Thirty-Fourth Philgram Pty Ltd v The Crown (Brisbane Exposition and South Bank Redevelopment Authority)

[1993] QLC 16

[1993] QLC 16

 

 

LAND COURT

BRISBANE.

2nd July, 1993.

Re: Resumption for Expo '88 Purposes

Acquisition of Land Act 1967

Thirty-Fourth Philgram Pty Ltd

v.

The Crown
             (Brisbane Exposition and South Bank Redevelopment Authority)

DECISION ON APPLICATION FOR COSTS

This is an application for costs by the respondent under the provisions of section 27 of the Acquisition of Land Act 1967. On 19th May, 1984 the respondent Authority resumed the whole of the claimant's land situated in Stanley Street, South Brisbane. A claim for compensation dated 14th December, 1984 was served on the respondent in the sum of $2,400,000. On 21st December, 1984 a first advance of $405,742 was paid to the claimant and on 31st January, 1991 a second advance of $394,258 brought the total advance paid at the date of hearing to $800,000.

During the hearing the claimant was granted leave to amend the claim to $1,237,982.  At the closing stages of the hearing the claimant sought leave to further amend the claim to $1,220,250.  Leave was granted subject to the respondent's right to argue this issue in relation to costs should that arise.  The amount of the valuation put in evidence by the Authority was $615,000. 

On 28th May, 1993, compensation was determined under all heads of claim at $689,750. The respondent seeks costs of and incidental to the hearing and determination of the matter. The respondent makes this application pursuant to section 27 of the Acquisition of Land Act 1967, which provides:

"Costs. (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 subsection does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to subsection (3) of section twenty-four or subsection (3) of section twenty-five of this Act."

The discretion given to the Court by subsection (1) to award costs is restricted by subsection (2) and dependent on the amount of the compensation determined.  In this case if costs are to be awarded there is no dispute as to which party is entitled to such costs.  However, while conceding that the respondent is so entitled, the claimant argues that the Court should, in the circumstances of this case, exercise its discretion not to order the claimant to pay the respondent's costs.

The respondent argues that it is entitled to an order for costs because the claim for $2.4 million had been pursued since 1984 and not abandoned until after the commencement of the hearing.  Even then, the amended claim was almost double the award.

On 25th January 1991, the respondent offered to settle compensation for land value for $800,000, an amount which exceeded the compensation awarded by the Court under all heads.  As the advances paid exceed the compensation awarded, the respondent contends that this alone justifies the award of costs.

The respondent also argues that the claimant used the notional development method of valuation, despite the criticism of the method by the Land Appeal Court, in an attempt to justify the level of compensation claimed.  It contends that such compensation could not be justified by the direct comparison method of valuation. 

On the other hand, the claimant argues that the case was difficult and complex, leaving room for differences of opinion; the valuers came to different conclusions in respect of matters of opinion and in the interpretation of the evidence; despite the criticism of the notional development method of valuation by the Land Appeal Court in the previous Expo cases, the determinations in those cases were the result of notional development valuations:  See Merivale Motel Investments Pty Ltd v. Brisbane Exposition and South Bank Redevelopment Authority (1984 - 85) 10 Q.L.C.R. 268 and Neray Holdings Pty Ltd and Norman Bruce Blocksidge and Robert Malcolm Badgery v. Brisbane Exposition and South Bank Redevelopment Authority, Land Appeal Court, 26th April, 1989 (not reported).

Therefore, it was argued that it could not be said that the respondent was unreasonably and unnecessarily forced into litigation.  The claimant further contends that it has been awarded a substantial amount of interest (which it has calculated at $277,788) on the compensation awarded by the Court.  Such an award could be obtained only from the Court, as the offer to settle for $800,000 was in respect of land value only.  The claimant says it has been entitled to not less than $689,750, as awarded by the Court, since 19th May, 1984, but did not receive that sum until 31st January, 1991.  Since that date no interest has accrued on the interest which has been awarded by the Court.

In weighing the merits of these arguments, it is necessary to consider the principles which have been established in relation to the Court's discretion to award costs.  In Moyses and Others v. Townsville City Council (1979) 6 Q.L.C.R. 271, the Land Appeal Court cautioned that while the general rule is that costs are in the discretion of the Court, the discretion must be exercised judicially, by reference to relevant considerations. The only restriction on the exercise of that discretion is that contained in subsection (2) of Section 27 of the Acquisition of Land Act.

The Land Appeal Court refrained from laying down rules and principles as to the way in which the Land Court's discretion should be exercised.  However, it did offer this guidance at page 274:

"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."

In this regard the observations of Wells J. of the Supreme Court of South Australia are also relevant.  In Minister for Environment v. Florence (1980-81) 45 L.G.R.A. 127, Wells J. was dealing with section 36 of that State's Land Acquisition Act, which did not contain a similar restriction to section 27(2) of the Queensland legislation. At pages 149-50 he said:

"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 had 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 hypothesi, 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."

After discussing the provisions of section 36, he continued at page 150:

"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 recognized, and orders made in that jurisdiction that are just and expedient."

In the present case it is clear that if, in the exercise of my discretion, I award costs they must go to the respondent.  However, it is equally clear that whatever may be the situation in other jurisdictions, in cases such as the present, costs do not necessarily follow the event.  Having regard to the principles discussed in Moyses and Florence, I do not think that either party is to blame for not resolving the matter before the hearing.

In the circumstances it was almost inevitable that the claim for compensation would have to be resolved by the Court.  The approaches to compensation adopted by the parties were so different that it is difficult to see how agreement would otherwise be reached.  Although the method was not accepted by this Court as other evidence was available, it was by no means frivolous for the claimant to adopt the notional development method of valuation.  Indeed, the Courts had to resort to it in the earlier Expo cases.  The valuer for the claimant, Mr Brett, considered that he had a set of circumstances which eliminated much of the uncertainty associated with the method, as here there was development approval from the Council, a building designed, plans drawn and a firm quote from the builder who built the adjoining building.

As a real estate agent and property developer, the claimant's managing director, Mr McPhee, was familiar with the notional development method and often used a variation of it in carrying out feasibility studies for various projects.  Although the method has been subject to criticism by the Land Appeal Court, I do not think that the conduct of the claimant has been unreasonable nor, having regard to the particular circumstances of this case, was the amended claim exorbitant.

The offer to settle compensation in the amount of $800,000 in the letter of 25th January, 1991 is expressly in respect of the head of claim for land value.  The letter goes on to state that the respondent is agreeable to allow the matter of disturbance to be determined by the Land Court.  The second advance was paid only a few days later bringing the total advance to $800,000.  Prima facie the claimant was entitled to assume that this figure did not include either disturbance or interest.  The claimant therefore had to come to Court seeking these items and, although both disturbance and interest were opposed by the respondent, the claimant succeeded, at least partially, in respect of both.  When the amount of interest is added to the compensation awarded, the total sum exceeds the amount advanced.

However, while the claimant was not entirely unsuccessful, the respondent's method of valuation was preferred and the award of compensation considerably closer to the respondent's valuation than to the amended claim.  Therefore, I am of the opinion that the respondent is entitled to a substantial part of its costs.

Accordingly, in the exercise of the Court's discretionary powers under section 27 of the Acquisition of Land Act 1967, it is ordered that the claimant pay the respondent's costs of and incidental to the hearing and determination of the claim, but limited to the first four days of the hearing. The amount of such costs shall be ascertained and fixed by the Costs Taxing Officer of the Supreme Court at Brisbane in accordance with the provisions of section 41(9) of the Land Act 1962.

(J.J. Trickett)     
  Member of the Land Court.