Ross v Caloundra City Council
[2007] QLC 17
•12 March 2007
LAND COURT OF QUEENSLAND
CITATION: Ross v Caloundra City Council (2007) QLC 0017 PARTIES: Steven Ross
(claimant)v. Council of the City of Caloundra
(respondent)FILE NO: A2006/0795 DIVISION: Land Court of Queensland PROCEEDING: Claim for compensation payable consequent upon the taking of land pursuant to the Acquisition of Land Act 1967. DELIVERED ON: 12 March 2007 HEARD AT: Brisbane DELIVERED AT: Brisbane MEMBER: Mr RS Jones ORDER: The respondent shall pay to the claimant:
(i) valuation costs in the sum of $6,875.00 together with interest thereon from 18 August 2006 to date of payment at the rate of 5.5 per centum per annum.
(ii) legal costs in the amount of $5,832.50.
(iii) interest on the amount of $900,000 at the rate of 5.5 per centum per annum for the period commencing on and from 22 November 2002 to and including 6 August 2005.
CATCHWORDS: Resumption – claim for compensation – whether compensation agreed – whether determined by Court – entitlement to interest – unreasonable delay in lodging claim – reduction in interest award – Acquisition of Land Act s.28.
Resumption – disturbance – legal and valuation fees – period over which claimable – need to relate to claim.
Words and Phrases – meaning of 'compensation' – meaning of 'determined' – Acquisition of Land Act, s.28.APPEARANCES: Mr B Cronin of counsel instructed by Heiner and Doyle Solicitors, for the claimant
Mr R Anderson of counsel instructed by Garland Waddington Solicitors, for the respondent
These proceedings concern claims for compensation by Mr Steven Ross (the claimant) as the registered proprietor of land resumed by the Caloundra City Council (the respondent) pursuant to the Acquisition of Land Act 1967 (ALA).
Background to the proceedings
By proclamation published in the Queensland Government Gazette on 22 November 2002 the respondent resumed from the claimant land described as lots 228, 229, and 230 on Registered Plan 62808 County of Canning, Parish of Bribie situated at Golden Beach, Caloundra. The purpose of the resumption was for "Civic Centres or Squares" and the total area of land taken was 1,821m².
Following discussions and correspondence between the parties, about which I will go into in more detail below, the claimant filed in the registry of this court on 28 September 2006 a claim for compensation dated 27 September 2006. The total amount of compensation claimed was $1,116,865.29. The major component of the claim was for the value of the land resumed said to be $900,000. At the hearing of this matter the claim for compensation was amended by leave without objection. The amended claim (Exhibit 4) provided as follows:
"(i) Value of Land Resumed $900,000.00
(ii)Interest from the date of proclamation up to date of payment
of the claim including Counsel in connection with the
preparation of them.
(iii) and (v) Solicitors costs $5,860.00
(iv)Valuer's fees inclusive of GST $7,562.50
(v)see (iii)
(vi) Rates Adjustment $2,112.79"
By the time the matter came before me on 31 January 2007 the parties had reached agreement about the value of the land taken, referred to by the claimant as the "primary sum", in the amount of $900,000 and the rates adjustment claim. That is, the only matters left for me to decide were interest and legal and valuation fees claimed under the heading of "Disturbance".
The Interest Claim and s.28 of the Acquisition of Land Act 1967
The claimant asserts that he is entitled to interest on the sum of $900,000 for almost the entire period from the date of resumption to the date of payment. The original position of the respondent was that while the claimant was entitled to interest it ought be limited to only some 12 months from the date of resumption. The respondent says that the period of 12 months was reasonable given what, according to it, was unreasonable delay on the part of the claimant in the lodgement of his claim. However, during the course of the proceedings the position of the respondent changed dramatically. The final position of the respondent is that the claimant is not entitled to any interest on the sum of $900,000.
