Caseldan Pty Ltd v Moreton Bay Regional Council (No 2) [2016] QLAC 4 (2016) 37 QLCR 180

LAND APPEAL COURT OF QUEENSLAND CITATION: Caseldan Pty Ltd v Moreton Bay Regional Council (No. 2) [2016] QLAC 4 PARTIES: CASELDAN PTY LTD (ACN 100 589 571) AS TRUSTEE UNDER INSTRUMENT 705893791 (appellant) v MORETON BAY REGIONAL COUNCIL (respondent) FILE NOS: LAC No. 001-15 Land Court No. AQL809-12 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal from the Land Court of Queensland ORIGINATING COURT: Land Court at Brisbane DELIVERED ON: 24 June 2016 DELIVERED AT: Brisbane HEARING DATE: Submissions on the papers JUDGE: Peter Lyons J PA Smith, Member WL Cochrane, Member ORDERS: 1. The respondent is to pay the appellant’s costs of and incidental to the proceedings in the Land Court, to be assessed on the standard basis; 2. The respondent is to pay the appellant’s costs of and incidental to the appeal to this Court, to be assessed on the standard basis. CATCHWORDS: PROCEDURE – COSTS –Land Court – s 27 Acquisition of Land Act 1967 – party who can claim – amount finally claimed – position closer to compensation determined – disposed owner – independent determination – Mentech approach – extent of ultimate success –issues contested unsuccessfully –standard basis. PROCEDURE – COSTS –Land Appeal Court –Ostroco v DTMR – non acceptance – offer to settle –indemnity basis-oral offer open for very short period –no basis for indemnity costs Acquisition of Land Act 1967 Barnes v Director-General, Department of Transport (1987) -- 1 of 7 -- 2 18 QLCR 133 Craft Printing Pty Ltd v Dwyer (Costs) (2009) 9 DCLR(NSW) 199 Mentech Resources Pty Ltd v MCG Resources Pty Ltd (in liq) & Ors (No 2) [2012] QLAC 002 Ostroco v Department of Transport and Main Roads (No 3) [2014] QLAC 7 COUNSEL: D O’Brien QC for the Appellant C L Hughes QC & N Kefford for the Respondent SOLICITORS: Corrs Chambers Westgarth for the Appellant Moreton Bay Regional Council (Legal Services Department) for the Respondent THE COURT: [2] This Court has allowed an appeal against the decision of the Land Court, which determined the value of the appellant’s land at the time of the resumption at $1.8million. This Court has determined the value of the land to be $4.1million. [3] The appellant has applied for an order that the respondent pay its costs of the Land Court proceedings, to be assessed on the standard basis; and that it pay it costs of the appeal, to be assessed on the indemnity basis. Submissions [4] The appellant submitted that it is in a position where an order for costs might be made in its favour under s 27(2) of the Acquisition of Land Act 1967 (Qld) (AL Act)1. The amount which it “finally claimed” was $5,555,000 for land, together with disturbance and interest (although it had an alternative claim of $3,535,000 for the value of the land). The amount of the valuation of the land finally put in evidence by the respondent was $1,800,000. As a result of the appellant’s success on the appeal, the award for compensation will be closer to the amount which it finally claimed, than to the amount of the valuation finally put in evidence by the respondent. The extent of its ultimate success justifies an award of costs in its favour. It is substantially greater than the amount offered by the respondent ($2.8million, with disturbance items and interest, on 12 February 2014). The only way that the appellant could secure appropriate compensation was by prosecuting its claim in the Land Court. The claim arose out of a compulsory acquisition of the appellant’s land by the respondent. [5] The appellant also seeks its costs of the appeal to this Court on the indemnity basis. In addition to its success, it relied on an offer which it made on 19 December 2014 to settle the matter for $2.5million for compensation under all heads. It submitted that the respondent unreasonably refused its offer. 1 Appellant’s outline of argument on costs, filed 17 June 2016. -- 2 of 7 -- 3 [6] For the respondent, it was submitted that each party should bear its own costs of the proceedings in the Land Court2. It did not accept the proposition adopted by this Court in Mentech Resources Pty Ltd v MCG Resources Pty Ltd (in liq) & Ors (No 2)3, that the general rule that costs follows the event “nonetheless informs (this Court’s exercise of the discretion to award costs) as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others.” Its submissions emphasised the breadth of the discretion. It submitted that its conduct of the proceedings in the Land Court was reasonable, given that it had received a valuation of the land of $1.8million. The reasonableness of its conduct was further demonstrated by the fact that it had paid a sum of $2,000,000 as an advance of compensation. It submitted that its approach to the determination of the value of the resumed land was appropriate, given that the appellant’s valuer had expressly stated in a Joint Expert Report that “offers/contracts are