Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40 (2015) 36 QLCR 283

LAND COURT OF QUEENSLAND CITATION: Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40 PARTIES: Brisbane Square Pty Ltd (appellant) v Valuer-General (respondent) FILE NO: LVA47-15 DIVISION: General Division PROCEEDING: Applications for costs DELIVERED ON: 16 November 2015 DELIVERED AT: Brisbane HEARD ON: 2 September 2015 HEARD AT: Brisbane MEMBER: PA Smith ORDERS: 1. The appellant’s application for costs of and incidental to dealing with the respondent’s amended Statement of Facts, Matters and Contentions is refused. 2. Each party bear their own costs of and incidental to the 2 September 2015 hearing before the Land Court. CATCHWORDS: COSTS – costs discretion under s 171 Land Valuation Act 2010 fetters costs discretion under s 34 Land Court Act 2000 – costs can be awarded under s 171 Land Valuation Act 2010 for an interlocutory matter. COSTS – examination of costs decisions under s 882 Water Act 2000 relevant to discretion to award costs under s 171 Land Valuation Act 2010. COSTS – need to find unmeritorious conduct to enliven costs jurisdiction under s 171(2) Land Valuation Act 2010 – examination of fault factors described in subsections 171(2)(d-f) Land Valuation Act 2010 - whether a party by -- 1 of 13 -- 2 filing an amended Statement of Facts, Matters and Contentions has not complied with court’s procedural requirements, introduced new material, or not properly discharged its responsibilities in the appeal COSTS – whether the application for costs itself was frivolous or vexatious Uniform Civil Procedure Rules 1999, Rules 5, 188, 378, 386 Land Court Rules 2000, Rule 4 Land Court Act 2000, s 34 Land Valuation Act 2010, ss 155, 157, 167, 171 Valuation of Land Act 1944, ss 56(1), 70 Water Act 2000, s 882 Integrated Planning Act 1997 Burdekin Shire Council v Pioneer Sugar Mills [2005] QPELR 13 Chrismel Pty Ltd v Department of Natural Resources and Mines (2005) 26 QLCR 87 Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council [2011] QCA 15 Gauci Developments (Qld 1) Pty Ltd v Bundaberg City Council [2009] QPELR 66 Kent Street Pty Ltd v Department of Natural Resources and Mines (No 2) [2009] 30 QLCR 167 M2 Property Group Pty Ltd v Gold Coast City Council [2006] QPELR 332 Reed v Department of Natural Resources and Mines [2014] QLC 1 Reed v QCoal Sonoma & Ors [2014] QLAC 8 APPEARANCES: Mr AR Lonergan of Counsel for the appellant Mr SP Fynes-Clinton of Counsel for the respondent SOLICITORS: Clayton Utz for the appellant In-house Legal, Department of Natural Resources and Mines for the respondent Background [1] On 13 February 2015 the appellant lodged a Notice of Appeal pursuant to the Land Valuation Act 2010 (LVA) against the respondent’s objection decision with respect to the valuation of the appellant’s property at 266 George Street, Brisbane. [2] On 30 March 2015 I made procedural orders by consent which included a requirement that the respondent file and serve its Statement of Facts, Matters and Contentions in response to the appellant’s grounds of appeal by 24 April 2015. -- 2 of 13 -- 3 [3] I further ordered at this time that the parties arrange for disclosure/discovery of relevant documents. I also ordered by consent that the proceeding be adjourned for further review until after judgement or earlier resolution of a related matter LVA 038-15. [4] On 27 April 2015 the respondent filed and served its Statement of Facts, Matters and Contentions (Statement). [5] The case of LVA 038-15 was resolved, and on 20 August 2015 the parties in this matter participated in a without prejudice conference. [6] This matter was listed again before this Court on 26 August 2015 when submissions were made regarding a proposed amendment by the respondent to its statement, particularly whether it would be necessary for the respondent to seek the leave of the Court for that amendment to be made. The appellant contended that leave was required as the respondent was seeking to withdraw an admission (Rule 188 UCPR); while the respondent submitted that it was not withdrawing an admission but making an amendment for which leave of the court was not required (Rule 378 UCPR). [7] The proposed amendment was not made available to the Court on 26 August 2015. [8] On 26 August 2015 I ordered the respondent to provide a draft amended statement together with a draft application to the Court for any necessary leave. The order further stated that unless the parties agreed on the terms of a consent order in relation to this issue by 1 September 2015, the application by the respondent would be heard on 2 September 2015. [9] On 1 September 2015 the Court was advised by the appellant’s solicitors, that the appellant had consented to the respondent making its proposed amendments to its statement but that the