Paradise Springs Development Pty Ltd v Chief Executive, Department of Lands

[1997] QLC 44

[1997] QLC 44

LAND COURT

BRISBANE

4 April 1997

Re:  Appeals against valuations of the Chief Executive,
  Gold Coast City Council (Albert Division)
  V95-372, V95-375

Paradise Springs Development Pty Ltd
  v.
  Chief Executive, Department of Lands

DECISION ON COSTS

The application

This is an application by the appellant for the appellant’s costs of or incidental to the appeals against the respondent’s valuations of the appellant’s land as at 30 June 1993 and 1 January 1995.  Written reasons for decision were delivered on 21 February 1997.
           The amounts contended for by the parties as the appropriate valuations, and the determinations of this Court, are summarised in the following table.

Valuation date - 30 June 1993
Value in Notice of Appeal	Appellant’s Contention at Court	Valuation appealed against	Respondent’s Contention at Court	Court’s Determination
$5,438,400	$5,250,000	$8,000,000	$8,000,000	$5,300,000

Valuation date - 1 January 1995
Value in Notice of Appeal	Appellant’s Contention at Court	Valuation appealed against	Respondent’s Contention  at Court	Court’s Determination
$6,131,900	$8,000,000	$14,000,000	$11,5000,000	$8,100,000

In practical terms, the dispute between the parties was with respect to the value of the low lying land only and the respective contentions and the Court determination for each valuation date were as follows:

Date	Appellant	Respondent	Court’s Determination
30 June 1993	$1,250,000	$4,000,000	$1,300,000
1 January 1995	$1,400,000	$4,900,000	$1,500,00

The power to award costs
           The power of the Land Court to order costs is found in section 41(9) of the Land Act 1962 (preserved by section 521 of the Land Act 1994). The subsection states:

“Powers of Court

...
(9) The Court may make such order as it thinks fit as to the costs of or incidental to any matter that it has jurisdiction to hear and determine including, without limiting the generality of this subsection, the costs of an adjournment or application made in a pending matter, allowances to witnesses attending for the purpose of giving evidence at the hearing and the costs of any surveys of boundaries.”

The question of costs of appeals against valuations under the Valuation of Land Act 1944 is determined by reference to section 70 of that Act, which provides:

“Costs of appeal against valuation

70.(1) Where the value of land as finally determined upon an appeal against the valuation is the value stated by the owner in the owner’s notice of appeal against the valuation, or is nearer to that value than to the valuation appealed against, costs shall not be awarded against the owner.

(2) Otherwise costs shall not be awarded against the chief executive.”

The value of the land as determined by the Court in each of these cases was much nearer to the value stated by the owner in the notices of appeal than to the valuation appealed against.  Thus costs shall not be awarded against the owner.  Putting that constraint to one side, the Court has considerable discretionary power.  It is useful to bear in mind section 41(5) of the Land Act 1962 which states:

“(5) Court to be guided by equity and good conscience.  Notwithstanding anything in this Act or in any other Act, or in any rule, process or practice of law -

(a) the Court in the exercise of any jurisdiction, duty, power or function conferred or imposed upon it shall be governed in its procedure and in its decisions by equity, good conscience, and the substantial merits of the case, without regard to technicalities or legal forms or the practice of the other courts:...”

The exercise of the discretionary power to award costs
           The Full Court of the Supreme Court of Queensland in Wyatt v Albert Shire Council ([1978] 1 Qd R 486) made the following general observations about the power to award costs:

“The power to award costs of proceedings is entirely the creation of statute.  Under the general law there was no power of awarding costs.  This was true in the common law courts and apparently also in equity:  see Re Birkman ex p. Pickering (1860) 1 Q.S.C.R. 14, 15, per Lutwyche J.  What is more important, it is equally true of tribunals that are statutory in origin:  see R. v. Justices at Brisbane ex p. Zagami (1901) 11 Q.L.J. 81, 83, per Griffith C.J. speaking on behalf of the Full Court.  In exercising their jurisdiction to award costs the common law courts adopted the principle that costs should follow the event. The `event’ for this purpose meant the jury verdict, provided, at any rate, that judgment accorded with the verdict;  but those courts also awarded costs related to success or failure on particular `issues’ irrespective of the overall outcome of the litigation.  The rule that costs followed the event was, however, a common law rule which did not prevail in the equity jurisdiction, where the discretion of the Court of Chancery over costs was, at least in theory, regarded as unfettered.”  (at 488)

