Moreton Bay Regional Council v Mekpine Pty Ltd (No 2)
[2014] QLAC 5
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- Unreported Judgment
- Appeal Determined (QCA) - Appeal Determined (HCA)
- Moreton Bay Regional Council v Mekpine Pty Ltd (No 2)[2014] QLAC 5
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Moreton Bay Regional Council v Mekpine Pty Ltd (No 2)[2014] QLAC 5
Moreton Bay Regional Council v Mekpine Pty Ltd (No 2)[2014] QLAC 5
LAND APPEAL COURT OF QUEENSLAND
CITATION: | Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No 2) [2014] QLAC 5 |
PARTIES: | MORETON BAY REGIONAL COUNCIL (appellant) MEKPINE PTY LTD (LAC009-12) (respondent) And MORETON BAY REGIONAL COUNCIL (appellant) v ZACSAM PTY LTD (LAC010-12) (respondent) |
FILE NOS: | LAC009-12 (Mekpine Pty Ltd) Land Court No. AQL816-11 LAC010-12 (Zacsam Pty Ltd) Land Court No. AQL817-11 |
ORIGINATING COURT: | Land Court of Queensland |
PROCEEDING: | Costs of appeal to the Land Appeal Court |
DELIVERED ON: | 24 July 2014 |
DELIVERED AT: | Brisbane |
HEARD AT: | On the papers |
THE COURT: | Peter Lyons J CAC MacDonald, President of the Land Court PA Smith, Member of the Land Court |
ORDER: |
|
CATCHWORDS: | COSTS – two related appeals heard at single Land Appeal Court (LAC) hearing – much common argument – one appeal allowed, one dismissed – whether costs award in each case should 'follow the event' – some distinctive features but normal costs rule to apply – apportionment a matter for costs assessor. COSTS – further appeal to Court of Appeal (QCA) from LAC decision – whether LAC costs decision should be delayed until QCA decision – costs decision not delayed – finality in LAC decision desirable. COSTS – costs of Land Court (LC) hearing of general applications reserved by LC – not sufficient information before LAC to vacate such order. Acquisition of Land Act 1967 (Qld) Appeal Costs Fund Act 1973 (Qld), s 15 Land Court Act 2000 (Qld), ss 34, 72 Retail Shop Leases Act 1994 (Qld) Uniform Civil Procedure Rules 1999, r 698 LGM Enterprises Pty Ltd v Brisbane City Council (2008) 29 QLCR 176 Mekpine Pty Ltd v Moreton Bay Regional Council [2012] QLC 46 Mentech Resources Pty Ltd v MCG Resources Pty Ltd (in liq) (No 2) (2012) 33 QLCR 43 Moreton Bay Regional Council v Mekpine Pty Ltd [2013] QLAC 5 |
SOLICITORS: | Moreton Bay Regional Council, Legal Services Department for the appellant Hillhouse Burrough McKeown for the respondents |
THE COURT:
- [1]On 14 November 2008 a small strip of vacant land was compulsorily acquired by the appellant, Moreton Bay Regional Council (the Council), from the south-west corner of a retail shopping centre known as the Castle Hill Shopping Court, under the provisions of the Acquisition of Land Act 1967 (Qld) (ALA). At the date of resumption, the first respondent Mekpine Pty Ltd (Mekpine) was the lessee of a grocery store trading as the Castle Hill IGA and the second respondent Zacsam Pty Ltd (Zacsam) was the lessee of a pizza shop trading as Eagle Boys Pizza. Both businesses were situated in the Castle Hill Shopping Court.
- [2]Mekpine and Zacsam lodged applications for the determination of compensation in the Land Court. Prior to the hearing of the claims, the Land Court ordered that a preliminary point be determined as to whether, at the date of resumption, Mekpine and Zacsam had an estate or interest in the resumed land pursuant to the ALA.
- [3]The Land Court held that both Mekpine and Zacsam had an interest in the resumed land for the purposes of the ALA.[1] The Council appealed against that decision to this Court.
