Caligiuri v Attorney General (on behalf of the State of Victoria) - [2019] VSC 101

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PRACTICE COURT
S ECI 2019 00173

ANTHONY CALIGIURI	First Plaintiff
J.I.I. INVESTMENTS PTY LTD (ACN 624 255 812)	Second Plaintiff
v
ATTORNEY GENERAL (ON BEHALF OF THE STATE OF VICTORIA)	Defendants
(and others in accordance with the attached Schedule)

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REASONS FOR DECISION
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JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 February 2019
DATE OF JUDGMENT (REVISED):	19 February 2019
CASE MAY BE CITED AS:	Caligiuri & Anor v Attorney General (on behalf of the State of Victoria) & Ors
MEDIUM NEUTRAL CITATION:	[2019] VSC 101

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LAND ACQUISITION AND COMPENSATION – Ministerial certificate – Orders in Council – Procedural fairness – Application for an interlocutory injunction.
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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C Canavan QC with Mr E Nekvapil	Macpherson Kelley
For First Defendant	Mr L Brown	Victorian Government Solicitor
For Third and Fourth Defendants	Mr S Goubran	Russell Kennedy

HIS HONOUR:[1]

[1]This is an edited transcript of a judgment delivered orally in the Practice Court on 19 February 2019.

This is an application for an interlocutory injunction to restrain Melbourne Water and Yarra Valley Water from publishing a notice of acquisition in relation to land known as 194–200 Donovans Lane, Beveridge. The land has been the subject of a Ministerial recommendation and an Order in Council, both dated 26 October 2018, under s 5(3) of the Land Acquisition and Compensation Act 1986 (Vic) (‘the Act’) certifying that a reservation is unnecessary, undesirable or contrary to the public interest, and a notice of intention to acquire dated 26 November 2018 under s 6 of the Act, all of which the plaintiffs seek in this proceeding to have declared invalid.
The legal principles that underlie the consideration of an application for an interlocutory injunction are well established. There must be a serious issue to be tried, the balance of convenience must favour the grant of the injunction and the court seeks to take the course that involves the least risk of injustice to the parties should the decision of the court ultimately prove to be wrong, having regard to the trial result.[2]
[2]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65.
I will turn first to the balance of convenience. There are competing claims about the balance of convenience. Melbourne Water and Yarra Valley Water rely on the affidavit of Ms Manson, a principal of their solicitors’ firm, the substance of which is derived from Mr Rowan Escreet, the Senior Project Manager, Major Project Delivery of Melbourne Water.
He says that the water storage infrastructure for which the land is to be acquired will cost just over $20 million and involves the construction of three drinking water storage tanks and one non-drinking water storage tank at Bald Hill, together with underground pipelines, all serviced by a 20-kilometre pipeline from the Yan Yean water treatment plant. The project is scheduled to take 14 months and is intended to become operational by early 2020.
Ms Manson deposed on information derived from Mr Escreet that the risk of failure of the current water storage infrastructure is high and that this is the main reason why the project is urgent. To illustrate the risk, Mr Escreet said through Ms Manson that Yarra Valley Water presently has nine hours of water storage capacity available in the Mount Ridley Reservoir. In the event of an infrastructure failure almost 13,000 customers would be affected. By October 2019 there will be 15,000 lots to be serviced and by December 2019 almost 15,500 lots or almost 2,500 more than the current number. This reduces water storage capacity at Mount Ridley Reservoir to 7.7 hours, well below the 9 hour minimum for emergency water storage.
According to Mr Escreet, this presents a severe risk that requires an immediate solution. He poses a number of issues and options. One is to stop all development approvals which might place additional demand on Mount Ridley Reservoir, although it is hard to see how this could be done given the extent of subdivisional developments already permitted. There would certainly be considerable inconvenience and complaint. He also states that in the event of a supply interruption Yarra Valley Water could potentially be exposed to claims for reimbursement and penalties, which he estimates at between $750,000 and $1.5 million, for failing to comply with the requisite standards.
Mr Escreet highlights that there might also be the need to install temporary water storage infrastructure to mitigate the risk of failure of capacity at the Mount Ridley Reservoir. Temporary infrastructure works would cost about $3.9 million. The additional costs would need to be passed on to customers, at least in part.
I now turn to the plaintiffs’ case for balance of convenience. The second plaintiff is a land developer seeking to subdivide the property at 170 and 194 Donovans Lane, Beveridge. Mr Caligiuri executed a contract for the purchase of the property on 22 August 2018. The second plaintiff conducted due diligence and was aware of the proposal to build water storage infrastructure at Bald Hill. The precinct structure plan shows the location of a Yarra Valley Water facility at Bald Hill. However, the second plaintiff had regard to the precinct structure plan and understood that the attractiveness of views to Bald Hill would be preserved.
The second plaintiff was nominated as the substitute purchaser on 26 October 2018. By letters in October 2018, it sought to be heard but was not given a hearing before the certificate was granted by the Orders in Council. The plaintiffs say there was a denial of procedural fairness. In an affidavit sworn 16 January 2019, Mr Caligiuri states that the impact of any acquisition on the second plaintiff's subdivision will be significant and will markedly reduce the value of lots that have views of Bald Hill. Looking at the photographs provided, Bald Hill does appear to be an attractive topographic feature. However, the extent to which the loss of views ultimately affects land value is a matter for valuers to determine.
There are some observations that should be made about the plaintiffs’ submissions about the balance of convenience. The first is that the second plaintiff's interest in the land is relatively short, dating back to 26 October 2018. The second plaintiff is not yet in possession of the land which is still in the hands of the vendor and registered proprietor.
The second observation is that, as a land developer, the second plaintiff could not be expected to have a long or enduring association with the land. As a developer, its object is to subdivide and sell the estate.
A third observation is that, if the acquisition does proceed, the owners of the land will be fully recompensed not only for the land acquired but also for any diminution in land value to the surrounding estate. I am informed, however, that the situation here is more complex because rights of compensation for compulsory acquisition have been reserved in favour of the vendor under the contract of sale. The contract of sale was not put in evidence.
Nonetheless compensation is payable for the acquisition of the land in accordance with the Act. The fact that there has been a private agreement between the vendor and the purchasers as to the disposition of compensation is ultimately a matter for them. By contrast, if the authorities suffer the costs or losses they say that they will in the event that an interlocutory injunction is granted, there is no recompense. Inevitably loss can only be met through water charges imposed on the community.
In all of the circumstances, I am not satisfied that the balance of convenience favours the grant of an interlocutory injunction. The question as to whether there is a serious question to be tried has been extensively canvassed during argument. However, assuming there is a serious question to be tried, the plaintiffs have not shown that the balance of convenience favours the grant of an injunction. As I may be the trial judge, it is better that I refrain from making further comments about the questions to be tried in this proceeding.
Accordingly the application for an interlocutory injunction will be dismissed, but I will make orders expediting the hearing of the proceeding as much as possible.

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SCHEDULE OF PARTIES

ANTHONY CALIGIURI	First Plaintiff
J.I.I. INVESTMENTS PTY LTD (ACN 624 255 812)	Second Plaintiff
ATTORNEY GENERAL (ON BEHALF OF THE STATE OF VICTORIA)	First Defendant
ATTORNEY-GENERAL	Second Defendant
MELBOURNE WATER CORPORATION (ABN 81 945 386 953)	Third Defendant
YARRA VALLEY WATER CORPORATION (ABN 93 066 902 501)	Fourth Defendant