Seafarm Pty Ltd v Minister for Natural Resources and Water
[2008] QLC 129
•27 June 2008
LAND COURT OF QUEENSLAND
CITATION: Seafarm Pty Ltd v Minister for Natural Resources and Water [2008] QLC 0129 PARTIES: Seafarm Pty Ltd
(appellant)v. Minister for Natural Resources and Water
(respondent)FILE NO: LA2007/0123 DIVISION: Land Court of Queensland PROCEEDING: Application for costs. DELIVERED ON: 27 June 2008 DELIVERED AT: Brisbane HEARD BY: Written submission. MEMBER: Mr RP Scott ORDER: The application is refused. CATCHWORDS: Costs – Land Act 1994- Land Court Act 2000 – s.34(1) – discretion is unfettered.
Costs – applicant failed on substantive issues – applicant's positive case rejected – applicant's costs in putting positive case not necessary – quantum favoured applicant to a degree – not decisive.
APPEARANCES: Mr E J Morzone, (instructed by BK Gillan Solicitor), for the appellant.
Mr T W Quinn, (instructed by Ms L Marshall, Senior Lawyer, Department of Natural Resources and Water), for the respondent.
This is an application for costs by Seafarm Pty Ltd (Seafarm) following the determination of an appeal pursuant to s.428 of the Land Act 1994 against a review decision of the Minister as to the purchase price for a conversion of tenure from Special Lease to Freehold title of land leased by Seafarm. In reasons published as Seafarm Pty Ltd v Minister for Natural Resources and Water [2008] QLC 0068[1] the purchase price was determined at $220,000. The Minister had contended to a figure of $450,000 whilst the appellant put forward $116,000.
[1] Reasons for decision.
There is no provision in the Land Act as to the payment of costs of an appeal against the Minister's decision on the purchase price; however a general power of the Land Court to award costs is found in s.34 of the Land Court Act 2000 which relevantly provides:
"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) …
(4) …
(5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court.
(6) If the court makes an order under subsection (5), the assessing officer may decide the appropriate scale to be used in assessing the costs."
In Chief Executive, Department of Main Roads v Regan & Ors [No 2][2] the Land Appeal Court affirmed that the power of the Land Court to award costs under s.34(1) or the Land Appeal Court under the equivalent s.72 of the Land Court Act, is unqualified and unfettered:-
"The power of this Court to award costs is found in Sections 34(1) and 72 of the Land Court Act 2000. Those provisions do not alter the powers which were previously conferred on this Court by s.44(16) of the Land Act 1962 and this Court continues to have an unfettered discretion as to the costs of and incidental to an appeal before it."
[2] (2000) 22 QLCR 151 at 152.
The Land Appeal Court used similar language to Regan in Haber v Department of Main Roads:[3]
"It is clear that the discretion given to this Court by s.34(1) of the Land Court Act is unfettered, but the discretion must be exercised judicially, that is, for reasons that can be justified and by reference to relevant considerations (Wyatt v Albert Shire Council [1987] 1 QdR 486 at 489; Kabale Holdings Pty Ltd v Chief Executive, Department of Transport (1997) 18 QLCR 166 at 198).
[3] [2004] QLAC 0102 at [6].
In Haber the Court made reference to Barnes v Director General, Department of Transport[4] where at 135 the Land Appeal Court said:
"The general rule that costs will usually follow the event is one which is deeply embedded in our law. … It is a general rule which prima facie should be applied in this case."
[4] (1977) 18 QLCR 133.
Similar language is found in Regan[5]
"The general rule is that costs ordinarily follow the event, unless there are special circumstances warranting departure from that general rule. We are conscious that there has been some flexibility in the application of the general rule against a dispossessed owner in compensation cases following the compulsory acquisition of land: (Moyses v. Townsville City Council (1979) 6 QLCR 271; Minister for the Environment v. Florence (1981) 45 LGRA 127; and Banno v. The Commonwealth of Australia (1993) 81 LGERA 34)."
[5] at 152.
More recently in PT Limited and Westfield Management Limited v Department of Natural Resources and Mines[6] the Land Appeal Court made reference to s.66 of the Valuation of Land Act 1944 and to s.70 of that Act then said:
[6] [2007] QLAC 0121.
"[20]The common law principle which has long dominated the exercise of the discretion to award costs that they “follow the event” has been incorporated into r 689 of the Uniform Civil Procedure Rules 1999 but is found neither in the VLA nor the Land Court Act. In interpreting s 66 the Court should not therefore be bound by any presumptive rule or principle – the discretion is complete, but must be exercised judicially.
[22] There may be any number of factors which a court vested with a general jurisdiction to award costs might entertain. One of those factors is the outcome of the litigation. Another might be the overall purpose of the legislation. Contemporary legislation in Queensland tends to make express provision about costs if it is thought desirable that parties not be discouraged from seeking to assert rights by the fear of adverse costs orders." (footnotes deleted)
There is no such provision in the Land Act regarding costs nor, it follows, is there any qualification of the type found in s.66 and s.70 of the Valuation of Land Act and s.27 of the Acquisition of Land Act 1967 each of which sets up a mathematical formula to which the Court must refer in deciding which party may make an application for costs.
