Merchin v The Commissioner of Main Roads

[1989] QLC 6

[1989] QLC 6

 

  LAND COURT,

BRISBANE

16th June, 1989

Re:   Claim for compensation  -
  Resumption for Road purposes.
  A88-89.

Leslie George Merchin, Beryl Jean Merchin and
  Stephen Leslie Merchin
  v.
  The Commissioner of Main Roads

DECISION ON INTEREST AND COSTS

(Hearing at Rockhampton)

On 6th June, 1981, a strip of land through Portions 88 and 90, County of Livingstone, Parish of Gracemere, was taken for Road purposes - the scheme of resumption being the relocation of the Capricorn Highway (Rockhampton to Duaringa). At the time the subject portions were part of an aggregation of lands which were held by the claimants and used for the purposes of grazing cattle, including the grazing of irrigated pastures. The road where it bisects the subject portions is a limited access road. The Notice of Intention to Resume the land was given on 19th December, 1980. The Notice among other things stated that the Constructing Authority (the Commissioner of Main Roads) hereinafter referred to as the Department was willing to treat with the claimants as to the amount of compensation and to negotiate any matter arising out of the acquisition of the land. The claimants through their solicitors, Messrs Swanwick Murray and Roche, in May, 1982, took up the offer to negotiate with the Department, more particularly on the question of accommodation works which could be provided by the Department during the construction of the road. Negotiations continued over a period without a formal claim for compensation being served on the Constructing Authority until 9th December, 1988, when the Crown Solicitor acting on behalf of the respondent referred the matter to the Court under Section 24 of the Acquisition of Land Act (the Act) and asked for an order to issue under Section 25. In response to an order duly issued under the section, a claim was filed in Court on 23rd February, 1989, by Messrs Swanwick Murray and Roche. Sums were claimed for land and improvements; injurious affection and severance and disturbance totalling $63,223 and interest was sought on compensation. When the matter was called on for hearing on 18th May, 1989, the Court was informed that compensation had been settled in the sum of $45,000 and that the issues before the Court were confined to the period in which interest should be paid on the agreed sum and the quantum that should be allowed for legal and valuation fees incurred in the preparation and lodgment of the claim.
           The respondent entered into possession of the resumed land on 12th September, 1983.  It is submitted by the respondent that interest should run from that date to a date in 1985 when advice was given by the respondent that the Department intended to provide no further accommodation works.  The submission of the claimants is that interest should run until the date of hearing.
           The claimants opened negotiations with the Department for the provision of accommodation works prior to the calling of tenders for the construction of the road.  An access under the Scrubby Creek bridge was one matter subject to negotiation, access across the road was another, and there were others, including the fencing of the road,  the installation of water pipes under the road and so on.  It was at all times the view of the claimants that it was reasonable to withhold the lodgment of the claim until such matters were finalised.  Alternatively, they could have claimed the monetary equivalent of the cost of the provision of such works as compensation.  The parties, however, elected to adopt a course under which certain works would be provided by the Department and effected during the construction of the road whilst some were effected by the claimants at cost to the Department.  The provision, revision and alteration of works went on over a period of years.  The respondent first pressed for the lodgment of a claim in a letter dated 13th September, 1985.  In May, 1986, following further discussions with the claimants, an offer of an advance against compensation in the sum of $23,250 was made and a claim invited.  On 7th January, 1987, and again on 19th August, 1987, the respondent in advices given to Swanwick Murray and Roche expressed concern over the delay in the lodgment of a claim and intimated in the first letter that it could reasonably be argued in the circumstances of the case that interest should not be paid on compensation.  The second letter was met with a reply from the claimants dated 7th September, 1987, that there were several problems regarding accommodation works which were still unresolved and that until they were resolved the claimants considered that they were not in a position to submit a final claim for compensation.  On 18th November of the same year, the respondent offered to settle compensation in the sum of $41,500 after having referred the matter to a firm of valuers for the purposes of investigating losses sustained as a result of the resumption.  On 5th January, 1988, the offer was repeated.  In December, 1988, the Crown Solicitor referred the matter to the Court.
Under Section 28 of the Act, the Court has a general discretion to award interest. In the exercise of the discretion, the Court may order that interest be paid on the whole or any part of the award for the whole or any part of the period between the date of the resumption and the date compensation is finally paid. The exercise of the discretion is dependant upon the facts and circumstances of each particular case. See The Ann Street Presbyterian Church Land (1925) 10 C.L.L.R. p. 257; I. Small and Anor. v. Brisbane City Council (1968) 35 C.L.L.R. p. 239; White v. Brisbane City Council (1975) 2 Q.L.C.R. p. 359; Barnes Milling Ltd. v. Brisbane City Council (1979) 6 Q.L.C.R. p. 217; Silverton Grazing Pty. Ltd. v. The Commissioner of Water Resources (1980-81) 7 Q.L.C.R. p. 197; and Shann v. The Commissioner of Water Resources (1986/87) 11 Q.L.C.R. p. 194.  The usual course is that interest is ordered to be paid from the date of resumption or the date the resuming authority took possession of the land to the date compensation is paid.  In Re: The Union Fidelity Trustee Company of Australia Limited v. The Co-Ordinator-General L.C. (11th August, 1988) (A88-44), the learned President listed some matters which were considered by him in the exercise of his discretion in the particular case.  These were -

