Inglis v State of Queensland (No 3)
[2016] QLC 28
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- Unreported Judgment
- Inglis v State of Queensland (No 3)[2016] QLC 28
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Inglis v State of Queensland (No 3)[2016] QLC 28
Inglis v State of Queensland (No 3)[2016] QLC 28
LAND COURT OF QUEENSLAND
CITATION: | Inglis v State of Queensland (No. 3) [2016] QLC 28 |
PARTIES: | Robert Mallalieu Inglis, Marion Inglis and Paul Mallalieu Inglis (applicants) |
| v |
| State of Queensland (respondent) |
FILE NO: | AQL863-12 |
DIVISION: | General Division |
PROCEEDING: | Application for costs |
DELIVERED ON: | 10 May 2016 |
DELIVERED AT: | Brisbane |
HEARD ON: | Heard on the papers Decision reserved on 14 March 2016 |
HEARD AT: | Brisbane |
MEMBER: | WA Isdale |
ORDER: | The General Application filed on behalf of the respondent on 1 April 2014 is dismissed. |
CATCHWORDS: | COSTS – COMPULSORY ACQUISITION – s 27 Acquisition of Land Act 1967 – where the constructing authority was substantially successful – whether costs should be awarded to the constructing authority – factors governing the exercise of discretion Acquisition of Land Act 1967, s 27(2) Land Court Act 2000, s 34 Inglis v State of Queensland (No. 2) [2014] QLC 7 State of Queensland v Inglis & Ors [2015] QLAC 3 Mio Art Pty Ltd & Ors v Brisbane City Council [2010] QLC 86 Yalgan Investments Pty Ltd v Council of the Shire of Albert (1997-1978) 17 QLCR 401 |
APPEARANCES: | Not applicable. The parties provided written submissions. |
Background
- [1]
The application
- [2]The General Application brought on behalf of the respondent for an order for costs was filed on 1 April 2014. It has been adjourned while the appeals were heard. The respondent seeks its costs, including reserved costs, on the standard basis. In the alternative, it seeks its costs on the standard basis so far as those costs are attributable to the claim for compensation of $2,900,000 on the basis that the highest and best use of the land was for poultry farming.
The respondent’s submissions
- [3]The respondent submits that the applicants unreasonably and unnecessarily forced it into litigation. The respondent referred the matter to the Court for compensation to be determined after the parties had not been able to reach agreement. The compensation of $2,900,000 contended for by the applicants was, it is submitted, not supported by the evidence led by the applicants although it was persisted with, unsuccessfully, by them. The evidentiary shortcoming was clearly illuminated, from an early stage of the hearing, by the respondent’s conduct of the case. The conduct of the case for the applicants, in adhering to the chosen basis, ultimately unsuccessfully, wasted costs, says the respondent.
- [4]The Acquisition of Land Act 1967 (the Act), provides, by s 27(2) that, in the circumstances of this case, where the amount of compensation is determined to be closer to the amount contended for by the respondent, costs, if ordered, may only be awarded to the respondent. There is no dispute that this is the situation here.
- [5]The respondent points out that it paid an advance of $1,875,000 and that the applicants’ claim never went below $3,000,000.
- [6]The respondent’s submissions refer to the decision of the Land Appeal Court in Yalgan Investments Pty Ltd v Council of the Shire of Albert,[3] where the Court said:
- “(k)Where the Land Court is considering whether it should award costs to a constructing 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. Usually it would be more relevant to enquire whether the conduct of the claimant (such as, for example, making an exorbitant claim) has been such as to force the authority, unreasonably and unnecessarily, into litigation (Moyses at p. 274) or whether the claimant has pursued a vexatious, dishonest or grossly exaggerated claim or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court (Banno at p. 53).”[4]
- [7]The respondent contends that the position taken by the applicants, that there was a particular purchaser which would have paid a 30% premium above market price for the land so as to use it for poultry farming, was unrealistic, unsupported by evidence, and that failure to abandon it forced the respondent into litigation. Had that aspect of the claim been abandoned, the dispute would have been limited to the subdivision potential of the land, a matter where the range of possible values resulting was $1,875,000 to $2,250,000. The Court found that the value of the land taken was $2,250,000, a decision in favour of the applicants on that point.
- [8]The respondent submits that half of the trial time and half of the inspection time was wasted with the hopeless contention relating to poultry farming.
The applicants’ submissions
- [9]The applicants submit that the application is without merit and ought to be dismissed, with costs in their favour in respect of the application. They accept that s 27(2) of the Act operates to only allow costs in this case, if awarded, to be in favour of the respondent.
- [10]It is pointed out that, as a result of the trial, the applicants were awarded in excess of $500,000 more than what the respondent contended for. This related to the development potential of the land, disturbance and interest, all resolved more favourably to the applicants than the respondent.
- [11]Reference was made to the decision of the learned President in Mio Art Pty Ltd & Ors v Brisbane City Counil[5] where Her Honour said:
[9] The effect of s.34(1) of the Land Court Act and s.27(1) of the Acquisition of Land Act is that the Land Court has a complete discretion as to the award of costs, subject only to s.27(2) of the Act. The discretion is to be exercised judicially, that is, for reasons that can be considered and justified. There are a number of factors that are relevant to the exercise of that discretion.
[10] One factor is that
"Compulsory acquisition cases differ from ordinary claims in the significant respect that the claimant, unlike the ordinary plaintiff, has no choice whether to make a claim or not. The mere acquisition by compulsory process gave the claimant a claim to compensation which he or she could hardly be expected to renounce."
