Spars Pty Ltd v Brisbane City Council
[2007] QLAC 58
•23 August 2007
LAND APPEAL COURT OF QUEENSLAND
CITATION: Spars Pty Ltd v Brisbane City Council [2007] QLAC 58 PARTIES: Spars Pty Ltd
(appellant)v. Brisbane City Council
(respondent)FILE NO: LAC2007/0059 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 23 August 2007 DELIVERED AT: Brisbane HEARD AT: Brisbane JUDGE
MEMBERSWhite J
Mr RP Scott
Mrs CAC MacDonaldORDER: The appeal is dismissed with costs CATCHWORDS: Acquisition of Land Act 1967 (Qld), s.9(2) -
Land Court Act 2000 (Qld), s.33(1)(b), s.34(1)PROCEDURE – COSTS – APPEALS AS TO COSTS – WRONG EXERCISE OF DISCRETION – where costs at first instance ordered in favour of the successful respondent - where the applicant/appellant alleges misconduct on the part of the respondent in the conduct of the proceedings - where the applicant/appellant alleges that the respondent is in breach of the Queensland Attorney-General's "Model Litigant Principles" - where the misconduct alleged by the applicant/appellant resulted in the loss of chance to bring different proceedings - whether there has been misconduct on the part the respondent - whether the applicant/appellant is entitled to costs
APPEARANCES: Mr R Spencer for the appellant
Mr M Hinson SC and Mr S McLeod for the respondentSOLICITORS: DLA Phillips Fox for the respondent
The appellant, Spars Pty Ltd ("Spars") has appealed against costs orders made against it in the Land Court.
Background
Spars is the registered proprietor of two adjoining parcels of land bounded by Montague and Boundary Roads and Bouquet and Landfear Streets, South Brisbane and by the Brisbane River. The respondent, Brisbane City Council, ("the Council") was desirous of acquiring the land for the location of the southern end of the proposed Hale Street cross‑river bridge project and to that end issued a notice of intention to resume the land being the whole of lots 1 and 2 for road purposes pursuant to the Acquisition of Land Act 1967 ("the Act") on 17 November 2006. Spars objected and on 21 December 2006 the Council served a notice discontinuing the resumption.
On that date, the Council served a second notice of intention to resume stating that the lots were to be resumed "for road purposes and a purpose (construction area) incidental to road purposes". Spars objected to this notice and was heard. The Council delegate, Dr NG Divett, prepared a report dated 7 February 2007 which considered in detail Spars' objections and recommended that the Council reconsider the power to acquire the "incidental land" for what were temporary construction purposes.
The Council served Spars with a notice amending the notice of intention to resume land on 9 March 2007 pursuant to s.8 of the Act. The purpose for the resumption was described as "road purposes". The whole of lot 1 was to be resumed and part of lot 2 leaving an area of 3,181sq.m. in Spars' ownership. The amended notice did not include information about the entitlement to object to and be heard about the proposed resumption. This balance land was the land originally proposed to be resumed for incidental purposes which Dr Divett had identified in his report as likely beyond power.
The application below
It was this failure to treat the amended resumption as if it were a new resumption notice and start the objection process de novo which prompted Spars to make application to the Land Court seeking declarations that the notice of resumption of 21 December 2006 was of no effect and that of 9 March 2007 was unlawful and invalid and an order that the Council afford Spars the opportunity to object in accordance with the regime for such objections as set out in the Act.
The Council contended that the Land Court did not have jurisdiction to grant the relief sought because it did not have exclusive jurisdiction to hear and determine the construction of the Act as required by s.33(1)(b) of the Land Court Act which accorded the Land Court power to make a declaration in certain limited circumstances ("the jurisdiction point"). The Council further contended that on a proper construction of the Act it was not required to treat the amending notice of 9 March 2007 as a new notice of intention to resume so as to bring into operation the objection process ab initio ("the merits point").
The application which had been filed on 21 March 2007 was heard on 29 March 2007. Spars was represented by Mr Grant Allan leading Mr P Walker and the Council by Mr Mark Hinson SC leading Mr S McLeod. As it forms part of the Spars appeal about the order for costs made below, it is necessary to say something about how the hearing proceeded.
The learned Member raised with counsel whether the jurisdiction point should be argued separately from the merits point. Both sides had written outlines on both points and the learned Member adjourned briefly to read the material and outlines. On his return he indicated that since he needed some time to reflect upon the jurisdiction point, it would be economical in terms of time (and, necessarily, costs) to hear argument on both points so that if he concluded that he did have jurisdiction he could proceed to a decision on the merits. When a merits point is not extensive this is the usual, and with respect, sensible way to proceed.
