Boral Bricks (Qld) Ltd v Director-General, Department of Main Roads [1999] QLC 221

[1999] QLC 221 Re: Claim for Compensation - Resumption for Road purposes - Acquisition of Land Act 1967 - (A97-23). Boral Bricks (Old) Ltd v. Director-General, Department of Main Roads DECISION ON APPLICATION FOR COSTS LAND COURT, BRISBANE 4 June 1999 Consequent upon the hearing of the judgment in the above matter on 4 March 1999, the respondent made application for the awarding of costs in its favour. The claimant resisted that application, claiming that, in the circumstances of the case, no order for costs ought to be made. There were no appearances on the matter of costs and, with the agreement of both parties, the matter of costs was determined on the basis of separate submissions supplied and exchanged by the parties. Counsel for the respondent was Mr GJ Gibson QC assisted by Mr RS Jones. Counsel for the claimant was Mr NM Cooke QC assisted by Mr T Trotter. History of the Claim: Following resumption of the land on 16 October 1992, the respondent applied to the Registrar of the Land Court on 21 May 1997, seeking an application under section 25(1) of the Acquisition of Land Act for the matter to proceed to a hearing in the Land Court. In response to an order from the Registrar, the claimant filed an initial claim for an amount of $7,721,189.55 on 30 July 1997. The matter was initially set down for hearing on 15 June 1998, but with the consent of the parties, the hearing commenced on 14 September 1998. Prior to the hearing the claimant sought an application on 7 September 1998 to amend the claim to an amount of $3,140,692.65, and at the hearing, by consent with the respondent, further amended the claim to an amount of $3,101,736.81, and -- 1 of 10 -- 2 subsequently further amended to $2,955,521.17, including professional fees of $22,000. The amount contended by the respondent was initially for $540,000 (including professional fees agreed at $22,000), and later amended at the hearing to: Acquisition of land = $671,000.00 Sign = $ 20,500.00 Agreed disturbance = $100,121.72 TOTAL = $791,621.72 The finding of this Court on 4 March 1999 was for an amount of $827,031.72, including the agreed professional fees of $22,000. The Legislation: The general powers of this Court in respect of the awarding of costs are to be found in the provisions of section 41 (9) of the Land Act 1962 which states: "The Court may make such order as it thinks fit as to the costs of or incidental to any matter that it has jurisdiction to hear and determine including, without limiting the generality of this subsection, the costs of an adjournment or application made in a pending matter, allowances to witnesses attending for the purpose of giving evidence at the hearing and the costs of any survey of boundaries. " Any costs are further directed under section 27 of the Acquisition of Land Act 1967 which states: "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 to 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." Decision: Before considering the implications on costs in the findings, I look to the key issues outlined by the parties. I am directed by the Crown Solicitor, for the -- 2 of 10 -- 3 respondent, to the history of the claim. The respondent notes that the most significant changes in respect of the claim may be summarised mainly as follows: • Under heading of "Disturbance" - deletion of $109,329.66 for loss of income. • Under heading of "Injurious Affection - abandonment of $4,913,012.61 for reduction in life of plant. • Under heading of "Severance" - a new claim for loss of clay totalling $785,861. The respondent argued that the belated withdrawal of the loss of income claimed and failure to advise the respondent of such amendments to the claim, until almost the actual date of the hearing, resulted in certain costs being "thrown away" for professional services and advice necessarily incurred by the respondent in order to defend the claim, later abandoned. The respondent argues that those costs could have been avoided but for, in his opinion, the unreasonable actions of the claimant. The claimant contests that view claiming that, in its opinion, the purely responsive approach by the respondent did not contribute to the early resolution of certain matters being investigated by the claimant. The claimant argues that such matters are therefore essential to fairly represent the cases of both parties, and should not be part of any order by the Court for costs associated with the hearing. It is the respondent's submission that costs should be awarded because: • Objectively the respondent adopted the more appropriate methodology in arriving at his estimate of the valuation. • The claimant failed to lead certain evidence in respect of Bora!' s policy on the future use of the claim materials, which might have had some bearing upon the outcome. • The methodology adopted by the claimant was contrary to well established legal principles. • The claims by the claimant were clearly excessive, thus requmng the respondent to seek a determination by the Court. • The claimant was unreasonable because of the nature of the way late amendments to the quantums claimed were made. -- 3 of 10 -- 4 • The late amendments of the claimant should be seen in the perspective of any advantage that might bring to the claimant in the event of seeking to avoid costs in the matter. Rowell Gill & Brown, solicitors for the claimant argue: • It is not appropriate to consider costs by a simple issue-by-issue basis, and the broad outcome of the case should be considered. • There is an obligation upon the respondent to document his own case, and to consider all aspects of the claimant's losses. • The Court found that the clay had an in situ value, but merely preferred the method of valuing the clay on a deferred value approach. The claimant's methodology was not found to be unreasonable or unsupportable. • The respondent's expert witness contributed to the length of the hearing by certain lack of clarity in his technical reports. • The claimant's claims for severance contained an amount of $750,000 for interest, not required to be decided by the Court. • The respondent also amended his estimate of compensation as the case progressed. In the matter of the power vested in the Land Court in respect of the awarding of costs, I note that they are established entirely by Legislation, but