- [4]This Court decided that the appeal in relation to Mekpine's claim should be allowed and that the preliminary point as to whether at the date of resumption Mekpine had an estate or interest in the resumed land pursuant to the ALA should be answered "No". It was also held also that the Zacsam appeal should be dismissed, and that matter was remitted to the Land Court for the determination of the claim for compensation of Zacsam.[2]
Timing and Scope of any costs order
- [5]Both parties have filed submissions in relation to the costs of the appeal. The Council submitted that it was premature for orders to be made in respect of costs as the decision of the Land Appeal Court in the Mekpine proceedings is the subject of an appeal to the Court of Appeal. The Council contended that:
A. the Mekpine and Zacsam proceedings are inextricably linked and that arguments in relation to costs should only proceed when both matters have concluded. If this Court were to make an order as to the costs of the appeal and the Court of Appeal were to reverse the decision of the Land Appeal Court, it may be necessary to rehear the argument in relation to costs in the Land Appeal Court.
B. Alternatively,
- Due to the interrelated nature of the two matters, a single costs order should be made in respect of both matters which recognizes:
- (i)the relative success of each of the parties; and
- (ii)the effort necessitated by each appeal.
- (i)
- The decision of the Land Court regarding costs of the general application should be vacated.
- The Council is entitled to 75 per cent of the costs of both matters as it prevailed in respect of the Mekpine proceedings and those proceedings represented the majority of the evidence, argument, court time and cost expended in the appeal to the Land Appeal Court.
- In the further alternative, because the Council was successful in the Mekpine matter, the costs of that appeal should follow the event.
- [6]Due to the interrelated nature of the two proceedings, the Council submitted, it is difficult to determine which costs apply to which matter. To now disentangle the costs attributable to one action from the other would involve an arbitrary exercise in which costs claimed for the proceeding in which one party has been successful were likely to be heavily loaded as against the proceeding which had not been successful. Counsel’s and solicitors' time spent in perusing and writing correspondence largely dealt simultaneously with both matters as did obtaining evidence and preparing for hearing. The process of apportioning costs between matters will be an exercise in artificiality likely to result in ongoing dispute and expense.
- [7]The Council submitted that the Mekpine proceedings represented the majority of effort by the parties and entailed more time in argument before the Court as it was necessary to conduct a forensic examination of the Mekpine lease and its applicability to the resumed area. No such enquiry was required of the Zacsam lease. The extra effort required in the Mekpine proceeding is evidenced by the following:
- the Council's submissions dealt exclusively with Mekpine for just under one page but otherwise addressed both matters equally;
- the respondents' submissions devoted two pages exclusively to the Mekpine proceeding but otherwise dealt with both matters equally;
- the Council's submissions in reply devoted one and a half pages exclusively to Mekpine but otherwise dealt with both matters equally; and
- in the decision of the Land Appeal Court, over five pages were devoted to the Mekpine proceeding as opposed to less than three for Zacsam.
- [8]In our opinion, it would be inappropriate to make a single costs order in respect of both matters. We accept that the proceedings were heard by the Land Appeal Court together and that one judgment was delivered dealing with both matters. However, it is clear from our reasons for judgment that while some issues were common to both appeals, others were not. Moreover, it was decided that the Mekpine appeal should be allowed and the Zacsam appeal be dismissed, which is a clear indication that separate issues arose in each appeal. If we were to deal with the costs of the appeals by way of a single costs order, we consider that the result would be arbitrary and unable to be justified for sound reasons. Accordingly, the costs in relation to each matter should be dealt with separately.
- [9]Further, we do not consider that our decision as to the costs of the appeals should be deferred until the result of the Mekpine appeal to the Court of Appeal is known. Zacsam is not involved in that appeal and we can see no good reason why the costs of Zacsam in the Land Appeal Court should not be dealt with at this stage. As to Mekpine, although an appeal by Mekpine is pending in the Court of Appeal, we are of the view that it is convenient to deal with Mekpine's costs in the Land Appeal Court to avoid any delay in the ultimate disposition of that proceeding.
