Congress Community Development and Education Unit Limited v Director-General, Department of Transport
[1998] QLC 52
•20 May 1998
LAND COURT
BRISBANE
20 MAY 1998
Re: Determination of Compensation
Resumption for future road requirement purposes -
Acquisition of Land Act 1967 and
Transport Infrastructure (Roads) Act 1991 -
Ref: A97-09
Congress Community Development and Education Unit Limited
v.
Director-General, Department of Transport
(now Department of Main Roads) RE: APPLICATION FOR COSTS
D E C I S I O N
Following entry of judgment in the above matter, on 13 March 1998, the respondent Director-General, Department of Main Roads, under cover of letter dated 14 April 1998 by way of a written submission made application for his costs of and incidental to the hearing of the matter. The Court Registry forwarded this submission to the solicitors for the claimant who responded, again by written submission under cover of letter dated 28 April 1998, seeking a finding that the respondent Director-General pay the claimant's costs of and incidental to the hearing and determination of compensation. Again the Registry forwarded the claimant's submission to the Director-General for final comment and the Director-General's written reply was received in the Registry on 7 May 1998.
Subsections (1) and (2) of s.27 of the Acquisition of Land Act 1967 conveys upon this Court the power to award costs consequent upon applications from either or both parties to an action involving the determination of compensation arising from land resumptions. The subsections read:
" (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 in 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."
Matters relevant to this resumption claim and the determination of compensation which have a direct bearing on the Court's consideration of the cost applications are:
(a)
The original claim for compensation by Congress Community Development and Education Unit Limited dated 27 April 1996 as filed in the Court Registry on 10 January 1997 was in the sum of $3,621,340. It was constructed so as to claim $364,000 for loss of land, $100,000 under the heading of severance, $3,136,000 for injurious affection and $21,340 for disturbance.
(b)
At the outset of the hearing of the matter in Townsville on 17 November 1997, counsel for the claimant sought leave to amend the claim for compensation to the sum of $1,646,295. Senior counsel for the respondent Director-General formally objected to the amendment on the basis that certain items in the amended claim ((iii), (iv), (v) and (vii)) had not previously been included in a claim, and the respondent was uncertain as to what additional costs might be occasioned in consequence of the need to meet a case which had not been foreshadowed. Notwithstanding this formal objection, the Court granted the claimant leave to amend the claim which was made up as follows:
Heads of Claim
(i) Land 2.788 ha (approx $55,000 ha) $154,000.00
(ii) Construction of buffer wall
4m high on 1.5 mound $700,000.00
(iii) Loss in value to remaining land by presence of buffer wall $89,000.00 (iv) Land for buffer wall 515 m x 16 m x ½ = .412 ha @ $55,000 ha $22,700.00 (v) Disturbance to ambience/concept $20,000.00 (vi) Architects costs for design changes $4,000.00 (vii) Cost to air-condition G/F 3 dormitory units $88,240.00 (viii) Loss of profitability $449,075.00 (ix) Interest on $285,700 @ 7.4% x 3.75 yrs $79,280.00 (x) Costs $40,000.00
$1,646,295.00
(c) Virtually at the end of the claimant's case, the claim for compensation was further and finally amended to the sum of $1,387,340 with the following particularisation: Heads of Claim
1. Value of land resumed at 11.3.94 (i) $154,000
2. Cost to construct buffer wall
• 4 m high on mound 1.5 m - as at 3.10.95 $595,000 ÷ 488 m = $1220 m
• Cost at 11.3.94 - less 4% = $1170 m • Length of wall 515 m - 150 m + 10 m = 375 m • Cost of construction 375 m as at 11.3.94
375 x $1170 = $438,750
• 2.5 m high as at 3.10.95 = $280 m • Cost of 11.3.94 less 4% = $270 m • Length of 2.5 m high wall 75 m + 150 m = 225 m • Cost of construction 225 m as at 11.3.94
225 x $270 = $60,750
• Total cost of wall at 11.3.94
$438,750 + $60,750 = $499.500 say (i) $500,000
• (Discount for deferred expenditure 1994 to 2010 16 years @ 5% offset by allowance for
escalation @ 5 - 7.5%)
3. Loss in value to remaining land by presence of buffer wall $89,000 deferred 16 yrs @ 5%
$89,000 x .458 = $40,762 say (i) $41,000 4. Land for buffer wall
375 m x 16 m x ½ = .3 ha @ $55,000 ha = $16,500
deferred 16 years x .458 = $7,557 say (i) $ 8,000 5.
Disturbance to ambience/concept (i) $ 20,000 6.
Architects' costs for re-design $ 4,000 7. Cost to air condition G/F
3 Dormitory units - 1994 (i) $124,000 (Discount for deferred expenditure offset by
allowance for escalation)8.
Loss of profitability $498,037 deferred from 1994 to 2002 - 8 yrs $498,037 x .677 = $337,171 say (i) $337,000 9.
Interest on $1,188,000 @ 5% x 3.75 yrs = $178,200 say $178,000 10.
Costs $21,340
$1,387,340
Note: (i) denotes that interest has been applied to this claim.
The amount of the valuation finally put in evidence by the constructing authority was $128,000 exclusive of any claim for disturbance items.
