Department of Natural Resources and Mines v Body Corporate for 'The Astor Terrace Car Park' & Anor [2003] QLAC 66

LAND APPEAL COURT OF QUEENSLAND CITATION: Department of Natural Resources and Mines v Body Corporate for "The Astor Terrace Car Park" & Anor [2003] QLAC 66 PARTIES: Chief Executive, Department of Natural Resources and Mines (applicant) v. Body Corporate for "The Astor Terrace Car Park" & Anor (respondents) FILE NO: LAC2003/0058 DIVISION: Land Appeal Court PROCEEDING: Appeal against Order for Costs ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 8 October 2003 DELIVERED AT: Brisbane HEARD BY: Written Submissions JUDGE: MEMBERS: Justice Mullins Mr RE Wenck, Mrs CAC MacDonald ORDERS: 1. The appeal against the decision of the Land Court made on 13 March 2003 be dismissed. 2. There be no order as to the costs of that appeal. CATCHWORDS: Costs – Appeal against order for costs – Where Land Court upheld appeals by licensees of stratum in respect of unimproved values for rental purposes – Where partial costs of the appeals to the Land Court awarded on the basis that the method of valuation likely to have wider application for broader community –No error in exercise of discretion -- 1 of 7 -- 2 COUNSEL: Mr J O'Rourke, Principal Legal Officer, for the appellant Mr G Allan for the respondents SOLICITORS: Legal Services, Department of Natural Resources and Mines for the appellant Russell Hanley & Johnson for the respondents [1] On 28 November 2002 the learned Member, Dr NG Divett, upheld appeals by the Body Corporate for "The Astor Terrace Car Park" Community Titles Scheme and Body Corporate for "The Astor Centre" Community Titles Scheme ("the respondents") in respect of the unimproved values for rental purposes of the stratum at Portman Lane, Spring Hill: Body Corporate for "The Astor Terrace Car Park" & Anor v Department of Natural Resources and Mines [2002] QLC 94. The respondents sought costs and were successful in obtaining an order for costs up until the completion of the first day of the hearing. The reasons for judgment of the learned Member in respect of the application for costs ("the costs reasons") were delivered on 13 March 2003: The Astor Terrace Car Park & Anor v Department of Natural Resources and Mines [2003] QLC 19. [2] The Chief Executive, Department of Natural Resources and Mines ("the appellant") was unsuccessful in appealing against the learned Member’s decision on the unimproved values: Department of Natural Resources and Mines v Body Corporate for "The Astor Terrace Car Park" & Anor [2003] QLAC 46 ("the appeal judgment"). [3] The parties delivered written submissions in relation to the appeal against the learned Member's decision on costs and did not require a hearing to supplement those submissions. The written submissions were delivered after this Court had published the appeal judgment. The appellant's submissions were received by the court on 14 July 2003. The respondents' submissions were received by the court on 21 July 2003. Submissions on behalf of the appellant in reply to the respondents' submissions were received by the court on 6 August 2003. Hearing in the Land Court [4] The hearing of the appeals before the learned Member involved written reports and valuations from the valuer for each party and oral evidence from each valuer. Preliminary and jurisdictional points and the oral evidence occupied the first day of the hearing on 22 August 2002. The submissions of the parties were made on the second day of the hearing on 29 August 2002. [5] The appellant's position before the learned Member was that the valuation of the stratum for the purpose of enabling the rent to be determined for each of the road licences over the -- 2 of 7 -- 3 stratum was to be made in accordance with ss 14 and 15 of the Valuation of Land Act 1944 ("VLA") and that s 23 of the VLA had no application. The respondents' valuer assumed that the stratum was rateable or taxable and that s 23 of the VLA applied to the valuations. [6] The learned Member determined that s 23 of the VLA was appropriate for valuing the stratum, even though the subject licences were not rateable or taxable lands. The learned Member acted on what the parties had informed him was agreed that the value of the subject land for rating purposes was zero. On appeal, this Court concluded that the subject stratum was rateable and that it could therefore be valued in accordance with s 23 of the VLA: see paras [17]-[25] of the appeal judgment. As this Court stated at para [25] of the appeal judgment: "Although we have followed a different route than the learned Member to conclude that s 23 of the VLA is applicable, the same conclusion has been reached." Decision on costs in the Land Court [7] The learned Member made reference to the relevant legislative provisions found in s 34 of the Land Court Act 2000 and s 70 of the VLA (at paras [6]-[7] of the costs reasons). The latter provision is concerned with when costs are not to be awarded and did not preclude an award of costs against the appellant. [8] The learned Member also referred to the requirement that the court must, in exercising the discretion in respect of costs, do so in a judicially sound manner and by reference to relevant considerations (at para [9] of the costs reasons). [9] The learned Member referred