not evidence of value”. It relied upon the fact that Caseldan’s initial claim for $8,629,500 plus disturbance costs, was unsupported by a valuation; and on the late amendment of the claim to $5,555,000. It submitted that it was obliged to incur the costs of preparing for the hearing, when the appellant’s initial claim was wholly unsubstantiated. It relied upon the fact that it had participated in good faith in a mediation; and had made a formal offer to settle the matter for $2.8million. It submitted that the appellant had groundlessly maintained an allegation that the respondent had changed its position about the provision of access to development on the appellant’s land by what was described as a loop road. [7] As to the costs of the appeal to this Court, the respondent submitted that the appellant had taken a scatter gun approach, its Notice of Appeal containing 20 grounds, alleging 35 errors in the Land Court. The appellant again maintained the groundless allegation that the respondent had changed its position about the loop road. The appellant had not been successful on all of its grounds of appeal. The respondent submitted that it had not unreasonably rejected the appellant’s offer to settle the proceedings, when the offer was open for a period of a little more than three hours. Moreover, it was made before the Notice of Appeal had been served, so that the respondent could not consider the grounds. [8] In reply, the appellant submitted that the original claim reflected the earlier valuation of Mr Rabbitt, whose revised valuation it relied on in the Land Court; that a copy of the earlier valuation was disclosed to the respondent in March 2013; the respondent knew six months before the Land Court hearing that Mr Rabbitt had revised his valuation to the amount finally claimed; and that the proposition in Mentech is correct4. The offers to purchase the appellant’s land had been disclosed in March 2013, with copies provided to the respondent shortly after, at its request. They were also set out in Ms George’s statement of evidence, filed more than a week prior to the trial. [9] As to the costs of the appeal, the appellant submitted that its offer was communicated orally, two days prior to the written offer. 2 Submissions on behalf of the respondent Moreton Bay Regional Council in relation to costs, filed 22 June 2016. 3 [2012] QLAC 002 at [4]. 4 Appellant’s submissions in reply in relation to costs, filed 23 June 2016. -- 3 of 7 -- 4 Statutory provisions [10] The power of the Land Court to make an award for costs of proceedings before it, in a case like the present one, is found in s 27 of the Acquisition of Land Act 1967 (AL Act). It has not been suggested that an award of costs of those proceedings by this Court should be made, other than by reference to this section. Relevantly, the section includes the following: “27 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. (3) Subsection (2) does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to section 24(3) or section 25(3).” [11] The provisions of s 34 of the LC Act should also be noted, as follows: “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.” [12] Section 34 is made applicable “with necessary changes” to this Court, with references in it to the Land Court to be taken as references to this Court5. Costs of proceedings in Land Court [13] The result of the appeal means that an award of costs may be made in favour of the appellant, by reference to s 27(1) and (2) of the AL Act6. [14] There are features of litigation in the Land Court over compensation for land which has been compulsorily acquired, which make it different to much other litigation. Some of those features are identified in the reasons for judgment in Leacy v Sunshine Coast 5 See s 72 of the LC Act. 6 Compare Barnes v Director-General, Department of Transport (1987) 18 QLCR 133, 138. -- 4 of 7 -- 5 Regional Council (No 2), to be delivered contemporaneously with these reasons. As is apparent from Barnes7, when determining an application for costs for such proceedings in the Land Court, the Court is required to take into account the fact that such proceedings are the only way in which a dispossessed owner can obtain an independent determination of the value of the land taken, and thus of the amount of compensation to which it is entitled. [15] Nothing has been advanced by the respondent which would warrant this Court rejecting the approach identified in Mentech; though its application in a particular case may be affected by other considerations, such as those just discussed. [16] While the appellant did not succeed to the full extent of its final claim in the Land Court, the extent of its ultimate success is a matter of some importance. The respondent was unsuccessful in contending that the value of the resumed land was $1.8million. While the claim was amended at the commencement of the hearing, there is nothing in the respondent’s conduct to support