Body Corporate for ‘Allure’ Community Titles Scheme 37607 v Valuer-General [2019] QLC 15

LAND COURT OF QUEENSLAND CITATION: Body Corporate for ‘Allure’ Community Titles Scheme 37607 v Valuer-General [2019] QLC 15 PARTIES: Body Corporate for ‘Allure’ Community Titles Scheme 37607 (appellant) v Valuer-General (respondent) FILE NO: LVA044-18 DIVISION: General division PROCEEDING: Application for costs DELIVERED ON: 13 March 2019 DELIVERED AT: Brisbane HEARD ON: Submissions closed 2 November 2018 HEARD AT: Heard on the papers PRESIDENT: FY Kingham ORDERS: 1. The application is dismissed. 2. Each party must bear their own costs of the appeal. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where the appellant withdrew its application under the Land Valuation Act 2010 – where the respondent sought the costs of an application for further disclosure, the costs of which had been reserved – where the respondent applied “cumulatively, but also alternately” for costs under s 34 of the Land Court Act 2000, r 18 of the Land Court Rules 2000, and s 171 of the Land Valuation Act 2010 – where the Court found costs of any aspect of an appeal under the Land Valuation Act 2010 are governed by s 171 of the Land Valuation Act 2010 – whether the appellant failed to comply with procedural requirements – whether the appellant failed to discharge its responsibilities -- 1 of 8 -- 2 in the appeal – where the Court dismissed the application for costs Land Court Act 2000, s 34 Land Court Rules 2000, r 18 Land Valuation Act 2010, s 171 Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40, considered Chrismel Pty Ltd v Department of Natural Resources and Mines [2005] QLAC 31, considered Kent Street Pty Ltd v Department of Natural Resources and Mines (No 2) [2009] QLAC 7, considered Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 3) [2017] QLC 53, applied APPEARANCES: N Murphy, Savills Valuations Pty Ltd, as agent for the appellant P Prasad, Principal Lawyer, In-House Legal, Department of Natural Resources, Mines and Energy, for the respondent [1] This decision concerns the costs of an application filed by the Valuer-General in the course of an appeal by the Body Corporate for ‘Allure’ Community Titles Scheme 37607. Allure was the appellant against an objections decision on the valuation of its land under the Land Valuation Act 2010. [2] Allure withdrew its appeal in October 2018. I ordered the costs of the appeal would be determined on the papers and set a timetable for submissions. The Valuer-General sought its costs of an application for disclosure, which had been reserved. Allure seeks no order as to costs. [3] Written submissions closed in early November 2018, and the application was allocated to a Member of the Court for decision. Recently, I became aware the application was confined to the costs of an interlocutory application that I had decided on the merits. I consider it is preferable for the member who determines a contested matter to deal with any questions of costs. Accordingly, I re-allocated the application so I could make the decision. [4] The parties are in dispute about the Court’s power to award costs and whether the Court should award costs of the application to the Valuer-General. -- 2 of 8 -- 3 What is the Court’s power to award costs in an appeal against the valuation of land? [5] The Valuer-General relied “cumulatively, but also alternately” on s 34 of the Land Court Act 2000, rule r 18 of the Land Court Rules 2000 and “primarily” on s 171(2)(d) and/or (f) of the LVA.1 Allure submitted s 171 applies. [6] Section 34, which confers on the Court a broad discretion as to costs, is expressly subject to the provisions of “another Act to the contrary”. [7] Section 171 of the LVA relevantly provides: “171 Costs (1) Each party to a valuation appeal must bear the party’s own costs of the appeal. (2) However, the Land Court may make a costs order if it considers any of the following circumstances applies - …” (emphasis added) [8] It is plain on its face that s 171 is “another Act to the contrary”. That is the approach taken in other decisions of this Court. In Suncorp Metway Insurance Pty Ltd v Valuer- General (No. 3),2 Member Isdale found s 34 did not apply. [9] In Brisbane Square Pty Ltd v Valuer-General,3 Member Smith considered arguments about how s 171 of the LVA and s 34 of the LCA might apply. The catchwords for that case include this statement – “costs discretion under s 171 Land Valuation Act 2010 fetters costs discretion under s 34 Land Court Act 2000”. That is not a correct statement of either the law or his Honour’s findings. Section 171 precludes the operation of, not fetters, s 34. Member Smith did not make the finding stated in the catchwords. He identified that proposition as an argument made by a party, but did not adopt it. He decided the application under s 171, without further reference to s 34, a clear indication that he considered it had no application. [10] That is consistent with the decision of the Land Appeal Court in Kent Street Pty Ltd v Department of Natural Resources and Mines (No 2).4 In that case, the Land Appeal Court decided that s 70 of the Valuation of Land Act 1944 “was another Act to the contrary”. Section 70 of the VLA then provided, relevantly: 1 Submissions of the Respondent – Costs Application filed 19 October 2018, [7]. 