Mahoney v Chief Executive, Department of Transport and Main Roads (No. 5)
[2016] QLC 36
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- Mahoney v Chief Executive, Department of Transport and Main Roads (No. 5)[2016] QLC 36
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Mahoney v Chief Executive, Department of Transport and Main Roads (No. 5)[2016] QLC 36
Mahoney v Chief Executive, Department of Transport and Main Roads (No. 5)[2016] QLC 36
LAND COURT OF QUEENSLAND
CITATION: | Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 5) [2016] QLC 36 |
PARTIES: | John Mahoney, Kathryn Mahoney and the estate of Austin Mahoney (applicants) |
| v |
| Chief Executive, Department of Transport and Main Roads (respondent) |
FILE NO: | AQL289-11 |
DIVISION: | General Division |
PROCEEDING: | Application for costs |
DELIVERED ON: | 14 June 2016 |
DELIVERED AT: | Brisbane |
HEARD ON: | Decided on written submissions Decision reserved 26 April 2016 |
HEARD AT: | Brisbane |
MEMBER: | WA Isdale |
ORDER: | 1. In relation to the 2012 hearing, the Court makes no order as to costs. 2. The applicants pay the respondent’s costs of and incidental to the two general applications heard on 2 December 2015. Such costs are to be assessed on the standard basis, if not agreed. |
CATCHWORDS: | Costs – compulsory acquisition – s 27 Acquisition of Land Act 1967 – whether costs should be awarded – factors governing the exercise of the discretion Acquisition of Land Act 1967, ss 20, 27 Land Court Act 2000, s 34 Uniform Civil Procedure Rules 1999, r 681 Barns v Director-General, Department of Transport (1997-98) 18 QLCR 133 Calderbank v Calderbank [1975] 3 All ER 333 Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96 Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196 Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11 Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (2014) QCA 356 Mahoney & Ors v Chief Executive, Department of Transport and Main Roads [2016] QLC 18 Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liquidation) & Ors (2012) 33 QLCR 43 Mio Art Pty Ltd & Ors v Brisbane City Council [2010] QLC 86 Oshlack v Richmond River Council (1998) 193 CLR 72 PT Limited & Westfield Limited v Department of Natural Resources and Mines (2007) 28 QLCR 295 Vass & Anor v Coordinator-General (No. 2) [2015] QLAC 2 Wyatt v Albert Shire Council [1987] 1 Qd R 486 Yalgan Investments Pty ltd v Council of the Shire of Albert (1997-98) 17 QLCR 401 |
APPEARANCES: | The parties made written submissions |
SOLICITORS: | Clayton Utz for the respondent |
Background
- [1]On 9 March 2016 this Court ordered that the parties make submissions in relation to an application for costs by the respondent in relation to the hearing which took place in 2012 and the hearing of general applications which were decided on 9 March 2016.[1] The history of the litigation is summarised in that decision.
- [2]The parties requested that the Court decide on the basis of their written submissions.
The legislative framework
- [3]The structure within which the Court may order costs is provided by the Land Court Act 2000 (LCA) and, in cases such as the present, the Acquisition of Land Act 1967 (the Act). The relevant provisions are these:
Section 34 of the Land Court Act 2000 provides that:
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.
Section 27(2) of the Act is a provision “to the contrary” and it prevails over s 34 of the LCA for the purposes of determining costs of the proceedings. Section 27 provides that:
27 Costs
- (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.
- (3)Subsection (2) does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to section 24(3) or section 25(3).
- [4]In the circumstances, if costs are to be awarded, they could only be in favour of the respondent, due to the concluding words of s 27(2).
The discretion
- [5]Section 27(1) of the Act provides that, within the bounds set by s 27(2), costs are in the discretion of the Court. The discretion is to be exercised judicially, that is for reasons that are not arbitrary and can be justified.[2] One of the factors to be taken into account is the outcome of the case. In Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liquidation) & Ors[3] the Land Appeal Court, although it was considering s 34, pointed out that while r 681 of the Uniform Civil Procedure Rules 1999 states that the costs follow the event, it does not govern the exercise of the discretion. However, there is justice in the approach that the rule informs the discretion. The concept is the same here, but subject to s 27(2). It protects those put to expense by others.[4] The Court should not be bound by any presumptive rule or principle in exercising its discretion[5] but must consider all of the facts and circumstances of the case.
- [6]
“… Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party.”
- [7]It is relevant to take into account that the matter concerned compensation relating to the compulsory acquisition of land. In Barns v Director-General, Department of Transport[7] the Land Appeal Court said:
“This Court has an unfettered discretion as to the costs of and incidental to an appeal before it. An unfettered discretion is not an unprincipled one, and on ordinary principles, costs in circumstances such as these would follow the event. The general rule that costs will usually follow the event is one which is deeply embedded in our law. Although it has attracted some criticism in recent years, there was no attempt by the legislature to modify it when the practice of this Court was given attention in the Land Act 1994. It is a general rule which prima facie should be applied in this case.
