Department of Main Roads v Townsville City Council
[2004] QLAC 111
•17 December 2004
LAND APPEAL COURT OF QUEENSLAND
CITATION: Department of Main Roads v Townsville City Council & Anor [2004] QLAC 0111 PARTIES: Chief Executive, Department of Main Roads
(appellant/applicant)v. Townsville City Council and Delfin Lend Lease Limited
(respondents/appellants)FILE NO: LAC2004/0093 DIVISION: Land Appeal Court of Queensland PROCEEDINGS: Applications for costs of rehearing application and appeal AND costs of application for leave to adduce further evidence at hearing of appeal, AND costs of rehearing ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 17 December 2004 DELIVERED AT: Townsville HEARD AT: Written Submissions JUDGE
MEMBERSCullinane J
Mr JJ Trickett, President
Mrs CAC MacDonaldORDERS: 1. The order of Mr RP Scott made on 19 March 2004, that the costs of Townsville City Council and Delfin Limited in respect of the rehearing application are to be paid by the Chief Executive, Department of Main Roads, such 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, is affirmed.
2. The appellant is to pay the respondents' costs of the appeal against the refusal of the application for leave to have the matter reheard.
3. The appellant is to pay the respondents' costs of the application for leave to adduce further evidence at the hearing of the appeal.
4. The appellant is to pay the reasonable costs of the respondents of the pending rehearing, limited to those costs over and above the costs that would have been incurred by the respondents in responding to the evidence and submissions of the appellant if they had been raised at the hearing of the compensation claim.
5. In (2), (3) and (4), the amounts of such costs are 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.
CATCHWORDS: Costs – Normal rule not followed – Appeal on a rehearing application – Exceptional circumstances – Conduct of appellant at original hearing criticized – Costs awarded against successful appellant COUNSEL: Mr MD Hinson SC and Mr RS Jones for the appellant/applicant
Mr PJ Lyons QC and Mr R Needham for the respondentsSOLICITORS: Crown Solicitor, Crown Law for the appellant/applicant
Wilson Ryan & Grose for the respondents/appellants
By decision handed down on 10 October 2003, the Land Court determined the compensation payable by the Chief Executive, Department of Main Roads (the appellant) in respect of the resumption of certain land owned by Townsville City Council and Delfin Lend Lease Limited (the respondents) in the sum of $5,377,898.
The appellant and the respondents have appealed against that decision. Those appeals have not yet been heard.
The appellant also applied to the Land Court, pursuant to s.12(1) of the Land Court Act 2000, for leave to have certain aspects of the matter reheard, and to this Court, pursuant to s.56 of the same Act, for leave to adduce further evidence at the hearing of the appeals. The purpose of both applications was to enable the appellant to challenge the respondents' engineer's calculation of the difference in road costs between the hypothetical development of one section of the resumed land, Parcel B, before the resumption as compared with the costs of development post resumption. For Parcel B, compensation for the loss of land, severance and injurious affection was determined at $3,751,000. In determining that aspect of the compensation, the learned Member accepted the respondents' engineer's evidence that the difference in costing of the major road system before and after the resumption was $1,717,187.
On 19 March 2004, the Land Court refused the application by the appellant for leave to have certain aspects of the matter reheard. The Court also ordered that the costs of the Townsville City Council and Delfin Limited in respect of the rehearing application were to be paid by the Department of Main Roads, such 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.
By decision handed down on 27 October 2004, this Court allowed an appeal against the refusal of the application for leave to have certain aspects of the matter reheard and decided that it was unnecessary to deal with the application for leave to adduce further evidence at the hearing of the appeals.
The appellant has now applied to this Court for the following orders:
1.That in respect of the rehearing application before the Land Court Member, the Chief Executive, Department of Main Roads, pay the costs of the Townsville City Council and Delfin Lend Lease Limited of and incidental to that application.
2.That in respect of the appeal to the Land Appeal Court against the refusal of the rehearing application, Townsville City Council and Delfin Lend Lease Limited pay the costs of the Chief Executive, Department of Main Roads of and incidental to that appeal.
The appellant has also submitted that no order should be made concerning the pending rehearing, because any submissions as to costs, following the determination of the rehearing, will be dependent upon findings on the merits of the parties' respective cases and are properly left to the discretion of the Land Court Member who will rehear the issue.
The respondents have submitted that the following orders should be made:
1.That the appellant pay the respondents' costs of the appeal against the decision of the Land Court refusing the application to have the matter reheard and the application to this Court under s.56 of the Land Court Act 2000.
2.That the appellant pay the respondents' costs of the rehearing application in the Land Court.
