Chief Executive, Department of Main Roads v Hammercall Pty Ltd
[2001] QLC 39
•15 May 2001
[2001] QLC 39
LAND COURT
BRISBANE
15 MAY 2001
Re: Claim for Compensation
Resumption for Transport Purposes
Acquisition of Land Act 1944
A98-13
Chief Executive, Department of Main Roads
Applicant
v.
Hammercall Pty Ltd
Respondent
APPLICATION FOR COSTS
(1) Consequent upon the decision on the judgment on compensation due in the above matter, submissions were received in respect of the awarding of costs to the applicant. There were no appearances on the matter on costs, and both parties agreed that costs should be determined on the basis of the written submissions supplied and exchanged by the parties. Counsel for the applicant was Mr RS Jones; and Counsel for the respondent was Mr B Cronin.
The History of the Claim -
(2) Following resumption of the land on 24 November 1995, the claimant lodged a claim with the Land Court for $1,571,760, including loss of land at $1,200,000, and disturbance items of $371,760. During the hearing leave was granted to amend the claim to $1,125,720, including land at $790,000, and disturbance items of $335,720, plus interest to be determined.
(3) The amount contended by the respondent was for nil compensation as a
consequence of the resulting betterment to the remaining lands.
(4) The finding of the Court on 21 September 2000 was for an amount of
$383,030, including land at $337,750, and disturbance items of $45,280, plus interest
to be determined. Those figures form the basis of any decision on costs in the matter.
The Applicant's Submission -
(5) The applicant argues that costs should be awarded in its favour noting the following reasons:
On the face of the judgment the claim could only be categorised as being greatly exaggerated in the sense of making litigation unavoidable. The claim was also clearly exaggerated when compared to the amount finally awarded as compensation.
It is also apparent that the case as run by the claimant was significantly
flawed for a number of reasons including:
(a)
the failure of the claimant to recognise properly that in the after case the property was significantly enhanced;
(b)
contending that the proposed Bermuda Street extension severed the subject land;
(c)
seeking to recover construction costs from the respondent which were clearly associated with the normal development of the land.
Relevantly, the evidence of most of the expert witnesses called by the respondent were preferred in respect of a number of substantive issues, including:
(a) the superior access in the after case; (b)
the evidence of the respondent as to the before value of the land was accepted;
(c)
the evidence of the respondent as to the after value of the land was accepted subject to being discounted for delays for access;
(d)
notwithstanding the finding that the Bermuda Street extension formed a part of the relevant "scheme" it formed no part of the actual resumption and caused no severance;
(e)
the claim for engineering costs in the sum of $105,500 was clearly associated with the commercial development of the land.
It was a central part of the claimant's case that the subject land was severed as a direct consequence of the resumption. This issue occupied a significant part of the hearing of the case. It is submitted that, from the outset, the position adopted by the claimant was bad in fact and in law. The respondent should not be effectively punished by having to bear its own cost of the action in such circumstances.
On any objective view, it could only be concluded that the respondent was substantially successful in defending the claim against it. Or, to put it another way was substantially vindicated by the Court in respect of the appropriate methodology of valuation principles. This is particularly highlighted by the findings on the severance and disturbance claims.
There are no facts or circumstances as to the "behaviour" on the part of
the respondent which would deny it being entitled to costs.
The Respondent's Submission -
(6) The respondent argues that there should be no award as to costs, bearing in mind the following factors in this matter:
The litigation involved in the claim was unavoidable and the claimant would always have had to go to Court in order to recover compensation.
The conduct of the respondent has, regardless of the claim, meant that
litigation was unavoidable. The amount of compensation awarded was $383,030, and that is a
substantial sum, particularly having regard to the amount finally
claimed, it represents over 34% of the claim.
There was no evidence of any advance being made and there was no evidence of any offer being made. It was always necessary for the claimant to have to go to trial in order to recover compensation.
Although some determinations were made in favour of the respondent, some significant determinations were also made in favour of the claimant.
It was never contended that the southern extension of the road had been resumed and that actual severance was created by the resumption. It was contended that severance arose by way of injurious affection following the resumption for the purposes of the scheme.
The impact of injurious affection is still a live matter before the High
Court in another matter. The values in the "before and after" situation rested upon the preferred
approach of the two respective valuers. Delay associated with access had always been an issue, and was never
seriously contested by the Department.
The Legislation -
(7) The general powers of this Court in respect of the awarding of costs are to be found in s.34 of the Land Court Act 2000, which relevantly states:
Costs
"appropriate.
34.(1) Subject to the provisions of this or another Act to the contrary, the
(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.
…
(5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court, under the scale of costs prescribed by law for proceedings in the Supreme Court."