Counsel then made their oral submissions in respect of both points. Whilst the transcript in the Appeal Record does not indicate times, nonetheless the matter concluded in one day and, likely, before the luncheon adjournment. The transcript comprises 23 pages.
In response to a question from the learned Member about "pressing time limits" for the delivery of his decision Mr Hinson indicated that "works on the Hale Street Link" were scheduled to commence on 1 June 2007. The learned Member reserved his decision.
The Council resolution
At its meeting on 27 March 2007 prior to the Land Court hearing the application for declaratory relief, the Council had "resolved to make an application to the Department of Natural Resources and Water for approval to the proposed resumption", in respect of Spars' land, the subject of the notice of 9 March 2007. The Council conveyed the above information in a letter to Spars dated 4 April 2007 but which, because of the intervention of the Easter Public Holidays, was not received by Spars until 10 April 2007. That letter indicated that Spars' further objections in response to that notice and "the report of the Council's Resumption Agent" would be included amongst the matters placed before the Department for its consideration.
The application to join
On 12 April 2007, the day the learned Member was to deliver his judgment at 2.00 pm, Spars sought an order joining the Minister for Natural Resources and Water and the Minister for Transport and Main Roads as respondents to its application prior to the learned Member handing down his judgment. It may be assumed, although not clearly articulated by Mr Allan, that an adjournment to re‑open the application to give the Ministers opportunity to be heard was sought. The Ministers had been served that morning but did not appear. Mr Hinson informed the learned Member that neither he nor junior counsel was aware of the resolution when the application was argued on 29 March 2007. He also informed the court that the Council had forwarded the application for resumption and supporting material that morning to the Minister with notification that judgment was to be handed down at 2.00pm that day in the Land Court.
The learned Member refused the application to join principally because there was no evidence to indicate that either Minister was a necessary party to the proceedings notwithstanding that the resumption had moved to the “next stage” pursuant to s.9(2) of the Act.
The decision below
The learned Member gave judgment in the principal proceedings ruling that the Land Court had no jurisdiction to entertain the application for declarations under the Act and dismissed the application. In case he was found to be wrong on the jurisdiction point, the learned Member considered the merits and found that there was no obligation to regard an amending resumption notice as an original notice requiring the objections regime to commence afresh.
The learned Member then sought submissions about costs. Mr Hinson sought costs on the basis that the Council was successful on both jurisdiction and the merits points. Mr Allan contended that the Council should pay Spars' costs notwithstanding its complete lack of success because of what was submitted to be "misconduct" by the Council in resolving to apply to the Minister for a resumption of the land while there was an application before the Land Court challenging the process. He submitted that had Spars known of the resolution earlier, it might have sought to join the Ministers at a much earlier stage or taken some other course such as bringing an application before the Supreme Court. In the alternative, he submitted that there should be no order as to costs because of the arguable nature of the case, or alternatively the costs should only be ordered on the jurisdictional point, the merits point being unnecessarily argued.
On 20 April 2007 the learned Member ordered that Spars pay the Council's costs of and incidental to the application filed on 21 March 2007 ("the declaratory relief application") and the application filed 12 April 2007 ("the joinder of the Ministers application"). He found there was no relevant misconduct.
This appeal
Spars has not appealed the substantive decisions of either application but has appealed the costs orders. Mr Richard Spencer sought to appear on behalf of Spars authorised by resolution of the company and that representation was not opposed and leave was given. The basis for challenging the costs orders was based on the contention, ventilated below, that the Council was bound by the "model litigant" principles published by the Attorney‑General in respect of the State and its agencies, exhibit 2. Whilst Mr Hinson did not accept that the Council fell within their purview and Mr Spencer accepted that that was likely the case, nonetheless Mr Hinson acknowledged that the Council would regard itself as being required to conduct litigation in accordance with those principles, particularly in exercising its power to resume private land. He submitted that, to a large extent, all litigants in Queensland courts governed by the Uniform Civil Procedure Rules are constrained in their conduct of litigation by the philosophy of exhibit 2 because of the provisions of r 5, namely,
"(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.
(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.
(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.
(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court."
