McInnes & Anor v Commissioner of Highways

[1993] HCATrans 61

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A26 of 1992

B e t w e e n -

DAVID JOHN MCINNES and HEATHER

MAY McINNES

Applicants

and

COMMISSIONER OF HIGHWAYS

Respondent

Application for special leave

to appeal

DEANE J
DAWSON J

TOOHEY J

Mcinnes 12/3/93

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 12 MARCH 1993, AT 11.14 AM

Copyright in the High Court of Australia

MR J.E. LUNN:  May it please the Court, I appear for the applicants. (instructed by Mouldens)

MR J.J. DOYLE, OC, Solicitor-General for South Australia:

May it please the Court, I appear with my learned

friend MR A.R.F. HALL, for the respondent.

(instructed by the Crown Solicitor for South

Australia)

DEANE J: Thank you, Mr Lunn.

MR LUNN:  The applicant's application for compensation

arises from statute and the application for special

leave arises from a question of causation in

relation to statutes generally and with a

peripheral justification on the basis of the

applicability of English law.

A scheme is required under the South

Australian Land Acquisition Act to be proclaimed to

enable an acquisition to occur. That scheme is

notified by a notice of intention to acquire and

the formal acquisition takes place by virtue of a

gazettal under the Act. Compensation is provided

for initially in relation to section 18 of the Act

which provides that persons interested in land

acquired shall have a claim for compensation in

respect of the acquisition of the land.

By section 23(3) of the Act, which is set out

in its relevant part at page 3 of the application

book, about line 15:

(3) Upon the hearing of a disputed claim, the

Court shall determine what amount should

adequately compensate in accordance with this

Act all persons interested in the subject land

and shall make such orders as it thinks just

in the circumstances.

It is those last words that I will return to.	By
section 25 of the Act, which is also set out at the

same place, the Act provides:

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;

Mcinnes 2 12/3/933

(b) in assessing the amount referred to in

paragraph (a) of this section consideration

may be given to -

and over the page -

(ii) the loss occasioned by reason of

severance, disturbance or injurious affection;

We say that the loss caused concerning which

this application is made is by reason of the

acquisition in the circumstances and is

compensable. The particular loss which is sought

and which was the subject of the question to the retained - which was a hotel - the income of which,

it is admitted, would be reduced and thereby the

value of the hotel would be reduced upon the

implementation of the scheme for which the land was

acquired, the road for which the land was acquired

effectively diverting the majority of traffic away

from the hotel.

We say that in relation to causation in

statute and the words "by reason of", which are

used in 25(a) and 25(b), are the important

questions to be considered and that in relation to
causation it is really neatly summarized in

Fleming, The Law of Torts, page 192 to 194, where

he directs the question of causation in relation to negligence as really being able to be dealt with in

two parts. The first question which he identifies

is whether there is factual causation, some

relation between the events on the one hand, which

have been authorized in this case by statute, and

the effect which the applicants here claim.

We say that there is no doubt that there is

factual causation in this case. I hesitate to use

the words, "but for" but we do say that the

applicants would not have sustained the loss of the

value of their land unless there was an

acquisition.

DAWSON J: Acquisition of what?

MR LUNN:  An acquisition of some land from the applicants,

contiguous to the land which is now affected.

DAWSON J: Well, if merely the land which was acquired from

the applicant had been the land which was acquired

the value of the hotel would not have gone down.

The road would still go in front of the hotel.

MR LUNN:  If that was the limited question to be asked, yes,

Your Honour.

Mcinnes	12/3/93
DEANE J:	Or looked at another way, if no land had been

acquired from your clients and the new road had

gone a quarter of a mile away, the loss we are

talking about here would not have been sustained at

all - or rather, the loss would have been
sustained, but there would have been no acquisition

of land.

MR LUNN:  Yes, we would have failed to have the threshold

step that there was some land acquired from us.	I
accept that.

TOOHEY J: But is that not your difficulty, Mr Lunn, to

relate the loss which your clients say they
suffered to the acquisition of land, as opposed to

the wider undertaking in which the acquisition of

land was involved.

MR LUNN:  Yes, and it is that point that I say is the

special leave point; that it is a factual cause,

that is, but for the acquisition there would have

been no loss. But there are two inquiries to be

made.

DEANE J: But can you say that? I mean, assume the land

acquired had somehow been contaminated and there

was no process of acquisition of it, the road would

have just gone a bit further away, would ·it not?

MR LUNN:  Yes.

DEANE J: Well, it is not really a "but for".

