PT Limited v Department of Natural Resources and Mines
[2007] QLC 46
•22 June 2007
LAND COURT OF QUEENSLAND
CITATION: PT Limited & Ors v Department of Natural Resources and Mines [2007] QLC 0046 PARTIES: PT Limited,
Kent Street Pty Ltd as Trustees & Ors
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: AV2003/0803
AV2003/0795DIVISION: Land Court of Queensland PROCEEDING: Applications for costs. DELIVERED ON: 22 June 2007 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr RP Scott ORDER: I make no order as to costs. CATCHWORDS: Costs – assumption that reasons for judgment are correct.
Costs - Valuation of Land Act– Acquisition of Land Act provisions not applicable.
Costs - Bowden re: costs only in "special cases" – not overruled by Latoudis v Casey or Tamawood Ltd & Anor v Paans – not displaced by Uniform Civil Procedure Rules – s.68 of Valuation of Land Act irrelevant to understanding of s.66.
Costs – public interest – commercial motives are valid – "test cases" approach considered – these are not public interest cases.
Valuation of Land Act - s.28 and s.29 power in Chief Executive to "alter" valuation – observation on use of power.
APPEARANCES: Mr J E Gallagher QC, Mr J Horton - for the appellants.
Mr D B Fraser QC, Mr T W Quinn – for the respondent.SOLICITORS: Mr R Bowie and Mrs A McDonnell – Minter Ellison Lawyers for the appellant.
Mr J O'Rourke Legal Services Department of Natural Resources and Mines – for the respondent.
The appellants appealed to this Court against decisions made by the respondent under the Valuation of Land Act 1944 (the Act) concerning statutory valuations of their respective shopping centre properties. The appellant PT Limited owns, as trustee, the property on which the Chermside Shopping Centre has been developed, whilst the property which is the concern of the other appellant is the site of Pacific Fair Shopping Centre. The two appeals were heard together but separate decisions were published.[1]
[1]PT Limited v Department of Natural Resources and Mines [2006] QLC 0068 (Chermside decision); Kent Street Pty Ltd & Ors v Department of Natural Resources and Mines [2007] QLC 0011 (Pacific Fair decision).
The respondent Chief Executive has applied for costs in these matters including reserved costs. The appellants resist those applications. The appellants submitted that as the order in each case was that the respective appeals were allowed they had succeeded. That is clearly wrong. The use of the expression that the appeal "is allowed" is nothing more than a matter of form. An earlier example of that can be found in Hymix Industries Pty Ltd v Chief Executive, Department of Lands[2]. In Seganfreddo Nominees Pty Ltd & Ors v Valuer-General[3] there are examples where, on the amounts proposed by the appellants at the hearing, they were clearly successful and the appeals were allowed, but the learned Member declined to award costs in their favour given the much lower amount mentioned in the notices of appeal. That arises from s.70 of the Act which I which discuss below.
[2] (1994-95) 15 QLCR 174.
[3] (1980) 7 QLCR 10
Whilst there are two applications to deal with, the submissions largely acknowledge the fact that the two matters were heard together and that many similar issues arose in each. The decision in the Chermside case dealt with all of the issues common to both cases whilst in the Pacific Fair decision some additional points confined to that matter were given attention.
I accept the submission by the respondent that my consideration of the question of costs should be based, not just on the reasons for judgment in each matter, but on the assumption that the reasons are correct. Reference to later decisions that may have dealt with one or more similar issues to those encountered in the two appeals before me and which might be said support an aspect of the appeals, is not valid or appropriate. Conventional jurisprudence requires this and is supported, I think, by what Kirby J said in South West Forest Defence Foundation Inc v Executive Director of Department of Conservation and Land Management and Another (No.2)[4]:
"[4] In disposing of the costs, it is necessary to begin with the orders which the Court made and to frame costs orders upon the assumptions inherent in the refusal of special leave to appeal".
[4] [1998] HCA 35.
The power to order costs in matters such as these is found in s.66 of the Act:
"66. Order of Court
Upon an appeal under section 55 the Land Court or, upon the rehearing of any such appeal, the Land Appeal Court may –
(a) affirm the valuation appealed against; or
(b)reduce or increase the amount of that valuation to the extent necessary in its opinion to determine the same correctly under, subject to, and in accordance with this Act;
and, subject to section 70, make such order as it deems fit with respect to the payment of costs."
The general power in the Land Court to make an order for costs is found in s.34 of the Land Court Act 2000:
"Costs
34.(1)Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate.
(2)If the court does not make an order under subsection (1), each party to the proceeding must bear the party's own costs for the proceeding.
(3)An order made under subsection (1) may be made an order of the Supreme Court and enforced in the Supreme Court.
(4) For subsection (3), it is enough to file the order in the Supreme Court.
(5)The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court, under the scale of costs prescribed by law for proceedings in the Supreme Court.
(6)If the court makes an order under subsection (4), the assessing officer may decide the appropriate scale to be used in assessing the costs."
Whilst it seems clear that s.34(1) in no way supplants s.66 of the Valuation of Land Act as to the source of power in cases such as the present, the remaining subsections of s.34 appear to supply provisions which support the exercise of jurisdiction under s.66. Section 34 as the source of power to award costs has been relied on in cases such as those arising under the Land Act 1994. For example, in Hegira Ltd v Department of Natural Resources and Mines[5] costs were ordered in a case involving the question of the price for the sale of some reclaimed land.
[5] (2006) QLC 1
Section 70 of the Valuation of Land Act 1944 provides:
"70 Costs of appeal against valuation
(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." (my emphasis)
In the Chermside matter the valuation appealed against was $54,000,000 whilst the value stated by the owner in the notice of appeal was $21,500,000. The value determined by the Court was $112,000,000. In Pacific Fair the valuation appealed against was $90,000,000, the owner's figure in the notice of appeal was $40,000,000 and the value determined was $128,200,000. The application of s.70 to those figures means that costs may not be awarded against the Chief Executive and the question I have to consider is whether costs should be awarded against each of the appellants. There is no basis for a costs order to be made in favour of either appellant.