3.In the alternative, that the costs (including the costs of the appeal and application) should be reserved as costs on the rehearing.
4.That the appellant pay the respondents' costs of the rehearing on an indemnity basis.
5.In the alternative, that the grant of leave be on terms that the appellant pay the respondents' costs of the rehearing on an indemnity basis.
Section 34(1) of the Land Court Act 2000 (the Act), which applies to applications for costs in the Land Appeal Court by virtue of s.72 of the Act, provides that:
"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, under the scale of costs prescribed by law for proceedings in the Supreme Court.
(6) If the court makes an order under subsection (4), the assessing officer may decide the appropriate scale to be used in assessing the costs."
Section 27 of the Acquisition of Land Act 1967 provides that:
"27.(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.
(3) Subsection (2) does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to section 24(3) or section 25(3)."
Costs of appeal against refusal of leave to have certain aspects of the matter reheard
The appellant was successful in this appeal and has submitted that the respondents should pay the Chief Executive's costs of and incidental to that appeal on the basis that costs should follow the event of a successful appeal.
The respondents have submitted that they should receive their costs of the appeal essentially because, in the circumstances of the matter (which are set out in detail in the decision of this Court in Department of Main Roads v Townsville City Council [2004] QLAC 0093 (Reasons for Judgment)), there was fault on the appellant's side and no fault on the part of the respondents.
The effect of s.34(1) of the Act and s.27(3) of the Acquisition of Land Act is that the Land Appeal Court has a free or unfettered discretion as to the costs of and incidental to an appeal before it (Barns v Director-General, Department of Transport (1997) 18 QLCR 133, at 135). That is not to say, however, that the discretion may be exercised in an arbitrary manner, but rather, it must be exercised judicially that is for reasons that can be considered and justified, by reference to relevant considerations (Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997-98) 18 QLCR 166 at 197, 198; Wyatt v Albert Shire Council (1987) 1 QdR 486 at 489). In Barns, the Land Appeal Court said (at 135) that in a case such as that, where a landowner had been successful, on appeal, in obtaining an increased award of compensation in a land resumption matter, the general rule is that, prima facie, costs will usually follow the event. The Court also said (at 136) that the authorities justify some flexibility in the application of the general rule against a dispossessed owner, but they do not support a departure from the rule as against a resuming authority in circumstances where the rule would ordinarily be applied.
There is no provision in the Land Court Act which expressly provides that costs may be awarded against a successful party and we have been unable to find any case similar to this, in this jurisdiction, where such an order has been made. However, it has been held in the general Courts that there is jurisdiction to make such an order.
In Knight v Clifton [1971] 2 All ER 378, the Court of Appeal held that the Court had jurisdiction to award costs against a successful defendant under the relevant English legislation which, like s.34(1) of the Act, gave the Court a full discretion as to the award of costs in a proceeding. Members of the Court accepted (at 386, 390 and 396) that it would only be in an exceptional case that an order for costs against a successful defendant could be made. Sachs LJ said (at 389) that it was inevitable that, from time to time, there must arise instances in which the justice of the case demanded that a successful defendant should pay the costs of the proceeding, although this would only happen rarely. He went on to say (at 390) that it was impossible as well as undesirable to attempt to define what constituted a strong or exceptional case but it could include occasional rare cases in which the conduct of the defendant had brought about the proceeding, or in which he caused its continuance, or in which he escaped the usual consequences of his blameworthy conduct by reason of some unexpected matter, which he knew but which the plaintiff could not know. In practice, he said, the borderline between where a court may order that a wholly successful defendant is not to be paid costs and those where it may order him to pay the plaintiff's costs may prove difficult to define. It may well simply depend on a question of the degree of weight to be given to the relevant facts.
In Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129, the Full Court of the Supreme Court of Victoria applied the decision in Knight v Clifton and upheld an order by the trial judge that the successful defendant to a claim under a marine insurance policy was to pay the plaintiff's costs up to the conclusion of the first day of the trial of the action, to be taxed on a solicitor own client basis. The relevant Rules of Court gave the judge a full discretion to determine by whom and to what extent the costs were to be paid. As Ormiston J pointed out, (at 174), the effect of the trial judge's order was that the successful defendant suffered three penalties – (1) it was deprived of any costs of defending the action successfully, (2) it was ordered to pay the unsuccessful plaintiff's costs of the proceedings up to the end of the first day of a two day trial and (3) it was ordered to pay those costs to the plaintiff on a solicitor own client basis.
We consider that the reasoning in those cases is applicable to the Land Court jurisdiction at least where s.34(1) of the Act is unrestricted by the application of other legislation. Section 34(1) gives the Court a full and unfettered discretion to order costs as it considers appropriate and, therefore, to make an order for costs against a successful party in an exceptional case.