In Wyatt’s case, the Full Court was considering the scope of a section which gave the Local Government Court power to “make such order as it thinks fit as to the costs of any proceedings before it”.  That discretion (which is essentially the same as the discretion conferred on the Land Court by section 41(9) of the Land Act 1962) was described by the Full Court as “complete” (at 488).  A similar power was described by Macrossan J as “full” (Assignment Pty Ltd v Kirby [1981] Qd R 129 at 134). The Full Court continued:

“To say that, however, is not to say that the discretion may be exercised in an arbitrary manner.  In England, where since 1890 the discretion of the High Court over costs is also acknowledged to be unfettered by statute, it continues to be recognized that the discretion must be exercised judicially:  see Knight v. Clifton [1971] Ch. 700. As the judgments in that case show, such a power does not exclude resort to the “settled practice” of a court where such a practice has evolved; but, to refer once again to what was said by Macrossan J. in Assignment Pty. Ltd v Kirby, supra, a purported exercise of discretion `which fails because the mind is closed to relevant considerations through a rigid adherence to preconceptions’ involves an error of law that is open to correction on appeal.” (at 489)

The Full Court considered that one should approach such a discretion with no preconceptions as to its exercise, save that it must be exercised “judicially”.

“That can only mean for reasons that can be considered and justified.  In saying that, we do not intend to imply that reasons must always be given for awarding or withholding costs.  In some, perhaps many cases the matter may be so obvious as not to require explanation in the form of stated reasons.  In such cases the findings themselves will ordinarily afford reason and justification for the decision on costs that follows.  But where what has been done appears to lack rational justification either in the findings or in the reasons expressed for it, a question may arise whether the decision has been arrived at judicially.  It may then be open to review the decision on costs as involving error or mistake of law.”  (at 489)

The oft-cited authorities on the Land Court’s power to award costs proceed in the same vein.  They declare that although the Land Court’s discretion is unfettered, it must be exercised judicially, that is, by reference to relevant considerations (for example see Townsville City Council v Moyses and Morris (1979) 6 QLCR 271 at 273-4, WH Bowden v The Valuer-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.  So, for example, the Hymix Industries Pty Ltd v The Valuer-General ((1990-91) 13 QLCR 173), the Land Appeal Court, in refusing an application for costs said:

“In the subject case it could not be held that either party has approached the valuation in an arbitrary, frivolous or vexatious manner or has completely disregarded principles which given certain facts, should be applied.  The position is more to the contrary.  The evidence has demonstrated that some complexity was involved and in our opinion there still remains some doubt as to the correct value of this land.  In the circumstances we are of the opinion that no order should be made.” (at186)

In dealing with applications for costs made under section 70 of the Valuation of Land Act 1944, the Land Court and Land Appeal Court have generally adopted a restrained attitude, emphasising the desirability of easy access to the Land Court to air grievances and have valuations reviewed. Such access “should be available without fear of costs being awarded to either party except in special cases” (see Bowden’s case at 147).
           The effect of the Land Appeal Court decisions was summarised in Queensland Landmark Developments Limited v The Valuer General ((1992-93) 14 QLCR 168) in the following terms:

“It can thus be seen 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 the Valuer General if satisfied that he has acted arbitrarily or capriciously and against the owner if satisfied that he has acted in a frivolous or vexatious manner.” (at 171)

That is not to say that the Court will not, in a proper case, make an award of costs, but there would need to be sufficient reason for such an award.  In exercising its discretion, the Court necessarily takes into account all of the circumstances then appearing.  Such cases include cases where a party may justifiably seek costs through lateness of notice, or where the Court is satisfied that proceedings are of a frivolous or vexatious nature or perhaps where a hearing is adjourned due to the wrongful conduct of a party (see Bowden’s case at 146 and The Valuer-General ats Queensland Club (1990-91) 13 QLCR 207 at 222-4 (Land Appeal Court) and cases cited therein).
Submissions and conclusions
           Each party provided written submissions concerning costs.
           The appellant noted that the primary point to be determined in the case, before any valuation could be made, was the highest and best use of the low lying land.  That much is clear from the reasons for decision, and on that issue the decision was in favour of the appellant.  The submissions by the respondent were rejected.
           The appellant contended that the respondent’s valuer was inadequately informed about the state of the law relevant to the valuation and so had been unable to reconsider the valuation before the hearing.  Even if the submission is correct, I am not convinced that the respondent’s valuations would necessarily have been revised to amounts at or about those for which the appellant contended.
           I agree with the appellant that the issues with respect to the question of highest and best use were complex, and it  may be that the respondent’s pre-trial preparation and negotiations were unsatisfactory.  Without firm evidence about such matters, and in light of the respondent’s submissions in reply to the appellant’s application for costs, I am not convinced that, bearing in mind the complexity of the case, the respondent’s conduct in preparing the valuations was so unreasonable that it unnecessarily forced the appellant to resort to the Court.
           In light of the above conclusions, it is unnecessary to deal in detail with the respondent’s submission.  It is sufficient to note that I accept that the case was not a test case (in the sense that no difficult question of law was involved).  Nor did the respondent act arbitrarily or capriciously.
           Accordingly, this case is not one in respect of which a general award of costs is appropriate.
           There is, however, reason to make a partial award of costs in light of a particular aspect of the conduct of the respondent’s case.  After evidence had been given for the appellant (including engineering evidence from Mr Grummitt) but immediately before tendering his valuation reports (Exhibits 11 and 12), the respondent’s valuer, Mr Gray, amended those reports in two respects.  The estimated area of the low land which could be developed for residential purposes was reduced from approximately 15.9 hectares (as at 30 June 1993) and 15.78 hectares (as at 1 January 1995) to 8.71 hectares in each case.  Mr Gray also reduced his estimated value per hectare of the low land in each case (see transcript 51-2).