The respondent submitted that the rule is not always applied by Courts exercising jurisdiction in land compensation matters. He cited Moyses v. Townsville City Council, Theo v. Brisbane City Council, Minister for the Environment v. Florence and Banno v. Commonwealth of Australia. These cases show that in compensation cases, the Land Court must take into account the fact that an appeal to that court is the only way in which a dispossessed owner can obtain an independent determination of the value of the land taken. As Wilcox J said in Banno:
‘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 case 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.’
Those cases justify some flexibility in the application of the general rule against a dispossessed owner. They contain no support for a departure from the rule as against a resuming authority in circumstances where the rule would ordinarily be applied.”[8]
- [8]It is helpful to consider the decision of the learned President in Mio Art Pty Ltd & Ors v Brisbane City Council[9] 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.’
…
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.”[10]
The respondent’s submissions
- [9]
- [10]Separately addressed is the costs of general applications brought by the parties and heard on 2 December 2015.[14]
Respondent’s submissions on costs of the general applications in 2015
- [11]The respondent seeks an order that the applicants pay its costs of and incidental to those applications, as it was wholly successful. The contention of the applicants, that severance and injurious affection had not been determined already, was unreasonable and incredible, forcing the respondent into litigation on that point. The outcome for the applicants was no better than what had been offered to them on 6 December 2012 in a Calderbank offer.[15] Reference was made to the decision of the Land Appeal Court in Yalgan Investments Pty Ltd v Council of the Shire of Albert where the Court said:
“In general, a party who is wholly successful in litigation can expect an order for costs in his favour.”[16]
- [12]In that same passage, the Land Appeal Court went on to say:
“But costs are discretionary and no hard and fast rules 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.”[17]
- [13]The decision in the matter of the general applications was referred to in order to illustrate that the Court did not view Ms Mahoney’s evidence favourably. A total of ten letters, written between 17 February 2015 and 7 August 2015 are pointed to in order to show the efforts made by the respondent’s solicitors to dissuade the applicants from the course they took with their general application.
- [14]The respondent also relies on the following passage in the Land Appeal Court’s decision in Yalgan v Shire of Albert:
“(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).”[18]
- [15]The solicitors for the respondent wrote to the applicants on 6 December 2012 and offered to settle the matter for $345,000, a sum which valued the resumed land at $275,000, the sum ultimately arrived at. The offer included a deduction of $111,000 for the respondent’s costs.[19]
Respondent’s submissions on costs of the hearing on 2012
- [16]The applicants were successful in this Court. The respondent successfully appealed to the Land Appeal Court. The applicants’ application for leave to appeal to the Court of Appeal was refused.[20]
- [17]The respondent does not seek costs incurred by it prior to 9 August 2012, when the two possible values, depending on the answer to the legal question heard in 2012, were agreed. The respondent points out that it did not seek an order for costs in the Land Appeal Court and submits that the present matter should be considered in the light of the decisions of that Court and the Court of Appeal.
- [18]The respondent seeks its costs of and incidental to the 2012 hearing, incurred after 9 August 2012 as it was ultimately wholly successful on the legal point, on which the applicants’ case was weak, and they have achieved an outcome essentially no better than the offer made to them on 6 December 2012.
- [19]It is submitted that, as the 2012 matter was a legal question rather than an orthodox hearing of competing valuations, it was more akin to a civil trial such that the general rule in relation to costs following the event ought more readily be applied. It is also submitted that the Land Appeal Court effectively held that the applicants’ case was weak, with the evidence supporting the conclusion that the rezoning of the land was independent of the resumption process. The Court of Appeal, it is submitted, also took the view that the applicants’ case on the facts was weak. Accepting that the applicants’ case was weak, it is submitted that it is appropriate to order that costs should follow the event.
The applicants’ submissions
- [20]The applicants first address the costs of the hearing in 2012. They assert that their case was not weak but that regional planning reforms provided support for their position. They explain the lengthy process of investigation which they carried out and the difficulties in obtaining access to information. Considerable efforts were made in an attempt to deal with their dispute outside of the Court system.
- [21]Concerning the general applications in 2015, it is submitted that the arguments presented were not unreasonable or incredible. They point out that they were representing themselves in those applications. Ms Mahoney, a solicitor, submits that she had no previous experience in this Court or in land law matters prior to 2011. It is submitted that Ms Mahoney’s limited understanding of the relevant law led to uncertainty regarding the comprehensiveness of the valuation figures arrived at by the valuers.
- [22]It is submitted that Ms Mahoney was conscious of the decision of the Court of Appeal in Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd[21] and was concerned to ensure that the value of the land was assessed separately to the damage caused by severance and injurious affection. Her conduct ought, it is submitted, be looked at in view of her intention to proceed correctly.
- [23]The applicants submit that their conduct would not be capable of forcing the respondent to pursue its general application as they were attempting to resolve the matter out of Court. They do not accept that the 2012 offer to settle is relevant to the 2015 application and stress the need for fair compensation to dispossessed landowners. They submit that it would be unfair to require them to pay costs.
Exercising the discretion
- [24]The discretion is to be exercised in view of all of the facts and circumstances of the case, bearing in mind that the purpose of costs is to compensate the successful party for the expense to which it has been put.
