John L Young v District Council of Gumeracha (No 2) No. SCGRG 93/189 Judgment No. 5252 Number of Pages 6 Compulsory Acquisition

[1995] SASC 5252

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Compulsory acquisition - Costs - exaggerated claim for compensation - most claims rejected - several firms of solicitors consulted - no entitlement to costs of consulting all solicitors - relevant principles - costs reduced. Minister for Environment v Florence (1979) 21 SASR 108, applied.

HRNG ADELAIDE, 31 May - 2 June, 26-28 June 1995 #DATE 5:9:1995 #ADD 28:11:1995

Applicant John L Young:            In Person

Counsel for respondent:            J A Mangan

Solicitors for respondent:         Mangan Ey and Associates

ORDER
Orders made.

JUDGE1 DEBELLE J The principles relating to awards of costs in disputed claims of compensation following a compulsory acquisition of land were stated by Wells J in Minister for Environment v Florence (1979) 21 SASR 108, at 134-139. His Honour identified the rationale for determining how awards of costs should be made and explained the background against which the terms of s.36 of the Land Acquisition Act should be understood.

2. The underlying principles are:
    1. Compulsory acquisition cases differ from the ordinary kind
    of claims dealt with in this court in that the claimant,
    unlike the usual plaintiff, has no choice whether to make a
    claim or not. The mere acquisition by compulsory process
    gives a right to a claim for compensation which a claimant
    can hardly be expected to renounce.

2. It is not, generally speaking, appropriate to speak of one
    party as having won. Compensation is awarded to a claimant
    who has already been given by statute the right to receive
    it.

3. It is, therefore, just to say that the claimant ought, in
    the absence of special circumstances, to receive his
    reasonable costs of obtaining compensation. The compensation
    is ex hypothesi his due.

4. Nevertheless, costs are always discretionary and no hard
    and fast rule will be allowed to govern the exercise of the
    discretion.

3. It is against that background that the provisions of s.36 must be considered and applied. Section 36 begins by stating the general rules as to costs, and then directs the court, but only in those cases where it is appropriate to do so, to take into consideration the kinds of circumstances mentioned in paras.(a) and (b). In other words, there must be some identifiable facts or circumstances signifying the appropriateness of considering, in particular, the relationship between the acquiring authority's best offer and the amount awarded, unreasonable conduct on the part of either party, or an excessive claim, or an unduly depressed offer: Minister for Environment v Florence at 135. Section 36 must be construed flexibly and not restrictively to the intent that the special nature of the jurisdiction to which it relates should be duly recognised: Minister for Environment v Florence at 135.

4. Although the rules of court provide for scales of costs, those scales are, as a general rule, to be linked with the character and difficulty of the proceedings, rather than with the conduct of the parties. As this is a relatively straightforward and simple acquisition, I do not think there should be any basis for ordering costs on any scale higher than the third scale. There is much to be said for ordering costs on the lowest scale. In this particular matter, it is unnecessary to determine the appropriate scale as Mr Young, the claimant, was not represented.

5. As a general rule, a successful claimant, who is entitled to costs, will receive only his reasonable costs, but even a successful claimant may not, in certain circumstances, recover all his costs, reasonable or otherwise. An instance of a successful claimant being deprived of its costs is Emerald Quarry Industries Pty Ltd v Commissioner of Highways (No.2) (1986) 18 SASR 438 at 478. The reasons for the order were explained at pp.444 and 467.

6. In this case, the claim lodged by Mr Young, the claimant, was initially for $942,210. When the trial began, the claim had been reduced to $594,294. Soon after the trial began, Mr Young added other items, making a total claim of approximately one million dollars.

7. As stated in the reasons for judgment concerning the assessment of the claim for compensation, the three parcels of land which were acquired by the Council were very small. They were taken from a very large parcel of farming and grazing land. They have an insignificant, if any, effect upon the operation of the land as farming land, and there were no major issues of principle relating to the assessment of compensation. The claim made by Mr Young was, on any view, extremely exaggerated and unrealistic. The award of compensation totalled $5,618. The award is but a minute proportion of the amount claimed.

