Affinity Property Group Pty Ltd v Fraser Coast Regional Council
[2011] QLC 70
•11 November 2011 [Ex Tempore]
LAND COURT OF QUEENSLAND
CITATION: Affinity Property Group Pty Ltd & Ors -v- Fraser Coast Regional Council [2011] QLC 70 PARTIES: Affinity Property Group Pty Ltd
(applicants)v. Fraser Coast Regional Council
(respondent)FILE NOS: LGR699-10, LGR700-10, LGR701-10, LGR702-10, LGR703-10, LGR704-10, LGR705-10, LGR706-10, LGR707-10, LGR708-10, LGR709-10, LGR710-10, LGR711-10, LGR712-10, LGR713-10, LGR714-10, LGR715-10, LGR716-10, LGR717-10, LGR718-10, LGR719-10 and LGR720-10
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Anna Nguyen and Tuan Bui
(applicants)
v.
Fraser Coast Regional Council
(respondent)LGR726-10
Anthony Solman
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR728-10
Michael Pearse
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR729-10
George Blackwood
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR733-10
Ajay Valanju
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR734-10
Prashant Menon
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR736-10
Agreedto Pty Ltd
(applicant)
v.
Fraser Coast Regional Council
(respondent)LGR737-10
DIVISION: General Division PROCEEDING: Application for Costs DELIVERED ON: 11 November 2011 [Ex Tempore] DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: His Honour, PA Smith ORDER: 1. The Appellants` pay the Respondents costs fixed in the sum of Two Thousand Five Hundred Dollars ($2,500) in total with respect to all appeals. CATCHWORDS: Costs – Discretion – Respondent totally successful in proceedings – “political” settlement achieved at client/client level APPEARANCES: Mr Tim Wright, Director of Affinity Property Group Pty Ltd
Mr John Butt, Solicitor, King & CompanySOLICITORS: King & Company Solicitors for the respondent
I have before me 29 matters which all relate to categorisation appeals between the Affinity Property Group and Others and the Fraser Coast Regional Council. Although there are technically 29 matters, the matters can more correctly be referred to as 22 units belonging to Affinity Property Group and seven units each held by individuals, so in a sense, eight matters, as Mr Butt has referred to, or even perhaps more correctly, one group of matters with a common purpose and intent.
The applications were first filed in the Court on 26th of October 2010. Following the normal procedures of the Court, the matters were set down for review and directions on the 29th of November 2010. That review and directions hearing did not proceed as the parties requested time for negotiations to occur. A subsequent directions hearing on 25 February 2011 also did not proceed so that those negotiations could be ongoing.
The upshot of the matter is that all appellants in this matter have now discontinued their proceedings against the respondent, subject to the resolution of the question of costs. The proceedings before me today have been argued solely on the point of costs.
Somewhat surprisingly, the appellants have all been represented throughout the 12 months that the matter has been before the Court by a firm of solicitors. However, in very recent times, those solicitors have formally withdrawn from the proceedings and all appellants are now represented by Mr Wright who is the sole director and, as I understand, the mouthpiece of Affinity Property Group Proprietary Limited.
Despite the fact that Mr Wright does not possess legal qualifications, and despite Mr Butt for the Fraser Coast Regional Council appearing today with comprehensive written submissions and affidavit material which Mr Wright had not previously had a chance to see, Mr Wright specifically advised that he was in a position to proceed with the hearing of the question of costs today.
On the manner in which Mr Wright has presented himself and argued his case, I am in no doubt that he is well-informed, fully understands, as best a lay person can, the submissions of the respondent, and has not been disadvantaged in having the matter proceed today. In this respect, I should commend Mr Wright for not taking an opportunity for further delay, but instead seeking to have the matter determined so that the parties can get on with their respective businesses.
The Fraser Coast Regional Council, through Mr Butt, has provided written submissions which, in my view, accurately summarise the law, both with respect to this case and generally as to costs. Relevant extracts from those written submissions are as follows:
“22. Section 18 of the Land Court Rules 2000 (the ‘LCR’) provides:
‘18 Costs
If an applicant discontinues or withdraws, the court may order the applicant to pay—
(a) the costs of the party to whom the discontinuance or withdrawal relates up to the date of the discontinuance or withdrawal, if the party has not consented to the discontinuance or withdrawal; and
(b) the costs of another party or parties caused by the discontinuance or withdrawal.’
23.Section 34 of the Land Court Act 2000 (the ‘LCA’) provides:
‘34 Costs
(1) Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate.
(2) If the court does not make an order under subsection (1), each party to the proceeding must bear the party’s own costs for the proceeding.
(3) An order made under subsection (1) may be made an order of the Supreme Court and enforced in the Supreme Court.
(4) For subsection (3), it is enough to file the order in the Supreme Court.
(5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court.
(6) If the court makes an order under subsection (5), the assessing officer may decide the appropriate scale to be used in assessing the costs.