2 Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 3) [2017] QLC 53, [8]. 3 [2015] QLC 40. 4 [2009] QLAC 7. -- 3 of 8 -- 4 “(1) Subject to subsection (2), each party to an appeal must bear the party’s own costs for the appeal. (2) The court may only order costs for an appeal, including allowances for witnesses attending for giving evidence at the appeal, as it considers appropriate in the following circumstances” [11] In previous cases before the Court, parties have argued that s 171 applies only to a final hearing. Section 171 falls within part 5 of the LVA. Section 167 of the LVA provides: “167 Application of pt 5 This part applies for the hearing of a valuation appeal.” [12] This has been argued as a point of distinction between the LVA and the VLA as it was when Kent Street was decided. [13] Respectfully, I agree with the view taken by Member Smith in Brisbane Square Pty Ltd v Valuer-General that the hearing of a valuation appeal includes a hearing of any issue in the course of the appeal.5 Section 34 is excluded by s 171 for a costs order in relation to any stage of an appeal. [14] The Valuer-General also relies on r 18 of the LCR. There are some decisions of this Court that appear to leave open the possibility that r 18 (and indeed s 34 of the LCA) may have some operation when an appellant withdraws an appeal under the LVA without the respondent’s consent.6 Respectfully, I do not agree. [15] Rule 18 provides the Court may order an appellant to pay costs if it withdraws an appeal without the respondent’s consent. That confers a broad discretion on the Court and, like s 34 of the LCA, is inconsistent with s 171 of the LVA, which constrains the Court’s discretion to award costs, except in specific circumstances. [16] Unlike s 34, r 18 is not expressly subject to a provision to the contrary. However, generally, a rule of court cannot be inconsistent with a statutory requirement.7 Section 171(2) specifies requirements that must apply before the Court’s power to award costs is enlivened. 5 Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40, [35]–[37]. 6 Alceon Captrans JV Pty Ltd v Valuer-General [2017] QLC 30; The Trust Company Limited v Valuer- General [2017] QLC 29. 7 See Gardziel v Gardziel [1961] Tas SR 6; Copping v ANZ McCaughan Ltd (1995) 63 SASR 523, 527 (Mohr and Nyland JJ agreeing), cited in Boylan v Farthing (1999) 86 FCR 120; [1999] FCA 267, [26]. -- 4 of 8 -- 5 [17] Further, there is a strong presumption against a construction of a rule that would practically negate a statutory provision.8 To rely on r 18 to make an award of costs in this appeal would practically negate the effect of s 171 of the LVA. [18] I find s 171 excludes the operation of both s 34 of the LCA and r 18 of the LCR in an appeal under the LVA. [19] The starting point for this application, therefore, is that each party bears its own costs, unless the Court considers any of the circumstances set out in s 171(2) of the LVA apply.9 If satisfied that any of the circumstances do apply, the Court has a discretion to make an order as to costs. Should the Court award the reserved costs against the appellant? [20] The Valuer-General argues that the circumstances specified in s 171(2)(d) and (f) apply. Those circumstances are, respectively, if a party fails to comply with procedural requirements and if a party fails to discharge its responsibilities for the appeal. Did Allure fail to comply with procedural requirements? [21] The Valuer-General asserts Allure did not comply with its duty of disclosure and, therefore, s 171(2)(d) applies. It relies on the fact that Allure provided amended particulars and a supplementary list of documents on 5 June 2018.10 [22] The Valuer-General has engaged in similar conduct in the appeal. On 28 August 2018, only 4 days after I made the disclosure orders, the Valuer-General filed an amended Statement of Facts Matters and Contentions that included 2 additional sales it intended to rely on in the appeal. On the same day, it delivered a Supplementary List of Documents. Both parties, therefore, refined their cases in the course of the appeal and provided further disclosure in doing so. I am not satisfied that constitutes non- compliance with procedural requirements. [23] None of that is relevant to the disclosure application at the heart of the Valuer- General’s application for costs. The disclosure application was made after Allure 9 See further, Chrismel Pty Ltd v Department of Natural Resources and Mines (2005) 26 QLCR 87. 10 Submissions of the Respondent – Costs Application filed 19 October 2018, [18]. -- 5 of 8 -- 6 provided its supplementary list, and the Valuer-General sought further disclosure in the terms sought in its letter of 27 June. [24] The relief sought in the application was broader than the orders made on the application. At the hearing, counsel for the Valuer-General said it only sought an order to in relation to documents in three categories. The application was, therefore, narrowed substantially on the day of the hearing and without prior notice to Allure. [25] Further, I ordered disclosure of only two of those three categories. [26] The third category, which was not included in the orders, related to intangible improvements. One of Allure’s grounds of appeal was that the issued site value failed to acknowledge intangible improvements. The particulars for that