Ostroco v Department of Transport and Main Roads

Ostroco was the lessee of premises that were compulsorily acquired by the Department of Transport and Main Roads. The appellant sought compensation for the disturbance caused by the resumption, including relocation costs, costs associated with making over replacement premises, and economic losses attributable to the resumption. The Land Court awarded compensation for relocation costs and part of the make over costs, but rejected other claims. Ostroco appealed to the Court of Appeal, which allowed the appeal in part and assessed compensation at $553,043 for relocation costs and $11,000 for valuation and legal fees. The court found that the Land Court erred in excluding certain make over costs, and that it had jurisdiction to award compensation for some of the economic losses. The Department of Transport and Main Roads cross-appealed, arguing that the court should not have awarded compensation for economic losses, but the cross-appeal was dismissed.

The Land Court was required to determine whether Ostroco was entitled to compensation for the disturbance caused by the resumption of the leased premises. The court had to decide whether the costs associated with making over the replacement premises, which were ordinarily paid for by the landlord, could be claimed by Ostroco. The court also had to determine whether Ostroco's business suffered economic losses as a result of the resumption, and whether it had jurisdiction to award compensation for losses that occurred before the resumption. Finally, the court had to decide whether Ostroco was entitled to compensation for its unsuccessful attempts to sub-let the resumed premises.

The Court of Appeal held that the Land Court erred in excluding certain make over costs from the compensation assessment. The court found that the costs related to works that would have been carried out by Ostroco if it had remained in the original premises, and therefore were reasonably incurred by Ostroco as a result of the resumption. The court also held that it had jurisdiction to award compensation for some of the economic losses suffered by Ostroco, even though they occurred before the resumption. The court found that the losses were a direct and natural consequence of the taking of the land, and that Ostroco had established its case on the balance of probabilities. Finally, the court held that Ostroco was entitled to compensation for its unsuccessful attempts to sub-let the resumed premises, as the loss was a direct and natural consequence of the taking of the land.

The Court of Appeal allowed the appeal and cross-appeal, and assessed compensation at $553,043 for relocation costs and $11,000 for valuation and legal fees. Interest was awarded on valuation and legal fees, and on so much of the sum of $32,000 for Mr Bettenay's fees as had been paid, from the dates of payment to the day immediately preceding the date upon which compensation was paid, at the interest rates identified in the decision of the Land Court. Costs were to be determined.