Pajares v The State of Queensland
[2003] QLC 63
•4 September 2003
LAND COURT OF QUEENSLAND
CITATION: Pajares v The State of Queensland [2003] QLC 0063 PARTIES: Luis James Pajares
(claimant/applicant)
v.
The State of Queensland
(respondent)FILE NO: A2001/0689 DIVISION: Land Court of Queensland PROCEEDING:
An application for costs of and incidental to the hearing and determination of a claim for compensation under the Acquisition of Land Act 1967
DELIVERED ON: 4 September 2003 DELIVERED AT: Brisbane HEARD BY: Written Submissions MEMBER Mr JJ Trickett, President ORDERS:
1.
The respondent pay 50% of the claimant's costs of and incidental to the hearing and determination of his claim for compensation.
2.
The respondent pay 50% of the claimant's costs of this application.
3.
The costs are to be assessed on the standard basis by the appropriate assessing officer of the Supreme Court under the scale of costs prescribed by law for proceedings in the Supreme Court.
CATCHWORDS:
Resumption - Costs - Principles to be applied - Claimant only partially successful - Partial award of costs - Factors to be applied - Standard or Indemnity basis - Acquisition of Land Act s.27 - Land Court Rules 2000 Rule 4(1) - Uniform Civil Procedure Rules Rule 704.
Practice and Procedure - Land Court Rules 2000 - Relationship to Uniform Civil Procedure Rules 1999 - Latter apply to Land Court despite apparent limitation to three mainstream courts.
Evidence - Admissibility - Without prejudice offer to settle without reservation as to costs - Calderbank procedure - Whether Court can consider effect of such offer in relation to costs.
COUNSEL: Mr CL Hughes SC and Mr RM Needham for the claimant
Mr DR Gore QC and Mr RS Jones for the respondentSOLICITORS: Suthers Taylor, Lawyers, for the claimant
Crown Solicitor, Crown Law, for the respondent
Background
[1] On 23 June 2003 the Land Court determined compensation consequent upon the resumption of land by the respondent from the claimant for National Park Purposes under the Acquisition of Land Act 1967 (the A of L Act). The amount of compensation determined was $3,696,000.
[2] The amount finally claimed by the claimant was $5,578,018.75, while the amount of the valuation finally put in evidence by the respondent was $1,802,527. The amount of compensation determined is therefore nearer to the amount claimed by the claimant than the valuation of the respondent.
[3] At the time of delivery of the Court's reasons for the determination of compensation, the parties were given leave to make written submissions as to costs. Both parties did so, the claimant making the present application for costs and the respondent contending that the Court should not award costs to the claimant, or at least limit any award of costs.
The Power of the Land Court to award Costs
[4] The general power of the Land Court to award costs is contained in s.34(1) of the Land Court Act 2000, which provides:
"Subject to the provisions of this or another Act to the contrary, the Land Court may
order costs of a proceeding in the court as it considers appropriate."
[5] However, in cases such as the present involving determination of compensation under the A of L Act, that general discretionary power is restricted. Section 27 of that Act provides:
"(1) Subject to this section, the costs of and incidental to the hearing and determination by the Land Court of a claim for compensation under this Act shall be in the discretion of that court.
If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than the amount of the valuation finally put in evidence by the constructing authority, costs (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority."(2)
Subsection (3) of s.27 is not relevant in these proceedings.