"No advance has been made.  There was no apparent undue delay in serving a claim on the constructing authority.  The claimant was not brought to Court in response to an Order to enter an Appearance (Section 25).  The claimant duly filed a copy of the claim in the Registry and requested that the matter be listed for hearing.  The claimant's conduct, as far as I am aware, has been rational and unobstructive.  The claimant has not remained in occupation.  "

In the subject case possession of the resumed land was effectively taken on 12th September, 1983. There is no suggestion that the claimants have been irrational or obstructive. Otherwise, the circumstances differ from those which exercised the mind of the learned President in the case last cited and those referred to previously. It can be accepted that provision of accommodation works acts as a setoff against compensation and that the quantum of the claim will fluctuate according to their degree and import. This is evident in the history of the offers. The claimants have had the services of a valuer since 1982. He had participated in discussions with the Department. The Department has had a number of valuers look at the matter over a period of time. Whilst it may be argued that the Department finalised its offer of accommodation works in September, 1985, there is evidence that the last payment for works effected by the claimants was made in September, 1986. During 1987 negotiations led the Department to make further investigations into the problems caused by the resumption and to make the offer made in November, 1987, but it would appear that the Department had not changed its attitude towards the provision of further accommodation works. It is noted that the account for the services of valuer Herron for the purposes of making an assessment of compensation for the claim including conferences and outlays is dated 28th August, 1986. This coincides with the time the Department finalised payment for works effected by the claimants. In the year following, three requests were made by the Department for the submission of a claim, without success. Pleas by the claimants acting on their own behalf for further negotiation on the provision of accommodation works were refused or ignored. It would appear to me that by August, 1987, it was evident the Department had reached the end of its tether and that matters thereafter could only have been concluded by the submission of a claim. This only came about through the action of the respondent in invoking the provisions of Section 25 of the Act. The settlement of compensation when compared with the offer made by the Department at the end of 1987 in the absence of a claim tends to confirm the view that the matter could have been finalised much sooner. In determining the issue, it is relevant to consider the nature of the acts done during the interval. In the period during which negotiations for works were being carried on and works were being carried out by agreement it would be reasonable in my opinion for the claimants to withhold the submission of a claim. The period appears to have terminated in about September, 1986. Thereafter there appears to be nothing in the correspondence of the Department which would lead the claimants to believe that further works would be provided. In the circumstances I am of the opinion that interest on the agreed sum could be terminated some twelve (12) months after the date of the first communication from the Department in 1987 or 5th January, 1988, being the date of the last communication prior to the matter being put into court by the respondent. Mr Kerry Herron of Herron Todd White Valuers had been involved in the matter since 1982. The fees claimed are in the sum of $3,000 which includes conferences and outlays to 1986. He inspected the land on more than one occasion and attended a number of conferences mainly relating to accommodation works to lessen interference and disturbance. Counsel for the respondent submits that the fees which are compensable are only those incurred for the purposes of the formulation of the claim and that fees based on the Australian Institute of Valuers Recommended Scale effective from 1st January, 1988, on the sum claimed would amount to $1,470 or $1,290 if based on the Scale operative from January, 1985.
           The bill of costs was delivered by Miss D.M. Flanagan, a partner in the firm of Swanwick Murray and Roche.  The bill is in the sum of $3,363.95 and covers the period from 2nd July, 1981 (subsequent to the date of the Proclamation) to 21st February, 1989.  The bill was prepared on a solicitor and client basis.  The bill includes fees of counsel in the sum of $760.  Apart from costs which could be claimed to be directly attributable to the formulation of the claim filed in response to the Order of the Court, the bill covers substantial areas where costs were incurred for the purposes of negotiation and discussion on the provision of accommodation works.  Miss Flanagan said that the bill only included costs which in her opinion were relevant to the formulation of the claim.  She is of the opinion that provision of accommodation works was an integral part of the claim and that her professional participation in negotiations and discussions on such matters assisted in the formulation of the claim. 
           Costs were a matter covered extensively by the Court in Merivale Motel Investments Pty. Ltd. v. Brisbane Exposition and South Bank Redevelopment Authority (1984/85) 10 Q.L.C.R. p. 175, where reference was made to the statement of the learned President in Szirtes v. Pine Rivers Shire Council (1969) 36 C.L.L.R. 103 at p. 105 where the learned President said -