The appellants made reference to Buckler v Commissioner for Railways[6] in which the Court referred to the "imaginary line" capable of being identified in the application of s.27(2) of the Acquisition of Land Act 1967. The appellants proposed that, based on that imaginary line and on the final position of the respondent in these two appeals, the relevant amounts are $66,250,000 for Chermside and $115,000,050 for Pacific Fair. Reference to decisions based on a different statutory provision as to costs are, in my view, of no assistance in the present matters. It is the figures to which s.70 of the Valuation of Land Act refers which are relevant in deciding to whom a costs order may be made. Nevertheless, the valuations contended for at trial are relevant in considering the question of the success of the parties.[7]
[6] (1933) 14 QLCR 386 at 390.
[7] See below at [61].
With one exception, reference to the approach of the Court to the question of costs in cases of compensation for the resumption of land is of no assistance in cases such as the present. The exception to which I refer is that the approach of the Court in such cases as Yalgan v Shire of Albert[8] demonstrates that the nature of the case before the Court can give rise to different considerations from those that a slavish adherence to "costs follow the event" would generate. In cases under the Valuation of Land Act it is Bowden which I now turn to discuss, which provides the touchstone.
[8] (1997) 17 QLCR 401.
The Land Appeal Court in a number of decisions of which notable examples include W H Bowden v The Valuer-General[9] and Queensland Club v The Valuer-General,[10] has concluded that making an award of costs in favour of what might be described as a successful party in Valuation of Land Act cases, is the exception and not the usual position. This approach is often identified with Bowden[11] where the Court said:
"Easy access to the Land Court to air grievances and have valuations reviewed is, as we have already stressed, most desirable in revenue cases, and such access should be available without fear of costs being awarded to either party except in special cases." (my emphasis)
[9] (1980) 7 QLCR 138.
[10] (1991) 13 QLCR 207.
[11] at 147.
What was said in Bowden has been referred to with approval by the Land Appeal Court in Hymix Industries Pty Ltd v The Valuer-General;[12] in Department of Natural Resources, and Mines v Body Corporate for "The Astor Car Park"[13] and in Chief Executive, Department of Lands v Juris Towers Pty Ltd.[14] The Land Appeal Court in Scougall v Chief Executive, Natural Resources[15] said:
"Historically, the Land Court and Land Appeal Court have been reluctant to award costs in annual valuation matters except in extraordinary circumstances."
[12] (1990 – 91) 13 QLCR 173 at 186,
[13] (2003) QLAC 67.
[14] (1994-95) 15 QLCR 273.
[15] (1996) 16 QLCR 536 at 556.
The Chief Executive submitted that the approach of the Land Appeal Court referred to above is erroneous being inconsistent with later, binding authority. The respondent submitted that the general rule is not as stated in Bowden but may be expressed as saying that costs should follow the event; or as, costs should be awarded to the successful party. The respondent accepts that unless Bowden and like decisions of the Land Appeal Court can be distinguished either because of the changed legislated framework discussed below at [23] and following or because of later inconsistent binding authority, I would be bound to apply Bowden.
Notwithstanding the contention made by the respondent with respect to Bowden it was submitted that, in any event, the Chermside and Pacific Fair matters warrant the costs orders sought as being cases which fall within the exception of being "special cases" referred to in Bowden. As a third basis to his submissions the respondent sought to rely on the application of the Uniform Civil Procedures Rules to the matter of costs. I return to these two alternative bases below, but will first turn to consider the respondent's primary submission.
Later Inconsistent Binding Authority
The first authority suggested by the respondent to be inconsistent with Bowden and binding on me is Latoudis v Casey,[16] a case concerned with costs in a summary criminal matter in the Magistrates Court in which, by a majority of 3 to 2, the High Court held that a successful defendant had a reasonable expectation of obtaining an order for costs against an informant (complainant). A statutory provision authorised the Court to order an informant to pay such costs as it considered just and reasonable when an information was dismissed. Whilst the application of Latoudis in Queensland is now qualified by the enactment of s.158A of the Justices Act 1886, certain principles expressed in it have subsequently been relied upon in this jurisdiction. Of present relevance is Hegira Limited v Department of Natural Resources and Water[17] where at [10] the learned Member referred to and relied on the general rule expressed in Latoudis v Casey that the successful party ought to be compensated by the unsuccessful party in respect of costs. Hegira was not, however, a matter which involved a hearing of an appeal under the Valuation of Land Act. It involved an application to strike out a purported appeal; that is, it was an interlocutory application whose successful outcome was final in nature. It was not a decision in which the rule expressed in Bowden applied. Perpetual Trustee Company Limited v Department of Natural Resources and Water[18] is an example of the Land Appeal Court applying the "general rule" in an interlocutory matter.
[16] (1990) 170 CLR 534.
[17] [2006] QLC 79.
[18] [2007] QLAC 0026.
The Chief Executive referred to the recent decision of the Court of Appeal in Tamawood Ltd & Anor v Paans[19] concerning the awarding of costs under the Commercial and Consumer Tribunal Act 2003(Qld). The provisions for costs in that Act are:
[19] [2005] 2 QdR 101.
"Purposes of div 7
The main purpose of this division is to have parties pay their own costs unless the interests of justice require otherwise.
71 Costs
(1) In a proceeding, the tribunal may award the costs it considers appropriate on –(a) the application of a party to the proceeding; or
(b) its own initiative.(2)The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended.
(3)If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends.
(4)In deciding whether to award costs, and the amount of costs, the tribunal may have regard to the following –
(a)the outcome of the proceeding;
(b)the conduct of the parties to the proceeding before and during the proceeding;
(c) the nature and complexity of the proceeding;
(d)the relative strengths of the claims made by each of the parties to the proceeding;
(e)any contravention of an Act by a party to the proceeding;
(f)for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
(g)anything else the tribunal considers relevant.