The power of the Land Court to award interest is contained in s.28 of the ALA which provides:
"(1)Subject to subsection (2), in respect of the period or any part of the period commenced on and including the date on and from which any land is taken and ending on and including the day immediately preceding the date on which payment of compensation is made the Land Court or, upon appeal, the Land Appeal Court may order that interest be paid upon the amount of compensation determined by it.
(1A)Such interest shall be at such rate per centum per annum as the Land Court or, upon appeal, the Land Appeal Court, deeming reasonable, fixes by the order.
(1B)Interest so ordered to be paid shall be payable as if it were part of the compensation in question and shall be added to the amount thereof and be payable by the constructing authority accordingly.
(2)Interest shall not be payable in respect of any amount of compensation advanced under section 23." (emphasis added)
The argument advanced on behalf of the respondent is that, in the circumstances of this case, as there was no determination by the Land Court concerning compensation for the land taken there was no statutory basis for an award of interest. In paragraphs 4 and 6 of the respondent's further written submissions the argument is advanced thus:
"4.'Determined' typically means 'decided or resolved on, settled' (Shorter Oxford Dictionary). In the context of the court system, the term has no different meaning. 'Determined by [the Land Court]' as the phrase is used in s.28 therefore suggests a figure reached, by the Court, as a result of a matter being brought before it. The use of the term 'settled' in the definition should not be confused with an out of court settlement reached by the parties – such a determination is not one reached by the Court, but by the litigants.
5.…
6.Force is given to this outcome by s.28(1A) which provides that interest so ordered shall be payable as if it were part of the 'compensation in question', indicative that it is only upon an amount of compensation, determined by the Court in the exercise of its jurisdiction under s.24 that is relevant. The primary sum of course was not in question here, only that amount claimed as disbursement and, if interest be payable here, it can only be upon that amount."
When this matter was argued before me on 31 January 2007 it was asserted on behalf of the respondent that by 28 July 2006 the parties had reached agreement and settled on compensation for the value of the land taken. That being so, Mr Anderson, counsel for the respondent contended that two consequences must follow. First, that for the purposes of s.24(2) of the ALA, as compensation for the value of the land taken had been agreed it had "no proper place" in the claim for compensation served on the respondent on 27 September and filed on 28 September 2006. Second, there being no live issue before the Court concerning compensation for the value of the land taken there was nothing relevantly left for it to "determine" for the purposes of s.28(1) of the ALA. Mr Anderson stated that he did not seek to rely on the fact that the sum of $900,000 was paid by the respondent into the trust account of the claimant's solicitor on 6 October 2006 which was after the date of the filing and serving of the claim but prior to any part of the claim coming before the Court for determination.
Having heard all of the evidence on this topic I am prepared to accept that by 28 July 2006 Mr Heiner, the claimant's solicitor, believed that some form of oral agreement had been reached about the value of the land taken in the sum of $900,000. However, I do not accept that the agreement, in whatever form it was, made the formal claim for compensation for the land redundant or otherwise invalid.
The oral testimony of Mr Heiner is to the effect that the genesis of the so called agreement was an oral agreement reached between the claimant's valuer and the valuer retained by the respondent.[1] The oral testimony of Mr Heiner is supported to an extent by his letter of 8 September 2006[2] to the respondent's solicitors. This letter in part says:
"My client and his consultant Mr Johnston believe that this matter is settled, but I would not like to have to rely on your telephone confirmation of that, given on 2 August …"
[1] T 35.9.
[2] Ex MMS 30 to the affidavit of Ms Shannon Ex. 6.
Whether or not the valuers had the authority to reach any binding agreement on behalf of the parties was not established. When it was put to Mr Johnston, the valuer retained by the claimant, that the value of the land had been finally resolved by July 2006 he rejected the suggestion.[3]
[3] T 29.3.
