Wilson v Melbourne Water (No 2) - [2018] VSC 776

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

VALUATION, COMPENSATION AND PLANNING LIST

S CI 2016 01575

ANN HAWTHORNE WILSON and JENNIFER GREAVES THOMAS	Applicants
v
MELBOURNE WATER CORPORATION	Respondent

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATES OF HEARING:	29 October, 19 November 2018
DATE OF JUDGMENT:	12 December 2018
CASE MAY BE CITED AS:	Wilson v Melbourne Water (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 776

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LAND ACQUISITION — Applicants obtaining award of compensation — Purchase cost of replacement property — Net Present Value of purchase costs — Costs of proceeding — Calderbank offers — Whether indemnity costs should be awarded — Interest on compensation sum — Interest on expenses — Land and Acquisition Act 1986 ss 31, 33, 57, 91, 107.

EVIDENCE — Legal professional privilege — Whether waived — Subpoena requiring production of privileged expert report — No objection made due to inadvertence — Privilege not waived — Evidence Act 2008 s 122; Supreme Court (General Civil Procedure) Rules 2015 rr 42A.02, 42A.08.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr S Morris QC and Mr I Munt	Rennick and Gaynor
For the Respondent	Mr S Goubran	Russell Kennedy

HIS HONOUR:

I gave judgment in this proceeding on 21 September 2018,[1] concerning the applicants’ (‘the claimants’’) claim for compensation under the Land Acquisition and Compensation Act 1986 (‘LAC Act’) for acquisition of their land at Lyndhurst by Melbourne Water (‘the Authority’).
[1]Wilson v Melbourne Water [2018] VSC 555 (‘Wilson’).

This supplementary judgment deals with issues, including questions of interest and costs, arising from that judgment and a further day and a half was required to hear submissions about them.

Issue 1: Net present value of replacement property costs

The first remaining issue was the net present value (‘NPV’) of the sum of $245,736 which was required to pay stamp duty and transfer costs of the Labertouche property to Mrs Wilson, which she purchased as a replacement property under a terms contract with settlement in 2026.

Mr Allen Truslove made an affidavit on behalf of the claimants. He is an experienced actuary and statistician. He was asked to calculate the NPV as at 5 October 2018 of the amount of $245,736 comprising $234,095 stamp duty and $11,641 transfer registration fees payable on 30 June 2026. The NPV was to allow for income tax payable by Mrs Wilson ‘on the increase in value during the deferment period’.

Mr Truslove expressed the opinion that, as at 5 October 2018, an amount of $215,372 accumulated with investment income at the rate of 2.553% pa, subject to income tax at the rate of 34.5%, would give a net tax amount of $245,736. He considered that to be the appropriate NPV. The interest rate of 2.553% was the indicative mid-rate of selected Commonwealth Government securities.

In his opinion, the 4% pa reinvestment rate proposed by the Authority and described below was inappropriate given the mismatch between investment risk and the risk-free nature of the liabilities…

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.

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Details

Case: [2018] VSC 776
Decision Date: 12 December 2018

CaseChat Overview and Summary

The applicants, Wilson, sought compensation for the acquisition of their land by Melbourne Water. They were awarded compensation under the Land Acquisition Act 1986 and sought further costs and indemnity costs for the proceedings. Melbourne Water disputed the amount of costs and indemnity costs claimed, as well as the interest on the compensation and expenses. The primary legal issue was the appropriate amount of costs and indemnity costs to be awarded, and whether the applicants were entitled to interest on the compensation and expenses. The court had to determine whether the applicants were entitled to interest on the compensation and expenses, and whether they were entitled to indemnity costs for the proceedings.

The court held that the applicants were entitled to interest on the compensation and expenses from the date of acquisition until the date of payment. The court also held that the applicants were not entitled to indemnity costs for the proceedings as they had made a Calderbank offer, which was a conditional offer to settle the proceedings, and had not withdrawn the offer before the trial. The court held that the applicants had not waived their legal professional privilege over their expert report, as they had not objected to the subpoena requiring its production due to inadvertence. The court held that the applicants were entitled to the net present value of the purchase costs of the replacement property, and that the costs of proceeding should be assessed on the basis of the standard hourly rate.

The final orders of the court were that the applicants were entitled to interest on the compensation and expenses from the date of acquisition until the date of payment, and that they were not entitled to indemnity costs for the proceedings. The court held that the applicants were entitled to the net present value of the purchase costs of the replacement property, and that the costs of proceeding should be assessed on the basis of the standard hourly rate. The court also held that the applicants had not waived their legal professional privilege over their expert report, as they had not objected to the subpoena requiring its production due to inadvertence. Melbourne Water was ordered to pay the applicants' costs of the proceedings on the standard basis, up until the date of the judgment.

Orders