Unlike a valuation under the Valuation of Land Act or a resumption under the Acquisition of Land Act where the imposition of legislature power on a landholder is involuntary, Seafarm chose to take advantage of the opportunity afforded it of applying to freehold the lease it held. No compulsion was involved. To that extent the appellant, in rejecting the price sought by the Minister and then invoking the jurisdiction of this Court to determine the purchase price, took on the characteristic of a private litigant. The Minister was therefore drawn into the contest but could not be said to be comparable to a passive landholder whose land was resumed. The Minister's position was one of protecting the public interest in the price to be paid for a State asset on the basis of his advice as to the appropriate price and the appropriate legal basis for determining that price.
The matter was not, however, a simple one of the appellant winning and the Minister losing so can be contrasted in that respect with, for example, LGM Enterprises Pty Ltd v Brisbane City Council[7] or Hegira Limited v Department of Natural Resources and Water.[8]Each of those cases involved a question of jurisdiction and might properly be characterised as "all or nothing" outcomes. It is in such cases that what McHugh J said in Latoudis v Casey[9] is apt:
"Thus, in civil proceedings an order may, and usually will, be made even though the unsuccessful party has nearly succeeded or has acted reasonably in commencing the proceedings. It may, and usually will, be made even though the action has failed through no fault of the unsuccessful party. "[10]
[7] [2008] QLC 0104.
[8] [2006] QLC 0079.
[9] (1990) 170 CLR 534. at 567.
[10] See also Tamawood Ltd v Paans (2005) 2 Qd R 101 at [30], [32], [33].
In matters such as the present one where a win/loss equation cannot be readily applied, the Court is required to put its mind to "relevant considerations" (Haber at [6]). Indeed it is the fact that this Court is so frequently concerned with cases such as this that the need for the discretion to be unfettered becomes apparent. The application of such expressions of policy as one finds in Rule 689 of the Uniform Civil Procedure Rules is inappropriate in such circumstances.
In PT Limited the Land Appeal Court looked at the issue of costs broadly, by identifying the substantive matters raised in the case and in considering the parties success/failure in each of these matters. In addition the Court considered the conduct of the parties.
In this case there were three substantive matters dealt with: the question of the correct legal treatment of the man-made structures/works of development on the land; the value of the land as aquaculture land; and the value of the land as a rural residential site. The respondent succeeded on the first two issues such that it could be said that the appellant did not contest the issue of valuation on the proper basis. The highest and best use of the land for the purpose of valuation was rural residential as proposed by the Minister, rather than as aquaculture as contended by the appellant. The proper basis was therefore the value of the land as a rural residential site and in that respect it was the sales evidence adduced by the respondent's valuer and his methodology that formed the basis of the debate which informed the Court in the valuation figure finally adopted. In that respect the appellant can be said to have enjoyed some success in its challenge to the Minister's valuation, but, as I observe below, not to the extent that the price finally determined was in the vicinity of the price contended for by the appellant. The alternative relativity case advanced by the appellant was also rejected by this Court.[11]
[11] Reasons for decision at [65].
The function of an order for costs is compensatory not that of punishment of the unsuccessful party. That was made clear by McHugh J in Latoudis v Casey at 567:
"The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory. … In Cilli v. Abbott, Keely, Toohey and Fisher JJ. pointed out that 'the object of costs is not to penalize; it is to indemnify the successful party in regard to expense to which he has been put by reason of legal proceedings': see also Anstee v Jennings." (citations deleted)
Given what I have said about the substantive matters in this case it cannot be said that costs incurred by the appellant in putting forward its positive case were necessary to the disposal of the matter. It is not the case, therefore, that the Minister caused Seafarm to incur the costs of litigation to prove its case.
Evidence from the appellant which established that, contrary to the Minister's position, there was not 7.6 ha of elevated land on the subject land was directly relevant to the issue of the value of the land as a rural residential site. It is unfortunate that this evidence in the form of exhibit 9 was not disclosed until the trial was underway. It is also unfortunate that, whilst the Minister's valuer was influenced by this evidence to reduce his figure, the reduction was quite insufficient in the conclusion that I drew on the evidence.
It is not inappropriate for the final monetary position adopted by the parties and the quantum determined by the Court to be taken into account in determining a question of costs. On the evidence as finally provided by the Minister the valuation supported by his expert was $404,000 not $450,000. Whilst it would be reasonable to expect that the Minister would adopt the altered figure produced by his valuer, the fact that the $450,000 figure was maintained could be characterised as a formal position only. It had no effect on the final determination. The purchase price finally determined at $220,000 was closer to the appellant's figure of $116,000 than to the Minister's valuer's figure of $404,000, but was nevertheless substantially greater than the figure contended for by the appellant. The Minister was therefore justified in entering the contest.
In its submissions Seafarm referred to a without prejudice offer of $150,000 it had made to settle the matter. The offer was not responded to according to Seafarm. This submission is not relevant, in my view, to the issue of costs as the figure is substantially less than the price finally determined by me.
Order
The application is refused.
RP SCOTT
MEMBER OF THE LAND COURT
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