Examples of paragraph (g) –
The tribunal may consider whether a party to a proceeding is acting in a way that unreasonably disadvantages another party to the proceeding.
The tribunal may consider whether the proceeding, or a part of the proceeding, has been frivolous or vexatious.
(5)A party to a proceeding is not entitled to costs merely because –
(a)the party was the beneficiary of an order of the tribunal; or
(b)the party was legally represented at the proceeding.
(6)The power of the tribunal to award costs under this section is in addition to the tribunal's power to award costs under another provision of this or another Act.
(7)The tribunal may direct that costs be assessed –
(a)in the way decided by a presiding case manager; or
(b)by a person appointed by the tribunal."
Based upon the reasoning of the Court in Tamawood the respondent submitted that the Court of Appeal concluded, in effect, that where there was legal representation in a complex case, an award of costs would usually follow to the successful party. The respondent appeared to place particular reliance on the words of Keane J.A. where his Honour said:
"[32] If orders for costs were not to be made in favour of successful parties in complex cases, then just claims might not be prosecuted by persons who are unable to manage complex litigation by themselves. Such a state of affairs would truly be contrary to the interests of justice; and an intention to sanction such a state of affairs cannot be attributed to the legislature which established the Tribunal."
His Honour went on, however, to say:
"[33] … In the absence of countervailing considerations, where a party has reasonably incurred the cost of legal representation, and has been successful before the Tribunal, it could not rationally be said to be in the interests of justice to allow that success to be eroded by requiring that party to bear the costs of the representation which was reasonably necessary to achieve that outcome. …"
His Honour's reference to "countervailing considerations", can be understood in the context of that case to be a reference to the range of matters included in s.71(4) and other relevant matters. That is, it is not a simple matter of deciding that the case was complex so legal representation was justified and costs flow to the successful party.
Of greater interest, I suggest, is what his Honour said at [23]:
"[23] As I have already said, in my view, the language of s.70 and s.71(5)(a) is sufficiently clear to negate the proposition that costs should, prima facie, follow the event unless the Tribunal considers that another order is more appropriate. In this regard, it is clear that the power of a court or tribunal to award costs to a party is now the creature of statute. (Knight v F.P. Special Assets Ltd (1992) 174 C.L.R. 178 at 193; Forest Pty Ltd (Receivers and Managers Appointed) v Keen Bay Pty Ltd & Ors (1991) 4 A.C.S.R. 107 at 111-113.) The nature and extent of that statute which creates the power and prescribes the occasions for, and conditions of, its exercise. In the performance of this task, observations of the courts in relation to the operation of other statutory regimes relating to costs may afford general assistance but they cannot be allowed to distract attention from the terms of the particular statute in question."
I notice that his Honour refers not to the statutory provision that creates the power to award costs but to the "terms of the statute" – a much broader proposition. And it is in that context that I see myself bound by the need to exercise the discretion expressed in s.66 of the Valuation of Land Act and, in so doing, to maintain the application of principle expressed in Bowden. Tamawood was a case dealing with a dispute between private parties and can be contrasted with the present matters which, as I say below,[20] arose out of the administrative powers of the State.
[20] at [33] – [35].
Changed Legislative Framework
Section 67(1) of the Valuation of Land Act provides:
"67 Practice and procedure for appeals
(1)The Land Court Act 2000 and the Land Court Rules 2000 apply for the purposes of an appeal under section 55, 64 or 65."
Rule 4 of the Land Court Rules 2000 states:
Application of Uniform Civil Procedure Rules
4.(1) If these rules do not provide for a matter in relation to a proceeding in the court and the Uniform Civil Procedure Rules 1999 (the "uniform rules") would provide for the matter, the uniform rules apply in relation to the matter with necessary changes."
(2) For subrule (1), an originating application under these rules it to be treated as if it were a claim under the uniform rules."
The Chief Executive submitted that by application of Rule 4 reference should be made to the costs provisions in the Uniform Civil Procedure Rules and in particular to Rule 689(1):
"689 General rule about costs
(1)Costs of a proceeding, including an application in a proceeding , are in the discretion of the court but follow the event, unless the court considers another order is more appropriate."
An issue as to whether Rule 680 of the Uniform Rules is incorporated into the Land Court Rules by virtue of s.4 of those rules was considered by the Land Appeal Court in Perpetual Trustee Company Limited.[21]At [7] the Court referred to Bowden where at 146 the Land Appeal Court in 1980 said that " … the approach of the Supreme Court to order for costs (as indicated by its Rules) cannot, with respect govern the approach of the Land Court or the Land Appeal Court to the exercise of a discretion." The Land Appeal Court in Perpetual Trustee Company Limited went on at [8] to consider the introduction of the Land Court Rules in 2000, that is twenty years after Bowden, and the scheme of the Uniform Rules which was said provided "a consistency in rules to the extent that that is appropriate". The Land Appeal Court held that Bowden does not authorise disregard of the Uniform Rules. Indeed, the Court held that s.34 of the Land Court Act was broad enough to support what was expressed in Rule 680. Nowhere, however, did the Land Appeal Court say that Rule 4 authorised a wholesale incorporation in the Land Court Rules of the Uniform Rules relevant to the matter of costs.
[21] [2007] QLAC 0026.
I do not think that the Uniform Rules can be said to have overtaken a consistent line of decisions of the Land Appeal Court such as Bowden which were based on the statute from which the jurisdiction to award costs arises. Apart from that, there can be difficulty in valuation appeals before the Land Court in deciding how the notion of "following the event" applies. In Mobbs v Valuer-General[22] the Court said:
"In valuation cases the Court has not to determine whether the value put on by one side is correct, or whether the value put on by the other side is correct, but has to determine what is the correct value. There is no 'issue' in the strict sense of the word."
[22] (1922) 6 LGR NSW 73 at 73.
