The McKellar Development Corporation Pty Ltd v The Director-General, Department of Transport

[1996] QLC 95

[1996] QLC 95

 

LAND COURT BRISBANE 16 JULY 1996

Re:Application for Costs - Determination of Compensation - A93-76

BETWEEN:

TheMcKellar Development Corporation Pty Ltd AND

The Director-General, Department of Transport

(Claimant)

(Respondent)

D E C I S I O N

When judgment in this matter was delivered, counsel for the claimant made application for an order for the claimant’s costs.

The respondent constructing authority, through the Crown Solicitor, sought leave for the respondent’s submission on the application to be made in writing. Leave was granted and the written submission was duly received by the Court. It was left to the Court to provide a copy of that submission to the claimant for written response which was subsequently received.

However, before the application had been dealt with, an appeal from the Land Court judgment was filed in the Land Appeal Court by the respondent.

A question arises as to whether or not (as has occurred previously - for example, Council of the City of Townsville v. MVO Investments Pty Ltd (1992-93) 14 QLCR 191 at p.195) the application for costs should now be left for consideration by the Land Appeal Court.

The Land Appeal Court has the power under s.44(16) of the Land Act 1962 to “rescind, confirm or modify any order as to costs made by the Land Court”. It seems to me that this application should be dealt with in the first instance by this Court, for the sake of completeness and practicality if, for any reason, the appeal did not proceed, when s.40(2) of the Land Act would again become relevant.

In this matter, the amount finally claimed by the claimant under the headings of loss of land and injurious affection, was in the amount of $696,900. The amount of the valuation put in evidence by the respondent was $230,000.  Agreement had been reached between the parties  as to the claimant’s entitlement to an amount of $6,100 for items of disturbance (professional fees).

Under the headings of loss of land and injurious affection, determination of compensation was in the amount of $467,000.

The Acquisition of Land Act 1967 (the Act) being the legislation relevant to this matter,

providesas follows: “Costs

27.(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.”

Although by only $3,550, an amount correctly described by the respondent as “significantly marginal” the determination was nearer to the amount of the claim than it was to the valuation of the respondent. It follows that in terms of the provision of ss.(2) of s.27 of the Act, the discretion of the Court to award costs may be exercised only in favour of the claimant.

The respondent submits that this is an appropriate case where the Court should exercise its discretion and make no order for costs. Reference is made to those areas where the Court, in its determination, did not accept the opinion of the claimant’s valuer and where the evidence of the respondent’s valuer had been accepted.

The respondent sees the matter as a clear case where it had been placed in the position of having to have the matter referred to and determined by the Court “because of unsuccessful negotiations to settle the compensation and the claim for compensation” and that in the end result the claimant was significantly unsuccessful in proving “its excessive claim for compensation”. On the other hand the claimant submits that the facts of this matter are that it was compelled to litigate its claim in order to recover just compensation and by so doing was successful in recovering an additional $237,000 over and above the respondent’s final valuation of $230,000. The claimant sees the difference between the parties as being related to the assessment of the highest and best use of the land prior to resumption - resulting in the claimant’s stance being vindicated.

The respondent referred to recent decisions of the Land Court where apportionments of costs were ordered, and makes the submission that if the Court was minded to exercise its discretion and award costs to the claimant, then such award should not exceed 50% of the claimant’s legal costs. In reply to that submission the claimant argues that an award of taxed costs would result in recovery of only those costs which were properly and necessarily incurred in the conduct of the litigation. It is submitted by the claimant that the conduct of the proceedings was such as not to support the respondent’s suggestion, in the alternative, of an award of partial costs.

Both parties agree that the principles which would be of assistance to the Court in the exercise of its discretion are found in, inter alia, Moyses and Ors v. Townsville City Council (1979) 6 QLCR 271 (L.A.C.) and Minister for the Environment v. Florence (1980-81) 45 LGRA

127.

In Moyses, the Land Appeal Court said at p.273 -

‘The general rule, then, is that costs are in the discretion of the Court, but of course the discretion must be exercised judicially, that is, by reference to relevant considerations. Subject to that, the only restriction on the manner of exercise of the Land Court’s discretion is that contained in sub-section (2) of Section 27.”

