Applicants v Respondent

2 The Plunketts seek an order that VicRoads pay their costs of and incidental to the hearing and determination of the separate question. For its part, VicRoads seeks an order that the Plunketts pay its costs of the separate question.

3 Having considered the written submissions filed by the parties, I have decided that the appropriate order is that the costs of and incidental to the hearing and determination of the separate question are costs in the proceeding. My reasons for that decision follow.

Section 91, Land Acquisition and Compensation Act

4 The parties agreed that s 91 of the Land Acquisition and Compensation Act 1986 (Vic) (LAC Act) applies to a proceeding involving a claim under Pt 5 of the PE Act.[2] They disagreed, however, on the effect of s 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;

(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.

6 The Plunketts submitted that there is a presumption that, in cases where s 91 applies, a claimant will receive an order for the claimant's costs.[3] VicRoads submitted that there is no such broad presumption. It contended for a narrower presumption, that an affected landowner should not have to bear the cost of seeking due compensation.[4]

7 I do not accept that s 91 creates any presumption in relation to costs. To the contrary, it provides that the Court has a discretion to award such costs 'as it thinks proper'. It simply identifies a number of matters, peculiar to land acquisition and compensation cases, for consideration when exercising that discretion. Where the Court awards a claimant more compensation than was offered by the relevant authority, it will usually be the case that the claimant is also awarded costs. But other considerations may indicate a different result, depending on the circumstances of the particular case.

8 In relation to an interlocutory application or separate question, s 91 does not dictate that a costs order should be made in favour of a party who has had an interim success. Rather, it indicates that the question of costs is to be determined at the end of a proceeding. It is only at that time that 'the amount of compensation awarded' to the claimant is known and can be compared with any offer made by the authority,[5] and the other matters set out in s 91(1)(b) can be assessed.

Was there unreasonable conduct by the Plunketts?

9 VicRoads submits that it should have its costs of the separate question because the Plunketts engaged in unreasonable conduct in relation to the separate question, within the meaning of s 91(1)(b)(i) of the LAC Act.

10 The claimed unreasonable conduct was said to be, primarily, pursuing a construction of ss 99 and 106 of the PE Act that was against Mr and Mrs Plunketts' interests, because VicRoads says that the land increased in value between May and October 2017. Second, VicRoads complained that the Plunketts had refused to engage with a notice to admit served by VicRoads.

11 I do not find that the Plunketts' conduct in relation to the separate question was unreasonable. As I set out below, the parties agreed (and the Court was persuaded) that resolution of the separate question was in everyone's interests. The construction put forward by the Plunketts was arguable. If accepted, their construction would have meant that their entitlement to compensation arose in May 2017, rather than in October 2017 as I concluded. This may have been to their advantage, even if the land increased in value over that time. It is really too early to tell.

12 As to the notice to admit, the matters that were set out in the notice did not bear on the construction of ss 99 and 106 of the PE Act. The meaning of a statutory provision does not depend on the facts of any individual case to which the provision applies. At most, those facts provide a means of testing the consequences of a particular construction.[6] VicRoads was able to make the point in argument that the land may have increased in value, without resort to the notice to admit.

13 VicRoads relied on the ordinary rule that costs should follow the event, and claimed that it was the successful party on the determination of the separate question. The Plunketts submitted that neither party was successful, in that the answer to the separate question did not reflect the position of either side.[7]

14 I consider that VicRoads was the successful party in relation to the separate question.

15 Mr and Mrs Plunkett submitted that the 'sale of the land', for the purposes of ss 99 and 106 of the PE Act, took place on entry into the contract of sale. The authorities did not establish that this was the 'accepted wisdom',[8] and I did not accept any of the submissions made for the Plunketts in support of that construction.[9]

16 My conclusion that the 'sale of land' took place upon completion of a contract for the sale of the land was based on my acceptance of many of the submissions made for VicRoads. The only point of substance on which I disagreed with VicRoads' position was whether the sale of the land took place at the time of settlement or upon registration of the transfer.[10] Although I did not accept VicRoads' submission on that point, I did find that the sale of the land occurred on completion of the contract of sale. This was, in effect, VicRoads' 'fall back' construction, and vindicated its position that the Plunketts did not have a right to compensation when they made their first claim in July 2017.[11]

17 While VicRoads was the successful party on the determination of the separate question, it was a separate question that both parties agreed should be determined in order to progress the proceeding. The order for the hearing and determination of the separate question was made by consent.

