Meyer v Commissioner of Highways No. Scgrg-96-1447 Judgment No. S6653

[1998] SASC 6653

MEYER v COMMISSIONER OF HIGHWAYS

Land & Valuation Division

Debelle J

This is a claim for compensation following the compulsory acquisition of land. The claim is made pursuant to s25 of the Land Acquisition Act, 1969. 

The Commissioner of Highways is reconstructing Mt Barker Road between Glen Osmond and Crafers.  The work is very substantial, including major re-alignment and straightening of the road and the construction of a tunnel beneath The Eagle on the Hill.  The work is called “the Adelaide to Crafers Freeway Project”. 

The claimant, Ms J A Meyer, is the registered proprietor of a large parcel of land, roughly rectangular in shape, situated at 9 Mt Osmond Road, Mt Osmond.  She is not the only person interested in the land.  Ms Meyer has lived in a de facto relationship for the past ten years with Mr M Torsiello.  In 1993 they purchased the land.  Notwithstanding that the land is registered in the name of Ms Meyer, they are agreed that they both have an interest in the land.  Thus, Ms Meyer will have to account to Mr Torsiello for his share of whatever is recovered as compensation.  I will refer to Ms Meyer and Mr Torsiello as “the claimants”. 

The land lies between Mt Osmond Road and Mt Barker Road and has a frontage to both roads.  Most of the land forms part of the slope between those two roads. The frontage to Mt Barker Road is extensive, running from a point approximately opposite the Old Toll Gate for a total distance in excess of 700 metres around the first major bend as the road proceeds towards Crafers.  The Commissioner of Highways has acquired two small parcels of land for the purposes of the construction of the Adelaide to Crafers Freeway Project.  One parcel comprises 1598 square metres and the other 812 square metres.  Before the acquisition the land comprised about 12.65 hectares.  After the acquisition it comprises about 12.4 hectares.

The Notice of Acquisition was published in the Government Gazette on 27 June 1996.  The compensation must, therefore, be determined as at that date.

The parties have agreed that the compensation to be paid for the value of the land acquired and for disturbance should be a total sum of $9,500.  There is an additional claim for injurious affection. The Commissioner disputes the claim on the ground that he is not liable in law to pay compensation under this head and, even if he is liable, he disputes the amount claimed.  The sum claimed for injurious affection is $18,500. 

Section 25 of the Land Acquisition Act allows for claims for injurious affection. It is important to distinguish between that which is properly the subject of compensation for disturbance and that which is injurious affection.  Generally speaking, compensation for disturbance is compensation for the disturbance and inconvenience caused by the acquisition.  It includes out-of-pocket expenses caused by the acquisition and disturbance resulting from nuisance and loss of amenity while the works are being carried out.  Broadly speaking, compensation for injurious affection is compensation for the depreciatory effect on the market value of the land remaining after the acquisition caused by the scheme for which the land was acquired.  As will be seen, it is necessary to refine that broad definition.

A house is constructed on the subject land and is close to the Mt Osmond Road frontage. Mt Barker Road is approximately 170 metres down a relatively steep slope from the house. The site is elevated and the house is being constructed to take advantage of the extensive views which are available from the site.  The house enjoys views across the valley along which Mt Barker Road runs to the timbered slopes opposite.  As well, there are commanding and expansive views to the City of Adelaide and of the metropolitan area north and west of the land.  The balance of the land is not used for any other purpose than passive recreation.  It is lightly timbered.  The land is suitable only for grazing.  From the house, no houses on neighbouring land are visible. Before the acquisition, Mt Barker Road was barely visible. The surface of the carriageway of Mt Barker Road was then several metres below the top of a relatively steep escarpment which acted as a noise barrier shielding the house to some extent from the noise of vehicles using the road. Occupiers of the house were, therefore, able to enjoy a high level of privacy on the land which had some of the hallmarks of country living while providing the advantage of close proximity to the city of Adelaide.  I find that, before the acquisition, Mt Barker Road was barely visible and that, although some traffic noise would be experienced, particularly when standing outside on the balcony, the noise would not be intrusive. 

