Hegira Ltd v Department of Natural Resources and Mines

[2006] QLC 1

LAND COURT OF QUEENSLAND

CITATION:

Hegira Ltd v Department of Natural Resources and Mines [2006] QLC 1 

PARTIES:

Hegira Ltd
(appellant)

v.

Minister for Natural Resources and Mines
(respondent)

FILE NO.:

LA2004/0075

DIVISION:

Land Court of Queensland

PROCEEDING:

Application for costs of hearing and reserved costs

DELIVERED ON:

17 January 2006

DELIVERED AT:

Brisbane

HEARD BY:

Written submissions

MEMBER

Mr JJ Trickett, President

ORDERS:

1.    The respondent is to pay Hegira's costs of and incidental to the appeal, including reserved costs.

2.    Such costs are to be ascertained and fixed by the appropriate assessing officer of the Supreme Court.  

CATCHWORDS:

Practice and procedure – Costs of hearing – Unfettered discretion of Land Court to award costs of Land Act appeals – Appellant substantially successful – Usual rule that costs follow the event applied – Reserved costs – Costs of adjournment when appellant taken by surprise – Issue raised found to be not valid – Reserved costs awarded to appellant 

APPEARANCES:

Mr S Ure for the appellant
Mr W Isdale for the respondent

SOLICITORS

Phillips Fox Lawyers, for the appellant
Crown Solicitor, Crown Law, for the respondent

1. This is an application for costs, including reserved costs, by Hegira Ltd (Hegira) following the determination of the unimproved value resulting from an appeal against an internal review decision upholding the decision of the Minister for Natural Resources and Mines (the Minister) as to the purchase price of reclaimed land.

Background

1. Hegira is the developer of a substantial development known as the Pacific Harbour Estate on Bribie Island.  The development entails the excavation of canals, the spoil from which is used for filling and pre-loading reclaimed areas.  The canals thus created are dedicated to the State.  A change in development intentions by Hegira required the reclamation of 4,499 square metres of part of a previously excavated and dedicated canal.

2. In accordance with s.127(6)(b) of the Land Act 1994, the Minister decided that the purchase price was $295,000.  Hegira sought an internal review of the Minister's decision and after being advised that it had been upheld, Hegira appealed to the Land Court.

3. The hearing commenced on 11 April 2005.  However Mr Ure, counsel for Hegira, requested an adjournment as an issue had that morning been raised with him by Mr Isdale, counsel for the Minister, upon which Hegira considered it necessary to seek further town planning advice.  The issue concerned the contention by witnesses for the Minister that layout designs relied on by Hegira's valuer did not comply with the requirements of the town planning scheme.

4. Mr Ure contended that the issue was not discernible from any of the reports which had been filed and served.  Mr Isdale opposed the adjournment, asserting that the issue was always going to be argued and that this was evident in various parts of the report.

5. Significantly, however, there was no mention of the issue in the conclave joint statement prepared by the valuers for the parties and filed by facsimile on 8 April 2005, the Friday before the Monday on which the hearing was to commence.  On the contrary, the conclave joint statement contained the following:

   "The Order of the Planning and Environment Court dated 14 July 2000 is the appropriate approval for development of the Dux Creek Precinct of which the area to be valued is part."

6. In the circumstances, it is understandable that Hegira was concerned that the witnesses for the Minister contended that the layouts for the "before and after" valuations undertaken by Hegira's valuer, were not in accordance with the provisions of the planning scheme, as such provisions relate to land in a residential zone at the relevant date.  According to Mr Ure, Hegira's advice was that they did comply.  The order of the Court with regard to conclave statements specifically required that any disagreement between experts be identified and explained.  As this issue had not been identified in the valuers' conclave statement, but had been raised just before the hearing was due to commence, I granted Mr Ure's application for an adjournment to enable Hegira to seek further town planning advice.  I reserved the costs of the adjournment pending the determination of whether or not the contentions made on behalf of the Minister were proven to be correct.

7. As the case progressed, it became clear that the Minister's valuers accepted that the preliminary approval of the Planning and Environment Court of 14 July 2000 was the code against which development of the subject land should be assessed.  However, they had formed the view that where that preliminary approval was silent as to certain requirements, those requirements would be assessed in accordance with the transitional planning scheme for residential subdivision.  However, in my reasons for the decision delivered on 27 October 2005, I accepted the evidence of the town planner for Hegira, Mr Ryter, that the transitional planning scheme was of no relevance in that regard, as the preliminary approval overrides the planning scheme, even where it is silent.  Furthermore, the subject land was not, and never had been, included in a residential zone. 

8. In other words, I found that the contentions on behalf of the Minister in relation to planning issues were not correct.  Accordingly, I find that Hegira is entitled to its costs thrown away as a consequence of the adjournment.

The costs of the appeal

1. On 27 October 2005, I determined the unimproved value of the subject land for the purposes of s.127 of the Land Act 1994, at $90,000.  The purchase price (unimproved value) of the subject land determined by the Minister had been $295,000.  Hegira contended for a purchase price of $45,000, based on the advice of its valuer, Mr Brett.

2. The Land Act 1994 makes no provision for the payment of costs of an appeal. However, the general power of the Land Court to award costs is contained in s.34 of the Land Court Act 2000 which relevantly provides:

   "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)  …  

   (5)  The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court."