The respondent sees it as important to note that the final determination of compensation was the “significantly marginal” amount above “the line” or midway point between the claim and the valuation, especially when the quantum of the claim is considered.

The Land Appeal Court in Moyses said at p.274:

“The public interest, it would seem to us is amply protected by the scheme of the legislation as a whole, by the fact that the discretion as to costs is one which is to be exercised judicially, and by the restriction on the exercise of that discretion which is imposed by sub-section (2) of Section 27. Moreover the effect of modern authority is that ‘... where an unfettered discretion is given by a statute or a rule no court can by its decision impose conditions upon the free exercise of that discretion by another Court ...’: Middleton -v- Freier and Others (1958)Qd.R. 351 at 357, per Philp J., speaking for the Full Court. 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 enquire 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.”

It would be seen as unrealistic if the reference by the Land Appeal Court to “the conduct of the claimant” in Moyses, did not have similar application tot he conduct of the authority when reverse considerations applied.

When the costs of modern litigation are considered, it is seen as arguable whether the “public interest” (as referred to by the Land Appeal Court in Moyses) continues to be protected by the fettered discretion imposed on this Court by ss.(2) of s.27 of the Act, in dealing with the specialist jurisdiction associated with compulsory acquisition of land.  The comments of Wells J in Florence (supra) at pp.134-5 are considered relevant in terms of the general principles of the exercise of a Court’s discretion in compulsory acquisition matters:

“Compulsory acquisition cases differ of course from ordinary claims dealt with in

the general jurisdiction in one significant respect: the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not; the mere acquisition by compulsory process gave him, by virtue of s.18 of the Act, a claim to compensation which he could hardly be expected to renounce.

Upon an ordinary claim in the general jurisdiction it is, generally speaking, obvious who has won and who has lost, and correspondingly clear why costs usually follow the event. Upon a claim for compensation for land compulsorily acquired, it is not, generally speaking, appropriate to speak of one party as having won; compensation is awarded to one who has already been given, by statute, the right to receive it. It is therefore as just to say of the latter sort of case that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation that is, ex hypothesis, his due, as it is to say of the former sort of case that prima facie costs follow the event in favour of the party who has won. But costs are, as always, discretionary, and no hard and fast rule will ever be allowed to occupy part of an area controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases ...

Against the history of a wide-ranging discretion given to this Court with respect to costs, I am, I apprehend, to construe s.36 flexibly and not restrictively, to the intent that the special nature of the jurisdiction to which it relates should be duly recognised, and orders made in that jurisdiction that are just and expedient.”

This Court, of course, has the restricted flexibility imposed by “special circumstances” being ss.(2) of s.27 of the Act. I am not persuaded that in this matter the significantly marginal amount which allows the Court to exercise its discretion in favour of the claimant, should then of itself, influence the exercise of the discretion one way or the other.

The respondent is correct in observing that there were some criticisms of the claimant’s valuation, in terms of the calculations and opinions which led to the monetary result of the claim. However, with the opposing opinions as to the highest and best potential use of the claimant’s land, before resumption, it is difficult to see how litigation of the case might have been avoided.

There have been cases where the conduct of proceedings or other relevant considerations have influenced the Land Court, again subject to the restricted discretion, to make a partial award of costs. However I agree with the claimant that this matter was not one where the conduct of the proceedings or any other consideration warrants the Court’s discretion being exercised in that manner. It is accepted as a relevant consideration, that the respondent was unsuccessful in convincing the Court as to the highest and best potential use of the claimant’s land prior to the resumption, and that was crucial to the end result. The circumstances are such that, even had there been no special circumstances, I would see it as just that the claimant receive its compensation in full, not reduced by its costs in achieving the awarded amount. As it happened, the special circumstances of the mathematical calculation necessitated by ss.(2) of s.27 of the Act allows the Court to exercise its discretion in that manner and the following order is made (in recognition of the Land Appeal Court’s power through the appeal process which has been initiated, to rescind, confirm or modify the order):

The respondent constructing authority pay the claimant’s costs of and incidental to the hearing and determination of the claim for compensation.  The amount of such costs shall be ascertained and fixed by the Taxing Officer of the Supreme Court in Brisbane, pursuant to s.41(9) of the Land Act 1962.

RE WENCK MEMBER OF THE LAND COURT