simply that the powers are necessary in some cases to facilitate the assessment of compensation for economic loss. The more relevant point is, as I have indicated in the previous paragraph, that the Act does not include any of the powers and procedures that ordinarily would be found in a statute that is intended to provide compensation for personal injury.
The Commissioner also refers to the fact that the Second Reading speech given by the Minister in support of the Land Acquisition Bill 1969 (SA) distinguished between situations where compensation would or would not be payable. The Minister stated that the Act “converts all interests [in the land] into claims for compensation”.[55] The Minister stated that compensation would not be payable to “persons whose land had not been taken for announced public works projects, but who, in some way (often indirectly), had suffered other losses or disadvantageous consequences either as the result of the announcement of a project or as the result of its execution.”[56] The Commissioner submits that the reference by the Minister to the conversion of all interests in the land into claims for compensation is consistent with the evident purpose of economic reinstatement of the owners of interests in acquired land. The Commissioner also submits that the Minister’s example of a situation where compensation would not be payable is consistent with his submission that non‑economic losses are not compensable under the Act.
[55] South Australia, Parliamentary Debates, Legislative Council, 19 November 1969 (The Hon CM Hill) at 3086.
[56] Ibid.
In my view the explanation offered in the Second Reading speech was primarily directed at situations similar to that which subsequently arose in McInnes v Commissioner of Highways.[57] The claimant in McInnes was the proprietor of a hotel located on Port Wakefield Road, Dublin. The hotel benefited greatly from passing trade on that busy highway.[58] Part of the land upon which the hotel was located was acquired pursuant to a scheme whereby Port Wakefield Road would bypass Dublin and also the hotel. Much other land was also acquired to enable the diversion. The hotel was likely to suffer a loss of passing trade and thus a loss in its market value. The Full Court held that the combined effect of provisions in effectively the same terms as the current s 22B and s 25(1)(a),[59] and the use of the words “by reason of the acquisition of the land”, was to connote a cause and effect situation. That restricted the Court’s consideration to the impact of the acquisition of a specific parcel of land and not the consequences flowing from the broader project of which the acquisition was but a portion.[60]
[57] (1992) 78 LGERA 410.
[58] Virtually all traffic from South Australia to Western Australia and the Northern Territory and to western and northern areas of South Australia use that highway.
[59] Then s 18 and s 25(a).
[60] (1992) 78 LGERA 410 at 414.
Even if the present circumstances permit reference to the Second Reading speech, I do not consider that the explanation provided by the Minister gives any real assistance in determining whether personal injury is compensable. The Minister’s observations were directed at the issue of causation and remoteness of damage rather than the nature of the loss that is compensable.
Having said that, I note that even if the Act did permit the payment of compensation for personal injury arising from an acquisition (being the only question currently before the Court) a claimant may face significant obstacles when addressing the questions of causation and remoteness. Furthermore, while the issue has been excluded from the question currently before the Court, I also note that a claimant would need to demonstrate that any psychiatric injury was not caused by the compulsory nature of the acquisition and thereby precluded under s 25(1)(g). I find it difficult to envisage circumstances where a claimant had suffered psychiatric injury as a result of the acquisition of their interest in land but which was not caused by the compulsory nature of the acquisition. However, that issue is not currently before the Court and if the question did arise it could only be answered after very careful consideration of the medical evidence, particularly as to the question of causation.
The final point made by the Commissioner is that when the Act was enacted in 1969 it had long been established that compensation for compulsory acquisition related to economic loss. Thus, for example, Fletcher Moulton LJ had stated in Lucas v The Chesterfield Gas & Water Board that:[61]
The principles upon which compensation is assessed when land is taken under compulsory powers are well settled. The owner receives for the lands he gives up their equivalent, i.e. that which they were worth to him in money. His property is therefore not diminished in amount, but to that extent it is compulsorily changed in form.
[61] [1909] 1 KB 16 at 29.