In any event, Rule 689 does not erode or qualify the jurisdiction of the Court to exercise its discretion on the question of costs. And the exercise of that discretion needs to take account of the nature of the substantive contest joined by the parties. It is in that context that the approach authorised by Bowden needs to be applied.
In Department of Natural Resources and Mines v The Body Corporate for "The Astor Terrace Car Park"[23] the Land Appeal Court did not overrule Bowden nor did it embrace the rules about costs in the Uniform Rules which were not referred to. That authority post-dates the Land Court Act, the Uniform Civil Procedure Rules and the Land Court Rules.
[23] [2003] QLAC 66.
Supplementary Points
The Chief Executive referred to s.68 of the Valuation of Land Act and submitted that that provision supports the view that far from an order for costs being the exception, an order for costs should ordinarily follow success. The submission went on to say that it may be inferred that s.68 is a provision which is designed to encourage the resolution of appeals before the commencement of the hearing of the appeal by reference to the costs consequences which flow from s.66 and the limitation in s.70. Section 68 provides:
"68 Alteration of valuation after notice of appeal and effect thereof
(1)The chief executive may after receiving notice of appeal alter the valuation in accordance with the requirements of such notice and may not less than 14 days before the commencement of the sittings of the court at which the appeal is to be heard give notice of such alteration to the appellant and to the court, as the case requires, and thereupon the appeal shall be determined.
(2)Moreover the chief executive may after receiving notice of appeal reduce the valuation and may not less than 14 days before the commencement of the sittings of the court at which the appeal is to be heard give notice of such reduction to the appellant who may not less than 7 days before the commencement of the sittings give to the chief executive and to the court, as the case requires, notice that the appellant accepts the valuation as reduced and thereupon the appeal shall be determined.
(3)If the appellant does not give such notice the valuation as reduced shall be deemed to be the valuation appealed against."
It seems to me that s.68 provides the Chief Executive with a further opportunity to reduce a valuation following the objection process and also provides machinery for the effect of such a reduction to be provided for. Certainly a settlement would usually have the effect of avoiding or reducing cost, but I see no connection between s.68 and the exercise of discretion to award costs under s.66. None was demonstrated by the respondent. The failure of an appellant to accept a reduced valuation may be relevant in a Court considering an application for costs, but that does not lead to a conclusion that s.68 is relevant to the understanding of s.66. In any event s.68 is not a new provision having been numbered as s.21A at the time Bowden was decided.
In "Law of Costs" G E Dal Pont[24] at 210 the learned Author writes:
"… that discretion involves applying, although not uncritically, the 'normal rule' that 'costs follow the event'. What this means, generally speaking, is that the successful party is entitled to receive his or her costs from the unsuccessful party. Ordinarily this is a just outcome because the party who turns out to have unjustifiably either brought another party before the court, or given another party cause to have recourse to the court to obtain his or her rights, should be required to recompense that other party in costs. …" (footnotes deleted)
[24] 2003 Butterworths.
Now it cannot usually be said that an appellant who prosecutes an appeal before this Court and against whom a costs order is permitted under s.70, has "unjustifiably … brought (the Chief Executive) before the Court" unless special reasons of the type referred to in Bowden are identified. A statutory valuation under the Valuation of Land Act is an administrative act in respect of which the statute provides a process and a venue for a landholder to address any disagreement with the outcome of that act. Having such a matter come before a Court with a specialised jurisdiction is a quite different matter from one where a party claims loss or damages caused by the act or omission of another, be it a breach of contract or a tort, for example. It would seem to be inappropriate if a landholder who elected to employ the process available to him by appealing to this Court suffered the risk of an order for costs, except in special circumstances.
At 213 Dal Pont says:
"[7.8] The object of requiring an unsuccessful party to pay the costs of the successful party is to provide some indemnity to the successful party for the loss incurred in being required to spend money in vindicating or upholding his or her rights in court."
That quotation points to the proposition that the general rule about costs following the event is concerned with parties and their rights. It cannot reasonably be said, I think, that the Chief Executive has some "right" to his valuation. The notion of an administrative act and the protection of rights are not readily assimilated with general rules about costs.
Irrespective of which statute gives jurisdiction to the Land Court, s.7 of the Land Court Act2000 is relevant to the exercise of that jurisdiction.
"7. In the exercise of its jurisdiction, the Land Court –
(a)is not bound by the rules of evidence and may inform itself in the way it considers appropriate; and
(b)must act according to equity, good conscience and the substantial merits of the case without regard to legal technicalities and forms or the practice of other courts."
This provision was recently considered by the Court of Appeal in Townsville City Council v Chief Executive, Department of Main Roads.[25] For the purpose of these reasons I will summarise what I understand to be the key points of that decision:
· The words "equity, good conscience and the substantial merits of the case" are not terms of art with some fixed legal meaning.[26]
· The application of s.7 in a particular case may, having regard to "the nature of the issues involved and, where appropriate clear intendment of any statute", indicate the application of strict principles of law on the one hand or the adoption of "a broader approach of common sense".[27]
· The inclusion of such a provision "widens rather than restricts the discretion available to a decision maker". "It is facultative not restrictive"[28]
· " … the merits may not be able to trump a countervailing rule of law but they are one factor that must be taken into account when exercising a discretion."[29]
[25] (2006) 1 QdR 77 from [37] to [45].
[26] At [38] quoting from Qantas Airways Ltd v Gubbins (1992) 28 N.S.W.L.R. 26 at 30.
[27]At [39] quoting from Trittenheim Pty Ltd, Heaney & Heaney v H & H Gill Nominees Pty Ltd (1994) 64 S.A.S.R. 434 at 442.
[28]At [40] and [41] quoting from Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 6 11.
[29] At [43].
The respondent submits that the "substantial merits" of each of these appeals lies with the Chief Executive who has been required to respond to singularly unsuccessful appeals. Whilst the present applications require the exercise of a discretion, that does not mean that the substantial merits, only should be taken into account. I am of the view that what was said in Bowden amounts to a "countervailing rule of law" which is binding on me. Section 7 is not a surrogate for the proposition that costs should follow the event. That provision was in place[30] at the time of the Bowden decision.