they are also fully or completely discretionary in nature. However, it has been held that in exercising that discretion this Court must do so in a judicially sound manner, and by reference to relevant considerations. In this regard I note the findings of the Land Appeal Court in Townsville City Council v. Moyses and Morris etc (1979) 6 QLCR 271, where the Land Appeal Court said at page 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." The general power to award costs was considered by the Full Court of the Supreme Court of Queensland in Wyatt v. Albert Shire Council [1987] 1 QdR 486. The Full Court also considered the scope of a section of Legislation which gave the Local Government Court power to "make such order as it thinks fit as to the costs of any proceedings before it", which it saw as essentially the same as the power -- 4 of 10 -- 5 conferred upon the Land Court, and which was described by the Full Court as "complete" (page 488). I am directed also to the need to examine the reasonableness of the conduct of the parties in deciding whether or not to award costs in this matter. In that respect I note the findings of the Land Appeal Court in Moyses (supra), where the Land Appeal Court followed the guidance outlined in Middleton v. Freier and Others (1958) QdR 351, where Philp J, speaking for the Full Court, said at page 357: "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 .. . ". However, the Land Appeal Court in Moyses (supra) went on to explain the nature of a judicial decision at p. 274: "Second, 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 of an exorbitant claim, if he has made one, has been such as to force the authority; unreasonably and unnecessarily, into litigation. " In seeking therefore to exercise my discretion on this matter, I note that had the respondent been wholly successful in its claim, it may have generally had an expectation for costs to follow the decision. However, such a conclusion would always be subject to the discretion of this Court. (See Moyses p. 278). The matter of whether a party has won or lost in a compensation matter was discussed in Minister for the Environment v. Florence (1980-81) 45 LORA 127, where Wells J said at p.149: "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 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 -- 5 of 10 -- 6 controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases." General guidance on costs in the matters of compensation were also reviewed by the Land Appeal Court in Yalgan Investments Pty Ltd v. The Council of the Shire of Albert (A94-94), 11 December 1997 (to be reported) at pages 3-5. In the Court below in that matter the learned Member, in the circumstances of that case, found that each party should bear its own costs of the appeal, arguing that the unusual circumstances of the rezoning of the land had an impact upon the determination of the highest and best use of the land. In his determination the Member was critical of each of the valuation methods adopted by the parties, and finally adopted a method which was a compromise of the two approaches. On appeal of that decision the Land Appeal Court, having outlined the principles influencing the awarding of costs, found that the claimant's application for costs should be allowed in part. The decision on costs was rescinded, and the respondent was directed to pay the costs associated with a part of the hearing, as fixed by the taxing officer of the Supreme Court. Because both methods of valuation were rejected, the Land Appeal Court found that the rights of the claimant to seek costs, as its claim was nearest to the amount of compensation awarded, should not have been denied. In determining that partial costs should be awarded in that matter, the Land Appeal Court drew support from two decisions of the Federal Court in Hughes v. Western Australian Cricket Association (Inc)(1986) 8 ATPR 40-748, and also in Dodds Family Investments Pty Ltd v. Lane Industries Pty Ltd (1993) 26 IPR 261, at 271-272. A review of the above decisions was analysed by the Land Appeal Court in Kabale Holdings Pty Ltd v. Director-General, Department of Transport (A94-34), 15 October 1997, to be reported, at pages 33 and 34. In the matter of Nadco Pty Ltd v. Chief Executive, Department of Transport (AV96-05), 18 July 1997, unreported, the learned Member found costs against the respondent on the basis that while the claimant was not "wholly successful", the facts available supported that the claimant had not acted unreasonably in pursuing the claim. The initial claim by the claimant amounted to $1,193,593.63, the respondent contended for $483,500, and the Land Court found for compensation at $718,611. On the final day of the hearing the claimant, with leave from the Court, and without opposition from the respondent, amended the claim to $892,000. -- 6 of 10 -- 7 On appeal the Land Appeal Court rejected the claim by the constructing authority for a re-assessment of the amount of compensation, but rescinded the Member's direction in respect of the awarding of costs. The Land Appeal Court found at page 10: "A clear intention evident in section 27(2) is to discourage exorbitant claims in compensation cases. It would not be unreasonable to describe the claim to $1,193,593.63 as exorbitant since it exceeded the sum arrived at by the Member by such a large amount. It remained the claim until nearly all of the costs of the hearing had been incurred. With hindsight it can be seen that the claimant was permitted the substantial advantage of avoiding any possibility of an order for costs against it by its late amendment; to add to that an order for costs in its favour went far too far we think. In the result we conclude that the Member's discretion on the matter of costs miscarried and that she should have made no order as to costs." That decision followed guidance found m Commissioner for Railways v. Buckler [1996] 1 QdR 18 where McPherson JA said at p.23: "Stated in general terms, what the court is now required to do in fixing the incidence of costs under this rule is look to the final positions taken up by the parties. In the case of the claimant, it is the quantum of compensation last claimed. Theoretically at least, its amount might not be known until the final address of counsel for the claimant. In practice, however, s.24(2A) furnishes a disincentive against conduct