The following memoranda have been referred to me by the Secretary, Department of Home Affairs for advice:

The Seat of Government Acceptance Act 1909, section 10, provides as follows: '10. The provisions of the Lands Acquisition Act 1906 shall apply to the acqui-sition by the Commonwealth, for any public purpose, of any land owned in the Terri-tory by any person:

Provided that, in determining the compensation to which the owner is entitled under that Act, the value of the land shall be taken not to exceed its value on the eighth day of October One thousand nine hundred and eight.' Under the Seat of Government (Administration) Act 1910, the section of the Seat of Government Acceptance Act 1909 above referred to was amended by omitting the proviso thereto and inserting the following proviso:-

'Provided that, in determining the compensation to which the owner is entitled under that Act, the value of the land shall be taken not to exceed the unimproved value of the land, or the interest therein of the owner, on the eighth day of October, One thou-sand nine hundred and eight, together with the value of his interest in the improvements on the land at the date of the acquisition of the land.'

The Lands Acquisition Act 1906, Part IV, provides that where any land is acquired by compulsory process the owner of the land shall be entitled to compensation; also, under section 28 the method of determining the compensation is set out in the following manner:

'28.

1. In determining the compensation under this Act, regard shall be had (sub-ject to this Act) to the following matters:-
1. The value of the land acquired;
2. The damage caused by the severance of the land acquired from other land of the person entitled to compensation; and
3. The enhancement or depreciation in value of other land adjoining the land taken or severed therefrom of the person entitled to compensation by reason of the carrying out of the public purpose for which the acquired land was acquired.
2. The enhancement or depreciation in value shall be set off against or added to the amount of the value and damage specified in paragraphs (a) and (b) of sub-section (1) of this section.'

From the foregoing it appears to me, and I have always held, that the owner of any land compulsorily acquired by the Commonwealth has no right to compensation for mat-ters which are not specifically provided for in the Lands Acquisition Act. For instance, in the case of Mr A.B., the owner of property lying partly within and partly without the Fed-eral Territory, and used by Mr B. as a whole, as indicated by the accompanying sketch. Mr B. came to this district many years ago and selected certain property. By industry and thrift with the object of providing for the reasonable requirements of himself and family he gradually extended his property. A part of this property (indicated by red tint on sketch) has been compulsorily acquired. An offer has been made by the Minister to Mr B. as compensation for the land so acquired. This offer has been refused.

The offer which has been made to Mr B. fairly represents the value of the land which has been taken, but it does not represent the value of the property to Mr B. as an integral part of his estate. The acquisition of this area has created a disturbance of Mr B. 's busi-ness, and the value of such disturbance has not been taken into consideration in arriving at the amount which has been offered. I am unable to discover any provision in the Lands Acquisition Act empowering the Minister to take that factor into consideration when determining the amount of compensation to be paid for the property acquired.

In the near future the portion of Mr B. 's estate, indicated by blue tint, will be acquired. On this portion stands the homestead from which the whole property is managed. For this portion of the property in the ordinary course of administration Mr B. will be offered the value of the land including the improvements thereon, but the acquisition of this land will deprive Mr B. of the most valuable portion of his property from a business standpoint, and render the balance which lies outside the Territory of comparatively small value.

The Lands Acquisition Act provides that compensation may be paid for damage caused by severance.

I have always held that severance means the division of a compact into two parts, one part of which is acquired by the Commonwealth and the other part left with the owner of the estate, and have not considered that disturbance of business in the manner above re-ferred to in Mr B. 's case falls within the four corners of the Lands Acquisition Act.

The acquisition of the privately owned properties within the Federal Territory will in-clude a considerable number of cases where actual severance-that is the division of the property-will occur owing to the boundary of the Territory traversing properties.

There will also be other cases on parallel lines to that of Mr B. where portion of an es-tate which will be acquired lies within the Federal Territory and portion which will not be acquired lies outside the Territory, which two portions, although not conterminous, have always been worked as one business concern. The interference with such properties, as far as I can see, has not been provided for in the Lands Acquisition Act.

