Ostroco v Department of Transport and Main Roads (No 3)

Ostroco brought a claim against the Department of Transport and Main Roads in the Land Court, which was appealed to the Land Appeal Court. The original matter concerned compensation following the compulsory acquisition of land. The Land Appeal Court awarded compensation of $564,043 plus interest to Ostroco. Both parties now sought orders for costs of the proceedings in the Land Court and the Land Appeal Court. Ostroco sought costs of the whole of the proceedings on the indemnity basis, while the Department sought costs of its cross-appeal. The position of the Department at the Land Court hearing was that no compensation was payable. Before the Land Appeal Court hearing, Ostroco made an offer to compromise, which, if accepted, would have been more favourable to the Department.

The court considered the principles of the costs order, focusing on the conduct of the parties during the proceedings. It examined the Department's initial stance that no compensation was payable, which was not supported by evidence. The court also noted Ostroco's offer to compromise, which would have been more advantageous to the Department had it been accepted. Based on these factors, the court determined that the Department should bear the costs of the Land Court hearing on the standard basis. For the appeal, the court ordered that the Department pay Ostroco's costs up until 24 January 2013 on the standard basis and from 25 January 2013 on the indemnity basis. No order was made regarding the costs of the cross-appeal.

The court's decision reflects a nuanced approach to costs, balancing the respective positions of the parties and their conduct during the proceedings. The order ensures that the Department, which held an unreasonable position in the initial hearing, bears a significant portion of the costs. The indemnity costs for the latter part of the appeal recognise Ostroco's reasonable compromise offer, which the Department did not accept. The court's detailed reasoning provides clarity on the application of costs principles in the context of compulsory acquisition claims.