One of the two small parcels of land acquired is at the north-western end of the land.  It is close to the Old Toll Gate.  It is common ground that the acquisition of that parcel will not cause injurious affection.  The other parcel is at the southern end of the land.  It is the acquisition of this parcel which the claimants say will result in injurious affection of the balance of the land remaining.  The land acquired was lightly timbered.

Before the acquisition, the existing road at this point comprised two lanes in each direction.  The new road will be a divided highway with three lanes in each direction.   At present, the road is used by all kinds of vehicular traffic including large trucks, semi-trailers and B double trucks, which are substantial semi-trailers comprising two sets of trailers.  When completed, the new roadway will be far superior to the existing road.  It is reasonable to infer that the improved road will carry a higher volume of traffic than the existing road. When constructed, the new road will be 12 metres (about 40 feet) higher than the existing road and will be closer to the retained land by up to a maximum of 24 metres.

The acquired land is to be developed in several ways for the purposes of this project.  Only part of the carriageway of the road will be constructed on the acquired land.  It will be a very small section about 0.6 metres wide on the left hand side of the carriageway as one proceeds from Adelaide to Crafers.  The rest of the acquired land will be used for a bituminised verge, a retaining wall and, above the retaining wall, a bicycle path about 3 metres wide containing two lanes.  Between the bicycle path and the boundary of the retained land there will be a further verge.  The Commissioner will construct a boundary fence of chain mesh about 1.8 metres high along the boundary.  The work on the acquired land will cause the removal of quite a number of trees but the Commissioner proposes to re-vegetate the area and plant trees between the boundary of the retained land and the bicycle path.  The evidence called by the Commissioner shows that there are no proposals to water the new trees and vegetation, although a contractor has been engaged for a period of 12 months.  There is no evidence which indicates with any certainty that these plantings of trees will grow effectively. 

The claimants say that they will suffer an increased amount of noise from that part of the freeway which will be constructed on the land acquired from them;  that the increased visibility of the road will impair the privacy and views across the valley which they previously enjoyed; and that the construction of the bicycle track will enable public access closer to the house, thus causing a further lack of privacy.  In short, they say the relevant rural tranquility they have enjoyed in the past will be substantially disrupted.

I do not think that the construction of the bicycle track will lead to an actual loss of privacy.  The fence which will be constructed will prevent the public entering the land and the trees to be planted by the Commissioner between the bicycle track and the fence will assist in screening the dwelling from view by those using the bicycle track.  But questions of privacy, like other aspects of injurious affection, are not always to be resolved by actuality: cf Cowper Essex v Local Board for Acton (1889) 14 App. Cas. 153 at 166. In the context of a residential dwelling, the perception of a lack of privacy is significant, not only to the vendor but to potential purchasers. I find, therefore, that it is a factor to which a hypothetical purchaser would have regard. Standing alone, however, it would not greatly affect the price to be paid by a hypothetical purchaser. The more significant factors which might affect the value of the land are the visibility of the elevated road surface and the increased noise.

The concept of injurious affection as a head of compensation in the Land Acquisition Act is founded upon the provisions of s63 of the Land Clauses Consolidation Act, 1845 (UK), the relevant parts of which provide that, when awarding compensation for the acquisition of land, regard should be had:

“... to the damage, if any, to be sustained by the owner of the land by reason of the severing of the land taken from the other lands of such owner, or otherwise injuriously affecting such other lands by the exercise of the powers of this or the special Act, or any Act incorporated therewith.”

Injurious affection is the latter head of compensation in s63. As Harman LJ noted in Edwards v Minister of Transport [1964] 2 QB 134 at 144 the expression “injurious affection” is “a piece of jargon having a respectable pedigree and prolific of litigation in our courts for a century or more”. That litigation has identified the circumstances in which compensation for injurious affection will be awarded. The cases were reviewed by Barwick CJ and Walsh J in Commonwealth v Morison (1972) 127 CLR 32.