It appears to me that in equity the owners of such properties are entitled to substantial consideration for disturbance of business, but in the administration of the Act I have failed to discover any statutory authority for the Minister taking such into consideration when determining the amount of compensation to be paid.

Perhaps the Minister may see his way to obtain the advice and opinion of the Attorney-General on this question, which is one of vital importance to owners of property in the Territory which have been or are about to be acquired.

With reference to my communication to you of this day's date, on the subject of the acquisition of lands outside the boundaries of the Federal Territory, I desire to ask that you will be good enough to favour me with an expression of opinion as to whether the Commonwealth in order to avoid a claim for severance can in a case where a property lies partly within and partly without the Federal Territory, legally acquire that part lying out-side the Federal Territory.

As regards the matter mentioned in the latter memorandum, I see no reason why land situated outside the Federal Capital Territory should not be acquired either by agreement or by compulsory process, provided it is required for some specified public purpose.

The Seat of Government Acceptance Act 1909, section 10, as amended by the Seat of Government (Administration) Act 1910, section 10, certainly applies the Lands Acquisition Act 1906 only to the acquisition of land owned in the Territory. But the Lands Acquisition Act itself applies to the acquisition of land in any part of the Commonwealth for public purposes.

The value of any land acquired outside the Federal Capital Territory must of course be assessed according to section 29 of the Lands Acquisition Act 1906 if acquired by compulsory process, and not under the provisions of the Seat of Govern-ment Acceptance Act 1909, section 10 (as amended).⁽¹⁾

As regards the question raised in the first memorandum, section 28 of the Lands Acquisition Act is as follows:

1. In determining the compensation under this Act, regard shall be had (subject to this Act) to the following matters:-
1. The value of the land acquired;
2. The damage caused by the severance of the land acquired from other land of the person entitled to compensation; and
3. The enhancement or depreciation in value of other land adjoining the land taken or severed therefrom of the person entitled to compensation by reason of the car-rying out of the public purpose for which the acquired land was acquired.
2. The enhancement or depreciation in value shall be set off against or added to the amount of the value and damage specified in paragraphs (a) and (b) of sub-section (1) of this section.

For the purpose of paragraph (b) of sub-section (1) of the above section, it is not in my opinion necessary that the land acquired should be actually contiguous to other land belonging to the same person. In Halsbury's Laws of England, Vol. 6, p. 39, the law of England on the subject is stated as follows:

Whether there has been something in the nature of a severance of his land is a question of fact in each case, but in order that there should be a severance it is not necessary that the part taken and the part left should be in actual contiguity. The principle is that where several pieces of land owned by the same person are so near to each other and so situated that the possession and control of each gives an enhanced value to all of them, they are lands held together within the meaning of the Acts, so that, if one piece is compulsorily taken, the owner will be entitled to compensation for damage by severance and injurious affection to the remainder. The fact that a railway or a road intervenes between the lands taken and the other land of the owner will not of itself necessarily prevent him from recovering compensation for severance. It is not necessary that the owner should hold the land with respect to which damage is claimed by the same title as the land that is taken.

In my opinion this statement correctly sets out the law of the Commonwealth as contained in the Lands Acquisition Act.

If the parcel of land which is acquired is by reason of location or otherwise so inti-mately connected with the part remaining in the owner's possession that the two par-cels taken together are of greater value than the sum of the values of the two parcels taken separately then, in my opinion, the owner would have a claim for severance.

I do not, however, think that a claim for severance would extend to include loss through disturbance of business, inasmuch as the Commonwealth cannot take into consideration the manner in which an individual owner conducts his business.

[Vol. 12, p. 321]

(1)The Secratary, Department of Home Affairs sought further advice--

as to whether the acquisition of that portion of Mr B.'s land outside the Federal Territory would be legal in order to avoid claim for severance and having in view that the acquisition of that portion of Mr B.'s lands within the Federal Territory considerably lessens the value of the remaining portion'.

Mr Garran on 15 june 1914[Vol. 12,p.326] replied:

In my Openion, of Mr B.'s property, within and without The Federal Territory, is acquired as a whole for the purposes of the Territory, the legality of the acquisition could not be impeached on the ground that the reason for the acquisition of the part outside was only to prevent a claim for severance'.