issue of costs was in dispute and would be argued on 2 September 2015. [10] At the 2 September 2015 hearing the appellant by its counsel confirmed that the respondent could make its amendment without the leave of the Court and confirmed it had no objection to the amendment being so made by the respondent. [11] However the appellant submitted that its costs thrown away as a result of the respondent’s amendment should be paid on the standard basis, and that its costs of the 2 September 2015 hearing should also be paid to it on the standard basis. [12] The respondent countered that it should not have to pay the appellant’s costs, and further it sought its own costs of the 2 September 2015 hearing, submitting that the appellant’s application for costs was baseless. -- 3 of 13 -- 4 The Amended Statement [13] The respondent’s amended statement was filed on 3 September 2015. [14] In its Notice of Appeal1 the appellant pleaded that the respondent’s valuation of the subject land did not properly take into account the constraints on the use of that land arising from the Brisbane City Council’s requirement that part of the land is to be used as a “civic square”. [15] In response, the respondent in its original statement2 stated that it had recognised the limiting effect of Lease No 711076130 in its valuation, by valuing the land subject to the lease at 33% of the value of the balance land not so affected. [16] In its amended statement, the respondent has expanded on its response to this issue and pleaded that to the respondent’s knowledge, there is no requirement imposed by the Brisbane City Council for part of the land to be used as a “civil square”.3 [17] In its amended statement, the respondent has restated its original contention that it recognised the limiting effect of Lease No 711076130 in its valuation4 and added5 that the 33% valuation reflected, in substance, the effect of the BCC requirement. [18] In its amended statement, the respondent pleads that the Council’s requirement to use part of the subject land as a “civic square” does not exist but if it does exist, it has been taken into account in his valuation by discounting the value of the land subject to Lease No 711076130. Submissions as to costs [19] The appellant submits that the amendment has expanded the respondent’s statement and introduced new material. [20] The appellant submits that through Rule 4 of the Land Court Rules 2000 (LCR) the provisions of the Uniform Civil Procedure Rules 1999 (UCPR) are applicable, given there is a gap in the LCR in terms of amending pleadings. [21] The appellant submits that the respondent’s amended statement can be amended via Rule 378 UCPR, and taking into account Rule 386 UCPR and general principles of fault, the costs of the appellant thrown away because of the amendment should be payable by the respondent. [22] The appellant submits that the authority to make a costs order in the Land Court in valuation appeals arises from s 34 Land Court Act 2000 (LCA) and s 171 LVA. Although the costs provisions in s 34 LCA are subject to the provisions of another Act to the 1 Ground 2 – 1(c). 2 At 5.a. 3 At 5.a. 4 At 5.a of the original statement and 5.b of the amended statement. 5 At 5.c of the amended statement. -- 4 of 13 -- 5 contrary, the appellant submits that s 34 LCA should not be fettered by the more prescriptive provisions in s 171 LVA. [23] The appellant further submits that s 171 LVA is not applicable to this matter as it is governed by s 167 LVA which limits the operation of s 171 to the hearing of a valuation appeal. It is submitted that as a valuation appeal is defined in s 3 of the LVA as “an appeal against an objection decision” the costs power under s 171 is limited only to the hearing of the appeal against the objection decision, and not to interlocutory matters arising from the appeal such as dealing with amendments to pleadings. On that basis s 34 LCA would provide authority for the Court to order costs it considers appropriate, such as in line with general principles of fault and Rule 386 UCPR. [24] In the alternative the appellant submits that if the Court finds s 171 LVA does fetter the Court’s discretion to award costs in this matter under s 34 LCA, it submits that the respondent has breached the requirement on parties outlined in sections 171(2)(d), (e), (f) LVA and the Court should therefore exercise its discretion to award costs under these subsections of s 171. [25] The respondent contends that the Land Court’s power to award costs under s 34 LCA in this procedural matter is clearly limited by s 171 LVA. The respondent referred the Court to the Land Appeal Court decision of Kent Street Pty Ltd v Department of Natural Resources and Mines (No 2)6 which held that s 70 Valuation of Land Act 1944 (VLA) (equivalent to the current s 171 LVA) did govern