It will have been noticed that s63 requires that, in order to recover compensation for injurious affection, the land owner must prove some damage by the exercise of the powers of the special Act. From an early stage, English courts held that, in order to recover compensation for injurious affection, the owner had to establish that the depreciation of value of the retained land had to be caused by the works and the use of the works on the acquired land:  re Stockport etc. Railway (1864) 33 LJQB 251. That has also been the view of courts in Australia: see, for example, Morison (supra) and McInnes v Commissioner of Highways (1992) 58 SASR 563 and, on appeal, (1992) 78 LGERA 1. Where the works carried out in pursuance of the statutory authority are confined to the acquired land and affect the retained land, it is unlikely that there will be any difficulty in assessing whether a claim for injurious affection exists. In that case, the works will or will not depreciate the value of the retained land. If they do, it will then be necessary to measure the extent of the damage. Thus, some of the cases, both in England and in this country, examine whether the work on the acquired land has caused damage to the retained land. An example is Cowper Essex v Local Board for Acton (supra).

The difficulties with the concept of injurious affection tend to arise when the works which have a depreciatory effect upon the retained land are not confined to the acquired land.  An instance is to be found in Edwards v Minister of Transport (supra). In that case the claimant owned a house and 4.3 acres of land in rural England. In order to construct a main trunk by-pass road, two small triangular shaped parcels of land were acquired. The trunk by-pass road caused considerable loss of amenity to the claimant’s land because of noise, flashing lights and smell. In the Lands Tribunal it was agreed that, if the damage was confined to the two small triangular parcels of land which had been acquired, the compensation would be 1600 pounds. However, if compensation could be awarded for the diminution in value caused by the use of all of the works, the compensation was agreed at 4000 pounds. The Lands Tribunal awarded 4000 pounds. On appeal, the Court of Appeal reduced the compensation to 1600 pounds.

In reaching its decision, the Court of Appeal followed existing principle and held (at 155) that, where damage arises partly on the claimant’s land and partly off it, the claimant cannot claim the whole damage which has been caused but only that part of the damage which he can attribute to activities on what was formerly his own land.  The Court particularly relied on the reasoning of the Judicial Committee of the Privy Council in Sisters of Charity of Rockingham v The King [1922] 2 AC 315 where Lord Parmoor said at page 328:

“The limitation of the amount of compensation to the anticipated construction of authorised works upon lands actually taken from the appellants has a special importance in a case like the present, where the shunting yard has been largely laid out on land which has not been taken from the appellants, and which has never been part of their property.  This limitation, which is plainly expressed in all the leading English decisions, is again restated in Horton v Colwyn Bay and Colwyn Urban Council [1908] 1 KB 327, in which it was held that as the acts of user, the contemplation of which caused the depreciation, would be done on lands not the property of the claimant, the claimant was not entitled to any compensation. The problem of applying the above principles in a case where the mischief complained of has arisen partly on lands taken from the claimants, and partly on other lands outside their property, can only be settled by a consideration of all the circumstances in a particular case.  Clearly in this case the appellants are entitled to a less amount of compensation than if all the lands taken in the laying out of the shunting yard had belonged to them, but on the other hand the fact that other lands are comprised in the scheme in addition to the lands taken from the appellants, does not deprive the appellants of their right to compensation so long as their claim is not extended beyond mischief which arises from the apprehended legal user of the two promontories as part of a railway shunting yard.” (emphasis added)

The emphasised passage is a reminder that it is necessary to have regard to all of the circumstances.  One question is how should the compensation be assessed when it is not possible to confine the damage caused to the retained land by the use of the acquired land. 

The major issue in the appeal in Edwards v Minister of Transport was the true basis for compensation.  The Court was presented with the agreed amount of compensation, the amount to be awarded depending on what was to be the true basis for compensation.  What is significant is that the Court did not have to determine the extent to which the use of the acquired land caused damage to the retained land.  Indeed, Harman LJ said that the sum agreed as the amount of the damage suffered if that damage was confined to acts done upon the acquired land had been arrived at “by some alchemy which I do not understand at all”.  When discussing that decision in Morison, Barwick CJ described the process as having “elements of mystery”.  I respectfully share those views.

