Gay v Chief Executive, Department of Natural Resources
[1997] QLC 130
•5 September 1997
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BRISBANE
5 September 1997
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 20028/07100 -
Local Government: Redland Shire
(AV96-304).
Christine R Gay
v.
Chief Executive, Department of Natural Resources(APPLICATION FOR COSTS)
Background:
Consequent upon the delivery of judgment in the above matter, the appellant made an application for costs of and incidental to the hearing and determination of the valuation. At the request of the appellant, and with the concurrence of the respondent, the Court agreed for the matter to be dealt with by way of written submissions, which were duly lodged with the Court by the agreed date of 1 July 1997.
In summarising her claim for the awarding of costs the appellant provided the following reasons:(1)The appellant was successful in proving that the respondent's valuation was incorrect.
(2)The respondent's valuation was found to be manifestly and significantly in error.
(3)The appellant's contended value ($160,000) was significantly closer to the amount determined by the Court ($360,000) than that put forward by the respondent ($750,000).
It is noted that the notice of appeal stated a value of $450,000, which figure was also significantly closer than the respondent's value.
(4)The appellant, in her objection, her notice of appeal and via her solicitors at the directions hearing, put the respondent on notice that all issues of valuation were contested in this appeal, which afforded the respondent adequate opportunity to re-assess its valuation.
(5)The respondent failed to properly assess and allow for the value of improvements to the site and continued to contest improvements, the vast majority of which the Court found to be amply justified.
(6)With utmost respect to the respondent, the respondent's valuation and the respondent's conduct can properly be described as either arbitrary or capricious.
(7)The appellant has expended considerable cost in proving her case, in circumstances where she should not have been required to do so, such that she should be duly indemnified for those costs.
(8)This case is to be properly regarded as a special case in which costs ought to be awarded against the unsuccessful party; the respondent.
The respondent resisted the application claiming:
(a)These facts do not warrant the making of an order for costs against the respondent; and
(b)Those issues that remained in dispute, viz. the allowances for interest and various fees, were not such as to give rise to such an order, when one has regard to the unique nature of the subject land.
A broad outline of the case discloses the following key facts:
•The appellant appealed the respondent's determination of the valuation for 1 January 1996, at $775,000, arguing the valuation should be $450,000.
•An offer by the respondent on 14 April 1997 to reduce the valuation to $750,000 under Section 68(1) of the Valuation of Land Act was not accepted by the appellant.
•Following a directions meeting, statements of facts and law were exchanged on 22 April 1997 at which the appellant amended her estimate of the valuation to $115,000.
•The Court determined the valuation on 30 May 1997 at $360,000.
Firstly in considering this matter I note that in the awarding of costs by this Court guidance is provided in the Valuation of Land Act 1944:
"Costs of appeal against valuation.
70.(1) Where the value of land as finally determined upon an appeal against the valuation is the value stated by the owner in the owner's notice of appeal against the valuation, or is nearer to that value than to the valuation appealed against, costs shall not be awarded against the owner.
(2)Otherwise costs shall not be awarded against the chief executive."
I am also aware that the matter of costs has been the subject of considerable precedent in this and higher courts. While noting that it has generally been the practice of this Court not to award costs in matters of valuation determinations under the Valuation of Land Act, I also note that discretion in these matters rests entirely with the Court.
In seeking guidance I have been drawn to precedents by both the appellant and the respondent in the following matters:(1) WH Bowden v. The Valuer-General (1980-81)(LAC) 7 QLCR 138.