[6] Those provisions and similar provisions in land acquisition statutes in other States and in the Commonwealth have been considered by courts on a number of occasions. In Yalgan Investments Pty Ltd v Council of the Shire of Albert (1997) 17 QLCR 401, the Land Appeal Court of Queensland considered the leading cases on the scope and exercise of the Land Court's discretionary power to award costs. In doing so, the Land Appeal Court identified a number of general principles which must be considered. In addition to Commissioner for Railways v Buckler (1994) 15 QLCR 262 (Queensland Court of Appeal), those authorities considered by the Land Appeal Court included Moyses & Ors v Townsville City Council (1979) 6 QLCR 271 (Land Appeal Court), Minister for the Environment v Florence (1980-81) 45 LGRA 127 (Supreme Court of South Australia), Banno & Anor v Commonwealth of Australia (1993) 81 LGERA 34 (Federal Court) and Kabale Holdings Pty Ltd v Director-General, Department of Transport (1997) 18 QLCR 166, in which the Land Appeal Court quoted passages from decisions of the Full Court of the Supreme Court of Queensland in Wyatt v Albert Shire Council [1987] 1 QdR 486 and Assignment Pty Ltd v Kirby [1981] 1 QdR 129.
[7] In the present case, the parties agree that the principles relevant to the exercise of the discretion of the Land Court under s.27(2) of the A of L Act, were conveniently summarised by the Land Appeal Court in Yalgan and that more recent cases on costs add little to the analyses in Yalgan. Those propositions and principles appear at (1997) 17 QLCR 406-408:
"(a) The power to award costs of proceedings is entirely the creation of statute
(Wyatt at p. 488 quoted in Kabale at p. 29).(b) The power of the Land Court to make an order for costs in relation to a claim for compensation is conferred by [s 34(1) of the Land Court Act 2000] and s 27 of the Acquisition of Land Act 1967. (c) Subject to section 27 of the Acquisition of Land Act 1967, the discretionary power of the Land Court is full or complete (cf. Wyatt at pp. 488-9 and Assignment Pty Ltd at p. 134, quoted in Kabale at p. 29). (d) The only statutory constraints on the exercise of the discretion are that: (i) if the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than the amount of the valuation finally put in evidence by the constructing authority, costs (if any) shall be awarded to the claimant; and
(ii) otherwise, costs (if any) shall be awarded to the constructing authority (see Buckler at pp. 23-4 for history of and policy reasons for those constraints).
(e)
Compulsory acquisition cases differ from ordinary claims in the significant respect that the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not. The mere acquisition by compulsory process gave the claimant a claim to compensation which he or she could hardly be expected to renounce (Florence at p.149, Banno at p. 53).
(f)
The discretion whether to award costs may not be exercised in an arbitrary manner but must be exercised on principled grounds (Banno at p. 53) or judicially, that is, for reasons that can be considered and justified (Wyatt at p. 489) by reference to relevant considerations (Moyses at p. 273).
(g)
In some cases the matter may be so obvious as not to require explanation in the form of stated reasons (Wyatt at p. 489).
(h)
In general, a party who is wholly successful in litigation can expect an order for costs in his favour. Where compensation is awarded to one who had already been given, by statute, the right to receive it, it is just to say that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation that is, ex hypothesi, his due. But costs are discretionary and no hard and fast rules will ever be allowed to occupy part of an area controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases. In some cases, the Land Court may consider that there are sufficient reasons for departing from the general rule (Moyses at p. 278, Florence at pp. 149-50).
(i) Although the exercise of the power does not exclude resort to the 'settled practice' of a court where such a practice has evolved, a purported exercise of discretion which fails because the mind is closed to relevant considerations through a rigid adherence to preconception involves an error of law that is open to correction on appeal (Wyatt at p. 489).
(j)
Section 27(2) of the Acquisition of Land Act 1967 should not be regarded as a legislative suggestion that, where the claim is substantially more than the amount awarded, and the amount put in evidence by the constructing authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding any costs to the claimant but should award costs to the authority (Moyses at p. 274).
(k)
Where the Land Court is considering whether it should award costs to a constructing authority, it would 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. Usually it would be more relevant to inquire whether the conduct of the claimant (such as, for example, making an exorbitant claim) has been such as to force the authority, unreasonably and unnecessarily, into litigation (Moyses at p. 274) or whether the claimant has pursued a vexatious, dishonest or grossly exaggerated claim or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court (Banno at p. 53)."