The judgment of the Court was for compensation in the following sums:
Loss in value of land due to resumption $450,000.00 Compensation for disturbance $21,317.50 Total Award of Compensation $471,317.40
It is submitted by the respondent Director-General that although the Court has a discretionary power to award costs, s.27(2) of the Acquisition of Land Act places a statutory limit on that discretion in that the discretion is only able to be exercised in favour of the party whose claim for compensation and/or valuation finally put in evidence is on the "right" side of the halfway point between the compensation claimed and the amount contended for by the constructing authority. In the present case, the halfway point I calculate to be $658,000
($1,188,000 plus $128,000 ÷ 2). It is to be noted that I have excluded from the claim for
compensation for this purpose items 9 and 10 (interest and costs). The judgment ($450,000) clearly falls below the midpoint calculation, and it is accordingly urged by the respondent that he should be benefited with an award of costs in his favour.
It is further submitted by the respondent that, notwithstanding the statutory limitation upon the exercise of discretion, the discretion of the Court to order costs is otherwise a very wide one, and that it has been said by the Land Appeal Court that often it may be necessary when considering whether or not to award costs, for the Court to examine the conduct of the parties as to whether or not one of them has behaved unreasonably and in such a way as to cause or make unavoidable litigation which would otherwise be unnecessary - vide Moyses & Ors v. Townsville City Council (1979) 6 QLCR 271. In that case the Land Appeal Court at p.274 said:
"First, we do not think that the presence of subsection (2) of Section 27 in the Act should be regarded as some sort of legislative suggestion that, where the claim is substantially more than the amount awarded, and the amount put in evidence by the 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. 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 more 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."
Now it is submitted by the respondent that costs should be awarded in his favour as the original claim in the sum of $3,621,340 was exorbitant, and unreasonably required him to have recourse to litigation which otherwise may have been unnecessary. Further it is submitted by the respondent that it is the original claim that should be considered by the Court in determining the respective positions of the parties for costs purposes. But in the alternative, it is also suggested that the amendment made to the claim at the commencement of the proceedings to the sum of $1,646,295 should also be seen as being exorbitant and unreasonably requiring the respondent to have recourse to what would be otherwise unnecessary litigation.
It is acknowledged by the claimant that the award of compensation ($450,000 plus interest - calculated by it at $153,000) plus $21,317.50 for disturbance - a total of $624,317.50 - was nearer to the amount of compensation contended by the respondent than to the claimant's final claim for compensation. But the claimant does seek its costs of and incidental to the hearing and determination of compensation, but in the alternative, if this application is unsuccessful, it contends that there should be no order as to costs.
The claimant suggests it would be wrong to conclude that the making of an offer to settle compensation should not be taken into consideration in determining the outcome of a costs application. It is submitted that the claimant sought to achieve a compromise of its claim by making a "without prejudice" offer conveyed by facsimile to the resuming authority on 11 November 1997. The facsimile reads:
" 'Without Prejudice'
Save as to Costs
Our client is prepared to settle this matter on the following basis in order to avoid a trial.
Loss of land component $160,000 Injurious Affection $300,000 Disturbance (costs of reports including legal costs to date) $30,000 In the event that this offer is not accepted we reserve our client's rights to produce this letter in support of any application for costs on behalf of our client in the event that this matter proceeds to a hearing."
It is to be noted that the offer to settle, exclusive of disturbance, is $460,000 (this compares with the determination by the Court of compensation in the sum of $450,000).
It is pointed out by the claimant in its written submission that its offer to settle was rejected by the respondent, and that, as a result, the claimant had no option but to proceed with its claim to the Court.
Now it is clear that, for the purposes of deciding costs applications, it is the "amount finally claimed by the claimant" which is to be used when considering the provisions of s.27(2) of the Acquisition of Land Act. Any doubt about this has been resolved by the decision of the Court of Appeal in Re: Claim for Compensation -Commissioner for Railways v. P & PD Buckler (1994-5) 15 QLCR 262 where at p.269 McPherson J.A. said:
"Stated in general terms, what the court is now required to do in fixing the incidence of costs under this rule is to look to the final positions taken up by the parties. In the case of the claimant, it is the quantum of compensation last claimed. Theoretically at least, this amount might not be known until the final address of counsel for the claimant. In practice, however, Section 24(2A) furnishes a disincentive against conduct like that. It does so by restricting the right to amend a claim once it has been filed in accordance with Section 24(2A) of the Act. Thereafter an amendment may be allowed; but on terms including payment of costs: see Section 24(3)."
I have carefully considered the submissions in this matter, and am persuaded by the claimant that its action in pursuing the matter in the Court was not unreasonable especially in view of the lack of response by the respondent to the "without prejudice" offer to settle compensation. Certainly the claimant markedly improved its compensation entitlement as a result of the litigation, although its claim was found to be exorbitant or even in part perhaps vexatious (example Item (viii) - loss of profitability). I should add that but for the provisions of s.27(2) of the Acquisition of Land Act which fetters the discretion of the Court in relation to costs awards, I would have been inclined to award costs to the claimant, notwithstanding the submission by the respondent that the offer was made only three working days prior to the hearing of the matter.
But, in the exercise of my discretion, in accordance with the provisions of s.27(1) of the Acquisition of Land Act 1967, I find it equitable that each party bear its owns costs of and incidental to the hearing and determination of compensation. It follows that I make no order as to costs.
CH CARTER
MEMBER OF THE LAND COURT
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