Croghan -V- Hawkesbury City Council [1999] NSWLEC 134

Land and Environment Court of New South Wales CITATION: Croghan -V- Hawkesbury City Council [1999] NSWLEC 134

PARTIES APPLICANT: Croghan

RESPONDENT: Hawkesbury City Council

NUMBER: 30199 of 1995

CORAM: Bignold J

KEY ISSUES: Costs :- whether the Applicant should be regarded as being substantially successful in the litigation—effect of certain agreements made between parties in course of litigation

LEGISLATION CITED: Land Acquisition (Just Terms) Compensation Act 1991

DATES OF HEARING: 04/21/1999

EX TEMPORE JUDGMENT DATE: 04/21/1999

APPLICANT: Mr P. Tomasetti, Barrister SOLICITORS; Mervyn J Cathers & Co. LEGAL REPRESENTATIVES: RESPONDENT: Mr D. Miller, Barrister SOLICITORS: Abbott Tout

JUDGMENT: IN THE LAND AND Matter No. 30199 of 1995 ENVIRONMENT COURT OF Coram: Bignold J. NEW SOUTH WALES 21 April 1999

ALAN FRANCIS CROGHAN

Applicant

v.

HAWKESBURY CITY COUNCIL

Respondent

JUDGMENT

Bignold J:

1. By its Motion filed on 4 March 1999 the Applicant seeks an order for costs in proceedings involving an objection pursuant to the Land Acquisition (Just Terms) Compensation Act 1991 (Just Terms Act) in respect of the compulsory acquisition by the Council of land previously owned by the Applicant, by Compulsory Acquisition Notice published in the Government Gazette No.86 of 14 July 1995.

2. In my judgment delivered on 5 June 1998, I upheld the objection and determined the amount of compensation in the sum of $621,027 plus interest, in accordance with Just Terms Act (s 49) to be paid. I reserved the question of costs. In my reasons for judgment, I had indicated that prima facie, the Applicant, having been substantially successful in the proceedings, enjoyed a presumptive entitlement to a costs order but since the Council had expressly asked me to reserve the question of costs, I did so, having made that initial observation to assist the parties on this issue.

3. On the hearing of the Motion today, effectively the Council urged me to depart from my earlier observations concerning the success of the Applicant and advanced an attractive argument, skilfully put together, that I should regard the Applicant as not having been substantially successful and that in consequence, I should depart from the ordinary rule which reflects costs following the event. Instead, Council submitted that it would be appropriate, if any costs order were to be made in favour of the Applicant to make a limited order, something like 50 per cent of the assessed costs of the hearing. The hearing was effectively completed in one day, although the hearing was supplemented by additional written submissions received from both parties subsequent to the hearing date

4. In my reasons for judgment, I indicated that the parties at the commencement of the hearing had notified the Court that they had reached agreement on a number of matters, chiefly upon the market value (at a per hectare rate) of the land compulsorily acquired. Other agreements concerning the existence of a footpath traversing part of the acquired land which had been constructed before the date of compulsory acquisition is referred to, together with an agreement as to costs of disbursements incurred by the Applicant in acquiring a replacement property.

5. Page 4 of the unreported reasons for judgment, contains the following statement:

I note that as a consequence of the foregoing agreements made by the parties the only matters requiring adjudication are,

and I there set out four matters, namely: (i) whether there should be an increase in the agreed amount of market value by virtue of the "adjoining owner influence"; (ii) the Applicant's claim to an amount of $7,000 representing his costs of removing agricultural plant and equipment from the land to his property situate at Dubbo; (iii) interest on compensation; and (iv) costs of the proceedings.

6. In the result, the Applicant (i) was entirely successful on the first of the issues, namely whether there should be added to the agreed market value an additional sum reflecting adjoining owner influence; (ii) failed on the claim for $7,000; and (iii) was successful on the dispute as to whether interest was payable on the compensation monies. The success on the adjoining owner influence produced an additional $53,250 reflecting 10 per cent of the agreed market value.

7. In these circumstances, the question arises as to the validity and strength of the Council's submission that in this litigation, the Applicant should not be adjudged to have been substantially successful. In the course of argument, I pointed out that the single issue presented to the Court in consequence of proceedings involving an objection pursuant to Just Terms Act (s 66(1)) was whether the amount of compensation offered in consequence of the compulsory acquisition was reasonable or adequate. In the present case, the amount offered in the compulsory acquisition notice was $504,000. That amount is to be compared with the amount of compensation of $621,027 ordered in my judgment, plus interest. Viewed from that perspective, there is no doubt in my mind that the Applicant was successful, and substantially successful in the proceedings.

