Alceon Captrans JV Pty Ltd v Valuer-General [2017] QLC 30

LAND COURT OF QUEENSLAND CITATION: Alceon Captrans JV Pty Ltd v Valuer-General [2017] QLC 30 PARTIES: Alceon Captrans JV Pty Ltd (appellant) v Valuer-General (respondent) FILE NO/s: LVA079-16 DIVISION: General division PROCEEDING: Application for costs DELIVERED ON: 16 June 2017 DELIVERED AT: Brisbane HEARD ON: Submissions closed 29 August 2016 HEARD AT: Heard on the papers MEMBER: WL Cochrane ORDER/S: The appellant pay the respondent’s costs of the appeal after (but not including) 17 March 2016. CATCHWORDS: PROCEDURE – COURT PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DISCONTINUANCE OF PROCEEDINGS – where proceedings discontinued after interlocutory orders– where parties bear their own costs in the usual course – whether the proceedings were frivolous or vexatious – where the costs should be awarded to the respondent. Land Court Act 2000, s 7, s 34 Land Court Rules 2000, r 18, r 24B Land Valuation Act 2010, s 171 Uniform Civil Procedure Rules 1999, r 5 -- 1 of 10 -- 2 Mudie v Gainriver Pty Ltd (No.2) [2003] 2 Qd R 271 Re Cameron [1996] 2 Qd R 218 Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) [2014] QLAC 5 APPEARANCES: N Murphy, as agent – Savills Pty Ltd for the appellant M Prowse, Special Counsel, Crown Law for the respondent [1] In this matter the respondent, following an intimation by the appellant that it proposed to withdraw an appeal against a determination of the Valuer-General, submits that the appellant should pay the respondent’s costs of the appeal. [2] To the extent that it is relevant, each party has filed affidavit material in respect of the costs application. [3] The respondent filed two affidavits of Michael Prowse on 21 July 2016 and 12 August 2016 together with written submissions. [4] The appellant filed an affidavit of Neil Patrick Murphy on 23 August 2016 and an affidavit of Alastair Dilke Storie on 23 August 2016 together with written submissions. [5] In his affidavit Mr Murphy deposes that “Prior to the commencement of the appeal, I verbally advised Alceon Captrans JV Pty Ltd of my view that the Respondent’s amended valuation of $6,500,000 could not be supported. That remains my view.”1 [6] The issue for determination is whether the conduct of the appellant has been such as to cause the Court to move away from the general rule that each party bears its own costs in valuation matters. [7] The notice of appeal was filed on 22 February 2016 against a determination by the Valuer-General that the site value of the land was $6,500,000. The appellant contended in its notice of appeal that the valuation should be $4,000,000. Interlocutory orders were made on 7 March 2016 which included orders for disclosure and particulars. In particular the following orders were made: (a) Disclosure and inspection of documents in the parties possession or control directly relevant to the issues in the proceedings; 1 Affidavit of Neil Patrick Murphy filed 23 August 2016, para 4. -- 2 of 10 -- 3 (b) The appellant was to file and serve a full and proper particularisation of each of the grounds of appeal set out in the notice of appeal; (c) The respondent was to file and serve a statement of facts, matters and contentions in response to the appellant’s particulars and the matter was listed for further review and directions hearing. [8] There was debate conducted by correspondence between the parties as to the adequacy of disclosure. In particular, Mr Murphy on behalf of the appellant provided disclosure on 14 April 2016, further disclosure on 11 May 2016 and yet further disclosure on 16 May 2016 and 10 June 2016 [9] It appears to me that the early conduct of this case, particularly with respect to the issue of disclosure, exemplifies the difficulties confronted by parties who engage an agent other than a solicitor to conduct appeals of this sort. [10] Unfamiliarity with the rules relating to disclosure often causes inconvenience and unnecessary delay when parties astute to the requirements for disclosure have to embark upon a campaign of correspondence in order to secure full and proper disclosure of all relevant documents from their opponents. [11] Even then the respondent contended that the disclosure was inadequate and the matter was brought back before me for further review and directions on 13 June 2016 on which occasion I ordered that further disclosure should occur by 24 June 2016 and that by 20 July 2016 the experts engaged by the parties should provide a joint report pursuant to r 24A of the Land Court Rules 2000 by 20 July 2016. The parties were also required to deliver to the Court statements of evidence prepared by the valuation witnesses. [12] On 24 June 2016 Connor O’Meara Solicitors advised the respondent that they had been appointed to act for the appellant. On 27 June 2016 Connor O’Meara Solicitors filed a notice of appointment of solicitors. [13] The respondent then raised yet further concerns about disclosure and there was dialogue between the parties as to the form of revised orders which should be made regarding a timetable for the proceedings. [14] It is noteworthy that it is only after the appointment of Connor O’Meara Solicitors by the appellant that issues of disclosure appear to have been resolved. That was through no fault of the respondent. -- 3 of 10 -- 4 [15] In the meantime, compliance with disclosure by the appellant may have been prompted by the filing on 21 July 2016 of an application for further disclosure including a request that costs be reserved. That application was set for hearing on 1 August 2016. [16] Further dialogue occurred regarding disclosure and on 22 July 2016 the solicitors for the appellant provided additional material by way of disclosure. That disclosed material appears to have been delivered in two tranches on 22 July 2016 at 3:09pm and 3:23pm.2 [17] Following without prejudice dialogue between the parties on 29 July 2016 the solicitors for the appellant advised the respondent that the appellant proposed to discontinue the