Boyle & Anor v Townsville City Council [2003] QLC 16

LAND COURT OF QUEENSLAND CITATION: Boyle & Anor v Townsville City Council [2003] QLC 16 PARTIES: ME Boyle and the Estate of Ada Irene Power (claimants) v. Townsville City Council (respondent) FILE NO: A2001/0117 DIVISION: Land Court of Queensland PROCEEDING: Costs of and incidental to the hearing and determination of a claim for compensation DELIVERED ON: 11 March 2003 DELIVERED AT: Brisbane MEMBER: Mr RE Wenck ORDER: No order is made as to the costs of and incidental to the hearing and determination of the claim for compensation. CATCHWORDS: Costs – Acquisition of Land Act 1967 – Section 27. Costs – Discretion of Court – Relevant considerations – Legal principles. SOLICITORS: Wilson Ryan & Grose for the claimants Suthers Taylor for the respondent [1] Section 27 of the Acquisition of Land Act 1967 (the Act) relevantly provides: "(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 -- 1 of 6 -- 2 authority, costs (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority." [2] The amount of compensation finally claimed by the claimants in the proceedings was $689,457.18 comprising $675,000 for loss of land together with disturbance items. [3] The amount of the valuation finally put in evidence by the respondent constructing authority was $489,457.18 comprising $475,000 for loss of land together with disturbance items. [4] In a judgment delivered on 19 December 2002, compensation was determined in the amount of $511,957.18 comprising $497,500 for loss of land together with amount for disturbance items. [5] The amount of compensation as determined is nearer to the amount of the valuation finally put in evidence by the constructing authority. Pursuant to sub-s.(2) of s.27 of the Act, costs, if any, shall be awarded to the constructing authority. Relevant Background [6] The background to the matter as may be relevant to the submissions on costs is as follows:  The land was taken on 3 November 2000.  The respondent referred the action to the Land Court through an application dated 5 May 2001 seeking an order that compensation be determined in the amount of $345,000.  The Claim for Compensation in an amount of $675,000 for the land together with disturbance items was filed with the Land Court on 14 December 2001.  The matter was initially set down for hearing on 12 June 2002 but the hearing date was then amended to 9 July 2002.  Experts' reports were exchanged on 18 June 2002.  The claimants' valuation of the land remained unaltered.  The respondent's final valuation of the land was increased from $345,000 to $475,000. The Respondent's Submissions [7] Included in the respondent's submissions are the following observations and contentions:  The amount of compensation awarded was:  comprehensively in accordance with the amount contended by the respondent since 18 June 2002;  not a substantial increase on the amount contended.  The Claimants did not have sufficient grounds to maintain their contended claim since the receipt of the respondent's increased valuation on 18 June 2002. -- 2 of 6 -- 3  The amount contended by the claimants was so high as to make litigation unavoidable whereas the respondent's valuation was revised upon receipt of further evidence.  The conduct of the claimants, in pursuing the exorbitant and exaggerated claim, unreasonably and unnecessarily forced the respondent to Court to have compensation determined.  There has been no action by the respondent or suggestion that the respondent behaved in any manner which should or would deny the respondent being awarded costs.  The appropriate exercise of the Land Court's discretionary power would result in an award of the respondent's costs calculated in accordance with the Supreme Court Scale of Costs:  from 25 June 2002, being one (1) week after the claimants were given notice of the final valuation of the land and such costs should include:  the respondent's costs and outlays of preparation for trial by the respondent from 25 June 2002; and  the respondent's costs and outlays for the duration of the trial. Claimants' Submission [8] Included in the claimants' submission were the following observations and contentions:  Their valuation had been well researched and prepared, took into account the advice of professional experts and was not one which could be described as lacking merit or as being frivolous and/or vexatious.  There was no undue delay or otherwise dilatory behaviour on the part of the claimants in the prosecution of their claim.  Considerable sums of money had been outlaid in preparation for the hearing on the expectation of meeting a case based on the respondent's position up until the exchange of valuations that the correct level of compensation for the land was $345,000.  Many findings in the Reasons for Judgment were not entirely inconsistent with matters contended by them.  Although the claimants' town planning evidence was not finally accepted by the Court, it could not be said that the case contended by them lacked creditability.  With the difficulty involved in the analysis of comparability of the sales evidence with the land taken, there was inevitably room for disagreement between the valuers.  Their valuer's approach was not so wrong as to be unarguable, despite the preference for the respondent's valuer's evidence in the Reasons for Judgment.  Having regard to legal principles and factual matters the claim should not be categorised as being exorbitant or grossly exaggerated and that on an objective overview of the totality of the evidence, the claimants' position was an understandable one.  While the amount of compensation determined is, in percentage terms, a relatively small amount in excess of the respondent's valuation, the additional amount of $22,500 is not so small as to be of little or no consequence. -- 3 of 6 -- 4 Legal Principles [9] Both sides in this matter have referred to the findings in Yalgan v Shire of Albert (1997- 1998) 17 QLCR 401 in which matter the Land Appeal Court considered the leading decisions relevant to the scope and exercise of the Land Court's discretionary power. The Land Appeal Court set out in summary form 11 propositions ((a) to (k) at pp.406, 407) for which the judgments and s.27 of the Acquisition of Land Act stand. Of those propositions, of particular relevance in this matter are seen to be propositions (e), (f), (h), (i), (j) and (k) which are repeated as follows: "(e) Compulsory acquisition cases differ from ordinary claims in the significant respect that the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not. The mere acquisition by compulsory process gave the claimant a claim