In this matter the Land Appeal Court dealt with whether the land was in fact used for the purpose of primary production. The Land Appeal Court found in favour of the appellant, who subsequently sought an application for costs incurred in both the Land Court and the Land Appeal Court. The appellant submitted the case was of a special nature and noted at page 145:"(a)There was no dispute as to quantum of value between the parties - the issue being joined on whether or not the provisions of section 11(1)(vii) of the Valuation of Land Act applied;
(b)It was clear that there was an erroneous application of the principles of the section by the Valuer-General in the Court below - a gross misconception had obliged his client to come to Court and establish his statutory entitlement; and
(c)It was a matter of record that no attempt had been made on the part of the Valuer-General to inspect the subject land, to interview the appellant or in any other way to ascertain whether or not the subject land was entitled to the benefit statutorily conferred upon it and that failure amounted to, or approached, a breach of natural justice. No real attempt had been made to apply the principles of the Act. "
In the matter of discretion provided for the Court, I note the principles which need to be considered, which were outlined in the Bowden case at page 145:
"It is true, as submitted by the appellant's counsel, that the legislature has not prohibited the Courts from awarded costs but we do not agree that if the legislature intended that no costs should be awarded it would necessarily have so stipulated. It appears to us that the legislature intended to leave all questions of costs in the Court's unfettered discretion subject to the prohibition against granting costs to the party whose valuation is nearer the valuation determined. "
The Land Appeal Court also found at page 145:
"The power of the Land Court and the Land Appeal Court to grant costs originates respectively in sections 41(9) and 44(16) of the Land Act. The power so granted is discretionary and is in no way circumscribed. "
However, while noting that discretion lies unfettered with the Court, the Land Appeal Court also noted at page 147:
"Easy access to the Land Court to air grievances and have valuations reviewed is, as we have already stressed, most desirable in revenue cases, and such access should be available without fear of costs being awarded to either party except in special cases. "
In the end, the Land Appeal Court found at page 149:
"We are satisfied that the Valuer-General did not arbitrarily or capriciously adopt the interpretation of section 11(1)(vii) upon which he based his valuation. There seems to have been an enquiry and a supply of information from the appellant. "
In those matters the Land Appeal Court had followed the principles outlined in Townsville City Council v. Moyses and Morris etc. (1979)(LAC) 6 QLCR 271 which said at page 273:
"The general rule, then, is that costs are in the discretion of the Court, but of course the discretion must be exercised judicially, that is, by reference to relevant considerations. "
In seeking to understand the exercise of a judicial nature, I note in the Full Court of the Supreme Court of Queensland in Wyatt v. Albert Shire Council (1987) 1 Qd.R. 486, where the Court found at page 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 judiciously. It may then be open to review the decision on costs as involving error or mistake of law. "
In Townsville City Council v. Moyses and Morris etc supra, the Land Appeal Court also considered the matter of whether the Court should lay down rules or principles on how the Court's discretion should be exercised, and followed the guidance outlined in Middleton v. Freier and Ors (1958) Qd.R. 351 where Phillip J., speaking for the full Court said at page 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 ... "
However, the Land Appeal Court in the Townsville City Council case also noted at page 274:
"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. "
I note also in Bowden (supra) at page 148:
"The facts entitling an owner to the concession may often be not obvious on inspection. They may be to a substantial (perhaps exclusive) extent, within the knowledge only of the owner. It therefore behoves owners, we think, to acquaint valuers with the facts that may entitle them to the concession. They should not sit idly by expecting the concession will automatically apply. We used the term `frank co-operation' in our judgment and we did so advisedly. It would place an intolerable burden on the Valuer-General's staff if they had to make detailed and prolonged enquiries in the first instance to ensure whether or not the concession operated in favour of particular owners. The procedure of an objection conference as a preliminary to appeal seems most appropriate in these somewhat special circumstances. "
Clearly, one matter which weighed heavily on the mind of the Land Appeal Court in that case was whether the respondent had acted in an arbitrary or capricious manner. In the end the Court placed emphasis on the level of information and inquiry between the parties, including an objection conference. In this regard I note that there have been several conferences between the parties in the current case, albeit it not successful in resolving all issues.
(2)JH Benson & HL Hudlow v. The Valuer-General (LAC)(AV91-347/348/349) 3 April 1992, unreported.
In that matter the appellant, in conjunction with AR Thomason v. The Valuer-General and NM Thomason v. The Valuer-General, appealed against the decision of the Land Court in respect of failure to allow concessional valuations on the three properties for the purposes of primary production under the Act. The appeal followed similar earlier appeals to the Land Appeal Court in 1989 (AV89-119); and in 1990 (AV90-65). Benson and Hudlow also appealed against the decision of the Land Court in awarding costs in favour of the Department of Lands.
The Land Appeal Court noted that in the previous appeals to the Land Appeal Court, the appellants did not test the June 1991 finding of the Land Appeal Court in a higher Court. It also noted that the appellants submitted "quite deliberately" absolute identical evidence to that submitted to the previous Land Appeal Court. The appellants claimed that procedure was taken in order to bring the matter to the Court quickly and so as not to waste the time of the respondent or the Land Court. In its decision the Land Appeal Court found at page 27:"We do not accept that people should take the time of the Land Court or the Land Appeal Court to re-argue repeatedly those matters which have been settled by this Court, particularly where the same parties are involved in the subsequent cases, the facts are identical or substantially the same and there is no real prospect of success. It is entirely reasonable for the Valuer-General to seek, and for this Court to grant, an order for costs in cases such as this. Fairness dictates that the unsuccessful party should bear the reasonable costs of the successful party who has been put to unnecessary cost and inconvenience. "
In its decision the Land Appeal Court dismissed the appeals, and directed that "the appellants pay the cost of the Department of Lands of and incidental to these appeals."