like that. It does so by restricting the right to amend a claim once it has been filed in accordance with s.24(2A) of the Act. Thereafter an amendment may be allowed; but on terms including payment of costs: see s.24(3 ). On the other hand, there seems to be no comparable restnct10n preventing the constructing authority from deferring disclosure of its final position until a late stage of the proceedings. It will be discoverable only from "the amount of the valuation finally put in evidence by the constructing authority", which means that it cannot with confidence be known what the amount of it is until the constructing authority closes its case." In the current matter the final amounts led by the parties formed the basis of any discretion on costs in the matter. In the end, while it is the final amount claimed by the parties which is to form the basis for comparisons under section 27(2) of the Act, any strategic advantage gained by a party in delaying the adoption of a final claim, should be taken into consideration when assessing whether costs should be awarded. Note the difference -- 7 of 10 -- 8 approach taken in Arcpoint Pty Ltd v. Director-General, Department of Transport, (1992) 14 QLCR 115 . However, in Buckler (supra) McPherson JA went on to explain that, in his opinion, the words "outlining the amount of the valuation finally put in evidence by the constructing authority 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'." (P.25). In the current matter the amount of $791,621.72 previously discussed should be taken to represent the respondent's final claim. In the current matter I also consider the "reasonableness" of the claims submitted by the claimant. Initially, on the directions of the Registrar of the Land Court, the claimant lodged an outline of its claim to a total of $7,721 ,189.55. That was subsequently in a series of amendments reduced to $2,955,521.17. It was argued during the hearing that some delays had occurred in bringing the matter to completion by a reluctance to pursue the matter by the claimant. That was strenuously denied by the claimant and not upheld by the Court. There was no evidence that the claimant had not approached the matter in other than a serious attempt to assess the total loss to the claimant. It was reasonable in such circumstances for both parties to fully examine all aspects of the possible claim, including, if appropriate, any claim for disturbance, injurious affection or severance. That some of those claims were later not proceeded with by the claimant, does not prove that the specialist technical advice for both parties was not necessary. In those circumstances I believe it was proper for each party to bear their own costs in preparing their respective cases, and I find no cause for costs to be awarded to either party for expenditure "thrown away" by not proceeding to hear on all matters. Such costs would appear to be reasonable costs associated with justifying the separate positions of each party. Following further discussions it was also agreed between the parties on disturbance items to a total of $100,121.72, thus reducing the length of the hearing, a matter which should not be held to the disadvantage of either party. A key issue between the parties was the preferred method of assessing any residual value in the claim for material lost by the resumption. In the end the Court favoured the method of deterred value, as proposed by the respondent. The decision of the claimant not to elect to provide other evidence of any different policy in respect of the use of the clay material, instead of that provided to the Court, influenced the reliance of the Court in the method adopted for that purpose. -- 8 of 10 -- 9 In considering the prosecution of this matter I have found no evidence of anything that could be construed as other than a very professional approach by both parties. In considering whether there were any "special circumstances" existing in this matter, I note the findings of the Land Appeal Court in WH Bowden v. Valuer- General (1980-81) 7 QLCR 138, where in dealing with the matter of costs, the Land Appeal Court said at p.146: "We think, in dealing with questions of cost, that it is an important consideration that there be ease of access to the Land Court and the Land Appeal Court ..... Fear of an adverse order with respect to costs may deter citizens with just complaints from resorting to the Courts; that has in the past occurred, as will appear. It seems to us unjust to adopt a restrained attitude towards awarding costs against citizens without adopting an equally restrained attitude towards awarding costs against the Valuer-General. 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 matters." In the end I find that the total amount awarded by the Court ($827,031.72) was considerably nearer to the final amount contended by the respondent ($791,621.72) than to the final amount claimed by the claimant ($2,955,521.17). On that basis there is argument for an award of costs in favour of the respondent under sections 27(1) and (2) of the Act. On the matter of whether there were any actions on the part of the parties that may have led to an unnecessary extension of the litigation, I find that, while the claimant acted in a reasonable manner in pursuing its claim, the major variation between the parties would have invariably led to requiring the matter to be resolved by the Court. Because of a lack of any "special circumstances" which might otherwise upset the usual rule that a successful party might expect an order for costs, I believe the respondent has a reasonable expectation of an award of costs in this matter. However, as noted earlier, in the matter of whether the respondent should be compensated for professional costs "thrown away", I find that those additional costs associated with preparing the respondent's case should be borne by the respondent. In accordance therefore with directions found in the Legislation and exercising judicial discretion afforded by precedents, I order that the claimant pay the respondent's costs of and incidental to this appeal. The amount of such costs shall be ascertained and fixed by the proper costs taxing officer of the Supreme Court of -- 9 of 10 -- 10 Queensland at Brisbane in accordance with the provisions of section 41 (9) of the Land Act 1962. (NG Divett) Member of the Land Court -- 10 of 10 --