The General Rule
[8] As stated in Rule 689 of the Uniform Civil Procedure Rules 1999 (the Uniform Rules), costs of a proceeding are in the discretion of the Court but follow the event, unless the Court considers that another order is more appropriate. Therefore, in most civil cases, unless there are circumstances which require departure from the general rule, a successful party will be awarded costs. However, as McPherson JA pointed out in Buckler at pp.268-269, compensation cases are different and to apply the general rule in an unqualified way would enable the claimant to contest the amount of compensation with more or less complete impunity as to costs, as it is rare for no compensation to be awarded.
[9] His Honour then examined the background to the present s.27(2) of the A of L Act, which limits the general discretion of the Land Court in awarding costs. Under that provision, the Land Court has the discretion whether or not to award costs, but costs, if awarded, are to be awarded to the constructing authority, unless the amount of compensation determined by the Court was the amount claimed by the claimant, or was nearer to it than the amount offered by the authority, in which case costs, if awarded, are to be awarded to the claimant. His Honour explained that the purpose of this and earlier provisions, was to encourage early settlement and discourage exorbitant claims. However, it is the final positions of the parties, not their initial positions, that the Court is required to consider in fixing the incidence of costs.
[10] In the present case, the claimant requests the Court to exercise its discretion and award costs in his favour. The amount of compensation awarded by the Court is nearer to the amount finally claimed by the claimant, so that costs, if any, can be awarded only to the claimant. However, the respondent opposes such an award, contending that the amount of compensation awarded by the Court of $3,696,000 exceeded the mid-point by a mere $5,728 and that the result is more reflective of a tie between the parties than a win to the claimant.
The Arguments of the Claimant
[11] The claimant contends that there were important features of the evidence in this case which support an award for costs in his favour, arguing that the conduct of the respondent must be considered. First, the failure of the respondent to accept an offer of settlement made by the claimant's solicitor's letter of 1 August 2002, made well in advance of the hearing; second, the conduct of the respondent in reducing the quantum of compensation based on what the Court found to be unsustainable reasoning; third, the claimant had no alternative but to proceed to Court to obtain appropriate compensation, as the compensation offered was about half the compensation assessed by the Court.
[12] The claimant further argues that the majority of the time during the hearing was directed to a raft of issues and arguments raised by the respondent in which the respondent was unsuccessful.
[13] In summary, the claimant argued that this was a clear case for an order in his favour. Based on the principles in Yalgan, the claimant contended: while the amount of compensation determined by the Court was only just nearer to the amount finally claimed than the amount finally put in evidence by the respondent, it would be wrong merely to have regard to the amounts alone; the claimant had to come to Court to receive reasonable compensation; there are no special circumstances why the claimant ought not to receive his reasonable costs. Therefore, the claimant submits that the Court should exercise its discretionary power to award the claimant his costs of and incidental to the hearing and determination of the claim for compensation, "... including this application on an indemnity basis," with such costs to be decided by the appropriate assessing officer of the Supreme Court.
The Arguments for the Respondent
[14] In response to the claimant's contentions, the respondent argued that the Court did not find that the conduct of the respondent was unsustainable; the Court made adverse findings against the respondent's case, but it also rejected a significant component of the claimant's case. The respondent rejects the claimant's contention that the majority of time during the hearing was directed to issues and arguments in which the respondent was unsuccessful; those issues did not occupy a significant proportion of time, while a large amount of the hearing time was devoted to the issues on which the claimant was not successful. On a number of issues, it is contended, the Court did not fully accept the position of either side.
[15] In response to the claimant's argument concerning the offer of settlement, the respondent contends that the Court can place no reliance on such documents in deciding the issue of costs; the correspondence between the parties was "without prejudice", which privilege is for the benefit of both parties.