In my opinion the documentary evidence about this issue is also far from conclusive. On 14 August 2006[4] Mr Heiner wrote to the respondent's solicitors to, among other things, "confirm" the agreement. This letter also raised the claims for interest and disturbance. There was no reply to the 14 August letter and Mr Heiner again wrote on 21 August 2006[5] raising the issue of rates adjustments. There being no response to his letters Mr Heiner wrote the letter of 8 September 2006 referred to above.
[4] Ex 6, MMS 27.
[5] Ex 6, MMS 28.
On 14 September 2006[6] the respondents solicitors wrote to Mr Heiner advising that instructions had been received in response to "…(the) claim for interest and disturbance, in addition to the agreed 'land content' compensation component of $900,000". This letter went on to identify issues in dispute concerning the disturbance and interest claims and concluded by saying "These matters notwithstanding, our client will pay $100,000 in respect of your client's claim for interest and disturbance items, thereby resolving the whole of your client's claim for compensation pursuant to the Act, for $1,000,000." This offer was rejected and on 25 September 2006[7] Mr Heiner wrote in the following terms:
"Having taken counsel's advice, my client has instructed me to lodge a formal claim for compensation with the Land Court, and this will be done prior to 29 September.
Mr Ross has had to take this course (with its attendant additional expense), because of the council's hard-nosed position on interest and costs, contained in your letter of 14 September."
[6] Ex 6, MMS 31.
[7] Ex 6, MMS 33.
There was no response to the letter of 25 September and on 27 September 2006[8] Mr Heiner wrote to the respondent's solicitors enclosing the claim for compensation. This letter went on to say:
"At this stage, my client is still proceeding on the basis that agreement was reached on the quantum of the primary sum, by the representatives of the parties, on or about 28 July 2006, and that the dispute before the Land Court is as to Mr Ross's entitlement to interest and costs.
Are you in a position to tell me why the council has still not paid the primary sum, nor even the earlier advance against compensation?
Referring to the Order of 27 June, and assuming for the moment that the dispute is restricted to interest and costs, I propose that we by-pass paras 2 and 3 of the Order and move immediately to the without prejudice conference mentioned in para 4. Your prompt response is requested." (emphasis added)
[8] Ex 6, MMS 34.
By way of response, on 6 October 2006 Mr Heiner received two cheques made out to his trust account totalling $900,000 and a very brief accompanying letter from the respondent's solicitors.
Mr Cronin, counsel for the claimant, submitted that the evidence before the Court does not justify a finding that the claim for compensation for the land taken was not a valid claim for the purposes of the ALA. I agree.
Mr Johnston did not believe that any formal settlement had been reached on the value of the land taken as at 28 July 2006. It is also my opinion that by as late as 27 September 2006 it was still not certain that the respondent had committed itself to any binding agreement to pay the sum of $900,000 for the land notwithstanding the interest and disturbance claims still being in dispute. On the evidence before me Mr Heiner's "cautious" and "prudent" approach[9] of including the land claim was justified.
[9] T 42.7 – T 43.2.
For the above reasons I do not accept that the claim in respect of the land taken was a redundancy because that issue had, prior to 27 September 2006 been finally disposed of by virtue of a previous agreement between the parties.
While Mr Anderson's oral submissions were largely (if not wholly) dependent upon the existence of a binding agreement being reached between the parties prior to the filing and serving of the claim for compensation, his written submissions received under correspondence dated 16 February 2007 were couched in much broader language. A distinction is sought to be drawn in paragraph 4 of the written submissions between any "out of court settlement" reached by the litigants and "determinations" made by the Court to resolve issues in dispute. In the former case there is no relevant compensation issue which has been determined by the Court for the purposes of s.28(1) according to Mr Anderson.
On behalf of the claimant, Mr Cronin submitted that regardless of the eventual settlement concerning the value of the land taken before trial, the power to award interest remained. That was so according to Mr Cronin for essentially two reasons which I summarise as follows:
(i) interest should be seen as a part of the overall compensation the claimant is entitled to pursuant to the ALA.
