Department of Natural Resources and Mines v Grohuni Pty Ltd [2003] QLC 13

LAND COURT OF QUEENSLAND CITATION: Department of Natural Resources and Mines v Grohuni Pty Ltd [2003] QLC 13 PARTIES: Chief Executive, Department of Natural Resources and Mines (applicant) v. Grohuni Pty Ltd (respondent) FILE NO: AV2002/0440 DIVISION: Land Court of Queensland PROCEEDING: Application for Costs consequent upon an appeal against an unimproved valuation being dismissed for want of prosecution. DELIVERED ON: 7 March 2003 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr RE Wenck ORDER: It is ordered that Grohuni Pty Ltd pay to the applicant Chief Executive, Department of Natural Resources and Mines the amount of Six Hundred and Eighty Dollars ($680) being for costs thrown away as a consequence of an appeal being dismissed for want of prosecution and the costs of this application. CATCHWORDS: Land Court Rules 2000 – Application granted for appeal to be dismissed for want of prosecution – Other option available to Court – Costs consequent upon an appeal being dismissed. Land Court Rules 2000 - Obligatory serving and filing of expert evidence. Costs – What constitutes costs "thrown away" – Basis of valuation – Not disturbed in result – Conduct of appellant considered. -- 1 of 9 -- 2 Costs – Claim based on costs of outsourcing legal services or cost to client of valuation services – Basis disallowed – Actual cost to respondent considered for in- house services. COUNSEL: Mr R Paterson, Principal Legal Officer, for the Chief Executive as applicant – written submissions Written responses from respondent to application. [1] Grohuni Pty Ltd is the registered proprietor of land in the Dunbulla locality north-east of Yungaburra in the Shire of Atherton. [2] An unimproved valuation of the land, as at 1 October 2001, was made by the applicant in this matter, in the amount of $52,000. [3] Grohuni Pty Ltd filed in the Land Court a Notice of Appeal against that valuation. [4] The matter was set down for hearing at the Atherton Court House at 10 a.m. on 26 November 2002. [5] On the morning of that day, prior to the matter being called on, a facsimile transmission from Dr RJ Davis, Managing Director of the appellant company, was received by the Court. The contents of that advice as are relevant to the application were as follows: "I must apologise for not being able to attend the Court for my appeal against the land valuation for the farm. Unfortunately, I have to work this morning, as you doubtless realise the remuneration for country practitioners is not great and I cannot afford to take time off." [6] There was no suggestion that the appeal was sought to be discontinued, and the balance of the communication pointed out matters which Dr Davis saw as relevant to the appeal against the unimproved value of the land. [7] Counsel for the chief executive, as the respondent in the appeal proceeding, was apprised of the contents of the communication immediately prior to the appeal being called on for hearing. [8] When the matter was called on at the appointed time, the facsimile transmission was received by the Court as an exhibit. An application was made by counsel for the chief executive for an order that the appeal be dismissed for want of prosecution. That application was granted. [9] Counsel for the chief executive then made application for an order for the chief executive's costs "thrown away". Leave was granted for a written submission to be made in support of that application and for a written response to be provided on behalf of the appellant. -- 2 of 9 -- 3 [10] The written submission was duly received followed by a response from Dr Davis which enclosed a cheque for the amount claimed, drawn in favour of the Registrar, Land Court of Queensland, "as per your instructions". The response included a statement that Dr Davis, a medical practitioner at Gordonvale, "did not book in any patients to be seen after 9 a.m. and until then I fully intended to attend the Court. That morning I was inundated with calls from patients, most of whom thought they were acutely ill. Under the circumstances I considered (wrongly in the Court's opinion) that my primary obligation was to my sick patients", thirty-two of whom "were seen that day". [11] There was clearly a misunderstanding of the intended process and the fact that no order was to be made until a response to the written submission by the applicant was received. The cheque was returned to Dr Davis. He was advised that his letter with the enclosed cheque was not deemed to be a formal written response but indicative of his misunderstanding of his right to respond after his consideration of the application, together with the quantum of the claim. The period within which to file and serve a written response was extended accordingly. [12] Within the extended period two further letters were filed with the Court by Dr Davis. One reiterated part of the contents of the earlier response as quoted above in this decision, with further apologies for the non-attendance and explanation that there had been no intention to ignore and disregard the instructions of the Court. The second letter raised matters regarding the unimproved valuation of the land which may have been relevant had the appeal been prosecuted and not dismissed for want of prosecution, but not relevant to the application for costs now before the Court. As to the quantum of the claim the single reference in response was as follows: "It does seem to me to be unfair that the government valuer should be charged out for some 46¼ hours to do a valuation at commercial rates; this appears to be at a much greater rate than he would have been paid." [13] The chief executive's reply to that observation was that the hourly rate claimed for the valuer "was determined in accordance with the scale of fees charged by the State Valuation Service for client valuation work" and that the hourly rate claimed for counsel Mr Paterson who is a principal legal officer in the employ of the chief executive "equates the Crown law fee for a principal legal officer for 'Tied Work'." [14] The written submission for the chief executive had raised, inter alia, the following points:  Dr Davis advised the Court shortly before the hearing was set down to commence that he would not be appearing because of work commitments.  