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Roads Corporation v Schembri

Roads Corporation v Schembri

Case [2009] VSC 369 31 August 2009

Compensatory Damages

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Statutory Interpretation

Valuation and Compensation Law

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6554 of 2009

ROADS CORPORATION	Plaintiff
v
JOSEPH SCHEMBRI, DENISE SCHEMBRI, CARMEN SCHEMBRI and PETER SCHEMBRI	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 June 2009
DATE OF JUDGMENT	31 August 2009
CASE MAY BE CITED AS:	Roads Corporation v Schembri
MEDIUM NEUTRAL CITATION:	[2009] VSC 369

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VALUATION AND COMPENSATION LAW – Application for leave to appeal heard with appeal from Victorian Civil and Administrative Tribunal – Appeal on questions of law – Claims for disturbance – Costs incidental to the purchase of replacement properties following compulsory acquisition – Loss due to failure by acquiring authority to make offer within the time period specified by statute – Opportunity cost claim - Whether findings open – Whether failure to have regard to relevant considerations – Application dismissed in respect of replacement property costs – Leave granted to appeal and appeal upheld with respect to opportunity cost claim as to quantum only - Sections 40 and 41 Land Acquisition and Compensation Act 1986; s 148 Victorian Civil and Administrative Tribunal Act 1998.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Batt	Garland Hawthorn Brahe
For the Defendant	Mr. J Delany S.C. with Mr. P Chiappi	Deacons

HIS HONOUR:

In May 2006 the plaintiff (‘the Corporation’) undertook the construction of a link between the Western Ring Road and the Western Freeway and compulsorily acquired a portion of a 42.64 hectare parcel of land owned by the defendants at Derrimut.

The defendants’ land was originally purchased by them in 1980 at a time when it was zoned for rural purposes, but with a view to its future development.

The Corporation concedes the defendants were developers of land, including the Derrimut land. The Derrimut land had been rezoned for industrial use by the time of compulsory acquisition and the defendants were seeking to develop it by subdivision.

As a result of the acquisition, the defendants claimed compensation and the claim was referred to the Victorian Civil and Administrative Tribunal (‘the Tribunal’).

At the hearing of the claim the Tribunal was informed the market value of the acquired land had been agreed at $11 million. This amount had already been paid to the defendants.

Three issues remained for determination:

(a) whether stamp duty and legal expenses incurred or proposed to be incurred by the defendants in purchasing other properties following the compulsory acquisition were ‘losses attributable to disturbance’ recoverable under s 41(1)(d) of the Land Acquisition and Compensation Act 1986 (‘the LAC Act’);

(b) whether the defendants were entitled, again under s 41(1)(d), as being ‘loss attributable to disturbance’ to an amount representing interest for loss of use of moneys as a result of the Corporation having been late in serving its offer of compensation in accordance with s 31 of the LAC Act;

(c) solatium.

The Tribunal awarded the defendants $586,918 in respect of the claim for costs associated with purchasing alternative properties.[1]

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Roads Corporation v Schembri

Details

AGLC: Roads Corporation v Schembri [2009] VSC 369
Case: [2009] VSC 369
Decision Date: 31 August 2009

CaseChat Overview and Summary

Roads Corporation sought leave to appeal and to appeal from a decision of the Victorian Civil and Administrative Tribunal (VCAT) in relation to a claim for compensation by Schembri. Schembri's property was subject to compulsory acquisition by Roads Corporation. Schembri claimed compensation for disturbance and costs incidental to the purchase of replacement properties, as well as an opportunity cost claim due to the delay in making an offer by the acquiring authority. The Tribunal dismissed the claim for replacement property costs, but allowed the disturbance and opportunity cost claims. Roads Corporation sought leave to appeal on questions of law concerning the Tribunal’s handling of the valuation of the opportunity cost claim.

The legal issues for the court to determine included whether VCAT was correct to dismiss the claim for replacement property costs, and whether the Tribunal had failed to consider relevant factors in determining the quantum of the opportunity cost claim. Roads Corporation argued that the Tribunal did not properly consider the diminution in value of Schembri's property due to the delay in making an offer, and that the Tribunal had failed to take into account the opportunity cost of that delay. The court also considered whether the Tribunal had erred in law by failing to have regard to relevant considerations in making its decision.

The Court found that the Tribunal's decision to dismiss the claim for replacement property costs was correct, as there was no evidence to support the claim. However, the Court found that the Tribunal had erred in its calculation of the opportunity cost claim. The Tribunal had failed to take into account the diminution in value of Schembri's property due to the delay in making an offer, and had therefore failed to have regard to relevant considerations. The Court held that the Tribunal's decision was open to challenge on questions of law and that the Tribunal had erred in the calculation of the opportunity cost claim. The Court granted leave to appeal and upheld the appeal with respect to the quantum of the opportunity cost claim.

The Court ordered that the matter be remitted to VCAT for reassessment of the quantum of the opportunity cost claim in accordance with the correct principles of law. The Court also confirmed that the Tribunal's decision to dismiss the claim for replacement property costs was correct and no further appeal lay in respect of that claim. The Court made no orders as to costs.

Orders