Wilson v Chief Executive, Department of Natural Resources and Mines

[2002] QLC 12

LAND COURT

BRISBANE

28 FEBRUARY 2002

Re:     V2001/0118 and V2001/0119

Application for Costs –
  Valuation of Land Act 1944

MW Wilson

v.

Chief Executive, Department of Natural Resources and Mines

D E C I S I O N

Having had success in appeals against unimproved valuations made by the chief executive, the appellant, Mr Wilson, has sought an order that the chief executive pay his costs of and incidental to the action.
           The valuations appealed against were in the amounts of $50,000 and $61,500 respectively.  The appellant's estimates of value were, in each case, "Nil".  The Court determined the unimproved valuations in the amounts of $13,000 and $16,000 respectively.
Section 70 of the Valuation of Land Act 1944 (the Act) provides as follows:

"(1) Where the value of land as finally determined upon an appeal against the valuation is the value stated by the owner in the owner's notice of appeal against the valuation, or is nearer to that value than to the valuation appealed against, costs shall not be awarded against the owner.

(2) Otherwise costs shall not be awarded against the chief executive."

Section 34 of the Land Court Act 2000 relevantly provides:

"(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."

Background to Appeals
           The valuations appealed against related to two small "parcels" of land (65 m² and 31 m²) leased from a parent parcel, for purposes associated with telecommunications infrastructure.  The terms of the leases were of sufficient length to trigger "subdivide" provisions pursuant to s.8 of the Act and the issue of separate unimproved valuations pursuant to s.35(1)(a) of the Act. 

The Appellant's Submissions
           Counsel for the appellant submitted that the circumstances surrounding these cases were special, in that there had existed uncertainty as to the methodology which should be adopted in the valuation of such statutorily created, but in reality, artificial parcels.  There had been demonstrable inconsistencies in the approaches taken by the chief executive and the resultant valuations of parcels used for telecommunications' purposes in various locations throughout the State.
           It was suggested that the chief executive had treated the subject cases as "test" cases, there being a recognised need for establishment of acceptable and consistent valuation methodology.
           The appellant saw the chief executive as having taken an inflexible and arbitrary valuation approach "albeit one falling short of capriciousness", and one which in effect, valued the leases rather than the land.
           The appellant, at his own cost, had been forced to contest the valuations.  Expert evidence called by the appellant was submitted as having provided the only evidence before the Court as to the specialised nature of the use of the parcels and the background to the rentals paid for the leases involved.
           While achieving substantial reductions in the valuations appealed against, the appellant argued that the benefit received was of a temporary nature and site specific.  However, it was submitted that there were much wider benefits flowing from the Court's decision, first to the chief executive in terms of the valuation methodology adopted by the Court, then subsequently to the community and local governments through equitable revenue gathering considerations. 
           It was seen by the appellant as unfair that he should bear the cost of proving the inequity of the valuation methodology which had been adopted by the chief executive in these cases.
The Respondent's Argument
           Counsel for the respondent accepted that in circumstances where a contested matter was in the nature of a "test" case and the Court's clarification of the relevant law would assist the chief executive in the performance of the functions vested in him under the Act, such as had occurred in the matter of The Valuer-General v. Queensland Club (1990-91) 13 QLCR 207, it might be appropriate for an order awarding costs against the chief executive.
           However in the subject cases, the valuation methodology as had been adopted by the chief executive - i.e. capitalisation of rentals, in the absence of comparable sales - although adjusted in terms of the final result, had been confirmed by the Court.  The valuation reductions had resulted from the Court's finding in relation to the appropriate capitalisation rate to be used in the subject matters. 
           It was submitted that, while the evidence was that the chief executive's valuation methodology for these artificially "subdivided" parcels had evolved over time, any inconsistencies in the criteria now adopted by departmental valuers in the capitalisation approach were indicative of nothing more than differing opinions which might reasonably be held by individual valuers. 

Counsel for the respondent saw the abandonment by the appellant of the ground of appeal which challenged the validity of the issue of separate valuations, and then the acceptance by the Court of the chief executive's valuation methodology as support for the stance taken in defending the valuations which had been appealed against.

It was accepted that the Court's findings should assist the chief executive in his approach to these unusual valuations.  However it was argued that the benefit which flowed to the appellant was no less significant.
Considerations and Conclusions
           In WH Bowden v. The Valuer-General (1980-81) 7 QLCR 138, the principles which should govern the exercise of the Court's discretion were extensively covered at pp.144-149. At p.146 the Land Appeal Court said:

"We think, in dealing with questions of costs, that it is an important consideration that there be ease of access to the Land Court and the Land Appeal Court.  … Fear of any adverse order with respect to costs may deter citizens with just complaints from resorting to the courts … It seems to us unjust to adopt a restrained attitude towards awarding costs against citizens without adopting an equally restrained attitude towards awarding costs against the Valuer-General.  That is not to say that, in a proper case, the Land Court or the Land Appeal Court will not award costs against either a citizen or an authority subject to the provisions of the statute which governs the matter."

Then, at p.147 –

"Easy access to the Land Court to air grievances and have valuations reviewed is, as we have already stressed, most desirable in revenue cases, and such access should be available without fear of costs being awarded to either party except in special cases." (emphasis added)

In the subject cases, if they had been regarded by the chief executive as "test" cases, which is probably a reasonable assumption, based on the historical shift in valuation methodologies which have evolved, three matters are seen to be relevant.  First, one of the grounds of appeal (Ground 2 … "the land is not land which should be separately valued pursuant to the provisions of the Act") was effectively abandoned by the appellant during the hearing.  Second, the valuation methodology as adopted by the chief executive was confirmed, in principle, by the Court, with, in the absence of sales evidence, the capitalisation of rental approach being followed.  The substantial reductions resulted from considerations relating to the quantum of the capitalisation rate.  Third, the valuation approaches put forward by the appellant were rejected.
           I do not accept that the chief executive adopted an arbitrary, capricious, vexatious or frivolous approach.  Neither do I accept that these were cases which, when considered in the context of considerations of a costs award, fall into a "special" category such as might have been envisaged by the Land Appeal Court in Bowden (supra).  The special circumstances related to the peculiar complexities associated with the valuation criteria, which the Court found to necessitate "the mingling of fact with artificiality", resulting in the adoption of a "theoretical" capitalisation rate.  That rate was influenced by facts disclosed by the evidence specific to the subject cases and applied for the purpose of achieving equitable valuation relativity. 
           Any public benefit which might flow from the appellant having challenged the valuations is obscure.  It would be expected that parcels of a comparable artificial nature as that of the subject parcels will, in the absence of comparable sales evidence, continue to be valued by the chief executive on the basis of capitalisation of rental.  The capitalisation rate should depend on the circumstances and criteria individual to each specific case, even though it was recognised in the determination that "the simplified mathematical equation which has been adopted, if applied on a statewide basis for these types of leases, should have some appeal to owners/lessees as well as the chief executive".
           Had these cases hypothetically resulted in determinations which, by quantum, reversed the statutory cost provision in favour of the respondent, my consideration of the "special" valuation circumstances would not have led me to order costs against the appellant.  In the adoption of a restrained approach, I do not find that this is an appropriate case to order costs against the respondent.
Order
           No order is made as to costs.

RE WENCK
MEMBER OF THE LAND COURT