Averala Pty Limited v Valuer-General, Tchadovitch v Valuer-General

KEY ISSUES: Costs :- objections to valuations - whether order for costs fair and reasonable - no order for costs made

LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 16 r 4 Valuation of Land Act 1916 s 37

CASES CITED: Hunter Development Brokerage Pty Ltd v Cessnock City Council [No. 2] [2006] NSWCA 292

APPLICANT Mr P Rosier (solicitor) SOLICITORS Rosier Partners LEGAL REPRESENTATIVES: RESPONDENT Ms A Pearman SOLICITORS Crown Solicitor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT Jagot J: Introduction 1 These are three applications for costs by each of the applicants in proceedings by way of objection to valuations of properties by the Valuer-General under the Valuation of Land Act 1916.

2 The parties accept that the question whether any order or costs should be made is one to be approached through the provisions of Pt 16 r 4 of the Land and Environment Court Rules 1996, which applies to proceedings under s 37 of the Valuation of Land Act 1916. Subsection 2 of the rule states that no order for the payment of costs will be made in proceedings to which the rule applies unless the Court considers that the making of a cost order is, in the circumstances of the particular case, fair and reasonable.

3 I have been assisted by the submissions of Mr Rosier appearing for the applicants and Ms Pearman appearing for the Valuer-General. Mr Rosier has helpfully categorised the applications for costs as falling within two groups, the first relating to the property 28A Norfolk Place and the second relating to the two properties at 23 and 23A Norfolk Place.

4 With respect to 28A Norfolk Place, Mr Rosier has pointed out that the Valuer-General originally determined the land value in the amount of $310,000, which amount was maintained after objection and that, in consequence of the commencement of the appeal proceedings Mr Brogan, the valuer then retained by the Valuer-General, assessed value in the amount of $300,000. But the Court ultimately determined the value in the amount of $255,000.

5 Mr Rosier submits that this is a significant reduction in the value achieved solely by litigation and that it cannot be that the objective result is immaterial to the question whether, in the circumstances of the particular case, it is fair and reasonable to make the costs order. Having regard to the course of valuations disclosed, Mr Rosier submits that it is fair and reasonable that the applicant in the 28A Norfolk proceedings have an order for costs in its favour.

6 With respect to 23 and 23A Norfolk Place, Mr Rosier accepts that the ultimate result was not of the same magnitude of reduction as for 28A Norfolk Place. Mr Rosier refers to various circumstances with respect to those proceedings which he submits makes it fair and reasonable that there should be an order for costs. In particular he identifies the fact that the valuer retained by the Valuer-General, Mr Brogan, regrettably became ill during the course of the proceedings. Prior to that point, as at 31 May, the position insofar as the applicants in the proceedings perceived it, was that the evidence had virtually closed, that Mr Brogan and Mr Dobrow (the applicants' valuer) had agreed that the most valuable property was 28A Norfolk Place, and that it was assumed that the comparable sales relevant to the assessment of value of 23 and 23A Norfolk Place would be the same comparable sales as relied on for 28A Norfolk Place. In all those circumstances, Mr Rosier submits that it was reasonable for the applicants not to have accepted the offer made by the Valuer-General on 31 May even though, as it has now transpired, the applicants in fact would have been better off had they accepted that offer. Mr Rosier also points out that the offer, although made on 31 May, was said to close on 1 June.

7 Further, Mr Rosier says that the illness of Mr Brogan had the consequence that the applicants had to come to Court, for example, for a full day or the best part of the day, on 23 June 2006. Over the applicants' objection the Commissioner ultimately made various directions requiring a further joint report of the Valuer-General's new valuer, Mr Carr, and Mr Dobrow.

8 For whatever reason, the valuers did not confer in accordance with the Commissioner's directions and, instead, on 14 July, the Valuer-General filed and served a statement from Mr Carr in which he assessed the value of 28A Norfolk Place in the sum of $300,000, 23 Norfolk Place in the sum of $320,000 and 23A Norfolk Place in the sum of $300,000.

9 From the applicants' point of view there was limited opportunity to respond to this evidence because the hearing took place on 18 July. The ultimate result was that the Commissioner determined the value of 23 Norfolk Place in the amount of $275,000 and 23A Norfolk Place in the amount of $260,000.

