Estate of the Late Clare Mahon v Chief Executive, Department of Main Roads [1998] QLC 142

LAND COURT, BRISBANE 18 November 1998 Re: Claim for Compensation Resumption for road purposes Acquisition of Land Act 1967. (A97-77). Estate of the Late Clare Mahon v. Chief Executive, Department of Main Roads DECISION ON APPLICATION FOR COSTS Consequent upon the hearing of judgment in the above matter on 2 October 1998, the claimant made application for the awarding of costs in its favour. The respondent resisted that application, claiming that, in view of the special 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 upon the basis of the separate submissions supplied and exchanged by the parties. Counsel for the claimant was Mr GR Allan, counsel for the respondent was Mr RS Jones. History of the Claim: Following resumption of the land, the claimant lodged an initial claim to the Court for an amount of $468,000, including $428,000 for the land, plus $20,000 for special value and $20,000 for disturbance. At the hearing the claimant sought an application, by agreement with the respondent, to amend the claim to $442,500 for the land, plus $2,554.60 for disturbance (agreed legal and valuation fees). The amount contended by the respondent was for $317,000 for the land, plus $2,554.60 for disturbance (agreed legal and valuation fees). The finding of this Court on 2 October 1998 was for $394,000 for the land, plus $2,554.60 for disturbance (legal and valuation fees). The Legislation: [1998] QLC 142 -- 1 of 9 -- 2 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. ” In considering the actual quantum of the amounts claimed, I note that it has been found that it is the final position taken by the parties which is important. In Commissioner for Railways v. Buckler [1996] 1 Qd.R. 18, Fitzgerald P in the Court of Appeal found at page 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, section 24(2A) furnishes a disincentive against conduct like that. It does so by restricting the right to amend the claim once it has been filed in accordance with section 24(2A) of the Act. Thereafter an amendment may be allowed; but on terms including payment of costs; see section 24(3). ” In the current matter the application to amend the initial claim was not contested, and the amounts led at the hearing form the basis of any discretion on costs in the matter. Decision: Before considering the implications of costs in the findings of this matter, I seek first direction in respect of the key issues involved. I am directed by Mr Allan for the claimant, to the factors which should be considered when exercising the discretion of this Court as -- 2 of 9 -- 3 provided for under section 27(1) and (2) of the Acquisition of Land Act 1967. In that respect I note that those factors were summarised by the Land Appeal Court in Yalgan Investments Pty Ltd v. Council of the Shire of Albert (A94-94), 11 December 1997, unreported, at pages 3 to 5. Those factors were also followed in SP and CE Blower v. Queensland Electricity Transmission Corporation (A96-50), 31 March 1998, unreported. It is Mr Allan’s submission that:  while the claimant was not “wholly successful”, in the absence of special circumstances, the claimant is entitled to costs;  the claim was not exorbitant;  the claim was not presented in a way as to incur unnecessary burdens upon the respondent;  while the Court may consider whether “special circumstances” may have occurred to justify the awarding of partial costs, on the evidence supplied an apportionment of costs does not exist;  the claimants were successful on the issues which occupied the majority of the hearing; and  there were no “exceptional circumstances” to provide grounds for an apportionment of costs. In his submission for the respondent, Mr Jones argues:  it is not a matter of who won or who lost, but it is more appropriate to consider the nature of the claim, and the behaviour of the parties prior to and during litigation;  the amount of compensation only exceeds the half-way point by less than 5%; and was $48,500 less than the amount claimed;  the claimant’s contention that the highest and best use of the land was for road purposes was rejected by the Court;  the claimant’s contention that there was no market for rural homesites was also rejected by the Court;  the number of witnesses called by the claimant far exceeded those called by the respondent;  additional evidence was led at the hearing by the claimant which resulted in additional time for the Court;  the subpoena of settlement files during the hearing caused unnecessary delays in the hearing; and -- 3 of 9 -- 4  “special circumstances” do exist in the case which warrant that there be no order as to costs. In the matter of the powers 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, which 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 Qd.R. 