In that light the Commissioner submits that if the Parliament had intended to extend compensation so as to cover losses of a different nature, it is to be expected that it would have made express provision. I note that the British Columbia Court of Appeal found the same point to be persuasive in Patterson.
I consider this submission to carry very substantial weight. At the time the Act was enacted, there was a long history of assessing compensation consistently with the principle stated by Fletcher Moulton LJ. If the legislative intention was to move away from long-standing practice by providing compensation for personal injury consequential upon a land acquisition, it can be expected that such a fundamental change would have been unequivocally identified in the Second Reading speech. I consider that the failure to do so provides strong support for a finding that the payment of compensation for personal injury was not in any way contemplated or intended by the legislature. Of course, that is essentially the same observation as I have made concerning the dicta of Bray CJ in Brewarrana and the dicta of Wells J in the several cases referred to above.
The Commissioner also submits that whilst at common law a personal injury claim may include economic loss, this analogy is insufficient to demonstrate that personal injuries are compensable under the Act. That is because such a claim would arise from the personal injury and not from the direct legal relationship between the claimant and their interest in the land. Thus, the claim does not fall within the proper scope of s 25(1)(a) of the Act. I accept the correctness of the submission.
Each of the heads of compensation specified in the Act arises from either the diminution in value of the claimant’s interest in land as a result of the acquisition (whether that be the land acquired or the land retained) or the incurring of expenses by the claimant as a direct result of the acquisition. While the classes of matter that may be compensable are not closed,[62] I do not consider that they extend to compensation for personal injury arising from an acquisition.
[62] (1978) 77 LSJS 344 at 347, Wells J.
The Commissioner also notes that the claimant has alleged that his personal injury was caused by the acquisition process, that being a series of events that occurred between July 2014 and May 2016. For that reason, the claimant’s claim does not focus upon the only relevant legal event, that being the point at which his interest in the land was divested or diminished or otherwise adversely affected. The claimant cannot properly base his claim on the administrative processes and other events that may have surrounded the taking of his interest in the land.[63] Thus, the Commissioner submits that if the Court finds that the claimant can pursue a claim for personal injury, his claim should be re-formulated so as to limit it only to the relevant legal event, that being the taking of his interest in the land. The Commissioner submits that if the claim is not limited in that way, it should be dismissed.
[63] Mitsui v City of Hamilton (1984) 30 LGR 46 at 58.
Because I have concluded that personal injury is not compensable under the Act, it is not strictly necessary for me to consider the correctness of this submission. Nevertheless, I will do so for completeness.
As I understand the Commissioner’s submission, it is not based upon the fact that the period referred to by the claimant covers almost two years. The point being made by the Commissioner is that the only event that could attract a right to compensation is the act of acquisition i.e. the vesting of title to the subject land in the Commissioner under s 16(2).
I consider the Commissioner’s submission to be correct. The right to receive compensation arises from the act of acquisition and the financial consequences that flow from that event. The right to be compensated for severance, disturbance and injurious affection, or any other newly identified ground, is based upon the acquisition of the interest in property held by the claimant rather than the administrative processes which surround that event. For that reason I respectfully consider that the Canadian case of Mitsui was correctly decided.
It is not inconceivable that the approach adopted by an Authority to the acquisition of land in a particular case might be so egregious as to give rise to a valid claim for damages in tort, e.g. for negligence or misfeasance in public office. However, that is not asserted in this case and is a very different matter to the payment of compensation under the Act for personal injury said to be caused by the fact of acquisition.
Conclusion
I conclude that the personal injury said to be suffered by the claimant is not compensable. That is because the compensation provided under the Act is limited to economic loss related to or arising in the claimant’s capacity as the holder of an interest in land. Compensation is to be fixed by reference to the value of the acquired land and any loss occasioned by severance, disturbance or injurious affection. Those matters do not extend to personal injury.
In that light my answer to the question:
Is a personal injury of the nature suffered by the applicant compensable as loss arising under s 22B of the Act as qualified by the principles of compensation set out in s 25 of the Act?
is “No.
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