[16] The respondent also rejects the claimant's contention that costs should be awarded on an indemnity basis. The respondent argues that notwithstanding Rule 4 of the Land Court Rules 2000, the discretion in Rule 704 of the Uniform Rules to award costs on an indemnity basis is not available to the Land Court. Alternatively, the respondent submits that this is not an appropriate case for the exercising of a discretion to make such an order; the established principle of awarding costs on a standard (or party and party) basis will only be departed from rarely and only where clear justification exists. The respondent contends that there is no proper basis to award indemnity costs in this case where the amount of compensation determined was, to all intents and purposes, as close to the amount contended for by the respondent as that contended for by the claimant.
[17] The respondent submits that the claimant's application for an award of costs is ill founded, that this is a case where special circumstances do exist and where no order for costs should be made. Alternatively, the respondent submits that because of the issues where the claimant was largely unsuccessful and the issues where the respondent was largely successful, only a proportion of the claimant's costs should be met by the respondent. Because of those special circumstances, it was argued that it would be appropriate to limit the costs awarded to the claimant to 25%, limited to costs on a standard basis.
The Arguments Considered
[18] The claimant relies on the decision of the Land Court in Edgarange Pty Ltd v. Council of the Shire of Redland (A95-49) delivered 12 December 1997, for the proposition that this is a clear case for an order in favour of the claimant. However, in my view, the circumstances of the present case are quite different from those in Edgarange, where compensation awarded was significantly closer to the claimant's claim than to the respondent's valuation evidence.
[19] In any event , the authorities warn that it would be wrong to have regard merely to the amounts of the claim and the award and the value put in evidence by the authority. It is more relevant to have regard to the conduct of the parties. The "mid-point" provided for in s.27(2) of the A of L Act determines which of the parties is eligible to be considered for an award of costs. In this case, it is the claimant and if costs are to be awarded, the discretion is exercisable only in favour of the claimant. However, this does not mean that the claimant is automatically entitled to his costs.
[23] land and legal and professional fees
[20] The claimant asserts that the Court found that the conduct of the respondent in reducing its previous assessment of compensation was "unsustainable" for two reasons:
the photogrammetry contour levels were not available at the date of resumption;
and as at that date, the best available information was the DPI suitability mapping. The Court did not find that the conduct of the respondent was "unsustainable". The findings that the photogrammetry contour levels were not available at the date of resumption and that the best information was the DPI mapping, impacted upon the case of the claimant, as well as the case of the respondent. Furthermore, the principal reason for not accepting the valuation contended for by the respondent was that the Court found that on the evidence there was not sufficient reason for the respondent's valuer to downgrade the values which he had previously applied, based largely on an extensive examination by the Court of the sales relied on by both valuers.
[21] The claimant alleges that the respondent's variation of those valuations, or more correctly, the acceptance by the respondent of valuation advice to that effect, was "unreasonable in the extreme and represented reprehensible treatment of the claimant." Again, those allegations are not based on the findings of the Court. The respondent acted on expert valuation advice and was obliged to do so. The Court made no findings which could be implied to suggest that the respondent's valuer, or the respondent, acted in other than good faith. (Reasons para. 261).
[22] The claimant further contends that the majority of the hearing was taken up with issues and arguments raised by the respondent in which the respondent was unsuccessful. However, this has to be balanced against the fact that because of the finding by the Court that the photogrammetry contour information was not available at the date of resumption, much of the evidence of the claimant's principal witnesses had to be disregarded. This applied particularly to the evidence which relied upon the Lait drainage scheme, which was heavily dependent upon the contour information. Furthermore, the Court did not fully accept the evidence of either of the parties in determining the areas suitable for sugar-cane production.
In addition, a number of issues, such as special value, the cost of purchasing replacement respondent. It was therefore not a case where the claimant was entirely or even largely successful on the issues decided.
The Offers to Settle
[24] The claimant has raised an additional matter going to the conduct of the parties. The claimant contends that the case could have been settled by negotiation without the need for litigation, relying on correspondence between the parties prior to the hearing. In particular, the claimant relies on two letters, a letter dated 14 May 1999 from the Director-General of the Environmental Protection Agency (EPA) to the claimant and a letter dated 1 August 1999 from the claimant's solicitors to the EPA. The letter of 14 May 1999 was clearly a continuation of ongoing negotiations, referring to "the last without prejudice conference in Townsville". The letter of 1 August 1999 is also clearly a continuation of negotiations; furthermore, it is headed "Without Prejudice". Both letters contain offers of settlement. The claimant contends that these letters are relevant to the issue of costs.