18 In making the order, Derham AsJ noted the joint memoranda of the solicitors for the parties dated 23 July and 6 August 2018. His Honour found that the parties had provided a persuasive case for the Court to order the trial of the separate question.[12] It is worth referring to those memoranda in some detail:

19 In a letter dated 23 July 2018, signed by both the solicitors for the Plunketts and VicRoads' solicitors, the parties submitted:

The proposed question is intended to isolate for hearing and determination a critical issue in the proceeding - namely, the proper statutory construction of section 106 of the Planning and Environment Act 1987 (Vic). The claimants contend that 'loss on sale' occurs upon entry into a contract for the sale of land. The Authority contends that 'loss on sale' occurs when full consideration is paid and title is transferred. This issue is fundamental to the assessment of the claimants' loss. The question will save significant time and costs to the parties and the Court by avoiding the need for two cases to be presented based on alternative dates of loss. It is for that reason, amongst others, that the parties consider the proposed question appropriate for preliminary hearing and determination.

20 This submission was expanded upon in a joint memorandum signed by the solicitors for the parties on 6 August 2018. Paragraph 5 of that memorandum read:

The resolution of the preliminary question potentially has a number of positive consequences. The major issue at trial will be the quantum of the Claimant's loss as determined by the evidence, and in particular, valuation evidence. The question of the date of assessment of the Claimants' loss will underpin at least the valuation evidence to be presented to the Court. The resolution of the question will save significant hearing time and significant cost to the parties by avoiding the need for two valuation cases to be presented by each party, based on the potential alternative dates on which the loss occurred.

On that basis, the parties submitted that, while the answer to the question might not end the litigation, it would promote the prospect of resolution through the mediation process and would substantially narrow the extent of evidence to be called at trial.

21 These case management considerations were sufficiently powerful to persuade Derham AsJ to make the order sought by the parties. As his Honour has said elsewhere, the discretion to order the trial of a separate question is one that is to be 'exercised with great caution, and only in a clear case'.[13]

22 In these circumstances, I am not persuaded by the submission for Mr and Mrs Plunkett that the separate question was a 'test case' run by VicRoads at their expense. They wanted to test the answer to the question,[14] applied by summons for it to be heard and determined separately, and consented to the order made on 14 August 2018.

23 I am also not persuaded that costs should follow the 'event' of VicRoads' success on the separate question. VicRoads also sought to have the question determined early, and can now enjoy the case management benefits identified in the joint memoranda. Those benefits include the narrowing of the issues to be determined at the ultimate trial, significant savings in costs and time, and improved prospect of early resolution.

24 The separate question was in issue between the parties before the proceeding commenced and, ordinarily, would have been determined at trial along with all of the other issues in dispute. The question of who bears the costs of its determination should depend on the outcome of the entire proceeding, having regard to the matters raised for consideration by s 91 of the LAC Act.

25 For these reasons, I consider it appropriate to order that the costs of and incidental to the hearing and determination of the separate question are costs in the proceeding.

[1] For the reasons given in Plunkett v Roads Corporation [2019] VSC 39 (Reasons).

[2] PE Act, s 105 applies Pt 10 and Pt 11 of the LAC Act to the determination of a claim for compensation under Pt 5 of the PE Act.

[3] Relying on Minister for the Environment v Florence (1997) 21 SASR 108, Roads Corporation v Love (No 2) (2010) 31 VR 551, Love v Roads Corporation [2011] VSCA 434.

[4] Relying on McKay v Commissioner of Main Roads (No 7) [2011] WASC 223; (2011) 185 LGERA 118 and Emerton J's ex tempore ruling on costs in Barilla v Roads Corporation (Supreme Court of Victoria, unreported, 30 August 2017).

[6] As was done in this case: Reasons, [67].

[8] Cf Applicants' Costs Submissions, [3.1], [6.5]-[6.6].

[9] Reasons, [26], [32], [35]-[37], [39]-[41], [43], [51]-[53], [64]-[71].

[11] The chronology is set out at Reasons, [3]-[4].

[12] Noted in 'Other matters' in the orders of Derham AsJ made on 14 August 2018.

[13] Derham AsJ summarised the relevant principles in Vale v Daumeke [2015] VSC 342, [31].

[14] This was made clear by senior counsel for Mr and Mrs Plunkett at the hearing on 10 December 2018, at 51:13-17 of transcript.