Anderson v Commissioner of Highways (No 3) - [2018] SASC 166

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
ANDERSON v COMMISSIONER OF HIGHWAYS (NO 3)
[2018] SASC 166
Judgment of The Honourable Justice Parker
6 November 2018
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - PROCEEDINGS FOR COMPENSATION - SOUTH AUSTRALIA - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE
The unsuccessful plaintiff in this matter seeks an order for costs in his favour.
A ‘question arising in the course of negotiations’ was referred to the Court under s 23C of the Land Acquisition Act 1969 (SA). In an earlier judgment in this matter, this question was answered ‘No’, against the submissions of the plaintiff.
Held, per Parker J (dismissing the plaintiff's application for costs):
1. When deciding a costs claim in a land acquisition matter, the Court has a particularly broad discretion and is not constrained by the ordinary principle that costs follow the event (at [17]).
2. The plaintiff did not act unreasonably in agitating the question (at [18]).
3. The circumstances do not support the making of an order that the successful defendant pay the costs incurred by the unsuccessful plaintiff (at [19]).
Land Acquisition Act 1969 (SA) ss 23, 23A, 23B, 23C, 36; Land and Valuation Division Rules 2014 (SA) r 3, referred to.
Minister for the Environment v Florence (1979) 21 SASR 108, applied.
Anderson v Commissioner of Highways [2018] SASC 13; Anderson v Commissioner of Highways (No 2) [2018] SASC 121; Dillon v Gosford City Council (2011) 184 LGERA 179; Oshlack v Richmond River Council (1998) 193 CLR 72, discussed.