[30] as s.41(5) of the Land Act 1962.
Public Interest
The respondent submitted that the appellant did not bring the appeal for any public purpose but rather for its own commercial advantage whereas the Chief Executive was acting in the public interest in defending the appeal. There is no evidence in support of the respondent's suggestion that it was acting in the public interest. Nor is there any legal basis supplied for the implied contention that the initiative of an appellant acting for its commercial advantage is noteworthy or is a matter for criticism. An appellant pursuing its statutory right of appeal under the provisions of the Valuation of Land Act will inevitably be motivated by commercial or financial considerations. The existence of the statutory right is therefore an acknowledgement of the validity of such motives. What I have said is, I think, supported by what Kirby J said in South West Forest Defence Foundation Inc.[31] at [5]:
"Nothing in the recent decision in Oshlack v Richmond River Council (1998) 152 ALR 83; 72 ALJR 578; [1998] HCA 11 requires that every time an individual or body bring proceedings asserting a defence of the public interest and protection of the environment, a new costs regime is to apply exempting that individual or body from the conventional rule."
[31] [1998] HCA 35.
Early in these proceedings there was some debate between the parties on the topic of test cases, the respondent noting that that appellants did not want test cases. The appellants opposed an application from the respondent to have some preliminary points determined. I accepted an argument pressed by the appellants that it would be preferable to hear evidence, particularly with respect to the 2003 amendments to the Act which introduced the notion of "intangible improvements", rather than dealing with pure questions of law. I can now confirm the good sense of the appellants' submission. That is a quite different proposition from South West Forest Foundation Inc. where the applicant for special leave to appeal accepted the opportunity to have a full scale hearing. An appreciation of the 2003 amendments in particular could not be obtained without the benefit of pertinent evidence.
The parties laid out a proposal that all of eleven shopping centre appeals similar in complex to the Chermside and Pacific Fair examples should be heard in blocks over a number of months. I decided that I would allocate a certain time for hearing and that the parties could consider what could be heard during that period. The parties settled on the two subject cases to be heard over seven weeks. I also decided that none of the remaining nine appeals would be heard until at least the period for appeal following my decisions had expired.
Whilst there was no express agreement by the parties that Chermside and Pacific Fair would act as test cases for the group of shopping centre appeals, what I have set out above indicates that these two appeals have virtually been treated as test cases. Nevertheless I do not think that the disposal of these cases should be classified as being in the public interest and that any decision concerning costs should be influenced on that basis. If the so called "test case" route is to be adopted, as it often is in this jurisdiction, it seems preferable that the parties agree to the disposition of costs at the outset. Although there is no definition of public interest in this context, the factors which may justify the tailoring or refusal of a costs order on that basis are usefully summarised in Halsbury's Laws of Australia – Practice and Procedure at [325 -9450]:
"[325-9450] Costs in public interest litigation
The proper exercise by the court of its costs discretion in the usual fashion, by ordering that costs follow the event, is not altered merely by the fact that the litigation may be called public interest litigation. A definition of 'public interest litigation' for this purpose is therefore unnecessary; rather the inquiry is on identifying those factors that may justify the court making a costs order other than that costs follow the event, which include the following:
(1) the extent to which the plaintiff and defendant were successful in the action;
(2)where the plaintiff is an individual, whether he or she had any personal, private or financial gain to make from the litigation;
(3)where the plaintiff is an association, whether its objects have a public character, and whether the litigation was pursued in accordance with those objects and for the purpose of fulfilling them;
(4)whether there was widespread public interest in the litigation and its outcome, or the case was otherwise designed to effectuate important public policies;
(5)whether, if the plaintiff had succeeded, numerous people would have benefited from the action; and
(6)whether the plaintiff would have had sufficient economic incentive to file suite even had the action involved only narrow issues lacking general importance.
These factors, though they overlap, are not decisive in each case, which must rest entirely on its own facts. They can, however, justify a discrete approach to costs where a litigant has properly brought proceedings to advance a legitimate public interest and the proceedings have contributed to the proper understanding of the law in issue and involved no or only peripheral private gain, in which case the costs incurred have been described as incidental to the proper exercise of public administration, and so ought not to be wholly a burden on the particular litigant.
It is within the court's discretion, where the factors are finely balanced, to avoid an 'all or nothing' order in favour of an order apportioning costs between the litigants."
It was submitted for the appellants that items (4) and (5) in the above list were satisfied by them. I really have no direct evidence in those respects, however I doubt that the outcome to the appellants, which is really commercial in nature, could be described as being in the public interest. That may be contrasted with, for example, Minister for Immigration and Multi-Cultural Affairs v Vadaralis[32] where their Honours Black CJ and French J at [29] said that the matter before them "involved matters of high public importance" and that there "was substantial public and, indeed, international controversy about the Commonwealth's actions". In those circumstances, the Court decided that it was appropriate to make no order as to costs.
[32] (2001) 115 FCR 229.
I return now to consider the submission for the respondent that if the principle expressed in Bowden were to apply, as I have said it does, then these matters fall within the exception for a number of reasons.
These appeals were exceptional because of the major issues debated and to which I come shortly, and for a number of other reasons. The size of the litigation and of the issues in dispute clearly necessitated legal representation for both appellants and the respondent. The appellants were represented by five senior counsel and two junior counsel and the respondent by one senior counsel and two junior counsel. The hearing of the appeals occupied more Court time than any previous appeal and involved a total of 29 witnesses including 19 experts. Some witnesses were called more than once. Many thousands of pages of documentary evidence were tendered leading to a transcript of greater than 5,000 pages and 1,439 pages of written submissions in addition to five days of oral submissions. The size of the trial arose from the complexity of the issues contested by the parties. The relevance of complexity in a consideration of the question of costs was identified by the Land Appeal Court in Hymix Industries Pty Ltd v Valuer General[33]
"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."
