APT Petroleum Pipelines Pty Ltd v Western Downs Regional Council (No 2) [2014] QLC 27

LAND COURT OF QUEENSLAND CITATION: APT Petroleum Pipelines Pty Limited v Western Downs Regional Council (No. 2) [2014] QLC 27 PARTIES: APT Petroleum Pipelines Pty Limited (appellant) v Western Downs Regional Council (respondent) FILE NOS: LGR023-13 LGR027-13 LGR028-13 LGR029-13 LGR030-13 DIVISION: General Division PROCEEDING: Application for costs DELIVERED ON: 14 August 2014 DELIVERED AT: Brisbane HEARD ON: Written submissions finalised on 4 July 2014 HEARD AT: Brisbane MEMBER: WA Isdale ORDER: The respondent pay the appellant’s costs of and incidental to these proceedings from 21 June 2013 onwards only, on the standard basis, such costs to be agreed or, failing agreement, to be assessed. CATCHWORDS: Land Court Act 2000, ss 7B, 34 Uniform Civil Procedure Rules 1999, Chapter 17A Costs Affinity Property Group Pty Ltd & Ors v Fraser Coast Regional Council [2011] QLC 70 APT Petroleum Pipelines Pty Limited v Western Downs Regional Council [2014] QLC 18 Barns v Director-General, Department of Transport (1997-1998) 18 QLCR 133 Beoco Ltd v Alfa Laval Co Ltd & Anor [1995] QB 137 -- 1 of 9 -- 2 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 4) (2010) 31 QLCR 141 Capolingua Pharm v Phylum Pty Ltd (1991) 5 WAR 137 Harrington v Greenwood Grove Estate Pty Ltd (No 2) [2011] NSWSC 1598 Hegira Limited v Department of Natural Resources and Water [2006] QLC 79 Legend International Holdings Inc v Taylor Ali Awaditijia & Anor (No 2) [2014] QLC 24 Middleton v Frier & Ors (1958) QdR 351 Monier Ltd v Metalwork Tiling Co of Australia Ltd (No. 2) (1987) 43 SASR 588 Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) [2014] QLAC 5 [12] Seachange GC Pty Ltd v Chief Executive Officer, Gold Coast City Council [2010] QLC 113 Townsville City Council v Moyses & Ors (1979) 6 QLCR 271 APPEARANCES: RN Traves QC instructed by King & Wood Mallesons for the appellant King and Company solicitors for the respondent Background [1] On 17 March 2014 this Court sat at Dalby and heard five appeals by the appellant (APT) against the respondent’s decisions to categorise parcels of its land for the purpose of levying rates. On 14 May 2014 the Court gave its decision allowing all of the appeals and setting a timetable for the making of any submissions as to the costs of the appeals.1 [2] On behalf of the appellant an order has been sought in the following form: Pursuant to s 34 of the Land Court Act 2000 it is ordered that the respondent pay the appellant’s costs of in (sic) incidental to the proceeding on the standard basis, to be assessed, pursuant to Chapter 17A of the Uniform Civil Procedure Rules 1999. No doubt it would be intended that costs “of and incidental …” are being sought. [3] The submissions on behalf of the respondent urge that the order instead be in this form: 1. The respondent pay the appellant’s costs of an (sic) incidental to these proceedings from 21 June 2014 (sic) onwards only, on the standard basis, to be assessed. It is clear from the submissions and the very date itself, that the year intended to be referred to must be 2013. 1 APT Petroleum Pipelines Pty Limited v Western Downs Regional Council [2014] QLC 18. -- 2 of 9 -- 3 The law [4] The only relevant statutory provision is s 34 of the Land Court Act 2000 which is in the following form: “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.” [5] The learned President recently considered s 34 in Legend International Holdings Inc v Taylor Ali Awaditijia & Anor (No 2).2 At [8] the learned President said: “The power of the Land Court to award costs under s 34 extends to the hearing of objections to a draft environmental authority as there is no other Act to the contrary. It has been held that the discretion granted to the Land Court by s 34(1) is not to be exercised arbitrarily, but judicially, for reasons that can be considered or justified. While not determinative, the outcome of the proceeding is a significant factor influencing the exercise of discretion to award costs.” [references omitted] [6] In Townsville City Council v Moyses & Ors3 the Land Appeal Court quoted with approval the words of Philp J in Middleton v Frier & Ors where His Honour, referring to authority, said: “It has been held again and again that where an unfettered discretion is given by statute or a rule no court can by its decision impose conditions upon the free exercise of that discretion by another court, …4 [7] The Court has an unfettered discretion with regard to costs orders under s 34.5 As the Land Appeal Court said in Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2):6 “It has been held on many occasions that the discretion to award costs granted by s 34 is unfettered but that the discretion is to be exercised judicially, that is for the reasons that may be explained and substantiated. However it has also been recognized by the Land Appeal Court that although the discretion to award costs is unfettered, the rule that costs follow the event may inform the exercise of the discretion granted under s 34(1), ‘as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others.’” [references omitted] Submissions on behalf of the appellant [8] The submissions for the appellant are that s 34 in its current form is applicable for present purposes and that the discretion, while unfettered, must be exercised judicially. It was correctly submitted that costs are ordinarily to compensate the successful party for 2 [2014] QLC 24. 