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Unreported Judgment

Suncorp Metway Insurance Pty Limited v Valuer-General (No. 3)[2017] QLC 53Member Isdale
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Suncorp Metway Insurance Pty Limited v Valuer-General (No. 3)[2017] QLC 53

LAND COURT OF QUEENSLAND

CITATION:	Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 3) [2017] QLC 53
PARTIES:	Suncorp Metway Insurance Pty Limited (appellant) v Valuer-General (respondent)
FILE NO/s:	LVA586-15
DIVISION:	General
PROCEEDING:	Application for costs
DELIVERED ON:	29 September 2017
DELIVERED AT:	Brisbane
HEARD ON:	Submissions closed 13 September 2017
HEARD AT:	Brisbane
MEMBER:	WA Isdale
ORDER/S:	The appellant’s application for costs is refused.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – where parties bear own costs in the usual course – where Act provides for where the Court may make a costs order – whether all or part of the respondent’s conduct in the appeal was frivolous or vexatious – whether the respondent did not properly discharge its responsibilities
	Land Court Act 2000 s 34 Land Valuation Act 2010 s 171 Alceon Captrans JV Pty Ltd v Valuer-General [2017] QLC 30 Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40 Mudie v Gainriver Pty Ltd (No 2) [2003] 2 Qd R 271 Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 2) [2017] QLC 46 Re Cameron [1996] 2 Qd R 218 YFG Shopping Centres Pty Ltd as TTE v Valuer-General [2017] QLC 11
APPEARANCES:	RJ Anderson QC (instructed by Otto Martiens Lawyers) for the appellant DB Fraser QC, with TW Quinn of Counsel (instructed by In-house Legal, Department of Natural Resources and Mines) for the respondent.

Background

[1]
On 25 August 2017 the Court gave its decision in the appellant’s appeal against a valuation under the Land Valuation Act 2010 (“the Act”). The appeal was allowed and the valuation of the land was determined in the amount of $13,180,000.^[1]

The present application

[2]
When the decision was delivered, the appellant applied for an order for costs in its favour. Written submissions were made by the parties.

The appellant’s submissions on the law

[3]
Whilst section 171 of the Act provides that the parties must bear their own costs, the section goes on to make some exceptions. It was submitted that the Court ought to exercise the discretion provided by section 17(2) of the Act to make a costs order in its favour.

[4]
The submissions refer to the respondents’ conduct in the appeal as being frivolous or vexatious and to it not discharging its responsibilities. Reference is also made to unmeritorious conduct, which in the submissions, is used to describe conduct that is frivolous and a failure to discharge its responsibilities.^[2] The appellant’s submissions in reply emphasise this.

The respondent’s submissions on the law

[5]
The respondent directs attention to section 171 of the Act and submits that the concept of unmeritorious conduct is not applicable since the Court is required to apply section 171 of the Act, which does not include such a consideration.

[6]
Before turning to the submissions relating to the facts which will affect the decision, it is convenient to delineate the applicable law.

The law

[7]
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.

[8]
In the cases such as the present, section 34 does not apply as there is a provision to the contrary. Section 171 of the Act will apply. It is in the following form:

171 Costs

(1)
Each party to a valuation appeal must bear the party’s own costs of the appeal.

(2)
However, the Land Court may make a costs order if it considers any of the following circumstances applies –

(a)
all or part of the appeal was frivolous or vexatious;

(b)
a party has not been given reasonable notice of intention to apply for an adjournment;

(d)
a party incurred costs because the other party did not comply with the court’s procedural requirements;

(e)
without limiting paragraph (c), a party incurred costs because the other party introduced, or sought to introduce, new material;

(f)
a party did not properly discharge the party’s responsibilities for the appeal.

(3)
In this section –

costs includes witness allowan ces for attending to give evidence.

[9]
The Court may only act as provided for in section 171. Subsection 2 of section 171, by use of the word “may”, gives a discretion, which must be exercised judicially, in accordance with reasons, if it becomes enlivened as set out in subsection 2.

[10]
The use of the expression “unmeritorious conduct” in the appellant’s submissions does not operate in a way adverse to the appellant, as paragraph [4] of those submissions make clear that its content is “frivolous” and a failure to “properly discharge” the party`s responsibilities within the meaning of section 171(2).