[25] On the other hand, the respondent submits that the Court can place no reliance on that correspondence; the letters were clearly attempts by the parties to settle the matter without recourse to litigation and attract "without prejudice" privilege for the benefit of both parties. However, while not abandoning its principal argument, in the event that the Court did decide to have regard to the negotiations of the parties, the respondent includes an affidavit from an officer of the EPA concerning further "without prejudice" negotiations regarding another offer of settlement by the EPA in July 2002.
[26] The respondent submits that in circumstances where an offer is made on a "without prejudice" basis, without expressly reserving the right to refer to the correspondence in respect of costs, the correspondence cannot be relied on in legal proceedings, including an application for costs after the substantive issues have been determined, in the absence of consent by both parties.
[27] In support of this submission, the respondent relies on "Cross on Evidence", Australian Edition 1996, paragraph 25360, which states:
"Without prejudice negotiations are not admissible on questions of costs ... A party may make an offer which is marked 'without prejudice save as to costs' ... The consequence ... is that the document and its contents are treated as being without prejudice for the determination of the substantial issues between the parties - they are privileged. But they may be used after those issues are determined, for the purpose of deciding the incidence of costs."
The respondent further relies on the decisions of the Court of Appeal in Walker v Wilsher (1889) 23 QBD 335 and Cutts v Head [1984] 1 Ch 290, and the decision of the Supreme Court of Queensland in Re Turf Enterprises Pty Ltd [1975]QdR 266.
[28] In Walker v Wilsher, the issue before the Court of Appeal was whether "without prejudice" communications could be taken into consideration by the Court with respect to the question of costs. The Court found that "without prejudice" communications could not be taken into consideration for any purpose, including determining the question of costs. Lord Esher MR put it this way at 337:
"It is, I think, a good rule to say that nothing which is written or said without prejudice should be looked at without the consent of both parties, otherwise the whole object of the limitation would be destroyed."
[29] However, the claimant contends that not only has Walker v Wilsher been the subject of considerable qualification and criticism in England in modern times, but it does not appear to be good law in Queensland. However, the only authority which is cited for that contention is Cutts v Head. In particular, the claimant refers to the following passages:
"Whatever may have been the position in 1889, it is, I think, clear that there can now no longer be said to be any reason in public policy why, where offers have been made and refused of everything which could be obtained by the proceedings, that fact should not be brought to the Court's attention in the argument as to costs." ([1984] 1 Ch 290 at 307 per Oliver LJ.)
"It seems to me that, no issue of public policy being involved, it would be wrong to say that the words were given a meaning in 1889 which is immutable ever after, bearing in mind that the precise question with which we are concerned in this case did not arise in Walker v Wilsher ..." ([1984] 1 Ch 290 at 316 per Fox LJ.)
[30] Certainly, Cutts v Head modified what had been thought to be the absolute prohibition in Walker v Wilsher, but Walker v Wilsher was not criticised in Cutts v Head. In that case the Court of Appeal considered the situation where the plaintiff had expressly reserved the right to bring a "without prejudice" offer to the attention of the Court on the matter of costs. It had been argued in that case on the authority of Walker v Wilsher, that a letter headed "without prejudice" could not be drawn to the attention of the Court in any circumstances. The passages relied on by the claimant must be taken in that context.
[31] In Cutts v Head the two members of the Court of Appeal found that the "without prejudice" rule derived in part from public policy and in part from an implied agreement of the parties; that the underlying public policy is that the compromise of disputes should be facilitated without resort to litigation and without the fear that anything said in the course of negotiations may be used to the prejudice of the parties in court proceedings.