Legal principles
- [10]Section 34 of the Land Court Act 2000 (Qld) (LCA) provides:
"34 Costs
- (1)Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate.
- (2)If the court does not make an order under subsection (1), each party to the proceeding must bear the party’s own costs for the proceeding."
- [11]Section 72(1) of the LCA provides, inter alia, that s 34 of the Act applies with necessary changes to the Land Appeal Court and s 72(2) provides that a reference in the applied section to the Land Court is taken to be a reference to the Land Appeal Court.
- [12]It has been held on many occasions that the discretion to award costs granted by s 34 is unfettered but that the discretion is to be exercised judicially, that is for reasons that may be explained and substantiated.[3] However it has also been recognized by the Land Appeal Court that although the discretion to award costs is unfettered, the rule that costs follow the event[4] may inform the exercise of the discretion granted under s 34(1), "as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others."[5]
Zacsam
- [13]Applying that approach, we consider that Zacsam should be awarded its costs of the appeal. Zacsam succeeded in its response to the appeal and no good reason has been put forward as to why an award of costs should not be made in Zacsam's favour. It will be a matter for the person who assesses the costs to determine how costs for work common to both proceedings will be dealt with.[6]
Mekpine
- [14]Mekpine has submitted that there are good reasons to depart from the usual practice that costs follow the event and that there should be no order as to costs in respect of the Mekpine appeal proceedings, because:
- Mekpine was entitled to rely on the decision of the Land Appeal Court in LGM Enterprises Pty Ltd v Brisbane City Council[7] where the Court found that a claimant in a materially identical position to Mekpine had an estate or interest in the resumed land, pursuant to the operation of the Retail Shop Leases Act 1994 (Qld) (RSLA).
- The Land Appeal Court decision in relation to Mekpine rejected the reasoning in LGM and the reasoning of the learned Member in these proceedings on the issue of whether the RSLA operated to create an estate or interest in land. In lodging its claim in the Land Court and resisting the appellant's appeal, Mekpine's conduct was based on known authority and sound reasoning.
- Mekpine acted reasonably and in good faith in consenting to the determination of the question as to whether it had an estate or interest in the resumed land as a preliminary point of law.
- Mekpine has no ability to apply for an indemnity certificate in respect to a costs order if one was made against it in these proceedings.[8]
- The Council, being a constructing authority, would suffer no substantial prejudice or injustice if no order as to costs were made.
- In the alternative, in view of the appeal to the Court of Appeal, questions as to costs should be stayed pending the outcome of that appeal.
- [15]We do not accept that our reasoning in relation to the application of the LGM decision represented a rejection of the earlier decision of the Land Appeal Court in that case. We said:[9]
"In LGM, it was held that a lessee had an interest in certain walkways in a shopping centre, which were external to the leased premises. In reaching that conclusion, the Land Appeal Court referred to 'the combination of the terms of the lease, the provisions of the RSLA and the uncontested evidence of the de facto recognition by the landlord of the areas of land on the gardens as walkways to the businesses in the shopping centre', as suggesting that 'the interest is not qualitatively different and, by no means, in the "absurd" category'. The provisions of the RSLA which the Court had in mind included s 43. It is not clear whether the Court found that s 43 was sufficient to give to a lessee in a retail shopping centre, an interest in land beyond the leased area. If that were a finding of the Court, we would not be prepared to follow it." (citation omitted)
Notwithstanding what has just been set out, if our decision were to be regarded as overruling LGM, that is not a sufficient reason to deprive the Council of its costs in this case. The LGM decision is relatively recent and there is uncertainty as to its true effect. In the circumstances of this case, we do not think that reliance by Mekpine on the decision in LGM warrants a departure from the usual rule, namely, that costs follow the event.