24.Recent decisions do not require any special or exceptional circumstances in order to justify an award for costs to the successful party. On the contrary, recent Land Court decisions have emphasised the general rule that a successful party should be compensated by the unsuccessful party in respect of costs.
25.In PT Limited and Westfield Management Limited v Department of Natural Resources and Mines, the Land Appeal Court considered the power to award costs in appeals under the Valuation of Land Act 1944. The Court emphasised that observations in earlier cases ought not to be read as imposing a gloss on the legislation, mandating when the discretion ought to be exercised or declined to be exercised. Ordinarily, costs are not awarded to punish the unsuccessful party, but they are intended to be compensatory in that they are intended to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
26.The Court cited with approval observations of Keane JA in Tamawood Limited v Paans which concerned the awarding of costs under the Commercial and Consumer Tribunal Act 2003:
‘As discussed above, costs are not awarded to punish the respondent but, as far as they can, to compensate the appellants for their costs incurred in the litigation. In this context we agree with the observations of Keane JA in Tamawood Limited v Paans where his Honour said, albeit in respect of different legislation:
‘[30] First, the Tribunal found that each party was justified in engaging the services of legal representatives to assist them in the conduct and defence of what the Tribunal recognized to be complex proceedings. That finding alone could be, in my view, a sufficient basis to conclude that the interests of justice warranted the exercise of the discretion to award costs in favour of the successful party, at least in the absence of any countervailing consideration. …
[32] If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal.
[33] … In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome. …’
27.This broad approach to the discretion was also evidence in Hegira Limited v Department of Natural Resources and Water where the Land Court examined the general provisions of s34 of the LCA. The Court ordered costs in favour of the successful party in an interlocutory proceeding concerning an appeal against an unimproved valuation. The Court cited with approval the observations of McHugh J in Latoudis v Casey relating to the general rule that the successful party should be compensated by the unsuccessful party in respect of costs.
28.McHugh J, in the context of dismissal of summary criminal proceedings, has said (quoting more extensively than in the Land Court judgment in Hegira):
‘An order for costs indemnifies the successful party in litigious proceedings in respect of liability for professional fees and out-of-pocket expenses reasonably incurred in connection with the litigation. The rationale of the orders is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not make to punish the unsuccessful party. Its function is compensatory. Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings…
Once a legislature abolishes the rule that the Crown and those who institute summary proceedings in the public interest neither pay nor receive costs, the various rationales of that rule cannot be used to justify the exercise of the discretion to refuse to order the payment of costs of a successful defendant in summary proceedings. To use them in that manner is to ignore the purpose of the legislature in enacting the legislation…
But even when the discretion is uncontrolled, civil course act on the basis that a successful party has reasonable expectation of obtaining an order for costs and that the discretion to refuse to award costs should not be exercised against the successful party except for a reason connected with the case. Thus, if a plaintiff sues on two causes of action and succeeds on one, he or she will obtain the general costs of the action and the costs of the cause of action on which he or she succeeded, but the defendant will receive the costs of the cause of action on which he or she was successful …
Likewise, a successful defendant in summary proceedings has a reasonable expectation of obtaining an order for the payment of his or her costs because it is just and reasonable that the informant should reimburse him or her for liability for costs which have been incurred in defending the prosecution.’
Conclusion
29.In the circumstances, there is no reason to depart from the usual rules which apply, namely:
(a)on the discontinuance of an action, the party discontinuing the proceedings should pay the other parties costs of the proceedings;
(b)costs ordinarily should follow the event.
30.The rationale for an order for costs is that it is just and reasonable that the Appellants, who have caused the Respondent to incur costs of litigation, only to discontinue the Appeals after twelve (12) months, should reimburse the Respondent for the liability incurred. The order is not made to punish the Appellants, but to compensate the Respondent for the liability which it has unnecessarily incurred.
31.The Respondent’s original categorisation remains unchanged. The Respondent should be compensated for its costs of and incidental to the Appeals which the Appellants have discontinued.”
For his part, Mr Wright has also provided clear submissions as to why, in his view, the council should actually pay costs, but he concedes that fairness would dictate that there be no order as to costs in this matter.
Mr Wright's submissions are as follows:
“1. Council’s lawyer will say this was an appeal against categorisation. They say as there was no change to the category appealed and we are withdrawing we should therefore pay the costs.
2. This statement is misleading and only gives part of the picture.
3. Upon completion in 2009 with the first rates notice the Applicants units were rated as a single apartment - Category One.
4. For 2010 / 2011 Council changed categories to provide that duplexes, dual key units and resort units (an undefined term) shall be rated as 2 units.
5. The Applicants units are all dual key units.
6. Upon receipt of the new rate notices immediate negotiations were commenced with Council pointing out the inconsistency in rating policy and the unfairness of this approach – as the dual key unit is sill only one title and unfairness for many other reasons. Many examples of resort units (such as Peppers) were given which were not double rated. In the view of the Applicants the categorisation conflicts with Councils own policies.
