Goodman v Roads and Traffic Authority of New South Wales

SOLICITORS: Crown Solicitor's Office

JUDGMENT: IN THE LAND AND Matter No. 30307 of 1999 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 12 December, 2000

Nigel Peter Goodman Applicant v The Roads and Traffic Authority of New South Wales Respondent

The respondent has filed a Notice of Motion seeking orders that the respondent bear the applicant's costs up until 3 August 2000 and that the applicant bear the respondent's costs on and from that date.

Relevantly, 3 August 2000 was a Thursday prior to the hearing which commenced on the following Monday, 7 August 2000.

On 3 August 2000 the respondent's solicitor, the Crown Solicitor, wrote a letter stating that the RTA offered to resolve the matter for an agreed determination of compensation in the sum of $535,000. The offer was limited to expire at 9.30 am on Monday 7 August 2000. There is no issue that the terms of the offer were sufficient for the applicant to understand the full implications of the offer made ( Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97; Hanave Pty Ltd v LFOT Pty Ltd (Fed C of A, 11 November 1998, unreported); Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No.2) [2000] FCA 602).

The immediate response made by the applicant's solicitors on 4 August 2000 was to make an offer to resolve the matter for an agreed determination of compensation in the sum of $557,000, including a valuation fee of $3,000, a fee paid to Baulkham Hills Shire Council in the sum of $500, and costs noted at $6,500. This reflects an assessment of the amount of compensation for the value of the land as $547,000. It contrasts to the determination of compensation by the Court allowed at $520,000 for market value and $4,000 in legal and valuation fees as costs attributable to disturbance.

The hearing extended over four days. In a written judgment dated 22 August 2000 the Court awarded the applicant an amount of compensation in the total sum of $524,000, including legal and valuation fees as costs attributable to disturbance in the sum of $4,000. The question of costs was reserved.

The offer made in the letter of 3 August 2000 was effectively $11,000 more than the total compensation awarded by the Court.

The respondent claims that in these circumstances a just award of costs would be an order pursuant to which the applicant is entitled to his costs up to the date of the offer but not subsequently. The respondent claims costs against the applicant on a party and party basis after the date of the offer.

At the commencement of the hearing a claim for solatium in the sum of $15,000 was not pressed. A further claim for relocation expenses, including stamp duty, was also abandoned during the hearing. The respondent asserts that the withdrawal of these claims was in effect a discontinuance of that part of the claim and therefore an admission that the claim in that respect was unreasonable.

In summary, therefore, the respondent says that because a less favourable outcome compared to the amount of the offer made, was received and that it was forced to prepare to meet groundless claims for solatium and relocation costs, the applicant is entitled to payment of its costs after the date of the offer. Although the respondent merely seeks an order that the applicant pay its costs after 3 August 2000 on a party and party basis, nevertheless it says strictly speaking it is entitled to payment of those costs on an indemnity basis.

Mr Maston for the respondent referred the Court to the observation made by McHugh J in Oshlack v Richmond River Council (1998) 96 LGERA 173 at 193 - 194 in respect of the circumstances where a Court may properly depart from the usual order as to costs. One of the instances identified by McHugh J is where a party obtains relief which the unsuccessful party had already offered in settlement of the dispute. That, according to Mr Maston, is the exact position here. Prima facie it is a sound argument.

However, Mr Hyam for the applicant has drawn the Court's attention to a number of factors and principles which demand a closer examination of the circumstances.

In the first place Mr Hyam notes that the offer was not delivered to the applicant's solicitors until the last business day before the hearing. In terms it was open only until 9.30 am on the day of the hearing. Mr Hyam asks the Court to recognise the inherent difficulty in obtaining proper instructions at such short notice, including over a weekend.

Furthermore, the applicant's solicitors wrote to the Crown Solicitor on 6 June 2000 requesting an explanation for an approach taken by the respondent's valuer identified for the first time in a valuation report dated 9 May 2000. There was no response to the letter of 6 June 2000 until 2 August 2000.