the award of costs in land valuation cases to the exclusion of s 34 LCA. [26] The respondent relied upon the judgments in Reed v Department of Natural Resources and Mines7 and Chrismel Pty Ltd v Department of Natural Resources and Mines8 to submit that the limited costs power in s 171(2) LVA is to compensate a party disadvantaged by unmeritorious conduct of another party. The respondent submits its conduct in raising an important issue to be determined in this matter at an early stage is not unmeritorious conduct. [27] The respondent further submits that its conduct does not breach subsections (d), (e) and (f) of s 171(2) LVA. The respondent submits it has complied with the Court’s procedural requirements; it has not introduced any “new material”; and it has fully discharged its responsibilities for the appeal. [28] The respondent also submits that the appellant has not thrown away any costs with respect to the amendment as the amendment merely requires the appellant to prove one 6 [2009] 30 QLCR 167. 7 [2014] QLC 1. 8 [2005] 26 QLCR 87, 95 [50]. -- 5 of 13 -- 6 of its grounds of appeal. It may require some additional work for the appellant but it has not caused the appellant to undertake work which is no longer applicable to this matter (i.e. thrown away). [29] Finally the respondent submits that the appellant’s application for costs is baseless and it is therefore open to the Court to conclude the application for costs is frivolous or vexatious. Therefore the respondent seeks its costs of and incidental to the 2 September 2015 hearing from the appellant pursuant to s 171(2)(a) LVA. Assessment [30] The first question to be answered is whether the costs provisions in s 34 LCA are fettered by the costs regime under s 171 in the LVA. [31] The Kent Street case concerned an application for costs that involved both the previous and amended s 70 VLA. The Land Appeal Court determined that the amended s 70 (which contains almost identical provisions to s 171 LVA) fettered the Court’s power to award costs under s 34 LCA. [32] The Land Appeal Court’s judgment in Kent Street had this to say at para 12: “Previously s.70 of the VLA dealt with costs in a limited way. It provided: ‘(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.’ As a consequence of limiting the jurisdiction to award costs to the outcome of the appeal as to quantum, the Court could call in aid the general power to award costs in s.34 of the Land Court Act. That is no longer the case and s.70 is now ‘another Act to the contrary’ and is the legislative authority for awarding costs in respect of appeals under Part 6A of the VLA.” [33] The appellant has submitted that the position is now different as the LVA contains section 167 which was not contained in the previous VLA. Section 167 states: “This part applies for the hearing of a valuation appeal.” [34] The appellant relies upon this section to submit that s 171 LVA does not apply to interlocutory applications because s 167 LVA limits s 171 costs to hearings (determinations) with respect the objection decision itself. [35] I cannot agree with this reasoning. [36] A hearing is an opportunity to state one’s case – to be heard in relation to an issue in dispute. “Hearing” in s 167 LVA should not be confined to a final hearing but should include the full hearing process from beginning to end of the appeal. -- 6 of 13 -- 7 [37] Section 155(1) LVA states that an objector may appeal to the Land Court against the objection decision. By s 157(1) LVA a (valuation) appeal is started by filing a notice of appeal. The hearing of a valuation appeal in s 167 is the hearing of all aspects of the appeal from the time the appeal is filed until all the issues surrounding it have been finalised. In my view, any other interpretation would be unnecessarily restrictive and narrow. [38] I note s 56(1) VLA also indicates a (valuation) appeal is started by filing a notice of appeal in the Land Court. The similarities between the respective costs provisions in the LVA and the VLA9 are not in my opinion by chance and the same interpretation should be adopted to both sets of costs provisions. [39] The President in the matter of Reed determined that costs should be awarded under s 882 Water Act 2000 (WA) for an interlocutory matter. Sections 882(3) and (4) WA are very similar to sections 171 (1) and (2) LVA. [40] The President noted:10 “Section 882(3) of the Water Act provides that each party to the appeal must bear its own costs. However s 882(4) provides the Court with a discretion to order costs in certain circumstances. The first issue to be considered is whether ss 882(3) and (4) apply only to the final determination of the appeal or whether they also apply to applications for costs in respect of interlocutory steps. Both parties have submitted that s 882(3) and (4) apply to interlocutory steps in the appeal.” [41] The President then went onto to consider decisions in the Planning and Environment Court given that costs provisions in the now repealed Integrated Planning Act 1997 (IPA) were largely identical with the costs provisions in the WA. The President cited the Chrismel case as authority for the Land Court to consider Planning and Environment Court decisions with care. [42] Importantly, the President said:11 “There are numerous decisions of the Planning and Environment Court where ss 4.1.23(1) and (2) were construed to enable the court to order costs with respect to interlocutory hearings. For example, in Gauci Developments (Qld 1) Pty Ltd v Bundaberg City Council, Wilson SC DCJ said: ‘Certainly s.4.1.23 refers to costs ‘… for the proceeding’ and, because IPA does not define that term it might at first blush be thought to apply, in instances like the present, only to the appeal in toto. The discretion arising under subs.(2) has, however, been construed on a number of occasions to apply to interlocutory matters including applications within proceedings. That is unsurprising, for two reasons: first some of the nine instances adumbrated in the subsection plainly refer to part, rather than the whole, of the proceeding subs.(2)(e) is an obvious example. I do not 9 Ss 171 and 70 respectively. 10 At [24] and [25] of Reed. 11 At [28] of Reed. -- 7 of 13 -- 8 think the particular reference to ‘part’ of the proceeding which appears only in subs.(2)(b) tells against this conclusion. The second reason concerns the wide nature of the discretion which subs.(2) obviously intends to give to the Court - as the phrase ‘… as it considers appropriate’ plainly envisages.’ ” (Citations omitted). [43] The President concluded that the costs provisions in s 882(4) WA did apply to the making of costs orders in interlocutory matters. [44] I consider that the costs provisions of the WA under ss 882(3) and (4) are very closely aligned with the costs provisions in ss 171(1) and (2) LVA and the same reasoning should be applied with respect to costs decisions for interlocutory matters under the LVA. [45] I also note that the reasoning of Wilson SC DCJ in the Gauci Developments (Qld 1) v Bundaberg City Council12 case is applicable to s 171(2) LVA. Why would the legislature provide in s 171(2)(c) LVA that costs could be awarded where a party did not comply with the court’s procedural requirements, if it meant to limit costs under this section to hearing substantive issues only? [46] I now turn to consider whether costs should be awarded against the respondent under section 171(d) – (f) of LVA. [47] Section 171 LVA states: (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 has incurred costs because the other party did not comply with the court’s procedural requirements; (e) without limiting paragraph (c), a party has incurred costs because the other party has introduced, or sought to introduce, new material; (f) a party did not properly discharge the party’s responsibilities in the appeal. [48] I note the President’s comments in Reed13 that the legislative intent of s 882(4) WA is to give the Court power to compensate a party disadvantaged by the unmeritorious conduct of another party in the appeal. Given the similarities between s 171(2) LVA and s 882(4) WA, I adopt the President’s view that for costs to be awarded under s 171(2), unmeritorious conduct must be present. This is a fairly high onus and it has attached to it a concept of fault or wrong doing. 12 [2009] QPELR 66 from 69. 13 At [33]. -- 8 of 13 -- 9 [49] I note that even if I find that the provisions of s 171 (2) have been proved, I retain a discretion as to whether or not I believe costs should be awarded in all the circumstances, having full regard to the conduct of the parties. [50] In terms of s 171(2(d) I find that the respondent did not strictly comply with the Court’s procedural requirements. The respondent was ordered by the Court on 30 March 2015 to file and serve its statement by 24 April 2015. The statement was filed and served on 27 April 2015. [51] However I do not consider that filing and serving of the statement on the Monday (27 April 2015) after the Friday due date is unmeritorious conduct. This breach is not worthy of a costs order under s 171(2)(d) LVA, and in any event this conduct was not submitted to be such by the appellant. [52] The appellant relies upon the amending of the statement by the respondent as evidence of it not complying with the Court’s procedural requirements. [53] By amending one part of its statement the respondent in my view has not committed unmeritorious conduct and has rightfully ensured its pleadings are as accurate as possible at an early stage in the matter. [54] To enliven subsection (d) a party must incur costs because the other