Kingston v Head, Transport for Victoria; Jomaring Pty Ltd v Head, Transport for Victoria (No 2) [2024] VSC 231
In this case, expert evidence was rejected by the court because it was based on assumptions that were unsupported by a reasonable interpretation of the law and/or the evidence.
Background
These were two proceedings where the plaintiffs were successful in their claim for increased compensation in relation to the compulsory acquisition of two land holdings located in Dingley under the Land Acquisition and Compensation Act 1986 (Vic). They sought payment of their costs of the proceeding on a standard basis.
The defendant, Head, Transport for Victoria (the Authority), opposed the claim and in turn, sought its costs of the proceeding on a standard basis to the date of the expiry of its Calderbank offer. Thereafter, it sought its costs on an indemnity basis.
Expert Evidence
During mediation, the plaintiffs' valuer, Mr NH, expressed the opinion that the 'C' value (combined, for both properties) was $39,865,000, based on assumptions most favourable to the plaintiffs. Meanwhile, the Authority's valuer, Mr MW, expressed the view that it was $2.3 million based on assumptions most favourable to the Authority.
During trial, the Authority identified certain conduct of the plaintiffs that was relevant to the determination of costs, one of which is the briefing of their valuation expert Mr NH. The Authority was of the view that the plaintiffs gave 'manifestly inappropriate' instructions to Mr NH, which was 'unreasonable conduct' on their part.
Under Section 91(1)(b)(i) of the Land Acquisition and Compensation Act 1986 (Vic), the court is required to take into consideration the extent to which the proceedings have arisen from, or been affected by, unreasonable conduct by any of the parties.
According to the Authority, the plaintiffs' instructions to Mr NH were unreasonable because he was instructed to make presumptions not supported by a reasonable interpretation of the law or the evidence. The Authority submitted that Mr NH was instructed in this way because the plaintiffs wished to establish that the permanent trustee land was worth considerably more than the amount for which it was sold.
The plaintiffs submitted that Mr NH was not told to assume these matters, only to consider them as possibilities and decide for himself. According to the plaintiffs, any unreasonableness in instructing Mr NH has not relevantly affected the proceedings or the costs incurred by the Authority.
The Authority countered that the instructions relevantly affected the proceedings as, had Mr NH not been instructed as he was, he would not have disputed the amount of sales. There would then have been no cause for dispute between the parties as to the 'B' value and there would have been substantial costs savings.
Quigley J found that the plaintiffs' decisions and actions unnecessarily added to the costs burden and time taken in the proceedings, which properly ought to have costs consequences. The court ruled that because of this, the proceedings have been adversely affected in several ways. The submissions of the Authority in respect of the briefing of Mr NH were accepted by the court and taken into account in the overall decision as to costs, as a factor against the plaintiffs.[234]
The court found that the manner of instruction given to Mr NH amounted to unreasonable conduct and conduct which adversely affected the incurring of costs and/or delay. [317] The court ultimately did not accept Mr NH's evidence, as it was not only influenced by the instructions he had been given, but also not soundly based on contemporaneous comparative sales.[319]
Key Takeaways:
· Assumptions given to experts should be supported by a reasonable interpretation of the law and the evidence.
· The improper manner of briefing and instructing experts may amount to unreasonable conduct, having an adverse effect on the proceedings, where parties may incur costs and/or delay.
Read the full decision here.
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