[32] Oliver LJ expressed the view that once the trial of issues was at an end, the public policy justification of the rule can have no further application. But he concluded that there was an additional basis for the decision in Walker v Wilsher and that was to be found in an implied agreement that from the marking of a letter "without prejudice", it should not be referred to at all.
[33] His Lordship then referred to authorities in support of that view before delivering the passage relied on by the claimant. In that context, his Lordship was not being critical of Walker v Wilsher, but was observing that there was no longer any reason in public policy why "without prejudice" offers should not later be brought to the attention of the Court in argument as to costs.
[34] His Lordship then considered exceptions to the strict rule in Walker v Wilsher, including the Calderbank procedure available in matrimonial proceedings (see the dicta of Cairns LJ in Calderbank v Calderbank [1976] Fam 93 at 106). He concluded that there was no reason why that procedure should be restricted to matrimonial proceedings.
[35] The other member of the Court of Appeal in Cutts v Head, Fox LJ, referred to Walker v Wilsher, (the authority of which he said, had never been questioned), as a straightforward case of an offer of terms of compromise made "without prejudice" and with no further qualifications, where the letters containing the offer were held not to be admissible on the question of costs. He referred to the Calderbank offer as the kind of "without prejudice" offer with which the Court of Appeal was concerned in that case.
[36] His Lordship regarded payment into Court as, in effect, a Calderbank procedure, as were the sealed offers in arbitration proceedings and in Lands Tribunal proceedings. He did not think there was any justification for rejecting Calderbank offers on grounds of public policy; they were more likely to fulfil rather than frustrate the public policy of facilitating compromises
[37] However, his Lordship went on to point out that the effect which attaches to the words "without prejudice" derives not only from public policy, but also from an implied agreement that the words have a particular effect. The agreement depends on what, by implication, is to be attributed to the words "without prejudice". He found that over the years there had developed a substantial body of practice adopting the Calderbank form or something similar to it and that it should be of universal application.
[38] His Lordship concluded that the meaning to be given to the words "without prejudice" is a matter of interpretation which is capable of variation according to usage in the profession. It is in that context that the second passage referred to by the claimant occurs. The complete passage reads as follows:
"It seems to me that no issue of public policy being involved, it would be wrong to say that the words were given a meaning in 1889 which is immutable ever after, bearing in mind that the precise question with which we are concerned in this case did not arise in Walker v Wilsher 23 QBD 335, and the court did not deal with it. I think that the wide body of practice which undoubtedly exists must be treated as indicating that the meaning to be given to the words is altered if the offer contains the reservation relating to the use of the offer in relation to costs."
[39] Therefore, the principle in Walker v Wilsher had been qualified by Cutts v Head which recognised the Calderbank procedure. The Court of Appeal did not criticise the principle in Walker v Wilsher, but found that it was capable of modification where the words used by the parties indicate they have agreed, such as where the offer to settle an action contains a reservation relating to the use of the offer in relation to costs.
[40] In the present case, there was no such reservation. However, the claimant contends that the letter dated 1 August 2002 was obviously written on the basis of "without prejudice save as to costs". Although the words "save as to costs" do not appear, the claimant argues that this is clear from the terms of the letter itself. However, in my view, the passages at page 9 of the letter which are relied on by the claimant, cannot be construed as reserving the right to bring the letter to the attention of the Court on the issue of costs.
[41] The claimant further contends that the respondent's reference to Re Turf Enterprises Pty Ltd is unhelpful. Although in that case the matter did not concern the subsequent use of an offer in relation to costs, in my view, it is helpful in two respects. First, on the authority of Walker v Wilsher the Court held that both parties to "without prejudice" negotiations must consent to the disclosure of the content of the negotiations, notwithstanding that only one uses the expression "without prejudice". Second, the rule extends to subsequent negotiations (correspondence and discussions) notwithstanding that the expression "without prejudice" is not used, unless there is a clear break in the chain of negotiations.
