Cunningham v Commonwealth

In *Cunningham v Commonwealth*, the plaintiff, Hilda Josephine Cunningham, brought an action in the High Court of Australia seeking compensation from the Commonwealth for the compulsory acquisition of her land in Chippendale, Sydney. The plaintiff's claim included compensation for the value of the land, improvements, loss occasioned by compulsory acquisition, and a prospective loss of income upon re-investment of the capital sum. The Commonwealth admitted the unimproved and improved values of the land but disputed the claims for loss occasioned by compulsory acquisition and prospective loss of income.

The court was required to determine whether the plaintiff was entitled to compensation for a prospective loss of income on the re-investment of the capital sum received for the resumed land, and whether she was entitled to compensation for loss occasioned by the compulsory acquisition. The assessment of compensation was to be made in accordance with the *Lands Acquisition Act 1906-1936*, specifically considering the value of the land acquired.

Williams J. disallowed the claim for loss occasioned by compulsory acquisition, as the circumstances outlined in *Geita Sebea v Territory of Papua* were not proven. Regarding the claim for prospective loss of income on re-investment, the court found that while it might have been difficult for the plaintiff to re-invest in comparable factory premises, it was unreasonable for her to limit her inquiries to that specific type of investment. More importantly, the court held that the established principle for compensation is to ascertain the value of the property to the owner, representing what a reasonably willing purchaser would pay. The court reasoned that a prospective loss of income on re-investment, due to receiving a lower return than previously earned, was too remote and did not form part of the value of the resumed land itself. A prudent purchaser would not be expected to include compensation for such a future, speculative loss in their purchase price.

Consequently, judgment was entered for the plaintiff for £1,000, with interest calculated on specific amounts and periods. The court also made orders regarding the costs of the action, apportioning them based on the success of the plaintiff's claims for the disputed items.