ANDERSON v COMMISSIONER OF HIGHWAYS (NO 3)
[2018] SASC 166

PARKER J: The unsuccessful plaintiff in this matter seeks an order for costs in his favour. The Commissioner submits that no order for costs should be made. For the reasons that follow I have concluded that no order for costs should be made, i.e. each party will bear their own costs.
The plaintiff held an interest in land that was acquired by the Commissioner of Highways under the Land Acquisition Act 1969 (SA) (the Act) so as to enable the undertaking of major road works. The plaintiff contended that he had suffered a personal injury as a consequence of the acquisition and further contended that the injury was not attributable to the compulsory nature of the acquisition. He contended that the Court should determine “a question arising in the course of negotiations” under s 23C of the Act. The defendant Commissioner opposed that course. On 16 February 2018, I published a ruling where I found that: [1]
the interests of justice would be best served by answering, as a preliminary point, the question of whether or not personal injury is compensable under the Act to the extent that the injury does not arise from the fact that the acquisition has been effected without the consent or against the will of the applicant.
As the Commissioner had unsuccessfully opposed the referral of a question under s 23C, I ordered that the Commissioner pay the plaintiff’s costs in relation to the argument as to whether the Court should consider a question referred under s 23C.
[1] Anderson v Commissioner of Highways [2018] SASC 13 at [47].
On 31 August 2018, I delivered judgment in respect of the question referred to this Court under s 23C.[2] In substance, the question referred to this Court was:[3]
Is a personal injury of the nature suffered by the applicant compensable as loss arising under s 22B of the Act as qualified by the principles of compensation set out in s 25 of the Act?
Contrary to the contentions of the plaintiff, my answer to this question was “No”.[4]
[2] Anderson v Commissioner of Highways (No 2) [2018] SASC 121.
[3] Ibid at [2].
[4] Ibid at [93].
The plaintiff’s submissions
The plaintiff notes that the Court has a general discretion to award costs as it considers it appropriate but that discretion must be exercised judicially. When exercising its discretion to decide costs in land acquisition matters, the Court must take into consideration the matters referred to under s 36 of the Act. The plaintiff submits that the effect of s 36 is that the discretion to award costs is not to be applied in the same way as in general civil litigation where costs ordinarily follow the event. Section 36 authorises the Court to “award such costs as it thinks proper” having regard to:
(a) the amount of compensation awarded by the Court as compared with the amount (if any) offered by the Authority; and
(b) the extent to which, in the opinion of the Court, the proceedings have arisen from, or been affected by—
(i) unreasonable conduct on the part of the claimant or the Authority; or
(ii) an excessive claim by the claimant or unduly depressed offer by the Authority.
The plaintiff notes that the purpose of the referral under s 23C was to clarify a point of law by pressing for the early determination of the question as to whether personal injury was compensable. By doing so the plaintiff removed the need for the parties to obtain expert medical reports and to call that evidence at trial. The determination of the question under s 23C was the most efficient and cost effective way for the parties and the Court to proceed. That approach also achieved the objective under r 3 of the Land and Valuation Division Rules 2014 (SA) of ensuring “the just, efficient and timely resolution of land and valuation disputes” and also advanced the objective “to minimise the cost of land and valuation litigation to the litigants and to the State”.
The plaintiff also submits that the question referred under s 23C had not previously been decided in Australia. While the Court found against the plaintiff, it only did so after undertaking careful, lengthy and considered deliberations. There was nothing in the judgment to suggest that the plaintiff’s argument was meritless or pursued unreasonably or in bad faith. Thus, in terms of s 36, there was no unreasonable conduct on the part of the plaintiff, nor did the question to be determined relate to an excessive claim.
The plaintiff also relies on observations made by Wells J in Minister for the Environment v Florence.[5]Amongst other observations, Wells J noted that compulsory acquisition cases differ from ordinary civil litigation in that the claimant had no choice whether to make a claim or not. Wells J indicated that it was generally not appropriate to speak of one party as having won or lost in a land acquisition case. In the absence of special circumstances, a claimant was entitled to receive their reasonable costs of obtaining compensation to which they were legally entitled. However, costs are always discretionary and no hard and fast rule could be applied. Section 36 required the special nature of the jurisdiction to be recognised with orders being made that are just and expedient.
[5] (1979) 21 SASR 108 at 134-135.
The plaintiff also relies upon a Fact Sheet distributed by the Department of Planning, Transport and Infrastructure (DPTI) that was provided to persons affected by the acquisition of their land.[6] The Fact Sheet included the following passage:
DPTI will reimburse fair and reasonable legal fees (including GST where relevant) that are:
1.   properly incurred by you in relation your claim for compensation, in so far as those costs arise naturally, reasonably and directly from the acquisition of the property; and
2.   ...
[6]    The Commissioner of Highways is an officer within DPTI.
The plaintiff also refers to evidence given to the Select Committee of the Legislative Council on Compulsory Acquisition of Properties for North‑South Corridor Upgrade:[7]
DPTI states that all persons whose property is required are encouraged to obtain independent legal and valuation advice to determine the actual value of the land. Where additional professional advice is required, the Department will reimburse all reasonable fees.
[7] Select Committee on Compulsory Acquisition of Properties for North-South Corridor Upgrade, Parliament of South Australia, Report of the Select Committee on Compulsory Acquisition of Properties for North-South Corridor Upgrade (2017) 50.
The defendant’s submissions
The defendant also relies upon the observations made by Wells J in Florence. The defendant contends that the reference by Wells J to “due” compensation refers to the amount of final compensation assessed by the Court. Thus, where the Court delivers a judgment that is in no way more favourable to the claimant than the position taken or offered by the Authority, there should be no presumption that the claimant’s legal costs should be paid by the Authority.
The defendant also contends that the discretion to award costs should be exercised consistently with the statutory scheme. That scheme emphasises the importance of negotiation and compromise to resolve compensation issues. In that respect the defendant refers to the fact that s 23 expressly provides for the negotiation of compensation, s 23A requires the Authority to make an offer, while s 23B empowers the Court to give effect to an agreement reached by the parties. Furthermore, s 23C allows the Court to adjourn its decision on a question referred to it so as to permit further negotiation between the parties.
The defendant also notes that in a number of instances the claimant in a compulsory acquisition matter has not been awarded their full costs. In particular, the defendant notes that in Florence, Wells J observed that “the Crown came out of the contest rather better than the claimant” and that if the claimant had properly responded to the offer made by the Authority “it is not unlikely that a further flow of negotiation would have been released which, in turn, could have led to a settlement at a figure not far distant from my award.”[8] Wells J awarded the claimant three quarters of his costs.
[8] (1979) 21 SASR 108 at 137-138.
The defendant also refers to the decision of the New South Wales Court of Appeal in Dillon v Gosford City Council.[9] The Court of Appeal set aside an order that the claimant pay 50% of the costs of the Authority and ordered that each party bear their own costs in relation to the “second stage” of the Court proceedings. In making that order, the Court of Appeal took into account that the claimant had behaved unreasonably and the amount of compensation awarded was only $5,000 higher than the final compromise offer made by the Authority.
[9] (2011) 184 LGERA 179 at 197-198 [73]-[80].
The defendant submits that statements to which the plaintiff refers about the willingness of DPTI to pay reasonable legal costs are directed at payment of the reasonable costs of obtaining legal advice in relation to the settlement of a compensation claim. The defendant contends that the statements in question are not intended to apply to the costs of legal representation relating to a contested hearing. In that respect the defendant points to the fact that the Fact Sheet is expressed to be only a “broad summary” and that payment of reasonable legal fees for “advice” will be made upon “final settlement” of the claim. The Fact Sheet does not refer to the payment of costs following contested hearings.
The defendant also refers to evidence given before the Select Committee to the effect that it is the practice of the Crown Solicitor’s Office to include, in letters making offers, a statement that the offer is made on a without prejudice basis “save and except that [the Commissioner] reserves the right to refer to it on the subject of costs if this matter is referred to the Supreme Court.”
The defendant submits that the statement in the Fact Sheet and the evidence given to the Select Committee are not relevant to the exercise of the Court’s discretion under s 36. The defendant further submits that the plaintiff did not succeed on the question it had referred to this Court under s 23C. The plaintiff’s position was not supported by any authority and was comprehensively rejected by this Court. The costs incurred by the plaintiff arose in in pursuing a claim for compensation that was not part of his “due”. Neither principle nor fairness suggests that the plaintiff should be awarded costs in these circumstances.
Consideration
It is clear from the observations made by Wells J in Florence, and also from s 36, that the Court has a particularly broad discretion when it decides a costs claim in a land acquisition matter. Most importantly, the Court is not constrained by the ordinary principle that costs follow the event.
I do not consider that the plaintiff acted unreasonably in agitating the question as to whether personal injury was compensable. While I rejected each of the contentions advanced on his behalf, the various propositions put by counsel were mostly arguable and generally required careful consideration and substantial research on my part.[10]
[10] Anderson v Commissioner of Highways (No 2) [2018] SASC 121.
I accept the correctness of the Commissioner’s submission that the statement in the Fact Sheet and the evidence given to the Select Committee are not relevant to the exercise of the Court’s discretion concerning the award of costs. The information provided was clearly directed at negotiated outcomes rather than contested proceedings. I also consider that the defendant Commissioner has given appropriate recognition to the points I have made in the preceding paragraph by not seeking an order for payment of costs in its favour.[11] For the reasons referred to at [16] above, I do not consider that the circumstances support the making of an order that the successful defendant pay the costs incurred by the unsuccessful plaintiff.
[11] See generally Oshlack v Richmond River Council (1998) 193 CLR 72.
I consider it appropriate to dismiss the plaintiff’s application that the Court make an order in his favour for the payment of costs. Of course, that conclusion does not affect the costs order made in favour of the plaintiff on 16 February 2018.