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 proceeding before it”, which it saw as essentially the same as the power conferred upon the Land Court, and which was described by the Full Court as “complete” (page 488). In seeking to understand the exercise of a judicial nature, I note in Wyatt the Full Court found at page 489: “ That can only mean for reasons that can be considered and justified. In saying that, we do not intend to imply that reasons must always be given for awarding or withholding costs. In sum, perhaps many cases the matter may be so obvious as not to require explanation in the form of stated reasons. In such cases the findings themselves will ordinarily afford reason and justification for the decision on costs that follows. But where what has been done appears to lack rational justification either in the findings or in the reasons expressed for it, a decision may arise whether the decision has been arrived at judicially. It may then be open to review the decision on costs as involving error or mistake of law. ” In seeking also whether there were any rules which should be applied in exercising the discretion of the Court, I note the findings of the Land Appeal Court in Townsville City Council v. Moyses & Morris etc (supra), at page 274, where the Land Appeal Court followed -- 4 of 9 -- 5 the guidance outlined in Middleton v. Freier and Others (1958) Qd.R. 351, where Phillip 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, in Moyses the Land Appeal Court went on to explain the nature of a judicial decision at page 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 claimant 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 page 278). The matter of which party has won or lost in a compensation matter was discussed in Minister for the Environment v. Florence (1980-81) 45 LGRA 127, where Wells J said at page 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 controlled by a discretion, however predictable the result of its exercise may be in certain sorts of cases. ” Another matter to which I am directed by Mr Allan was that with the quantum of the claim, and the manner of the hearing, neither could be called “exorbitant” or “sought to impose unnecessary burdens on the constructing authority or the Court”. There was some suggestion by Mr Jones that the number of witnesses, and later evidence submitted by the claimant, tended to add to the duration of the hearing. However, I am reminded that in prosecuting its case, the claimant had a difficult task in the absence of all of the available -- 5 of 9 -- 6 background material which eventually influenced the outcome of the decision. I note also that in considering the duration and extent of evidence led in this matter, it would be inappropriate to consider the matter of costs and any dissuasion of the parties from canvassing all issues which might be material to the decision. (Dodds Family Investments Pty Ltd v. Lane Industries Pty Ltd (1993) 26 IPR 261, at page 271-272). I note also that Mr Jones argues that some delays had occurred during the hearing as a consequence of the belated subpoenas of the settlement files of the respondent. While that has some validity, it is also to be noted that the respondent, prior to the hearing, was the only party fully conversant with the details of those settlement files, and the valuation reports prepared for each settlement by Mr Horrigan. In the decision of this Court, some weight was placed upon certain of those valuations for the settlements, which supported a comparison of sales of rural homesites in the locality of the subject lands. In considering the prosecution of this matter I have found that there is no evidence of anything that could be construed as other than a very professional approach by both parties. There is no evidence of any “vexatious” claims or methods used to influence the passage of the claim. The key issues in the matter were:  the different approaches to the determination of highest and best use of the subject lands;  the appropriate comparison of sales of comparable rural homesites; and  the weight applied to the evidence of the valuations for the former settlements. 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 page 146: “ We think, in dealing with questions of costs, 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 the 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 matter. ” -- 6 of 9 -- 7 While those guidelines are of assistance in the general rule for this Court, I am aware that strict adherence to any preoccupation with the adoption of such a general rule may well involve an error of law that is open to correction on appeal. Indeed that was enunciated in Wyatt (supra), where the Full Court said at page 489: “ To say that, however, is not to say that the discretion may be exercised in an arbitrary manner. In England, where since 1890 the discretion of the High Court over costs is also acknowledged to be unfettered by statute, it continues to be recognised that the discretion must be exercised judicially: see Knight v. Clifton [1971] CH 700. As the judgments in that case show, such a power does not exclude resort to the ‘settled practice’ of a court where such a practice has evolved; but, to refer once again to what was said by Macrossan J. in Assignment Pty Ltd v. Kirby (supra), 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. ” I look then at the different approaches adopted by the valuers in determining the highest and best use of the land. It is clear