10 Mr Rosier also says that, irrespective of any general order for costs, although it is no doubt true that the respondent was not in control of the fact that Mr Brogan fell ill and was unable to proceed in the matters, there were additional costs incurred by the applicants as a consequence of his illness for which the respondent rather than the applicants should be responsible.

11 Ms Pearman for the respondent has submitted, as must be the fact, that of course Mr Brogan's illness was very unfortunate and had an unfortunate effect on the course of these proceedings, but it was not a matter at all within the respondent's control. The course of the proceedings does not support any inference that the respondent somehow sought to take unfair advantage of that situation. Ms Pearman has also pointed to the fact that the Commissioner's directions expressly contemplated that there would be a further joint report between Mr Carr and Mr Dobrow to be filed on 14 July and the reason that Mr Carr's statement of evidence instead was filed and served on that day was that, for whatever reason, the valuers did not meet and provide the joint statement in accordance with the Commissioner's directions.

12 With respect to the property 28A Norfolk Place, Ms Pearman has pointed to the fact that the Valuer-General made an offer relatively early in the course of the proceedings on 6 March to settle the matter on the basis of a value of $300,000. The ultimate result of $255,000 was in fact closer to the Valuer-General's value than that proposed by Mr Dobrow for the applicant.

13 With respect to 23 and 23A Norfolk Place, Ms Pearman points to the fact that although the 31 May 2006 offer was open only for a very short period, that is neither here nor there because on 6 March the Valuer-General had offered to settle the proceedings with a value of $250,000 for 23A and $275,000 for 23 Norfolk Place - in circumstances where the ultimate result was $275,000 consistent with that offer for 23 Norfolk Place and $260,000 for 23A Norfolk Place. Ms Pearman says that the motions should be dismissed with costs.

14 Having regard to the observations of the Court of Appeal in the recent decision of Hunter Development Brokerage Pty Ltd v Cessnock City Council [No 2] [2006] NSWCA 292, I accept that I must approach the question of costs through Pt 16 r 4 subr 2. That is, I must look to the circumstances of the particular case to determine whether it is fair and reasonable for any costs order to be made. I also accept, having regard to the observations in that decision and as Mr Rosier submitted, that the outcome of the proceedings cannot be irrelevant to the question whether it is fair and reasonable in the particular circumstances to make orders for costs. It is true that, in at least the 28A Norfolk proceedings, the ultimate result was less, and materially less, than the Valuer-General's original determination and, indeed, the offer made by the Valuer-General in March consistent with Mr Brogan's evidence. With respect to 23 and 23A Norfolk Place, again the results were lower than the Valuer-General's original determination, although not lower as it turned out than Mr Brogan's original evidence relied on by the Valuer-General.

15 In my view, the whole of each matter must be considered in assessing whether in the particular circumstances it is fair and reasonable to make any order for costs.

16 I am not satisfied that the result in 28A Norfolk should be considered in isolation from all of the circumstances of that matter, including the offers to which I have referred.

17 For similar reasons, I am not satisfied that the result and other matters identified with respect to 23 and 23A Norfolk are such as to make it fair and reasonable in all of the circumstances that orders for costs be made.

18 I accept that the illness of Mr Brogan had an unfortunate effect on the course of conduct of the proceedings, however, it does seem to me that Mr Brogan's illness was not within the respondent's control and should not lead to an order for costs having regard to the terms of Pt 16 r 4 subr 2.

19 I accept, therefore, the submissions made by Ms Pearman that, when regard is had to the whole of the circumstances surrounding the course of the proceedings, they do not fall within the terms of the exception to Pt 16 r 4 subr 2 - that is, that the making of a costs order in the circumstances of the particular case is fair and reasonable. It follows, in my view, that the three notices of motion should be dismissed. I have also given consideration to the question whether any order for costs should be made with respect to the notices of motion. I recognise that the usual approach of the Court is that where a person unsuccessfully brings a notice of motion for costs, the result is that costs follow the event. However, again, I think there are circumstances which strongly suggest to me that it would not be fair and reasonable or appropriate for an order for costs to be made against the applicants with respect to the notices of motion that they have brought - for that conclusion I again rely on the facts and circumstances which have been ably summarised to me in the submissions of both Mr Rosier and Ms Pearman.

20 The notices of motion should be dismissed, but each party should pay its own costs of those notices of motion. I propose so to order in each of the matters. Accordingly, in each of the matters I order: (1) The notice of motion for costs is dismissed.

(2) Each party pay its own costs of the notice of motion. ****************************

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