Dellow v Council of the Shire of Livingstone [1992] QLC 18 (1992-1993) 14 QLCR 66

LAND COURT BRISBANE 19th June, 1992 Re: Resumption for Drainage purposes - A91-89. (Acquisition of Land Act 1967) K.H. Dellow and M.I. Dellow v. Council of the Shire of Livingstone DECISION ON APPLICATION FOR COSTS By proclamation published in the Government Gazette on 29th September, 1990, the respondent resumed certain land in the ownership of the claimants. A claim for compensation dated 25th September, 1991, was served on the respondent in the sum of $216,500. In December, 1991, an advance against compensation in the sum of $40,000 was made. When the matter was called on for hearing, leave was sought and obtained to amend the claim to $80,263.75 ($80,148 if corrected by the sum agreed for legal fees ($700) incurred in the preparation and lodgment of the claim). The amount of the valuation finally put in evidence by the respondent was $33,000 exclusive of the sum agreed for legal fees. Compensation was determined in the sum of $44,700. The respondent seeks costs of and incidental to the action. The statutory provisions governing the matter are found in s. 27 of the Act. This section 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 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. " Sub-s. 2 of the section restricts the discretion given to the Court by sub-section 1 and makes the discretion dependent upon the amount of the award. In this case the award is nearer to the amount of the valuation finally put in evidence by the respondent. Prima facie, the respondent is entitled to costs. In Moyes and Ors v. [1992] QLC 18 -- 1 of 5 -- 2 Townsville City Council (1979) 6 Q.L.C.R. 271 at p. 274, the Land Appeal Court said - "First, we do not think that the presence of sub-section (2) of Section 27 in the Act should 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 any costs to the claimant, but should award costs to the authority. 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. " The respondent emphasizes the last part of this paragraph. Clearly were the circumstances limited to the claim as served on the respondent and the valuation finally put in evidence by the respondent, I would have little hesitation in awarding costs to the respondent. However, the matter is not as simple as that. Between the service of the claim on the respondent and the hearing, nothing appears to have taken place between the parties other than satisfaction of a request for an advance which under s.23 of the Act serves as notice of the valuation likely to be put in evidence by the respondent. The services of a valuer were obtained for the purposes of the preparation and lodgment of the claim. He made an assessment in the sum of $140,000. He subsequently withdrew from the case (without charge) on being elected to the respondent council. On the day prior to the commencement of the hearing the respondent was notified that the claim was being reduced to $98,598.75. This was the first notice that the respondent received that the claimants were abandoning the claim for $216,500. On the morning of the hearing, the respondent offered the claimants the sum (all up) of $55,000 less the advance. The offer was rejected. The amount finally claimed was based upon a valuation made only a day or so before the commencement of the proceedings. The assessment by this valuer for loss of land was $75,000. The submission of the respondent is essentially that the circumstances fall neatly within the relevant principles as stated in Moyes supra. The submission put on behalf of the claimants in that the words "finally claimed" and "the valuation finally put in evidence" are explicit and that as such it could not be argued that the amount finally claimed was "outrageous" for reasons that the award exceeded the valuation finally put in evidence by the respondent by $11,000; that it could not be said that the amount finally claimed was based on a valuation which was blatantly wrong and that the conduct of the respondent shows that there was some uncertainty in the mind of the respondent as to the true value of the land. It is submitted that the offer made on the morning of the Court should be ignored on grounds that by then the claimants had -- 2 of 5 -- 3 already incurred substantial costs of the action. The respondent, I believe, could argue equally. In this case the amendment involved a substantial departure from the sum claimed but there is no evidence that the respondent was prejudiced by the amendment. Leave to amend was granted. In Arcpoint Pty Ltd v. The Director-General, Department of Transport (27th May, 1992 - A91-20) the Court in considering the meaning of the words contained in sub-section 2 of s.27 of the Act said - "Inherent in the submission of Mr Samios is the submission that the amount finally claimed as compensation and the valuation finally put in evidence should be confined to those amounts amended by leave (claimant) and put to the Court (respondent) at the commencement of the hearing, otherwise, he argues, either party could, upon review during the proceedings, negative a party's entitlement to costs. However, there appears to me to be ample protection within the legislation to prevent a denial of the opportunity to seek costs in such circumstances. Firstly, in dealing with the claim, the words "the amount finally claimed by the claimant in the proceedings" must be read with the proviso to the sub-section and with the provisions of ss.19 and 24(3) of the Act. S 19 deals with particulars which should be included in a claim and service of the claim on a constructing authority. S 24 provides that a claimant makes a reference to the Court by filing in the Court a copy of the claim served on the constructing authority. Sub-s. 3 provides - The claimant shall not amend the claim filed by him in the office of the Registrar of the Land Court except upon leave granted by that Court (which leave the Court may grant upon such terms as it deems just, including terms with respect to the payment of costs). The latter section would appear to divorce costs which may properly flow from an amendment of the claim from costs which may properly flow from the proceedings following the amendment. This may occur in a case where there is a substantial departure such as a case where the amendment has resulted