party has not complied with the Court’s procedural requirements. In terms of exercising my discretion to award costs I would need evidence of costs being incurred by the appellant that would not necessarily have been incurred if the Court’s procedural requirements were complied with. This resulting costs or throwing away of costs is consistent with the President’s decision in Reed where costs or bringing an application to the court were awarded after a party failed to comply with a court order until after an application to enforce compliance had been filed. [55] In this case I note that the appellant has submitted that because of what was pleaded in the original statement (and later changed by the amendment to the statement), costs were incurred as they prepared for and attended a without prejudice conference. Also the appellant submits it incurred costs in having to consider and respond to the proposed amendment. [56] With respect, no evidence has been produced to establish that the appellant only attended the without prejudice conference because of the content of the unamended statement and would not have done so had they been presented initially with the contents of the amended statement. [57] Also as submitted by counsel for the respondents, the amendments just call into question the existence of the Councils’ requirement for a civic square on the property. This is -- 9 of 13 -- 10 necessary additional work and the amendment does not discount or lay to waste work that had already been undertaken. [58] As for the appellant undertaking work to consider this amendment, it would have had to undertake this work whether or not it was provided originally or later. Also in terms of responding to the amendment, the appellant has agreed that it can be made by the respondent as of right without seeking the court’s leave. [59] On the evidence before me I am not convinced that the costs necessarily incurred by the appellant with respect to the amendment are anything more than the usual costs associated with running their case. Hence even if I was satisfied that the Court’s procedural requirements had not been complied with, I am not satisfied costs incurred by the appellant with respect to subsection (d) should be ordered against the respondent in these circumstances. [60] In terms of s 171(2)(e) the appellant submits that it incurred costs because the respondent introduced new material i.e. the amended statement. [61] The respondent referred the court to the planning and environment case of M2 Property Group Pty Ltd v Gold Coast City Council.14 In this case His Honour Judge Rackemann in dealing with a similar section in the IPA to s 171(2)(e) LVA states:15 “In my view, the making of a submission as to a jurisdictional issue arising on the material before the Court does not constitute the introduction of “new material”. [62] In this case a jurisdictional issue was first raised in submissions for trial however His Honour found that it was not new material. His Honour quoted from another planning and environment case Burdekin Shire Council v Pioneer Sugar Mills16 which identified new material in that case as the introduction of traffic engineering evidence. [63] On considering the amendment made by the respondent I do not consider it constitutes new material as it fits squarely into Judge Rackemann’s decision of raising a jurisdictional issue or point of contention. [64] Even if the amendment can be characterised as introducing new material, I do not believe it to be unmeritorious conduct because the respondent has ensured its pleadings are as accurate as possible at an early stage in the matter. [65] To enliven subsection (e) a party must incur costs because the other party has introduced new material. On the evidence before me I am not convinced that the costs necessarily incurred by the appellant with respect to the amendment are anything more than the usual costs associated with running their case. Hence even if I was satisfied that the respondent 14 [2006] QPELR 332. 15 At 335. 16 [2005] QPELR 13. -- 10 of 13 -- 11 had introduced new material, I am not satisfied costs incurred by the appellant’s with respect to subsection (e) should be ordered against the respondent in these circumstances. [66] In terms of s 171(2)(f) I note Judge Rackemann in the M2 Property Group case considered this question in terms of a similar provision in the Integrated Planning Act 1997. His Honour accepted that not discharging responsibilities for an appeal is a wider concept than simply being in default of the court’s procedural requirements which are already covered under another subsection in the Act. [67] In Chrismel17 the Land Appeal Court found that a similar provision in the Water Act 2000 (s 882(4)(g)) can be extended to a wide variety of unmeritorious conduct such as the