8. The factors which point to the exercise of discretion, either to award no costs, or substantially reducing the costs of Mr Young, are, firstly, for the reasons just given, the claim was, at all times, unreasonable, if not extremely unreasonable. Even if the view is taken that the Council has failed to deal with this acquisition with reasonable expedition and with an appropriate awareness of the interests of Mr Young, the claim for compensation is out of all proportion to what was involved in the acquisition. It is not unfair to use epithets such as exaggerated or extravagant. Secondly, the Council has had to bear very substantial costs in defending this unreasonable claim. In addition, it might be noted that, on 13 February 1995, an award of costs was made in the Council's favour for the costs of that day.

9. On the other hand, the factors which point to Mr Young receiving an award of costs are, first, that he has succeeded in obtaining an increase in the award of compensation, albeit a very small increase having regard to the magnitude of the claim. Secondly, Mr Young has succeeded in obtaining an order that the Council improve the quality of the fencing which was erected in place of the existing fencing. Thirdly, Mr Young should not be unreasonably out of pocket for costs he has had to incur in prosecuting a claim for an acquisition which was visited upon him.

10. Having regard to all of those factors, I believe that there should be some award of costs in favour of Mr Young. However, given that the claim was an unreasonable one, there has to be some recognition of the fact that the Council has, in large part, succeeded. Whilst it is true to say, as Wells J did in Minister for Environment v Florence, that it is not, generally speaking, appropriate to speak of one party as having won, in this case, it is clear that the Council has succeeded on most of the issues which were raised in the course of this acquisition. It had to answer what was a very substantial claim made against it. There must be some reflection of that fact in any award of costs.

11. There are some other matters which bear upon the amount of any award of costs. First, Mr Young has consulted a number of firms of solicitors and at least two valuers. Secondly, a claimant is entitled only to the reasonable costs of prosecuting his claim - as a general rule, he will not get solicitor and client costs, thirdly, the reason why it has been necessary for Mr Young to consult so many firms of solicitors has not been established. It is, nevertheless, not unreasonable to infer this has been in consequence of the fact Mr Young has sought to prosecute such a substantial and unreasonable claim. I infer that he was advised to that effect and has not found the advice to his taste.

12. The amounts which Mr Young claims for legal and valuers' costs are before me. They have not been formally proved, nor is there any proof they have all been paid. I hesitate to put the Council to the further time and expense involved in a taxation of costs. Mr Mangan, who appears for the Council, agrees that it would be appropriate to make, at this stage, a lump sum assessment of an award of costs. Mr Young, similarly, does not oppose such a course.

13. In all the circumstances, I think it is appropriate to make a lump sum award of costs. I am encouraged to do so because it will avoid the Council incurring the further costs involved in taxation. Secondly, for the reasons I have already expressed, I do not think that Mr Young is entitled to recover all of the costs he seeks. Thirdly, Mr Young will have difficulty as a layman preparing a bill of costs in taxable form. Fourthly, just as some items of compensation have not been adequately proved, it is unlikely there will be proper proof of all of the claims for costs.

14. As I have said, Mr Young should not get all his costs. The claim is unreasonable. No doubt, part of his costs were incurred in advising on claims which could not be sustained. In addition, he is entitled only to his reasonable costs. Some deduction must be made for costs unreasonably incurred. It was not, I think, reasonable to consult so many firms of solicitors. In addition, the costs payable to Mr Taylor, the valuer, appear to be out of all proportion to the exercise involved.

15. At the end of the day, it is necessary to make a broad axe assessment based on the limited material available to me. Costs payable to solicitors and valuers are set out in items 15 to 21 of the claim as noted in the reasons for judgment. In addition, there is a claim for accountant's fees to Mr Boyle. The claims for legal costs are costs payable to five firms of solicitors.

