Linda Harvey v Burwood Council

[1998] NSWLEC 101

Land and Environment Court

of New South Wales

CITATION:	Linda Harvey v. Burwood Council [1998] NSWLEC 101
PARTIES:	APPLICANT Linda Harvey RESPONDENT Burwood Council
FILE NUMBER(S):	30684 of 1991
CORAM:	Talbot J
KEY ISSUES:	:-
LEGISLATION CITED:
CASES CITED:
DATES OF HEARING:	27/07/98
EX TEMPORE JUDGMENT DATE :	07/27/1998
LEGAL REPRESENTATIVES:	APPLICANT Mr G De Souza (Agent) Solicitors Applicant n/a RESPONDENT Mr F Levy (Solicitor) Forbes Smith & Co Solicitors

JUDGMENT:

1. HIS HONOUR: The question of costs was reserved when I delivered judgment in this matter on 11 May 1998. The reason that the question of costs was reserved is because the history of the matter in its entirety, or at least to a very large extent, had not been touched on during the course of the hearing before me. In particular during submissions in so far as they were relevant to a question of costs.

2. The matter has a long history and it is not necessary for me to reiterate all of the events that have occurred since the land was first resumed by the council in February 1989. However it is apparent from the material that is before the Court, either by way of evidence or in the record of other proceedings associated with this resumption, that there has been, from the outset, an ongoing hard fought dispute between this applicant and the council.

3. The jurisdiction of the Court in relation to the order for costs is found in s 69 of the Land and Environment Court Act. In common with s 76 of the Supreme Court Act it is clear and well established that any order for costs is in the discretion of the Court.

4. In the course of argument Mr De Souza, appearing as agent for the applicant, put a submission that the applicant should have an order for her costs, including all of the out of pocket expenses that were incurred in respect of the representations made, and that the costs order should encompass the prospect that there were expenses incurred in that respect.

5. In Cachia v Hanes 179 CLR 403 the High Court considered the effect of s 76 of the Supreme Court Act (which as I said is relevantly in the same terms as s 69 of the Land and Environment Court Act) on a claim for compensation for loss of time spent in preparation and conduct of the case and for out of pocket expenses where the individual litigant was not legally represented.

6. The High Court dismissed that claim and held that costs were confined to money paid or liabilities incurred for professional legal services.

7. Costs as between party and party are by way of an indemnity to the person entitled to them. They are not intended as a punishment on the one hand, nor do they represent something beyond the entitlement of the successful party in any judgment as if it was a bonus.

8. The function of an order for costs is that it is intended to be compensatory. Cachia v Hanes is again authority for that proposition, as is Latoudis v Casey 170 CLR 534. It is while bearing in mind that authority that I have already indicated to Mr De Souza during argument that any order for costs will not encompass anything beyond the costs which have been incurred for any necessary legal representation or the costs associated with the expense of bringing valuers to court for the purposes of supporting the applicant's claim.

9. The claim made by the applicant was initially supported by a valuation from a Mr Spathonis. That valuation was attached to the class 3 application which initiated the proceedings. It indicated a claim in the sum of $650,000 as the value of the land.

10. The applicant's claim thereafter varied from time to time according to the approach taken by several valuers engaged to assist the applicant in the conduct of its case. They were based upon information that the valuers respectively had from time to time in regard to the development potential for the land.

11. It is fair to say that the applicant's claim generally ranged, at various stages during the proceedings, between $600,00 and $700,000 although a valuation was furnished at one stage which suggested that in certain circumstances, depending upon the evidence that was forthcoming in regard to development potential, the value could be as low as $430,000.

12. It is also fair to say that the council's contention was generally to pay compensation in the sum of $250,000 although, as I will mention in a moment, there was an indication that if the Court held a certain way in relation to the development potential for the land, that figure would be increased to accommodate that potential. That was indicated as long ago as 1990, when the $250,000 was being put forward, as I understand it, in respect of a simple residential site. It was acknowledged at that time that if the development potential was shown to be for home units, it could be in the order of $390,000.

13. On 16 March 1992, in an interlocutory judgment, Bignold J noted that the claimant's claim was then in the order of $500,000 and that the council had apparently offered the sum of $250,000. That indicates a consistency with the dispute in the order of what I just outlined.

14. The council, in December 1991, was still maintaining that the appropriate amount for compensation in respect of the value of the land was $250,000 and it indicated accordingly.

15. For the purpose of acquainting myself with the nature of the issues that were before him, I have now read the judgment of Bignold J delivered on 7 May 1993. One of the major issues in that hearing was the highest and best use of the land. His Honour noted in the judgment that the council's offer of compensation in the sum of $250,000 did not reflect any potential for residential flat development. It is apparent from the reading of his Honour's judgment that the council's valuer was prepared to acknowledge that the land value would be in the order of $325,000 if the resumed land was regarded as part of an agglomerated residential flat development site. A Mr Sykes, who gave evidence on behalf of the applicant, provided a valuation based upon an in globo unit rate of $125,000 in the sum of $750,000. In the event, Bignold J applied the evidence as he saw it and determined a market value of $561,000.

