Kilpatrick v Head, Transport for Victoria (No 2)
[2020] VSC 241
•8 May 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION COMPENSATION AND PLANNING LIST
S CI 2017 04299
| JOHN MURRAY KILPATRICK | Plaintiff |
| v | |
| HEAD, TRANSPORT FOR VICTORIA | Defendant |
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JUDGE: | GARDE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 8 April 2020 |
DATE OF JUDGMENT: | 8 May 2020 |
CASE MAY BE CITED AS: | Kilpatrick v Head, Transport for Victoria (No 2) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 241 |
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VALUATION AND COMPENSATION – Interest on financial loss – Award for expenses – Interest on expenses – Award of costs following contested compensation claim – Supreme Court Act 1986 (Vic) s 60(1) – Land Acquisition and Compensation Act 1986 (Vic) ss 56, 91 – Planning and Environment Act 1987 (Vic) s 101.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S Morris QC with Mr P Chiappi | Hall & Wilcox |
| For the Defendant | Mr J Gobbo QC with Ms L Hannon | Russell Kennedy |
HIS HONOUR:
Introduction
Following the reservation of land owned by John Murray Kilpatrick (‘claimant’) at 1000 Ballan Road, Wyndham Vale (‘subject land’), the claimant sought compensation for financial loss. The reservation was for the public purpose of the Outer Metropolitan Ring/E6 Transport Corridor. The defendant, formerly known as Roads Corporation (‘authority’), is responsible for payment of compensation. The claim was made under Part 5 of the Planning and Environment Act 1987 (Vic) (‘PE Act’).
On 21 February 2020, I published a judgment awarding the claimant compensation of $48,844,000 (‘financial loss’) for diminution of land value and agreed expenses of $104,716, giving total compensation of $48,948,716 (‘award’). The judgment placed a value of $950,000/ha on the 51.6 ha residential component of the subject land.[1] The expenses were awarded under s 101 of the PE Act.
[1]Kilpatrick v Head, Transport for Victoria [2020] VSC 53 (‘judgment’).
During the conduct of the proceeding, the authority made advances of compensation to the claimant. On 8 April 2020, judgment was given in the amount of the award (which had by then been paid) and agreed damages in the nature of interest of $6,562,602.57.
On the same day, the parties made written and oral submissions as to the following two issues on which they were unable to agree:
(a) Should interest be awarded on the agreed expenses of $104,716, and if so, in what amount?
(b) What order should the Court make as to the costs of the proceeding?
These reasons are concerned with these issues.
Interest on expenses
Background
The claimant seeks interest on the amount of $104,716 agreed for expenses from the date of the referral on 27 October 2017 to 13 September 2019. This is the date on which the authority offered to pay the agreed sum.
The authority submits that there should be no award for interest on expenses.
In affidavits of 23 and 25 March 2020, the authority’s solicitor, Matthew Beazley, deposed as to the conduct of the proceeding as it related to the claim for expenses.
On 24 July 2017, the authority received the claim for compensation from the claimant, accompanied by a certificate of valuation from Urbis Valuations Pty Ltd (‘Urbis Valuations’). On 16 October 2018, following the referral of the claim into court for determination, the claimant gave discovery of the ‘before’ plan.
The discovered documents did not include invoices in relation to ‘planning consultancy expenses’, or ‘other consultancy expenses’. Extracts were provided of some invoices showing the letterhead, date, quantum and in some cases a subject line with the balance of each invoice redacted. The invoices for legal expenses in the sum of $59,944.24 gave no subject information. Some of the surveying and engineering invoices referred to a costs sharing agreement with another entity.
On 15 March 2019, Mr Beazley sent an email to the claimant’s solicitors expressing concern that the claimant’s expenses exceeded $340,000 and requested copies of the invoices without redaction within seven days.
On 8 April 2019, the claimant’s solicitors provided some invoices with most redactions removed.
On 9 and 18 April 2019, Mr Beazley sought unredacted copies of all invoices relating to the expenses claim.
On 22 May 2019, Mr Beazley repeated his request. In response, the claimant’s solicitors provided a link to various unredacted invoices.
On 24 July 2019, Mr Beazley requested copies of invoices relating to planning and other consultancy expenses, as well as copies of six invoices from Watsons Urban Development Consultants and Managers (‘Watsons’). On 2 August 2019, the claimant’s solicitors provided copies of the requested invoices.
