Social Media | April 2, 2020

Compulsory Acquisition – claim for personal injury?

Supreme Court of South Australia considers whether compensation under Land Acquisition Act (SA) can extend to include personal injury

Summary

In its judgment delivered on 31 August 2019 in Anderson v Commissioner of Highways (No 2) [2018] SASC 121, the South Australian Supreme Court considered an application for compensation for personal injury against the acquisition of land made by the Commissioner of Highways for South Australia. 

The central issue to be determined was whether personal injury met the definition of “compensable loss” arising under s 22B of the Land Acquisition Act 1969 (the Act) and as qualified by the principles of compensation set out in s 25. 

Background

The Claimant, then aged 43, resided in his parent’s home on Main South Road, Bedford Park, in Adelaide’s south, along with his wife and two children.   The Applicant used the property to run two business operations – described as a vending machine business and a blind cleaning business.

In about July 2014 the Commissioner notified the Claimant and his parents that the property would be compulsorily acquired in order to undertake major road works along the north-south corridor. 

The Claimant contended that as a result of being notified of the proposed acquisition, he 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. 

Claimant’s submissions

The Claimant contended that the use of the phrase “for any loss that [is] suffered by reason of the acquisition of the land” creates a cause and effect relationship.  The primary submission was that the wording of the Act did not limit the meaning of the words “any loss” and therefore did not exclude a compensable claim for personal injury suffered because of the compulsory acquisition. 

A further submission was forwarded on the basis that an interpretation of ‘just terms’ as expressed by s 3 of the Act would be repugnant if it excluded compensation for loss arising from personal injury. 

Commissioner’s submissions

The Commissioner submitted 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 summarised that the answer to whether the claim was compensable or not depended upon the proper construction of the land acquisition legislation and nothing else.

Conclusion

The Court noted that although the boundaries of what may be compensable as disturbance under the Act are less clearly defined, there is nothing in the common law to suggest that disturbance would extend to compensation from psychiatric injury. 

In the result, the Court held that the personal injury suffered by the Claimant was not compensable as the compensation provided under the Act is limited to economic loss related to or arising in the Claimant’s capacity as the interest holder in land. 

(At [90]), J Parker stated:-

“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 … is based upon the acquisition of the interest in property held by the claimant rather than the administrative processes which surround that event.”

However, J Parker went on to opine (at [91]) that it would not be inconceivable that the approach adopted by a compensating 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, for example in cases of negligence or misfeasance in public office. 

If you have an interest in property which is being compulsorily acquired and need assistance, please contact Fraser Lamb on (08) 8177 2043.

The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law is continually changing and the circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.

Fraser Lamb
Partner

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