WESTERN AUSTRALIAN PLANNING COMMISSION and SHIM
[2007] WASAT 262 (S)
•12 OCTOBER 2007
WESTERN AUSTRALIAN PLANNING COMMISSION and SHIM [2007] WASAT 262 (S)
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 262 (S) | |
| LAND ADMINISTRATION ACT 1997 (WA) | |||
| Case No: | DR:456/2006 | 4 DECEMBER 2007 | |
| Coram: | JUDGE J CHANEY (DEPUTY PRESIDENT) | 12/10/07 | |
| 20/02/08 | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Applicant ordered to pay respondent's costs | ||
| B | |||
| PDF Version |
| Parties: | WESTERN AUSTRALIAN PLANNING COMMISSION KYOUNGAE SHIM |
Catchwords: | Costs Proceedings for compensation for resumption of land Award of compensation greater than landowner offered to accept Principles to be applied in relation to costs in resumption cases |
Legislation: | State Administrative Tribunal Act 2004 (WA), s 87 State Administrative Tribunal Rules 2004 (WA), r 42 Supreme Court Rules 1971 (WA), O 24A |
Case References: | Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 32 LGRA 170 Cerini v Minister for Transport (2001) WASC 309 (S) Clifford and Shire of Busselton [2007] WASAT 89 (S) Downie v Sorrell Council [2005] 141 LGERA 304 Minister for the Environment v Florence (1979) 21 SASR 108 Mount Lawley Pty Ltd v Western Australian Planning Commission (2006) WASC 82 (S) Pastrello v Roads and Traffic Authority of NSW (2000) 110 LGERA 223 Western Australian Planning Commission and Shim [2007] WASAT 262 |
Orders | 1. The applicant pay the respondent's costs in an amount to be agreed by the parties, or failing agreement to be determined by the Tribunal. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : LAND ADMINISTRATION ACT 1997 (WA) CITATION : WESTERN AUSTRALIAN PLANNING COMMISSION and SHIM [2007] WASAT 262 (S) MEMBER : JUDGE J CHANEY (DEPUTY PRESIDENT) HEARD : 4 DECEMBER 2007 DELIVERED : 12 OCTOBER 2007 SUPPLEMENTARY
DECISION : 21 FEBRUARY 2008 FILE NO/S : DR 456 of 2006 BETWEEN : WESTERN AUSTRALIAN PLANNING COMMISSION
- Applicant
AND
KYOUNGAE SHIM
Respondent
Catchwords:
Costs Proceedings for compensation for resumption of land Award of compensation greater than landowner offered to accept Principles to be applied in relation to costs in resumption cases
Legislation:
State Administrative Tribunal Act 2004 (WA), s 87
(Page 2)
State Administrative Tribunal Rules 2004 (WA), r 42
Supreme Court Rules 1971 (WA), O 24A
Result:
Applicant ordered to pay respondent's costs
Category: B
Representation:
Counsel:
Applicant : Ms D Quinlan
Respondent : Mr M Hawkins
Solicitors:
Applicant : State Solicitor's Office
Respondent : Austasia Legal
Case(s) referred to in decision(s):
Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 32 LGRA 170
Cerini v Minister for Transport (2001) WASC 309 (S)
Clifford and Shire of Busselton [2007] WASAT 89 (S)
Downie v Sorrell Council [2005] 141 LGERA 304
Minister for the Environment v Florence (1979) 21 SASR 108
Mount Lawley Pty Ltd v Western Australian Planning Commission (2006) WASC 82 (S)
Pastrello v Roads and Traffic Authority of NSW (2000) 110 LGERA 223
Western Australian Planning Commission and Shim [2007] WASAT 262
(Page 3)
Summary of Tribunal's decision
1 Having made an award of compensation payable by the Western Australian Planning Commission to Mrs Kyoungae Shim for the taking of her leasehold interest in land, the Tribunal received an application by Mrs Shim for payment of her costs of the proceedings. Mrs Shim had obtained an award of compensation substantially in excess of the amount offered by the Commission, but also substantially less than her claim. The award of compensation was, however, also substantially more than Mrs Shim had offered to accept during negotiations in the course of the Tribunal proceedings. The Tribunal examined the principles to be applied in relation to the costs of compensation proceedings, and determined that, in the circumstances of this case, an order should be made that the Commission pay Mrs Shim's costs both before and after the offer of settlement. The amount of the costs payable is to be agreed between the parties or alternatively determined by the Tribunal.