Although Mr Grummitt was cross-examined to a limited extent about the ground levels which were the basis for calculating the area of potential residential land, the respondent’s representative indicated that the respondent may concede the accuracy of the levels on which the appellant’s case was made (transcript 20-22). When he was cross-examined, Mr Gray acknowledged that he was not the original valuer, that he had made the calculations of the areas of potential residential land on the basis of information about the ground level in a letter from Weathered Howe of 9 June 1989 (Exhibit 3 Attachment C), that he had first seen the  more accurate surveyor’s plan (Exhibit 4) at an objection conference some time in 1995 (the hearing was in June 1996) but had relied on the 1989 document as containing the more accurate figure (transcript 60-61).
           His explanation for proceeding in that way seemed to have two components.  First, although the surveyor’s plan had been provided at a without prejudice conference, the respondent had not accepted the more accurate ground level figures until they were presented in the course of Mr Grummitt’s evidence at the hearing.  In his words, “The plans that we were given were without prejudice and that we couldn’t rely on those plans as being suitable evidence until this time” (transcript 61).  That answer is a little ambiguous and may be clarified by what I take to be the second component of his explanation, namely, that the respondent did not understand the surveyor’s plans. As Mr Gray put it:

“The figures that we based on are on levels of the land, we weren’t to know that those levels that were given to us were not an improved level. The fill had been introduced all through the redevelopment, the levels could have changed. ... Without being an engineer and being able to understand that those plans would represent a figure of 1.17 we weren’t to know.” (transcript 61)

A little later he explained that he had not been concerned that the surveyor’s plan showed developed levels of the golf course, but he had not known if the levels were the original levels of the land.  He continued:

“We realise that the golf course levels aren’t those levels. ... But we weren’t to know what sort of levels they are from.” (transcript 61-2)

He had not made inquiries about what the levels were, but said that the appellant had not disputed the RL 1.5 metre level even with the submission of that plan at the time of the objection conference.
           Counsel for the appellant foreshadowed that this aspect of the respondent’s conduct may have implications for a possible award of costs (transcript 51).  Some attempt to reply was made by the respondent’s representative.  He decided not to go into evidence, influenced, it seems, by his understanding that “costs are not normally awarded in these situations”. (transcript 78)
           The evidence on this matter suggests that, although it was not unreasonable for the cases to proceed to a hearing, the hearing itself was prolonged because evidence was given in respect of a matter which could have been agreed between the parties on the basis of information which was available to them well before the commencement.  The hearing proceeded over two days.  I am satisfied that it would not have been confined to one day and that each witness would have been called even if this matter had not been ventilated at the hearing.
           The respondent’s submission notes that it has not been the Department’s practice to engage technical experts in valuation rating appeals.  The situation is different in compensation hearings where considerably larger sums of money (as opposed to level of valuation) are at stake.  In my opinion, the present cases were not run-of-the-mill rating appeals because the valuations in dispute were large, the differences between the parties’ valuations were substantial ($2,750,000 in 1993 and $3,500,000 in 1995) and the issues were complex.  These were cases where a greater than usual amount of preparation may have been necessary. It would have been appropriate for the respondent to seek expert technical advice, without necessarily engaging an engineer to give evidence at the hearing.

I am satisfied that the appellant should be awarded some amount for costs directly related to that aspect of the hearing.  It should be a modest, though not nominal, sum.  I will hear the representatives for each party before deciding what that amount should be.

GJ NEATE
MEMBER