(ii) as disturbance items were still in issue the Court was still required to make a "determination" on compensation for the purposes of s.28(1) of the ALA and, in this context, s.28 should be construed in a liberal way in favour of the claimant and, to construe it in the way contended for by the respondent would result in a "manifestly unfair" result.
As to the first of these arguments the word "compensation" is not defined in the Act but it has been the subject of judicial consideration. In Nelungaloo Pty Ltd v Commonwealth[10] Dixon J said:
"Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it."
[10](1948) 75 CLR 495 at 571; see also Housing Commission of NSW v Falconer (1981) 1 NSWLR 547 at 569 per Mahoney JA.
While it might be tempting to view interest pursuant to s.28 of the ALA as part of the fair compensation a dispossessed land owner is entitled to receive it does not, in my opinion, fit within the meaning of the term "compensation" as contemplated by the ALA.
Pursuant to s.12(5) of the ALA, on and from the date of publication of the resumption notice the land resumed relevantly vests in the constructing authority and the dispossessed landowner's estate or interest in the land is converted into a right to claim compensation "under this Act". S.20(2) of the ALA provides that:
"(2)Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken."
The effect of s.20(2) is that the value of the land taken and, where appropriate, the damage caused to the balance land as a consequence of injurious affection and/or severance (s.20(1)), are all to be assessed according to their worth or value as at the date of resumption, that date being the date of loss to the dispossessed landowner. It is because "compensation" for the purposes of the ALA has to be assessed as at the date of resumption that interest has sometimes been referred to as compensation for the landowner having to wait for his or her final compensation award to be paid[11] or, as an entitlement to replace the right to retain possession of the land from the date of resumption.[12]
[11] eg. Alex Gow Pty Ltd v Brisbane City Council (1999-2001) 22 QLCR 292 at [81] (LAC).
[12]Inglewood Pulp & Paper Co v New Brunswick Electric Power Comm. (1928) AC 492 cited with approval by the LAC in Small & Anor v Brisbane City Council (1968) 35 CLLR 239 at 247.
In my opinion the words used in s.28 of the ALA also make it clear that interest is not a component of "compensation" for the purposes of the Act. If it were otherwise it would make little sense for interest to be paid "… upon the amount of compensation determined …" (s.28(1)) or for it to be paid "… as if it were part of the compensation in question and shall be added to the amount thereof …" (s.28 (1B)). Further, the existence of a discretion to award interest pursuant to s.28(1) does not, in my opinion, sit comfortably with the concept of compensation as dealt with elsewhere in the ALA.
For the reasons expressed above I do not accept the claimant's first argument.
As to the second argument I am not attracted by the suggestion that I could give judgment for the sum of $900,000 and simply note that it has already been paid. In any event I do not see how this approach avoids the respondent's essential argument that there has been no relevant determination by the Court about that issue as is required by s.28(1).
It is however true that the issue of disturbance is before the Court. Also, for the reasons expressed above, I have found that the claim concerning the land taken was a valid claim when filed on 28 September 2006 and amended on 31 January 2007 without objection by the respondent.
Further, at all material times, the respondent was fully aware that interest was an important element of the claimant's claim for compensation and was a matter to be agreed or determined by the Court. To put it another way, the evidence makes it tolerably clear that the acceptance of the $900,000 by the claimant was conditional upon interest being agreed or, failing agreement, determined by the Court. In the circumstances of this case "compensation" for the land taken and interest thereon were inextricably linked and, as no complete agreement finally disposing of those interrelated matters had been reached, still required "determination" by the Court.
It is also my opinion that it would be bordering on perverse in cases such as this to construe s.28(1) in such a way as to deny the claimant the right to have the Court determine the issue of interest based on the merits of his claim. The construction of s.28(1) of the ALA contended for on behalf of the respondent would act as a disincentive to dispossessed landowners to settle compensation claims or parts thereof and would otherwise tend to operate in an unjust way against the interests of dispossessed landowners. It is my opinion that Parliament would not have intended such consequences from what is essentially a remedial or beneficial provision contained within legislation, a fundamental purpose of which is to ensure, as far as is practicable, just compensation to persons affected by the compulsory taking of their land.