It is appropriate also to notice the decision in Horton v Colwyn Bay and Colwyn Urban Council (supra) if only to distinguish it. In that case the respondent authority constructed a sewage scheme on land acquired from the claimant and other land.  The sewage works were close to land retained by the claimant after acquisition and that fact caused the value of the land to depreciate.  The works which were constructed on the land acquired from the claimant were sewage pipes used for carrying sewage to and from the sewage works.  As the sewage pipes were not offensive, the claimant was unable to recover compensation for injurious affection.  In other words, this was a case where the use of the works on the acquired land did not injuriously affect the retained land.  The decision points up the need to consider the circumstances of each particular case.

The issues involved in cases where the depreciatory effects are not confined to the acquired land were examined by three of the judges in Morison.  That was a case involving the acquisition of land to extend an existing airport to enable regular use by jet aircraft.  Compensation was claimed for injurious affection of the retained land caused by jet aircraft using the airport.  The extension of the airport was going to lead to a substantial increase in the number of daily movements of jet aircraft and to cause increased noise levels.  The Court awarded compensation for what was, in effect, injurious affection but did not dissect the noise caused by the use of the resumed land from the noise caused by the use of the airport on the original land.  On appeal to the High Court, the assessment was upheld.

The Court had to consider s23(1)(c) of the Lands Acquisition Act, 1955 (Cth) which does not use the expression “injurious affection” but allows compensation to be awarded for the depreciation in value of the land retained “by reason of the carrying out or the proposal to carry out the public purpose for which the land was acquired”. The reasoning of Barwick CJ, McTiernan and Walsh JJ differed from that of Menzies and Gibbs JJ. While the latter were content to found their reasons on the difference in terminology between s23 of the Land Acquisition Act, 1955 (Cth) and s63 of the Land Clauses Consolidation Act, the other three members of the Court took the view that it was sound principle that compensation for depreciation in the value of the retained land should be for the depreciation caused by the use of the works on the acquired land: see Barwick CJ (with whom McTiernan J agreed) at 39-42 and Walsh J at 48-53. Although s23(1)(c) of the Lands Acquisition Act does not in terms refer to “injurious affection”, it is apparent it is referring to the same head of compensation.  Furthermore, it is also readily apparent from the reasons of Barwick CJ and Walsh J that their conclusion is founded on the principles established by the courts in England concerning claims for injurious affection under s63 of the English Act.  Two principles are to be found in the reasons of Barwick CJ,  McTiernan and Walsh JJ, namely,

1. In those cases where it is possible to isolate factors which depreciate, that is to say, injuriously affect, the value of the retained land to the use of the works carried out upon the acquired land, the diminution in value will be confined to the effect of those factors: Barwick CJ at 39, Walsh J at 47-49.

1. In those cases where it is not possible to isolate to the use of the works on the acquired land the depreciatory effects upon the retained land, the compensation will be the whole of the diminution in the value of the retained land: Barwick CJ at 39-42, Walsh J at 52-53.  In such cases, it is not appropriate to award nothing, nor is it appropriate to attempt to determine the compensation by some arbitrary processes of assessment, for example, by taking that proportion of the total depreciation which the area of the land taken bears to the whole area upon which the activities are conducted: Walsh J (at 52).  As Barwick CJ noted (at 41) the approach is consistent with that adopted in the United States as the following passage from Corpus Juris Secundum vol 29A, “Eminent Domain”, para 139, pp588-589 illustrates.  In that passage it is stated that whilst the basic rule is that the damages to the retained land,

“...should be limited to those accruing from the improvement on the land condemned...some courts have modified this rule, stating that where a part of an owner’s land is taken for a public improvement, and the use of the part taken constitutes an integral and inseparable part of a single use to which the land taken and other adjoining land is put, the owner is entitled to recover the full damage to his remaining property due to such public improvement, even though portions of the public improvement are located on land taken from surrounding owners, although where the use of the part taken is found to be separable consequential damages should be allowed only for the use of the part taken”.

With respect, this approach accords with both principle and commonsense. In contrast to Morison, the land acquired in this case is a small parcel.  But the principles expressed in that decision nevertheless apply.

There is another principle to be found in the decision in Morison, namely, that a claimant is entitled to be compensated for injurious affection of the retained land even if the work  involved in the authorised undertaking is the improvement of an existing facility.

