The Tribunal in Heislers v Melbourne Water Corporation [2014] VCAT 1399 ordered that Melbourne Water, as the acquiring authority of a pipeline easement related to the Wonthaggi desalination plant, pay 80% of the claimant’s costs in the proceeding. 

The amounts claimed and offered by the parties in relation to a compulsory acquisition claim are matters that may be considered by the Tribunal in determining an application for costs.  The order that Melbourne Water pay the claimant’s costs was made in this case notwithstanding that the Tribunal:

  • Upheld Melbourne Water’s assessment of market value, which was approximately 50% less than the upper amount of market value asserted by the claimant; and

  • In respect of other items of claim, the amount awarded by the Tribunal was only $20,000 more than that offered by Melbourne Water.

In making its order for costs, the Tribunal referred to the relevant decisions of the Victorian Supreme Court which establish a strong inference that a claimant whose land has been affected by compulsory acquisition should be able to recover its costs.  The Tribunal referred to the Court of Appeal in Love v Roads Corporation [2011] VSCA 434 which identified that the ‘starting point’ for the exercise of discretion as to costs is that the ‘dispossessed owner should recover the costs of making the claim’ and the discretion is ‘tilted in favour of the claimant’.  The Tribunal also referred to Secretary to the Dept of Business and Innovation v Murdesk Investment Pty Ltd [2012] VSC 586, where the Court confirmed that there must be ‘strong justification’ for awarding costs against a claimant and this will only occur in ‘special cases’.

The Tribunal did apply a 20% discount to the claimant’s application for costs in the Heislers proceeding. This decision was made having regard to the conduct of the parties, the Tribunal holding that the claimant’s case could have progressed more efficiently and involved less time and expense in relation to some matters of dispute between the parties.

Acquiring authorities should have regard to the real risk of adverse costs orders, notwithstanding the underlying merits of the claim, when making decisions regarding their conduct in compulsory acquisition proceedings.

For more information contact:

Greg Tobin
Harwood Andrews
T: 03 5225 5252

Deborah Mann
Special Counsel
Harwood Andrews
T: 03 5226 8551