Gold Coast City Council v Hymix Industries Pty Ltd
[2001] QLC 41
•18 May 2001
LAND COURT BRISBANE 18 MAY 2001
[2001] QLC 41
Re:Appeal against Categorisation Local Government Act 1993 Local Government: Gold Coast City (VC00-31)
Gold Coast City Council
v.
Hymix Industries Pty Ltd
Applicant
Respondent
(Hearing at Coolangatta) APPLICATION FOR COSTS
Background:
This matter relates to an application for costs thrown away as a result of a late decision to withdraw an appeal against the categorisation of land. The subject land is located at Castle Hill Drive and Hymix Road, Nerang, is described as Lot 2 on RP 131027, Lot 2 on RP 167082 and Lot 64 on WD939, and is used for the purpose of quarry extraction. The appeal was lodged with the Land Court on 27 January 2000, against the categorisation of the land as new Category H, seeking redesignation as new Category A.
On 9 February 2000 the Registrar of the Land Court acknowledged receipt of the appeal, advising that the matter would be set down for hearing at the next available sitting of the Court at Coolangatta. By Court Notice of 12 December 2000 the parties were advised that the matter was listed for hearing at Coolangatta on 6 February 2001.
At the hearing on 6 February 2001 Mr L McDonald, Solicitor of Corrs Chambers Westgarth, appeared for the applicant. Mr M Campbell, instructed by Primrose Couper Cronin Rudkin, Solicitors, appeared for the respondent.
History of Events -
Mr McDonald argues that this appeal had not been activated since initially lodged with the Court on 27 January 2000, until he, acting as solicitor for the applicant, sought advice on 3 August 2000 as to the intentions to proceed. Following
a response from the respondent's solicitors of 9 August 2000 that the respondent intended to proceed with the appeal, Mr McDonald instructed legal counsel to prepare advice as to the evidence needed for the appeal. As a result of the Court Notice of 12 December 2000, preparations were commenced for the hearing.
On 16 January 2001 Mr McDonald received a telephone call from the respondent's solicitors, with confirming letter also of 16 January 2001, advising of the intention to withdraw the appeal. On 22 January 2001 Mr McDonald advised the respondent's solicitors that consent to withdraw the appeal was not agreed, and that costs thrown away by the applicant would be argued. Discussions to resolve the matter were unsuccessful between 22 January 2001 and 2 February 2001. On 2 February 2001 the respondent's solicitors advised that costs thrown away by the applicant would not be paid by the respondent. On 5 February 2001 Mr McDonald faxed confirmation to the respondent's solicitors that costs of the respondent were still required in accordance with s.18 of the Land Court Rules 2000, and would be argued at the hearing on 6 February 2001.
The Respondent's Case -
Mr Campbell argues that the letter of 2 February 2001 from the respondent's solicitors encapsulates the background to the appeal, and the actions of the applicant, which precipitated the appeal. The respondent had appealed against the categorisation of the subject land following the issuing of rate notices by the applicant on 29 October 1999.
In attempts to clarify the background to the categorisation decision of the applicant, the respondent's solicitors made extensive requests under the Freedom of Information legislation for relevant documents. Those requests involved lengthy delays before clarification revealed a nexus between the new categorisations recently introduced by the applicant, and a policy decision to substitute those categories for road maintenance levies, which had previously been imposed upon certain sections of the Gold Coast extractive industries.
As a result of further inquiries, the respondent became aware that various "concessions" had been made to other extractive industry operators in respect of the road maintenance levies being imposed. As a consequence of an approach to the Council about 15 September 2000, the Council agreed in November 2000 to refund an amount of $20,000 to the respondent in respect of the road maintenance levies. Apparently the respondent had been paying twice for the loading on the extractive
operations, firstly through the road maintenance levy, and also through the new rating category.
Mr Campbell argues that it is not correct to claim, as the applicant now does, that the matter of the over payment of the road maintenance levy is an entirely different matter to the issuing of the categorisation of the land. Mr Campbell claims that by refunding $20,000 to the respondent, the applicant virtually had conceded that it had levied the infrastructure charges in error. It is argued that the refund of the
$20,000 virtually resolved the need for the appeal.