On 13 August 2019, the authority offered to pay compensation for expenses in the amount of $104,716.10 consisting of:
(a) legal expenses of $37,258.10;
(b) valuation expenses of $23,458; and
(c) survey, engineering and town planning expenses of $44,000.
The claimant responded on 9 October 2019, reducing the expenses claim to $274,254.63. The letter provided additional invoices and a schedule of costs.
On 4 November 2019, the claimant responded by letter to the authority’s offer of 13 August 2019, maintaining that his entitlement to expenses was $265,873.63. The letter was a Calderbank offer[2] marked ‘without prejudice save as to costs’, and contained an offer to accept the sum of $180,000 as full and final settlement of the claim for expenses.
[2]Calderbank v Calderbank [1976] Fam 93 (Cairns and Scarman LJJ, and Sir Gordon Willmer).
An unsigned affidavit of Ms Natalie Bannister, a partner of the claimant’s solicitors, accompanied the offer. The unsigned affidavit stated that the claimant’s solicitors were engaged in about January 2013. Senior counsel was retained in about September 2013, and a planning consultant in about October 2013. Urbis Valuations was retained in about October 2016 to provide a valuation of the subject land. On 7 November 2019, the authority gave notice that Ms Bannister was required for cross-examination in relation to the expenses claim.
In opening submissions filed 8 November 2019, the claimant confirmed that the expenses claim would not be pursued beyond the amount of the authority’s offer. Expenses were agreed in the amount of $104,716.10.
In an affidavit of 6 April 2020, Ms Bannister deposed that the expenses claim was a minor aspect of the claim. The claimant’s discovery in October 2018 provided redacted copies of the expense invoices as the claimant wished to maintain confidentiality in relation to certain matters.
Ms Bannister said that the authority initially took no issue with this approach, attending a mediation in January 2019.
Following the request for unredacted invoices in March 2019, Ms Bannister provided a further list of documents and removed most of the redactions on solicitor’s invoices. Given its relatively low value, the expenses claim was not pursued.
In a second affidavit of 24 April 2020, Ms Bannister deposed that one invoice dated 29 June 2017 in the amount of $6,715.50 was duplicated and refunded. She also deposed that two invoices in the amounts of $1,952.50 and $11,000 were not paid by the claimant until 10 November 2017 and 23 November 2017 respectively.
Relevant provisions
Section 101 of the PE Act provides:
If compensation is payable under section 98, the owner or occupier of any land may also claim from the planning authority or responsible authority any legal, valuation or other expenses reasonably incurred in preparing and submitting the claim.
Section 60(1) of the Supreme Court Act 1986 (Vic) (‘SC Act’) provides:
The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.
Although not applicable here, s 56 of the Land Acquisition and Compensation Act 1986 (Vic) (‘LAC Act’) provides that interest is payable on any amount awarded for disputed expenses from the date the claimant paid the expenses.
Objectives for awarding interest
In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No 3), Gillard J identified three main objectives for the award of interest by the Court on amounts recovered:
First, as compensation to the judgment creditor for being out of the funds from the date of commencement of the proceeding until judgment; secondly, to deter judgment debtors from delaying proceedings and thereby having the use of the money for a longer period; and finally, to encourage defendants to make realistic assessments of the liability in a case and to take bona fide steps to compromise the claim.[3]
[3][2003] VSC 244, [61].
In Victorian WorkCover Authority v Esso Australia Ltd, Kirby J said:
Inflation erodes the value to parties kept out of their moneys of the sum ultimately recovered in proceedings in a court. This is why Lord Wilberforce explained that statutory interest on judgments was intended to do no more than to “compensate [the party successful in litigation] for being kept out of [the] ‘real’ value” of money.[4]
[4](2001) 207 CLR 520, 547 [71], quoting Pickett v British Rail Engineering [1980] AC 136, 151 (House of Lords). See also Minister for Energy, Environment and Climate Change v Morton [2017] VSC 774 (Garde J), [71], [72]; Kalenik v Apostolidis (No 2) [2009] VSC 410, [83] (Hargrave J)
Parties’ submissions
The authority opposed the award of interest on the expenses claim, and submitted that:
(a) the claimant did not supply evidence of the expenses in a timely manner;
(b) the claimant failed to put the authority in a position to make an informed offer to pay substantial compensation out of public monies;
(c) the claimant will receive a financial windfall over and above any proper compensation for being out of funds;
(d) the authority did not delay proceedings and sought to make a realistic assessment of the expenses claim;
(e) the authority made several offers, but the claimant only made one offer as to the expenses claim;
(f) although the Court is functus officio as to the award made in the proceeding, the claimant was paid $6,715.50 in respect of an expense that he did not in fact incur; and
(g) two invoices were paid after the date of referral.