In our opinion this is an exceptional case where the costs of the appeal should be paid by the successful appellant. The following section of our decision summarizes the relevant parts of the proceedings (Mr Hailey was the engineer who gave evidence on behalf of the respondents and Mr Woodman the engineer who gave evidence on behalf of the appellant):
[41] Mr Hailey's evidence was that there was no longer any dispute between the engineers as to the difference in costing of the major roads in the before and after cases. He also said that there was no longer any dispute between himself and Mr Woodman as to the matters raised in Mr Woodman's reply report, that is that in the before situation a road would have been built in the same location as various parts of Riverside Boulevard and that that should have been allowed in the before costing.
[42] There were a number of opportunities available to the appellant to challenge this evidence. Mr Hailey was not cross-examined on this issue. Mr Woodman failed to challenge it when he gave evidence even though he was asked whether there was anything he wished to draw to the Court's attention. No evidence was adduced as to the difference in costings that would flow if Mr Woodman's opinion were accepted. The appellant did maintain its original criticism in its final submissions. After the apparent discrepancy was raised by the learned Member at the informal mention, Counsel for the respondents supplied Counsel for the appellant with a note setting out the relevant transcript references. Nevertheless, the appellant did nothing to support its position at the subsequent mention other than to ask the Member to consider the evidence as it stood.
[43] The appellant's explanation for not grasping these opportunities is that it had a different understanding of the effects of Exhibit 56, (the "Areas of Agreement and Disagreement" document), and also of Mr Hailey's evidence. Senior Counsel said that no tactical decision was made not to adduce the further evidence. Mr Woodman has sworn an affidavit to the effect that he had never resiled from his original criticism made in Exhibit 33.
[44] The effect of this explanation appears to be that the appellant's advisers misunderstood Mr Hailey's evidence. Mr Hailey's evidence was that the difference in costing of $1,717,187 of the major roads was no longer in dispute. The misunderstanding seems to have arisen because Mr Woodman considered that he and Mr Hailey disagreed as to one another's methodology but accepted each other's costings. Such a misunderstanding explains both the failure to challenge Mr Hailey's evidence and the failure to adduce additional evidence in support of Mr Woodman's criticism. It is a case where the appellant had the opportunity to remedy the deficiency but failed to do so, and on one view that is the end of the matter, because of the public interest in the finality of litigation. However, the authorities cited above indicate that another concern, in an application for a reopening, is that the interests of justice be served, and therefore the interests of justice that an inadequate or insufficient finding be set aside is to be weighed against the public interest in the finality of litigation."
As this extract shows, we consider that the respondent's evidence clearly indicated its position and that the appellant failed to take advantage of the opportunities available to challenge that evidence. To retrieve the situation the appellant brought the application for leave to have aspects of the matter reheard. The refusal of that application led to the appeal. Although we found that there had been an error in the exercise of discretion by the learned Member in refusing the rehearing application, the primary reason that it was necessary to bring the application and the subsequent appeal was the appellant's failure to challenge Mr Hailey's evidence and to adduce evidence in support of Mr Woodman's criticism. Although we considered that the failure was due to a misunderstanding of the evidence by the appellant's advisers, and not to any deliberate decision by them, the result was that the proceedings were lengthened by the conduct of the appellant in circumstances where that could have been avoided. The respondents were not responsible for the increased length of the proceedings because, as indicated at [32] of our Reasons for Judgment, we considered that any error that there has been in the Land Court's decision was not caused by the respondents, whose evidence and submissions were consistent throughout that the difference in costings was in the order of $1.7 million.
It also has to be borne in mind that the proceedings involved, that is, an application to rehear a matter already heard, are somewhat exceptional and any order for the costs of such proceedings will necessarily have to be moulded by reference to the particular circumstances in which, if such an application is successful, the need for a re-hearing came about. This may involve fault on one or both parties or fault on the part of none. A simple application of the costs follow the event principle may bring about an unjust result.
We consider therefore that this is a case where not only should the successful appellant be deprived of his costs but is one where the appellant should also pay the costs of the respondents.
Costs of the application for leave to adduce further evidence on the hearing of the appeal
We consider that similar reasoning is applicable to the application under s.56 of the Act for leave to adduce further evidence on the hearing of the appeal, and therefore that the appellant should also pay the respondents' costs of that application.
Costs of the application for a rehearing
The learned Member ordered that the respondents' costs of the application for a rehearing should be paid by the appellant.
