Rothcote Pty Ltd v Council of the City of Thuringowa

[1998] QLC 122

[1998] QLC 122

 

LAND COURT

BRISBANE

9 OCTOBER 1998

Re:     A97-28 -
  Application for Costs
  Claim for Compensation -
Acquisition of Land Act 1967

Rothcote Pty Ltd
v.
Council of the Shire of Pine Rivers

D E C I S I O N

By proclamation published in the Government Gazette on 5 July 1996 the Council of the Shire of Pine Rivers (the Council) took from the registered proprietor, Rothcote Pty Ltd (Rothcote), certain lands, for road purposes. 

Then by proclamation published in the Government Gazette on 6 September 1996, the Council took from Rothcote land for environmental purposes. 
           Initially both parties had considered the question of compensation as if there had been contemporaneous resumptions, the claimant, on that basis, claiming $1,250,000 and the respondent assessing compensation as "nil".
         The hearing of the matter continued into the fifth day.  As the hearing proceeded, and on the basis that there were two resumptions at differing dates, the final claim by Rothcote was as follows:

For road purposes   -      $866,080
           For environmental purposes   -     $441,600

The Council's final valuation put in evidence was as follows:

Compensation for road purposes  -                 Nil
           Compensation for environmental purposes         -      $197,250

Compensation was determined as the amount of the valuation finally put in evidence by the Council.
It was noted in the determination that there had been no claim finally before the Court for "disturbance items such as legal and valuation fees expended by the claimant in compilation and lodgment of the claim for compensation". Instead, the final claim had been formulated on the basis that Rothcote sought its costs of and incidental to the hearing. However, pursuant to s.27(2) of the Acquisition of Land Act 1967 (the Act), the party to whom costs (if any) could be awarded, was the Council.
           The Council has now made application for its costs, supported by written submissions.  Written submissions have also been received in response, from Rothcote's solicitors. 
           Section 27 of the Act relevant provides:

"          (1)       Subject to this section, the costs of and incidental to the hearing and determination by the Land Court of a claim for compensation under this Act shall be in the discretion of that Court.

(2)       If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than to the amount of the valuation finally put in evidence by the constructing authority, costs (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority."

The Council's submission, in part, is that in exercising its discretion under Section 27(1) of the Act, the Court should be guided by an observation made by the Land Appeal Court in Moyses and Ors v. Townsville City Council (1979) 6 QLCR 271 at 274, relative to a resuming authority being forced, by the making of an exorbitant claim, "unreasonably and unnecessarily, into litigation". In Moyses, counsel for the resuming authority had invited the Court "to lay down rules or principles as to the way in which the Land Court's discretion should be exercised in certain circumstances", such circumstances being, for example, "where the amount claimed has been substantially more than the amount awarded, and where the amount put in evidence by the authority is not substantially less than the amount awarded".  The Court commented - "Although not spelled out in so many words, it is clear that the suggestion was that the effect of the rules should be that, in general, there should in such circumstances be some order for costs in favour of the authority."  The Court thought that it should decline the invitation made to it by counsel.  The full observations which were made by the Court and to which reference in part was made in the submission by the Council here, were as follows:

"          However there are two observations which we feel at liberty to make.  First, we do not think that the presence of sub-section (2) of section 27 in the Act should be regarded as some sort of legislative suggestion that, where the claim is substantially more than the amount awarded, and the amount put in evidence by the authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding any costs to the claimant, but should award costs to the authority.  Second, where the Court is considering whether it should award costs to an authority, it could be wrong to have regard merely to the amounts of the claim and of the award and of the value put in evidence by the authority.  We would think that usually it would be more relevant to inquire whether the conduct of the claimant, including his making of an exorbitant claim, if he has made one, has been such as to force the authority, unreasonably and unnecessarily, into litigation"  (emphasis added).

The Council here submitted that in view of the amount claimed it was obliged to conduct the litigation "to ensure that compensation was determined according to law", and, there being "no opportunity for reasonable negotiation" to "vindicate its position on the question of enhancement".  The Council saw itself as having succeeded in respect of all issues which it advanced, and in particular:

"(a)     the contention that the road resumption resulted in enhancement of the value of the land;

(b)the contention that the highest and best use of the land in the "after" situation was for a residential subdivision (a contention almost self evident having regard to the obvious pattern of development in the locality);

(c)the contention that the highest and best use of the subject land in the "after" situation was in fact brought about by the construction of the very road for which land was taken, namely a distributor road of sufficient standard to provide appropriate access to a residential subdivision."

The Council submitted that there was nothing in its conduct to disqualify it from obtaining an order for costs.
           It should be said that it is clear that litigation of this matter could not reasonably have been avoided.  However, that is not seen to be as a result of the stance of the claimant alone.  The Council succeeded entirely in terms of the issues as particularised above, but not in respect of all issues which led to the dispute.  In the first place, the scheme underlying the resumption for road purposes was found to be as submitted by the claimant, not by the Council.  That led to the need for principles different to those adopted by the Council and as it happened, by the claimant, being applied by the Court, to the "before resumption" valuation, "to ensure that compensation was determined according to law".
           Both parties accept fault for the erroneous initial assumption that the two resumptions were to be treated as one.  However, the valuation approach adopted by the Council, resulted in its assessment of enhancement flowing from the road resumption being offset against compensation for the effect of the resumption for environmental purposes.
           The onus was on the Council to prove enhancement and it failed by its own admission, with regard to the resumption for environmental purposes, until corrected at a stage in the hearing when the costs of litigation of that aspect of the resumption matters, could not have been avoided.  It is of no assistance to ponder the effect on the costs of the litigation had the Council correctly separated the resumptions in the first place.  It had that responsibility in the enhancement stance which it took.
           It is clear that there was no alternative other than for the matter of the road resumption to have been litigated.  The Council's stance relative to enhancement was vindicated by the Court's determination.  The proof of enhancement was not, however, provided by the valuation methodology adopted by the Council but as a result of the Court's deliberations based on the evidence of both parties.
           Indeed, as Rothcote has submitted, it was as a result of the litigation, that any uncertainty which existed as to the responsibility for the construction of the full length of the road within the resumed area, was resolved by an undertaking given to Rothcote by the Council during the proceedings.
           Rothcote submitted, correctly, that, as a result of "forcing" the Council into litigation, it has received substantial benefits.  Those benefits flow from the award itself, interest on the award and then the undertaking relative to road construction costs necessary to ensure the highest and best potential use of the retained land after resumption.
           Furthermore, the Council has not been asked to pay Rothcote's legal and valuation fees expended in lodging its claim for compensation.
           In Moyses (supra), the Land Appeal Court said, in its reasons for not allowing an appeal against the decision of the Land Court not to award costs, at p.278:

"We are not to be taken as indicating that, in any case in which enhancement is in issue, a claimant is entitled to take the matter to Court without incurring any risks as to the costs of the authority.  But we do say that there are cases in which the Court can properly take the view that it was reasonable to have the matter decided by the Court and that, notwithstanding the failure of the claim, there should not be any order as to costs."

The very circumstances which led to the Council being wholly successful in terms of sub-s.(2) of s.27 of the Act, now lead me to the conclusion that, as this is a case where the claimant has substantially improved its position as a result of the litigation, and notwithstanding the final failure of the claim, it was reasonable for both parties to have the matter decided by the Court and then bear their own costs, accordingly.
Order
           In the exercise of the Court's discretion pursuant to sub-s.(1) of s.27 of the Act, the application is disallowed and no order is made as to costs.

RE WENCK
MEMBER OF THE LAND COURT