Drovandi v North Burdekin Water Board [2006] QLC 62

LAND COURT OF QUEENSLAND CITATION: Drovandi v North Burdekin Water Board [2006] QLC 62 PARTIES: Grazia Drovandi and Grazia Drovandi as personal representative (claimants/applicants) v. North Burdekin Water Board (respondent) FILE NO.: A2004/0099 DIVISION: Land Court of Queensland PROCEEDING: An application for costs of and incidental to the determination and hearing of a claim for compensation under the Acquisition of Land Act 1967 DELIVERED ON: 27 September 2006 DELIVERED AT: Brisbane HEARD BY: Written submissions MEMBER Mr JJ Trickett, President ORDERS: 1. The application is dismissed. 2. The claimants/applicants pay the respondent's costs of this application. CATCHWORDS: Costs – Compulsory acquisition of land – Compensation – fettered discretion of Land Court to award costs – Whether compensation closer to amount claimed – Respondent contended no compensation payable – Acquisition of Land Act 1967 s.27. SOLICITORS Ruddy Tomlins and Baxter for the claimants/applicants Dickinson Simeoni and Robins for the respondent [1] This is an application for costs by the claimants/applicants arising from the hearing and determination by the Land Court of a claim for compensation following the taking of an -- 1 of 6 -- 2 easement over land in which the claimants/applicants had an estate or interest, by the North Burdekin Water Board (the respondent) under the provisions of the Acquisition of Land Act 1967 (the Act) for purposes of channel construction. Background: [2] On 26 March 1999, the respondent resumed an easement with an area of 1.23 ha for construction of an irrigation channel, over an area of the claimants'/applicants' land which was burdened by four easements for drainage purposes. The claimants/applicants initially claimed compensation of $86,025.00. However, during the proceedings, the claimants/applicants sought and were granted leave to amend the claim to $237,880.00. The Land Court determined compensation at $27,880. [3] On the other hand, the respondent contended that the value of the claimants'/applicants' remaining land was enhanced by the construction of the irrigation channel, so that no compensation was payable and the amount of the valuation put in evidence by the respondent was nil. [4] The claimants/applicants now seek an order that the respondent pay the claimants'/applicants' costs of and incidental to the proceedings and of this application. The respondent argues that it is not liable to pay costs of the proceedings or of this application. The Power of the Land Court to Award Costs [5] The general power of the Land Court to award costs is contained in s.34(1) of the Land Court Act 2000, which 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." [6] However, in cases involving the determination of compensation under the Act, that discretionary power is restricted. Section 27 of that Act provides: "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 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)." The Claimants'/Applicants' Argument -- 2 of 6 -- 3 [7] The claimants/applicants contend that they were forced into litigation by the respondent who steadfastly maintained that no compensation was payable. They argue that because of the respondent's intransigent position, if they had wished to recover even nominal compensation, they could have done so only by pursuing their claim before the Court. [8] They submit that it is not the intention of the legislation for claimants who pursue their claims in such circumstances, to be refused their costs of doing so. They contend that the award of compensation made by the Court is nearer to the amount claimed by them, because the resuming authority made no offer at all. Any other interpretation, they argue, would mean that where a resuming authority refused to pay any compensation, a claimant seeking even a modest amount would be faced with the prospect of litigation to recover compensation, without having the opportunity to consider a reasonable offer. The necessity for them to litigate in this case, they claim, was brought about by the robustly negative conduct of the respondent. [9] In support of their argument, the claimants/applicants rely on the decision of the Land Appeal Court in Moyses & Ors v Townsville City Council (1979) 6 QLCR 271, particularly at 273: "The general rule, then, is that costs are in the discretion of the Court, but of course the discretion must be exercised judicially, that is, by reference to relevant considerations. Subject to that, the only restriction on the manner of exercise of the Land Court's discretion is that contained in sub-section (2) of section 27." [10] Also at p.274 the Court said: "… where the Court is considering whether it should award costs to an authority, it could be wrong to have regard merely to the amounts of the claim and of the award and of the value put in evidence by the authority. We would think that usually it would be more relevant to enquire whether the conduct of the claimant, including his making an exorbitant claim, if he has made one, has been such as to force the authority, unreasonably and unnecessarily, into litigation." [11] The claimants/applicants submit that it is they who were forced unreasonably and unnecessarily to pursue litigation to obtain the compensation which was properly payable to them, because of the attitude adopted by the respondent. [12] The claimants/applicants also rely upon the statements of Wells J in Minister for the Environment v Florence (1980-81) 45 LGRA 127, at 149 - 150: "Compulsory acquisition cases differ of course from ordinary claims dealt with in the general jurisdiction in one significant respect: the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not; the mere acquisition by compulsory process gave him … a claim to compensation which he could hardly be expected to renounce. Upon an ordinary claim in the general jurisdiction it is, generally speaking, obvious who has won and who has lost, and correspondingly clear why costs usually follow the event. Upon a claim for compensation for land compulsorily acquired, it is not, generally speaking, appropriate to speak of one party as having won; compensation is awarded to one who had already been given, by statute, the right to receive it. It is therefore as just -- 3 of 6 -- 4 to say of the latter sort of case that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation that is, ex hypothesi, his due, as it is to say