No prior indication of any intention not to prosecute the appeal had been given to the chief executive and no notice of discontinuance had been served under Rule 16 of the Land Court Rules 2000. -- 3 of 9 -- 4  The chief executive's counsel and valuer had prepared for the appeal on the understanding that the hearing would proceed.  In the result the costs incurred in such preparation were thrown away. [15] The claim is in the amount of $4,660.88, calculated as follows: Counsel: ¼ share of air fare $228.03 ¼ share of travelling expenses $139.10 Time – including reading valuer's report and valuation, conferring with valuer and share of travelling time – 5 hours @ $165.00 per hour $825.00 $1192.13 Valuer: Time – including preparation of report and valuation, and attending to filing and serving same, necessary re-inspections of subject and sale properties, telephone calls, and conferring with counsel – 46.25 hours @ $75 per hour $3468.75 Total Counsel and Valuer $4660.88 [16] Pursuant to s.34 of the Land Court Act 2000, the Land Court may order costs for a proceeding in the Court as it considers appropriate. [17] The submission by the chief executive relies on the general rule that costs will usually follow the event as discussed by the Land Appeal Court in Barns v Director-General, Department of Transport (1997-98) 18 QLCR 133 at 135, including an event in the Land Court, subject of course to the provisions of an Act to the contrary. [18] There is no fetter in the provisions of the Valuation of Land Act 1944 to the discretion of the Land Court to award costs in an event other than a final determination upon an appeal. [19] As it appeared to the Land Appeal Court in WH Bowden v The Valuer-General (1980-81) 7 QLCR 138 at 145 – "the legislature intended to leave all questions of costs in the Court's unfettered discretion subject to the prohibition against granting costs to the party, whose valuation is nearer the valuation determined." The Court went on to say at p.146 – "We think in dealing with the question of costs, that it is an important consideration that there be ease of access to the Land Court and the Land Appeal Court." Then later – -- 4 of 9 -- 5 "That is not to say that, in a proper case, the Land Court or the Land Appeal Court will not award costs against either a citizen or an authority subject to the provisions of the Statute which governs the matter." [20] It is the chief executive's case that the conduct of the appellant in not proceeding with this appeal should lead to the conclusion that this is an example of "a proper case" for an award of costs. [21] It was further submitted that the history of events leading up to the date of hearing led the chief executive "to believe that the subject appeal would be proceeding and there is nothing in his letter to the Court on 26 November 2002, to indicate that an emergency situation had arisen which required his attention and which would prevent his attendance at Court." This is seen to be a correct interpretation of the relevant facts. [22] There is an inference in the contents of the communications received from Dr Davis that he may have expected that the matter would have proceeded, in his absence, to a final determination on the merits of the appeal. [23] The question arises as to what costs, if any, were thrown away through the want of prosecution. Had Dr Davis appeared in person as I accept he had intended to do, until virtually the last hour, and not been successful in convincing the Court that the valuation was wrong, then the valuation appealed against would stand as it does in any event. Had he been successful in the face of the case presented by the chief executive, then the valuation would have been altered. It would have been most improbable, depending on the hearing related conduct of the parties, in terms of the findings of the Land Appeal Court in Bowden (supra) that, regardless of the result there would have been any application or order for costs against either party. [24] Subrules (1) and (2) of Rule 23 of the Land Court Rules 2000, provide as follows: (1) A party who intends to call a person to give evidence as an expert witness must serve on each other party a statement - (a) giving the name and address of the witness; and (b) describing the witness' qualifications to give evidence as an expert; and (c) containing the witness' evidence for the hearing. (2) A party must comply with subrule (1) at least 21 days before the date set for the hearing or, if the court directs a different time, within the time directed by the court. [25] In this matter no doubt as a result of the date (25 October 2002) of the notice to the parties that the matter would be brought before the Court on 26 November 2002, subrule (2) was varied to allow experts' statements to be filed and