The claimant submitted that:
(a) he had complied with the requirements to provide particulars and evidence in the proceedings;
(b) the invoices were initially redacted to avoid disclosing privileged matters. This issue was eventually addressed by the claimant, and the authority was able to put an offer;
(c) the fact that interest was awarded on one part of the claim is not a reason not to award interest on a separate part of the claim;
(d) the conduct of the authority in avoiding delay and in seeking to understand the claim is not a reason to deny the claimant interest; and
(e) the fact that the claimant only made one written offer of compromise was of no significance.
Analysis
The expenses consisted of consultancy fees and legal fees incurred by the claimant. The consultants retained were highly regarded experts in their field. Mr Ritchie of Watsons and Mr Dudakov of Urbis Valuations gave extensive evidence at the trial. The retainer of these experts and legal advisers was necessary if the claim for compensation was to be brought.
Except for the duplicated invoice and two other invoices, the agreed expenses were paid before the referral into court.
The claimant lost the use of his funds because of the need to retain consultants and legal advisers. The award of interest over the period from 27 October 2017 or from the payment of expenses (whichever is the later) to 13 September 2019 would partially compensate him for his expenditure on consultants and legal practitioners.
The parties have agreed on the penalty interest rate of 10% per annum for the larger amount of interest payable on the financial loss.
From the parties’ submissions, I conclude:
(a) While there was delay by the claimant in providing the authority with evidence of expenses, the invoices were subsequently made available. The amount awarded for expenses was agreed.
(b) The authority was able to, and did put an offer to the claimant which was accepted.
(c) The claimant will not receive a windfall if interest is awarded on expenses. Rather, he will be compensated for part of the time for which he was out of pocket for the costs of consultants and legal advisers. It was the reservation of the subject land for public purposes that necessitated the incurrence of expenses.
(d) The authority conducted itself properly and appropriately in respect of the expenses claim, but this is not a reason to deprive the claimant of interest on expenses.
(e) The authority has shown good cause why interest should not be paid on the expense that was refunded, and should be paid from the date of the referral or the date of payment of the expense whichever is the later.[5]
[5]See Amcor Ltd & Ors v Barnes & Ors (No 2) [2019] VSC 849 (Sloss J), [71] n 55; Cameron v McMahon & Anor (No 2) [2009] VSC 412 (Davies J), [6].
Conclusion
On the basis set out above, it is fair and just to award the claimant interest on the professional expenses that were actually incurred and included in the award.
I will award the sum of $18,356.73, being interest at the penalty interest rate of 10% per annum taking into account the refunded invoice and the dates of payment of the two invoices paid after the referral of the claim.
Costs
Background
The claimant submitted that the authority should pay the costs of the proceeding including reserved costs and the costs of the hearing on interest and costs on the standard basis. The authority submitted that each party should bear its own costs of and incidental to the proceeding including reserved costs.
Relevant law
Section 91 of the LAC Act governs the award of costs in compensation proceedings and provides:
In any proceedings under this Part, …the Court …may award such costs as it thinks proper but in making an order for costs must, if the …Court considers it appropriate to do so, take into consideration –
(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)the failure of the claimant to give adequate particulars of the claim or supply supporting material when required to do so; or
(iii)an excessive claim by the claimant; or
(iv)an unduly depressed offer by the Authority; and
(c)any other matters which under this Act are to be taken into account in determining the allocation of costs.
Section 91(1) gives the Court a wide discretion to award such costs ‘as it thinks proper’. In Love v Roads Corporation, the Court of Appeal gave detailed consideration to s 91. [6] After referring to s 36 of the Land Acquisition Act 1969 (SA) on which s 91 is based and to the South Australian decision of Minister for the Environment v Florence,[7] the Court said:
We accept that the position of a claimant in proceedings under the Act is not that of an ordinary litigant and that the starting point for the exercise of the Court’s discretion as to costs is that the dispossessed owner should recover the costs of making the claim. The discretion as to costs in compensation proceedings is tilted in favour of the claimant. However, it does not follow that the Court’s discretion is limited so as to prohibit it from taking into account conduct responding to a ‘without prejudice’ offer. As Wells J said in Florence, against the history of a wide ranging discretion given to the Court with respect to costs, the Court must construe the provision flexibly and not restrictively, to the intent that the special nature of the jurisdiction to which it relates must be duly recognised, and orders made in that jurisdiction that are just and expedient.[8]
[6][2011] VSCA 434 (Warren CJ, Tate JA, Emerton AJA) (‘Love’).
