Beginners Guide to Compulsory Acquisition (Part Two)

Compulsory Acquisition Hearings:

There is a long standing practice of conducting conferences between valuers (Valuers Conference) initially if there is a dispute where the valuers for opposing parties meet at an early stage in the process to discuss their opinions and the evidence upon which those opinions are based.

• Valuers will often arrive at an opinion of value based on a particular piece of sales evidence which may have escaped the attention of an opposing valuer.
• The valuers’ conferences often result in agreement as to sale rates or other aspects of a claim or, at the very least, a narrowing of the areas in dispute.
• A valuers conference is usually held in the presence of all parties and experts to try to resolve any difference.

If the Acquiring Authority and the owner of an interest in land cannot agree to the compensation amount then the matter is deemed to be in dispute and any part may initiate proceedings to have the dispute determined either in VCAT or in the Supreme Court of Victoria.

• Part 10 of the Act deals with determination of disputes. Section 80 provides:
  • The Authority or the claimant may apply to the VCAT Tribunal for determination of a disputed claim in accordance with this Act; or refer a disputed claim to the Court for determination in accordance with this Act.
  • Matters referred to the Supreme Court are heard by a single judge and for the most part the judge in charge of the Valuation, Compensation and Planning List.
  • Any case involving a substantial sum of money or complex legal issues generally finds its way to the specialist judge in the Supreme Court.

Example of future conduct of the matter:

The smaller less complex cases are conveniently dealt with by VCAT. The Tribunal is able to hear and determine cases more quickly and the lesser scale of costs (generally as per the County Court) mean that the costs of litigation and the risks associated therewith are lower.

• Further, the Tribunal is generally constituted by a legal member and one or more practicing valuers.
• The valuers bring a practical approach to the determination of the dispute.
• When conflicting valuation evidence is presented to the Tribunal, the expert members are well equipped to assess that evidence.
• If one or other party refers the disputed claim to the Tribunal, it is open to the responding party to seek to have the matter uplifted to the Supreme Court on the basis that it is particularly difficult or important. The Court will favourably entertain such an application in circumstances where a decision by VCAT is likely to be appealed by the losing party in any event.
• It is common practice in both the Supreme Court and the Tribunal to require that parties attend a mediation.
  • Quite apart from the obvious benefit of potential settlement of the whole of the claim, the mediation process allows scrutiny of much of the factual detail of the claim and the narrowing of areas in dispute. In claims involving, for example, a hypothetical subdivision analysis as a basis for calculating market value, the need to call engineering evidence is often avoided by agreeing the costs and expenses of the hypothetical subdivision during the mediation process.
• It is customary for the Court or Tribunal to give directions that detailed particulars of the claim and the offer be provided and that all evidence be presented in the form of witness statements or affidavits attaching or referring to all documents to be relied upon.
• There is no formal discovery process for disputed compensation claims. Because many claimants are not large corporations, the costs and risks of litigation are a major disincentive to pursuing a claim to court, let alone to judgment.

Costs in Compulsory Acquisition:

Costs are generally awarded to a claimant that recovers more that the sum offered by the Authority. As the Authority can and often does make a series of open and “without prejudice” offers, including VCAT Act section 112 and “Calderbank” offers; claimants are often put under significant pressure to accept what is offered, rather than risk a judgment that does not exceed an offer made by the Authority.

In addition to the compensation elements as outlined above in definitions please consider provision 11 in the Notice of Intention that Council will pay for all reasonable legal fees associated with the acquisition and resultant compensation claim. And provision 6 states that compensation will include any losses occurred by you for not being able to build on the land and the resultant profit from such works.

Those affected by a compulsory acquisition should be aware that although the Act entitles them to any legal, valuation and other professional expenses necessarily incurred to have a 3^rd and 4^th valuation may limit the likelihood that the all the reports will be considered necessary.

Claimants almost invariably, in the absence of dispute about liability, recover a greater quantum than that initially offered by the Authority. Even a settlement on the door of the court generally produces a better result than the initial offer.

A well recognised and reasonable head of claim is far more likely to prompt a reasonable offer from an Authority than one that attempts to break new ground.

Daniel Epstein of Counsel