And in Banno v The Commonwealth Wilcox J said -
"… The acquisition left the applicants in the position of either accepting the Commonwealth’s assessment of the proper compensation or of having the Court rule on its adequacy. Perhaps people in that position should be allowed access to the Court, to present an arguable and well organised case, without being deterred by the prospect of being ordered to pay the Commonwealth’s costs if their case proves unpersuasive. I distinguish the situation of resumees who pursue a vexatious, dishonest or grossly exaggerated claim or present their case in such a way as to impose unnecessary burdens on the Commonwealth or the Court."
Similarly, in Pastrello v Roads and Traffic Authority (NSW) Talbot J said -
"There needs to be a strong justification for awarding costs against an applicant where the effect of making that order is to erode the benefit of the just compensation recovered as a consequence of the Court's determination. It is only in special cases that the Court will deprive the owner of the full benefit of the compensation which is determined as fair and just in the circumstances of the case."
[11] Another factor to be considered is the quantum of the claims as compared with the amount of the Court's determination. The Council has submitted that the claims were exorbitant and that the effect of the exorbitant claims was that the Council was forced erroneously and unnecessarily into a lengthy and complex two week trial.
[12] It is clear that the claims pursued by the claimants in this matter were substantially higher than the amount awarded as compensation. However, as pointed out by the Land Appeal Court in Yalgan Investments Pty Ltd v Shire of Albert, s.27(2) of the Act should not be interpreted to mean that where the claim is substantially more than the amount awarded, and the amount put in evidence by the constructing authority is not substantially less than the amount awarded, the Court should award costs to the constructing authority. It is more relevant to enquire whether the conduct of the claimant (such as, for example, making an exorbitant claim) was such as to force the authority, unreasonably and unnecessarily, into litigation or whether the claimant pursued a vexatious, dishonest or grossly exaggerated claim, or presented its case in such a way as to impose unnecessary burdens on the constructing authority.
…
[14] The claims may be characterised as excessive but it should be recognised that the claimants have, in effect, been penalised for making excessive claims through the operation of s.27(2) of the Act. The effect of s.27(2) is that the claimants are unable to obtain an award of costs even though they have obtained a determination that is $3,500,000 higher than the Council’s final valuation. The question is whether the claimants' conduct has been such that, in addition to being deprived of the opportunity to obtain an award of costs, costs should be awarded against them.
[15] The claims in this matter were not vexatious or dishonest. The claimants were entitled to pursue their claims for the loss of the land and, as recognised in Pastrello v Roads and Traffic Authority (NSW), there needs to be strong justification for awarding costs against an applicant where the effect of the order is to erode the benefit of the just compensation awarded as a consequence of the Court's determination. There were legitimate and complex town planning, architectural and valuation differences between the parties related to the development potential of the subject land. Those issues were such that I consider that litigation was almost unavoidable. Moreover, the claimants were vindicated to the extent of an award of an additional $3,500,000 beyond the Council's final position. The evidence indicates that no offer to settle was made as between Mio Art or Greener and the Council, although prior to the hearing the Council had paid out $13,500,000 by way of compensation for the resumed land.[6]
The respondent’s reply
- [12]The respondent’s submissions in reply, while acknowledging the repetition of some of its initial submissions, emphasise what is said to be the applicants’ error. This was the proposition that a particular adjoining owner was sure to have purchased the land for a figure well above what would otherwise be the market value. This, it is submitted, is a legal error not just a failure to provide sufficient evidence. What was required to be proved, it correctly submits, was what increment should have been added to what would otherwise have been the market value in order to compensate the dispossessed owner for the loss of potential to sell for more than would otherwise have been the market value.
- [13]The applicants’ case was consistent with the proposition correctly stated by the respondent. The increment sought was the full amount of the higher sale price contended for.
Consideration
- [14]The case presented for the applicants was unsuccessful as they did not present evidence which established their contention in relation to a purchaser for a premium price. The legal argument contingent on the existence of that fact therefore failed. This failure of evidence was fundamental. It ought to be distinguished, however, from forcing the respondent unreasonably and unnecessarily into litigation. The failure was in making out the case in practice rather than in its conceptual approach. Accordingly, this Court is unable to characterise the applicants’ conduct as unreasonably and unnecessarily forcing the respondent into litigation. The failure was in relation to evidence and the claim could not be fairly said to be vexatious or dishonest or grossly exaggerated. The applicants’ case simply lacked the evidence which was crucial to its success; that is why it failed. This shortcoming, certainly serious, has had consequences already. Although successful in the matters already discussed, the applicants are, because of s 27(2) of the Act, not able to receive an award of costs in respect, for instance, of those parts of the case in which they were successful and in respect of which they were forced to litigate. Their case, where unsuccessful, did burden the respondent. That is clear. Where successful, the applicants were burdened and are not able to claim costs. The compensation claim, if properly supported by evidence, would not have been exorbitant, assuming the proof of the market contended for, poultry farming by a particular corporation. The Court might have been able to be satisfied that the proper increment in value was the amount contended for.
- [15]For the reasons which have been given, this Court exercises its discretion in favour of the applicants by not making the order sought by the respondent. The General Application is dismissed.
- [16]The applicants seek their costs of responding to this General Application in respect of which they have been fully successful. Section 27(2) of the Act will apply so that costs may not be awarded to them.
Order
The General Application filed on behalf of the respondent on 1 April 2014 is dismissed.
WA ISDALE
MEMBER OF THE LAND COURT