Background
2 In a decision delivered on 12 October 2007 (Western Australian Planning Commission and Shim[2007] WASAT 262), the Tribunal ordered that the applicant pay to Mrs Shim the sum of $549, 202 plus interest (less an amount paid by advance payment), by way of compensation for the compulsory taking of a leasehold interest held by Mrs Shim in a property in William Street, Perth. Following that decision, the respondent sought an order that the Commission pay her costs of the proceedings, including her costs and expenses incurred in getting advice and assistance in assessing the quantum of compensation, making the claim, and having the claim dealt with by the Tribunal. The written submissions filed in support of that application dealt with the Tribunal's jurisdiction to award costs, and identified factors which the respondent contended support an award of costs in this case. They did not condescend to detail as to what costs or expenses were being claimed.
3 During oral submissions, the respondent's counsel produced a document entitled "Shim Expense Summary" which indicated, it was said, the costs and expenses to which Mrs Shim has been subjected and which form the basis of the claim for an order. That expense summary was as follows:
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Syd Chesson |
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Gerry Brown |
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Richard Todd |
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(Page 5)
4 No further breakdown of the claimed expenses was provided by counsel, and the hearing on costs was concluded on the basis that the Tribunal would rule as to what, if any, categories of costs might be awarded, following which the parties would endeavour to agree quantum, or alternatively the Tribunal would determine the quantum in the light of a more detailed claim. These reasons concern, therefore, the question of whether any award of costs should be made in favour of the respondent, and if so what categories of costs or expenses should be included in that award.
The principles to be applied
5 The principles which govern the determination of an application for an order for payment of costs by the Tribunal in the context of proceedings for compensation for compulsory acquisition were explained by the President of the Tribunal, Justice Barker, in Clifford and Shire of Busselton [2007] WASAT 89 (S) at [39] to [63]. I respectfully adopt his Honour's analysis and explanation of the approach to be taken. In summary, his Honour explained that the starting point is that the State Administrative Tribunal is a costs neutral Tribunal (s 87(1) State Administrative Tribunal Act 2004 (WA) (SAT Act). It has, however, a discretion to order one party to pay another party's costs in an appropriate case (s 87(2) SAT Act). He discussed the development of approaches to the exercise of that discretion by reference to the example of the approach taken in vocational regulation proceedings. He referred to s 87(3) which empowers the Tribunal to make an order of an amount over and above the normal legal costs of proceedings to compensate a person in certain circumstances; to s 87(4) dealing with some factors to be considered on the question of costs in relation to review proceedings; to s 87(5) dealing with the effect of certain offers to settle and responses to that offer; and to the provisions of the State Administrative Tribunal Rules 2004 (SAT Rules) dealing with offers of settlement, and in particular r 42. His Honour then observed that the jurisdiction of the Tribunal in relation to the assessment of compensation is in the original jurisdiction of the Tribunal. In relation to compensation proceedings, his Honour said at [54] – [56]:
"Ordinarily, where a citizen feels obliged to commence a proceeding in the Tribunal for compensation under the LA Act they are dissatisfied with and have rejected an offer of compensation made by a resuming authority. If they succeed in their claim in the Tribunal, it would seem fair and reasonable that the Tribunal should ordinarily exercise its discretion under s 87(2) and award the applicant the costs of
(Page 6)
- those proceedings. This is because, putting it simply, ordinarily if the applicant succeeds, it will have been demonstrated to the Tribunal that the applicant was not offered fair compensation by the resuming authority and was obliged to commence and maintain the proceedings in order to gain justice. It would seem unreasonable for an applicant to have to fight to gain fair compensation only to have to deduct from the compensation the costs incurred in obtaining the award.
Of course what should be recognised as 'success' in every case requires some further consideration. If the applicant does not succeed in obtaining a compensation award following a hearing that betters the original compensation offer made by the resuming authority, it can hardly be said that the applicant was successful in the proceedings. Indeed it could be said in such a case that the applicant has maintained an unjustified proceeding and so should have to pay the respondent its costs for the trouble and expense of defending the claim.
Either way it really is a question of fairness: on the one hand, in the case of a successful applicant it is fair that they should ordinarily receive their costs when they are put to the trouble and expense of proving that their claim is right, over the reticence of the resuming authority to recognise the rightness of the claim; on the other hand, it is fair that an applicant who does not establish that a resuming authority's offer was not right, should have to pay the resuming authority's costs given the trouble and expense to which they have put the resuming authority."
