Land and Environment Court of New South Wales CITATION : Ibrahim and Mariette Doueihi and Anor v Roads and Traffic Authority of New South Wales (No 2) [2004] NSWLEC 80 FIRST APPLICANTS Ibrahim and Mariette Doueihi PARTIES : SECOND APPLICANTS A & M Doueihi Pty Limited RESPONDENT Roads and Traffic Authority of New South Wales FILE NUMBER(S) : 30421 of 2002 CORAM: Cowdroy J KEY ISSUES: Valuation of Land :- Compulsory acquisition of land - Costs - alleged fundamental change in claim after offer of compromise made LEGISLATION CITED: Land and Environment Court Rules 1996, Pt 13 r 27 Supreme Court Rules 1970, Pt 22 r 3, Pt 52A r 22 CASES CITED: DATES OF HEARING: 10/03/2004 DATE OF JUDGMENT: 03/12/2004 APPLICANTS Ms V. Culkoff (Barrister) SOLICITORS Russo and Partners LEGAL REPRESENTATIVES: RESPONDENT Mr R. Lancaster (Barrister) SOLICITORS Henry Davis York JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 30421 of 2002 Cowdroy J 12 March 2004 Ibrahim Doueihi and Mariette Doueihi First Applicants A & M Doueihi Pty Limited Second Applicant v Roads and Traffic Authority of New South Wales Respondent Judgment No 2 – Costs 1 Judgment was delivered in these proceedings on 5 March 2004 and the question of costs was reserved for argument on 10 March 2004. 2 An offer of compromise was made by the respondent to the applicants on 6 March 2003 in the amount of $1,100,000 for compensation, exclusive of legal costs. Pursuant to Part 22 rule 3 of the Supreme Court Rules 1970 (which is adopted pursuant to Part 13 rule 27 of the Land and Environment Court Rules 1996) such offer expired on 4 April 2003. 3 At the time the offer of compromise was made the hearing had been set down for between 7 April 2003 and 10 April 2003. On 4 April 2003 such hearing dates were vacated because new issues had arisen including town planning issues and the respondent required additional time for further investigation by their experts. 4 The applicants submit that such new issues resulted in a fundamental change in the nature of proceedings so as to constitute a different claim. The applicants submit that after the discovery of the new issues there was a fundamental change to that claim. The applicants say that the "goal posts" were moved in such a way that there was no offer available for acceptance after the vacation of the hearing dates and the discovery by the respondent of the new issues. 5 The respondent submits that as it is the successful party the applicants should pay its costs from after the date of the offer of compromise, namely 6 March 2003 pursuant to the general rule. The respondent also submits that there was no fundamental alteration of the applicants' claim because the applicant was at all times aware of the unlawful use and the amended points of claim filed by the applicant on 24 March 2003 were not changed after that time. 6 Part 13 rule 27 of the Land and Environment Court Rules 1996 provides:- The provisions of Part 22 of the Supreme Court Rules "Offer of Compromise" and Part 52A rule 22 of those rules apply to all compensation proceedings in Class 3. 7 Part 52A rule 22 of the Supreme Court Rules 1970 relevantly provides:- … (3) Subrules (4)–(6) apply to an offer which has not been accepted at the time prescribed by Part 22 rule 3 (8). … (6) Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall, subject to rule 33, be entitled to an order against the defendant for the plaintiff's costs in respect of the claim up to and including the day the offer was made, assessed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter assessed on a party and party basis. … 8 The applicants claim that a whole new claim arose in April 2003 cannot be sustained as the amended points of claim were not altered despite the respondent becoming aware of the unlawful use and thereafter reducing the amount of compensation it considered to be appropriate. The applicants' final claim at the conclusion of the hearing ranged from $1,017,000 to $1,357,000 therefore such claim was still greater then the amount awarded by the Court. 9 Rule 22(6) of Part 52A of the Supreme Court Rules clearly provides that a successful party is prima facie entitled to an award of costs. The whole purpose of such rules is to avoid accumulation of legal costs. In this case the applicants chose not to accept an offer of compromise and took the chance that they would be successful in court. In this case the applicants were unsuccessful and the usual rule as to costs should apply. Orders 10 The Court makes the following orders, save as to any costs the subject of an existing costs order:- 1. ORDER that the respondent pay the applicant's costs of the proceedings up to an including 6 March 2003; 2. ORDER that the applicants pay the respondent's costs of the proceedings after 6 March 2003. 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