Roads Corporation v Love (No 2)
[2005] VSC 357
•7 September 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
No. 6693 of 2004
| ROADS CORPORATION | Applicant |
| v | |
| THOMAS JAMES LOVE | Respondent |
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JUDGE: | OSBORN J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 26 AUGUST 2005 | |
DATE OF JUDGMENT: | 7 SEPTEMBER 2005 | |
CASE MAY BE CITED AS: | ROADS CORPORATION v LOVE (No. 2) | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 357 | 1st Revision: 7 September 2005 |
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Compensation for land acquisition – Claim for costs incurred in course of proceeding – s.41(1) and (4), Land Acquisition and Compensation Act 1986 – Meaning of "costs incurred by a claimant in the course of prosecuting any proceedings".
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J. Delany SC with Ms M. Foley | Garland Hawthorn Brahe |
| For the Respondent | Mr D. O’Brien | McCluskys |
HIS HONOUR:
In this matter the Roads Corporation (“the Authority”) has applied to dismiss part of the respondent’s claim for compensation in respect of legal costs, valuation and like expenses. The Authority contends that such costs and expenses are proper matters to be considered upon the resolution of the proceeding pursuant to s.91 of the Land Acquisition and Compensation Act 1986 (“the Act”). The Authority contends they do not form a legitimate component of the claim itself and do not fall within the categories of loss compensable pursuant to s.31 of the Act.
The proceedings themselves are somewhat unusual in their underlying character and it is necessary first to set out how they come before the Court.
By notice of acquisition published in the Victoria Government Gazette 11 February 2002 the Authority purported to compulsorily acquire from the respondent land comprising a 25.62 hectare strip running through a rural property known as Clonard located near Craigieburn. The land was acquired for the purpose of the Hume Freeway.
The respondent, who was at this date the registered proprietor of the land, contends in other proceedings before the Court that the acquisition was invalid. Accordingly the respondent has participated in the present proceeding only subject to continuing disclaimers to this effect.
Section 30 of the Act provides a right to compensation upon the compulsory acquisition of land.
The mechanism triggering such right is the publication of notice of acquisition of an interest in land pursuant to s.19 of the Act.
Section 31 in turn provides that the acquiring authority must make an initial offer of compensation to persons affected within a specified period (which is capable of extension by various administrative procedures).
The Authority made an offer of compensation on 26 July 2002 in the sum of $2,458,295. It stated further that it would pay “your reasonable legal, and valuation expenses incurred as a direct consequence of the acquisition by VicRoads.”
The offer was accompanied by a Certification of Valuation under the hand of the Valuer‑General.
At the date of this offer the respondent remained in possession of the acquired land.
Section 33 of the Act provides:
“(1)Subject to s.106(1), before the expiration of three months after the date of service on a claimant of an offer under s.31, the claimant must –
(a)serve a notice of acceptance on the Authority stating that the claimant accepts the amount of compensation offered in respect of the acquisition; or
(b)serve a notice of claim upon the Authority.
(2)If the claimant fails to serve on the Authority the notice under sub‑s.(1)(a) or (b), the matter becomes a disputed claim for the purposes of this Act.”
In the present case no response was made to the offer in accordance with s.33(1) and in particular no notice of claim was served in accordance with the requirements of s.35. Accordingly the matter became a “disputed claim” in accordance with s.33(2) although no claim had in fact been made.
For the sake of completeness it is to be noted that the response to offer form provided to the respondent enabled a claim to be made for “all legal, valuation and other professional expenses necessarily incurred by reason of the acquisition of the interest in land”.
On Friday, 7 November 2003, the respondent made an interim claim for the cost of reinstatement of cattleyards, water bores, fencing, cattle laneways and sheds. This interim claim was not accepted.
On 4 February 2004, the solicitors for the Authority directed the attention of the respondent’s solicitors to the terms of s.33(1) and s.107(1) of the Act. Section 107(1) relevantly provides:
“Notwithstanding anything in any other section of this Act, the time in which a person other than the Authority is required to do anything under this Act shall not expire until the expiration of seven days after the Authority has advised that person in writing of the effect of that expiration.”
