Seachange GC Pty Ltd v Chief Executive Officer, Gold Coast City Council

[2010] QLC 113

LAND COURT OF QUEENSLAND

CITATION:

Seachange GC Pty Ltd v Chief Executive Officer, Gold Coast City Council  [2010] QLC 0113

PARTIES:

Seachange GC Pty Ltd as TTE for the Seachange (GC) Unit Trust
(appellant)

v.

Chief Executive Officer, Gold Coast City Council
(respondent)

FILE NO:

LGA436-09

DIVISION:

Land Court of Queensland

PROCEEDING:

Costs of appeal

DELIVERED ON:

10 August 2010

DELIVERED AT:

Brisbane

HEARD AT:

Written submissions

PRESIDENT:

Mrs CAC MacDonald

ORDER:

1.   The respondent’s application for costs is refused.

2.   The respondent is ordered to pay 50% of the appellant's costs of and incidental to the hearing of the appeal. 

CATCHWORDS:

Application for costs - s.34 Land Court Act 2000 - unfettered discretion of the Court - common law principle that costs follow the event balanced against the conduct of the parties - belated points of defence raised at the hearing - surprise pleadings resulting in a discontinuance - unnecessary costs incurred by the appellant.

Effect of Notice of Discontinuance - s.18 Land Court Rules 2000.

Categories for rating purposes - commercial or residential - Local Government Act 1993.

COUNSEL:

Mr G Allan for the appellant
Mr E Morzone for the respondent

SOLICITORS:

Anderssen Lawyers for the appellant
King & Company for the respondent

1. On 2 October 2009, the appellant Seachange (GC) Pty Ltd filed a notice of appeal in this Court, pursuant to s.987 of the Local Government Act 1993, against a categorisation decision made by the respondent Gold Coast City Council in respect of land owned by the appellant situated at 299 Napper Road, Arundel.  The decision was made under the respondent Council’s Revenue Statement Resolution of Rates and Charges 2008-2009 and the relevant rate notice issued on 25 May 2009.  The effect of the decision was that the subject land was categorized for rating purposes as Category 4D “Commercial”.  The appellant contended that the land should have been categorized as Category 1A “Residential”, or alternatively, that the bulk of the subject land should be included in Category 1A with the balance in Category 4D “Commercial”. 

2. At the relevant time the appellant was developing the subject land as an integrated active lifestyle resort that would include 395 attached dwellings and medium density detached dwellings, community purposes and indoor recreation club.  A temporary sales office was also operating on the land.  The appellant submitted that, in accordance with the planning approval in place for the subject property, the land was used for residential purposes and accordingly it should be included in Category 1A.  The temporary use of the sales office, which occupied about 920 m² of the total area of the subject of more than 20 ha, did not constitute a material change of use of the subject property from residential to commercial for the purposes of The Integrated Planning Act and the Planning Scheme, the appellant said. 

3. Prior to filing the appeal in this Court, the appellant had objected to the inclusion of the subject land in Category 4D.  The objection was disallowed.  The Notice of Decision and Reasons for Decision issued on behalf of the respondent said, in part, that –  

   “Council is aware that a Sales Office currently operates on the land, and was operational during the relevant rates period (being the period pertaining to the objection notice).  The Sales Office operates for the purpose of selling homes on the land at a profit.  Further, given that the scope for development on the land extends to 395 residential dwellings and that at least 13 homes have been sold to date, the activity of the Sales Office can be considered buying and selling "on a large scale".  This demonstrates that the Sales Office operates for a commercial purpose.” 

   The decision maker went on to say that for land to fall within Category 1A it must be used solely for residential purposes.  The presence of the sales office, which operated for a commercial purpose, prevented categorisation in Category 1A.  However, there was no similar requirement in Category 4D to the effect that to fall within the definition of commercial purposes, the land must be used solely for commercial purposes. 

