Caligiuri v Attorney-General (on behalf of the State of Victoria) (No 3)

[2019] VSC 516

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST

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) & ORS (according to the schedule attached)	Defendants

---

JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATES OF HEARING:	On the papers
DATE OF JUDGMENT:	2 August 2019
CASE MAY BE CITED AS:	Caligiuri & Anor v Attorney-General (on behalf of the State of Victoria) & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2019] VSC 516

---

COSTS – Relevant principles for the award of costs – Procedural fairness – Plaintiffs successful in obtaining a declaration that a notice of acquisition was invalid – Plaintiffs successful on alternative ground – Proceeding otherwise dismissed – Order for costs – Supreme Court Act 1986 (Vic) s 24 – Civil Procedure Act 2010 (Vic) s 65C – Land Acquisition and Compensation Act1986 (Vic) s 19.

---

HIS HONOUR:

Introduction

1. This proceeding relates to the compulsory acquisition of the land at 170–200 Donovans Lane, Beveridge (‘the Land’) by the third and fourth defendants (‘the authorities’).

1. On 19 February 2019, the Court determined a summons for an interlocutory injunction made by the plaintiffs.[1]  The Court dismissed the application and ordered that the plaintiffs pay the authorities’ costs of and incidental to the summons. These costs are not the subject of these reasons.

   [1]Caligiuri & Anor v Attorney General (on behalf of the State of Victoria) & Ors [2019] VSC 101.

1. On 19 June 2019, the Court published its reasons for judgment in relation to the substantive issues in this proceeding.[2] The Court held that a person with an interest in land cannot and should not be deprived of that interest without being afforded a right to be heard by the acquiring authority. Procedural fairness conditions the exercise of the power under s 19 of the Land Acquisition and Compensation Act 1986 (Vic) (‘the LAC Act’) to issue a notice of acquisition. As the Court was not satisfied that procedural fairness was afforded to the plaintiffs by the authorities, the Court declared that the notice of acquisition was invalid and of no effect. Costs were reserved for later determination. The proceeding was otherwise dismissed.

   [2]Caligiuri & Anor v Attorney General (on behalf of the State of Victoria) & Ors (No 2) [2019] VSC 365.

1. The parties to the proceeding have filed written submissions as to costs.  They are content that the question of costs be decided on the basis of written submissions without the need for an oral hearing. The Court is now asked to make orders as to costs. 

Submissions as to costs

Attorney General

1. The first and second defendants (‘the Attorney General’) submit that the plaintiffs should be ordered to pay the Attorney General’s costs of the proceeding on the standard basis as the Attorney General was wholly successful in the proceeding.  Otherwise the Attorney General does not wish to be heard as to what costs order should be made as between the plaintiffs and the authorities. 

The plaintiffs

1. The plaintiffs accept that they should be ordered to pay the Attorney General’s costs of the proceedings on the standard basis.  They submit that the authorities should pay their costs of the proceeding on the standard basis.

1. In support of their submission, they make the following points:

(a)they were denied procedural fairness in a decision making process that culminated in the compulsory acquisition of the Land;

(b)they sought to impugn the compulsory acquisition on the basis that it was affected by a breach of procedural fairness;

(c)the Court held that there was an obligation to afford procedural fairness to the plaintiffs, and that the obligation arose at the final stage of decision-making – namely before the authorities published the notice of acquisition in respect of the Land under s 19 of the LAC Act;

(d)the Court held that the authorities did not afford the plaintiffs an opportunity to be heard;

(e)the plaintiffs succeeded in relation to all of the matters raised by the authorities as to why the Court should refuse relief in the exercise of its discretion; and

(f)although they unsuccessfully relied on other grounds of review, these grounds were directed to the same relief as the ground which the Court upheld.

The authorities

1. The authorities submit that the plaintiffs should pay their costs of the proceeding on the standard basis.

1. In support of their submission, the authorities make the following points:

(a)they accept that the usual rule as to costs applies;

(b)however they place emphasis on the fact that the plaintiffs were unsuccessful as to all other claims, and therefore contend that the costs discretion should be exercised in their favour;

(c)fairness demands that the plaintiffs pay the authorities’ costs; and

(d)the public interest in the proceeding and the public nature of the authorities are not reasons why the authorities should not have their costs.