of the former sort of case that prima facie costs follow the event in favour of the party who has won. But costs are, as always, discretionary, and no hard and fast rule will ever be allowed to occupy part of an area controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases." [13] The claimants/applicants submit that they were successful in terms of s.27(2) and the Court should exercise its discretion in their favour by an award of costs. They contend that to do otherwise may encourage a culture among resuming authorities to adopt an intransigently rigid attitude in not making any offer to settle claims, thereby forcing aggrieved claimants into pursuing lengthy, expensive litigation. The Respondent's Argument [14] The respondent denies that it is liable to pay costs of the proceedings or of this application. In the respondent's submission, the issue is whether the amount of compensation determined by the Land Court is nearer to the amount of the valuation finally put in evidence by the respondent or the claimants/applicants. The respondent argues that where a constructing authority contends that the value of land was enhanced, the amount of the valuation put in evidence by that constructing authority is nil. A nil amount which is still an amount which can be used to determine which party was nearer the amount awarded by the Court: Commissioner for Railways v Buckler [1996] 1 QdR 18. [15] The respondent points out that in this case the claimants/applicants initially claimed compensation of $86,025, but were later granted leave to amend the claim to $237,880. The amount put in evidence by the respondent was nil, as the respondent contended that the claimants'/applicants' remaining land had been enhanced. Therefore, the amount of $27,880 awarded by the Court is nearer the amount of nil contended for by the respondent. In the circumstances, it was submitted, the Court is prohibited from making an award of costs in favour of the claimants/applicants and may make an award only in favour of the respondent. Conclusion [16] The issue in this case is whether or not costs of and incidental to the hearing and determination by the Land Court of the claim for compensation should be awarded to the claimants/applicants. However, the discretion of the Court to award costs is limited by subsection (2) of s.27 of the Act. If the amount of compensation determined is nearer to the amount finally claimed by the claimants/applicants than the amount finally put in evidence by the constructing authority, costs can be awarded to the claimants/applicants, otherwise costs can be awarded to the constructing authority. -- 4 of 6 -- 5 [17] There is no doubt about the amount finally claimed by the claimants/applicants. That amount is $237,880. However, there is an issue as to the amount of the valuation finally put in evidence by the constructing authority. The claimants/applicants contend that no amount was put in evidence by the constructing authority, while the respondent contends that the amount was nil. [18] For the claimants/applicants to succeed, they must demonstrate that nil is not an amount which the Court can have regard to for the purposes of s.27(2) of the Act. [19] However, that was the very issue before the Court of Appeal in Commissioner for Railways v Buckler. In that case, the amount finally claimed by the claimant in the proceedings was $3.2 million. Because the constructing authority contended that the claimant's balance land was enhanced to the extent of $2 million, it was argued that the valuation finally put in evidence by the constructing authority was minus $2 million. The amount of compensation determined by the Land Court was $1,474,250. [20] The argument before the Court of Appeal was whether the amount determined by the Land Court was closer to the claimant's figure or the constructing authority's figure. If the enhanced value was taken into account, the amount determined by the Land Court was closer to the claimant's figure and the costs of the Land Court proceedings could be awarded to the claimant. If, on the other hand, as contended for by the constructing authority, the figure was nil and not the enhanced figure of $2 million, compensation awarded by the Court was closer to that figure and costs could be awarded to the constructing authority. [21] The Court of Appeal found that the expression "valuation" in s.27(2) of the Act refers to the constructing authority's assessment of the compensation payable, which in the ordinary way will be contained in a valuation report put in evidence in the proceedings. In that case, the amount payable contended for by the constructing authority, was the valuation finally put in evidence as nil. Therefore, the Court of Appeal found that the amount was nearer to the award of the Land Court than the amount of $3.2 million claimed by the claimant. Therefore, s.27(2) operated in that case to authorise an award of costs in favour of the constructing authority, and not the claimant. [22] In the present case, Mr Honnef, the valuer for the claimants/applicants, in both valuation reports (Exhibits 24 and 25), concluded that no compensation was payable and assessed compensation as "Nil". Therefore, adopting the reasoning of the Court of Appeal in Buckler, the amount determined by the Land Court is nearer to that amount than the amount of $237,880 finally put in evidence by the claimants/applicants. In such -- 5 of 6 -- 6 circumstances, by virtue of s.27(2) costs cannot be awarded to the claimants/applicants, but can be awarded to the respondent. [23] However, the respondent does not seek costs for reasons similar to those expressed by the Land Court in Robertsons Furniture and Design (Qld) Pty Ltd v Department of Main Roads [2005] QLC 0025 and the cases cited therein. Under s.27(2) of the Act, the respondent is the only party in whose favour a costs award can be made. Therefore, the claimants/applicants have no claim for an award of costs and their application must be dismissed. [24] In respect of the costs of this application, the respondent submits that the law is clear and the claim for costs brought by the claimants/applicants is unmeritorious and wasteful and that in the circumstances, costs of this application should be awarded to the respondent. I agree with that submission. Orders: 1. The application is dismissed. 2. The claimants/applicants pay the respondent's costs of this application. JJ TRICKETT PRESIDENT OF THE LAND COURT -- 6 of 6 --