8. Mr Miller, on behalf of the Council, urged me to revise that opinion on the basis of the litigation history, including several offers of compromise passing between the parties in the course of litigation. Ultimately, I do not find the evidence concerning these offers of compromise to be decisive one way or the other. In the exercise of the Court's discretion on costs, the capacity for special costs orders in consequence of the operation of the relevant rules dealing with offers of compromise, is simply not enlivened in the present case.

9. The next matter relied upon by Mr Miller in his argument seeking to persuade the Court that the Applicant was not truly substantially successful in the litigation concerns the fact that on the hearing, the issues presented to the Court requiring adjudication had been substantially reduced by the agreements reached between the parties on the matters that I have earlier mentioned (in particular the agreement as to the market value of the land, save for any question of additional compensation by dint of the adjoining owner influence doctrine and other matters that I have earlier referred to). It was put, very forcefully on behalf of the Council, that the legal consequence in terms of the exercise of the costs discretion of the agreements reached between the parties meant that much of the preparation costs in the case were rendered strictly unnecessary in the light of the only matters ultimately requiring adjudication, and on that score should not be included in any costs order in favour of the Applicant. In my judgment, this submission must be rejected.

10. In rejecting it, as I pointed out in the course of argument, the agreed amount of market value (uninfluenced by any adjoining owner influence) at $11,000 per hectare produced a market value of $532,000. This compares with the Valuer General's market value of $500,000, which was included in the statutory valuation of $504,000, the subject of the Compulsory Acquisition Notice given to the Applicant in the present case.

11. In my judgment to proceed to exercise the Court's costs discretion in proceedings involving an objection under the Just Terms Act (where certain agreements such as those concerning the market value of the land taken are reached in the course of litigation) along the lines suggested by the Council's argument thereby depriving the Applicant of his costs incurred in the litigation including the costs incurred up to the point of that agreement, would be unreasonable and would impose a substantial and unfair liability on an Applicant seeking to vindicate his objection that the compensation offered was not adequate.

12. The only other matter relied upon by the Council concerned the actual outcome of the matters that required adjudication. I have already referred to these. Numerically, the Applicant was totally successful on two of the three matters and was entirely unsuccessful on the claim for removal expenses which amounted to $7,000. This was a modest claim, not subject of any preparation in terms of reports and the like, and was sought to be vindicated or justified by oral evidence called on the day by the Applicant. However, to regard the Applicant as being successful on two of the three issues debated by dint of a numerical appraisal, in my judgment, is to skewer the reality of the issues and outcomes in the proceedings. There was a very live issue between the parties concerning the adjoining owner influence and that issue dominated the proceedings and was opposed vigorously, not only by Council through its legal submissions but by the Council's witnesses. The two valuers whom it called said that the adjoining owner influence raised an important issue of principle and on that issue, most of the hearing time was devoted, and on that issue the Applicant was entirely successful.

13. In my judgment, this is not a case for the exercise of discretion on costs by apportioning costs according to success on discrete issues. As I said, the issue upon which the Applicant failed (and the only issue upon which it failed) occupied a small sliver of the hearing time and was not the subject of any evidence in preparation of the case, whereas the issues upon which the Applicant was entirely successful were the subject of expert reports by the three valuers, who also gave oral evidence in the case and were the subject of detailed legal submissions on both sides.

14. The final matter referred to by Council concerns the litigation history in the Court. In my judgment, that matter can have no bearing upon a proper appraisal of whether the Applicant was successful in the proceedings. It speaks for itself. I need not traverse the history other than to note that it indicates that the Applicant was found to be in procedural default of directions on two occasions at least, and on each occasion was ordered to pay the Council's costs, including an order upon the vacation of earlier hearing dates to pay costs thrown away by the vacating of the dates. The order that I propose to make in the present case, of course, does not affect or derogate from the specific costs orders made during the interlocutory proceedings.

15. In summary therefore, I conclude for the reasons given, that the Applicant was substantially successful in the litigation and no special circumstances have been demonstrated which would justify apportionment of costs on the basis of issues litigated in their respective outcomes such as may occur from time to time when a proper appraisal of the result of the litigation calls for a detailed analysis of issues raised and debated, time spent on the issues and the ultimate outcome thereof, justifies partial costs orders only. In the present case the claimant, having clearly established his objection to the amount of compensation offered ($504,000 compared with the amount ordered by the Court, $621,027 plus interest), clearly is to be adjudged the successful litigant, and in accordance with the principles upon which the Court exercises its costs discretion in cases involving claims to compensation under the Just Terms Act, should receive the usual costs order.

16. In the circumstances, I order the Respondent to pay the Applicant's costs of the proceedings in the sum agreed or, failing agreement, as assessed.

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I HEREBY CERTIFY THAT THE PRECEDING 16 PARAGRAPHS ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT OF THE HONOURABLE JUSTICE N R BIGNOLD.

Associate

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