appeal and intended to file a notice of discontinuance in the Land Court Registry first thing on Monday morning, which it did on 1 August 2016. [18] Following that notice of discontinuance the respondent now seeks its costs it says (as set out in the respondent’s submissions in support of its application for costs), on the basis that the appellants conduct in the appeal has: “(a) forced the respondent to unreasonably, unnecessarily and unjustified trouble (sic) to prepare and respond in the proceedings; (b) resulted in the inappropriate and inefficient use of the Court resources; which could have been avoided had the appellant given proper consideration to the propriety of instituting the appeal.” [19] The appellant’s letter of 29 July 2016 included the following: “Our client’s instructions emerged as result of advice that we have recently given it in relation to the appeal and its prospects in the appeal.” [20] At the time of the sending of the letter on 29 July 2016 there was still live, theoretically, an order made on 13 June 2016 requiring the valuation experts to commence a meeting of experts and subsequently deliver a joint report and there was also an order in place of the same date requiring delivery to the Court and exchange with the other party to the proceeding a statement of evidence prepared by the valuation witnesses. [21] Presumably some of the work required to comply with those orders had begun. 2 Affidavit of Michael Prowse filed 12 August 2016, Ex MGP3 and MGP4. -- 4 of 10 -- 5 [22] In any event, all of that work was wasted. [23] There is no suggestion raised by the appellant that the advice which underlay the decision to withdraw the appeal related only to factors which had lately emerged. [24] In my view it is open to me to infer that, had advice been sought from Connor O’Meara at an earlier time, much of the work which the respondent was required to carry out could have been avoided. [25] It is true however that the appellant was exercising its statutory right granted to it by the Land Valuation Act 2010 and the filing of a notice of appeal to protect its position while it, presumably, sought advice as to the strength of its case is unexceptional. The first order made by the Court was on 17 March 2016 and up to that point in time this appeal had followed the usual process. [26] Thereafter things somewhat unravelled. [27] Disclosure was never satisfactorily completed and required correspondence from the respondent prompting or provoking the appellant into providing proper disclosure and ultimately the appellant seemingly engaged solicitors to provide proper legal advice. [28] That step could have been taken earlier as I pointed out above. [29] The Court’s general power to award costs is contained in s 34 of the Land Court Act 2000. That section provides: 34 Costs (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. (2) If the court does not make an order under subsection (1), each party to the proceeding must bear the party’s own costs for the proceeding. [30] The appellant in its submissions unsurprisingly submits to the Court that focus should be upon s 171 of the Land Valuation Act 2010 rather than upon s 34 of the Land Court Act 2000 or r 18 of the Land Court Rules 2000. [31] In particular, the appellant’s submissions resist the notion that inference could be drawn that the appeal was commenced for purposes other than to air grievances and have the valuation reviewed. The appellant says: “20. The Court cannot draw such an inference as: -- 5 of 10 -- 6 (a) the prospects of success of a proceeding is something which evolves over time and may be influenced by things such as the particularisation of the Respondent’s case and the provision of disclosure by the Respondent, both of which occurred after the commencement of the appeal, but before the decision to discontinue the appeal. (b) a decision to discontinue proceedings is influenced by matters other than the prospects of success alone, such as changing circumstances of the Appellant or other factors; and (c) an acknowledgement that instructions to discontinue the appeal had “emerged as a result of advice that we have recently given it in relation to the appeal and its prospects of success”, is not the same as an acknowledgement that the appeal was unmeritorious or lacked utility.”3 [32] Numerous Courts at various levels within the Australian legal system have had to grapple with the terms “frivolous” or “vexatious”. [33] In Mudie v Gainriver Pty Ltd4 the Queensland Court of Appeal had to consider those terms. [34] That case referred to The Macquarie Dictionary which defined frivolous as “of little or no weight, worth or importance; not worthy of serious notice” and vexatious as “causing vexation; vexing; annoying”. [35] In the Mudie decision the Court found5 that “Unquestionably, something much more than lack of success needs to be shown before a party's proceedings are frivolous or vexatious.” [36] In Re Cameron6 Fitzgerald P observed: “It is also necessary to decide what makes legal proceedings vexatious. Although there are sometimes statutory indications, the broad test potentially concerns such factors as the legitimacy or otherwise of the motives of the person against whom the order is sought, the existence or lack of reasonable grounds for the claims sought to be made, repetition of similar allegations or arguments to those which have already been rejected, compliance with or disregard of the court’s practices, procedures and rulings, persistent attempts to use the court’s processes to circumvent its decisions or other abuse of process, the wastage of public resources, and funds, and the harassment of those who are the subject of the litigation which lacks reasonable basis.” 3 Appellant’s Submissions, pages 7 to 8, para 20. 4 Mudie v Gainriver Pty Ltd (No.2) [2003] 2 Qd R 271, para [35]. 5 Ibid [36]. 