6 His Honour observed that the settlement rules fit into the regime he had just described "very neatly". He said at [61] – [63]:
"Nonetheless, there is an expectation in the context of the SAT Act provisions referred to earlier, and these settlement rules, that where a party did not accept an offer more favourable than the Tribunal's final order, then that party will ordinarily be liable to meet the other party's costs.
In the context of a compensation claim under the LA Act, offers to settle made by a resuming authority or an applicant will also ordinarily take into account costs and fees reasonably incurred.
(Page 7)
- In the final result, however, the Tribunal maintains a discretion to award or to not award costs notwithstanding the making of settlement offers and the rejection of settlement offers. This enables the Tribunal to take into account all the circumstances of the particular case."
7 In Mount Lawley Pty Ltd v Western Australian Planning Commission (2006) WASC 82 (S) Templeman J considered the approach to be taken to an award of costs in the context of a valuation case arising from the imposition of a reservation of the subject land. He considered at [19] - [51] a line of authorities commencing with Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 32 LGRA 170; Minister for the Environment v Florence (1979) 21 SASR 108; Pastrello v Roads and Traffic Authority of NSW (2000) 110 LGERA 223 and culminating in Downie v Sorrell Council [2005]141 LGERA 304 at [112], where Hill AJ accepted that the approach to costs in cases for compensation for compulsory acquisition should include a consideration by the court of the following matters:
"(1) Costs should be awarded to the claimant if the award of compensation is significantly higher than the amount offered by the authority.
(2) The determination of compensation is not ordinary litigation and arises out of a unilateral decision by the acquiring authority to compulsorily acquire the claimant's land.
(3) Costs are compensatory, not punitive.
(4) The extent to which an award of costs to the acquiring authority will erode the full benefit of the compensation awarded. [His Honour then referred to the passage from the judgment of Talbot J in Pastrello at [17].]
(5) The extent to which the claim was frivolous or excessive as compared to the amount awarded."
8 Templeman J also made reference to the decision of Parker J in Cerini v Minister for Transport (2001) WASC 309 (S) where, in considering whether the public interest in enabling dispossessed landowners to secure their due entitlement to compensation should displace the operation of O 24A of the Supreme Court Rules 1971 (WA), his Honour concluded that public interest was a relevant consideration but not a justification for displacing the normal
(Page 8)
- operation of the rule. That position was endorsed by Templeman J in Mount Lawley, who also, at [51], extracted from the authorities he had referred to the proposition:
"that there is no overriding principle in a compensation case (or a valuation case) that the amount of compensation (or value) determined by the Court should not be eroded by denying the applicant his costs or requiring him to pay the costs of the relevant authority. In the end, whether or not there are statutory provisions relating to the exercise of the costs discretion in such cases, it is always necessary to have regard to the particular circumstances. It cannot be said that only in an exceptional case should an applicant be deprived of his costs, or required to pay the costs of the relevant authority."
10 Where there have been offers made by either or both of the parties in negotiations prior to hearing, whether in accordance with the SAT Rules, or as Calderbank offers, it will be necessary to have regard to those offers to determine what is fair by way of a costs order in the circumstances.
Offers to settle
11 The history of negotiations and the positions adopted by the parties at the hearing are set out in [8] – [11] of the Tribunal's reasons in the substantive hearing. In essence, the Commission's position was that the total amount of the advance payment, namely $282,700 represented full compensation for the taking. Mrs Shim's claim, based on Mr Chesson's evidence, was for an amount of $1,200,000, although Mr Chesson's differing valuation approaches
(Page 9)
- produced a number of figures from $459,000 plus stock to $1,890,000. At the hearing, Mrs Shim called Mr Todd, and relied upon his valuation which produced a total compensable amount of $514,000. The approach taken by Mrs Shim at the hearing was, in effect, to put forward a number of alternative bases of assessment of compensation and inviting the Tribunal to choose that which it considered appropriate in the light of the evidence adduced.
12 At the hearing in relation to costs, I was provided with a copy of a Calderbank letter (that is, a letter written without prejudice save as to costs) dated 19 April 2007 from Mrs Shim's solicitors to the solicitors for the Commission. That letter contained an offer to settle the matter for $100,000 over and above the interim payments made to that point. The letter is silent as to Mrs Shim's costs to that point, and the offer to settle must be read as inclusive of costs. The letter also refers to, and rejects, an offer apparently made on 3 April 2007 by the Commission to settle the matter for $15,000. By the time of the offer of 19 April 2007, the proceedings in this Tribunal hadcommenced, there had been four directions hearings and a mediation in the Tribunal. The offer was made at the point where Mrs Shim was about to file her Statement of Issues, Facts and Contentions and was faced with compliance with various directions leading up to the two-day hearing listed for late July 2007.