3. Therefore, unlike matters under the Acquisition of Land Act 1967, or the Valuation of Land Act 1944, where the discretion of the Land Court to award costs is constrained, the discretion conferred by s.34 is unfettered. The operation of s.34 was considered by the Land Appeal Court in Chief Executive, Department of Main Roads v Regan & Ors (2000) 22 QLCR 151 at 152:

   "The power of this Court to award costs is found in ss.34(1) and 72 of the Land Court Act 2000.  Those provisions do not alter the powers which were previously conferred on this Court by s.44(16) of the Land Act 1962 and this Court continues to have an unfettered discretion as to the costs of and incidental to an appeal before it.

   The general rule is that costs ordinarily follow the event, unless there are special circumstances warranting departure from that general rule.  We are conscious that there has been some flexibility in the application of the general rule against a dispossessed owner in compensation cases following compulsory acquisition of land (Moyses v Townsville City Council (1979) 6 QLCR 271; Minister for the Environment v Florence (1981) 45 LGRA 127 and Banno v The Commonwealth of Australia (1993) 81 LGERA 34). However, those cases containing no support for departure from the general rule as against a resuming authority, where the rule would normally apply (Barns v Director-General, Department of Transport (1997) 18 QLCR 133 at 135-136)."

4. More recently, the Land Appeal Court again considered those cost provisions in Haber v Department of Main Roads [2004] QLAC 0102. In that case, the Court said at [6]:

   "It is clear that the discretion given to this Court by s.34(1) of the Land Court Act is unfettered, but the discretion must be exercised judicially, that is, for reasons that can be justified and by reference to relevant considerations (Wyatt v Albert Shire Council [1987] 1 QdR 486 at 489; Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166 at 198). In Barns v Director-General, Department of Transport (1997) 18 QLCR 133, the Land Appeal Court said (at 135):

   'This Court has an unfettered discretion as to the costs of and incidental to an appeal before it.  An unfettered discretion is not an unprincipled one, and on ordinary principles, costs in circumstances such as these would follow the event.  The general rule that costs will usually follow the event is one which is deeply embedded in our law.  …  It is a general rule which prima facie should be applied in this case.' "

1. Hegira was successful in most of the issues raised.  Therefore, it should be awarded costs unless there are special circumstances warranting departure from the general rule.

2. The case involved the determination of the purchase price of a parcel of land which had previously been developed as part of a canal and dedicated to the State of Queensland. Under s.127(6) of the Land Act 1994, the Minister decided that the purchase price was $295,000, which was confirmed by an internal review decision. 

3. However, the evidence shows that the Minister's purchase price was based on the assessment of valuer, Mr JT Houghton, which had been based on wrong assumptions.  An internal Departmental memorandum dated 25 March 2004, indicates that Mr Houghton later recognised that and revised his assessment to $180,000.  Mr Houghton has since retired and was not called to give evidence.

4. However, the Minister's purchase price was not altered because there were errors in Mr Houghton's revised approach.  Other valuers, principally Mr Naish, had undertaken another valuation and check valuations, which were in excess of Mr Houghton's initial valuation.  The view seems to have been taken that the Minister's decision as to the purchase price was well and truly supported.

5. However, as mentioned earlier, I found that the valuation was based on an interpretation of the planning requirements, which I did not accept, whereas the valuation by Mr Brett, the valuer for Hegira, was based on the advice of town planner, Mr Ryter, whose evidence I accepted in relation to town planning issues.

6. Furthermore, even though the valuers for both parties had agreed as to the method of valuation to be applied, essentially the "before and after" method, there were differences in their hypothetical development exercises to arrive at the values "before" and "after".  For the reasons discussed in my decision of 27 October 2005, I found Mr Brett's exercises to be more technically correct and more soundly based.

7. Mr Naish relied on three check valuations to support his principal valuation.  However, I found that two of those valuations had no validity for the reasons explained.  In the third check valuation, Mr Naish adopted a "before" valuation approach based on a development plan similar to Mr Brett's 22-lot "before" exercise, but with the equivalent of two of those lots dedicated as park.  However, for reasons explained, I preferred the reasoning and the valuations of Mr Brett.

8. The difference between Mr Brett's "before" and "after" valuations resulted in $90,000 as the value of the subject land.  However, Mr Brett reasoned that in the circumstances, unless the State sold the land to Hegira, it would not be able to sell it to another purchaser.  He concluded on the basis of Mort's Dock and Engineering Co Ltd v The Valuer-General (1924) 6 LGR (NSW) 162, that a prudent vendor and a prudent purchaser would "split the difference" between them, that is between a Nil value on the one hand and a value of $90,000 on the other. I rejected that proposition for reasons explained preferring to apply the principle in Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer Vizagapatam (1939) AC 302.

9. That was the only issue in which the Minister was successful.  However, in my view, it is not a sufficient basis on which to consider apportioning costs between the parties.  The Mort's Dock argument occupied little time, insignificant when compared with the major issues upon which Hegira was substantially successful.

10. In my view, therefore, there are no special circumstances in this case which would justify departure from the general rule that costs follow the event.

Orders

1.The respondent is to pay Hegira's costs of and incidental to the appeal, including reserved costs.

2.Such costs are to be ascertained and fixed by the appropriate assessing officer of the Supreme Court.

JJ TRICKETT

PRESIDENT OF LAND COURT