Most Read Contributor in Australia, September 2016
The recent decision of Heislers v Melbourne Water
Corporation  VCAT 1399 highlights the risk of adverse costs
orders being made against acquiring authorities in compulsory
acquisition cases, and given that risk, the need for acquiring
authorities to take steps to protect against that risk.
In compulsory acquisition cases, a successful claimant will
still have a strong claim for costs being awarded in the
claimant's favour even if the amount of compensation ultimately
awarded is much less than the claimants' claim.
For the effects of an easement for the Victorian desalination
plant pipeline, the Heislers claimed market value in the sum of
between $210,000 and $300,000. The Heislers also made other,
smaller claims, including for disturbance, solatium and
pre-referral expenses. The parties could not agree on the
compensation payable, and so the dispute was referred to the
Victorian Civil and Administrative Tribunal. The Tribunal assessed
the market value at $155,000, which was exactly the amount of
Melbourne Water's offer. With regard to the other items of
claim, the Tribunal awarded approximately $20,000 above the
original offer. Given the Tribunal's findings on market value,
one might say the result was a relatively good one for Melbourne
At the costs hearing, Melbourne Water claimed costs against the
Heislers, and the Heislers claimed costs against Melbourne
The Tribunal awarded costs in favour of the Heislers, albeit
with a 20% discount. The Tribunal observed comments made by the
Court of Appeal in Love v Roads Corporation  VSCA
434 that "the discretion as to costs in compensation
proceedings is tilted in favour of the claimant". The
Tribunal also had regard to the way in which both parties conducted
the case. Both parties made a number of criticisms of the other.
The Tribunal's key findings in terms of those criticisms are at
paragraphs 27, 28 and 39 of the decision.
Given the discretion as to costs in compensation proceedings is
tilted in favour of the claimant, for acquiring authorities, the
decision highlights the importance of giving early consideration to
'Calderbank offers' and/or offers of compromise at
an appropriate point in the litigation, to provide a measure of
costs protection to the acquiring authority.
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