In conclusion, it is my opinion that once a valid claim for compensation is filed and served s.26(1) of the ALA enlivens the jurisdiction of the Court to "… hear and determine all matters relating to compensation under this Act". The jurisdiction to award interest is not lost or taken away because the parties have settled all or part of the claim before a final determination about it is made by the Court. Of course it would be open for the parties to reach agreement and settle all matters including interest.
For the reasons set out above I find that the claim for interest is valid and ought be decided on its merits.
The Merits of the Interest Claim
As already referred to above one of the main purposes of an award of interest is to recompense the dispossessed landowner for the delay between when the loss occurred and the date of payment of compensation. In Alex Gow Pty Ltd v Brisbane City Council the Land Appeal Court at paragraph 82 said:
"82.The usual practice of the Land Court has been to order that interest be paid on compensation from the date of resumption until compensation has been paid by the resuming authority. However, as discussed in VH Cox V Water Resources Commission (1996-97) 16 QLCR 266, that long established practice has been subject to two exceptions:
·Where there has been unreasonable delay in lodging the claim for compensation and/or in pursuing that claim; and
·Where a dispossessed owner remains in possession of that land. (16 QLCR 273)"
The Land Appeal Court went on in paragraphs 87 and 94 to agree that mere delay on the part of the plaintiff (claimant) should not disqualify him or her from an award of interest and that, as an award of interest is compensatory in nature not to award interest will usually be punitive.
After reviewing the authorities it seems to me that the claimant should only be denied interest over the usual period if it can be shown that there has been unreasonable delay in lodging and/or prosecuting his claim. The usual period is from the date of proclamation of the resumption notice in the Government Gazette to the date of payment of compensation.
In his oral submissions, Mr Anderson sought to draw a distinction, when giving consideration to what is "unreasonable delay" between what might be able to be directly attributable to the claimant and what might be seen to be an unreasonable delay in an overall sense. As I understand Mr Anderson's submissions about this, it was being suggested that it might not always be helpful to focus only on the behaviour of the claimant as other factors relevant to determining whether or not a delay was unreasonable might be overlooked. At the end of the day I do not consider it necessary to thoroughly dissect Mr Anderson's subtle argument as the appropriate test seems reasonably clear from authorities of this Court and the Land Appeal Court. There must be, in an objective sense, an unreasonable delay in lodging and/or prosecuting the claim for compensation and dilatory behaviour on the part of the claimant is an important factor to be considered.[13]
[13] Alex Gow Ltd at [82] – [97].
The denial of an award of interest may not always be strictly punitive. It might be appropriate, as referred to in the Land Appeal Court in Alex Gow, where the owner is allowed to remain in possession/occupation of the land after its resumption. It seems to me though that this exception to the general rule ought not apply where the dispossessed owner is required to pay a commercial rent to remain in occupation.
On behalf of the respondent it was originally suggested that interest could be affected because the claimant remained in possession and received rent until 25 May 2003. As it turned out the rent received by the claimant was for only one of the three properties taken and was limited to a period of two weeks. In these circumstances I do not intend to take any account of rent received.
Essentially there were four matters raised in support of the respondent's position being:
(i) the period of about 4 years between resumption and the filing of the claim is of itself indicative of there being unreasonable delay and it was only after the respondent took the initiative that the claim was eventually filed and served.
(ii) while some delay is able to be attributed to the claimant's former solicitor the claimant should have been more pro-active in ensuring his claim was lodged in a timely fashion.
(iii) in any event, even if the delay can be sheeted home to negligence on the part of the claimant's former solicitor, why should the respondent have to bear the consequences of that negligence.