in the claimant finally seeking compensation on a basis anew to that which the respondent was led to believe would be the case on receipt of the claim and as a result has wasted professional fees in preparing to answer the claim. In cases other than those involving a substantial departure, the matter whether the costs question of the result may be affected by the amendment seems to be irrelevant in the application of s.24(3) (see also s.25(3)). Secondly, it is in the discretion of the Court whether leave is granted and thirdly, whilst leave is required to amend a claim, a claimant may lead evidence to a sum other than the sum stated in the claim. The words "the amount of the valuation finally put in evidence by the constructing authority" clearly recognise that the valuation put before the Court may be different from another valuation made by the constructing authority for the same purpose. Prior to the hearing of a claim, a party may apply for an exchange of valuations and all supporting data (s.41B - Land Act 1962). If an application is made and granted the exchange is effected by exchanging material filed in the Court by the parties. Where an exchange does not take place under the section the Court, of its own motion and upon hearing the views of the parties, may, on the day of hearing, order an exchange. It is not uncommon for this to be done without an order from the Court. In either of these cases it -- 3 of 5 -- 4 appears that this is the point where the "battle lines" have been drawn and that the word "finally" used in s.27 should be given such meaning. It follows that whatever is done by a party during the hearing is done at his peril as to costs. " In Minister for the Environment v. Florence (1980-81) 45 L.G.R.A. 127, Wells J in discussing the counterpart provisions of the Land Acquisition Act 1969 (SA) said at pp 149-150 - " 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 of its exercise may be in certain sorts of cases. In cases under the Land Acquisition Act, the legislature has provided some assistance to the judge who is required to exercise that discretion. Section 36 of the Act provides: '36. In any proceedings under this Act the Court may award such costs as it thinks proper, but, in making an order for costs, shall, where it is, in the opinion of the Court, appropriate to do so, take into consideration - (a)the amount of compensation awarded by the Court as compared with the amount (if any) offered by the Authority; and (b)the extent to which, in the opinion of the Court, the proceedings have arisen from, or been affected by - (i)unreasonable conduct on the part of the claimant or the Authority; or (ii)an excessive claim by the claimant or unduly depressed offer by the Authority. ' As I construe it, the section begins by stating the general rule. It then directs the court 'where it is, in the opinion of the Court, appropriate to do so, [to] take into consideration' one or more facts and circumstances of the kind specified in pars (a) and (b). It is to be observed that the direction is not unconditional; the court is only to give effect to the direction where it considers it appropriate to do so. The implication, in my opinion, is that before applying the substance of paras (a) and (b) there must be some identifiable facts or circumstances signifying the appropriateness of considering, in particular, the relationship between the authority's best offer and the amount awarded, unreasonable conduct on the part of either party, or an excessive claim or unduly depressed -- 4 of 5 -- 5 offer. Put another way what the section means is, not that there is a discretion to be exercised having regard to the facts and circumstances of the kind referred to in pars (a) and (b) (supra), but that the discretion is to be exercised generally, and, when the facts and circumstances seem to call for it, the court is to consider the implications, for the case then before it, of those paragraphs. I should, in passing, observe that there is a clear difference in emphasis between par. (a) and sub-par. (ii) of par. (b). By the former the court is called on to consider a comparison of the two amounts; by the latter, the court is called on to consider amounts said to be excessive or unduly depressed in se. Against the history of a wide-ranging discretion given to this Court with respect to costs, I am, I apprehend, to construe s. 36 flexibly and not restrictively, to the intent that the special nature of the jurisdiction to which it relates should be duly recognized, and orders made in that jurisdiction that are just and expedient. " It may be seen that matters contained in that legislation as matters for consideration by the Court are akin to the principles laid down in Moyes supra as principles applicable in the interpretation of s.27 save that under the Act the exercise of the discretion in this jurisdiction is restricted by sub. s(2) and follows provisions governing an amendment of the claim. It is in the latter area where I am unable to appreciate how circumstances which may have been relevant to the question whether leave to amend should or should not be granted and were not then brought into account can be brought into account on the costs question of the result following an amendment. It seems to me that the legislature intended otherwise. On my reading of the legislation and Moyes case supra, the sums which appear dominant for my consideration are those which follow the amendment. In that light the amount finally claimed was based on a valuation which I agree was not blatantly wrong. Nor could it be said that the valuation finally put in evidence by the respondent was blatantly wrong - the award exceeded the valuation by $11,000. Both assessments rested on opinion and on the interpretation of the market evidence. This is not uncommon in an exercise in valuation. I would, in such circumstances, make no order as to costs. Generally speaking it appears that this was a case in which neither party was prepared to give ground until the day prior to the hearing when both began to waiver. By then both had incurred substantial costs of the action. In consideration of all the circumstances I am of the opinion that the case is one where the parties should bear their own costs. Accordingly, I make no order as to costs. Member of the Land Court -- 5 of 5 --