to compensation which he or she could hardly be expected to renounce (Minister for the Environment v Florence (1980-81) 45 LGRA 127 at p.149, Banno& Anor v Commonwealth of Australia (1993) 81 LGERA 34 at p.53). (f) The discretion whether to award costs may not be exercised in an arbitrary manner but must be exercised on principled grounds (Banno at p.53) or judicially, that is, for reasons that can be considered and justified (Wyatt v Albert Shire Council [1987] 1 QdR 486 at p.489) by reference to relevant considerations (Moyses & Ors v Townsville City Council (1979) 6 QLCR 271 at p.273). (h) In general, a party who is wholly successful in litigation can expect an order for costs in his favour. Where compensation is awarded to one who had already been given, by statute, the right to receive it, it is just to say 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. But costs are discretionary and no hard and fast rules 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. In some cases, the Land Court may consider that there are sufficient reasons for departing from the general rule (Moyses at p.278, Florence at pp.149- 50). (i) Although the exercise of the power does not exclude resort to the 'settled practice' of a court where such a practice has evolved, a purported exercise of discretion which fails because the mind is closed to relevant considerations through a rigid adherence to preconceptions involves an error of law that is open to correction on appeal (Wyatt at p.489). (j) Section 27(2) of the Acquisition of Land Act 1967 should not be regarded as a legislative suggestion that, where the claim is substantially more than the amount awarded, and the amount put in evidence by the constructing authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding any costs to the claimant but should award costs to the authority (Moyses at p.274). (k) Where the Land Court is considering whether it should award costs to a constructing 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. Usually it would be more relevant to enquire whether the -- 4 of 6 -- 5 conduct of the claimant (such as, for example, making an exorbitant claim) has been such as to force the authority, unreasonably and unnecessarily, into litigation (Moyses at p.274) or whether the claimant has pursued a vexatious, dishonest or grossly exaggerated claim or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court (Banno at p.53)." Relevant Considerations [10] The Claim for Compensation was prepared after professional investigation and reflected, in monetary terms, the outcome of those investigations. The primary issue between the parties in the first instance was the highest and best use potential of the land. The zone within which the land was included in the transitional planning scheme, which was described by the claimants as the result of a "conscious and deliberate decision" by the respondent Council, would have been expected to provide a higher and better use than was then indicated in the relevant Development Control Plan and Strategic Plan, on the respondent's interpretation. The determination of the Court was influenced by, but not entirely dependent on, the respondent's opinion as to the likely outcome of an application for reconfiguration of the land. A reconfiguration option, raised by the claimants – ie group title subdivision – was seen as an alternative potential development opportunity, although not on the concept which formed the basis of the claimants' valuation. [11] The difficulty facing the Court in matters where highest and best use considerations are dependent on town planning considerations, but that potential use has not been proved one way or another, is that it is the marketplace perception of potentiality which is determinative of market value. The Court must "do the best it can" in interpreting that perception based on the evidence before it. [12] It follows that just as a claimant would hardly be expected to renounce a claim for compensation, it should not be seen, in my opinion, as unreasonable for the claimant to claim compensation based on optimistic expert opinion as to the unproved potential. [13] In this matter, the result was that the claimants were unable to persuade the Court that their optimism was a reflection of the marketplace perception, but even if it had been, the result on a proper interpretation of the Reasons for Judgment, would unlikely have been a wholly successful claim, in monetary terms. Nevertheless, while "optimistic" both in terms of potential and market value, I have not been persuaded that the claim should be categorised as "exorbitant" or "grossly exaggerated". [14] There has been no suggestion by the respondent that the claimants pursued a vexatious or dishonest claim. However it is suggested, by implication, that in not accepting the significantly increased valuation which was finally placed before them, the claimants had presented their case in such a way as to impose unnecessary burdens on the constructing -- 5 of 6 -- 6 authority and/or the Court. It is contended by the respondent that the original claim as maintained by the claimants was so high as to make litigation unavoidable and in pursuing the "exorbitant and exaggerated claim ... unreasonably and unnecessarily forced the respondent to Court". [15] It seems to me that while the conduct of the respondent in having its valuation reviewed reflected a prudent approach, the result then demonstrated that the claimants' initial decision to prosecute their claim was vindicated. The decision to continue with the prosecution of the claim was further vindicated by a not insignificant in monetary, if not percentage, terms, increase above the respondent's valuation being achieved. I am not persuaded that the conduct of the claimants alone unreasonably or unnecessarily forced the respondent to Court. [16] In my opinion this is an example of a situation to which the Land Appeal Court made reference, first in Moyses at p.274 and as observed in Yalgan in propositions (j) and (k). [17] The claimants were successful in receiving an award greater than the respondent's valuation but are denied by the legislature the opportunity of having the costs of achieving that result reimbursed. There is no justification on my consideration of either legal principles or the facts in this matter seen to be relevant, to have that award of compensation further eroded by an order to pay the respondent's costs or any part thereof. Order In exercising the Court's discretion the application by the respondent for its costs is disallowed and no order as to costs is made. RE WENCK MEMBER OF THE LAND COURT -- 6 of 6 --