In the current matter, Mrs Gay has sought comparability with the Benson and Hudlow decision in as much as she has been forced to "considerable expense to ventilate the issues".
It is also noted in Bowden (supra) at page 146:"It seems to us unjust to adopt a restrained attitude towards awarding costs against citizens without adopting an equally restrained attitude towards awarding costs against the Valuer-General. That is not to say that, in a proper case, the Land Court or the Land Appeal Court will not award costs against either a citizen or an authority subject to the provisions of the statute which governs the matter. "
(3) Beedell Farms and Grazing Pty Ltd v. The Valuer-General (1979)(LAC) 6 QLCR 322.
In that matter I note the Land Appeal Court decision in the Beedell Farms case awarded costs to the appellant in respect of a preliminary jurisdictional hearing only a few days prior to the final hearing of the case. There were no costs awarded in respect of the final decision in that case.
While the Land Appeal Court gave no specific reason for its awarding in the preliminary jurisdictional matter, I believe there is a reverse analogy in that case with the intentions of Section 62 of the Act which says in respect of an adjournment:"Costs of adjournment
62. The Land Court may make such order as to costs in favour of the chief executive as it thinks fit in respect of any adjournment of the hearing of an appeal occasioned by the appellant filing a notice of appeal not complying in all respects with the requirements of section 56 or defective in a material particular or occasioned by the service on the chief executive of a copy of a notice of appeal that is not a true copy of the notice filed in the Land Court registry or that is defective in some other material particular. "
In the current case the respondent has not sought to extend the proceedings through adjournment, but in fact acceded to a request for application for adjournment by the appellant on 21 January 1997.
(4) Mr Paterson also drew support against costs being awarded in the decision of the Land Appeal Court in Santos Limited v. The Valuer-General (1988-89)(LAC) 12 QLCR 231, where the appellant came before the Land Appeal Court with no further valuation evidence to support his case, but seeking guidelines from the Court. In that case, while the appeal was dismissed, the Land Appeal Court, while regarding the appeal as "very near the borderline on the matter of costs" exercised its discretion and refused the application.(5) I note also the matter of the findings of the Land Appeal Court in Hymix Industries Pty Ltd v. The Valuer-General (1990-91)(V89-415)(LAC) 13 QLCR 173 which said at page 186:
"In the subject case it could not be held that either party has approached the valuation in an arbitrary, frivolous or vexatious manner or has completely disregarded principles which given certain facts, should be applied. "
(6) In the matter of The Valuer-General ats Queensland Club (1990-91)(LAC) 13 QLCR 207, I note that the Land Appeal Court dismissed the appeal and found that the Valuer-General was responsible for costs of the respondent in respect of that case, adopting the reasoning of Denning v. The Council of the Shire of Ipswich (1988-89) 12 QLCR 171. The Denning case was a compensation matter in which the decision went in favour of the respondent, and in line with the particular legislation governing costs, the Court could not award costs in favour of the dispossessed owner. The Land Appeal Court considered that "justice would be best served if in the particular circumstances of this case no order is made as to costs". The Land Appeal Court in The Valuer-General ats Queensland Club (supra) found that the converse reasoning was applicable, and found the respondent entitled to costs of the appeal to the Land Appeal Court.
The key issue in that case was really a matter of law in respect of the application of heritage provisions, and the case was seen as a test case, in which the respondent argued at page 222:"Counsel for the respondent argues that the matter is in the nature of a test case and that it would be inequitable for the respondent to have to bear the costs of testing a piece of legislation which is used for the benefit of all. "
The Land Appeal Court agreed with the respondent, and saw the "test case" as a matter in which costs should not be worn by the respondent because the overall application of the heritage principle which has wider community implications.
In the current matters, I turn now to the claims of the appellant.(1) The respondent's valuation was incorrect.
In this regard the estimates of the improved value of the subject were determined at $950,000 (appellant) and $1,250,000 (respondent). The Court found the improved value at $1,100,000. In the end the difference between the improved values rested entirely upon the considered opinions of two very experienced valuers, in a market where there was no direct comparison of sales of comparable lands. I have no reason to find any lack of competence or judgment by either valuer in that matter.
In the matter of the value of allowable site improvements, I note that the difference between the parties lies in the method adopted by the two professional engineers. I note also that in his determination the respondent has maintained the methods agreed by the parties in a previous without prejudice "heads of agreement". (V90-13). In so doing he has sought to maintain what he believed was an "agreement in principle" between the parties, and to my view, has not demonstrated any actions of an arbitrary or capricious nature.