4. In a Points in Reply document filed by the respondent pursuant to a Court order, the respondent rejected the appellant’s ground of appeal that the categorisation of the land into Section 4D was wrong, on the grounds that

   “The subject land was used for the commercial purpose of selling Seachange Village homes at a profit from a temporary sales office located on the land, which land has been occupied for that purpose since approximately 30 October 2008.” 

5. At the hearing of the appeal on 10 June 2010 written submissions were handed up by Counsel for each party.  Counsel for the respondent submitted that the use of the sales office prevented categorisation of the subject as residential land.  He also submitted that the operation of the residential park constituted a commercial enterprise.  During the course of the hearing, Counsel elaborated on that submission saying that because the appellant provided common areas, utilities, a site manager and charged rent on the individual sites, the operation of the park was a commercial venture. 

6. The result was that at the hearing the appellant was apprised for the first time of the fact that the respondent was seeking to support the categorisation decision by relying on additional reasons to those given in support of the objection decision and in the Points of Reply.  As a result, Counsel for the appellant foreshadowed at the luncheon adjournment that he reserved the right to prepare supplementary written submissions to deal with the issue first raised at the hearing. 

7. After the luncheon adjournment, Counsel for the appellant advised that he had been instructed to discontinue the appeal because of the new basis for the respondent’s case.  Counsel said that the appellant had taken the view that on a cost benefit analysis, it was not worth pursuing the appeal, given the new arguments that had been raised and the amount of money in issue.  

8. Subsequently the appellant filed an application seeking an order that the respondent pay the appellant’s costs of and incidental to the appeal.  The respondent has countered with an application seeking orders that the appellant’s application for costs be refused and that the appellant be ordered to pay the respondent’s costs of and incidental to the appeal.  

9. A Notice of Discontinuance signed by both parties was filed by the appellant on 23 June 2010[1].  This appears to have been filed prematurely because, although Counsel for the appellant said at the hearing that he had been instructed to withdraw the appeal, Counsel for both parties indicated that they may apply for costs.  Accordingly I made orders timetabling the filing of any costs applications.

   [1]        See s.16 Land Court Rules 2000. 

10. Counsel for the appellant referred in his costs submissions to the apparent anomaly created by the filing of the Notice of Discontinuance in the light of s.18 of the Land Court Rules 2000 which provides -    

    18 Costs

    If an applicant discontinues or withdraws, the court may order the applicant to pay - 

    (a) the costs of the party to whom the discontinuance or withdrawal relates up to the date of the discontinuance or withdrawal, if the party has not consented to the discontinuance or withdrawal;  and

    (b) the costs of another party or parties caused by the discontinuance or withdrawal.

11. Were there no other relevant facts it would appear that s.18(a) might preclude me from considering the respondent's application for costs because the respondent consented to the discontinuance.   However, it is clear from the transcript of the hearing[2] and from the orders I made at the time that both parties reserved the right to apply for costs.  Subsequently both have applied for costs.  In the circumstances, I do not consider that s.18 of the Land Court Rules covers the field. Rather these costs applications should be considered under s.34 of the Land Court Act 2000. 

    [2]        See T 52 - 55.

Respondent's application for costs

1. Counsel for the respondent submitted that the effect of the discontinuance was that the appellant had failed in its appeal.  Counsel said that the respondent’s submissions relied primarily on the appellant’s evidence as to the nature of the operation.  The matters he had raised were always open on a proper consideration of the evidence and far from it being the respondent's belated points of defence which defeated the appellant, it was the appellant's own evidence which led to its downfall.  Accordingly, the respondent should be awarded its costs. 

2. Section 34 of the Land Court Act provides that -    

   "34.  Costs

   (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. The authorities are clear that s.34(1) of the Land Court Act confers an unfettered discretion on the Land Court in relation to the award of costs.  The discretion is not to be constrained by the application of any preconceived rules or principles other than that the discretion is to be exercised judicially, that is by reference to relevant considerations.[3] 

   [3]        Moyses v Townsville City Council (1979) 6 QLCR 271 at 273, 274.