(8) Those powers replaced the previous powers enshrined in s.41(9) of the Land Act 1962, and are now enforced under s.85 of the Land Court Act 2000 which states:
"85. A proceeding started in the Land Court before the commencement of section 4 may be continued and completed by the Land Court under this Act."
(9) Any costs are further directed under s.27 of the Acquisition of Land Act 1967 which states:
"27 Costs
(1) Subject to this section, the costs of and incidental to the hearing and
determination by the Land Court of a claim for compensation under this
Act shall be in the discretion of that court.(2) If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than to the amount of the valuation finally put into evidence by the constructing authority, costs, (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority."
(10) In considering the actual quantum of the amounts claimed, I note that it is the final position taken by the parties which is important. (Commissioner for Railways v. Buckler [1996] 1 QdR 18 at 23, per McPherson JA).
(11) However, while the discretion of this Court is entirely unfettered, it must be exercised judicially, and by reference to the relevant considerations of the matter. (Townsville City Council Moyses & Morris & Ors (1979) 6 QLCR 271, at 273).
(12) The general power to award costs was considered by the Full Court of the Supreme Court of Queensland in Wyatt v. Albert Shire Council [1987] 1 QdR 486. The Full Court also considered the scope of a section of legislation which gave the Local Government Court power to "make such order as it thinks fit as to the costs of any proceeding before it", which it saw as essentially the same as the power conferred upon the Land Court, and which was described by the Full Court as "complete" (p.488).
(13) In seeking to understand the exercise of a judicial nature, I note in Wyatt the Full Court found at p.489:
"That can only mean for reasons that can be considered and justified. In saying that, we do not intend to imply that reasons must always be given for awarding or withholding costs. In some, perhaps many cases the matter may be so obvious as not to require explanation in the form of stated reasons. In such cases the findings themselves will ordinarily afford reason and justification for the decision on costs that follows. But where what has been done appears to lack rational justification either in the findings or in the reasons expressed for it, a question may arise whether the decision has been arrived at judicially. It may then be open to review the decision on costs as involving error or mistake of law."
(14) In seeking also whether there were any rules which should be applied in exercising the discretion of the Court, I note the findings of the Land Appeal Court in Townsville City Council v. Moyses & Morris etc (supra) at p.274 where the Land Appeal Court followed the guidance outlined in Middleton v. Freier & Ors (1958) QdR 351 where Philp J, speaking for the Full Court said at p.357:
"… where an unfettered discretion is given by statute or a rule no court can by its decision impose conditions upon the free exercise of that discretion by another court …"
(15) However, in Moyses the Land Appeal Court went on to explain the nature of the
judicial decision at p.274:"Second, where the Court is considering whether it should award costs to an authority, it could be wrong to have regard merely to the amounts of the claim and of the award and of the value put in evidence by the authority. We would think that usually it would be relevant to enquire whether the conduct of the claimant, including his making of an exorbitant claim, if he has made one, has been such as to force the authority; unreasonably and unnecessarily, into litigation."
(16) I am also reminded that compensation cases arising from compulsory acquisition of land is distinguished from the ordinary litigation where costs follow the event, due to the inherent right to receive compensation bestowed by the legislation. (The Minister for the Environment v. Florence (1980-81) 45 LGRA 127, at 149-159).
(17) The general principles governing the awarding of costs were identified by the Land Appeal Court in Yalgan Investments Pty Ltd v. The Council of the Shire of Albert (1997-98) 17 QLCR 401, and summarised at pp.406-408.
(18) Relevant additional considerations from Yalgan in the current matter include:
In general, a party who is wholly successful in litigation can expect an order for costs in his favour. Where compensation is awarded to one who has already been given, by statute, the right to receive it, it is just to say that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation, ie ex hypothesise his due.
But costs are discretionary and no hard and fast rules will be allowed to occupy part of an area controlled by discretion, however predictable the result of its exercise may be in certain sorts of cases. In some cases, the Land Court may consider that there are sufficient reasons for departure from the general rule.
Although the exercise of the power does not exclude resort to "settled practice" of a court where such a practice has evolved, a purported exercise of discretion which fails because the mind is closed to relevant considerations through a rigid adherence to preconception involves an error of law that is open to correction on appeal.
Section 27(2) of the Acquisition of Land Act should not be regarded as a legislative suggestion that, where the claim is for substantially more than the amount awarded, and the amount put in evidence by the constructing authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding any costs to the claimant but should award costs to the authority.
Where the Land Court is considering whether it should award costs to a constructing authority, it could be wrong to have regard merely to the amounts of claim and of the award and of the value put in evidence by the authority. Usually, it would be more relevant to inquire whether the conduct of the claimant (such as eg making an exorbitant claim) has been such as to force the authority, unreasonably and unnecessarily, into litigation … or whether the claimant has pursued a vexatious, dishonest or greatly exaggerated claim, or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court.