The solicitors for the Authority advised the respondent’s solicitors:
“In accordance with the requirements of s.107(1) you are advised that at the expiration of seven days from the date of transmission of this facsimile this matter will become a disputed claim for compensation – if your client fails to deliver a Notice of Claim or, alternatively, a Notice of Acceptance in accordance with the requirements of s.33(1) of the Act.”
On 5 March 2004, the respondent made a further claim for reinstatement of facilities at the property of $22,061 bringing the interim claim to a total of $154,843.
By facsimile of 1 April 2004, the solicitors for the Authority advised the solicitors for the respondent that given the respondent’s failure to respond to the Authority’s offer the matter had become a disputed claim.
Thereafter, by notice dated 24 June 2004, the Authority referred the disputed claim to this Court in accordance with s.80 of the Act for determination.
Following referral to the Court, directions were given that the respondent file and serve particulars of the claim.
On 10 September 2004, the respondent filed the particulars of claim which included a claim for legal and other professional expenses.
On 18 October 2004, the Authority filed a notice of sum offered with particulars. The notice offered, inter alia, as an allowance for legal valuation and like expenses (in addition to amounts previously paid) $20,000.
On 26 November 2004, the Court ordered the respondent file amended particulars. On 24 December 2004, the respondent filed amended particulars of claim, including a further claim for legal and like expenses.
In February 2005, a series of affidavits were filed and served on behalf of the Authority relating to the substance of the claim.
In March 2005, answering affidavits were filed on behalf of the respondent.
On 13 April 2005, the solicitor for the Authority received a facsimile from the respondent’s solicitor setting out a claim for expenses as at 12 April 2005 as follows:
(a)Claim for legal expenses of professional expenses $78,139.71 and disbursements $103,500.84.
(b)Claim for valuation and other professional expenses of land and business valuation fees $71,328.95 and other professional expenses $42,939.
By summons dated 27 April 2005, the Authority sought discovery of particular classes of documents and further particulars of the respondent’s claim including full particulars of the claim for legal and valuation expenses.
On 5 May 2005, the Court ordered the respondent give further discovery and provide further particulars, including particulars of the claims for legal and other professional expenses.
On 24 June 2005, further orders for particulars relating to a special value claim and for discovery and for the filing of further affidavits of evidence‑in‑chief were made.
On 28 July, the respondent filed further amended particulars of claim, claiming a total of $22,001,835. This claim included claims for legal expenses in the sum of $287,854.18 particularising invoices between 14 September 2004 and 16 May 2005 and including an estimate of $100,000 for future legal expenses, together with valuation and like expenses in the sum of $166,265.96 particularising invoices between 11 November 2004 and 25 March 2005 and including an estimate of $60,000 for future valuation and like expenses.
By summons dated 22 August 2005, the Authority seeks an order:
“The respondent’s claims for legal, valuation and other professional expenses as particularised in items 4 and 5 of the Respondent’s Further Amended Particulars of Claim dated 27 July 2005 … be dismissed.”
Section 41 of the Act relevantly provides by sub-ss.(1) and (4) as follows:
“(1)Except as otherwise provided in this part, in assessing the amount of compensation payable to a claimant in respect of interest in land which is acquired under this Act, regard must be had to the following factors - …
(f)any legal, valuation and other professional expenses necessarily incurred by the claimant by reason of the acquisition of the interest.”
“(4)The expenses referred to in sub-s(1)(f) do not include costs incurred by a claimant in the course of prosecuting any proceedings (in) the Tribunal or the Court under Part 10.”
Section 91(1) of the Act provides:
“(1)In any proceedings under this Part, the tribunal or court (as the case requires) may award such costs as it thinks proper, but in making an order for costs must, if the tribunal or court considers it is appropriate to do so, take into consideration –
the amount of compensation awarded by the tribunal or court as compared with the amount (if any) offered by the authority; … “
The Authority contends:
(a)That legal and valuation expenses incurred after the referral of the claim to the court cannot be the subject of a s.41(1)(f) claim; and
(b)that on their face the amounts claimed are simply the costs of the proceeding.