[33] (1990) 13 QLCR 173 at 186.
In the reasons for decision in Chermside at [432] I said:
"In truth the many exercises or components of exercises carried out under s.3(2) struck me as being better described as products of a voyage of discovery rather than references to a well worn chart."
The issues in the appeals may be broadly divided into two groups: one including the valuation under s.3(1)(b), the other arising from an exercise under s.3(2). This later provision is not frequently utilised in this Court so is not the subject of a history of collected authorities. In addition to that, there were amendments made to the Act in 2003 which were relevant to the operation of that provision. Those amendments introduced for the first time in this jurisdiction a statutory concept of "intangible improvements". As a consequence there was considerable debate as to the nature of intangible improvements, whether they were present in the unimproved subject properties and their extent in an individual improved shopping centre; the cause of their generation and the manner of valuing them. That debate involved a theoretical dimension but was resolved essentially by means of statutory interpretation and the application of valuation principle. It is my clear estimation that the s.3(2) debate consumed the bulk of time and resources in these appeals.
Whilst s.3(1)(b) is the provision most frequently employed in valuations under the Act its application to the valuations in dispute generated substantial debate on questions of principle. Pivotal to that debate was the application to the present cases of what was in the reasons for decision referred to as the Nathan formulation.[34] The appellants can be said to have lost that debate which involved a consideration of a number of authorities. In particular, it involved the apparent conflict between Nathan on the one hand and Toohey'sLimited v The Valuer General[35] on the other. That conflict had not been expressly dealt with in any earlier case, though the conclusions that were drawn in my reasons owed much of their logic to what the Land Appeal Court said in AMP Society v Chief Executive, Department of Lands.[36]
[34]See the Chermside reasons at [64] and the reference to Commissioner of Land Tax v Nathan (1913) 16 CLR 654.
[35] (1925) AC 439.
[36] (1995) 15QLCR 344.
A matter which I wrestled with in the Chermside appeal was the contention for the respondent that the Nathan formulation[37] was of general application in valuations under s.3(1)(b). That issue was discussed in the reasons for decision at [188] to [190] concluding that the application of that formulation in AMP Society was confined to the "special position of such valuable sites as those occupied by regional shopping centres …" That is, the use of the land is special and exclusive within its geographical area and visits upon the land a value that other sites in the vicinity with a different use would not have. That may be contrasted with, for example, a commercial site particularly attractive to tenants. Such a site would have a higher value than inferior sites owing to that factor not because of the special nature of its use. That is, the application of the Nathan formulation to such a property would have no effect on its value, as unimproved.
[37] Reasons [64].
Neither the respondent nor the appellant assisted me in coming to grips with this issue. The submission for the respondent was broad and general in its impact and took no notice of the apparent tension between such cases as AMP Society, and ANZ Holdings Limited v Chief Executive, Department of Lands[38] discussed in the Chermside reasons at [186] – [189]. The appellants were understandably of no assistance as their submission was that the Nathan formulation had no application being supplanted by Toohey's case.
[38] [1994] 15 QLCR 223.
Whilst the application of s.70 leads to the conclusion that "costs should not be awarded against the Chief Executive" it is of interest to observe that in neither appeal did the Chief Executive contend for the valuation appealed against. Each "deemed correct" valuation[39] was abandoned by the respondent who led evidence to much higher figures. Those higher figures were generated by methods not revealed until valuation reports were exchanged as part of the pre-trial procedures and which rendered largely, if not completely redundant, the answers to interrogatories sworn by the Chief Executive albeit in answers to the questions posed. That would have not been helpful in the appellants' preparation of their cases. Contrasted with the abortive interrogatories is the fact that the appellants each served notices of appeal with detailed grounds of appeal and were required to provide particulars. An appellant is limited to the grounds of appeal.[40] Before they received the respondent's valuations as part of the pre-trial exchange process, the appellants had been provided with a statement of reasons pursuant to the Judicial Review Act (1991): "a document that could best be described as inadequate and at worst misleading".[41] They had also been presented before trial with an explanation of the "Denman model", a process employed in a s.3(2) exercise – a model appropriately abandoned by the respondent valuers subsequently. The appellants became aware of that at the time of exchange of valuations before trial.
[39] S.33 Valuation of Land Act refers.
[40] S.45(4).
[41] Reasons for decision Chermside [2].
In fact, the contest in the case of Chermside was between the respondent's valuation of $151,000,000 at its highest and the appellant's figure of $19,000,000, at its lowest. For Pacific Fair the figures were $255,000,000 for the respondent and $21,000,000 respectively for the appellant. In considering the notion of "success" one ought not, in my view, focus on the imaginary middle figure produced by the application of s.70 of the Act. That provision simply provides a formula whose application protects one party or the other from an order for costs. It appears to me to be a formula which assumes that the contest would reflect the figures identified as being the "valuation appealed against" on the one hand, and the value stated in the "notice of appeal" on the other. It was however held in AMP Life Ltd v Department of Natural Resources and Mines[42] that the parties may lead evidence to figures different from those contemplated by the language in s.70. In circumstances where one party leads evidence to a substantially different figure from the one referable to s.70, as the Chief Executive did in both of these matters, the policy intent of s.70 would appear to be frustrated. There is no formal means by which an appellant may alter the valuation stated in the notice of appeal, but the Chief Executive has the means of s.28 and s.29 of the Act to formally alter a valuation giving rise to fresh rights of objection and appeal. Such an alteration also allows for the nature of disagreements between the parties to be made clear and for pre-trial procedures to focus on the altered valuations. Apart from that it would allow s.70 to apply as Parliament would have intended.