presentation of irrelevant evidence or the raising of plainly unarguable matters. [68] In Reed18 the President considered Rule 5 UCPR in determining that the appellant had not properly discharged his responsibilities in the appeal and awarded costs in an interlocutory matter. In that case her Honour found that a party had breached its responsibilities to proceed in an expeditious manner. [69] The amendment or disclosure that the civic square ground of appeal is in issue, was properly made. It should be made so the appellant knows the case against it, and what it must prove at the hearing. [70] It is unknown when the respondent became aware that the civic square ground of appeal may not be available to the appellant. Regardless the amendment appears to have been made at an early stage of the proceedings, given the proceedings were held in abeyance for several months. [71] In these circumstances I am not convinced that the respondent’s amendment to its statement amounts to unmeritorious conduct or that it has not properly discharged its responsibilities for the appeal. Costs of the hearing on 2 September 2015 [72] Given that the appellant’s application for costs in relation to the amendment must fail, it stands to reason that the appellant is not entitled to its costs with respect to the 2 September 2015 costs hearing. [73] However is the respondent entitled to its costs of preparing for and attending at this hearing? The respondent submits the costs application by the appellant was baseless. [74] To obtain its costs the respondent needs to show that one of the subsections to s 171(2) LVA is applicable and I should exercise my discretion to award costs in its favour. The only limb that appears possible is subsection (a) which would require a finding that the appellant’s costs application was frivolous or vexatious. 17 At [50]. 18 At [36]. -- 11 of 13 -- 12 [75] In Kent Street the Land Appeal Court19 held that frivolous or vexatious conduct is characterised by a lack of seriousness or sense, not worthy of serious consideration, or bringing about serious and unjustified trouble or harassment. [76] In Reed v QCoal Sonoma and Ors20 the Land Appeal Court21 considered a costs application on the basis of whether there had been frivolous or vexatious conduct under s 882(4)(b) WA (similar to s 171(2)(a) LVA). [77] The Land Appeal Court confirmed that the words frivolous or vexatious in these circumstance should be given their normal meaning. For example a party relying upon groundless assertions and putting parties to serious and unjustifiable trouble can be sufficient. [78] Also the Land Appeal Court favourably noted the Trial Member’s reliance on the Court of Appeal case of Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council.22 In that case, Chesterman JA, with whom McMurdo P and Philippides J agreed, said:23 “… a proceeding will be frivolous if it lacked substance, so there was no reasonable basis for starting it so that its prosecution produced unjustified trouble for the other party.” [79] The Land Appeal Court accepted the Trial Members view of frivolous and vexatious and when costs under that heading should be made:24 “The Court must consider the totality of the ordinary meanings of the words ‘frivolous or vexatious’ and do so in the context of the facts of the present case. It must be borne steadily in mind that there is no punitive element in an award of costs but they are to indemnify a successful party for the expense to which they have been put. It is important that the starting point is that set out in s 882(3) of the Act, that each party must bear their own costs. The discretion in s 882(4) is enlivened once it is shown that the appeal, or part of it, was frivolous or vexatious.” [80] The starting point for any costs order under the LVA is s 171(1): that is, each party bears their own costs. To enliven a costs order for frivolous or vexatious conduct much more than a lack of success needs to be shown. [81] In this application for costs the appellant was not successful but I am not convinced that its application lacked substance, seriousness or sense, or relied upon groundless assertions, or put the respondent to serious and unjustified trouble in responding to it. Having carefully considered this matter, I see no reason to depart from the starting point regarding costs in s 171(1) LVA, that each party bears their own costs. 19 At [20]. 20 [2014] QLAC 8. 21 From [11]. 22 (2011) QCA 15. 23 At [7]. 24 Reed at [14]. -- 12 of 13 -- 13 Orders 1. The appellant’s application for costs of and incidental to dealing with the respondent’s amended Statement of Facts, Matters and Contentions is refused. 2. Each party bear their own costs of and incidental to the 2 September 2015 hearing before the Land Court. PA SMITH MEMBER OF THE LAND COURT -- 13 of 13 --