- [16]Further, we consider that the other reasons put forward by Mekpine for not awarding costs are unpersuasive. It does not appear to us to be relevant to the question of liability for costs that the issue of whether Mekpine had an estate or interest in the land was determined by a preliminary point of law. Indeed Mekpine has been relieved of the likelihood of incurring the costs of a full hearing as a result of this Court's decision. Similarly we do not consider that the question of whether Mekpine might apply for an indemnity certificate is relevant to the issue of liability for costs. Finally we do not consider that it is correct to say that the Council, being a constructing authority, would suffer no substantial prejudice or injustice if this Court makes no order as to costs. There is no authority to this effect and we can see no rational ground on which we could accept such a submission.
- [17]Our reasons for judgment in the substantive appeal show that there were a number of issues raised by Mekpine at that hearing, namely:
- whether the land resumed was included within Mekpine's lease;
- whether on the proper construction of the Mekpine lease, Mekpine had a contractual right to use the resumed land for car parking by its customers;
- whether that contractual right constituted an estate or interest in the resumed land;
- whether the resumed land was a common area of a retail shopping centre under the RSLA;
- whether, if the resumed land were a common area under the RSLA, the rights created under that Act gave rise to an estate or interest held by Mekpine in the resumed land.
- [18]Mekpine failed in relation to the first issue identified above and consequently it was unnecessary for the Land Appeal Court to determine the second and third issues. Mekpine succeeded on the question of whether the resumed land was a common area of a retail shopping centre under the RSLA but failed in its submission that that Act created rights giving rise an estate or interest held by Mekpine in the resumed land.
- [19]When the matter is looked at as a whole, it can be seen that Mekpine failed on most of the issues raised in its submissions at the hearing of the appeal. Accordingly, we consider that Mekpine should pay the Council the costs of the appeal to the Land Appeal Court.
Other issue
- [20]The Council submitted that a decision of the Land Court regarding costs of a general application should be vacated. This appears to refer to the general applications filed in the Land Court by the Council in both matters, on 15 February 2012. The applications sought a determination of the question of whether Zacsam and Mekpine had an interest in the resumed land under the ALA, as a preliminary point. The applications were successful, directions were made by the Land Court and the costs of the applications were reserved.
- [21]There has been no appeal to this Court against the orders reserving costs so there is an issue as to whether we could interfere with the orders made by the learned Member. In any event this Court does not have any information as to whether it would be appropriate to vacate those orders and we therefore decline to do so.
ORDERS
- In LAC009-12, the respondent Mekpine Pty Ltd is to pay the appellant's costs of the appeal on the standard basis, such costs to be agreed or, failing agreement, to be assessed.
- In LAC010-12, the appellant is to pay the costs of the appeal of the respondent Zacsam Pty Ltd on the standard basis, such costs to be agreed or, failing agreement, to be assessed.
PETER LYONS J
CAC MacDONALD
PRESIDENT OF THE LAND COURT
PA SMITH
MEMBER OF THE LAND COURT
Footnotes
[1]Mekpine Pty Ltd v Moreton Bay Regional Council [2012] QLC 46.
[2]Moreton Bay Regional Council v Mekpine Pty Ltd [2013] QLAC 5.
[3] See, for example, BHP Queensland Coal Investments Pty Ltd v Cherwell Creek Coal Pty Ltd (No 2) (2009) 30 QLCR 173 at [12]; Anson Holdings Pty Ltd v Wallace (No 2) (2010) 31 QLCR 130 at [5].
[4] See rule 698 of the Uniform Civil Procedure Rules 1999.
[5]Mentech Resources Pty Ltd v MCG Resources Pty Ltd (in liq) (No 2) (2012) 33 QLCR 43 at [4].
[6] We note that there is some authority for the proposition that fees for work which is common to more than one proceeding may be divided or apportioned: see R v Hore, Ex parte Brisbane City Council [1969] Qd R 75, 91; cited in Roger Quick, Thomson Lawbook Co, Quick on Costs, vol 2 (at update 72) [4.3380]; and see the other authorities discussed there.
[7] (2008) 29 QLCR 176 (LGM).
[8] Section 15, Appeal Costs Fund Act 1973 (Qld).
[9] Moreton Bay Regional Council v Mekpine Pty Ltd [2013] QLAC 5 at [68].