Relevant principles

1. The Court has a broad discretionary power to make orders as to costs.[3]  The Court’s discretion is absolute and unfettered but is exercised judicially upon facts connected with, and leading up to, the litigation and not by reference to irrelevant or extraneous considerations.[4]  Although costs are in the discretion of the Court, the ordinary rule is that, in the absence of sound reasons to the contrary, a successful litigant should receive his or her costs.[5]  The purpose of an order for costs is to indemnify or compensate the person in whose favour it is made, and not to punish the unsuccessful party.[6]

   [3]Supreme Court Act 1986 (Vic) s 24; Civil Procedure Act 2010 (Vic) s 65C.

   [4]Latoudis v Casey (1990) 170 CLR 534, 557 (Dawson J); Oshlack v Richmond River Council (1998) 193 CLR 72, 86 [34] (Gaudron and Gummow JJ).

   [5]Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460, 477 (Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ).

   [6]Latoudis v Casey (1990) 170 CLR 534, 563 (Toohey J), 567 (McHugh J).

1. In Oshlack v Richmond River Council, McHugh J explained that the principle that a successful party in litigation is entitled to an award of costs is grounded in reasons of fairness and policy.  If the litigation had not been brought or defended by the unsuccessful party, the successful party would not have incurred the expense which it did.  As between the parties, McHugh J observed that fairness dictates that the unsuccessful party typically bears the costs of the unsuccessful litigation.[7]

   [7](1998) 193 CLR 72, 97 [67].

Exercise of discretion

1. I am satisfied in the exercise of my discretion that the plaintiffs should have their costs of the proceeding (except for those previously ordered) on the standard basis for the following reasons:

(a)the proceeding primarily concerned the question whether the plaintiffs had a right to procedural fairness before a notice of acquisition in respect of the Land was published in the Government Gazette;

(b)this inevitably required the Court to review the steps that had been taken up to acquisition, and the relevant provisions of the LAC Act;

(c)the Court came to the view that persons whose interest in land was being compulsorily acquired did have a right to procedural fairness and that that right arose prior to the service of a notice of acquisition under s 19 of the LAC Act;

(d)the Court was not satisfied on the evidence that the authorities had afforded procedural fairness to the plaintiffs prior to the service of the notice of acquisition;

(e)the Court rejected a number of submissions advanced by the authorities to the effect that:

(1)the plaintiffs lacked standing to bring the proceeding;

(2)it would be futile to grant relief;

(3)the plaintiffs were guilty of delay, waiver and acquiescence;

(4)the grant of relief would adversely affect the vendor’s position; and

(5)the plaintiffs’ claim was out of time; and

(f)as a result, the plaintiffs were successful obtaining a declaration that the notice of acquisition was invalid and of no effect.

1. I reject the authorities’ characterisation of the outcome that they were successful because the proceeding was otherwise dismissed. The proceeding was an important case concerning the fundamental issue whether acquiring authorities are obliged to render procedural fairness during the acquisition process. The authorities contended that on a proper construction of the relevant provisions of the LAC Act they were not. The Court concluded that procedural fairness conditioned the power of compulsory acquisition of land under s 19 of the LAC Act, which had not been afforded to the plaintiffs.

Conclusion

1. Although the authorities were successful as to a number of arguments, the plaintiffs obtained a declaration and were successful in the proceeding. The ordinary rule that costs should follow the event applies in this case. 

1. The Court will make an order that the first and second defendants’ costs of the proceeding are to be taxed by the Costs Court on the standard basis and when taxed paid by the plaintiffs. The Court will also order that the plaintiffs’ costs of the proceeding (excluding the costs of and incidental to the summons dated 23 January 2019) are to be taxed by the Costs Court on the standard basis and when taxed paid by the authorities.  It may be necessary for the parties to deduct or set off the costs ordered in favour of the authorities against the plaintiffs by the order of the Court made on 19 February 2019.

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

SCHEDULE OF PARTIES