Cox v Water Resources Commission [1995] QLC 60

LAND COURT BRISBANE 21 JULY 1995 Re: Claim for Compensation Resumption for Burdekin River Irrigation Project Acquisition of Land Act 1967 Water Resources Act 1989 (A91-50, A91-51, A91-52, A92-49) Vivian Henry Cox v. Water Resources Commission DECISION ON APPLICATION FOR COSTS The respondent has applied for costs of and incidental to the determination of compensation in respect of lands resumed from the claimant under the provisions of section 27 of the Acquisition of Land Act 1967. By proclamations published in the Government Gazette, the respondent resumed lands owned by the claimant on 5 May 1990, 22 September 1990 and 27 April 1991. Claims for compensation totalling $6,303,950, dated 23 October 1991 and 17 November 1992, were served on the respondent. On 29 June 1992 an advance against compensation of $1,305,979 was made and on 6 January 1993 a further advance of $107,000 was made. During the hearing of the matter, leave was given to the claimant to amend the claim on 16 February 1994 to $10,398,000. The amount of the valuation finally put in evidence by the respondent was $1,908,834, exclusive of the sum of $2,000 agreed for legal fees. By judgment delivered on 17 July 1995, compensation was determined at $4,960,400, made up as follows: Value of the land taken $4,542,600.00 Structures: Shed $90,900.00 Yards $34,400.00 $125,300.00 Disturbance: Feed Lot $290,500.00 Legal Fees $2,000.00 $292,50 $4,960,400.00 The power of this Court to award costs is contained in section 27 of the Acquisition of land Act 1967, which 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 [1995] QLC 60 -- 1 of 5 -- 2 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. The subsection does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to subsection (3) of section twenty-four or subsection (3) of section twenty-five of this Act." The provisions of section 27 were considered by the Land Appeal Court in Moyses & Others v. Townsville City Council (1979) 6 QLCR 271. At p.273 the Land Appeal Court said: "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. Subject to that, the only restriction on the manner of exercise of the Land Court's discretion is that contained in subsection (2) of section 27." In that case the Land Appeal Court refused to lay down rules or principles as to the way in which the Land Court's discretion should be exercised. The Land Appeal Court went on to point out that the presence of subsection (2) of section 27 should not be regarded as some sort of legislative suggestion that where the claim is substantially more than the amount awarded, and the amount put in evidence by the authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding costs to the claimant, but should award costs to the authority. The Land Appeal Court went on to say at p.274: "... 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." After considering the circumstances of that case, the Land Appeal Court said at p.277: "The amount claimed by the claimants was of course substantially in excess of the amount awarded, but there is not any reason whatever to suppose that the course of events would have been any different had their claim been less ... All the facts suggest that they would not have obtained full compensation, or anything near it, had they not gone to Court." In the present case, as in Moyses case, the issues were live issues, with the result by no means a foregone conclusion, and in the end, the authority succeeded only in part. -- 2 of 5 -- 3 The general rule in most jurisdictions is that costs usually follow the event. The Land Appeal Court made it clear that this is also generally so in the Land Court where one of the parties has been completely successful. At page 278 of its judgment in Moyses case, the Land Appeal Court said: "In general, of course, a party who is wholly successful in litigation can expect an order for costs in his favour, but we think that the learned Member could consider that in the present case there were sufficient reasons for departing from the general rule." In that case the issue involved enhancement to the remaining lands held by the dispossessed land owner. After considering that aspect, the Court went on to say: "But we do say that there are cases in which the Court can properly take the view that it was reasonable to have the matter decided by the Court and that, notwithstanding the failure of the claim, there should not be any order as to costs." In the present case, although there is a large difference between the claim and the amount awarded, it cannot be said that the respondent has been wholly successful or that the claim has wholly failed. In the event, neither party was wholly successful. The respondent applied for costs limited to two weeks on the basis that most of the hearing time was related to trying to prove the viability and practicality of the Davco Scheme. It was submitted that on that issue the claimant failed. In addition, it was argued that the claimant's basis of valuation was not accepted and it was the method of valuation advanced by the respondent's valuer which succeeded, although not the quantum of value. The claimant's case had been based on the proposition that the circumstances of the matter were such that it must be assumed as a matter of law that in the absence of the Burdekin Irrigation Project, the subject land would have been receiving irrigation water from the Davco project at the date of resumption. Although I found that I could not accept that proposition, I agree with the claimant's submission in opposing the present application that such a proposition was at least arguable and not fanciful. In endeavouring to prove that the Davco Scheme would have been both technically and economically feasible, the claimant did succeed to at least some degree. First, I accepted that the reverse Pointe Gourde principle (as explained in Melwood Units Pty Ltd v. Commissioner of Main Roads [1979] A.C. 426) applied in this case, and that at the date of resumption the value of irrigable/arable land was depressed because of the Burdekin project. The value per hectare awarded for such land was closer to that of the claimant's valuer than that of the respondent's, although the area was substantially -- 3 of 5 -- 4 adjusted for the actual groundwater entitlements of the claimant. Second, an enhanced value was awarded for the area of dry arable land for the potential that a hypothetical prudent purchaser would have foreseen for the possible future success of the Davco project, at least in part. If the merits of the Davco Scheme had not been canvassed, the claimant could not have recovered the additional amount. In addition, there was a claim of $390,500 for disturbance in respect of the feedlot. The respondent argued that the claim should not be allowed. However, the claimant was successful in recovering an amount of $290,500. In total, the claimant was awarded in excess of $3,000,000 more than the valuation finally put in evidence by the respondent. Therefore, it cannot seriously be suggested that this was a situation where the respondent was forced unreasonably and unnecessarily into litigation. The matter was a complicated one and although I did not accept the proposition of law contended for by the claimant, it was not a frivolous or fanciful argument. It is obvious from the different approaches adopted by the parties, both with respect to the law and to the appropriate method of valuation, that even if the amount of the claim was substantially less, the matter could only be resolved by coming to Court. There had been no success in resolving the matter when the amount of the claim was, before amendment, $6,303,950. In such circumstances it is useful to refer to the reasoning of Wells J of the Supreme Court of South Australia in Minister for the Environment v. Florence (1980/81) 45 LGRA 127. When discussing the power of that Court to award costs under section 36 of the South Australian Land Acquisition Act 1969, His Honour said at pp.149-50: " Compulsory acquisition cases differ of course from ordinary claims dealt with in the general jurisdiction in one significant respect: the claimant, unlike the ordinary plaintiff, had no choice whether to make a claim or not; the mere acquisition by compulsory process gave him, by virtue of s.18 of the Act, a claim to compensation which he could hardly be expected to renounce. 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 -- 4 of 5 -- 5 of its exercise may be in certain sorts of cases." In the present case, it would clearly be wrong if, in exercising the discretion given to this Court by section 27 of the Act, consideration was given only to the amount of the claim, the amount finally put in evidence by the authority and the amount of the award. Neither party was wholly successful and, although the award was closer to the respondent's valuation, the claim did not wholly fail. Because of the different approaches taken by the parties, efforts to settle the matter were unsuccessful, but it cannot be said that the authority was forced unreasonably and unnecessarily into litigation. It was a case that could only be decided by the Court. In the whole of the circumstances, I think that this is a proper case where both parties should bear their own costs.Therefore, in the exercise of the discretion given to me under section 27 of the Acquisition of Land Act 1967, I make no order as to costs. JJ TRICKETT MEMBER OF THE LAND COURT -- 5 of 5 --