[11]
Section 171(1) makes clear that the usual case will be that the parties will bear their own costs. Subsection (2) provides the Court with a discretion to make a costs order if it considers that any of the circumstances in subsection (2)(a) to (f) is made out. The ones pointed to by the appellant are (a) and (f).

[12]
With regard to this framework, the factual aspects of the submissions may now be considered.

The appellant’s submissions on the facts

[13]
The appellant points to the following matters:

(a)
The respondent issued a valuation of $39,500,000 which it abandoned shortly before the hearing, at which it contended for $34,500,000. The Court found that the valuation should be $13,180,000, a large reduction. This suggests that there was a gross error;

(b)
The Court found that the respondent had valued the wrong thing;

(c)
By including leases at a late stage, the respondent acted contrary to the model litigant principles which apply to the respondent and which require acting consistently and trying to limit the scope of litigation and its cost, or to avoid it altogether;

(d)
The respondent sought to rely on section 163 of the Act in order to amend the property description. The Court did not accept this;

(e)
The respondent sought, unsuccessfully, to rely on section 179 of the Property Law Act 1974;

(f)
The respondent valued the leases instead of the volumetric lot which the Court found was what was to be valued;

(g)
The respondent’s valuation evidence was of poorly analysed or unsuitable sales, showing error beyond a difference in the opinion of experts;

(h)
The appellant was put to serious and unjustified trouble and expense to correct the respondent’s valuation.

The appellant’s submission on the discretion

[14]
The appellant submits that section 171 will apply equally to both parties. This is not in dispute. The appellant also submits that a fairly high onus will apply and that the Court has a restrained approach to awarding costs. This is also not in dispute.

[15]
Frivolous or vexatious conduct includes, it is submitted, relying on groundless assertions and putting a party to serious and unjustifiable trouble. It directs attention to the Court’s decision in Brisbane Square Pty Ltd v Valuer-General^[3] where his Honour Member Smith said:

“In Kent Street the Land Appeal Court held that frivolous or vexatious conduct is characterised by a lack of seriousness or sense, not worthy of serious consideration, or bringing about serious and unjustified trouble or harassment.

In Reed v QCoal Sonoma and Ors the Land Appeal Court considered a costs application on the basis of whether there had been frivolous or vexatious conduct under s 882(4)(b) WA (similar to s 171(2)(a) LVA).

The Land Appeal Court confirmed that the words frivolous or vexatious in these circumstances should be given their normal meaning. For example a party relying upon groundless assertions and putting parties to serious and unjustifiable trouble can be sufficient.

Also the Land Appeal Court favourably noted the Trial Member’s reliance on the Court of Appeal case of Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council. In that case, Chesterman JA, with whom McMurdo P and Philippides J agreed, said:

“… a proceeding will be frivolous if it lacked substance, so there was no reasonable basis for starting it so that its prosecution produced unjustified trouble for the other party.”

The Land Appeal Court accepted the Trial Members view of frivolous and vexatious and when costs under that heading should be made:

“The Court must consider the totality of the ordinary meanings of the words ‘frivolous or vexatious’ and do so in the context of the facts of the present case. It must be borne steadily in mind that there is no punitive element in an award of costs but they are to indemnify a successful party for the expense to which they have been put. It is important that the starting point is that set out in s 882(3) of the Act, that each party must bear their own costs. The discretion in s 882(4) is enlivened once it is shown that the appeal, or part of it, was frivolous or vexatious.”

The starting point for any costs under the LVA is s 171(1): that is, each party bears their own costs. To enliven a costs order for frivolous or vexatious conduct much more than a lack of success needs to be shown”^[4] (references omitted).

[16]
Because of its submissions on the facts, which have already been referred to, the appellant submits that the discretion should be exercised in its favour.

