Haber v Department of Main Roads
[2004] QLAC 87
•13 October 2004
LAND APPEAL COURT OF QUEENSLAND
CITATION: Haber v Department of Main Roads [2004] QLAC 0087 PARTIES: John Kevin Peter Haber
(appellant)v. Chief Executive, Department of Main Roads
(respondent)FILE NO: LAC2004/0047 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal against decision on costs ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 13 October 2004 DELIVERED AT: Townsville HEARD AT: Townsville JUDGE
MEMBERSJustice Cullinane
Mr RE Wenck
Mrs CAC MacDonaldORDER: The appeal is disallowed. CATCHWORDS: COSTS - Section 27 Acquisition of Land Act 1967 - Appellant ordered to pay partial costs - Where compensation claim excessive but award greater than respondent's final valuation
Acquisition of Land Act 1967 (Qld) s.27
Land Court Act 2000 (Qld) s.34(1)Banno v Commonwealth of Australia (1993) 81 LGERA 34, cited
Townsville City Council v Moyses (1979) 6 QLCR 271, cited
Yalgan Investments Pty Ltd v Council of the Shire of Albert (1997) 17 QLCR 401 at 413, consideredAPPEARANCES: Mr JJ Haydon for the appellant
Mr RS Jones for the respondentSOLICITORS: Bill Cooper and Associates for the appellant
Crown Solicitor, Crown Law, for the respondent
The appellant was the owner of land in Malcomson Street, Mackay, part of which was resumed by the Chief Executive, Department of Main Roads (the respondent) for future road requirement purposes on 19 February 1999. The resumed land was an undeveloped section of a caravan park, the Central Tourist Park. Pursuant to the Acquisition of Land Act 1967, the appellant claimed compensation from the respondent which was determined by the Land Court as follows:
Value of land taken: $20,000
Loss in value of claimant’s other land: $242,000
Disturbance (including interest) $11,000
$273,000
The respondent was also ordered to pay interest to the appellant.
Subsequently, the respondent applied for costs in respect of the hearing and determination of the claim for compensation. The Land Court ordered the appellant to pay 50% of the respondent's costs of and incidental to the matter, 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.
The appellant has appealed against both decisions of the Land Court. By decision handed down today this Court has disallowed the appeal in the substantive matter. This decision is concerned with the appeal against the order for costs.
Section 34(1) of the Land Court Act 2000 provides that:
"Costs
34.(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."
The discretion given to the Land Court by that section is limited, in claims for compensation made under the Acquisition of Land Act 1967 (the Act), by s.27 of that Act which provides that:
"Costs
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."
The appellant originally claimed compensation of $2,684,000. On the last day of the hearing, he was granted leave to amend the claim to $2,500,000. The appellant then abandoned several items of the claim so that his final claim was $1,591,000 including agreed disturbance of $11,000. The amount of the valuation finally put in evidence by the respondent was $111,000 including agreed disturbance of $11,000. No advance against compensation was paid.
The Land Court determined compensation at $273,000. Thus the appellant succeeded in obtaining an amount that was $162,000 higher than the respondent’s final valuation. However, the amount determined was $1,318,000 less than the appellant’s final claim. It is apparent that the amount of the valuation finally put in evidence by the respondent is nearer to the amount of compensation as determined than the amount finally claimed by the appellant. The effect of s.27(2) of the Act is, therefore, that if any costs were to be awarded, they could only have been awarded to the respondent.
Land Court Decision
In deciding to award the respondent 50% of its costs, the Land Court was mindful of the fact that the appellant had been partially successful to the extent of $162,000 but that the compensation determined was $1,318,000 less than the amount of the valuation finally put in evidence by the appellant. Consistently with what was said by this Court in Townsville City Council v Moyses (1979) 6 QLCR 271 and by the Federal Court in Banno v Commonwealth of Australia (1993) 81 LGERA 34, the Land Court said that in deciding whether to exercise the discretionary power to award costs, regard should be had not merely to the amounts of the claim, the final value adduced by the respondent and the award. Usually it would be more relevant to consider whether the conduct of the appellant had been such as to force the respondent unreasonably and unnecessarily into litigation, or whether the appellant had pursued a vexatious, dishonest or grossly exaggerated claim or had presented its case in such a way as to impose unnecessary burdens on the constructing authority or the Court. The Court held that this claim was not vexatious or dishonest. Although it could be characterised as excessive, the appellant was awarded $272,000 more than the respondent had been prepared to offer until the exchange of valuations just prior to the hearing. The Court noted that claims for compensation under land acquisition statutes differ from others in civil litigation in that the claimant had no choice as to whether to make a claim, but said that it would be unjust to deprive the respondent of at least partial costs because the respondent had achieved very substantial success.