Mr Campbell argues that s.7 of the Land Court Act 2000 provides guidance in respect of the Court applying principles of "equity and good conscience" in its deliberations. He notes also that while the Court has discretion to award costs under s.34(1) of the Land Court Act 2000, s.34(2) provides that where the Court does not make an order for costs, then each party is to bear its own costs. Mr Campbell argues that in view of the protracted nature of the commercial settlement of the current matter, then it is appropriate that each party bears its own costs.
In making that observation Mr Campbell concedes that there has been no re- categorisation of the subject land. However, he argues that there in effect has been some retraction of its position by the Council in respect of levy charges due by the respondent. He contends that such matters must be considered by the Court in exercising any discretion under Rule 18. Mr Campbell also notes that even though the appeal was lodged prior to the coming into effect of the Land Court Act 2000 and Land Court Rules 2000, the appeal should be considered under the new Act by virtue of s.85 of that Act.
The Applicant's Case -
Mr McDonald argues that the matter of the commercial negotiations between the parties in respect of the levy for road maintenance purposes is entirely separate to the matter of the categorisation of the land, and the current appeal. Mr McDonald further argues that the negotiations on the maintenance levy charges were undertaken by a separate department of the Council, unknown to the Council officers dealing with the categorisation matter. He is informed by Council officers that at no time was there any waiving of rights to the matter of any costs which might be forthcoming from the categorisation appeal.
Mr McDonald concludes that the applicant Council has incurred costs involved in preparing for, and briefing Counsel in preparing for, a hearing of the
appeal. He subsequently provides a statement of actual costs on a solicitor and owner/client basis on an hourly base rate representing:
· Costs up to and including 30 November 2000
(including barrister's fees) $3,642
· Costs up to and including 6 February 2001
(including barrister's fees) $6,340
Mr McDonald argues that it would be appropriate for an order that costs be assessed at the Supreme Court scale as is the normal practice in this Court when costs are determined.
The respondent's solicitors in its letter to the applicant's solicitors of 13 February 2001 challenged the lack of detail of the client's costs, supplied subsequent to the hearing on 6 February 2001. However, the applicant's solicitors advise that they have no further submissions on that matter.
Decision:
(i)Was there a link between the categorisation and the infrastructure levy?
While the two separate matters of the road maintenance levy and the newly established categorisation may have been under the care of separate departments of the Council, that does not itself establish that there was no linkage between the matters. It was, of course, the responsibility of the overall "Council" to deal with both matters, and it would be the policies of the "Council" which would direct the actions of the separate departments. In such circumstances it should be assumed that the left hand should be aware of what the right hand is doing.
On the evidence supplied, the purposes of the road maintenance levy, and the new categorisation, would appear to be directed towards ensuring that the operators of quarries with heavy-laden vehicles, contribute appropriately to infrastructure charges aimed at maintaining the integrity of the road network. To conclude that the matters were unrelated would appear to be inconsistent with their stated intentions. In my opinion the exercise of equity in this matter would support that, on balance, it was probable that a nexus did exist between the matters.
The protracted nature of the Freedom of Information requests also, in my opinion, demonstrate the disadvantage experienced by the respondent in fully understanding the reasons and background to the new charges flowing from the new
categorisation, later appealed. That subsequent events disclosed an inconsistency in the manner in which other extractive industry operators were being dealt with by Council, reinforces the respondent's disadvantage in understanding the new categorisation.
In the period between the lodging of the notice of appeal on 27 January 2000, and the apparent settlement of the reimbursement of over-paid road maintenance levy charges ($20,000) in November 2000, I believe the respondent was not in a position to decide fully whether its appeal had legal substance in the circumstances of that matter. However, from the date of issue of the Court Notice on 12 December 2000, it would have been reasonable for the respondent to have then reappraised its position in respect of continuing the appeal. That it chose not to advise the applicant Council until 16 January 2001 would, in my opinion, have placed the Council at a disadvantage in the matter.