The respondent contends:
(a)That s.41(1)(f) expenses can be incurred after the referral of a disputed claim to the court; and
(b)that the costs comprise the costs of preparation of a claim, which costs must fall within the terms of s.41(1)(f) or alternatively (d) which provides a residual category of compensation namely any loss attributable to disturbance.[1]
[1]Section 40 defines loss attributable to disturbance to mean any pecuniary loss suffered by a claimant as the natural direct and reasonable consequence of - … “(b) the fact that an interest of the claimant in that land has been divested and diminished, being a pecuniary loss for which provision is not otherwise made in this part.”
In my view, legal and other professional expenses might be incurred after the referral of a disputed claim to the Court e.g. where they were incidental to legitimate costs of relocation. When this was put to Mr Delaney in discussion with the Bench, he accepted that this was so.
Moreover, this is so despite the underlying scheme of the Act identified by Batt J in Roads Corporation v Costa:[2]
“The interpretation which I have adopted in my view accords with the important, if not fundamental, scheme of the Act, that claims are to be negotiated and not litigated before the Board … or the Court if at all possible. That scheme appears from ss.31 to 37 which provide a detailed code to that effect, including a requirement of the disclosure of valuations, a requirement that the authority’s offer be fair and reasonable, and an entitlement in a claimant at each stage to accept a portion of an offer by an authority and leave the balance in dispute.”[3]
[2](1997) 93 LGERA 317 at 321.
[3]His Honour went on to refer to extrinsic material supporting this view.
It follows that I reject the first contention made on behalf of the authority. Nevertheless, if it were apparent that in terms of s.41(4) the costs claimed were “costs incurred by a claimant in the course of prosecuting any proceedings (in) … the Court under Part 10”, such a claim could not be maintained.
My preliminary view is the phrase “prosecuting any proceedings” is apt to include the prosecution of a claim during the conduct of proceedings by a respondent with respect to a deemed disputed claim. The formulation, and particularisation of a claim for the purposes of prosecuting a proceeding in respect of a deemed disputed claim is the prosecution of a proceeding.
Conversely, the particulars of claim formulated and filed in this proceeding do not constitute a claim made in accordance with s.35 of the Act.
The costs of formulation of particulars of claim by reference to which it is proposed to contest the Authority’s offer and prosecute a claim in this Court (albeit it under protest) are thus in my view properly dealt with as costs of the proceeding.
Nevertheless, in order to justify the summary dismissal or striking out of part of the respondent’s claim, it would be necessary to conclude that the claim was completely untenable.[4] I am not prepared to so conclude on the face of the particulars, because they do not necessarily permit a full and fair characterisation of the costs claimed. Moreover a strike out application is not, in my view, the appropriate vehicle for resolving a substantive question of law despite the wide terms of R.8.05(2)(b) of Chapter II of the Rules of the Supreme Court.[5]
[4]Cf.General Steel Industries Inc. v Commissioner for Railways (NSW) & ors (1964) 112 CLR 125, per Barwick CJ at 129.
[5]Cf. Lonrho Plc. V Fayed [1992] 1AC 448 at 469-70
Accordingly, if the respondent desires to pursue the claim as to costs despite the preliminary view that I have expressed as to the applicable principles, the outstanding issue of discovery with respect to expenses will have to be resolved. If it is to be contended that the amounts in issue are properly the subject of a claim for interest as a component of compensation, then their characterisation cannot be postponed without discovery until the conclusion of the trial on all other issues. The Authority is entitled to protect itself by making an informed assessment and offer at this point in time. In other words, it is entitled to obtain discovery to ascertain whether the expenses are or are not expenses in the proceeding.
Accordingly, the question of appropriate discovery will have to be resolved now and I will give counsel the opportunity to make further submissions as to how this is best done in the light of these reasons.
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