Land and Environment Court of New South Wales CITATION : BMP Manufacturing Pty Ltd and Ors v Road and Traffic Authority of New South Wales (No.2) [2009] NSWLEC 41 FIRST APPLICANT BMP Manufacturing Pty Ltd SECOND APPLICANT Purmar Holdings Pty Ltd PARTIES : THIRD APPLICANT ELN Ford Pty Ltd RESPONDENT Roads and Traffic Authority of New South Wales FILE NUMBER(S) : 30037 of 2006 CORAM: Sheahan J KEY ISSUES: COSTS :- compulsory acquisition, failure to recover more than the compensation originally determined, unsuccessful claims, interests of justice Ashfield Municipal Council v Roads and Traffic Authority of NSW (2001) 112 LGERA 389 Banno v Commonwealth (1993) 81 LGERA 34 BMP Manufacturing Pty Ltd and Ors v Roads and Traffic Authority of New South Wales [2008] NSWLEC 298 Latoudis v Casey (1990) 170 CLR 534 CASES CITED: Maloney v Cowra Shire Council [2000] NSWLEC 107 Nevitoro Investments Pty Limited v Hawkesbury City Council [2000] NSWLEC 151 Overton Investments Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 (2001) 113 LGERA 439 Rukavina and Robertson v Wagga Wagga City Council (1993) 80 LGERA 8 Serbian Cultural Club 'St Sava' Inc & Serbian Cultural Club Limited v Roads and Traffic Authority of New South Wales (No.2) [2008] NSWLEC 78 Yakas v Roads and Traffic Authority (NSW) (No.2) [2004] NSWLEC 589, (2004) 139 LGERA 116 DATES OF HEARING: 20 March 2009 DATE OF JUDGMENT: 9 April 2009 APPLICANT Mr I Hemmings SOLICITORS CBD Law LEGAL REPRESENTATIVES: RESPONDENT Mr J Maston SOLICITORS Blake Dawson JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Sheahan J 9 April 2009 30037 of 2006 BMP Manufacturing Pty Ltd and Ors v Roads and Traffic Authority of New South Wales (No.2) JUDGMENT Introduction 1 His Honour: I delivered my substantive judgment in this matter on 28 October 2008 ([2008] NSWLEC 298), and final orders have now been agreed upon, and made by the court. 2 The only remaining issue in the matter is costs. 3 The three applicants collectively seek an order in their favour, but the respondents submit that the appropriate order is that all four parties respectively pay their own costs. 4 The regime for resolution of costs claims has changed since the proceedings were commenced in 2006, and the Uniform Civil Procedure Rules are now in force in this court. 5 Costs remain within the discretion of the court, a discretion which must be exercised judicially, and any order made should be "just and reasonable" in all the circumstances of the case. They are "compensatory", not "punitive" in character. Latoudis v Casey (1990) 170 CLR 534. 6 Generally speaking, courts award costs to the "successful" party, on the basis that "costs follow the event" of success in adversarial litigation. 7 However, compulsory acquisition cases are not "ordinary litigation", concerning as they do a unilateral exercise of State power. See Banno v Commonwealth ("Banno") (1993) 81 LGERA 34, at 53. Success? 8 While these proceedings had some unusual features, they followed basically the normal course for such matters – the acquiring authority made an offer based on the Valuer General's determination ($592,200), the applicants declined to accept it and pursued their claim in the court ($2,161,067.63), the respondent contended at the hearing for a lower amount than that in the Valuer General's determination ($350,220), and the court determined the compensation ($496,470). 9 Each of these gross amounts can be analysed as among the claims of the three applicants, the statutory heads of compensation, and the various issues won and lost at the hearing. For example, the first two applicants, which owned between them the acquired land, claimed $1,407,757.63 in total and recovered $471,470, while the third applicant, which conducted its motor dealership on the land, claimed $753,310 and recovered $25,000. 10 Mr Maston for the respondent submits that the applicants' claims were "grossly exaggerated" and substantially unsuccessful. 