the view that it would have taken a different position in the litigation, had the lower amount been claimed at the outset or at some earlier time. It continued to resist the claim, and to rely on the valuation for which it contended. Moreover, it knew well before the hearing that Mr Rabbitt had revised his value to the amount on which the claim was finally based. The value of the land as ultimately determined was substantially greater than either the value for which the respondent contended, or the amount of its advance. It is unusual to take into account in an application for costs by a successful party, an offer by the unsuccessful party for a lesser amount. No authority was cited in support of the relevance of this offer on the question of costs. [17] The respondent succeeded on the issue as to whether it had changed its position about the loop road. While this was an issue of potential importance in the proceedings, it cannot be said that attention to it would have required, in the context of this case, a significant amount of work, or that it took up a significant proportion of the trial. Moreover, there were many other issues which the respondent contested unsuccessfully. [18] When these considerations are weighed up, and bearing in mind in particular the fact that the appellant was a dispossessed land owner who had no other avenue than to bring proceedings in the Land Court in order to obtain proper compensation, it is appropriate to order that the respondent pay the appellant’s costs of those proceedings, to be assessed on the standard basis. Costs of the appeal [19] None of the matters relied upon by the respondent warrant a refusal to make an order for costs in favour of the successful appellant. In light of the findings in the Land Court, the appellant had no option but to appeal to this Court, in order to obtain proper compensation. [20] It may be said that the appellant’s Notice of Appeal is unusually detailed. Nevertheless, the appellant succeeded in establishing many of the errors to which it referred. To some extent, the structure of the Notice of Appeal, and the range of grounds, are a consequence of the way the reasons for judgment of the Land Court were developed. 7 At 135. -- 5 of 7 -- 6 The points advanced for the appellant were not entirely without substance, even where it was unsuccessful. [21] In Ostroco v Department of Transport and Main Roads (No 3)8, this Court said that non-acceptance of an offer to settle “may well be a significant matter in determining whether to award costs on the indemnity basis; and that there are strong policy reasons for making such an award, even when there is not a marked difference between the offer and the ultimate result.” [22] It is apparent from this passage that the rejection of an offer, while often a matter of significance, will not lead to an award of indemnity costs in every case. In this case, the appellant’s reliance on its offers is misplaced. The written offer was open for such a short period of time as to border on the ephemeral. It might be noted that it required clarification. The precise terms in which the oral offer was made are unknown; but in any event it was only open for a very short period. Inevitably, a litigant receiving an offer will need some time to consider it, usually with the assistance of its legal advisers9. The respondent’s position was inevitably made more difficult because it had no means of knowing the case which the appellant intended to advance on the appeal. Moreover, in the case of an entity like the respondent, it cannot be assumed that a person with appropriate authority will be available to respond to an offer on very short notice. The appellant’s offers in this case do not provide a basis for an award of indemnity costs. [23] Accordingly, an order should be made that the respondent pay the appellant’s costs of, and incidental to the appeal, to be assessed on the standard basis. Conclusion [24] The following orders should be made in relation to the costs of the proceedings:- 1. The respondent is to pay the appellant’s costs of and incidental to the proceedings in the Land Court, to be assessed on the standard basis; 2. The respondent is to pay the appellant’s costs of and incidental to the appeal to this Court, to be assessed on the standard basis. 8 [2014] QLAC 7 at [56]. 9 See the discussion by Johnstone DCJ in Craft Printing Pty Ltd v Dwyer (Costs) (2009) 9 DCLR(NSW) 199; [2009] NSWDC 191; at [24]; cited in Dal Pont Law of Costs (3rd ed, 2013, LexisNexis Butterworths Australia) at [13.32]. -- 6 of 7 -- 7 ORDERS: 1. The respondent is to pay the appellant’s costs of and incidental to the proceedings in the Land Court, to be assessed on the standard basis; 2. The respondent is to pay the appellant’s costs of and incidental to the appeal to this Court, to be assessed on the standard basis. PETER LYONS J PA SMITH MEMBER OF THE LAND COURT WL COCHRANE MEMBER OF THE LAND COURT -- 7 of 7 --