that the best method was found to be as a rural homesite as proposed by the respondent, and not for road purposes as proposed by the claimant. However, Mr Payne, the valuer for the claimant, sought to use the method ‘as for road purposes’ in the context that he believed that there was a paucity of sales of rural homesites in the area, due to the impending resumption of the future roadworks in that locality. During the hearing he accepted that, in the event of his hypothesis not being accepted, then use as a rural homesite would be appropriate. (Decision page 25). In adopting his assumption of highest and best use as for road purposes, Mr Payne concluded that there was only one possible buyer of the subject lands, in view of the proposed roadworks. In accordance with the principle followed by the Land Appeal Court in MacDonnell v. The Crown (1940) 18 QCLLR 38, at page 42, he assessed the potentiality of the lands as if there had been several possible purchases. In following such an approach he concluded that the value to be adopted was to reflect what the respondent would be willing to pay for the lands at the date of resumption, in a friendly negotiation, in order to acquire the lands for road purposes. He sought further support for the adoption of the value for road purposes in the decision of the Land Court in Barker v. Brisbane City Council (1966) 33 QCLLR 28. However, as noted in my decision, I believe that both of those matters can be distinguished. (Decision page 21 and page 23). In noting the claimant’s reliance upon Jovist Pty Ltd v. Campbelltown City Council (1970) 19 LGRA 134 in respect of the assessment of highest and best use of the lands as for -- 7 of 9 -- 8 road purposes, I have already acknowledged that sales to the authority are admissible. However such sales must be treated with caution and for that reason I have applied those sales only where there is a high level of correlation between the settlement figures, after allowing for legal and valuation fees, and the former market valuations prepared by Mr Horrigan. (Decision page 28). In the matter of the appropriate comparable sales, while this Court adopted the six sales of Mr Horrigan, and only two sales of Mr Payne, the weight afforded to those sales varied considerably. A key sale in the comparison was Mr Payne’s Sale 7 which provided a direct comparison with the subjects. (Decision page 29). In the application of the Departmental settlements in the area, the high level of correlation between Mr Horrigan’s former valuations and the final settlement figures adopted, provided further weight to Mr Payne’s estimate of the valuation of the subject. In the end there was little to separate the claims by the parties, and the resulting compensation awarded reflects that comparison. It is agreed that this matter did not demonstrate the complexities of Yalgan nor was the quantum of the compensation of a comparable figure. However in the exercise of the judgment of this Court, the size of the amount awarded is not the deciding issue. It is the reasonableness of the decision which must pass the test of credibility. In the end I find nothing to support a claim for the awarding of costs in this matter. Advance Payments: Neither in the prepared statements, or during the hearing of evidence, was there any reference about possible advance payments brought to the attention of the Court. The decision was accordingly handed down in the understanding that there had been no such advances. Subsequent to the handing down of the decision on 2 October 1998, both parties have now confirmed in writing to this Court that in fact an advance had been paid by the respondent to the claimant on 12 December 1997 in an amount of $317,000. In seeking now for the Court to amend its direction of 2 October 1998, the parties are aware that it is not the responsibility of this Court to seek evidence in respect of any advance payments made in respect of the appeal. That responsibility rests squarely upon the parties to the claim. However, on the basis of the written statements confirming that payment, and on the application of the parties, I now vacate my former determination and issue the following amended decision. -- 8 of 9 -- 9 I determine compensation totalling $396,554.60, being $394,000 for the land, and $2,554.60 for disturbance (legal and valuation fees). Total = $396,554.60 Less advance payments from the respondent on 12 December 1997 = $317,000.00 Balance owing = $ 79,554.60 Interest: In accordance with section 28 of the Acquisition of Land Act, I ORDER that the respondent pay to the claimant interest at the rate of 6.5% per annum on the sum of Three hundred and ninety-four thousand dollars (being $396,554.60 less the agreed legal and valuation fees of $2,554.60) from 21 November 1997 up to and including 12 December 1997 (the date of the payment of the advance). Then on $77,000 (being $394,000 less advance of $317,000 paid on 12 December 1997) up to and including the day immediately preceding the date on which final payment of compensation is made. I make no award as to costs and direct that each party bear their own costs. (NG Divett) Member of the Land Court -- 9 of 9 --