13 In the final result, Mrs Shim was awarded compensation of $510,000 plus interest, taking the total award to $549,202 as at 12 October 2007. She therefore succeeded in obtaining considerably greater compensation than she had offered to accept in April 2007.
The appropriate costs order
14 Having regard to the observations of Barker J in Clifford, there is, in my view, a clear case for an award of costs to be made to Mrs Shim, at least from the date of offer of 19 April 2007. It was clear, at that point at least, that the Commission was not prepared to offer fair compensation, and Mrs Shim had no alternative but to proceed to hearing, and incur the expenses associated with doing so. Her compensation ought not be eroded by those costs.
15 In my view, the same consideration applies in relation to costs reasonably incurred by Mrs Shim prior to the offer of 19 April 2007. The Commission's position was effectively unchanged between the time of the second advance payment through to the completion of the hearing. That position was reaffirmed by its offer of $15,000 on 3 April 2007. That offer was merely a reaffirmation of what was clearly the Commission's position from the time of
(Page 10)
- the early advanced payments onwards.
16 It is necessary, however, to determine whether the costs incurred by the dispossessed landowner were reasonable having regard to what the Tribunal has ultimately determined to be the appropriate amount of compensation. It is reasonable that costs of representation and expert advice be obtained to enable proper assessment of the acquiring authority's offer to be made. If, however, an exorbitant claim is pursued, that may be a reason to disallow some or all of the costs of pursuing that claim. In this case, Mr Chesson's expert report adopted valuation approaches which produced compensation figures well in excess of the amount ultimately allowed. It appears to me that those figures were produced as attempts to illustrate the significance of the loss of the premises to Mr and Mrs Shim and were excessively favourable to her claim. His report which produced those figures needs to be read, however, in the context that Mrs Shim was relying as well on Mr Todd's report which produced a lower figure (approximating the amount ultimately awarded), and that the respondent had indicated a preparedness to accept a much lower figure than most of Mr Chesson's figures. The need to deal with Mr Chesson's alternative approaches took relatively little time at hearing, although it probably consumed some time during the expert conferral processes. I do not, however, consider that the overall cost of the proceedings was significantly affected by the approach taken in Mr Chesson's report.
17 The ultimate decision of the Tribunal drew on the opinion of Mr Todd, and the support for that opinion by Mr Chesson. One of the approaches to valuation by Mr Chesson reflected the approach preferred by the Tribunal, albeit that the figures used by Mr Chesson produced a significantly higher value for the leasehold interest. The approach to compensation put forward by the applicant was rejected. On my view, it can be said that the respondent was substantially successful in her claim.
18 In the circumstances, I consider that there should be an award of costs in favour of the respondent in an amount to be agreed by the parties, or alternatively settled by the Tribunal. In approaching the quantum of the costs, I consider that an allowance for the initial evaluation assessments and meetings with lawyers and valuers concerning compensation around the time of resumption should appropriately be awarded as expenses resulting from the matter because of which the proceedings were bought – see s 87(3). To compensate for the aspects of Mr Chesson's report which were ultimately found to be excessive, I would suggest that the allowance in relation to his expert and Tribunal
(Page 11)
- witness fee should be reduced by 50 per cent. There should be no allowance for the item referred to as "Brofam – Gerry Brown", since no information has been provided to explain that aspect of the expense summary. The claim for legal costs of the proceedings in the Tribunal by AustAsia Legal and Vicki Mountain and counsel fees are matters which may need more particularisation. I would be inclined, however, to award costs in relation to those items provided particularisation demonstrates their reasonableness. I would be hopeful that the parties could agree a figure in relation to those items. The item in relation to Mr Todd's expert witness fee appears, on its face, reasonable.
19 Hopefully the parties can agree costs but otherwise the matter can be relisted for directions.
Orders
20 The Tribunal orders:
1. The applicant pay the respondent's costs in an amount to be agreed by the parties, or failing agreement to be determined by the Tribunal.
I certify that this and the preceding [20] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE J CHANEY, DEPUTY PRESIDENT
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