6 Re Cameron [1996] 2 Qd R 218. -- 6 of 10 -- 7 [37] Having regard to those observations I am further comforted that there is nothing either frivolous or vexatious in the conduct of the appellant in this particular case. [38] The discretion to award costs pursuant to that section is unfettered but it has been observed7 that the discretion is to be exercised judicially and for reasons that may be explained and substantiated. [39] The Land Court Rules 2000 also contain a specific power to award costs in circumstances where a party discontinues or withdraws an appeal. Rule 18 provides as follows: 18 Costs If an applicant or appellant discontinues or withdraws, the court may order the applicant or appellant to pay— (a) the costs of the party to whom the discontinuance or withdrawal relates up to the date of the discontinuance or withdrawal, if the party has not consented to the discontinuance or withdrawal; and (b) the costs of another party or parties caused by the discontinuance or withdrawal. [40] The discretion pursuant to r 18 is triggered in circumstances where the other party to an appeal has not consented to the discontinuance or the withdrawal as is the case in the present instance. [41] In the present case, because this is an appeal against a land valuation, s 171 of the Land Valuation Act 2010 comes into play. [42] That section 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— (a) all or part of the appeal was frivolous or vexatious; (b) a party has not been given reasonable notice of intention to apply for an adjournment; (c) an applicant for an adjournment incurred costs because of the other party’s conduct; (d) a party incurred costs because the other party did not comply with the court’s procedural requirements; (e) without limiting paragraph (c), a party incurred costs because the other party introduced, or sought to introduce, new material; 7 Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) [2014] QLAC 5, para [12]. -- 7 of 10 -- 8 (f) a party did not properly discharge the party’s responsibilities for the appeal. (3) In this section— costs includes witness allowances for attending to give evidence. [43] As the respondent correctly points out in its written submissions the power to order costs is not exercised to punish an unsuccessful party but a cost order is intended to be compensatory in that they are intended to indemnify a party against the expense to which that party has been put by reason of the legal proceedings. [44] A careful reading of s 171 of the Land Valuation Act 2010 makes it clear that there must be some unsatisfactory aspect of the conduct of the party against whom a cost order is sought. [45] In the course of the respondent’s submissions they say as follows:8 “23. The Court should find that the appellant did not obtain any formal advice regarding the value of the Land prior to the institution of the appeal. The appellant’s list of documents does not identify any such advice. If such advice had been obtained then the appellant would have been obliged to disclose it. 24. The Court should find that the appellant did not obtain any legal advice prior to the institution of the appeal. The appellant’s list of documents does not identify any such legal advice or other legally privileged material. If such advice had been obtained then the appellant would have been obliged to disclose it, even if maintaining a claim of legal professional privilege. 25. In the circumstances, the Court should conclude that the appeal was commenced without any, or any proper, consideration of whether there was any demonstrable error in the respondent’s valuation, or whether the appellant would be able to prove the allegations contained in its notice of appeal.” [46] Those findings require this Court to speculate about what matters transpired between the appellant and its agent prior to the institution of the appeal. [47] It is clearly not necessary that for a party to obtain advice it would necessarily have to obtain such advice in writing although such a step would obviously be a prudent one. [48] In cases where the application of a provision such as r 171 applies, the Court needs to be, in my opinion, objectively satisfied of some failing by the party against whom the cost order is sought. 8 Respondent’s Submissions, paras 23 to 25. -- 8 of 10 -- 9 [49] It is not an unusual thing for the parties to, in a sense, “test the water” by bringing an appeal particularly in circumstances where land has a very high value such as the present case. [50] I am not willing to go behind the letter written by the solicitors who eventually came to act for the appellant and who informed their opponents that they had given legal advice that led to the intention to withdraw the appeal. [51] The appellant had an opportunity to inform the Court of the nature of the advice or to provide information establishing that the advice could not have been provided earlier. They did not do that. [52] That is not however the end of the matter. [53] I am of the view that there is weight in the basis set out by the respondent in its application for costs (notwithstanding that the grammar is somewhat tortured). [54] The order made on 17 March 2016 was in the usual form for matters of this type and contained nothing onerous or unique. [55] Indeed order No. 3 required the appellant to focus on the grounds of appeal because that order required a full and proper particularisation of each of the grounds of appeal set out in the notice of appeal and intended to be relied upon at hearing. [56] In the present case I am satisfied that the appellant has, after 17 March 2016, put the respondent to unreasonable trouble and expense in attempting to comply with the orders of the Court in the face of inadequate disclosure by an appellant who, late in the piece, decided to withdraw its appeal. [57] Accordingly, in the circumstances of this particular appeal, I am of the view that the appellant should pay the respondent’s costs of the appeal after (but not including) 17 March 2016. ORDER The appellant pay the respondent’s costs of the appeal after (but not including) 17 March 2016. -- 9 of 10 -- 10 WL COCHRANE MEMBER OF THE LAND COURT -- 10 of 10 --