The respondent’s submissions on the facts

[17]
The respondent submits that none of the circumstances set out is section 171 has occurred. It points out that:

(a)
The appellant’s real objective was to establish that the land was valueless or had a nominal value, such as one dollar. In this, it was unsuccessful, succeeding only on its fall-back position of the value found by the Court;

(b)
The appeal would always have had to be resisted and the respondent successfully resisted the appellant’s primary contention;

(c)
Courts routinely accept evidence from one party and reject it from the other. This case is no more than an instance of that. It is necessary to show much more than the failure of a case in order to satisfy section 171(2);

(d)
The acceptance of the evidence of one expert in preference to that of another does not demonstrate the existence of any exceptional circumstances;

(e)
The respondent relied on an expert who expressed his own opinion. The expert was not dictated to by the respondent;

(f)
The valuation of $13,180,000 found by the Court was far from the zero value or one dollar contended for as the primary thrust of the appellant’s case;

(g)
The Court found that the value of $13,180,000 would be likely to represent the value at the lower end of the highest and best use of the land and to be a very conservative one;

(h)
The Court found some usefulness in Mr Hart’s valuation;

(i)
The respondent was obliged to consider the position which it eventually adopted in compliance with its duty as a model litigant;

(j)
The change in description of the land did not greatly change the valuation from what was initially claimed by the respondent and the sales relied upon in support of it did not change. Mr Hart’s evidence did not substantially change;

(k)
The valuation task was inherently difficult;

(l)
The Court did not fully adopt the evidence of either valuer;

(m)
Mr Hart’s approach was rational;

(n)
There is no evidence, only an assertion, of additional expense. Bearing in mind the primary assertion of nil or a nominal value, there would always have been a contest;

(o)
Costs are compensatory and not punitive.

The respondent’s submission on the discretion

[18]
There is no operative dispute in relation to the scope of the discretion or the legal principles governing how it ought to be exercised. The focus falls upon the facts of the case.

Resolution

[19]
As the learned President pointed out in YFG Shopping Centres Pty Ltd as TTE v Valuer-General,^[5] costs are not awarded to punish, they are compensatory in nature. They are awarded to compensate one party for the expense to which they have been put by reason of the other party’s conduct of the proceedings.^[6]

[20]
Section 17(2) sets out the circumstances where the Court is able to order costs in a case such as the present.

[21]
His Honour Member Cochrane considered section 171 and the concept of “frivolous or vexatious” in Alceon Captrans JV Pty Ltd v Valuer-General.^[7] His Honour said:

“Numerous Courts at various levels within the Australian legal system have had to grapple with the terms “frivolous” or “vexatious”.

In Mudie v Gainriver Pty Ltd the Queensland Court of Appeal had to consider those terms.

That case referred to The Macquarie Dictionary which defined frivolous as “of little or no weight, worth or importance; not worthy of serious notice” and vexatious as “causing vexation; vexing; annoying”.

In the Mudie decision the Court found that “unquestionably, something much more than lack of success needs to be shown before a party’s proceedings are frivolous or vexatious.”

In Re Cameron Fitzgerald P observed:

“It is also necessary to decide what makes legal proceedings vexatious. Although there are sometimes statutory indications, the broad test potentially concerns such factors as the legitimacy or otherwise of the motives of the person against whom the order is sought, the existence or lack of reasonable grounds for the claims sought to be made, repetition of similar allegations or arguments to those which have already been rejected, compliance with or disregard of the court’s practices, procedures and rulings, persistent attempts to use the court’s processes to circumvent its decisions or other abuse of process, the wastage of public resources, and funds, and the harassment of those who are the subject of the litigation which lacks reasonable basis.”

Having regard to those observations I am further comforted that there is nothing either frivolous or vexatious in the conduct of the appellant in this particular case.

The discretion to award costs pursuant to that section is unfettered but it has been observed that the discretion is to be exercised judicially and for reasons that may be explained and substantiated”^[8] (references omitted).

[22]
In the present case the respondent was brought to the Court and did not commence action for any improper purpose. It did not use the Court’s process for any improper purpose. Attention falls upon the words of Fitzgerald P in the passage quoted from Re Cameron^[9] where there is reference to a lack of reasonable grounds for the claims sought to be made, i.e. the position taken by the respondent.

[23]
In this case the respondent sought, unsuccessfully, to justify the valuation which was made. This Court must look at the respondent’s conduct in the context of the whole case. The respondent relied on expert evidence which was not accepted in relation to its approach and conclusions but was of some usefulness. The Court is not satisfied that the respondent conducted its case in a way that was frivolous or vexatious as those expressions have been interpreted in the decisions to which reference has been made. The respondent was unsuccessful rather than frivolous. The valuation task was difficult and the Court found deficiencies in the approaches of both valuers. The respondent’s valuer proceeded rationally but was simply found to be in error.