3 (1979) 6 QLCR 271, 274. 4 (1958) QdR 351, 357. 5 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 4) (2010) 31 QLCR 141. Amendment of section 34 subsequent to that decision has not affected the viability of this conclusion. The amendment removed some machinery provisions for enforcing orders. 6 [2014] QLAC 5 [12]. -- 3 of 9 -- 4 the expense incurred and are not punitive. The Court must consider each case on its merits and the rule that costs follow the event is not automatically applied but is deeply embedded in our law.7 [9] Reference was made to the decision of Member Smith in Affinity Property Group Pty Ltd & Ors v Fraser Coast Regional Council8 where His Honour accepted submissions that the general rule is that a successful party should be compensated in respect of costs.9 Attention was also drawn to the decision of this Court in Hegira Limited v Department of Natural Resources and Water10 where the Court stressed that in cases such as this any orders for costs are not a punishment.11 [10] The appellant seeks the order for which it contends on the bases that: i It was wholly successful in all appeals. ii The Court changed the rating categories in all cases to those claimed on behalf of the appellant in its Statement of Facts and Contentions which was “filed and served” on the respondent on 21 June 2013, a period of nine months prior to the hearing. iii There is no reason for costs not to follow the event. iv The respondent continued to maintain its position after being informed by the Statement of Facts and Contentions on 21 June 2013. v It was necessary for the conduct of the appeals that preparation occur and that the appeals were conducted efficiently. vi The appellant was put to expense due to the respondent’s error in each case. The respondent’s submissions in reply [11] The submissions made on behalf of the respondent are that the Court has power under s 34 of the Land Court Act 2000 to award costs in these proceedings. It also submitted that, notwithstanding the breadth of the Court’s discretion, costs typically follow the event, the successful party being awarded costs. [12] The respondent submits that costs should be limited to the period after 21 June 2013 when the appellant first contended that the rating categories for the land should be those which the Court accepted were correct. It is submitted that prior to 21 June 2013 the appellant contended that the land should be categorised differently to the position adopted from 21 June 2013. That change, it is submitted, is a material change of position and the appellant’s success was as a result of it. 7 Barns v Director-General, Department of Transport (1997-1998) 18 QLCR 133, 135. 8 [2011] QLC 70. 9 [2011] QLC 70 [24]. 10 [2006] QLC 79. 11 [2006] QLC 79 [7]. -- 4 of 9 -- 5 [13] It is submitted that on 22 October 2012 the appellant gave the respondent an objection notice claiming that the land should have been categorised as “General Rates Rural”. [14] On 22 January 2013 notices of appeal were lodged in each of the appeals with the category contended for being expressed as follows: “No Differential Code applies, or alternatively a category in Rate Code 3 ― Rural Group.” [15] The Court’s case management of these appeals included a review on 15 May 2013. At that review the learned President made orders for the progress of the appeals. The orders commenced with the following: 1. The appellant file and serve a statement of facts and contentions (in which it must nominate the specific alternate rating category to which it contends each of the subject lands belong) by 12 June 2013. [16] The transcript12 shows that at the review on 15 May 2013 the solicitor for the respondent referred to disclosure and a settlement conference having been completed and that the parties had conferred and agreed on a proposed order for further directions in each appeal. He handed a copy of that document to the Court. Except for the insertion of a further review date, the orders were made as per the draft.13 [17] The respondent submits that the appellant delivered its Statement of Facts and Contentions to it on 21 June 2013. It was filed in the Court on 11 July 2013. [18] In this statement the appellant changed its position to assert that the five parcels of land should be properly characterised as Industrial, Transport and Storage in the relevant former Shire or as rural purposes.14 This was further particularised to the categorisations which the Court subsequently found to be correct or, in the alternative, to “Small Rural” categorisations. [19] The appeal was actually conducted at the hearing on the basis that the rating categories should be those that were set out in that Statement as in the Industrial, Transport and Storage category.15 The alternative was not referred to. [20] The respondent submits that the Court has a wide discretion under s 34 to award costs and agrees with the appellant’s submissions that costs typically follow the event, with the relative success of the parties being an important consideration in the discretion to be exercised. This is balanced against other factors such as the conduct of the parties, each case being considered on its merits. 