4. The respondent’s success in the proceedings is a factor to be taken into account in exercising the Court's discretion under s.34(1). While the rule that costs follow the event is not automatically applied in this jurisdiction, the Land Appeal Court has recognized that it is one which is deeply embedded in our law.[4] 

   [4]        Barns v Director-General, Department of Transport (1997) 18 QLCR 133 at 135.

5. However, the Court may also take into account the conduct of the proceedings by each of the parties.[5]  The appellant was taken by surprise by the respondent's arguments, adduced for the first time at the hearing, that since the operation of the park constituted a commercial enterprise the subject land could not be categorized as Category 1A.  The purpose of the pre-trial procedures adopted by the Court in this matter was to ensure that the parties' positions were known to each other in advance of the hearing.[6]  Thus the Court ordered the respondent to file Points of Reply responding to the appellant's Grounds of Appeal.  Similarly, the parties were ordered to exchange and provide to the Court in advance of the hearing written statements of evidence by any witnesses, and a written statement of agreed facts.  The appellant's submissions as to the commercial nature of the park operation were not referred to in any of these documents.  Nor, of course, was that a reason relied on by the decision maker in the original objection decision.

   [5]        See Anson Holdings Pty Ltd v Wallace [2010] QLAC 0002 at [37], [38].

   [6]See Chief Executive, Department of Natural Resources and Mines v Sabina Three Gorges Corporation Ltd, unreported, Land Court, 12 April 2001 at [16];  Royal National Agricultural and Industrial Association of Queensland (RNA) v Chief Executive, Department of Natural Resources and Mines, unreported, Land Court, 6 June 2001 at 3. 

6. It is accepted that these appeal proceedings called for a hearing de novo and, therefore, that it was open to the respondent to base its submissions on facts beyond those taken into consideration by the original decision-maker.  However, the respondent's failure to give notice of those submissions until the day of the hearing is conduct which must be taken into account in deciding the issue of costs.

7. Counsel for the appellant has submitted that, had the respondent identified the new basis in its Notice of Decision disallowing the appellant's objection or in its Points of Reply, the appellant would not have commenced the appeal or, alternatively, would have discontinued the appeal after the Points in Reply had been filed.  This submission was supported by an affidavit sworn by Mr PJ Goodman, the Chief Executive Officer of Pradella Property Ventures and the project director for Seachange Village Arundel (the development on the subject land).  Mr Goodman also confirmed that he considered that the new basis would be more difficult and costly to appeal and presented too much risk for the appellant, and that it would not be economically viable for Seachange to continue the appeal.  He had, therefore, instructed Seachange’s solicitors to discontinue the appeal.

8. I am satisfied that the respondent's late notification of the new basis of argument caused the appellant to pursue the appeal proceedings unnecessarily.  I consider therefore that the respondent's conduct was such as to disentitle it from an award of costs in its favour.  Accordingly, the respondent's application for costs is refused. 

Appellant's application for costs

1. Although I have accepted that the appellant was taken by surprise by the new arguments raised by the respondent at the hearing, I do not consider that that of itself points to an award of costs in favour of the appellant.

2. The appellant was always faced with the risks of litigation in bringing this appeal.  There was no certainty that it would have succeeded in the appeal if the dispute had been confined to a challenge to the original reasons relied on by the decision-maker.  Further, because the appeal involved a hearing de novo all relevant facts and circumstances were open for consideration by the Court, including those matters raised by the respondent at the hearing.  Thus there is a degree of risk inherent in proceedings of this nature that new material will emerge which a Court must take into consideration in reaching its decision.

3. Those factors are to be weighed against the fact that the appellant incurred unnecessary costs in commencing and or continuing the appeal because of the respondent’s conduct of the proceedings.  Taking all those factors into account, I consider that an award to the appellant of 50% of its costs is appropriate. 

ORDERS

1.  The respondent's application for costs is refused.

2.   The respondent is ordered to pay 50% of the appellant's costs of and incidental to the hearing of the appeal. 

CAC MacDONALD

PRESIDENT OF THE LAND COURT