(iv) There is no behaviour on the part of the respondent which caused or materially contributed to the delay. And, in this context the respondent had repeatedly requested the claimant to lodge his claim.
I agree that on its face four years between resumption and the filing of the claim seems to be an unusually long time. However, a reference to the Alex Gow case reveals that four years is not at the extremes.[14] I also accept if the respondent had not taken the action that it did there was a genuine risk that the claimant might not have finalised his claim until some later time, a matter considered relevant in Hardy v Queensland Electricity Commission.[15]
[14] Alex Gow 8 + years: Marshall 10 years.
[15] (1988-89) 12 QLCR 89 at 91.
In this case there is no doubt that the timely lodgement of the claim was materially frustrated by the actions of the claimant's then solicitor, Mr Hoolihan.
The evidence of the claimant was that he had a long standing professional relationship with Mr Hoolihan extending over some 20 years. Most of the claimant's involvement with Mr Hoolihan concerned conveyancing matters but there was apparently one piece of litigation where both were involved. The claimant said that he instructed Mr Hoolihan to lodge his claim some time in 2002. After that it seems Mr Hoolihan offered a series of excuses as to why the claim was being delayed including blaming the valuer, Mr Johnston. According to the claimant, Mr Hoolihan told him sometime in 2004 that a claim had been lodged.
The evidence also makes it tolerably clear that for sometime before April 2006 Mr Hoolihan's mind was not focused on his practice responsibilities and, in April 2006 he advised the claimant that he had been made bankrupt. It was at this time that the claimant says he became aware that no claim had in fact been lodged.
When pressed by Mr Anderson as to why he did not become more pro-active in pursuing his claim the claimant replied that "he trusted Mr Hoolihan to do the right thing." When considering this last piece of evidence I think it is relevant to bear in mind that the claimant was a retired truck driver who had relied on Mr Hoolihan for legal advice on property matters for about 20 years.
While some parts of the claimant's evidence were vague, if not evasive, overall I accept his evidence as it relates to his dealings with Mr Hoolihan. His evidence about this is supported by the evidence of Mr Johnston who agreed with Mr Anderson's suggestion that Mr Hoolihan had made his valuation task difficult. In this context, Mr Johnston stated that Mr Hoolihan repeatedly failed to make available a copy of a contract for the sale of land which, if it in fact existed, could have been an important element in the valuation exercise to be carried out. Mr Johnston also gave evidence that the valuation exercise was already a difficult one particularly in respect of determining the highest and best use of the land in a rapidly rising market.
Once the claimant became aware of Mr Hoolihan's situation he wasted no time in retaining the services of Mr Heiner, his current solicitor. Mr Heiner was retained in May 2006. From the time Mr Heiner took over the claim, notwithstanding some delays in getting possession of the files, the claim was served on 27 September 2006 and filed on 28 September 2006 with payment for the land component of the claim occurring on 6 October 2006.
A significant part of the cross-examination of the claimant centred around whether or not it should have been reasonably apparent well before April 2006 that he should have taken steps to progress the claim and, if necessary, take the matter away from Mr Hoolihan. As I have already mentioned, the personal circumstances of the claimant and his longstanding relationship with Mr Hoolihan is a relevant consideration. It is also relevant that the claimant was being actively misled by Mr Hoolihan as to the progress of his claim and the reasons for the delays in its finalisation. Also of relevance is that, in this case, notwithstanding Mr Hoolihan's attitude to the claim, negotiations were continuing on other fronts. Although the evidence about the nature and extent of these negotiations is far from certain it is tolerably clear that through 2003 and 2004 several meetings occurred where compensation was discussed.
In Jackarmarra v Krakover[16] Kirby J, when considering the principles applicable in cases involving procedural time limitation defaults, at pp 542-543 considered that the conduct of a litigant's lawyer may be a relevant consideration but, on the other side of the coin, that the ability of a party to take steps to safeguard his/her own interests might also be relevant. That approach is, in my opinion, applicable here. That is, the conduct of Mr Hoolihan is relevant but not the only consideration and it is relevant to also consider whether or not the claimant had taken reasonable steps to look after his own interests.
