Roads Corporation v Onans (No 2)

[2001] VSC 160

SUPREME COURT OF VICTORIA

COMMON LAW DIVISION

  VALUATION, COMPENSATION & PLANNING LIST

Not Restricted

No. 6691 of 1999

ROADS CORPORATION	Acquiring Authority
V
NEVILLE GRAHAM ONANS	Firstnamed Claimant
And
COTTAGE BLUFF PTY LTD (ACN 007 168 970)	Secondnamed Claimant

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JUDGE:	Balmford, J.
WHERE HELD:	Melbourne
DATE OF HEARING:	14 May 2001
DATE OF JUDGEMENT:	24 May 2001
CASE MAY BE CITED AS:	Roads Corporation v Onans (No. 2)
MEDIA NEUTRAL CITATION:	[2001] VSC160

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COSTS – what factors should be taken into consideration under s 91 Land Acquisition and Compensation Act 1986 (Vic) when making an order for costs in matters involving awards of compensation for the compulsory acquisition of land.

Land Acquisition Act 1969 (S.A.) – section 36.
Land Acquisition and Compensation Act 1986 (Vic) – sections 30, 91.

Coastal Estates Pty Ltd v Shire of Bass  [1994] 1 VR 210
Mario Piraino Pty Ltd v Roads Corporation [1991] 2 VR 534
Minister for the Environment v Florence (1979) 21 SASR 108

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APPEARANCES:	Counsel	Solicitors
For the Acquiring Authority	Mr CJ Townshend	Garland Hawthorn Brahe
For the Claimants	Mr J Atkins	Alan J Munt

HER HONOUR:

1. On 3 May 2001 I published my findings in this matter and the reasons therefor, and adjourned the matter to enable submissions from counsel as to the orders to be made as a result of those findings and as to costs.   The findings read:

The rights of the respective claimants to compensation in respect of the acquisition are:

Mr Onans  $188,563.28
Cottage Bluff  Nil

These reasons should be read in conjunction with the reasons delivered on that day.

1. The submissions of counsel were heard on 14 May 2001 when it was ordered by consent that Mr Onans pay to Roads Corporation within 30 days an amount of $62,516.72.   However, the appropriate costs order was a matter of dispute.

1. Section 91 of the Land Acquisition and Compensation Act 1986 (“the Act”), dealing with costs under Part 10 of the Act which relates to the determination of disputes, reads as follows:

91.Costs

(1)In any proceedings under this Part, the Tribunal or the 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 appropriate to do so, take into consideration -

(a)the amount of compensation awarded by the Tribunal or Court as compared with the amount (if any) offered by the Authority; and

(b)the extent to which, in the opinion of the Tribunal or 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.

(2)The Court may make an order with respect to the assessment of costs in the same manner as it may in respect of any other matter before the Court.

(4)All costs payable to the Authority may be set off by it against any compensation awarded or costs payable to the claimant.

(5)All costs payable to the claimant may be recovered by the claimant from the Authority in the same manner as the compensation awarded.

1. In Coastal Estates Pty Ltd v Shire of Bass [1994] 1 VR 210 at 213, Gobbo J adopted the following passage from the judgment of Wells J in Minister for the Environment v Florence (1979) 21 SASR 108 at 134-5, commenting on section 36 of the Land Acquisition Act 1969 of South Australia, on which section 91 of the Act was modelled.

Compulsory acquisition cases differ of course from ordinary claims dealt with in the general jurisdiction in one significant respect: the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not; the mere acquisition by compulsory process gave him, by virtue of s.18 of the Act, a claim to compensation which he could hardly be expected to renounce.

Upon an ordinary claim in the general jurisdiction it is, generally speaking, obvious who has won and who has lost, and correspondingly clear why costs usually follow the event.   Upon a claim for compensation for land compulsorily acquired, it is not, generally speaking, appropriate to speak of one party as having won;  compensation is awarded to one who has already been given, by statute, the right to receive it.   It is therefore as just to say of the latter sort of case that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation that is, ex hypothesi, his due, as it is to say of the former sort of case that prima facie costs follow the event in favour of the party who has won. But costs are, as always, discretionary, and no hard and fast rule will ever be allowed to occupy part of an area controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases. . . .Against the history of a wide-ranging discretion given to this Court with respect to costs, I am, I apprehend, to construe s. 36 flexibly and not restrictively, to the intent that the special nature of the jurisdiction to which it relates should be duly recognized, and orders made in that jurisdiction that are just and expedient.

I would, with respect, adopt that approach to the matter before me.

1. In Coastal Estates at 218 and also in Mario Piraino Pty Ltd v Roads Corporation [1991] 2 VR 534 at 544 Gobbo J expressed the view, with some caution, that section 91 contained a general discretion which was not limited by the categories set out in that section. I would, with respect, agree that the opening words of the section provide for such a general discretion. However, the legislature has chosen to emphasise the significance of those categories in the consideration of the award of costs in proceedings under the Act, and it is convenient to deal with the matter on that basis.

1. Accordingly, I turn first to consider, in the context of section 91 and in the light of the amount of compensation awarded by the Court, the relevance of various offers of compensation made by Roads Corporation and claims made by the claimants.