[42] [2002] 23 QLCR 300
No criticism can be levelled at the Chief Executive for not seeking to defend the valuations appealed against, in circumstances where different values result from the application of what he or his advisors perceived to be the correct principles and the appropriate methodology. It is quite another matter to say, however, that the appellants' case preparation would have been no different had each of them known before the exchange of valuations of the level of values to be pursued by the Chief Executive at the hearing; of his abandonment of the "Denman model" and of the irrelevance of the answers to interrogatories. What is apparent, however, is that the appellants were to be confronted with a much higher level of values to those appealed against; produced by a different methodology from that presented by the Chief Executive's officers in earlier discussions and in respect of which interrogatories were administered.
The respondent submitted that one factor the Chief Executive should take into account in considering whether to alter a valuation under s.28 and s.29 is the fact that the altered valuation would become the new valuation for the purpose of revenue impositions. The difficulty with that suggestion is that, first, it imposes on the Chief Executive a revenue role in circumstances where the role of that office under the Valuation of Land Act is quite clearly independent of the revenue implications of his statutory duties. Second, it presumes what an appellant would prefer, without any evidence that the appellants were consulted.
It was suggested for the Chief Executive that his position is different from that of the valuers called on his behalf. In the context of the present discussion that submission cannot be accepted, in my view. The Act (s.13) imposes the duty on the Chief Executive to "decide the unimproved value" of the relevant land and s.3 to s.6 provide the legislative structure within which a valuation must be made. The value adopted by the Chief Executive therefore must be based on that legislative structure and on the experts who give effect to it. I do, however, accept the respondent's submission that a valuer cannot be directed by the Chief Executive as to the evidence, including expert evidence, that he should give.
I do not accept the suggestion for the appellants that there is no framework for the operation of s.70 in the circumstances where the Chief Executive chose to not rely on or advance the presumed correctness of the valuations appealed against. Those valuations nevertheless remain properly described as being the valuations appealed against for the purposes of s.70. It was not open to the respondent to waive the effect of s.33; the provision which deems the Chief Executive's valuation to be correct.[43]
[43] See AMP Life Ltd [2002] 23 QLCR 300 at [26].
The respondent submitted that if the Chief Executive altered the valuations to the figures finally contended by him the appellants would have a more difficult task as the altered valuations would be presumed as correct under the Act. That, I think, overstates the limited purpose of s.33 which I have explained in the Chermside decision at [331] to [335]. The same evidence is capable of displacing the Chief Executive's valuation whether that valuation is deemed correct or otherwise.
Each appellant could have at an early stage accepted the valuation appealed against, being $54,000,000 for Chermside and $90,000,000 for Pacific Fair. However, once the prosecution of the appeal was underway and valuation reports were exchanged it became apparent that the respondent was seeking valuation figures of a much higher order than those appealed against. The appellants could have still withdrawn the appeals and accepted the valuations appealed against at that stage, but some important considerations would have been relevant . First, substantial costs had been incurred by the parties at that stage and those would have included costs for expert reports directed towards the date for valuation. Second, it had become clear by then that the Chief Executive was seeking to establish a higher level of values than historically had been the case for the two shopping centre properties. The respondent had in 2002 flagged an intention to utilise s.3(2) for this purpose. Following that, the 2003 amendments were introduced and s.3(2) was employed for the present appeal properties. The level of increase of the valuations appealed against compared with the earlier valuations[44] was substantial. Whilst the amount of increase is not relevant to the correctness of a valuation, it is, understandably, something that would motivate a landholder to at least query if not appeal.
[44] 2001 at $21,500,000 for Chermside and $40,000,000 for Pacific Fair.
It was submitted by the respondent that the prospect of the Chief Executive altering the valuations to a higher figure had the appeals been withdrawn was merely a matter of speculation. I was referred to the earlier occasion in the 2001 valuation where "there was evidence available to increase the valuations under s.3(2)" with respect to the appeals then before the Court, but that did not take place. The suggestion seems to have been that the appellants were aware of those earlier circumstances so need not have been concerned with the prospect of a higher valuation being pursued in the present cases had the appeals been withdrawn. The implications of that suggestion appear to be that, following the exchange of valuations the appellants would have been aware that they could have accepted the valuations appealed against following which the more recent higher valuation figures would not have been pursued; but they would be confronted with the higher valuations if they had proceeded. That would be a notable if not remarkable position for a statutory officer to adopt. It is not one that I would expect an appellant to anticipate.
It has long been recognised that valuations under the Valuation of Land Act 1944 should be in correct relativity with each other,[45] in order that the rating and taxing burden, and the rental burden for some properties, is distributed proportionately in accordance with unimproved value. It follows that the Chief Executive[46] has a duty to value land correctly and in so doing to employ and follow the provisions of the statute to that effect. The appellants could well have expected that, had the appeals or either of them been withdrawn, the Chief Executive would have either employed s.28 and s.29 to "alter" the valuation of the two subject properties in accordance with his perception of the correct application of s.3(2); or to have pursued the high level of values on the occasion of the next annual valuation at which time much of the expert evidence prepared for the present cases would need to be revisited.
[45] See for example, Barnwell v Valuer-General (1989) 13 QLCR 13 at 16.
[46] See s.13.
The respondent invited me to follow The King v Recorder of Leeds[47] in which costs were ordered against the unsuccessful party who had sought a reduction in his rates, but failed. The submission is that the appellants sought to reduce the valuations appealed against but failed so the Recorder of Leeds case ought to apply in favour of the respondent. The first difficultly I have with that submission is that it appears from the judgment in Recorder of Leeds that there was no equivalent principal to that expressed in Bowden operating in the English jurisdiction. In addition to that it seems to me that characterising the matters which were before me as if the only valuations of interest were those appealed against and that success or failure ought to be measured in accordance with those, disregards the evidence led by the Chief Executive to substantially higher figures. In the present cases any consideration of success would need to take into account not just the very low values contended for by the appellants[48] but the reduction of the valuations contended for by the respondent. In the case of Chermside the determination of $112,000,000 represents a 26% reduction of the $151,000,000 valuation sought, whilst for Pacific Fair the determination of $128,200,000 is close to 50% lower than the $255,000,000 valuation sought.
[47] [1919] 1 K.B. 671.