served by 20 November 2002. In practice, when appellants do not engage an expert such variance is generally for the -- 5 of 9 -- 6 benefit of the respondent chief executive, if his case had not been largely prepared prior to issue of the Court Notice. However, the purpose of serving the relevant experts' statements as early as possible is to bring to the attention of the parties the specific expert evidence on which the opposing party's case is founded. Again, in practice, the respondent chief executive's case is always founded on expert evidence, of at least the valuer who takes responsibility for the valuation appealed against. It is not unusual, at least in the less complex matters, for an appellant's case not to be founded on expert evidence. In such circumstances subrule (2) does not extend to be a requirement on the appellant. While the situation could be seen to discriminate against the chief executive, it can also be seen to assist in levelling the playing field for the lay owner who is dissatisfied with a valuation made for revenue-gathering purposes, and who has reasonable expectation of gaining ease of access to the Court. One advantage to the chief executive is that the lay owner who sees strength in the written case to be presented through the chief executive's expert valuer may be persuaded that formal challenge through a Court hearing is unlikely to be successful and may decide, as a consequence, to discontinue the appeal. Rules 15 and 16 provide for such a decision to be made by an appellant although the Court has a discretion still to order that the appellant pay the costs thrown away by the respondent, if the respondent has not consented to the discontinuance. [26] The Court and an appellant should be able to assume that the basis for a valuation, or a decision on objection against a valuation, has been established by the relevant experts' considerations of the evidence during the period of valuation and objection procedure. It is also a reasonable expectation that if an owner/appellant, faced with the strength of formal valuation evidence provided pursuant to Rule 23, decides to discontinue the appeal, as expeditiously as is reasonable after service of that formal evidence, strong argument could be advanced even in the absence of the respondent's consent to the discontinuance, against an order being made for the appellant to pay the respondent's costs up to the date of discontinuance. At that time, many of the components of cost now sought by the respondent in this matter as relate to the valuer, would have been already outlaid, but not necessarily "thrown away" if those costs were instrumental in the valuation remaining unaltered. Different considerations related to unreasonable conduct on the part of the appellant, could constitute a "proper case" in the circumstances of these types of matter, for the Court to exercise its discretion to award costs to the respondent. Each application for an award of costs needs to be treated on its merits. [27] In this matter the chief executive, pursuant to Rule 14 of the Land Court Rules 2000, exercised the discretion to make application for the order to have the matter dismissed for -- 6 of 9 -- 7 want of prosecution. Subrule (2) of Rule 14 provided the Court with the discretion to grant the chief executive's application or make another order it considered appropriate. For example, had it been requested by the appellant in the circumstances of a decision not to attend and not to seek an adjournment, unsatisfactory as such procedure has proved to be in other matters, the Court had the discretion to order that the matter proceed to a hearing on the merits of the appeal, despite the appellant's non-attendance. [28] The reason given by Dr Davis' for his non-attendance at the hearing as contained in the initial advice to the Court, implied a lack of consideration of other than lost income potentialities from his medical practice. In his response to the application the reason was expanded to an unusually high and urgent demand for his services on the particular morning. Had the conduct of the appellant been such as to demonstrate that there had never been an intention to prosecute the action, then it would be clear that the respondent would have been put to unnecessary expense in preparing for the defence of the appeal and would be entitled to an order that his reasonable costs of preparation be paid by the appellant. I am satisfied that such contempt of the due process has not been the case here. Nevertheless, it would be untenable for any appellant to see it as reasonable to make a belated decision not to appear in person in an action, causing inconvenience to both the Court and the responding party, and expect that, at that stage, an apology is sufficient redress. [29] Therefore the application for an award of costs "thrown away" is seen as reasonable. However, in terms of the earlier discussion, I am not persuaded that the conduct of the appellant company through Dr Davis has been such that the respondent's costs involved in reviewing the basis of the valuation appealed against, then providing a statement of evidence as required pursuant to Rule 23 were "thrown away". Those costs would have necessarily been outlaid even had there been a timely withdrawal of the appeal or had the hearing proceeded in the absence of Dr Davis as it seems he had expected. There are also other parts of the claim which I do not accept constitute costs "thrown away" or which have been otherwise satisfactorily proved and which will be identified in the relevant findings. Findings [30] In the particular circumstances of this application I make the following findings:  In light of the order that the appeal be dismissed for want of prosecution I find counsel's (Mr Paterson's) time involved in reading the valuer's report and valuation and conferring with the valuer has been lost to the chief executive as counsel's employer.  