[7](1979) 21 SASR 108, 135 (Wells J) (‘Florence’).
[8]Love (n 6) [173]. See also Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2010] NSWLEC 27, [34] (Biscoe J); Nasser v Roads and Traffic Authority (No 3) [2006] NSWLEC 562, [32] (Pain J); Simpson v Bagnall [2008] NSWLEC 79, [10] (Jagot J).
The approach of Wells J in Florence was applied in the decisions of Mario Piraino Pty Ltd v Roads Corporation[9] and Coastal Estates Pty Ltd v Shire of Bass.[10]
[9][1991] 2 VR 534 (Gobbo J).
[10][1994] 1 VR 210 (Gobbo J) (‘Coastal Estates’).
More recently in Department of Economic Development, Jobs, Transport and Resources v MG Pastoral Company Pty Ltd, Emerton J said:
The special nature of compensation proceedings following compulsory acquisition has long been recognised…
Having regard to these principles, a person whose interest in land is divested or diminished because the land has been resumed in the broader public interest must be given considerable latitude in seeking to articulate its claim for compensation. The LAC Act is complex, particularly having regard to concepts such as ‘special value’ and ‘severance’. The application of the ‘before and after’ analysis to determine market value required by s 41(3) of the LAC Act involves a conceptual scrambling of other heads of claim with market value and has given rise to a range of difficult questions. Well-trained legal minds may differ on the best route to obtain just compensation in any given circumstance.[11]
[11][2016] VSC 456, [49]–[51].
The same observations may be made of claims for compensation under pt 5 of the PE Act. Part 5 claims can involve even greater complexities than acquisition claims under the LAC Act.
In Wilson v Melbourne Water Corporation (No 2), Ginnane J said:
Costs usually follow the event, including in compensation cases, although where there has been mixed success by the parties, the Court can take a ‘pragmatic’ approach to the allocation of costs, if it considers that to be an appropriate exercise of its discretion.
In effect, the Authority was seeking to reduce the costs the claimants would otherwise receive by applying an issues based approach and then having those costs awarded to the Authority. This is an uncommon outcome. That might occur in respect of abandoned claims, but it is not often the case in respect of claims that are not abandoned but are not successful.[12]
[12][2018] VSC 776, [23]–[24], referring to Chen v Chan [2009] VSCA 233 (Maxwell P, Redlich JA and Forrest AJA).
In Plunkett v Roads Corporation (No 2), Richards J had to make a costs order following the trial of a separate question arising in a claim under pt 5 of the PE Act. Her Honour said:
The [plaintiff] submitted that there is a presumption that, in cases where s 91 applies, a claimant will receive an order for the claimant’s costs. VicRoads submitted that there is no such broad presumption. It contended for a narrower presumption, that an affected landowner should not have to bear the cost of seeking due compensation.
I do not accept that s 91 creates any presumption in relation to costs. To the contrary, it provides that the Court has a discretion to award such costs ‘as it thinks proper’. It simply identifies a number of matters, peculiar to land acquisition and compensation cases, for consideration when exercising that discretion. Where the Court awards a claimant more compensation than was offered by the relevant authority, it will usually be the case that the claimant is also awarded costs. But other considerations may indicate a different result, depending on the circumstances of the particular case.[13]
[13][2019] VSC 230, [6]–[7] (citations omitted).
Parties’ submissions
The authority acknowledged that the Court awarded the claimant more compensation than it offered. However, it submitted that there were considerations which militated against an award of costs in favour of the claimant, and that the award was substantially closer to the authority’s position than that of the claimant. In this sense, the authority submitted that the claimant did not substantially succeed in his claim.
The authority submitted that the claimant:
(a) made excessive claims in the proceeding having regard to the overall award and the individual heads of claim;
(b) failed to provide supporting material when required to do so; and
(c) conducted the claim unreasonably.
The claimant disputed each of these submissions by maintaining that he materially succeeded in the claim as the award was:
(a) $9,144,000 above the authority’s particulars of offer of 5 October 2018;
(b) $844,000 more than the authority’s without prejudice offer of 6 November 2019; and
(c) $4,684,000 more than the authority’s offer of 7 November 2019 made two business days before the trial commenced.