In this case, the Commissioner relied on the decision in Edwards v Minister of Transport. But, as Barwick CJ noted in Morison (at 40), the decision in Edwards v Minister of Transport was a case presented to the Court of Appeal on the footing that a separate and identifiable depreciatory effect could be attributed exclusively to the work done and the use made of the works done on the acquired land.  All that the Court of Appeal had to determine was the issue of principle, that is to say, on which basis the compensation for injurious affection should be assessed. The Court of Appeal did not, in that decision, have to determine how the compensation would be assessed where it is not possible to identify or isolate to the use of the acquired land the depreciatory effect of the works.  The decision rests on the fact that it was possible in that case to confine the damage to the use of the acquired land with a correspondingly lower assessment than if the use of the other land as well as the acquired land had caused the diminution in the value of the land. By contrast, as will be seen, in this present case it is not possible to confine the cause of the damage in the same way. 

In this case, the Commissioner called evidence from Dr Peter Swift, an acoustical engineer, for the purpose of proving that noise from road traffic using that portion of the road which is constructed on the land acquired from the claimants will be minuscule.  The evidence is not based on measurement of noise before and after the work, a procedure which Dr Swift described as being ideal.  Instead, it is a theoretical computation of the change in noise levels using a method called “the UK DOE 1988 method”, sometimes called “CORTN”.  The calculation was described by Dr Swift as a “pure theoretical prediction” of the change from the existing noise levels to the new noise levels when the roadworks are completed.  It assumes the same road surface and no change in the volume of traffic.  The parameter used to assess the traffic noise is an average level measured over 18 hours.  The calculation of noise propagation had regard to the distance of the source of noise, physical barriers between the source of noise and the hearer, the average height of propagation above the ground, and the effect of reflected noise, for example, a reflection off the rock walls opposite the claimants’ land. 

Dr Swift purported to isolate the noise emanating from the use of that part of the works which are located on the acquired land.  I find that to be an unrealistic approach, and I reject it.  First, it assumes the same volume of traffic.  That is quite unrealistic.  Dr Swift agreed that an increase in the number of vehicles per hour would affect the noise level.  Ordinary experience indicates and I find that the volume of traffic will increase and that volume will include greater numbers of heavy vehicles such as semi-trailers and B double trucks. Secondly, the average measurement obscures the impact of the noise caused by large vehicles or noisy motor cycles, both of which noises were described by Dr Swift as “more subjectively intrusive”.  Thirdly, the acquired land forms part of the left hand traffic lane.  It is quite absurd to suggest that one can measure the noise only from the small part of land some 0.6 metres wide at the left of that lane.  That is tantamount to saying that, if it had been a railway instead of a road, one could measure the noise emanating from one rail only.  Fourthly, as the acquired land forms part of a continuous carriageway, it is unrealistic to purport to assess the increase in noise on the acquired land without any regard to any increase in noise caused by traffic immediately before or after. As Dr Swift acknowledged, the total noise which is audible from the house comes from all angles and the ear does not discern the precise source of the noise.  In other words, the increase in the level of noise is caused by vehicles travelling over part of the acquired land and those vehicles will, generally speaking, be travelling along a continuous path before and after the acquired land.

Finally, the calculation is based on the fact that, given the general level of noise prevailing in the area, it is impossible to measure the noise emanating from that part of the road.  It could only be measured if there were no other noise in the area.  But, as Dr Swift conceded, the road as constructed with three lanes in each direction will result in an increase in the noise level over the existing road with two lanes in each direction.  Thus, there will be an increase in noise level caused by the use of the small part of the road constructed on the acquired land.  In the particular circumstances of this case, it is not possible to isolate the use of the small part of the road which is constructed on the acquired land and which forms an integral part of the roadworks.  It forms a small part of a large sweeping curve.  What is being said on behalf of the Commissioner is that, because of the generally increased noise levels in the area, the increase in noise from this part of the road will be minuscule.  That is in large part because of quite a high increase in noise levels from parts of the road a short distance from the acquired land, an increase resulting from a more efficient noise path.  In other words, there is an increase in the noise level but it is largely obscured by traffic noise from parts of the road a short distance before and after that part constructed on the acquired land.  Where, as here, the acquired lands form such an integral part of a carriageway, it is not practical or realistic to say that it has no depreciating effect, or to isolate that area and say that its effect is minuscule.  In truth, the position is that the roadworks on the acquired land and other land will result in increased noise level and it is not possible separately to ascertain the diminution in value caused by the increase in noise emanating from the acquired land.  In other words, this is a case where it is not possible to isolate the depreciatory effect of the use of the acquired land from the use of other land used for the undertaking so that the compensation for injurious affection will be the whole of the diminution in value of the retained land resulting from the use of the new road: Morison.   For these reasons, it is necessary to determine whether the increase in noise levels will cause a diminution in value of the retained land.