(19) I am also directed to decisions of this Court where costs have been awarded where a party has been substantially successful, as reported in Boral Bricks (Qld) Ltd v. Director-General, Department of Main Roads (A97-23) 4 June 1999, unreported and Shellray Pty Ltd v. Chief Executive, Department of Main Roads (A98-27), 21 December 1999, unreported.
(20) I note also that a different view was adopted in Heavey Lex No. 64 Pty Ltd & Anor v. Chief Executive, Department of Transport (A97-43), 16 March 2000, unreported. In Heavey Lex the learned Member distinguished Boral, concluding that a test had been applied in that case to the constructing authority which, in his opinion, was intended to apply only to the claimant. The learned Member sought support in such a conclusion in Banno & Anor v. Commonwealth of Australia (1993) 81 LGERA 34, at p.53.
(21) However, in the end in Heavey Lex the learned Member awarded partial costs of the hearing on disturbance to the respondent to the extent of two of the three days of the hearing. That reflected that, while the claimant had been unsuccessful overall in the matter of disturbance, it had been partly successful on some of the disturbance claims for legal fees and professional costs.
Decision:
(22) Before considering implications on costs I look first to the key issues separating the parties.
(i) Was the Claim greatly exaggerated?
(23) The amount finally claimed by the appellant was $1,125,720, and the amount settled by the Court was $383,030, or 34% of the amount claimed. The amount contended for by the respondent was nil. That the claimant did receive an amount of compensation, in spite of the respondent's assertion that no moneys were due because of enhancement, provides some evidence of the success of the claim.
(24) The claimant also notes that two requests for an advance against compensation were ignored by the respondent, demonstrating, in the claimant's opinion, the intractable nature of the respondent towards settling the claim. However, from the respondent's perspective, if he believed that there should be nil compensation, then any advance of moneys would be contrary to the respondent's conclusion.
(25) The evidence shows that there had been no offers of advances against compensation, and there had been no advance given as a step in settling the matter. On that basis the claim for compensation by the claimant must be seen in the light of his seeking redress for the loss of his land. The amount finally awarded by the Court would suggest that the claim was not greatly exaggerated, as the principles involved in the matter, and the way it was argued, and not just the amount involved, are the more significant determining features for consideration. (See Chief Executive, Department of Transport v. Nadco Pty Ltd (to be reported).
(26) In the Nadco matter the Land Appeal Court rejected the appeal against the amount of compensation awarded, but overturned the awarding of costs to the claimant, noting the belated amendment of the claim by the claimant late in the hearing of the matter. Each party was then directed to pay their own costs in that matter.
(27) In considering whether the quantum claimed by the claimant was exaggerated, it must be borne in mind that it is the loss to the owner which has to be estimated. That was directed by the High Court in The Moreton Club v. The Commonwealth (1948) 77 CLR 253, where Dixon J said at 257:
"It must, however, be steadily borne in mind that compensation depends upon the value to the owner dispossessed. It is the owner's loss that is to be estimated and that may be done in various ways. 'In cases of compulsory acquisition the value to the owner may, according to the circumstances, be proved in more ways than one, but a very common way is to base it upon, though not necessarily to confine it to, the market price - that is, the price which a willing buyer would give to a willing seller who was desirous of getting rid of the property and had made his preparations accordingly. In cases of compulsory acquisition, however, an owner may be able to show that the value to him is something more than such market price, and in such cases he may adopt one of two courses. He may either set out in detail or possible elements making up the value to him, or he may with regard to some incidental expenses and claims give general evidence indicating that a lump sum should be allowed in respect of a number of matters with relation to which it would be difficult or an unnecessary waste of time to go into details.'"
(ii) Did the Claimant act reasonably?
(28) The applicant in this matter argues that the case run by the claimant was significantly flawed because it failed to recognise that the balance of the subject land after the resumption was significantly enhanced; that the Bermuda Street extension did not sever the subject land; and that seeking to recover construction costs from the respondent for matters clearly associated with the development of the land was not appropriate.
(29) The claimant argues that while the decision of the Court made some determinations in favour of the respondent, it also made others in favour of the claimant. This, it argues, supports that the claimant had acted reasonably in pursuing its case.
(30) The claimant notes that the decision of the Court rested upon its preference for the evidence of the respondent's valuer (Mr Parsons), but the impact of delays for the claimant in seeking access to the lands was approved in the evidence of Mr Hamilton for the claimant, and not seriously contested by the respondent. The claimant also notes that the reason for refusing the claim for the construction of the temporary access road had never been clearly articulated by the respondent, prior to the need to air the matter at the hearing.