Excessive claim – s 91(1)(b)
In 15 Lorimer Street Pty Ltd v Secretary, Department of Infrastructure, Byrne J referred to s 91 of the LAC Act as preserving the Court’s overriding discretion as to costs and said:
I start from the position that the Claimant should receive its costs unless special circumstances are shown. This position is reinforced by the fact that, on balance, the Claimant has obtained a greater sum than was offered… The word ‘excessive’ in s 91(1)(a)(iii) in the context in which it is found plainly means something more than that the sum claimed is greater than the amount of compensation awarded. This is the situation in most if not all successfully disputed claims. It has a pejorative connotation in the sense that the sum claimed exceeds the sum awarded to a degree which is unreasonable or worthy of criticism. This is not only a function of the difference between the two sums but also the reason for this difference. In my view what Parliament intended by para (iii) is that the court or tribunal should have the power to punish a Claimant by an adverse costs order for making a claim which amount is so unreasonably large that it ought not in the circumstances have been referred to the court or tribunal for determination.[14]
[14](Supreme Court of Victoria, Byrne J, 24 April 1998) 2; citing Coastal Estates (n 10) 218–9; Roads Corporation v Dacakis [1995] 2 VR 508, 545 (Batt J). See also Secretary to the Department of Business and Innovation v Murdesk Investments Pty Ltd (No 2) [2012] VSC 586, [56] (Emerton J).
The financial loss claim when made in 2017 was based on a valuation opinion given by Urbis Valuations. Mr Dudakov, a very experienced valuer, took the view that the residential component of the subject land should be valued at $1,200,000/ha. The claimant’s particulars dated 8 December 2017 therefore alleged a ‘before’ value of the subject land of $63,570,000. This compares with the ‘before’ value of the subject land as found in the judgment of $52,384,000 including $3,364,000 for the quarry buffer area.
Mr Dudakov subsequently reduced his valuation of the residential component of the subject land to $1,150,000/ha.
The authority made three ascending offers including a ‘before’ value of $43,800,000 on 5 October 2018, $47,900,000 on 7 November 2019, and $49,805,000 on 19 November 2019. It also made a Calderbank offer on 6 November 2019 for the total sum of $54,248,608.37 plus standard costs inclusive of the claim for financial loss, expenses and interest. The offer specified that, if accepted, the compensation paid for market value would be $48,000,000 for registration on title.
The award was $844,000 more than the authority’s without prejudice offer for loss of market value.[15]
[15]In Love (n 6) [155], the Court of Appeal held that s 91(1)(a) is concerned with open offers made by the authority relative to the eventual award of compensation as one important factor in the exercise of its costs discretion.
While there were also differences between the parties concerning the highest and best subdivision of the subject land, the principal difference between the parties related to the assessment of market value. Mr Haines adopted a land value of $800,000/ha, later increasing it to $900,000/ha, while Mr Willison adopted a land value of $825,000/ha, later increasing it to $900,000/ha. They reconsidered their valuations based on the final Watsons plan resulting in a value of $972,002/ha or $928,605/ha in the case of Mr Haines depending on whether a 17.5% or 20% profit and risk allowance was used. Mr Willison adopted a value of $950,000/ha.
The proceeding was a classic valuation case, and the result principally depended on the comparable sales analysis. The key controversy was how the value of the subject land related to the land value derived from the Country Garden sale. Mr Dudakov took the view that the subject land was superior, while the authority’s valuers considered it inferior. Although there were factors that pointed both ways, I found that the per hectare value of the subject land was less than that of the Country Garden land when fully analysed. I also found that the lot sales value of the subject estate was at the low end of the values derived from the Jubilee estate.
The valuers made different assessments. The claimant, who is a farmer, acted on the valuation advice that he had. While the claim proved too high and was well above the award ultimately made by the Court, I do not consider that the claim was excessive in the sense of unreasonable or worthy of criticism.
The expenses claim was a minor part of the proceeding. It was resolved by the commencement of the trial, and apart from a brief mention occupied no trial time. The claimant ultimately accepted the authority’s offer, although he took some time to do so. Having regard to the size of the claim overall and the fact that the claimant was entitled to some professional and legal costs for bringing the expenses claim, this aspect of the claim has little significance as to the order to be made for the costs of the proceeding.
Failing to give adequate particulars
The authority submits that the claimant failed to supply detailed plans and costings, or to particularise his claim for expenses. It says that this caused it to expend time and money in seeking to understand the claim, make an appropriate offer, and prepare that part of the case for hearing.
The claimant says that he provided costings and particulars, as well as supporting material in accordance with the Court’s directions. He asserts that the authority failed to file particulars of offer as required by court order.