[16] (1998-99) 195 CLR 516.
In all the circumstances I cannot help but conclude that the claimant ought to have been more pro-active in the pursuit of his interests and, either put pressure on Mr Hoolihan to act or have him replaced sooner than he did. In that sense the claimant has, in my opinion, been guilty of unreasonable or dilatory behaviour in the lodgement of his claim. However, in the circumstances of this case I consider the twelve month period advocated for on behalf of the respondent is unreasonable. In reaching this conclusion I have had particular regard to the following matters. First, the nature and length of the relationship between the claimant and Mr Hoolihan. Second, the extent of the misleading by Mr Hoolihan and the difficulties caused to Mr Johnston in the performance of his valuation task. Third, the complexity associated with valuing the land resumed. Last, there is no evidence that the respondent suffered or will suffer any material prejudice as a consequence of the delay.
After taking the matters referred to above into account I have reached the conclusion that the claimant ought to have acted 1 year earlier in changing solicitors, that is by May 2005.
From when the matter was referred to Mr Heiner it took about 5 months to file the claim and about 5½ months before the sum of $900,000 was paid. However, even in the hands of Mr Heiner the claimant was required to seek an indulgence of the respondent to defer the filing of the claim from 12 May 2006 to September 2006. In saying this I intend no criticism of Mr Heiner who, it seems to me, progressed the file as quickly as he could. In consideration for the second indulgence, Mr Heiner offered that his client would forego interest for one month between 16 May and 16 June 2006. Mr Cronin does not seek to back away from that offer but says that should be the extent of it. I must say I initially struggled somewhat with the logic of limiting interest between May and June 2006 only when effectively the same indulgence was required when seeking an extension of time from June to September 2006. However, in circumstances where it is quite clear that by August 2006 the extent of the claim was largely known and settlement negotiations concerning the main claim (the value of the land) were continuing, the submission of Mr Cronin has some force.
As mentioned above the usual practice of this Court is to allow interest from the date of resumption (22 November 2002) to date of payment (6 October 2006). However, for the reasons set out above, I will reduce that period by fourteen months to take account of the claimant's failure to act earlier (12 months) and the various delays in the filing of the claim between May and September 2006 (2 months).
Disturbance
Some General Issues
By reference to the amended claim (exhibit 4) the claimant, under the heading of disturbance, wants to be compensated for certain professional costs incurred being:
solicitors costs: $5,860.00
valuers fees (incl. GST) $7,562.50In this case it is not disputed that the claimant is entitled to recover the costs incurred in the preparation of his compensation claim provided that they are reasonable.[17] Nor is there any dispute that the hourly rates charged by the solicitor Mr Heiner, and the valuer Mr Johnston, were other than reasonable and that the work claimed for was actually done.
[17]Director of Buildings and Lands v Shun Fung Ironworks Ltd (1995) 2 AC111; Heavey Lex No. 64 Pty Ltd v Chief Executive, Department of Transport (2001) 22 QLCR 177 (LAC).
The position of the respondent is, in essence, that the claimant has failed to sufficiently prove that all of the work done and charged for by Messrs Heiner and Johnston was reasonably incurred in the preparation of the claim. The respondent's first submission is that no allowance should be made for legal or valuation work done in the formulation of the claim insofar as it concerns the value of the land taken. That is so because, according to the respondent, the land claim was effectively settled before the final claim was lodged. As I have not accepted the respondent's submissions about this when dealing with the question of interest there is no need for me to consider it further now. The second submission on behalf of the respondent is that, as some of the work done was not otherwise sufficiently connected with the preparation of the claim, the claimant is not entitled to be compensated for it.
