Director-General, Department of Transport v Hibiscus Holdings Pty Ltd [1997] QLAC 208

IN THE LAND APPEAL COURT BRISBANE BETWEEN: (A92-5) IN THE MATTER of an appeal to the Land Appeal Court by the Director-General, Department of Transport, from the decision of the Land Court in the matter of the determination of compensation payable consequent upon the resumption by the Director-General, Department of Transport, for Road purposes under the provisions of the Acquisition of Land Act 1967 and the Main Roads Act 1920 of areas of 2932 m2 and 410 m2, being Lot 1 and Lot 3 respectively on Plan 230416, County of Ward, Parish of Boyd. DIRECTOR-GENERAL, DEPARTMENT OF TRANSPORT (Respondent) HIBISCUS HOLDINGS PTY LTD (Claimant) REASONS FOR JUDGMENT ON COSTS - THE COURT Delivered the Eighteenth day of December 1997 Appellant Respondent On 15 August 1997, the Court allowed the Director-General's appeal and gave him one week in which to deliver his submission on costs. That submission was delivered to the Court on 22 August. The respondent had been given one week to respond to the appellant's submission, but did not do so until 24 September, the submission being dated 23 September. No explanation for the delay was offered. The appellant submitted that the respondent should pay his costs of the appeal to this Court. He submitted that the facts and circumstances relevant to the exercise of the costs discretion included the following: " (a) the quantum of the respondent's original claim before the Land Court ($1,340,270); (b) the quantum contended for by the respondent before the Land Court ($500,000, or alternatively, $314,215.19); (c) the extent of the reduction in the quantum of the compensation between the Land Court ($201,000.00) and the Land Appeal Court ($78,300.00); (d) the fact that the evidence to prove that the totality of the downturn in income contended for by the respondent was solely in the hands of the respondent and yet it failed to adequately prove such a connection. (Page [1997] QLAC 208 -- 1 of 6 -- 2 2.7 Reasons for Judgment ofFryberg J; page 6.3 and page 7 of Reasons for Judgment of Mr Wenck); (e) the fact that the Land Appeal Court concluded (contrary to the respondent's case) that the works carried out on the resumed land did result in an enhancement to a part of the underline balance land. (Although not to the extent contended for by the appellant). (Page 15.7, 16.7 of Reasons for Judgment of Mr Wenck)." He further submitted that he should recover his costs of the proceedings in the Land Court, or alternatively, a proportion of those costs. The respondent submitted that the facts and circumstances relevant to the exercise of the Court's discretion include: (a) the alternative claim of $314,215.19 contended for by the respondent before the Land Court; (b) the relatively minor reduction in the quantum of the compensation awarded by the Land Court of $201,000 to the amount contended for by the respondent as its alternative claim of$314,215.19; (c) the fact that the estimate of compensation contended by the appellant was effectively minus $120,000.00 and that this valuation was still the contention of the appellant before the Land Appeal Court; (d) that the basis of valuation contended by the appellant was rejected in its entirety and the capitalisation method adopted by the respondent was the method ultimately accepted by the Land Appeal Court; (e) that the contention by the appellant's valuer that there was no added value for the surplus land, was incorrect; (f) that the basis of the decision of the Land Appeal Court was the capitalisation method which was in contrast with and contrary to the appellant's contention; (g) that of the 26 List of Findings of the Land Court Member challenged by the appellant, almost all of those disputed findings were resolved in favour of the respondent and were rendered less contentious by the capitalisation method of valuation found by the Land Appeal Court to be the appropriate method of valuation; (h) the fact that the decision of the Land Appeal Court to allow compensation in the sum of $78,300.00 when taken with the negative estimate of compensation of $120,000.00 contended by the appellant means that there is an increase in compensation from the amount estimated by the appellant of $198,300.00 -- 2 of 6 -- 3 compared with the final claim for compensation by the respondent of $314,215.19. It was further submitted that there should be no order for costs of the Land Appeal Court, or in the alternative if there is an order for costs then such order should be in favour of the respondent, as the compensation finally ordered is still a long way from the minus $120,000 contended by the appellant. Furthermore it was contended that for the respondent to have recovered any compensation whatsoever, it was necessary for the respondent to proceed to Court, ,-., as it was unrealistic to expect that any resolution for the claim was likely to rise when the appellant's estimate was effectively minus $120,000. In reply the appellant submitted that the respondent's submission should not be considered by the Court due to the delay in its delivery and the absence of explanation for that delay. The appellant was entitled to make that submission, the facts relied on being correct. Ordinarily, the Court would not have awaited the convenience of the respondent, but in this case that has occurred and we do not see the appellant as having been disadvantaged by our decision to consider the respondent's submission. The appellant contended that the respondent's primary case in the Land Court had been directed to a claim in the amount of $500,000, and in any event, having regard to the decision of the Court of Appeal in Commissioner of Railways v. Buckler1 and the correct interpretation of s.20 of the Acquisition ofLand Act, identification of enhancement does not allow a valuation result of a "minus" amount of compensation, the set-off provision restricting the result to a "nil" valuation . .. Costs in the Land Appeal Court The discretion to award costs conferred on this Court by s.44(16) of the Land Act 1962 is not an unprincipled discretion. On ordinary principles, costs of an appeal would follow the event. It is true that there has long been a recognition by courts exercising jurisdiction in land compensation matters that this general rule need not apply in every case. However that recognition has been expressed in respect of proceedings brought at first instance 2• Underlying these decisions is the view that the Court must take into account the fact that an appeal to a court is the only way in which a dispossessed owner can obtain an independent determination of the value of the land taken. 