The appellant did not expressly challenge that order for costs in the Notice and Grounds of Appeal, nor was the issue raised at the hearing of the appeal. In their submission on costs to this Court, the appellant submitted that in respect of the rehearing application, the Chief Executive should pay the respondents' costs of and incidental to that application. The respondents have submitted that the appellant should pay the respondents' costs of the rehearing application in the Land Court.
As there is no dispute between the parties as to the appropriate order to be made as to the costs of the rehearing application we consider that the learned Member's order should stand.
Costs of the pending rehearing
The respondents have submitted that this Court should order that the appellant pay the respondents' costs of the pending rehearing on an indemnity basis.
Alternatively, the respondents have submitted that the grant of leave should be on terms that the appellant pay the respondents' costs of the rehearing on an indemnity basis.
The respondents say that this Court indicated, at [48] of the Reasons for Judgment, that the prejudice to the respondents' interests caused by the rehearing may be dealt with by appropriate orders for costs. They consider that those orders should be made by this Court and that it is inappropriate to leave the costs of the rehearing to the learned Member. The respondents submit that the rehearing will be a claim for compensation and that the Land Court's power to order costs in a compensation claim is limited by s.27 of the Acquisition of Land Act. The effect of the section is that it exposes the respondents to the risk that they will not be able to recover the costs of the rehearing, which is a prejudice which this Court has indicated that the respondents should not have to bear.
The appellant has submitted that no order should be made concerning the pending rehearing and that any orders as to costs will be dependent on the merits of the respective cases of the parties and are properly left to the discretion of the learned Member.
The rehearing will be limited to those aspects of the matter dealing with the nature and extent of any road cost savings in relation to the construction of the lower order internal roads which resulted from the construction of Riverside Boulevard in the after case as compared with the before case. The result of the rehearing may be that s.27(2) of the Acquisition of Land Act has the effect that no order for the costs of the determination of the claims for compensation can be awarded in favour of the respondents. We cannot interfere with the operation of that section in that respect and it will be for the learned Member to determine the appropriate award of costs in respect of the determination of the claim for compensation, taking into account the effect of s.27(2), in due course.
However, the effect of the grant of leave is that the respondents will be forced to relitigate certain aspects of the matter in circumstances which have arisen without fault on their part. As indicated in the Reasons for Judgment at [48], we considered that the necessity for the respondents to relitigate those aspects of the matter could be dealt with by an appropriate order as to costs, as could any difficulties faced by the respondents' witness, Mr Hailey. As foreshadowed, therefore, we are prepared to make a restricted order for payment of the respondents' reasonable costs of the pending rehearing.
If the issue had been fully litigated at the hearing of the compensation claim, the respondents may have incurred some additional costs in dealing with any further evidence and submissions brought on behalf of the appellant. Since those costs would have been necessarily incurred by the respondents, we do not consider that we should make an order dealing with their payment – they will be dealt with as part of the final award of costs in the compensation claim. However, it is likely that, in respect of the rehearing, the respondents will incur additional costs beyond those that would reasonably have been incurred at the original hearing and we consider that, whatever the outcome of the rehearing, the appellant should compensate the respondents for those additional costs.
We do not consider that the respondents should be awarded these costs on an indemnity basis. As indicated above, the appellant's failure to fully litigate the issue was due to a misunderstanding of the evidence by the appellant's advisers. There was no conduct on the part of the appellant which would attract the award of indemnity costs. The authorities were reviewed in Rouse v Shepherd [No 2] (1994) 35 NSWLR 277 and indicate that while the categories of case are not closed, it is only in unusual circumstances that such an award is made – for example, where an action was commenced or continued for some ulterior motive, or where there was some wilful disregard of the known facts or the clearly established law (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401), or where the action taken constituted an abuse of court process in the sense that the court's time and litigants' money has been wasted on totally frivolous and thoroughly unjustified defences (Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362).
Orders
1.The order of Mr RP Scott made on 19 March 2004, that the costs of Townsville City Council and Delfin Limited in respect of the rehearing application are to be paid by the Chief Executive, Department of Main Roads, such 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, is affirmed.
2.The appellant is to pay the respondents' costs of the appeal against the refusal of the application for leave to have the matter reheard.
3.The appellant is to pay the respondents' costs of the application for leave to adduce further evidence at the hearing of the appeal.
4.The appellant is to pay the reasonable costs of the respondents of the pending rehearing, limited to those costs over and above the costs that would have been incurred by the respondents in responding to the evidence and submissions of the appellant, if they had been raised at the hearing of the compensation claim.
5.In (2), (3) and (4), the amounts of such costs are 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.
CULLINANE J
JUSTICE OF THE SUPREME COURT
JJ TRICKETT
PRESIDENT OF THE LAND COURT
CAC MacDONALD
MEMBER OF THE LAND COURT
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