[24]
The Court is not satisfied that the respondent failed to properly discharge its responsibilities. It was unsuccessful, which is not an indicator of a failure in this regard. Making a vigorous case in defence of the valuation is not at all inconsistent with the duties of a model litigant.

[25]
As the Court is not satisfied of the existence of the criteria relied upon to found the exercise of the discretion there is no basis upon which to exercise it. The application for costs must be refused.

[26]
Should it have been necessary to consider exercising the discretion, it may be useful to briefly give reasons why the Court would not have exercised it in favour of the appellant in any event.

[27]
The appellant contended for a nil or nominal value, such as $1. This was the primary thrust of its appeal and in this it failed.

[28]
The appellant was successful in regard to its secondary contention, which was one that the Court noted was the product of a use at the lower end of the highest and best use of the land, where developable area was not utilised to its potential.^[10]

[29]
This result, although successful, did little in assisting the Court to “correctly make the valuation” as it is required to do by section 170(b). The Court was left to choose the least worst option in the material before it.

[30]
The conduct of the respondent was directed towards assisting the Court to correctly make the valuation. It simply failed to achieve that in this case. The conduct of the respondent did not lengthen the proceeding or put the appellant to additional expense that has been demonstrated on the evidence.^[11] The appellant simply continued to present the case it had prepared from the outset.

Order

The appellant’s application for costs is refused.

WA ISDALE

MEMBER OF THE LAND COURT

Footnotes

[1] Suncorp Metway Insurance Pty Limited v Valuer-General (No. 2) [2017] QLC 46.

[2] Appellant’s submissions, para [4].

[3] [2015] QLC 40.

[4] [2015] QLC 40 at [75] to [79].

[5] [2017] QLC 11.

[6] Ibid at [19].

[7] [2017] QLC 30.

[8] Ibid at [32] to [38].

[9] [1996] 2 Qd R 218.

[10] Suncorp Metway Insurance Pty Limited v Valuer-General (No. 2) [2017] QLC 46 at [64].

[11] Mudie v Gainriver Pty Ltd (No 2) [2003] 2 Qd R 271.

Editorial Notes

Published Case Name:
Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 3)
Shortened Case Name:
Suncorp Metway Insurance Pty Limited v Valuer-General (No. 3)
MNC:
[2017] QLC 53
Court:
QLC
Judge(s):
Member Isdale
Date:
29 Sep 2017

Appeal Status

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Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
Alceon Captrans JV Pty Ltd v Valuer-General	[2017] QLC 30	3 citations Jump To Cite 1 - [2017] QLC 30 Cite 2 - [2017] QLC 30 Cite 3 - [2017] QLC 30
Brisbane Square Pty Ltd v Valuer-General	[2015] QLC 40	3 citations Jump To Cite 1 - [2015] QLC 40 Cite 2 - [2015] QLC 40 Cite 3 - [2015] QLC 40
Mudie v Gainriver Pty Ltd	[2003] 2 Qd R 271; [2002] QCA 546	2 citations Jump To Cite 1 - [2003] 2 Qd R 271 Cite 2 - [2003] 2 Qd R 271
Re Cameron	[1996] 2 Qd R 218	2 citations Jump To Cite 1 - [1996] 2 Qd R 218 Cite 2 - [1996] 2 Qd R 218
Suncorp Metway Insurance Pty Ltd v Valuer-General (No. 2)	[2017] QLC 46	3 citations Jump To Cite 1 - [2017] QLC 46 Cite 2 - [2017] QLC 46 Cite 3 - [2017] QLC 46
YFG Shopping Centres Pty Ltd v Valuer-General	[2017] QLC 11	3 citations Jump To Cite 1 - [2017] QLC 11 Cite 2 - [2017] QLC 11 Cite 3 - [2017] QLC 11

Cases Citing List of cases on Queensland Judgments citing this Judgment

Case Name	Full Citation	Frequency
Body Corporate for 'Allure' Community Titles Scheme 37607 v Valuer-General	[2019] QLC 15	2 citations
RG Property Three Pty Ltd v Valuer-General	[2020] QLC 19	2 citations
Valuer-General v Suncorp Metway Insurance Pty Limited (No 2)	[2018] QLAC 8	1 citation

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Suncorp Metway Insurance Pty Limited v Valuer-General (No. 3)[2017] QLC 53