[48]Noticeably low in the case of Pacific Fair whose figure the Land Appeal Court in 1992 had described as "conservative".
The fact that the valuers for the Chief Executive altered their valuations on a number of occasions during the hearing is not open to criticism as such.[49] It is preferable that a valuer not remain silent if his opinion changes or if he discovers a mistake in his valuation. Nevertheless, those alterations had to be dealt with in the appellants cases and would have caused disruption to them.
[49] Windsor v Queensland Electricity Commission (unreported, Land Appeal Court 2 December 1987).
The Chief Executive was not successful in having a figure calculated by the s.3(2) method in either appeal displace one produced by the valuation method employed to address s.3(1)(b). In that respect it might be said that the appellants were successful though the reasons for decision were not based on the PWC model which was advanced by the appellants. The "rational method" employed in the Chermside appeal[50] owed some of its logic to submissions from the appellants which referred to a method described by them as the "mere deduction" approach. The appellant was successful in my acceptance of the submission that the nature of "intangible improvements" was one that was best understood as a question of statutory interpretation rather than one of theory based on the respondent's American expert, Professor Vandell. It was also successful in my acceptance of the existence of substantial intangible improvements in a major or super-regional shopping centre, whilst the respondent convinced me that its approach in estimating the improved value of the subject property should be preferred.
[50] at [609] and following.
In that part of the case dealing with the s.3(2) approach the appellants had provided an estimated new replacement cost of structural improvements in their s.35A applications, then departed from that collection of estimates in their evidence. That was disruptive to the respondent's case though the quantity surveying evidence was, in the end, largely surplus to requirements.
I do not intend turning this discussion into representing a "score board" on the various points of debate which were ventilated in the s.3(2) topic – there were many more points than those discussed thus far. I have, however, reviewed the reasons for decision and, following that, formed the view that in this major part of the case it was the appellant in Chermside who dominated. It was the Chief Executive who was promoting the s.3(2) exercises as producing the preferred valuation figures in these cases. I say that notwithstanding the fact that it was the appellant who made application under s.35A for intangible improvements to be taken into account. It was the appellant's contention that intangible improvements fell to be considered under s.3(1)(b) as well as s.3(2) therefore justifying an application under s.35A. I note that the statute provides no means of an appellant becoming aware that the Chief Executive has carried out a s.3(2) exercise therefore whether an application under s.35A for that purpose might be appropriate. Answers to interrogatories made it clear that the valuations appealed against where made using the s.3(2) method. Each appellant sought to identify a direct relationship between the respective s.3(1)(b) and the s.3(2) exercise such that the latter figure would buttress the former . That aspect was referred to by the respondent in submissions as somehow indicating the extensive reliance placed on s.3(2) by the appellants. I cannot accept that submission. An appellant would not normally expect to utilise the s.3(2) method at all, not only because it is an inherently unreliable method. Where a valuation under s.3(1)(b) is able to be carried out, all that a s.3(2) exercise can do as to provide a higher figure which an informed appellant would not seek; or a lower and therefore irrelevant figure. I cannot imagine a properly advised appellant choosing that approach except in circumstances where he is confronted with a s.3(2) exercise from the Chief Executive.
It transpired that not only was an incursion into the s.3(2) method unnecessary, but much of the evidence need not have been called. I refer in particular to that of the quantity surveyors and of the two American experts called by the parties. In truth, neither party gave sufficient attention to the question of statutory construction that arose under the s.3(2) approach.
In Pacific Fair the same issues as discussed thus far with regard to s.3(2) were relevant given my adoption of the key decisions of principle recorded in Chermside. The reasons for decision in Pacific Fair did not, however, extend to the adoption of the "rational method". An important part of the case under s.3(2) turned on my conclusion that the state of the evidence as to the value of improvements under s.5 of the Act was such that I could not safely draw a conclusion on a s.3(2) exercise. In holding that, I attributed part of the cause to the respondent not providing an estimate of the value of improvements based on the cost less depreciation method, but preferring to simply offer up criticism of the appellant's estimate of the cost of the improvements, as new. I was critical of the appellant in not disclosing the as constructed drawings (the so called Blue Books) in a timely manner and in so doing I addressed the suggestion of the appellant that an earlier disclosure would have made no difference to the respondent's case.
Both parties in Pacific Fair failed to convince me that their respective approach to the topic of depreciation of improvements was correct or even valid. I wrote quite a deal on this issue in the reasons in an attempt to provide some guidance on this issue. I am of the view that the approach of the appellant was sound as far as it went and, in that regard superior to that employed by the respondent.
In the s.3(1)(b) valuation for the Chermside property I preferred the evidence of the valuer called by the respondent though considered his primary "calibration method" and his "allocation method" to be of little assistance.
In the Pacific Fair matter I was led to the conclusion that the valuer called by the respondent had not presented a comparison with sales which could be relied upon and, unusually, I elected to rely on points of comparison referred to in the evidence of the valuer called by the appellant in utilising the respondent's sales evidence. In both cases the main sale relied on by the appellant's valuers, the Telstra sale, was rejected by me both on the basis of legal principle and on its valuation analysis. The valuers for the appellants selected the Telstra sale as reflecting the application of the appellants' contention that Toohey's case had overtaken the Nathan formulation – a proposition not accepted by me. The identification of other sales by the appellants' valuers was based on the same legal error.
I will not repeat the various points discussed above except to say that I am bound to follow Bowden and can find no special circumstances sufficient to find a conclusion that costs should be awarded against the appellants. Indeed, there is justification in holding that the conduct of the cases by the parties and the complexities encountered are such that an award of costs would not be appropriate. I am of the view that there should be no order as to the cost of the substantive appeals.
The respondent, as I have said, sought costs including reserved costs. It seems to be common ground that such costs should go with the general cost of the proceedings. I am of the view that there is no basis for treating reserved costs differently from the costs of these substantive appeals.
Order
I make no order as to costs.
RP SCOTT
MEMBER OF THE LAND COURT
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