2 (1996) I QdR. 18 See for example Moyses v. Townsville City Council (1979) 6 QLCR 271; Minister for the Environment v. Florence (1981) 45 LGRA 127; Banno v. Commonwealth of Australia (1993) 81 LG ERA 34. -- 3 of 6 -- 4 Quite different considerations arise when a further appeal is brought from a decision of the Land Court. As far as we are aware, it has never been held that the approach suggested in the cases referred to above should be adopted in the Court of Appeal. In our view, the same is true in respect of appeals to this Court, at least where the appeal is conducted on the record. The nature of an appeal to this Court since the amendments made by the Land Act 1994 has been discussed in a number of cases, including our interlocutory judgment in this case3, abd need not be further explored here. We see no reason to depart from the ordinary rule in the present case, ,, and we are not persuaded otherwise by the submissions of the respondent. The respondent should pay the appellant's costs. The circumstances relating to our discretion referred to by the appellant reinforce this view. Costs in the Land Court The appellant's submission stated "Investigations by the appellant suggest that no costs order was made by the learned member below". There was no dispute from the respondent in that regard. However, the statement is not correct. We have established for ourselves that certain procedural orders and directions relevant to the issue of costs in the Land Court, were in fact made by the learned Member. The parties were reminded of the position which existed subsequent to the Land Court decision and were provided with a copy of those orders and directions together with an invitation to make further submissions if that was desired. The parties chose to rely on the original submissions, reply by the appellant and rejoinder by the respondent. Any application for costs which might have arisen in the Land Court had been effectively deferred as a result of the procedural orders and directions. The question of costs of the Land Court hearing was then overtaken by the appeal by the appellant from the decision of the Land Court in its determination of compensation. In his initial submissions on costs, the appellant submitted that in addition to the appellant's costs of and incidental to the Land Appeal Court, the respondent should be ordered to pay the appellant's costs of and incidental to the Land Court proceedings or alternatively 50% of those costs. He submitted that s.44( 16) of the Land Act 1962 confers power on the Land Appeal Court, depending on the findings of that Court, to make such costs orders as it considers appropriate regarding the proceedings before the Land Court. In this case no order as to costs had been made by the Land Court but, as had been referred to in the unreported decision of the Land Appeal Court in JT and LJ Barns v. Director- 3 Delivered on 9th June 1995. -- 4 of 6 -- 5 General, Department ofTransport4, the discretion to award costs as provided by s.44(16) of the Land Act 1962, "should be exercised so as to make such an order as to costs as would properly have been made by the Land Court, had the decision on appeal been given at first instance". In Barns, the Court continued - "In our judgment, s27(3) of the Acquisition of Land Act 1967 is intended to ensure that s27(2) is not applied in respect of costs of an appeal (whether to this Court or to the Court of Appeal). It is not intended to signal that s27(2) is irrelevant when this Court is replacing the order for costs below". Section 27(2) of the Acquisition of Land Act provides as follows: "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 this case, whether the final claim by the respondent was $500,000, or the alternative $314,215.19, the award of compensation of $78,300 is closer to the nil compensation valuation of the appellant, in accordance with the decision of the Court of Appeal in Buckler. Costs if any, may therefore be awarded only to the appellant. The appellant submitted that the final claim of the respondent was $500,000 and in the circumstances of the award being "less than 20% of the respondent's amended claim", the principles identified in the cases Moyses, Florence, and Banno6 "demonstrate no acceptable reason for the appellant not to recover its costs of and incidental to the Land Court proceedings". In the alternative the appellant submitted that the respondent's primary and wholly unsuccessful claim as to highest and best use, involved at least 50% of the hearing time and if this Court was not minded to order the respondent to pay the whole of his costs, then it would be at least appropriate to order that 50% of his costs be paid. The respondent's submission highlighted the need for the question of compensation to be determined by the Land Court, due primarily to the appellant's attitude relative to alleged enhancement and "negative estimate of compensation". The result of the decision in the Buckler7 case was seen to lead to an unfair result when a claimant in order to receive any compensation, had, in reality, to first overcome the actual valuation deficit. This was seen by 4 Delivered on 2 September 1997. 5 Id. 6 Id. 7 Id. -- 5 of 6 -- ,,, 6 the respondent as an inherent difficulty when the valuation of the balance land, after resumption, was assessed as being greater than the value of the land before resumption. It was submitted that it was the unrealistic valuation approach of the appellant which not only led to the hearing in the first place but also to the manner in which the respondent found it necessary to conduct its case for a positive assessment of compensation. It is true that the appellant had no option but to litigate the matter in the first irtstance due, without doubt, to the appellant's unsuccessful stance relative to enhancement offsetting compensation in terhis of the Acquisition of Land Act. It is, however, also true that the respondent chose to conduct a case based on alternative propositions which clearly extended the hearing time and the appellant's costs of the proceedings in the matter. We have not been convinced however that any "principles identified in the cases" (Moyses, Florence and Banno) as referred to by the appellant, support the appellant's submission. After considering the merits of the submissions by both parties, we see this as being an appropriate case where each of the parties should bear their own costs of the proceedings in the Land Court. Orders The respondent should pay the appellant's costs of and incidental to the appeal to this Court (including reserved costs if any), such costs to be ascertained and fixed by the taxing officer of the Supreme Court at Brisbane according to the scale of costs prescribed in respect of proceedings in the Supreme Court. · · No order is made as to the costs of the proceedings in the Land Court. FrybergJ Justice of the Supreme Court JJ Trickett President of the Land Court RE Wenck Member of the Land Court -- 6 of 6 --