16. The council appealed to the Court of Appeal against the assessment of compensation by Bignold J and, in the orders sought, contended for compensation in the sum of $290,000 which, although inconsistent with what Mr Hubbard had put, appears to be in line with its underlying position regarding the value of the development potential of the land.

17. The applicant lodged a cross appeal in the Court of Appeal and contended in that cross appeal for an order that the compensation should be increased from the figure of $561,000 determined by Bignold J to a figure "closer to $750,000".

18. The Court of Appeal made no determination about the level of compensation. It published its reasons for setting aside the judgment of the Bignold J on 3 April 1995 and returned the matter to this Court for a rehearing.

19. Evidence was presented to me this morning of a consideration of a report by the general manager of the council by a meeting of council on 13 June 1995. It appears that after the Court of Appeal had delivered its judgment, the applicant, Ms Harvey, wrote to council on 3 May offering to settle the matter in an amount of $462,000. Clearly that offer was not acceptable to the council.

20. Ultimately, before me the issue of the development potential for the land remained a live issue. At best the council contended for a development potential of four units and for a unit value of $77,000 per unit which would in that case have generated compensation in an amount of $308,000. Recognising that there had been evidence regarding the potential for a six unit development, the valuation evidence of the council was that in that circumstance, the value should be in the order of $460,000. Both those figures were put forward on the basis that it was necessary first of all for the Court to find that either a four unit or six unit development potential was accepted.

21. On the other hand, the applicant contended for a six unit development potential. The valuation per unit ranged between $102,000 and $120,000 per unit which reflected a range contended for by the applicant between just over $600,000 and just over $700,000.

22. In the ultimate result, which became the order of the Court when I delivered judgment on 11 May this year, compensation was awarded to the applicant in the sum of $450,000 on the basis that the land had potential for the development of a 2-storey four 2-bedroom unit building with parking and that the unit value was in the order of $110,000 for each 2-bedroom unit site. That gave a derived value of $440,000 which the Court rounded to $450,000 to give the dispossessed owner the benefit of any doubt.

23. It is apparent from the summary of events I have given that on one view of it neither party has been successful. The applicant has not been successful in contending for the ultimate potential for the site in terms of the capacity to accommodate the number of units for which she contends. Secondly, the rate per unit site has not been supported by the Court. Equally the council's position has not been vindicated. Adapting the evidence from both sides, the Court was able to determine what, in its opinion, was the true value of the land to be reflected in compensation payable as at the date of resumption.

24. Throughout these proceedings, firstly before Bignold J and secondly before me, there was vigorous contention regarding the development potential of the land. In order to meet her own case, or should I say propound her own case and to meet the council's case, it was necessary for the applicant to rely on the expertise of a valuer or valuers from time to time.

25. Although the judgment of Bignold J was overturned in the Court of Appeal, it was nevertheless part of the chain of litigation within this Court which ultimately led to the determination of the amount of compensation. I hasten to add of course that in making my determination on 11 May 1998 I neither took account of the evidence before Bignold J, that is in so far as the evidence was not tendered afresh before me, nor did I have regard to Bignold J's reasons. However I have taken account of the reasons given by the Court of Appeal for setting aside the decision of Bignold J.

26. I therefore recognise the expense incurred by the applicant for the two expert witnesses, to whom Bignold J had regard, as a necessary expense incurred by the applicant to meet the contention of the council for a figure which was ultimately not sustained. It was not sustained by Bignold J or by me. I am satisfied that the applicant is entitled to recover the costs incurred by the payment of fees to Messrs Sykes and Riley in so far as those costs were properly and relevantly incurred in relation to the conduct of the litigation before Bignold J.

27. The valuation evidence in the hearing before me was provided by a Mr Aitken on behalf of the applicant. Mr Levy for the council, correctly in my opinion, concedes that it would not be unreasonable for the applicant to be reimbursed for the evidentiary costs incurred in relation to Mr Aitken.

28. I am satisfied that a costs order in favour of the applicant should include such legal costs incurred in relation to the conduct of the litigation. In addition, the order should include the costs incurred by way of payment of fees to Messrs Sykes, Riley and Aitken in so far as they relate to the conduct of the litigation.

29. The costs incurred by fees paid to Mr Spathonis are not quite as clear cut as the costs incurred for fees paid to the other valuers. However, the valuation or letter of valuation furnished by Mr Spathonis was used, as required, to support the class 3 application. I am satisfied therefore that it was a necessary and incidental cost as an out of pocket expense incurred by the applicant in the conduct of the litigation.

30. The formal order that I make is that the respondent pay the costs of the applicant including such fees as were properly paid for the purpose of the conduct of the litigation to valuers Spathonis, Sykes, Riley and Aitken. I think that order covers the situation.