Korab & Co Pty Ltd v The Minister for Natural Resources

[1996] QLC 113

[1996] QLC 113

 

  LAND COURT

BRISBANE

23 AUGUST 1996

In the matter of an application for costs with

respect to the conversion of tenure

Special Lease No.:06/47783, Brisbane District

Lessee:Korab & Co Pty Ltd

(SL 06/47783)  

Korab & Co Pty Ltd
  v.
  The Minister for Natural Resources

(Hearing at Brisbane)  

Application for Costs

Korab & Co Pty Ltd, “the applicant lessee” has applied for an order for costs arising out of an application, “the jurisdiction application” made on behalf of the respondent submitting that this Court did not have jurisdiction to hear an appeal from the applicant lessee in the matter of an application for conversion of tenure of a lease held by it, “the substantive matter”. This application for costs is made pursuant to s.41(9) of the Land Act 1962 which provision was continued in effect by s.521 of the Land Act 1994.
           In a written decision handed down on 29 March 1996 I held that the substantive matter could not proceed for want of jurisdiction, however, that decision was based on substantially different grounds from those submitted on behalf of the respondent.  The effect of my decision on the jurisdiction application was that the matter could be heard following the completion of certain formalities.
           It transpired that those formalities were completed and the substantive matter was heard.  The written decision on the merits was handed down on 26 April 1996.  The respondent had sought a figure of $300,000 and the applicant a figure of $275,000.  My determination was at $290,000. 
           I will not repeat in detail here, the legal and factual matters contained in the two written decisions referred to above.  What appears in this decision is best understood however, if read  together with those earlier decisions.  It will be useful however, if I set out a brief chronological  summary:-

August 1994Application for conversion of the lease held by the applicant lessee

under the provisions of the Land Act 1962.

June 1995Ministerial offer made pursuant to the Land Act 1962.  Offer not accepted by the applicant lessee.  This was followed by various exchanges between the parties by telephone and letter and in face to face discussions. “Without prejudice” offers were made by the applicant lessee.

August 1995Applicant lessee advised of the outcome of the review process, purportedly conducted pursuant to the Land Act 1994.

September 1995Letter headed “Notice of Appeal” filed in the Land Court Registry and served on the delegate of the Minister. 

23 February 1996Grounds of appeal filed in the Land Court Registry and served on the delegate of the Minister, both by facsimile.

23 February 1996Letter from the respondent’s legal representative, saying that a question of jurisdiction will be raised when the matter is heard on 26 February 1996, provided to the Land Court Registry and to the applicant lessee by facsimile. 

26 and 27 FebruaryHearing of the jurisdiction application.

6 March 1996Decision on the jurisdiction application handed down.

13 & 14 March           Hearing of the substantive  matter.

29 March 1996Decision on the substantive matter handed down.

29 March 1996Reasons for decision on jurisdiction application published.

4 April 1996Hearing of application by the applicant lessee for costs of the jurisdiction application.

26 April 1996Reasons for decision on substantive matter published.

Whilst the application to convert was made under the Land Act 1962 and the offer was made under that Act, the process of ongoing interaction between the parties overlapped the coming into effect of the greater part of the Land Act 1994 on 1 July 1995. The matter then took on the appearance on one governed by the provisions of that Act and came to the Court, initially, as a purported appeal under that Act. The evidence is clear that reference to the 1994 Act was first introduced by the respondent’s department in what appears to have been a conscientious attempt to afford the applicant lessee the opportunity to avail of the new internal review processes introduced in the new Act. The behaviour of the respondent department in this regard was described by the applicant lessee as “misleading”.
           When the substantive matter came on for hearing, Counsel for the respondent submitted that the purported appeal did not satisfy the provisions of s.428 of the 1994 Act, therefore, the Court did not have jurisdiction to hear the matter.  I will refer to this as the “s.428 argument”. In my decision on the jurisdiction application I decided that the 1994 Act was not relevant but that the matter should continue under the 1962 Act which required the Minister, not the applicant lessee to refer the matter to the Court.  I will refer to this as the “1962 Act argument”.  In my written decision I stated my view in passing of certain issues arising out of s.426 of the 1994 Act, a section which I said would need to be satisfied before any appeal right could arise under sections 427 and 428.  This may be referred to as “the section 426 point”. 
           I come back now to the matter of the application for costs.  During this application I heard some submissions touching on the substantive matter, in particular, a suggestion by the respondent that the applicant lessee had, by its behaviour, forced the respondent into Court.  Reference was made to Moyses v Townsville City Council (1979) 6 QLCR 271 where at 274 the Land Appeal Court said:

“......, where the Court is considering whether it should award costs to an 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.  We would think that usually it would be more 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 do not consider the substantive matter to be relevant in a costs application.  Moyses may be relevant in the substantive matter itself, but can have no direct application in considering the question of costs arising out of the respondent’s jurisdiction application.  I therefore put aside this submission, together with all other submissions concerning the substantive matter but with one exception.  That exception involves what I consider to be the appropriate behaviour of the respondent who, having heard my decision concerning the jurisdiction application, acted to have the relevant formalities completed with such haste that the substantive matter was able to be disposed of within a time frame suitable to the needs of the applicant lessee.
           Whilst disposing of these preliminary points, I also mention that I do not see as relevant to the question of costs the issue of the conduct of the applicant lessee in seeking to settle the substantive matter by means of without prejudice dealings.  Without saying whether this may or may not be relevant in other circumstances, I find this to be irrelevant to the jurisdiction application, therefore not relevant to this costs application. 
           The applicant lessee made reference to the Land Act 1962 in submissions on the respondent’s application but did not touch on the point which became the ratio decidendi of my decision.  The respondent did not refer to the 1962 Act argument.  It cannot be said that either party succeeded in their submissions in that the lessee applicant had submitted that the Court had jurisdiction to hear the matter whilst the respondent’s argument centred on the proposition that the substantive matter could not proceed at all.  The respondent might, on a generous view, be said to have succeeded in submitting that the Court did not have jurisdiction and in my finding accordingly.  To take this point further: had the respondent not raised the point of jurisdiction I might have proceeded in ignorance of the absence of appropriate legislative authority. On the evidence that I heard however, I see such an argument as being a little like turning the lights out, then complaining about the dark.  The respondent did not succeed in having the matter struck out in toto but did succeed in assuring that the matter was placed before the Court in the required manner: an important but not a critical outcome. 
           It is said on behalf of the applicant lessee that it was misled into proceeding under the 1994 Act by the behaviour of the respondent.  “Misleading” is perhaps a strong word to use in the circumstances as the evidence indicated to me that there was simply a misguided attempt to assist the lessee and to apply the provisions of the 1994 Act.  This does not mean that I am of the view that the respondent’s department is blameless, as it seems to me that the agency which administers the Act, whilst it does not adopt a fiduciary role with respect to citizens dealing with matters under the Act, at least has the responsibility of adopting the correct procedure.  I am aware that the relevant procedure provided under the 1994 Act is new and little tricky in parts, however all this suggests is that officers of the relevant department need to ensure that appropriate legal advice is obtained and in a timely manner.  The applicant lessee cannot however, point to these deficiencies and absolve itself of all responsibility and then call on independent legal advice when difficulties become apparent.
           The most important submission by the applicant lessee, in my view, is concerned with the manner by which the respondent approached its jurisdiction application.  My first concern in this regard lies with the failure to raise with the applicant lessee sufficient of the nature of the application to be made to allow that party to prepare itself.  It transpired that the applicant lessee’s solicitor correctly anticipated the central matter to be raised by the respondent but such an approach does not allow for a proper ventilation of the issues nor for the Court to be provided with relevant submissions and authorities.  In fact there was an adjournment on the 26 February, brought about to a large extent at my initiative, to ensure that the applicant lessee was in a position to reply to the respondent’s submissions.  I do not see such behaviour by the respondent as being conducive to either settling the matter or in providing for an expeditious hearing.  My second concern is with the conduct of the jurisdiction application itself.  Now it was the respondent’s case that the s.428 argument was the central point but it was not until the second day of the respondent’s application that important evidence concerning this argument was called,  by consent, after the respondent had closed its case.  The respondent had been aware in September 1995 of the “Notice of Appeal” and ought to have been in a position to prepare a succinct, well structured case.  An application of this nature should be prosecuted with somewhat more precision than it was.  In matters such as this it is often useful to provide, at the outset, a full chronology with all supporting evidence and then to apply the relevant law to that.  Such an approach is not only helpful to the Court but allows the other party to become well acquainted with the case to which it has to respond.  I think this is a highly important matter.  Whilst it is important that a Court not proceed without jurisdiction, it is similarly important that a party whose submissions may result in another party having jurisdiction denied it be given every reasonable opportunity to become aware of the issue to be dealt with.
           It probably goes without saying that time was wasted during the hearing of the respondent’s jurisdiction application on the “s.428 argument” an argument which in the circumstances it was appropriate be responded to by the lessee applicant.  Equally, there was time  spent in dealing with the s.426 point which was initially raised by the applicant lessee, through the treatment of this matter by the respondent was somewhat cursory.
           I now turn to consider and apply the law to what I have set out above.
           Whilst in some jurisdictions, it might be said that costs follow the event unless some special reasons exist, the approach of the Land Court is somewhat different and has been considered recently by my learned colleague Mr. Neate in Flagstone Creek Pty Ltd. v. The Chief Executive, Department of Lands (unreported 20 July 1995) where following consideration of a number of authorities he wrote:

“The Land Court’s discretion is unfettered but must be exercised judicially, that is, by reference to relevant considerations (for example see Townsville City Council v MoysesandMorris (1979) 6 QLCR 271 at 273-4, WH Bowden v TheValuer-General (1980-81) 7 QLCR 138 at 144-7). It is apparent that the attitude which the Court should take in the exercise of its discretion is primarily one of restraint which, speaking broadly, may be exercised against a party if the Court is satisfied that the party acted arbitrarily or capriciously, or in a frivolous or vexatious manner. In determining whether a party has acted in such a way, it is relevant to consider whether the legislative provision under consideration is complex in it own terms or if difficulties arise in its application in a particular case. Such considerations are also appropriate in a case where an application is made for an order for costs against a non-party.”

I do not understand Mr. Neate to be saying that costs would be awarded only where a party acted arbitrarily or capriciously or in a frivolous or vexatious manner but that such behaviour may be sufficient to found an order for costs.  I do take Flagstone, however, as being  authority for the proposition that this Court acts with restraint in exercising its discretion concerning the matter of costs.  To this I would add that it is my view that the conduct of the parties in the application is a most relevant consideration in exercising that discretion.  See for example Ritter v Godfrey [1920] 2 K.B. 47.
           The conduct of applications and other hearings before this and any other Court is a matter of great importance for the community at large expects, perhaps demands, economy and efficiency in the conduct of litigation.  It is this issue which together with the outcome of the respondent’s jurisdiction application that has most influence on my consideration of the application for costs.  The outcome is a somewhat peculiar one when one considers the authorities, for it is unusual for one party to succeed in the application but to fail in the outcome.  Here as I have said, the respondent “succeeded” in having the Court find an absence of jurisdiction but failed in that the substantive matter was in fact heard. 
           Counsel for the respondent referred me to Beedell Farms and Grazing Pty Ltd v. TheValuer-General (1979) 6 QLCR 109 where the Land Appeal Court ordered costs against the Valuer-General who did not raise the question of jurisdiction until the matter was before the Land Appeal Court. I understand counsel’s submission to be that costs might be awarded in such an extreme case but not in the case of the type that I heard. I derive no assistance from this authority for a number of reasons, the first being that there is nothing to say that the Land Court may not have awarded costs had the question of jurisdiction been squarely placed before it. In addition, I would say that the matter I heard is a conversion matter and not a matter arising under the Valuation of Land Act 1944 and therefore may have different impacts on the Land holder. In any event, the question of costs is a matter of discretion.
           In the instant case, the applicant lessee did succeed in having the substantive matter heard, and although this is not a jurisdiction where costs would generally follow the event, I think it appropriate in all of the circumstances that I have outlined, that an award of costs is made in favour of the applicant lessee.  I think, however, that this is a case for the apportionment of costs as I cannot conclude that the applicant lessee is without blame in the manner that the matter came before the Court. 
           I have from the parties an agreement that were costs to be awarded an amount of $3,000 would be appropriate.  Having regard to what I have set out above, I order that the respondent pay the applicant lessee’s costs to the extent of $2,000.

RP SCOTT     
  MEMBER OF THE LAND COURT