MR LUNN: Well, with respect, it is because we are there

talking not about a question of causation, but a

question of whether we are within the terms of the

Act. There is no doubt that we are within the

terms of the Act overall. It is then a question of

whether the second test of causation, that is, whether there is a legal consequence, is to be

applied. Our point is that the law must really ask

this second question: what consequences in the

matter of law, and for which compensation will be	broadest sense flow which will be dealt with as a	given? The Court in the negligence cases of March
v Stramare and Bennett v The Minister, has said
that a broad common-sense test is to be applied.
Once there is the "but for" test, or factual question of consequence, then the Court has to exercise some interpretive legal policy or value
judgment in order to decide whether there will be
an allowance for compensation in tort.

Our point here is that if you consider the

same thing in relation to statute, are you to look

Mcinnes 4 12/3/93

at a narrow cause under the statute or a broad

cause?

TOOHEY J:  You do not have to do either really, do you? You

just look at what the Act says. It says that

compensation is to be awarded in respect of the

acquisition of the land. If the acquisition of the

land produced no adverse consequences, or at least

no consequences of the sort that you are arguing

for, does not the matter just stop there?

MR LUNN:  It is a question of whether, when the Act refers

to the acquisition of the land, it refers to only
those words or to the whole of the acquisition and

scheme which is integral with it.

TOOHEY J: But it does not. That is your difficulty, is it

not? It says, "in respect of the acquisition of the land", not "in respect of the acquisition of the land and the purpose for which the land is

acquired" or "the undertaking to which the land is

given".

MR LUNN:  Your Honour, what the Act does say in section 23

is that one has to have regard to the

circumstances. We say that a broad approach to the

Act is justified because of that and that the

provision that the Full Court dealt with at
page 20, line 25, of the application book, in the

judgment of Mr Justice Olsson, with whom the others

agreed, says:

the fact remains that, taking the provisions
of both sections 18 and 25(a) together, the

expression "by reason of the acquisition of

the land" necessarily connotes a cause and

effect situation. It logically limits

consideration to the impact of the acquisition

of a specific parcel of land; and not

consequences flowing from the broader

undertaking of the Commissioner, of which the

acquisition is but portion.

I accept that that is in a sense what Your Honour

was just putting to me.

We say that there is, however, the need to

look at what are the broader causes, and in

particular in section 25(b), there is the ability

to look at a number of factors. If the Court goes

back to pages 3 and 3A of the application book, you

will see that where the court is directed to apply

principles for the granting of compensation that

the very broad statement "by reason of the

acquisition of the land" is assisted in definition

in (b) by saying that "consideration may be given

to". That word "may", we say, enables the Court to

Mcinnes 12/3/93

say not only should injurious affection be looked

at, but other factors as well.

TOOHEY J: But it is all governed by the expression "in

respect of" or "by reason of the acquisition of the

land". The reference to injurious affection might

well broaden the principles according to which

compensation might otherwise be assessed, but you

are still driven back to the foundation point,

which is: what loss has been suffered by reason of

the acquisition of the land, not what loss has been

suffered by reason of the fact that the road being

moved half a mile in a different direction deprives

your clients of the frontage that they once had.

MR LUNN:  I accept that what Your Honour says is the logical

approach, but of course what the subsections then

do is to look at things other than just the mere

acquisition of the land in the statutory sense.

They do enable the Court, in assessing the compensation, to look at other things, such as the

Point Gourde principle and the injurious affection which does deal with compensation for land not acquired, and the allowance, and it deals with

factors such as an allowance to be made in favour

of the authority for any enhancement of this

adjoining land.

So that, it is not simply a matter of looking

at those words, "the acquisition of the land", as

the mere act of acquisition, but rather in the

context of the scheme of the Act as a whole. We do

say that if one looks at it in that way, that it

raises a general question of importance, as to how

causation should be looked at in statute, and

whether the courts should look to the whole broad

scheme of the Act.

In those circumstances, we say that the

judgments in March v Stramare and

Bennett v Minister of Community Welfare, were

effectively confined to causation in negligence,

and that it would be appropriate for this Court, as

a final appellate court, to review the question of

causation in relation to statute generally.	May it
please the Court.

DEANE J:  Thank you, Mr Lunn. The Court need not trouble

you, Mr Solicitor. The Court is not persuaded that

the decision of the Full Court of the Supreme Court

of South Australia, in this case, is attended by

sufficient doubt to warrant a grant of special

leave to appeal. Accordingly, the application for

special leave to appeal is refused.

MR DOYLE:  If the Court pleases, I make what I hope is a

relatively straightforward application for costs.

Mcinnes 6 12/3/93

DEANE J:	Mr Lunn?
MR LUNN:	No submissions.
DEANE J:	The application for special leave is refused with

costs.

AT 11.29 AM THE MATTER WAS ADJOURNED SINE DIE

Mcinnes 12/3/93