Decision on costs of the hearing in 2012
- [25]The respondent was wholly successful on the legal point on appeal and the outcome for the applicants is not noticeably superior to that which would have resulted from accepting the offer made to them before the hearing. The Court accepted the applicants’ contentions but that was reversed on appeal. As already noted, it was a legal question before the Court, rather than the usual choice between competing valuations.
- [26]It is clear that the intention of putting the legal question to the Court was for the purpose of endeavouring to limit the proceedings, rather than for any vexatious purpose, and the Court was greatly assisted by that.[22] There was nothing about that hearing which could be properly criticised. It was conducted in a proper and efficient manner and no criticism could be made in relation to the reasonableness of the two competing valuations, they were agreed alternatives. The legal question would determine which one applied.
- [27]The respondent’s success on the legal question ought not to be considered as if the dispute was a typical civil case. It is more significant for present purposes that the parties endeavoured to focus their compensation dispute on a legal question in order to save resources. The Court is satisfied that this was done genuinely by the parties and that this is not a case of one party unreasonably forcing the other into litigation.
- [28]The case presented to this Court was arguable and well-presented. It was the case of dispossessed landowners who had made significant efforts to resolve their dispute outside of Court and then to minimise the question to be decided by the Court. The conduct of the hearing was not such as to impose any unnecessary burdens on the respondent or the Court.
- [29]In relation to the 2012 hearing, the Court is not satisfied for the reasons given that, in the exercise of its discretion in accordance with the authorities which have been referred to, it would be proper to award costs in favour of the respondent. Without detracting from what has already been said, it is a consideration that making the order sought would deprive the applicants of the full benefit of the compensation which has been determined to be just and reasonable.
- [30]The Court makes no orders as to costs in relation to the 2012 hearing.
Decision on costs of the general applications in 2015
- [31]The respondent was wholly successful in respect of the general applications, one brought by each party, that were heard on 2 December 2015. It was reasonable for the respondent to bring its general application in order to progress the long-running litigation. The applicants brought their general application questioning the extent of what had been agreed as included within the compensation figures arrived at by the valuers and used in the case throughout. Ms Mahoney, it is submitted, was questioning this in the light of her knowledge of the decision in Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd.[23] The Court found that this concern was misplaced and the contention incorrect. It did not find that there was mendacious conduct, though it was invited to do so.
- [32]In the 2015 general applications the situation is distinct from the 2012 hearing. The 2015 general application by the respondent was necessary to move the litigation to conclusion and it was wholly successful. It was necessary as the applicants were delaying resolution due to an incorrect understanding of the agreement on the basis of which the case had been conducted. That understanding was without merit and could properly be characterised as unreasonable. The respondent was forced into litigation unnecessarily in respect of the 2015 general applications. The respondent conducted itself properly and efficiently in dealing with those applications.
- [33]The Court considers that the unreasonableness of the applicants’ conduct in the 2015 applications is sufficient to weigh decisively against the erosion of the compensation awarded. The Court orders that the applicants pay the respondent’s costs of and incidental to the two general applications heard on 2 December 2015.[24]
Order
- In relation to the 2012 hearing, the Court makes no order as to costs.
- The applicants pay the respondent’s costs of and incidental to the two general applications heard on 2 December 2015. Such costs are to be assessed on the standard basis, if not agreed.
WA ISDALE
MEMBER OF THE LAND COURT
Footnotes
[1] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads [2016] QLC 18.
[2] Wyatt v Albert Shire Council [1987] 1 Qd R 486 at 489.
[3] (2012) 33 QLCR 43 at [4].
[4] Vass & Anor v Coordinator-General (No. 2) [2015] QLAC 2 at [59].
[5] PT Limited & Westfield Limited v Department of Natural Resources and Mines (2007) 28 QLCR 295 at [20] where the Valuation of Land Act 1944 was applicable.
[6] (1998) 193 CLR 72 at [67].
[7] (1997-98) 18 QLCR 133.
[8] Ibid at 135, 136. Followed in Vass & Anor v Coordinator-General (No. 2) [2015] QLAC 2 at [62].
[9] [2010] QLC 86.
[10] [2010] QLC 86 at p 4, 5 and 6.
[11] Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196.
[12] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11.
[13] The history can be found in Mahoney & Ors v Chief Executive, Department of Transport and Main Roads [2016] QLC 18.
[14] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads [2016] QLC 18.
[15] Calderbank v Calderbank [1975] 3 All ER 333.
[16] (1997-98) 17 QLCR 401, 407(h).
[17] (1997-98) 17 QLCR 401, 407(h).
[18] (1997-98) 17 QLCR 401, 408.
[19] Affidavit of Kaia Maree Duce sworn on 30 March 2016.
[20] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (2014) QCA 356.
[21] [2015] QCA 96.
[22] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11 at [4], [5].
[23] [2015] QCA 96.
[24] Mahoney & Ors v Chief Executive, Department of Transport and Main Roads [2016] QLC 18.