to decisions of the Land Appeal Court on costs in valuation matters including Bowden v Valuer-General (1980) 7 QLCR 138 ("Bowden") and Valuer- General v Queensland Club (1991) 13 QLCR 207 ("Queensland Club") (at paras [13] and [16]-[19]). [10] The learned Member then dealt with a number of issues that had been raised by the submissions of the parties on costs. He concluded that there was no element of arbitrariness in the approach of the appellant's valuer to his valuation (at para [33] of the costs reasons); the respondents were not unreasonably required by the appellant to go to court, because of the "virtual rarity of exactly similar stratum lands" (at para [36] of the costs reasons); the fact that the appellant's valuer made an error of professional judgment in how he applied the premium attaching to the two parcels adjoining the stratum did not amount to disregard of fundamental valuation principles (at paras [38] and [39] of the costs reasons); and both parties contributed to the additional evidence on the higher values sought by the appellant at the hearing (at para [40] of the costs reasons). -- 3 of 7 -- 4 [11] What persuaded the learned Member to award costs in favour of the respondents was that the appeals were in the nature of a test case and that "both valuers suffered from a lack of procedure to guide them in respect of the valuation of a common road licence stratum" (at para [43] of the costs reasons). The learned Member made specific reference that, with an increasing potential to create similar stratum connections between city buildings and the matter of stratum underground tunnels between buildings, the methodology resolved upon in the appeals was likely to have wider applications (at para [43] of the costs reasons). [12] The learned Member expressly noted that the appellant had not sought for the appeals to be determined as a "test case" for guidance, but believed that "the circumstances of the evidence of the scarcity of such stratum road licences should be a matter for consideration" (at para [45] of the costs reasons). The learned Member drew a distinction between the Queensland Club which was resolved on a question of law and the subject appeals which revolved around a principle of valuation, but considered that "the relatively unique nature of both matters draws a direct analogy between them" (at para [45] of the costs reasons). On the basis of following Queensland Club, the learned Member decided to award partial costs of the appeal to the respondents on the basis that they "should not be totally burdened with the cost of proving a method of valuation which is likely to have a wider application for the broader community" (at para [45] of the costs reasons). [13] What the learned Member did therefore was to rely on the unique facts of the valuation of the subject stratum for the purpose of the road licences being of benefit in valuing other strata to treat the appeals as a special case for which costs should be awarded in favour of the respondents, rather than applying the usual restrained approach to awarding costs in the Land Court on valuation appeals which was recognised in Bowden (at 146-147). [14] What can be observed about the learned Member's process of reaching his conclusion on costs is that none of the matters which he canvassed or on which he relied to award costs would have been affected in any way by the different route which this Court followed in agreeing with the learned Member's conclusion that s 23 of the VLA was applicable to the valuations of the stratum. Grounds of Appeal [15] The appellant pursued all but ground 1 of the grounds of appeal set out in the notice of appeal. The grounds of appeal in contention were therefore: " 2. That the decision of the Land Court was based on incorrect principles and failed to take account of correct principles. 3. That the decision of the Land Court was against the evidence and the weight of evidence. 4. That the learned Member erred in treating the matter as a test case. -- 4 of 7 -- 5 5. That the learned Member erred in following and not distinguishing the decision in Queensland Club v. Valuer-General (1990-91) 13 Q.L.C.R. 207. 6. The learned Member erred in that he: (a) made a costs Order against the Respondent notwithstanding that he had concluded that the Respondent's Valuer had not: i. acted arbitrarily ii. disregarded fundamental valuation principles iii. acted unreasonably; (b) failed to conclude that the hearing was unnecessarily lengthened only by the Appellants; (c) made a costs Order against the Respondent notwithstanding that he: i. rejected the arguments of the Appellants in favour of that Order ii. concluded that both Valuers had done the best they could with the evidence available." [16] The appellant did not make separate submissions in respect of each of grounds 2 and 3, but relied on the submissions made in relation to ground 6. Ground 4 [17] It is implicit in this ground of appeal that the appellant contends that the learned Member treated the appeals before him as a test case. As set out above, the learned Member appreciated that the appeals before him were not a test case, but considered that the unique nature of what was raised by applying principles of valuation to the subject stratum enabled an analogy to be drawn between the appeals