The claim for Mr Paterson's time included a component for shared travelling time. Mr Paterson's services were utilised by the chief executive in other matters at the -- 7 of 9 -- 8 relevant sittings and at another sittings in the region. I am not persuaded that even on a shared basis, time involved in travel or indeed the actual cost of travelling as claimed for Mr Paterson, which costs would not have been avoided in any event, should be regarded as costs thrown away. No award will therefore be made for Mr Paterson's shared travelling time or airfares.  Despite the travelling time component, I find it appropriate to increase the claim for Mr Paterson's time from five hours to eight hours lost as a result of the order made, once the hearing on the merits of the appeal did not continue and when the order in relation to this application extended to the provision of a written submission on costs.  I am not persuaded that the hourly rates sought for Mr Paterson or the valuer Mr Moroney, constitute the proper basis for assessment of the chief executive's costs. I have been referred to an unreported Land Court decision published on 18 December 2000, in the matter Pavex Construction Pty Ltd v Chief Executive, Department of Natural Resources, in which the Member accepted the basis of the chief executive's claim for counsel's and valuer's fees, at rates of $25 per hour and $22.50 per hour respectively, although they were seen as "quite generously low". It seems that the claim in that matter in the absence of knowledge of the cost of outsourcing such work, was based on actual salary levels at the time. While I accept that the actual costs of both counsel's and valuer's in-house services would be significantly greater than actual hourly salary rates, I do not accept that the costs thrown away by the chief executive are other than the actual costs of those in-house services. The claim was based on the direct cost of outsourcing the legal services to Crown Law, and the direct cost to a client in engaging the services of the State Valuation Service. However, in the absence of estimates of actual cost to the chief executive of either Mr Paterson's or Mr Moroney's time, but bearing in mind the "quite generously low" rates claimed in the Pavex matter, I will adopt rates of $60 per hour and $50 per hour respectively. The question of the actual cost of the valuer's time was a matter raised by Dr Davis.  An estimate of a total eight hours of Mr Paterson's lost time at $60 per hour equates $480.  The Land Court Rules 2000 placed an obligation on the chief executive to serve and file his expert's evidence prior to the hearing. It is seen as quite extraordinary that, if the basis of the valuation appealed against had been established by the chief executive in the pre-appeal valuation process, it would require some 46.25 hours of the valuer's time to produce that basis in a written form acceptable for filing in the Court and serving on the appellant. If the basis of valuation had not been sufficiently established in the valuation process and required extensive expert research for the purpose of confirming its veracity, that research is not seen as a cost "thrown away" by the chief executive but an important component of the valuation process. It is accepted that time involved in refreshing the valuer's memory as to the basis of valuation is a reasonable cost involved in the obligatory filing and serving of the expert evidence if the valuation appealed against was to be supported. However, in this matter the question remains as to whether the cost of the reasonable work involved in filing and serving the evidence is a cost thrown away due to the matter not proceeding to be decided on its merits. For reasons previously discussed, it is my opinion that in a case such as this, where the appellant genuinely intended that the matter should proceed, the chief executive's reasonable costs in performing the obligatory filing and serving of the expert evidence were not costs thrown away. I am satisfied that costs directly associated -- 8 of 9 -- 9 with a hearing which was expected to proceed and which would not have been expended otherwise, may reasonably be regarded as costs thrown away.  In the absence of a specific breakdown of the time loss claimed for Mr Moroney, I will allow four hours of his time as having reasonably been involved in a pre-trial conference with Mr Paterson then time lost as a consequence of the hearing on its merits not proceeding at the time set down. For the reasons given earlier, Mr Moroney's time will be allowed at a cost to the respondent chief executive of $50 per hour totalling $200.  Total costs thrown away including costs associated with this application, as a consequence of the appeal being dismissed for want of prosecution are allowed in the amount of Six Hundred and Eighty Dollars ($680). Order It is ordered that Grohuni Pty Ltd pay to the applicant Chief Executive, Department of Natural Resources and Mines, the amount of Six Hundred and Eighty Dollars ($680) being for costs thrown away as a consequence of an appeal being dismissed for want of prosecution and for costs of this application. RE WENCK MEMBER OF THE LAND COURT -- 9 of 9 --