Greenwells Wollert Pty Ltd v Head, Transport for Victoria (Costs Ruling)
[2023] VSC 315
•8 June 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST
S ECI 2020 03155
| GREENWELLS WOLLERT PTY LTD | Applicant |
| v | |
| HEAD, TRANSPORT FOR VICTORIA | Respondent |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 8 June 2023 |
CASE MAY BE CITED AS: | Greenwells Wollert Pty Ltd v Head, Transport For Victoria (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 315 |
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COSTS – Whether applicant’s refusal of Calderbank offer justifies indemnity costs order – Terms of Calderbank offer required applicant to release respondent from potential claims which were not the subject of the proceeding – Not unreasonable for applicant to reject Calderbank offer – Applicant successfully resisted respondent’s contention that it did not have standing to claim compensation – Written submissions specifically addressed applicant’s standing – Respondent ordered to pay costs of the applicant’s written submissions on standing – Applicant otherwise ordered to pay the respondent’s costs on a standard basis.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | No appearance | Maddocks Lawyers |
| For the Respondent | No appearance | Victorian Government Solicitor’s Office |
HIS HONOUR:
On 24 May 2023 the Court dismissed an application by the applicant for compensation pursuant to Part 5 of the Planning and Environment Act 1987 (‘the Act’).[1] The parties were directed to file written submissions on the question of costs. The respondent seeks an order that the applicant pay its costs as follows:
[1]Greenwells Wollert v Head, Transport for Victoria [2023] VSC 271.
(a) In respect of costs incurred up to and including 29 May 2022 on the standard basis;
(b) From 30 May 2022 onwards (being the date of the first Calderbank offer by the respondent) on an indemnity basis;
(c) With such costs to be taxed in default of agreement.
The applicant submits that it should be ordered to pay 65% of the respondent’s costs on a standard basis to be taxed in default of agreement.
The Court has power pursuant to s 91 of the Land Acquisition and Compensation Act 1986 to order costs as it thinks proper. The Court must, if it considers it appropriate to do so, take into consideration the matters prescribed by s 91(1)(a)-(c).
The respondent served a Calderbank letter upon the applicant on 30 May 2022. The respondent offered to settle the applicant’s claim for $200,000, inclusive of costs, on the following terms:
3.1 The Authority pays the Claimant a single (all in) sum of $200,000 in full and final settlement of the proceeding, including any entitlement to compensation the claimant may have under Part 5 of the PE Act, any costs of the proceeding, and any entitlement to interest.
3.2 The Claimant will enter into a Deed of Settlement, the terms of which will be provided by the Authority (and can be provided on request during the period in which this offer is open), by which the Claimant agrees to:
(a) release the Authority from any and all entitlements to compensation that it otherwise may have under the PE Act, including in relation to any costs incurred by the Claimant; and
(b) not commence any further proceedings against the Authority under the PE Act or otherwise in relation to the Subject Land.
The offer remained open and capable of acceptance until 14 June 2022. It was not accepted prior to this date. The respondent submits that it was unreasonable for the applicant not to have accepted the offer thereby enlivening an entitlement to an order for indemnity costs.
The Calderbank letter of 30 May 2022 set out the basis upon which the respondent contended that the applicant should accept the offer. Relevantly, the letter included the following:
9. It is undisputed that:
9.1 At the times that the Claimant:
(a) Exercised the call option on 10 July 2015;
(b) Entered into the Contract of Sale, with a date of sale of 19 January 2016; and
(c) Entered into a deed of agreement by which Adnow would transfer the property to it on 27 April 2016;
9.2 The Claimant:
(a) Had knowledge of Amendment C187, including the PAO that proposed to reserve the Subject Land pursuant to that Amendment; and
(b) Expected, and proceeded with the call option on the basis that, Amendment C187 would be approved, noting that the Price under the Proposed Contract of Sale was required to be determined on the basis that Amendment C187 (and the PSP to be applied by that Amendment) would be approved.
10. The Authority considers that the Claimant’s claim will fail either because:
10.1 The Claimant in fact bought the Subject Land for less than it would have otherwise because of the presence of the reservation; or
10.2 To the extent the Claimant paid more for the Subject Land than its value as affected by Amendment C187, any loss suffered by the Claimant was not caused by the reservation, but was caused by the Claimant’s decision to buy the land at that price knowing that the part of the Subject Land affected by proposed reservation would be stripped of its development potential.
Paragraphs [9] to [10] of the Calderbank offer foreshadowed the basis upon which the Court subsequently dismissed the applicant’s claim for compensation under Part 5 of the Act. Further, although the offer of $200,000 inclusive of costs did not represent a significant compromise, if it had been accepted, the offer represented a substantially better outcome than that flowing from the Court’s judgment of 23 May 2023. These are matters which weigh in favour of a finding that the applicant acted unreasonably in failing to accept the offer contained in the Calderbank letter.
As against the matters set out above, the applicant submits that the rejection of the offer was not unreasonable because it was subject to a term that the applicant release the respondent from any and all entitlements to compensation that it might otherwise have under the Act and not commence any further proceedings against the Authority under the Act or otherwise in relation to the Subject Land. I accept this submission. Whether a rejection of a Calderbank offer was unreasonable requires an evaluation of the terms of the offer by reference to all of the relevant surrounding circumstances.[2]
[2]King Network Group Pty Ltd v Club of the Clubs Pty Ltd (No 2) [2009] NSWCA 204, [11].
The applicant’s claim for compensation was based upon its inability to undertake residential development of a narrow strip comprising 0.85ha of the Subject Land which had been reserved for a public purpose. It was reasonable for the applicant to construe the terms of the Calderbank letter as preventing it from making any future claims for compensation against the respondent in respect of the Subject Land. It was not unreasonable for the applicant to reject an offer which, if accepted, would have prevented the applicant from making any future claims for compensation in relation to the Subject Land unrelated to the claim in respect of the 0.85ha the subject of the proceeding. Save for the costs of the written submissions in respect of the issue of standing, the applicant will be ordered to pay the respondent’s costs on a standard basis to be taxed in default of agreement.
The respondent submits that the applicant’s conduct prior to the commencement of the trial caused significant delays with associated adverse cost consequences. I am not satisfied that the applicant’s conduct prior to the commencement of the trial warrants an order that it be required to pay the respondent’s costs on an indemnity basis.
The applicant contends that any order for costs should take into account the applicant’s success in resisting the respondent’s contention that the applicant did not have standing to make a claim for compensation under Part 5 of the Act. The applicant’s standing was one of two principal issues for determination in the proceeding. The applicant and the respondent filed written submissions which specifically addressed the issue of the applicant’s standing. The issue of standing was determined in the applicant’s favour. It is appropriate that the respondent pay the applicant’s costs of the applicant’s written submissions dated 15 August 2022 and that there be no order as to costs in respect of the respondent’s written submissions dated 18 March 2022.
Most of the three days of trial were taken up with the issue of whether any financial loss sustained by the applicant was a natural, direct and reasonable consequence of the reservation of the Subject Land. I do not consider it appropriate to apportion the costs of the three days of hearing by reference to the issues of standing and causation.
I shall order as follows:
1.The applicant’s claim for compensation under Part 5 of the Planning and Environment Act 1987 is dismissed.
2.Subject to [3] and [4] the applicant is to pay the respondent’s costs on a standard basis to be taxed in default of agreement.
3.The respondent is to pay the applicant’s costs of the applicant’s written submissions dated 15 August 2022 on a standard basis, to be taxed in default of agreement.
4.No order as to costs in respect of the respondent’s written submissions dated 18 March 2022.
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