It was held that the appellant's compensation should not be eroded to the extent that he had presented an arguable and well organised case. One major issue was the value of the land including whether the development approval was able to be exercised and the economic viability of further development of the caravan park. These matters were properly litigated and placed no unnecessary burden on the respondent or the Court. The other major issue related to the effect of the resumption and the construction of the new road on the caravan park. The capitalisation rate adopted by the Court for the after valuation resumption was closer to that adopted by the respondent's valuer than that adopted by the appellant's valuer. The Court said that the claimant was entitled to seek expert advice on the extent of the impact of the resumption.
However there were issues argued by the appellant which were contrary to well established legal and/or valuation practice in which the appellant was unsuccessful. The costs of litigating those issues should be awarded to the respondent.
The appellant was ordered to pay 50% of the respondent’s costs of and incidental to the hearing.
Notice and Grounds of Appeal
In the Notice of Appeal against the decision on costs, the appellant said, so far as is relevant to this appeal, that
2. there ought to be no order as to costs in the Land Court because of the matters set out in Attachment 'A';
3. in the light of the findings in paragraphs [22] and [24] of the reasons delivered on 30 January 2004 and in the light of the purpose of s.27(2) of the Act, the discretion of the Land Court miscarried, especially with the expressed difficulty in paragraph [34] of the Reasons for Judgment. No order for costs should have been made.
Twenty one "grounds of appeal" were set out in Attachment A to the Notice of Appeal. In view of their length, they are not repeated here.
Decision
The Notice of Appeal referred specifically to paragraphs [22], [24] and [34] of the Decision on Costs to demonstrate that the Court’s discretion as to costs had miscarried. Counsel for the appellant conceded, in oral submissions, that success in this appeal depended on establishing the error alleged in paragraph 3 of the Notice of Appeal, that the discretion of the Land Court had miscarried.
Paragraphs [22], [24] and [34] of the reasons for judgment are as follows:
"[22] Having regard to the final positions taken up by the parties with regard to compensation, the claimant has been partially successful to the extent of $162,000. However, on the other hand, the compensation determined by the Land Court was $1,318,000 less than the final position of the claimant. In terms of amount, the respondent was successful. In terms of issues, the respondent succeeded in most issues.
[24] The claim in the present case was not vexatious or dishonest. While it could be characterised as excessive, the claimant succeeded in obtaining $272,000 more than the respondent was prepared to offer as compensation, prior to the exchange of valuation reports in April 2003, just prior to the commencement of this case in May 2003.
[34] In the present case, although I am reluctant to erode the claimant's compensation by an award of costs, the fact remains that the respondent has had very substantial success. In my view, it would be unjust to deprive the respondent of at least partial costs. The difficulty is to make an appropriate award in the circumstances of the case. To order costs of the five day hearing would substantially deprive the claimant of the compensation awarded."
The power of the Land Court to award costs in a matter of this nature is discretionary and it was recognized in Yalgan Investments Pty Ltd v Council of the Shire of Albert (1997) 17 QLCR 401 at 413 that the Land Appeal Court should interfere with the exercise of the discretion only if there has been some disregard of principle or misapprehension of the facts. In that case, the Land Appeal Court listed a number of propositions, extracted from earlier decisions, pertinent to the exercise of the Court's discretion to award costs. Relevant to this matter are:
· subject to s.27 of the Act, the discretionary power of the Land Court is full or complete (at 406);
· compulsory acquisition cases differ from ordinary claims in the significant respect that the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not (at 407);
· the discretion to award costs may not be exercised in an arbitrary manner but must be exercised on principled grounds, or judicially, that is for reasons that can be considered and justified by reference to relevant considerations (at 407);
· costs are discretionary and no hard and fast rules will ever be allowed to occupy part of an area controlled by a discretion (at 407);
· s.27(2) of the Act should not be regarded as a legislative suggestion that, where the claim is 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 (at 408);
· 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 the claim and of the award and of the value put in evidence by the authority. Usually it would be more relevant to enquire whether the conduct of the claimant (such as, for example, 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 grossly exaggerated claim or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court (at 408).