"However, a claimant who seeks to obtain costs incurred preparatory to lodging a claim must prove not only that the costs have been incurred for the purpose of formulating and lodging his claim but also that they were necessary and reasonable in the circumstances of the case.  "

In the Merivale case, the learned Member rejected a claim for costs incurred in an objection conference.  He rejected costs incurred in conferring with the resuming authority in an abortive endeavour to obtain a settlement of compensation.  He allowed costs on a solicitor and client basis.  The objection taken to the bill of costs by Counsel for the respondent is generally that in the period between July, 1981, and early February, 1989, the bill accounts for costs incurred in matters dealing with the provision of the works provided.  In the period I note that certain costs were incurred in engaging the services of Mr Herron and matters ensuing.  Had the claimants been unsuccessful in these negotiations, there would in my opinion be every reason to agree with the submission that such costs had been thrown away but this does not appear to be the case.  If an analogy is taken that costs follow the event, the claimants would be expected to be successful in obtaining costs of and incidental to the action in obtaining the provision of the said works.  The formulation of the claim was dependant upon the provision of such works.  In the circumstances I see no reason to distinguish between costs incurred for the purposes of obtaining the accommodation works and costs strictly relative to the formulation of the claim. 
           The matter has obviously been regarded by the parties as having some complexity.  The respondent sought advices from a number of valuers.  Miss Flanagan had the services of Mr Herron and sought the advices of Counsel.  Such action does not appear to me to be unreasonable.  I have therefore concluded that the bill should be allowed in full and that Mr Herron's fees should also be allowed in full.
           Accordingly it is ordered that interest on the agreed sum of $45,000 be paid at the rate of 13.25 percentum (13.25%) per annum for the period commencing on 12th September, 1983, and ending on 5th January, 1988.
           Compensation payable by the respondent for legal and valuation fees incurred by the claimants for the purposes of the claim is determined in the sum of $6,363.95 (Six thousand, three hundred and sixty-three dollars and ninety-five cents).

Member of the Land Court