before him and a test case involving a question of law such as Queensland Club. [18] The appellant cannot succeed on ground 4, as the learned Member did not treat the appeals as a test case. To the extent that this ground of appeal in substance attacks the approach of the learned Member in treating the appeals before him as analogous to a test case, it is covered by grounds 5 and 6. Ground 5 [19] The decision in Queensland Club (at 223) shows that what makes a test case is that the outcome of the test case is of benefit to the valuing authority in other matters. What the learned Member decided in determining the issue of costs on these appeals was that the approach to valuing the subject stratum was likely to have wider application than the valuation of the subject stratum. That finding is not challenged by any of the grounds of appeal. [20] The appellant seeks to rely on a number of features which it is submitted enable the decision in Queensland Club to be distinguished from the appeals that were before the -- 5 of 7 -- 6 learned Member. That approach, however, overlooks that what the learned Member has done is rely on Queensland Club by way of analogy rather than as directly applicable. [21] As the finding of the learned Member that the approach to valuing the subject stratum was likely to have wider application was not challenged, it was open to the learned Member to treat the subject appeals as analogous to a test case. Ground 6 [22] The substance of this ground of appeal is that the learned Member erred in the exercise of his discretion to award partial costs to the respondents. Both parties refer to the matters referred to in Queensland Club (at 223) which must be shown in order to set aside a discretionary order as to costs which were that the discretion miscarried or that some incorrect principle was applied or that the discretion was not exercised at all. That is a summary of the established principles which are followed by any appeal court where the appeal is against the exercise of a discretion: House v The King (1936) 55 CLR 499, 505. [23] This ground of appeal also incorporates a challenge to the learned Member's failure to conclude that the hearing was unnecessarily lengthened by the respondents. The appellant does not, however, challenge the conclusion of the learned Member that the approach of the appellant in adducing evidence at the hearing of the appeals of a higher value than that originally applied to the land did result in additional time of the hearing of the appeals (at para [40] of the costs reasons), but that the respondents also contributed to the additional length of the hearing by opposing the acceptance of that higher value. Such a finding precluded the learned Member from finding that the hearing was unnecessarily lengthened only by the respondents. [24] Basically, the thrust of the appellant's submissions on this ground of appeal is that the factor relied upon by the learned Member to treat the appeals before him as a special case was not sufficient to warrant such an approach, in the light of the learned Member's rejection of the grounds put forward by the respondents in support of their costs application. The issue is not whether this Court would have decided the costs application in the same way as the learned Member. The consideration which was the deciding factor for the learned Member was not irrelevant, supports the exercise of the discretion to award partial costs in favour of the respondents and is consistent with the principles found in Bowden and Queensland Club. It cannot be said that the learned Member's exercise of discretion miscarried in a way that makes his decision on costs appellable. Costs of the appeal against the decision on costs [25] The respondents in their written submissions sought their costs in opposing the appellant's appeal against the learned Member's decision on costs. -- 6 of 7 -- 7 [26] It is relevant on this aspect that the respondents' written submissions on the question of the appellant’s appeal against the learned Member’s decision on costs were lengthy (11 pages containing 52 numbered paragraphs), sought to attack the basis on which the learned Member decided the question of costs and put forward alternative arguments to support the learned Member's decision. There was no appeal by the respondents against the learned Member’s decision on costs, but the respondents used their opportunity to respond to the appellant's appeal on this question to agitate for quite different grounds for making the decision on costs. This had the result in eliciting a lengthy submission in reply from the appellant. [27] In order to dispose of the appeal on the question of costs, it has been unnecessary to deal with most of the matters raised in the respondents' submissions. [28] In these circumstances, it is not appropriate to make an order for costs in favour of the respondents and both parties should bear their own costs of the appeal against the learned Member's decision on costs. Orders [29] The orders which will be made are: 1. The appeal against the decision of the Land Court made on 13 March 2003 be dismissed. 2. There be no order as to the costs of that appeal. MULLINS J JUSTICE OF THE SUPREME COURT RE WENCK MEMBER OF THE LAND COURT CAC MacDONALD MEMBER OF THE LAND COURT -- 7 of 7 --