The compulsory acquisition by the respondent initially was a response to a request made by the applicant to acquire the property on the grounds of hardship.

The acquisition took place on 22 October 1999 and at that time a statutory valuation was issued assessing compensation at $444,550. After the proceedings were commenced the market value of the property was assessed by the respondent at $437,500 in a Points of Assessment of Compensation. The market value was amended to $387,500 in an Amended Points of Assessment of Compensation furnished on 27 March 2000.

The Points of Claim filed by the applicant assessed the total compensation at $578,360. This amount was subsequently amended to $618,038 on 28 July 2000.

In the meantime the respondent's valuer John Kinchington had carried out an alternative valuation at $503,000. That was the state of the contest between the parties at 3 August 2000 when the offer to settle for $535,000 was made.

It is the applicant's contention that the history of the pleadings and exchange of valuations with outstanding information showed that the applicant was not in a position to properly consider settlement until the day before the hearing.

In Maloney v Cowra Shire Council [2000] NSWLEC 107 I referred to the well-known passage from the judgment of Cripps J in North Albury Shopping Centre Pty Ltd v Albury Municipal Council (1983) 49 LGRA 215 at 221 where His Honour recognised the serious circumstances of a dispossessed owner.

The same theme was reiterated by Wilcox J in Banno & Anor v Commonwealth of Australia & Anor (1993) 81 LGERA 34 at 53 as follows:- But this is not ordinary litigation. The relationship between the parties giving rise to the litigation did not arise out of their mutual desire; it arose because of a unilateral decision of the Commonwealth to acquire the applicant's land in order to satisfy a perceived public need. The acquisition left the applicants in the position of either accepting the Commonwealth's assessment of the proper compensation or of having the Court rule on its adequacy. Perhaps people in that position should be allowed access to the Court, to present an arguable and well organised case, without being deterred by the prospect of being ordered to pay the Commonwealth's costs if their case proves unpersuasive.

Bearing in mind the special circumstances which weigh on the exercise of the Court's discretion to make an order for costs in compensation cases, it is relevant to place considerable weight on the lateness of the offer made by the respondent and its limited duration. When the hearing commenced the offer made by the respondent had lapsed and the only offer remaining on the table was that made by the applicant in the hurried response effectively made the day before the hearing.

In the terms of the principles referred to by McHugh J in Oshlack , if the applicant had accepted the respondent's offer to settle he would have received a greater amount of compensation than the sum awarded by the Court. Furthermore, the costs of a hearing would have been saved.

On the other hand, there was no explanation why the offer was left until the last moment. By that time the applicant had incurred the costs of preparing for a hearing. The effect of the professional advice he had was that he had a real prospect of recovering a greater sum by proceeding with the litigation.

The case presented by the applicant, even though unsuccessful, was not vexatious, dishonest or grossly exaggerated. In my view both parties should have made greater efforts to bridge the gap between the offers, even if it meant that the commencement of the hearing was delayed pending an attempt to finalise negotiations.

It is true that the land was acquired at the request of the applicant. However, apart from the statutory constraint placed upon the award of compensation under specified heads of claim, once the land was acquired the applicant was entitled to pursue his claim to the full extent that the law allowed.

The respondent is as much to blame for the lack of a settlement, for making the offer at the last moment as the applicant is for failing to take the opportunity to save the cost of the hearing.

On balance, the actions of the applicant do not provide sufficient justification for eroding the benefit of the just compensation recovered by the making of a costs order against him.

The respondent recognises that it is appropriate for an order for costs to be made against it up to 4 August 2000. After that date it was open for both parties, indeed incumbent upon them, to attempt to avoid the incurring of further costs, particularly as the dispute between them was so limited. The applicant has not been heard to make a claim for an order for costs in his favour after 4 August 2000. It is appropriate therefore that there be no order as to costs after 4 August 2000.

The formal orders of the Court are:- 1. By consent the respondent is ordered to pay the applicant's costs up to and including 4 August 2000.

2. Otherwise than in order (1) there is no order as to costs.

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