[42] Finally on this point, the claimant contends that the appropriate law in Queensland is probably that set out in the Full Court decision in Smith v Smith [1987] 2 QdR 807. However, Smith v Smith is not a "without prejudice" case. There the offer was an "open" offer. In the judgment of Thomas J, (with whom Andrews CJ agreed), upon which the claimant relies, the words "without prejudice" do not appear. In the judgment of de Jersey J, the only mention of "without prejudice" is in relation to an earlier offer made in similar terms to the open offer. However, the earlier "without prejudice" offer played no part in either judgment.
[43] The issue in Smith v Smith was whether the Court could vary a consent order as to costs made by a judge earlier in the proceedings, on the ground that in reliance on Rules of the Supreme Court Order 45 Rule 1, facts had arisen after the making of the order which entitled the person against whom it was made to relief from it. The "fact" arising subsequent to the consent order was the open offer. That offer to accept $200,000 was made over 15 months after the consent order was made and in it the respondent had expressly reserved the right to bring the offer to the attention of the Court on the question of costs.
[44] On the question of whether the Court below had properly exercised its discretion, Thomas J referred to Cutts v Head. However, his Honour did not consider the "without prejudice" aspect of that case, starting from the point where the Court of Appeal found that the letter containing the offer was admissible. He then considered the effect of the offer in the case before the Full Court in relation to the question of costs and how that would impact upon the discretion of the judge below in relation to varying the order. In my view, the case of Smith v Smith is of no assistance in deciding the present matter.
[45] Having considered those authorities, I have come to the conclusion that despite the contentions of the claimant, the "without prejudice" communications attract the "without prejudice" privilege for the benefit of both parties. The respondent does not consent to the disclosure of those negotiations. Therefore, I cannot have regard to that "without prejudice" correspondence in the matter of costs.
The Claim for Costs on an Indemnity Basis
[46] The claimant submits that the Court should exercise its discretionary power to award the claimant costs of and incidental to the hearing and determination of the claim for compensation, including this application on an indemnity basis. However, the claimant cites no authority for an award on that basis.
[47] On the other hand, the respondent opposes such an award, raising two arguments. First, the respondent submits that neither s.34(1) of the Land Court Act nor s.27 of the A of L Act expressly give the Land Court the power to award costs on an indemnity basis. The discretion to do so is contained in Rule 704 of the Uniform Rules and that vests only in the Supreme, District and Magistrates Courts and is not available to the Land Court.
[48] Rule 4(1) of the Land Court Rules provides:
"If these rules do not provide for a matter in relation to a proceeding in the court and the [Uniform Rules] would provide for the matter, the Uniform Rules apply in relation to the matter with necessary changes."
However, the respondent argues, Rule 3 of the Uniform Rules makes it clear that unless expressly provided for, a court for the purposes of the Rules is the Supreme Court, the District Court and the Magistrates Court; therefore, notwithstanding Rule 4 of the Land Court Rules, Rule 704 of the Uniform Rules is not available to the Land Court to award costs on an indemnity basis.
[49] In my view, this argument must fail. If the respondent was correct, then Rule 4(1) of the Land Court Rules is rendered of no effect, despite the fact that the Land Court Rules commenced at a later date than the Uniform Rules. This would make a nonsense of Rule 4(1) of the Land Court Rules. Rule 4(1) has been invoked by the Land Court on many occasions in applying the Uniform Rules. It has also been applied by the Land Appeal Court: see, for example, Dawson v Chief Executive, Department of Natural Resources and Mines [2002] QLAC 23.
[50] The respondent's second submission in the alternative on this point, is that this is not an appropriate case to make such an order. The respondent submits that a useful summary of the attitude of the courts to making such orders is to be found in the decision of Badgery- Parker J in Rouse v Shepherd (No 2) [1994] 35 NSWLR 277, including from the judgment of Sheppard J in Colgate-Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 at 233-234. I do not propose to set out the circumstances where the Courts have considered that it would be appropriate to award costs on an indemnity basis. It is sufficient to say that I agree with the respondent that the thrust of the authority is to the effect that the established principle of awarding costs on a standard basis will only be departed from rarely and only where clear justification exists. In my view, there are no such circumstances in the present case.