Mr Spencer refined the submission about the Council's "misconduct" to Spars' loss of a chance to take some other course of action had it been alerted in good time to the Council's resolution. When pressed, he suggested the joinder might have been sought as soon as the resolution was passed when it should have been notified to Spars, or that the proceedings in the Land Court might have been abandoned in favour of an application to the Supreme Court pursuant to the Judicial Review Act 1991.
The power in the Land Court to award costs is found in s 34(1) of the Land Court Act 2000. It provides
"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."
The award of costs is discretionary but must be exercised judicially in accordance with established principle and factors directly connected with the litigation, Oshlack v Richmond River Council[1]. By far the most important factor which has guided the exercise of the discretion is the outcome of the litigation[2]. As McHugh J observed in Oshlack[3]
"The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation."
[1](1998) 193 CLR 72 per McHugh J at 96
[2]ibid at 97
[3]at 97
His Honour referred to the traditional exceptions to the usual order as to costs focusing on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. His Honour quoted Devlin J's formula of the relevant principle in Anglo‑Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd[4]
"No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct."
[4][1951] 1 All ER 873 at 874
In this context McHugh J held that misconduct meant misconduct relating to the litigation or the circumstances leading up to the litigation. He concluded at pp.97‑98 that a court may properly depart from the usual order as to costs
"… when the successful party by its lax conduct effectively invites litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute."
These circumstances are not exhaustive but tend to be the conduct most likely to attract the exercise of the discretion adverse to the successful party.
See also Barron River Foods Pty Ltd & Australian Food Processors Pty Ltd v National Australia Bank Ltd[5] for an example of the failure of a successful party to be granted costs.
[5][2005] QSC 138
Mr Spencer does not go so far as to describe the Council's conduct as "sharp practice". From the perspective of Spars the sequence of events may look suspicious but when examined more objectively it does not necessarily bear that characterisation. Mr Spencer focuses on the loss of the chance by Spars to do something different. It was accepted that there was some urgency about the resumption. When the Council resolved to advance the resumption process on 27 March 2007 it was aware of the Land Court application. After all, it was a party. The argument that the Land Court had no jurisdiction to entertain the application was a strong one in its favour. There is nothing objectionable in being ready to proceed to the next stage. That it did so on the date fixed for judgment is probably no more than seeking to proceed expeditiously but no evidence was received on that point. In any event, as Mr Hinson submitted, it must be in the highest degree improbable that had there been an adverse judgment to the Council on jurisdiction and on the merits the Minister would have resumed the land in complete disregard for the orders of the Land Court. It would have invited the severest censure and an indemnity costs order in any court. The real question is what chance, insofar as costs are concerned, was Spars deprived of by the Council not informing it as soon as possible that it had resolved to make application to the Minister to resume the land.
The application for declaratory relief was filed on 21 March 2007 and given a hearing date. By 27 March 2007 it may confidently be assumed counsel was briefed. Why would Spars not have proceeded with the application in the Land Court on the merits given that it had been advised by its lawyers that the Land Court was the appropriate venue for its complaint against the Council? Nothing about the Council resolution changed that issue. The late attempt at joinder to bind the Minister by the decision was misconceived because the Minister could only entertain an application under s 9(2) of the Act if it were, in all respects, a complying application. That Spars has subsequently sought an order in the Supreme Court does not suggest Spars would have departed from its set course in the Land Court. The learned Member was correct to conclude that the conduct of the Council did not fall within that category of "limited circumstances" which might affect the discretion to award costs to the successful party.
Nonetheless, the learned Member was also correct, with respect, to make the observation that he did at paragraph 16 of his costs reasons published on 23 April 2007
"It might have been preferable for the respondent to have waited until after the decision [in the Land Court] was handed down … I also agree that it would have been preferable that the applicant knew about the resolution complained about prior to the proceedings on 29 March 2007 …"
This must be particularly so where an unwilling party whose land is being resumed feels aggrieved about the fairness of the process.
Mr Spencer did not seek to pursue the submission that because, as had been contended below, the issues were fairly arguable no order as to costs ought to have been made. He recognised that this is no basis for resisting a costs order. Whilst he did pursue, but faintly, that the costs order ought to have been confined to the jurisdiction point, as the analysis shows it was clearly efficient and cost effective to deal with the merits at the same time.
It follows that no doubt has been cast on the learned Member exercising his discretion to order costs in favour of the Council.
The appeal is dismissed with costs.
WHITE J
JUSTICE OF THE SUPREME COURT
RP SCOTT
MEMBER OF THE LAND COURT
CAC MacDONALD
MEMBER OF THE LAND COURT
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