It is noted that Council had already been notified by the respondent on 9 August 2000 that it intended continuing with the appeal. In the absence of advice to the contrary, after the separate settlement on the maintenance levy matter, it would have been reasonable for the Council to continue preparation for the eventual hearing on 6 February 2001.
(ii) The Legislation -
I am reminded that in the matter of costs Rule 18 of the Land Court Rules 2000 provides:
"Costs
18. 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."
I note also that Rule 18 applies only to the applicant to whom the withdrawal or discontinuance relates, and action under Rule 18 in the current matter is restricted only to the payments to the applicant Council.
In exercising my discretion under Rule 18, I am also reminded that costs awarded under s.34(1) of the Land Court Act 2000 are also entirely at the discretion of
the Court. However, while the Land Court's discretion is unfettered, it must be exercised judicially, by reference to relevant considerations (Townsville City Council
v. Moyses & Morris etc (1979) 6 QLCR 271, at 273).
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 QdR 486, where the 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 finding 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."
In Townsville City Council v. Moyses & 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 & 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 …"
However, the Land Appeal Court in the Townsville City Council case also noted at p.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."
The matter of costs was also explored in some detail in Collins Foods International (Properties) No. 2 Pty Ltd v. Chief Executive, Department of Natural Resources (1996-97) 16 QLCR 651, where the learned Member said at p.665:
"This is not to say that the Court will not, in a proper case, make an award of costs, but there would need to be sufficient reason for such an award. In exercising its discretion, the Court necessarily takes into account all of the circumstances then appearing. Such cases include cases where a party may justifiably seek costs through lateness of notice, or where the Court is satisfied that proceedings are of a frivolous or
vexatious nature or perhaps where a hearing is adjourned due to the wrongful conduct of a party."
However, where there has been no action by either party, which was seen to be arbitrary, frivolous or vexatious in nature; and where there had been some complexity involved in the matter, the Land Appeal Court has also directed that no costs should be awarded. That principle was followed in a determination of an earlier valuation in 1990 of the actual subject land in the current matter, and reported in Hymix Industries Pty Ltd v. The Valuer-General (1990-91) 13 QLCR 173, at 186.
(iii) The Amount of any Costs -
In considering any costs unnecessarily thrown away by the applicant Council, I believe any client and solicitor costs incurred prior to 12 December 2000 (the date of the Court Notice) were likely to have been costs normally associated with a party contemplating litigation. While it was the creation of the appeal by the respondent/appellant which did raise the expectation of the need for legal advice, it was also the decision of the applicant Council to determine the categorisation which precipitated the appeal.
However, once the respondent/appellant had been afforded a commercial acceptance of the over payment of the maintenance levy in November 2000, and then being fully informed of the circumstances of the categorisation, further continued the appeal after 12 December 2000, that was likely to have incurred the applicant Council in further expenses, which are now know to have been thrown away.
I believe that it is appropriate that the respondent/appellant be held responsible for costs incurred after it became clear, or ought to have become clear, that it needed to act to withdraw its appeal or to continue to prosecute it.
I note a similar finding was found in Chief Executive, Department of Natural Resources and Mines v. Sabina Three Gorges Corporation Ltd (V00-43), 12 April 2001, to be reported. That matter was an early decision on costs under the new Land Court Act 2000, and noted that appeals under the Valuation of Land Act 1944 are often lodged on a protective basis, as a tool of negotiation (p.8). I believe a similar scenario existed in the current matter.
I order that the respondent to the application on costs pay the applicant's costs of and incidental to the appeal, such costs being incurred subsequent to 12 December 2000 and up to the date of advice of the withdrawal on 16 January 2001, to be ascertained and fixed by the appropriate assessing officer of the Supreme Court at
Brisbane, according to the scale of costs prescribed by law for the time being in respect of proceedings in the Supreme Court and in accordance with the provisions of s.34(5) of the Land Court Act 2000.
In respect of the mater of the hearing on the application for costs, I order that each party bear its own costs.
NG DIVETT MEMBER OF THE LAND COURT
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