Conclusion [51]
This was a complex case with many issues arising and given the disparity between the positions of the parties, it was inevitable that the matter would be heard and determined by the Land Court. However, in my view, the claim for compensation was not exorbitant. Although the amount of compensation as determined was just nearer to the amount finally claimed by the claimant than the amount of the valuation finally put in evidence by the constructing authority, the claimant relied on expert advice for each item of claim and each issue was arguable.
[52]
Whichever way the matter is viewed, the outcome of the case was that the claimant was at least partially successful. In the absence of special circumstances, the claimant ought to be awarded reasonable costs of obtaining that compensation. However, I am of the view that there are special circumstances in this case. The Court did fully not accept the valuation evidence or the methodology for calculating compensation adopted by either party. In addition, because of the finding that the photogrammetry contour information was not available at the date of resumption, significant parts of the claimant's case were not accepted. There were also other issues where the claimant wholly or substantially failed. On the other hand, there were issues upon which the respondent was not successful. I am therefore of the view that it is appropriate to make a partial award of costs.
[53]
In both Kabale at 202-204 and Yalgan at 417-418, the Land Appeal Court referred to two decisions of the Federal Court which set out the factors which a court ought to take into account when deciding whether to make a partial award of costs.
[54]
In Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 Toohey J stated:
"(1) Ordinarily, costs follow the event and a successful litigant receives his costs in the
absence of special circumstances justifying some other order ...
(2) Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed ...
(3) A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law ...". (p.48, 136)
[55] In Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 the Full Court of the Federal Court of Australia observed that the propositions enunciated by Toohey J in Hughes v Western Australian Cricket Association (Inc) are:
"... subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case ... In Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213; 28 ALR 201, Fisher J regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally speaking, and notwithstanding the considerations referred to by Toohey J and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation might properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs." (pp.271-272)
[56] In the present case, the principal item of claim was the value of the land taken. The claimant approached that valuation on a classification basis, attributing a different value to each classification. The value of potential cane land was largely dependent upon the ability to drain the lower-lying land. The drainage plan depended upon a digital terrain model which was produced from photogrammetry contour information. The Court found that that information was not available at the date of resumption, therefore much of the claimant's evidence had to be rejected. A significant amount of the hearing time was devoted to attempting to demonstrate that the land could be drained and the evidence which depended upon that.
[57] However, notwithstanding that that part of the claimant's case was rejected, the Court found that there was sufficient evidence to demonstrate that at least part of the land was capable of growing cane, although the areas and classifications put forward by the claimant were not accepted. With respect to the value of land taken, the claimant was more successful than the respondent.
[58] There were other issues such as special value and disturbance items, including costs of purchase of a replacement property and legal and professional fees incurred in the preparation of the claim, in which the claimant was less successful. I respectfully agree with the approach of the Land Appeal Court in Yalgan that in a complex case such as this, no useful purpose can be served by dissecting the issues where the claimant was partially successful and where the respondent was partially successful in an attempt to determine precisely what proportion of costs should be awarded. I propose to take a broad view, as adopted by the Land Appeal Court in Yalgan, having regard to the relative success achieved by the claimant in this case..
[59] In my view, while it would be unjust to burden the respondent with the full costs of those issues, the claimant is entitled to a partial award of costs. Having regard to the facts and circumstances of this case, I have come to the conclusion that it would be appropriate to award the claimant 50% of his costs of and incidental to the hearing and determination of his claim on a standard basis.
Orders
(1) The respondent pay 50% of the claimant's costs of and incidental to the hearing and
determination of his claim for compensation.(2) The respondent pay 50% of the claimant's costs of this application. (3)
The costs are to be assessed on the standard basis by the appropriate assessing officer of the Supreme Court under the scale of costs prescribed by law for proceedings in the Supreme Court.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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