Perpetual Trustee Co Ltd v Valuer-General; Trust Co of Australia Ltd v Valuer-General (No 3) - [2007] SASC 345

Supreme Court of South Australia
(Land and Valuation Division)
PERPETUAL TRUSTEE CO LTD & ANOR v VALUER-GENERAL; TRUST CO OF AUSTRALIA LTD & ANOR v VALUER-GENERAL (No 3)
[2007] SASC 345
Judgment of The Honourable Justice Debelle (ex tempore)
24 September 2007
PROCEDURE - COSTS
Application by respondent for solicitor and client costs after appeals dismissed – delivery of Calderbank letters immediately before hearing of appeals – whether letters contained compromises – application for solicitor and client costs dismissed – whether there is any basis upon which liability for costs should be reduced – appellants to pay 80 per cent of costs of respondent.

PERPETUAL TRUSTEE CO LTD & ANOR v VALUER-GENERAL; TRUST CO OF AUSTRALIA LTD & ANOR v VALUER-GENERAL (No 3)
[2007] SASC 345

DEBELLE J. I have published my reasons for dismissing each of those appeals. The respondent Valuer-General applies for costs in each appeal. The application seeks the costs of the whole of these proceedings. In addition, there is an application for solicitor and client costs following the delivery of a Calderbank letter in each appeal.
I deal first with the question of the Calderbank letter.
In the appeal by Trust Company of Australia Ltd, the Calderbank letter was delivered on the morning of the hearing of the appeal itself. Plainly, it gave very little time for consideration by the appellant. It was a letter which was quite uncompromising in that the Crown Solicitor stated that the Valuer-General would compromise the appeal on the footing that the assessment was upheld. That hardly comes under the heading of “compromise”. Indeed, to describe it as a compromise could only be described as an abuse of the English language. The lateness of the letter, therefore, is one factor which tells against the Valuer-General being able to rely upon it.
Another factor is that in an appeal of this kind, the Valuer-General is in the position where the offer to compromise, if that it can be called, really has no price in that it is entirely without risk. Effectively, the Valuer-General is saying ‘If I succeed in defending my assessment, then you, the appellant, must bear the costs of the appeal on a solicitor and client basis, if not on an indemnity basis’. That, I think, is an entirely inappropriate position in appeals of this kind. As I said in the course of argument, it would even be open, on that argument, for the Valuer-General to adopt such an approach at the outset of an appeal, an approach that can only be described as in terrorem.
Mr Gray, for the Valuer-General, has sought to defend the position on the footing that it was not until the eve of trial that the Valuer-General was in a position to know that the case being advanced on behalf of the appellant had at least, in the Valuer-General’s view, no merit, and indeed lacked any factual support. I do not think that is a sufficient consideration.
In my view, in the Trust Company of Australia Ltd appeal, there is no ground at all for the award of solicitor and client costs for any part of the proceedings.
In relation to the appeal by Perpetual Trustee Company Ltd, the letter was delivered on the Friday before the hearing of the appeal was to begin on the following Monday. Similar considerations apply.
For these reasons, I am not prepared to allow any part of an award for costs to be on the footing of either solicitor and client costs or indemnity costs. I turn to the question of costs generally.
The starting point is that the appellants have appealed against the assessment and the appellants have failed. On that footing, they would, in the ordinary course, be liable to pay the costs of the all of the proceedings. The only question is whether there is any appropriate basis upon which that liability for costs should be reduced.
The first question to consider is whether the Valuer-General should have his costs on the hearing of the preliminary issues.
I have ultimately decided these appeals on grounds which were not argued by the parties. Indeed, both parties sought to advance an approach as the proper basis for assessment which I have found to be wrong. The Valuer-General has persisted in maintaining his approach which, for convenience, was called “the court based approach” even until the very end of these proceedings and despite a number of invitations by me to consider his position afresh.
So far as the costs of the preliminary hearing are concerned, the simple fact is that both parties advanced an approach which I have not adopted in the ultimate result. As I have explained in the reasons published today, they had agreed an approach which caused me to err in my first decision. By that, I do not mean to blame the parties. I am the one who must accept responsibility for the error. I refer to that only because I seek to emphasise the Valuer-General’s approach has ultimately failed, notwithstanding that his assessment has been upheld. For these reasons, I think that the appropriate order for costs on the preliminary hearing is that there should be no order for costs. However, in making that order, I limit that only to the counsel fees of and incidental to the hearing of the preliminary point, that is to say, the Valuer-General will be able to recover solicitors’ fees in relation to the preliminary hearing.
What must also borne in mind is that, in these appeals, the appellants have throughout maintained the view that their approach is the only correct approach to the assessment of the capital value of the two parcels of land the subject of each of these appeals. The Valuer-General has been put to the expense, and what is clearly considerable expense, of defending his assessment. The submissions which have been made on behalf of both appellants on the issue of costs smack of a considerable degree of opportunism. They contend that the fact that the Valuer-General’s argument also did not prevail should result in a reduced liability for costs. Such a submission plainly has little or no regard to the fact that the appellants throughout have sought to maintain a position which would have reduced the Valuer-General’s assessment by an amount in the order of 25 per cent. They have maintained that view throughout. There has been no hint of any compromise by the appellants. In my view, the appellants must bear the greater liability for the costs of these proceedings.
However, I do not think, in all the circumstances, it is appropriate that they should recover a major part of their costs. I think a fair reduction is that the appellants in each appeal pay 80 per cent of the costs of the Valuer-General.
Before I make the orders, I draw attention to the fact that there is a typographical error on the penultimate paragraph. It is the second line of the last page of the judgment. The amount should be $51,150,000 not $51,750,000.
In each appeal the same order will be made, namely,
1Appeal dismissed.
2That the appellants shall pay 80 per cent of the respondent’s costs save and except for the counsel fees of and incidental to the preliminary hearing.