12 T 15/5/2013 1-2 L 35-45. 13 T 15/5/2013 1-4 L 30. 14 Statement of Facts and Contentions filed 11 July 2013 [51]. 15 Outline of Submissions on behalf of the appellant. Traves QC 17 March 2014, 23, 50, 69, 70. -- 5 of 9 -- 6 [21] Reference was made to the decision of the learned President in Seachange GC Pty Ltd v Chief Executive Officer, Gold Coast City Council.16 In that case the learned President said: “[14] The authorities are clear that s.34(1) of the Land Court Act confers an unfettered discretion on the Land Court in relation to the award of costs. The discretion is not to be constrained by the application of any preconceived rules or principles other than that the discretion is to be exercised judicially, that is by reference to relevant considerations. [15] The respondent’s success in the proceedings is a factor to be taken into account in exercising the Court's discretion under s.34(1). While the rule that costs follow the event is not automatically applied in this jurisdiction, the Land Appeal Court has recognized that it is one which is deeply embedded in our law. [16] However, the Court may also take into account the conduct of the proceedings by each of the parties. …” [references omitted] [22] In that case the respondent raised new reasons to support its categorisation decision at the hearing. On becoming aware of this the appellant discontinued the appeal. Each claimed to be entitled to costs of and incidental to the appeal. The respondent’s application for costs was refused and the respondent was ordered to pay 50% of the appellant’s costs of and incidental to the hearing of the appeal. The learned President said: “[19]I am satisfied that the respondent's late notification of the new basis of argument caused the appellant to pursue the appeal proceedings unnecessarily. I consider therefore that the respondent's conduct was such as to disentitle it from an award of costs in its favour. Accordingly, the respondent's application for costs is refused. Appellant's application for costs [20] Although I have accepted that the appellant was taken by surprise by the new arguments raised by the respondent at the hearing, I do not consider that that of itself points to an award of costs in favour of the appellant. [21] The appellant was always faced with the risks of litigation in bringing this appeal. There was no certainty that it would have succeeded in the appeal if the dispute had been confined to a challenge to the original reasons relied on by the decision- maker. Further, because the appeal involved a hearing de novo all relevant facts and circumstances were open for consideration by the Court, including those matters raised by the respondent at the hearing. Thus there is a degree of risk inherent in proceedings of this nature that new material will emerge which a Court must take into consideration in reaching its decision. [22] Those factors are to be weighed against the fact that the appellant incurred unnecessary costs in commencing and or continuing the appeal because of the respondent’s conduct of the proceedings. Taking all those factors into account, I consider that an award to the appellant of 50% of its costs is appropriate.” 16 [2010] QLC 113. -- 6 of 9 -- 7 [23] The respondent submits that the usual rule as to costs should be departed from in these appeals because the appellant only succeeded after it materially changed its position on 21 June 2013. If not for that, it is submitted, it would not have been successful. I particularly note the learned President’s words in [21] of the passage just quoted. [24] The respondent refers to Beoco Ltd v Alfa Laval Co Ltd & Anor where Stuart-Smith LJ said that: “As a general rule, where a Plaintiff makes a late amendment as here, which substantially alters the case the Defendant has to meet and without which the action will fail, the Defendant is entitled to the costs of the action down to the date of amendment.”17 [25] It is noted by the respondent that this has been followed in New South Wales18 and the respondent correctly acknowledges the distinction that there are not formal pleadings in the present appeals. [26] The respondent contends that the principle underlying the decisions to which reference has just been made is applicable in the present appeals and points out that the original objections contended that the land should be categorised in the “General Rates Rural” descriptor, whilst the Notices of Appeal claimed that no differential code applied or alternatively that rate Code 3 – Rural Group would be applicable. It was not until 21 June 2013 that the descriptors ultimately found to be applicable were included in the appellant’s case to the respondent’s knowledge. This results, it is submitted, in unnecessary costs in preparing to meet the case originally made. Further submissions from the parties [27] The parties requested that they be permitted to make further submissions. The Court received the appellant’s further submissions on 27 June 2014 and those of the respondent on 4 July 2014. The appellant’s further submissions [28] On behalf of the appellant it is submitted that the identification of the relevant category was not made at a late stage so the “general rule” referred to in Beoco Ltd v Alpha Laval Co Ltd & Anor19 would not apply, that being a case where the amendment was made on the first day of the trial. The submissions go on to address other cases referred to by the respondent. 