That the level of improvements agreed by the Court exceeded those previously agreed by the parties, now reflects mainly the greater personal knowledge of the subject by Goakes, the professional engineer. There is no evidence that the respondent has addressed the matter of improvements in anything other than a professional manner, based upon the professional evidence available to him.
In the matter of whether the circumstances of the case warranted its treatment as a special case for the awarding of costs, I note that the decision has in fact provided some fresh guidelines for the valuation of canal estates. In that regard it could be seen as a type of "test case", which in its application would have some similarity with The Valuer-General ats Queensland Club (supra). However, to counterbalance that impact, it needs to be remembered that the subject is not the "average" canal lot. In fact as noted in the decision on page 5, the subject was almost unique in that area in view of its "relatively large size, aspect and location". Any wider application would be limited in scope.
(2)The appellant's estimate of the valuation was closer to the determined valuation.
In considering the relative estimates of the valuation as determined by the parties, I note that Section 70 of the Valuation of Land Act establishes guidelines where costs shall not be awarded. When the owner's estimate is closer to the determined value, then costs shall not be awarded against the owner. However, the Act is silent in respect of whether costs should be allowed, and as noted previously the Court is afforded unfettered discretion in awarding costs, subject to relevant considerations.
(3) The respondent has failed to consider all relevant issues affecting the valuation.
From the evidence the appellant has signalled consistently that she challenged the determination of the respondent in respect of the valuation. This was initially disclosed in the notice of appeal of 5 July 1996, where grounds of appeal (10) noted - "The cost of development of the block was not taken into account"; (Ground 13) noting "The Chief Executive has failed to give any or any proper consideration to the matters raised in the notice of objection"; and (Ground 14) "any current enhanced value of the property in question is attributable solely to the mass expenditure made on improvements".
It is also noted that at the "directions hearing" on 13 February 1997, the appellant further sought to clarify that she would be calling evidence from an engineering consultant in respect of "the costs of earthworks and improvements", and "will give evidence about costs and estimates of construction and developments".
In response to that advice, Mr Paterson for the respondent advised the Court that the respondent had abided by the previous agreement, and sought advice from the appellant's advocate, Ms J Chapple of Hopgood and Ganim, Solicitors, "whether that agreement is still on foot or whether some other evidence is now to be brought forward" (page 6). Ms Chapple advised "that there will be evidence as to what works constitute improvement on the land subsequent that heads of agreement".
When further questioned by the Court, it was agreed that the respondent would seek to clarify the extent of further evidence to be led, and its possible impact upon the duration of the hearing. In the end it would appear that the respondent probably only became aware of the additional evidence of the costs of improvement on the exchange of experts' evidence on 23 April 1997, following a conference between the parties on 21 April 1997. The hearing was heard by the Land Court on 28 April 1997.
It is also noted that the parties had an objection conference on a without prejudice basis on 6 December 1996, and from the evidence of Mr Paterson at the directions hearing on 13 February 1997, it would appear to be confirmed that the respondent was unclear of the extent of additional evidence to be led in respect of the extent and costs of improvements. While it is now stated by the appellant in her statement in support of her application for costs (Item 21) that the "agreement was not sought to be relied upon by the respondent as binding upon the parties", the evidence of Mr Paterson would suggest to the contrary.
In seeking to balance the arguments in respect of costs the appellant concedes that the respondent was presented in the hearing with evidence of additional costs, the details of which he could not reasonably have been expected to fully investigate. However, the appellant also claims that the respondent was always aware of the complex nature of the development of the subject, and had been "put on notice" of the appellant's position. In the end the appellant had incurred considerable costs (approximately $25,000) in ensuring the matter was fully examined by the Court.
Summary:
In examining the claims of the parties, I find there is little reason to doubt the integrity and professionalism of either party. The evidence of all of the technical witnesses was sound and based on long experience in their specialties. The case was prosecuted on the basis of considerable commitment to their causes, albeit it with a change of emphasis between the two engineer. On balance the Court leant heavily upon the greater personal involvement of Mr Goakes in the development of the subject. I have no reason to find the evidence of any of the respondent's witnesses to be arbitrary or capricious.
In the matter of whether this decision should be treated as a special case for costs, I believe the very special nature of the subject means that a community-wide adoption of the principles as determined is unlikely.
In the exercise of my discretion in accordance with Section 70 of the Valuation of Land Act 1944, I find that it is equitable for each party to these actions to bear their own costs.
Accordingly, I make no order as to costs.
(NG Divett)
Member of the Land Court
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