McInnes & Anor v Commissioner of Highways

This matter concerned an application for special leave to appeal to the High Court of Australia by David John McInnes and Heather (the applicants) against the Commissioner of Highways (the respondent). The dispute arose from a claim for compensation under the South Australian Land Acquisition Act. The applicants sought compensation for a reduction in the value of their hotel, which they contended was caused by the implementation of a road scheme for which their land was acquired, leading to a diversion of traffic.

The central legal issues before the court were the interpretation of the causation provisions within the Land Acquisition Act, specifically the phrase "by reason of" as used in sections 25(a) and 25(b). The applicants argued that the loss they suffered, namely the reduction in the hotel's income and thus its value, was a direct consequence of the acquisition and the subsequent road scheme. They contended that this loss was compensable under the Act, which requires compensation for any loss suffered by reason of the acquisition, including loss occasioned by severance, disturbance, or injurious affection.

The applicants' argument focused on establishing a causal link between the statutory acquisition and the claimed loss. They referred to established principles of causation in tort law, as discussed in Fleming, The Law of Torts, suggesting a two-part test involving factual causation. The applicants asserted that factual causation was evident in this case, as the loss would not have occurred "but for" the acquisition and the implementation of the road scheme. The court was therefore required to determine whether the statutory language permitted compensation for such a consequential loss.