7. Agreement could not be reached in the time frame required to lodge an appeal and the Appeal was filed. Every appeal against categorisation is a defacto appeal against the quantum of rates.
8. Negotiations continued directly between the parties. Correspondence settled by Rod Lister SC was provided to Council. At insistence by the Applicant Council put the issue on its November 10 Agenda as the Applicant was keen to resolve the matter and no cost to be unnecessarily incurred – but Council subsequently withdrew the matter from their agenda and to be discussed at budget meetings in 2011.
9. This matter should have been settled last November without incurring the costs for almost a full year.
10. In or about March 2011 Council amended its policy and categorisation such that dual key units are now rated in their own category and lower. In other words a rate reduction and change of category occurred. Please see attached council 2010/11 and 2012/13 which clearly shows the change in categorisation and change in $ value.
11. The result is a compromise. It is correct that the category was not changed to the category requested on appeal but this is largely because the Council has changed categories and the Applicant is left with a successful but compromise result.
12. Effectively the Council categorisation has changed. It would lead to a nonsense result for the appeal to continue in respect to policy which has changed. This should be a matter for mutual withdrawal. It would be grossly unfair to award costs against the Applicant in these circumstances.
13. At a practical level the matter has settled in the Applicants favour and the Council should pay the costs of the Applicant however the Applicants accept that a good faith and a fair result would be for each party to pay their own costs”
The key element that flows from my consideration of this matter is, of course, one of discretion. The Land Court, which is to be guided at all times by the provisions of section 7 of the Land Court Act, is a Court that must keep at its forefront the interests of justice and ensuring that all parties can come before the Court confident in a fair and just outcome without relying on legal technicalities to the greatest extent possible.
As I have remarked in other cases, the Land Court is referred to in some areas as the People's Court in this regard, and this is particularly relevant when it comes to matters between citizens and various arms of government relating to ownership of land and the rights and responsibilities that flow from such ownership.
The discretion to be exercised in this matter is not an easy one. I accept the legal submissions put forward by the respondent and the force of their submissions. I also accept the submissions by the appellants in that they were in a situation where they were seeking to have a categorisation scheme of the council changed for the ultimate purpose of having their rates liability reduced.
It does appear, on the face of the matter, that two things have occurred, and this is where the difficulty also arises. As regards the technical appeals, each of those appeals have been withdrawn and discontinued, and no change will occur to the rating or the categorisation of any of those properties for the time period of the appeal.
However, subsequent events by council which have occurred, it would seem, in a legal vacuum to some extent as far as the legal representatives of the respective parties are concerned (but there's nothing stopping clients speaking to clients in any legal proceedings), have resulted in a variation to the categorisation categories by the local authority, at least for the current rating period.
I can understand that, in lay terms, Mr Wright sees the change in categorisation categories as a win in the case and a concession by council, although, of course, as I already indicated, the submissions by Mr Butt are correct, that there has been no actual success by the appellants at all as regards the technical elements of this case.
In normal circumstances when matters of discretion are finely balanced, the compelling view can be to simply let the costs fall where they lie. The case at hand is slightly different because of the unexplained late withdrawal of the appellant's legal representatives, and this was a point specifically referred to by Mr Butt.
I am not, though, persuaded that this is a case where a general order as to costs should be made and the parties all incur substantial additional costs going through a legal process to have the costs of this matter determined in light of the complex nature of the dealings, both at a legal and at a political/client level of negotiations.
I can envisage some difficulty and some argument as to what costs are or are not properly claimable on a party and party basis. And, indeed, this is perhaps a classic case where the costs of arguing and determining costs could exceed the costs that are ultimately awarded at the end of the day. That is something I do not wish to put either party through.
In the circumstances then, I have another discretion which I am able to take, and that is to make a determination now as to the quantum of costs which I consider appropriate to determine the matter.
I am minded to make such a determination now in favour of the Fraser Coast Regional Council, but I must say, Mr Butt, before hearing from you as to what that quantum should be, that I am not minded to make a 100 per cent finding of what the party and party costs should be, nor am I looking at a nominal one dollar type finding as to costs. I have in mind a realistic amount that covers some of the Council's costs, without overly disadvantaging the appellant who I do see has had a matter resolved through a political process, which does have an impact on the outcome in this matter.
Following further submissions by the parties as to the appropriate quantum of costs, the Court determined the costs with respect to all appeals in the sum of Two Thousand Five Hundred Dollars ($2,500).
Orders
The Appellants` pay the Respondents costs fixed in the sum of Two Thousand Five Hundred Dollars ($2,500) in total with respect to all appeals.
HIS HONOUR PA SMITH
MEMBER OF THE LAND COURT
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