11 The applicants submit that, as they collectively achieved a monetary outcome higher than the contentions of the respondents ($496,470 c.f. $350,220), albeit less than they could have accepted at any time prior to judgment ($592,200), they "succeeded" in the proceedings and should have their costs (presumably apportioned among them in some way, as the compensation has been in the final orders agreed upon). Their final award should be tested against the amount for which the respondent contended at the hearing, rather than the amount offered at resumption. Discussion 12 In Serbian Cultural Club 'St Sava' Inc & Serbian Cultural Club Limited v Roads and Traffic Authority of New South Wales (No.2) ("Serbian") [2008] NSWLEC 78, Jagot J usefully summarised the authorities, as I had done in the earlier case of Ashfield Municipal Council v Roads and Traffic Authority of NSW (2001) 112 LGERA 389 at 393-6, and Her Honour concluded that there are "no hard and fast rules", and no "automatic results", and that the "interests of justice" must be served in the case at hand. 13 Clearly there is more for the court to consider than simple arithmetical comparisons. 14 As the Court of Appeal said in Overton Investments Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 ("Overton") (2001) 113 LGERA 439 (per Stein JA at [72]), the court must "look realistically at the litigation, the issues, the way it was conducted and the result, in order to assess who really succeeded and to what extent". As Talbot J said in Nevitoro Investments Pty Limited v Hawkesbury City Council ("Nevitoro") [2000] NSWLEC 151 (at [35]), the courts must "have regard to the particular circumstances of each case". 15 Mr Hemmings for the applicants says that the Valuer General's determination is relevant only in so far as it gives rise to the proceedings in the first place. He went on to rely upon Pain J's decision in Yakas v Roads and Traffic Authority (NSW) (No.2) ("Yakas") [2004] NSWLEC 589, (2004) 139 LGERA 116, which to some extent distinguished Overton. However, interestingly, Stein JA said in Overton (at [71]) that the relationship between the Valuer General's determination and the ultimate award was "a relevant factor but one which rarely will be a determining one" on the costs issue. 16 In Yakas, Pain J observed that the applicant in Overton "was clearly unsuccessful" and that Stein JA's comments were "directed at that circumstance". Her Honour proceeded to consider the situation in Yakas on the basis of the key time-consuming argument in the case, one regarding underlying zoning, on which the applicant was unsuccessful, despite having "an arguable case". Her Honour, nevertheless, ordered the respondent to pay the applicant's costs. 17 In various cases the final disposition of the costs question has involved the making of "special orders" to reflect particular aspects of the case and/or whether particular issues raised by applicants were won or lost. Nevitoro was one such case, as was Serbian, but see also, for example, Maloney v Cowra Shire Council [2000] NSWLEC 107, and Rukavina and Robertson v Wagga Wagga City Council (1993) 80 LGERA 8. 18 Pain J concluded her judgment in Yakas with a warning to applicants and their advisers that they should beware of lodging "large ambit claims" which "drop substantially at the hearing to a more realistic claim", as the claim may ultimately be held to be "frivolous", and (she implied) may sound in costs. 19 What failed in the present case were large claims by the applicants for site redevelopment costs and business losses (in terms of both profit and value). 20 I do not regard them as "frivolous" claims at all. They were "arguable" and "presented efficiently and economically" (Banno at 53). In the end I found them unsupported by authority or the evidence before the court as a whole. They certainly amounted to an "ambit claim", but I do not accept the submission that they were "grossly exaggerated", in the sense in which that term was used by Wilcox J in Banno, in conjunction with the words "vexatious" and "dishonest". 21 The applicants should be neither compensated nor penalised for putting such claims in all the circumstances of the case. The respondent does not seek its costs for resisting them, but, those claims having largely failed, the respondent cannot be expected to pay the applicants' costs of arguing them. Conclusion and Orders 22 Looking "realistically at the litigation", I cannot conclude that the applicant was "successful". 23 Accordingly, each party is ordered to pay its own costs of the proceedings, including (1) the costs involved in finalising the substantive orders to be made, and (2) the costs of the hearing on costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.