1. The amount awarded by the Court was $188,563.28.   That award was, of course, less than the amount of $251,080 advance compensation received by Mr Onans on 15 October 1998, but the payment of the advance compensation was made in circumstances which changed with the subsequent decision by Roads Corporation to re-align the acquisition so that Mr and Mrs Onans could remain in their house.   Leaving the advance compensation on one side, the amount of the award was larger than any of the offers made by Roads Corporation, and less than any claim made by the claimants.   I note also the finding by Gobbo J in Coastal Estates at 218 that “there is no useful basis for treating secret offers as offers which are to be taken into account in the application of s. 91”. Accordingly, I think it is appropriate that I consider only the final offer and claim which were before the Court.

1. The total compensation offered in the Notice of Sum Offered and Particulars of Offer filed by Roads Corporation on 13 April 2000 was $125,211.   As Mr Townshend, for Roads Corporation, pointed out, that offer included $25,000 described as “legal, valuation and other professional expenses incurred (subject to proof)”.   If $16,026.28 is added to that amount, so that the offer includes the whole of the unchallenged costs figure of $41,026.28 included in the Amended Notice of Claim of 24 January 2001, the total amount of compensation offered becomes $141,237.28.   The total claimed in the Amended Notice of Claim of 24 January 2001 was $432,653.98.

1. In Mario Piraino at 543, Gobbo J found that “the award was so significantly higher than the sum offered that it should require compelling circumstances before the claimant is deprived of its costs [under paragraph 91(1)(a)]”. I would take the same view of the relationship between the award and the offer in the present case, and I find no relevant compelling circumstances. However, I do not consider that the offer was “unduly depressed” in terms of paragraph 91(1)(b)(iv).

1. As to paragraph 91(1)(b)(iii), the amount of the claim is well over twice the amount of the award.   This is due substantially to the claim of $165,000 in respect of the plantation palms (item 6), for which the amount awarded was $12,480.   Mr Townshend estimated that the valuation of the plantation palms occupied 60% of the ten days of the hearing, and I did not understand Mr Atkins, for the claimants,  to challenge that estimate.   As Mr Atkins pointed out, Roads Corporation offered nothing for the plantation palms, so that in a sense Mr Onans can be said to have been successful on that claim.   The claim was supported by evidence, and on balance, I do not think it appropriate that I take the size of the claim into consideration as being “excessive” in this context.

1. There are, however, matters which I do consider it appropriate to take into consideration under paragraphs 91(1)(b)(i) and (ii), while bearing in mind that a claim which is unsuccessful is not thereby to be taken as being unreasonable.   All of those matters inevitably affected the proceedings by adding to the time needed for preparation and at the hearing.

1. It ought to have been apparent from the outset that Cottage Bluff, the secondnamed claimant, had no claim under the Act. The only suggestion in the evidence that it might at any time have had an interest in the acquired land, so as to come within section 30 of the Act, which confers the right to make such a claim, was the reference to “rent” in its accounts. That reference was not supported by any other evidence; and there were no accounts produced for the year in which the acquisition date fell. Thus, of the two claimants, only Mr Onans was “given, by statute, the right to receive compensation in respect of the acquisition”, to adapt the words of Wells J in Minister for the Environment v Florence.   It is not in issue that Mr Onans controls Cottage Bluff.   The inclusion of Cottage Bluff as a claimant constituted, in my view, unreasonable conduct on the part of Mr Onans in terms of paragraph 91(1)(b)(i), and conduct which it is appropriate to take into consideration when making an order for costs.

1. Further, the claim set out in the Notice of Claim was made by Mr Onans and Cottage Bluff jointly, under fourteen separate heads, but there was no specification as to which items or what amounts were claimed by which claimant.   That constituted a failure by Mr Onans to give adequate particulars of the claim in terms of paragraph 91(1)(b)(ii).

1. There were other items claimed the inclusion of which, in my view, amounted to unreasonable conduct in terms of paragraph 91(1)(b)(i).   It was not appropriate to claim for the shed (item 5), which was for the most part situated on the adjoining property, or for the costs of replacing that shed (item 9).   Most of the plant and equipment claimed under item 7, to the value of $34,300 from a total claim under that head of $35,135, was either taken into account under other headings or had been retained by Mr Onans.

1. Mr Townshend pointed out that the Amended Notice of Claim was served, in contravention of orders that it be served by 30 November, less than one week before the commencement of the hearing, with a lengthy affidavit from Mr Onans as well as the affidavit of Mr Pullar.   That is also conduct which must be regarded as unreasonable.   He submitted that had Roads Corporation had longer to prepare its case, the matter might have occupied less time.   In response, Mr Atkins submitted that Roads Corporation could have asked for an adjournment at the expense of the claimants, and that such a request would have been hard to resist.   However, I accept the submission of Mr Townshend that he was not obliged to make such an application, and that there were reasons why he might not have wished to do so.

1. To attempt to separate out those matters amounting to unreasonable conduct on the part of Mr Onans to which I have referred and estimate the effect of each on the proceeding would be an elaborate exercise which would not necessarily produce accuracy or justice.   The hearing of the substantive matter occupied ten days, the first of which was largely taken up by a visit to the land, and the ninth of which was extremely short.   I consider that it would be “just and expedient” in the words of Wells J, to order that Mr Onans have his costs of the claim up to the hearing and that he have two-thirds of his costs of the hearing, as well as his costs of the final hearing on costs, as to which he has been substantially successful.

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