17 [1995] QB 137, 154. 18 Harrington v Greenwood Grove Estate Pty Ltd (No 2) [2011] NSWSC 1598. 19 [1995] QB 137, 154. -- 7 of 9 -- 8 [29] In Seachange GC Pty Ltd v Chief Executive Officer, Gold Coast City Council20 the relevant submission was made on the day of the hearing and in Capolingua Pharm v Phylum Pty Ltd the amendments were made on the fourth and last day of the trial.21 [30] In Monier Ltd v Metalwork Tiling Co of Australia Ltd (No. 2)22 the relevant issue was raised on the trial date and in Harrington v Greenwood Grove Estate Pty Ltd (No. 2)23 the defendant’s amendment was not foreshadowed until a little over three weeks before the hearing, a time when it was not realistically open to the plaintiff to discontinue the proceedings. [31] The appellant submits that the position which it ultimately was successful with was identified in its Statement of Facts and Contentions nine months prior to the hearing. This indicating, it is submitted, that even if the point had been raised earlier, the appellant would have still had to proceed to the hearing in order to resolve the matter in its favour. It is clear, the appellant submits, that even if the amendment had been made earlier, the action would have still been resisted by the respondent.24 [32] The appellant also directs attention to the respondent’s duty to correctly apply its categorisations and submits that it should not be denied costs on what would effectively be the basis that it failed to identify the respondent’s precise error earlier than it did. The respondent ultimately failed to successfully defend its decision while endeavouring to the last to do so. The respondent’s further submissions [33] The respondent points out that in the appellant’s Statement of Facts and Contentions of 21 June 2013 it contended for the land being either in the category ultimately found or in the rural purposes categorisation and it was not until the delivery of the appellant’s outline of submissions at the end of the trial on 17 March 2014 that the alternative rural designation was actually abandoned as a potential finding. [34] The respondent submits that the cases to which it referred should not be so narrowly confined as to require a change of position at a hearing in order to justify a departure from the usual rule as to costs, the cases merely referring to a “late” change and each being the product of their own facts. It is submitted that the general rule referred to in Beoco Ltd v Alfa Laval Co Ltd & Anor25 is not limited to where an amendment is made at or shortly before a hearing. None of the other cases referred to by the respondent contain 20 [2010] QLC 113. 21 (1991) 5 WAR 137, 139. 22 (1987) 43 SASR 588. 23 [2011] NSWSC 1598. 24 Beoco Ltd v Alfa Laval Co Ltd & Anor [1995] QB 137, 154 citing Kaines (UK) Ltd v Osterreichische Warrenhandelsgesellschaft [1993] 2 Lloyd’s rep 1,9. 25 [1995] 1 QB 137. -- 8 of 9 -- 9 such a qualification and do not prevent the Court from exercising its discretion to make no order for costs prior to 21 June 2013. [35] It is submitted that in this case the unsuccessful respondent is not seeking an order that the successful party pay its costs prior to the change of position. The respondent is only asking that each party bear their own costs prior to 21 June 2013. Exercising the discretion [36] Taking into account everything which has been submitted by the parties, I note that the appellant has been wholly successful in all of the appeals on a basis which was made known to the respondent as one of two alternatives on 21 June 2013. Prior to that date the appellant while having commenced appeals which could theoretically have been successful had not articulated the basis upon which they were able to, and ultimately did, succeed. Once the appellant made the contention which included the correct categorisations on 21 June 2013, the respondent was able to focus on the relevant details of the disputes. The appellant had previously made a categorisation claim which was different and on 21 June 2013 changed its position in a real and substantial way. In all of the circumstances of this case the respondent’s liability for the costs of the appellant should begin when the appeals took the form which led to their success, as it is substantially different to the cases as previously made known to the respondent. Although the rural purposes categorisation remained open to the appellant it was not pursued and its continuing presence does not detract from the significance of the new contention made on 21 June 2013. Order The Court accepts that it is not necessary to refer in its Order to Chapter 17A of the Uniform Civil Procedure Rules 1999 as s 7B of the Land Court Act 2000 allows for enforcement of orders in the Supreme Court by filing them in that Court. The Order should be that the respondent pay the appellant’s costs of and incidental to these proceedings from 21 June 2013 onwards only, on the standard basis, such costs to be agreed or, failing agreement, to be assessed WA ISDALE MEMBER OF THE LAND COURT -- 9 of 9 --