consequential losses

david hornby

Consequential losses are all other losses suffered by the dispossessed owner and in some cases, are the major claim. For example, the compulsory taking of, or damage to a business enjoying a great deal of goodwill. Consequential losses also arise where the dispossessed owner is forced to find alternative premises and in such a case, the compensation payable is based on the cost of reinstatement.


There is a tendency for new compensation legislation to list those items allowable under the head; "cost of relocation". For example, under the Western Australian Act:

s9 (i) removal expenses; or

(ii) disruption and reinstatement of a business; or

(iii) the discontinuance of building works in progress at the date when such land is taken or resumed and the termination of building contracts in consequence thereof; or

(iv) architect's fees or quantity surveyor's fees actually incurred by the claimant in respect to proposed buildings or improvements which cannot be commenced or continued in consequence of the taking or resumption of such land; or

(v) any other facts which the respondent or the court considers it just to take into account having regard to the circumstances of each case.

The Nevill Committee determined that all reasonable valuation and legal costs incurred by the claimant as a result of the resumption other than costs directly related to legal proceedings, should be added to the above list. Such costs should be coded as there is common law authority that a claimant is not entitled to compensation for the cost of employing lawyers and valuers to represent him/her - Army v Pacific Hotel (1944) 68 CLR 310.


The owner of a cottage is forced to move to new premises and therefore, he/she can claim the consequential costs of reinstatement as follows:

removal expenses

legal costs

stamp duty

loss in value of carpets

loss in value of venetian blinds.

loss in value of curtains

(Morrison v Comm for main roads (1964)10 LGRA 314).

The compensation paid on carpets, blinds, and curtains is the difference between their value in situ and "realisable value". For example, for "wall to wall" carpets there is a substantial discount or loss in selling carpet cut specifically for the shape of a particular room separate. Other consequential losses that have been allowed by the courts are:

abortive expenditure: For example, on plans for additions to the house.

loss in value of growing crops

residual value of fertiliser

loss through a forced sale: For example, loss in moneys obtained through the quick sale of stock and plant.

cost of valuer's representations.