We do not consider that there is any error of principle discernible in paragraphs [22], [24] and [34] of the reasons for judgment. There is no indication that the Court applied any fixed rule in deciding on the appropriate order to be made. Similarly, there is nothing in the reasons for judgment to indicate that the Land Court concluded that the party whose valuation was closest to the amount of the judgment should automatically receive costs. This was a case where the respondent could have been awarded all of its costs, if the only matter taken into account had been the 'half way' rule. The Court did not award the respondent all of its costs. Rather, the Court said that "the very substantial success" of the respondent meant that it would be unjust to deprive the respondent of at least partial costs. While there is no rule, in compensation matters, that a successful constructing authority must be awarded costs, the success of a party is a matter which the Court was entitled to take into account in exercising its discretion in favour of that party.
Having come to the conclusion that the respondent should not be deprived of all of its costs, the Court said that the difficulty was to make an appropriate award in the circumstances. The expressed difficulty was not whether to award costs in favour of the respondent but to determine what award would be appropriate. The Court weighed up a number of matters in the course of deciding that the appellant should pay 50% of the respondent's costs. The partial success of the appellant, the fact that the appellant had no choice but to bring the claim and the Court's reluctance to erode the appellant's compensation award were taken into consideration in favour of the appellant. The Court also took into account, as it was appropriate to do, the conduct of the litigation and concluded that the value of the land taken was a principal issue that was properly litigated. Implicitly, therefore, the Court acknowledged that it was reasonable for the appellant not to have accepted the respondent's original offer of $1,000, or indeed the later offer of $111,000, and to prepare for a hearing. The Court also recognised that the appellant was entitled to seek expert advice on the extent of the impact of the resumption on the operations of the caravan park after the construction of the new road although the Court had not accepted the appellant's valuer's methodology or the capitalisation rate adopted by the valuer in the after resumption valuation. All of these matters were relevant to the exercise of the Court's discretion in favour of the appellant, in that 50% only of the respondent's costs were ordered to be paid by the appellant. We do not consider that, even though matters such as the value of the land taken and the effect of the resumption on the operations of the caravan park were fairly arguable, there should have been no order as to costs. We consider that if there were no award of costs in favour of the respondent, the respondent's very substantial success in terms of quantum and its success in relation to most of the issues, including those issues pursued by the appellant which were contrary to well-established legal and/or valuation practice, would be wrongly ignored.
There is no indication in the Land Court's decision that costs were awarded to penalize the appellant. Nor do we consider that costs were ordered to be paid by the appellant simply because the appellant's valuer's approach was not accepted by the Land Court. Similarly there is no suggestion that the late abandonment of the appellant's claim for compensation in respect of the costs of demolition of improvements and facilities in the old caravan park caused the Court to order costs in favour of the respondent.
We do not accept that the appellant should be exonerated from any potential liability to pay costs because he was found not to have been vexatious or dishonest. Given the discrepancy between the amount finally claimed by the appellant and the amount of compensation determined by the Court, we consider that it was open to the Court to have characterised the claim as a "grossly exaggerated" claim. The Court chose not to do so but did say that the claim could be described as excessive. We consider that to be a matter which is appropriately taken into account in exercising the discretion to award costs. Although, prior to the exchange of valuation reports, the respondent’s offer of $1,000 compensation was very low, we do not consider that it is accurate to say that the respondent was as exorbitant in its approach as the appellant. Nor do we consider that the respondent’s conduct placed an undue burden on the appellant. We do not consider, therefore, that there are reasons which would indicate that each party should pay its own costs.
We can find no error of principle or misapprehension of the facts in this decision. We consider that in exercising the discretion given by s.27(2) of the Act, the Court acted on principled grounds giving reasons that were explained and justified and which took into account the relevant considerations (see Yalgan at 407). We can see no reason to allow the appeal.
Order
The appeal is disallowed.
CULLINANE J
JUSTICE OF THE SUPREME COURT
RE WENCK
MEMBER OF THE LAND COURT
CAC MacDONALD
MEMBER OF THE LAND COURT
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