(31) In respect of the claim for injurious affection arising from the "scheme", the claimant argues that an impending decision of the High Court in Marshall v. Department of Transport (1999) QCA 430, has still to be resolved, particularly in respect of the same points raised in an appeal against the current matter. On that basis it is clearly an issue of some moment, and the claimant must be seen to have acted reasonably in the current matter in raising the issue at the hearing.
(32) A similar conclusion would also apply in respect of the claim for substantial engineering costs associated with the design and documentation of the southern connection road and the service road.
(33) On the above understanding, I believe the claimant has acted reasonably in this matter.
(iii) Did the Respondent act reasonably? (34) The respondent argues that there were no facts or circumstances as to
behaviour on the part of the respondent which should deny its entitlement to costs.
(35) The claimant responds by noting that the position of the respondent in respect
of the value of the resumed land at nil has been entrenched since two months after the
date of resumption in January 1996. The claimant also argues that the respondent
failed to respond to a request for a settlement on two occasions, and at no time did the
respondent indicate the basis upon which it had determined that no compensation was
due.
(36) The internal memorandum of the respondent of 1 July 1998 (obtained by
Freedom of Information), reveals that the respondent believed that legally the
applicant was required to dedicate the resumed land free of cost to the respondent, as
a condition of the rezoning of the land in 1990. However, that rezoning was not
formally ratified by an agreement between the former owners and the Albert Shire
Council, and those conditions did not run with the land when it passed to the claimant
in September 1994.
(37) The matter of whether the claimant would have subsequently been required to
dedicate the subject land is now not an issue, as it was resumed by the respondent
prior to any attempt to further develop the land. The historical presumption by the
respondent that the land should be obtained free of cost would appear to be a key
issue in its approach to settling the matter.
(38) The matter of access to the western severance of the subject land, and the
protracted nature of determining its final approved form, was a key issue contributing
to the dispute between the parties. While failing to respond to the requests for access
by the claimant since May 1998, final agreement was not forthcoming from the
respondent until the letter of 25 January 2000. I believe the failure to obtain approved
access would have been a matter weighing heavily upon the mind of the claimant in
its decisions as to how it could settle the matter of compensation.
(39) The claimant argues that the respondent appeared to seek to tie the matter of
compensation at no cost into the provision of access, referring in particular to Exhibits
17, 39 and 43. However, the relevant document in those exhibits would appear to be
not inconsistent with the general position of the respondent Department where
dedication of land is usually required at no cost where access to a highway is
contemplated.
(40) In considering the actions of the respondent, I believe he has acted reasonably,
and consistent with his understanding of the provision of land for the Bermuda Street
extension at no cost. I believe that view was demonstrated in the draft ministerial
reply of 28 August 1995 (Exhibit 39). However, I see no evidence of any link
between the road closure procedures for the temporary access road in Exhibit 43 and
the matter of compensation.
(41) That the subsequent valuation by Mr Parsons of the resumed land was
estimated at nil value due to enhancement would appear to be fortuitous, but a
separate matter.
(iv) Was the Respondent substantially successful?
(42) The respondent argues that the decision of the Court substantially vindicated the principles and methodology of the respondent, particularly in respect of severance and disturbance.
(43) The respondent notes that its evidence was preferred in respect of the superior access in the "after" situation; the value of the land in the "before and after" situations, except for a discount applied in the "after" situation for delays in obtaining access; and the rejection of the claim for engineering costs associated with the commercial development of the land. While the Bermuda Street extension was found to be part of the relevant "scheme" it was found to form no part of the actual resumption.
(44) The claimant argues that the litigation was unavoidable in view of the respondent's entrenched opinion that compensation should be nil. It also argues that an awarding of costs to $383,030 demonstrates that the respondent was not substantially successful, where it had previously argued for nil compensation. Because of the complex and numerous facets of the case it is argued that the Court was always likely to have to resolve the matter.
(45) In respect of whether there were any special circumstances associated with this matter, which would otherwise condition the awarding of costs, I note the findings of Shellray (supra) at pp.9-11 and also p13 and p.14. In the current matter I believe that the actual quantum of the amount determined is a relevant issue for awarding costs under s.27(2) of the Acquisition of Land Act 1967, where there were no special circumstances to dictate otherwise.
(46) On the evidence supplied, and balancing the outcomes and the behaviour of the parties, I am not persuaded that the respondent is not entitled to the normal rule that costs should follow the event. As the final amount ordered is nearer to the amount finally led by the respondent than that submitted by the claimant, I order that the claimant pay to the respondent the costs of and incidental to the hearing and determination of the claim for compensation, the amount of such costs to be ascertained and fixed by the Registrar of the Supreme Court in Brisbane, pursuant to s.34(5) of the Land Court Act 2000.
NG DIVETT
MEMBER OF THE LAND COURT
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