Valuation Fees
According to Mr Johnston the fees charged by him were conservative and did not include time wasted because of the difficulties caused by Mr Hoolihan. The items charged for were ones he could "justify". When he was pressed in cross-examination it did however become clear that not all of the work charged for was related to the preparation of the claim. In this context, Mr Johnston referred to his consideration of the validity of the resumption process itself and agreed that some time was spent in negotiations and on other more general matters. However, Mr Johnston was quite adamant that of the 27½ hours charged for no more than 2½ of those hours were spent on extraneous activities and his evidence about this was not really shaken. Accordingly, I intend to reduce the fees of Mr Johnston by only 2½ hours. At the rate of $250/hour the total valuation fees then are $6,250 and with GST included $6,875.00.
Solicitors Fees
Mr Heiner gave evidence that he reviewed his fees twice to include only that work associated with the preparation of the claim. In cross-examination, Mr Anderson directed most of his time to the subjects of when agreement was reached on the value of the land taken and how much time Mr Heiner spent working on the claim after that.
In final submissions some 18 to 20 of the items set out in Appendix "A" of Mr Heiner's statement (Exhibit 9) were challenged on the basis that they were related to settlement negotiations and/or other matters too remote from the preparation of the claim. However, in cross-examination Mr Heiner was only directly challenged about items 6, 12 and 50[18]. In respect of items 6 and 12 Mr Heiner agreed that the first was partly to do with the claim and part not and that in respect of item 12 it was primarily concerned with settlement negotiations. Items 6 and 12 are worth $17 each.
[18] T37 – T38.
I suspect that if every item was agonisingly investigated other inconsistencies might have been uncovered. However, on the evidence before me, the only reduction I consider it appropriate to make concerning the legal fees is $25.50 being half of item 6 and the whole of item 12 resulting in a total for legal fees of $5,832.50.
Interest on Disturbance Items
Interest on disturbance items typically runs from the date they were paid by the claimant up to the time the claimant is reimbursed by the constructing authority. The evidence is that the claimant paid Mr Johnston's fees on 18 August 2006. Mr Heiner's fees were paid progressively. I will order that interest be paid on the valuation fees from 18 August 2006 to date of payment of that amount. As to the legal fees, the evidence that they were paid progressively is far from satisfactory. The first item in Mr Heiner's exhibit A occurred on 9 May 2006 and the last item claimed for on 5 October 2006. I initially considered awarding interest from a period half way between 9 May 2006 and 5 October 2006. However, at the end of the day, I was not satisfied that this would work in a fair way as the bulk of those fees could have been paid early or very late in the time frame between May and October 2006. In the circumstances I therefore propose to make no orders concerning interest on legal fees.
There is only one further matter I intend to raise in respect of disturbance. In circumstances where, at least at face value, the professional fees claimed were not manifestly excessive I was surprised and disappointed that some form of agreement could not have been reached between the parties about them.
Conclusions and Orders
For the reasons expressed above I find that:
(1) in respect of the disturbance claim the claimant is entitled to recover from the respondent:
(a)valuation costs in the sum of $6,875.00 together with interest thereon from 18 August 2006 to the date of payment at the rate of 5.5 per centum per annum.
(b)legal costs in the sum of $5,832.50
(2) in respect of the interest claim the respondent is to pay interest on the sum of $900,000 at the rate of 5.5 per centum per annum for the period commencing on and from 22 November 2002 to and including 6 August 2005.
I publish my reasons but will hear from the parties as to the costs.
ORDERS
The respondent shall pay to the claimant:
(i)valuation costs in the sum of $6,875.00 together with interest thereon from 18 August 2006 to date of payment at the rate of 5.5 per centum per annum.
(ii)legal costs in the amount of $5,832.50.
(iii)interest on the amount of $900,000 at the rate of 5.5 per centum per annum for the period commencing on and from 22 November 2002 to and including 6 August 2005.
R S JONES
MEMBER OF THE LAND COURT
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