16. I think, in all the circumstances, it reasonable that there should only be costs payable to one firm of solicitors. The firm of solicitors which were consulted and which have done work material to the present acquisition were Messrs Cowell Clarke. Their fees are $8,656. That sum includes a very substantial counsel fee to Mr Townsend, a counsel fee which, on its face, appears to be unreasonably large. In fairness to Mr Townsend, there is little to indicate the extent to which he was involved in the matter. It may be that he has done the work that justifies that fee. Nevertheless, I think there should be a substantial reduction for the purpose of assessing costs in this matter. I will reduce the total fees payable to Cowell and Clarke to $6,000.

17. The valuer's fee payable to Mr Branson should be allowed. However, as I have already mentioned, the valuation fee to Mr Taylor is out of all proportion to the work involved and is manifestly extravagant. I would allow only $1000 as a fee to Mr Taylor. I allow a second valuer's fee because, notwithstanding the small amount involved in the acquisition, I do it more out of a sense of generosity rather than an exercise of principle. There is no basis upon which it is reasonable to allow the fees claimed for Mr Boyle.

18. In addition, I have, in the reasons for judgment, made an assessment of other costs of prosecuting the claim which total $4,670. In reducing the award payable to Cowell and Clarke, I have also given some weight to the fact that the claim which has been prosecuted is unreasonable. Thus, for legal and valuer's fees, I reduce the claim for costs to $10,000. That sum should be added to the $4,670, being the costs of prosecuting the claim as assessed in reasons for judgment, making a total of $14,670.

19. As already mentioned, the Council has been awarded the costs of 13 February, 1995. Mr Mangan has prepared a bill in taxable form which is on the file for some $3,600. I make a broad axe deduction to reduce it to $2,000. That sum is to be deducted from the sum of $14,670.

20. In addition, the Council claims for costs which were lost on 1 June, 1995. The trial of this matter could not proceed on this day because Mr Young complained he was suffering from an eye condition. I am not prepared to say that the matter should have gone ahead on that day, or that Mr Young should be liable for costs which were unfortunately thrown away on that day. I do not think any deduction should be made from his costs on that occasion.

21. I do think it proper, nevertheless, to have regard to the fact that what was a relatively straightforward acquisition has occupied several hearing days in addition to all the work involved in the Council's preparation to defend this unreasonable claim. Some broad axe adjustment must be made to reflect that fact. The entitlement to be reimbursed for costs and in particular legal and valuers fees, which is expressed in the Land Acquisition Act, is not a charter for unreasonable claims in the secure knowledge that all legal and valuer's cost will be paid. That is made quite clear by the terms of s.36 of the Act.

22. I think, in all the circumstances, the most appropriate course is to reduce the claim for cost to $7,500. I might have made a larger deduction, but for the fact that I have already made some deduction of the costs payable to Cowell Clarke.

23. There will therefore be an order that the Council pays towards Mr Young's legal and valuer's fees and the cost of prosecuting the claim, the sum of $7,500.

24. In my reasons for judgment I mentioned that it might be necessary for there to be a taxation of costs but plainly that course is not now necessary.

25. There will be a declaration that the total compensation payable in respect of this acquisition is the sum of $5,618. There will be orders as follows:
    1. The respondent pay the applicant the sum of $2,828, being
    the difference between the amount paid into court on 28
    January 1993 and the declared award of compensation.

2. That the respondent pay the applicant interest on the said
    sum of $2,828, which I fix at $445.

3. That the respondent pay the applicant's costs, which I fix
    at $7,500.

4. That the respondent repair the fencing in the following
    manner:-
    (a) replacing permapine posts with concrete posts;
    (b) replacing strainer posts with hard wood or concrete
    posts;
    (c) tie the new fence to the existing fence at the eastern
    end of parcel 2, in a manner which secures the fence, and
    maintains a reasonable alignment of the fence, and if
    reasonably necessary installing an additional strainer post.
    5. That the applicant cause to be delivered up to the
    respondent the duplicate certificate of title, Register Book
    Vol.4246 folio 961, within three working days of notice in
    writing to do so.