The Commissioner relies heavily on the decision in Edwards v Minister of Transport.  But, in the particular circumstances of this case, that reliance is misplaced for the reasons already given. The decision can only be relied on where it is possible to establish that the diminution in the value of the retained land has been caused by the works on the acquired land.

The Commissioner also relies on the decision of this Court in McInnes v Commissioner of Highways. But that is quite a different kind of case, since the Court held that the use of the works on the acquired land did not cause any loss to the retained land. The Court did not have to deal with the issues which arise when the depreciatory effects are caused by the use of the acquired land as well as other land. In that case, the land was acquired to enable the construction of the new Port Wakefield Road which by-passed the town of Dublin. The land acquired included part of a larger parcel of land owned by the claimant. The claimant operated the Dublin Hotel on part of the retained land. He claimed compensation for the loss of business to the hotel caused by the by-pass. The claimant’s difficulty was that a road continued to run through Dublin. The cause of the lost business was not the acquisition of the parcel of land from the claimant. The hotel continued to trade and the original road continued to run through Dublin and past the hotel. The damage was caused by the broader undertaking, namely, the by-pass road: see Olsson J 78 LGERA at 413.

Two valuers gave evidence on this issue, Mr R H Brooke for the claimants and Mr J F Metters for the Commissioner.  Mr Brooke’s evaluation identified several factors which, he said, would adversely affect the value of the retained land, namely the removal of trees and undergrowth, the construction of the bicycle path with its concurrent facilitation of public access along the boundary, a loss of privacy, the effects of noise and the intrusion of services on the subject land which will require maintenance.  I think he has attached too much weight to factors other than the effect of traffic noise.  While the construction of the bicycle track will bring a different form of public access which will lead to a perception of intrusion, it will only marginally reduce the price which a hypothetical purchaser would pay for the subject land.  I entirely discount any diminution in the value of land caused by maintenance of the services on the retained land.  The maintenance will not be frequent.  Many land owners are required to allow maintenance or inspection of public utilities on their land and it is very rare that it is of such a nature that it causes disruption to the use of the land and hence a diminution in value.  This is not such a case.  The assessment by Mr Brooke must be discounted to eliminate or reduce the factors I have mentioned.  The depreciatory effect of the noise is, however, reasonably substantial.

Mr Metters did not think that the decision in Morison applied.  In his view, it was appropriate to follow the decision in Edwards v Minister of Transport.  He, therefore, assessed the injurious affection as minimal and made no monetary compensation for it.  For the reasons I have given, this is a simplistic approach to the decision in Morison.  He also grounded his assessment on the opinion that there would not be any significant increase in noise levels in consequence of the use of the new roadworks.  For the reasons already given, I do not accept that opinion.  I, therefore, do not accept his approach.

In the result I am left with Mr Brooke’s assessment that the compensation for injurious affection should be assessed in the sum of $18,500.  As I have said, I think he has attributed too much weight to some factors.  It is, therefore, necessary to reduce his assessment.  Nevertheless, the increase in noise levels will be a significant cause of a diminution in value.  For these reasons, I assess compensation for injurious affection in the sum of $10,000.

There will, therefore, be an order that the Commissioner pay compensation in a total sum of $19,500, being

Value of land acquired   $ 3,500
                  Disturbance  6,000
                  Injurious affection  10,000
  $19,500

I will hear the parties on the claim for interest and costs.