Mr Beazley deposes that the failure of the claimant to provide a ‘before’ plan caused delay to the authority because the Valuer-General required that hypothetical development plans and costings be prepared. Ms Bannister responds that the requirement to produce development plans and costings is routine, as the authority would have been aware in July 2017 when the claim was lodged.
Mr Beazley explains that the Kilpatrick 2 land was immediately adjacent to the Kilpatrick 1 land, and that the authority’s experts (common to each claim) were endeavouring to finalise plans and costings in respect of that claim.
Ms Bannister counters that the ‘before’ plan was a stand-alone development of the subject land, and needed to connect to the adjoining Kilpatrick 1 estate. The Kilpatrick 1 claim settled on 19 July 2018.
On 22 August 2018, the Court directed that particulars of offer be filed by 17 September 2018, the date proposed by the authority. Ms Bannister deposes that the authority did not comply with its own date for providing particulars of offer. The claimant then issued a summons seeking an order for the provision of particulars returnable on 10 October 2018. In the event, the authority provided particulars of offer on 5 October 2018, and agreed to pay the claimant’s costs of the summons.
Doing the best that I can with the material dealing with the conduct of the proceeding, I conclude that there were some delays and difficulties on both sides. This is not surprising bearing in mind the difficulties associated with the preparation and defence of a claim of this magnitude and complexity. Overall, I am persuaded that any order for costs that might be made in favour of the claimant should not be adversely affected by his failure to provide adequate particulars or supply supporting material. Having regard to the level of offer made on 5 October 2018, the proceeding would have gone to trial in any event. I am not satisfied that the matters raised by the authority ultimately had any material effect on the total amount of costs incurred by the parties.
Unreasonable conduct of the claim
The authority submits that the claimant conducted the proceeding unreasonably, relying on what it says was an excessive claim and an absence of particularisation. It points to the claimant’s obligations under the Civil Procedure Act 2010 (Vic) (‘CPA’) to conduct proceedings having regard to the overarching purpose to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute,[16] the obligation to cooperate,[17] and the obligation to disclose the existence of critical documents.[18] The authority says that the claimant had an obligation to use all reasonable endeavours to resolve the dispute.
[16]CPA s 7.
[17]Ibid s 20.
[18]Ibid s 26.
The authority submits that apart from attending the mediation, and a letter of offer concerning the expenses, the claimant made no effort to compromise the claim, or engage with the authority in relation to its Calderbank offer. By contrast, the authority says that it increased its open offers as further information and advice became available, and made a significant Calderbank offer. The award did not significantly exceed this offer in percentage terms.
The claimant submits that he acted reasonably by reason of the following:
(a) He participated in the court ordered mediation. Later, he put a Calderbank offer as to the expenses.
(b) The claimant’s valuer took part in the joint conference process to identify areas of agreement, as well as disagreement. The claimant says he was prepared to compromise where appropriate.
(c) The fact that the award is less than the amount claimed does not show a failure to compromise. The claimant was required to undertake the risk and costs of a Supreme Court proceeding in order to be fully compensated. He recovered a substantially greater award than he was offered.
(d) The successful outcome of the claim shows that he was justified in pursuing his claim. He was not obliged to compromise his claim for the authority’s lesser offers. It would not be in the interests of justice for him to be pressured into accepting a lower offer.
(e) The authority says that it increased its offers when information and advice were available to it. That is not meritorious, but the obligation of the authority.
(f) The authority does not say in any detail how the claimant was in breach of the provisions of the CPA. The failure to provide the ‘before’ plan or unredacted invoices until later in the proceeding has been explained.
I am not satisfied that the claimant acted unreasonably. He acted in accordance with court orders and directions. The proceeding was efficiently conducted by both sides. I am not satisfied that the claimant or his legal advisers acted in breach of their obligations under the CPA.
Conclusion
The costs of the proceeding were principally incurred in the preparation of affidavits and expert reports, the conduct of joint conferences, and an eight day trial including a view.
The claimant was successful in obtaining an award that exceeded all offers made by the authority, including the offer made on the trial eve. It is normal in these circumstances to order that the claimant have the costs of the proceeding.
Having regard to the matters listed in s 91(1) of the LAC Act, I am persuaded that the issues raised by the authority do not provide sufficient reason to depart from a standard costs order in favour of the claimant.
The Court will order that the authority pay interest on expenses in the amount of $18,356.73, and that the claimant’s costs of the proceeding including reserved costs and the costs of the hearing on interest and costs be taxed on the standard basis and when taxed paid by the authority.
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