ground of appeal referred to vacant land sales sold with a development approval or infrastructure credit. [27] Counsel for the Valuer-General explained that it requested disclosure relating to intangible improvements because it was unsure of the scope of this ground of appeal. That is a concern about the pleadings rather than about disclosure. Once counsel for Allure confirmed it relied only on those intangible improvements particularised, counsel for the Valuer-General did not press the third category because the details of development approvals and infrastructure credits are publicly available. [28] The Valuer-General submits Allure might have avoided the application had it provided an affidavit swearing there were no further documents to disclose. However, Allure was not obliged to do so in the circumstances of this case. Unless ordered by a court,11 a party who has disclosed all relevant documents12 is not obliged to file an affidavit stating documents sought by another party do not or have never existed. [29] The Valuer-General persuaded me there was an objective likelihood that Allure had in its possession some documents relating to two categories. That relied on an inference drawn from the pleadings. I reserved the costs of the application, accepting the submission by counsel for the Valuer-General that the extent of further disclosure would be an important discretionary factor in deciding costs. 11 Uniform Civil Procedure Rules 1999, r 223. 12 UCPR, r 211. -- 6 of 8 -- 7 [30] As it transpired, Allure filed an affidavit confirming it had disclosed all relevant material and the Valuer-General made no complaint about that. No further disclosure resulted from the Valuer-General’s application. [31] Given that, I am not satisfied Allure failed to comply with procedural requirements. Did Allure fail to discharge its responsibilities for the appeal? [32] The Valuer-General asserts Allure failed to discharge its responsibilities for the appeal by: 1. “failing to make disclosure within the timeframe ordered by the Court”; and 2. “staying silent in terms of any substantive response to the Respondent’s disclosure complaint which provided a cost effective solution by way of a sworn affidavit which was not provided until ordered by the Court following the hearing of the GA”13 [33] Allure argues the Court should decide whether s 171(2)(f) applies by reference to its conduct in the appeal as a whole, not just in relation to the disclosure application. I accept that submission. [34] The reasoning of the Land Appeal Court in Chrismel Pty Ltd v Department of Natural Resources and Mines14 when considering an analogous provision of the Water Act 2000 provides some guidance. The question is whether the Court should compensate the Valuer-General for disadvantage caused by unmeritorious conduct by Allure in the appeal. [35] I have already given my reasons for finding Allure did not fail to comply with procedural requirements in relation to disclosure. [36] The Valuer-General asserts the Court can infer from Allure’s decision to withdraw the appeal that it was wholly unmeritorious and, as a result, it incurred unreasonable and unnecessary costs and time in responding to the appeal. [37] Six days after the Valuer-General refined its case, Allure took steps to alter its position in the appeal. Both parties refined their cases to add comparable sales for valuing the property. Regrettably, it is not unusual for parties in land valuation appeals to refine their case after they have filed their initial pleadings. That suggests a lack of independent valuation advice when they draft their pleadings. 13 Submissions of the Respondent – Costs Application filed 19 October 2018, [23]. 14 [2005] QLAC 31. -- 7 of 8 -- 8 [38] The frequency of changes to the parties’ cases is surprising, and concerning, given there can be no appeal without prior objection to and internal review of the valuation. In cases involving a valuation exceeding $5m, such as this one, the objection process includes an independently chaired conference. The Court expects the parties would fully explore questions such as comparable sales in that conference. [39] The Court’s revised directions about statements of facts, matters and contentions and the preparation of expert evidence are intended to focus the parties’ minds on such issues as early as possible in the appeal. In this case, it seems the Valuer-General’s further comparable sales, identified in response to the additional sale notified by Allure in June, prompted a change in Allure’s position. I accept that it then acted promptly in ending the appeal. [40] The Valuer-General has not contended that the appeal was frivolous or vexatious.15 Withdrawing the appeal does not indicate the appeal was wholly unmeritorious. The outcome of litigation is uncertain and there can be many reasons that an appellant decides not to pursue their appeal. The Court should not discourage parties from taking and acting on advice about their prospects. [41] The Valuer-General has not established that Allure did not properly discharge its responsibilities for the appeal. Orders 1. The application is dismissed. 2. Each party must bear their own costs of the appeal. FY KINGHAM PRESIDENT OF THE LAND COURT 15 Reply Submissions of the Respondent – Costs Application filed 2 November 2019, [10]. -- 8 of 8 --