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[2013] QLAC 3
General information, not legal advice.
Land Appeal Court of Queensland
2013-06-21
Peter Lyons J
Original judgment source is linked above.
Costs ― whether costs should follow event ― unfettered discretion in Court ― both parties partially successful ― appellant required to pursue present hearing due to respondent's stance ―but appellant excessively over-stated claim ― respondent to pay 75% of appellant's costs ― Land Court Act 2000, s.34
Acquisition of Land Act 1967, ss 27(2) and (3)
ADD Design Pty Ltd v Brisbane City Council [2012] QCA 102
Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234
Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748
Mentech Resources Pty Ltd v MCG Resources Pty Ltd (In Liq) & Ors (No. 2) [2012] QLAC 002
Mio Art Pty Ltd v Brisbane City Council (No 2); Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council (No 2) [2012] QLAC 005
Oshlack v Richmond River Council [1993] HCA 11; (1998) 193 CLR 72
Ostroco v Department of Main Roads (No 2) [2012] QLAC 007
Pricom Pty Ltd v Sgarioto (1994) VCONVR 54-50
Queensland Construction Material Pty Ltd v Redland City Council [2010] QCA 248; (2010) 175 LGERA 153
Sochorova v Commonwealth of Australia [2012] QCA 152
X and & Y (by her tutor X) v PAL, Unreported, New South Wales Court of Appeal, 7 June 1991 (BC 9101914)
YMCA v Chief Executive, Department of Transport and Main Roads (No. 2) [2012] QLAC 004
Griffins Lawyers for Greener Investments Pty Ltd (In Liquidation)
[1] The Court: On 11 October 2012 this court delivered a judgment by which the amount of compensation payable by the respondent increased from $16,600,000 to $18,000,000.[1] Both appellants now seek orders that the respondent pay their costs of and incidental to the further hearing of this matter. It should be noted that the further hearing of this matter, to which the judgment of 11 October 2012 reflected, arose as a result of a decision of the Court of Appeal.[2]
[2] After the decision of this court was delivered on 11 October 2012, there remained issues between the parties as to the payment of interest on the award, as well as costs. Communications involving the parties and the court then proceeded over an extended period, with the issue of interest resolved by agreement between the parties and endorsed by order of this court dated 3 June 2013. As a consequence, the only issue now requiring resolution is that of costs. Submissions as to costs closed on 18 April 2013.
[3] Section 34 of the Land Court Act 2000 (Qld) ("the Act") provides:
(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.
(3) An order made under subsection (1) may be made an order of the Supreme Court and enforced in the Supreme Court.
(4) For subsection (3), it is enough to file the order in the Supreme Court.
(5) The court may, if it considers it appropriate, order the costs to be decided by the appropriate assessing officer of the Supreme Court.
(6) If the court makes an order under subsection (5), the assessing officer may decide the appropriate scale to be used in assessing the costs."
[4] Section 72(1) of the Act provides that s.34, amongst other provisions, applies "with necessary changes" to the Land Appeal Court and a "reference in the applied sections to the Land Court is taken to be a reference to the Land Appeal Court".
"[4] Hence the Land Appeal Court may order costs 'as it considers appropriate'. The discretion to award costs is unfettered. However the rule often followed, and the rule incorporated in r 689 of the Uniform Civil Procedure Rules 1999, is that costs follow the event. That rule, while it does not govern the exercise of the discretion here, nonetheless informs it, as there is justice in that approach. It protects those put to unnecessary and substantial expense at the behest of others." (footnotes omitted)
[7] Although the appellants had orders in their favour made on 11 October 2012, the respondent seeks that this court depart from the principles applied in Mentech (No 2), YMCA (No 2) and Ostroco (No 2) and instead order that there be no order as to costs or, alternatively, that the respondent pay one fifth of the appellants' costs.
[8] The respondent contends that the appellants, in seeking an award of an additional $6,384,809 at the further hearing, relied on three issues, namely:[7]
(a) an additional 2600m² of GFA being allowed for the increase in height of the riverfront building from 6 to 10 storeys (issue 1);
(b) an additional 8390m² of GFA being allowed in respect of the space between buildings (issue 2);
(c) applying a land value of $3624 per m² instead of the Land Court's assessed figure of $2900 per m², by the methodology on p.3 of the schedule to the appellant's submissions of 20 December 2011 (issue 3).
[9] The respondent says that the appellants failed with respect to issues (b) and (c), and says that, as regards issue (a) the respondent had "conceded that an adjustment of an additional 2400-2600m² of GFA should be made in respect of the riverfront building".[8]
[10] It should be noted that, in referring to "issues", the respondent is doing so in the context of a disputed question of fact or law, rather than in a technical pleading sense.
"... must of course be exercised judicially. There are decisions, both of Australian and English courts, that throw light on the way in which the discretion is to be exercised. I shall not refer to those decisions in any detail; I shall simply set out in a summary way what I understand to be their effect.
1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order (Ritter v Godfrey [1920] 2 KB 47.)
2. Where a litigant has succeeded only upon a portion of his claim the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. (Forster v Farquhar [1893] QB 564; (1983) 1 QB 564.)
3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, 'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. (Cretazzo v Lombardi (1975) 13 SASR 4 at p 12.)"
[12] The respondent relies upon three recent Court of Appeal decisions as precedent for the court in this case to depart from the conclusion that costs should follow the event. The cases referred to are Sochorova; Queensland Construction Materials Pty Ltd v Redland City Council;[12] and AAD Design Pty Ltd v Brisbane City Council.[13]
[13] In each of those matters, the Court of Appeal made costs orders which reflected the relative victories of the parties.[14]
[14] In Sochorova, an appellant which was only partially successful on appeal was ordered to pay half of the respondent's costs.[15] In Queensland Construction Materials, no order for costs was made in circumstances where both parties were partially successful,[16] while in AAD an unsuccessful appellant was ordered to pay ⅓ of the respondent's costs in circumstances where the respondent had significantly departed from its earlier contentions.[17]
[15] The respondent has also drawn the court's attention to s.27(2) of the Acquisition of Land Act 1967, noting that, if this appeal was instead a hearing in the Land Court, the appellants would not be able to claim costs. Of course, s.27(3) makes it clear that s.27(2) does not apply to an appeal. However, the respondent says that s.27(2) should be kept in mind by the Land Appeal Court in "informing the exercise of discretion under s.34(1) of the Land Court Act".[18]
[16] The respondent neatly puts a summary of its contentions in paragraphs 17 and 18 of its submissions:
"17. The appellant has succeeded in recovering about one-fifth of what it claimed. It failed completely on its claim for the second adjustment relating to the space between buildings, which was the largest part of its claim. The respondent conceded the first adjustment of 2600m², and only argued that on the Land Court's approach which was necessarily approximate rather than precise, and the absence of any direct relationship between value per m² of land and value per m² of GFA, the appellant had not shown a basis for appellate intervention.
18. In those circumstances, it is just as between the parties to let each of them bear their costs of the proceedings in this Court on the issue remitted by the Court of Appeal, or at best for the appellants, to order that the respondent pay one-fifth of its costs."
"By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs."
[18] Mio Art also relies on the decision of Eames J in Pricom Pty Ltd v Sgarioto:[21]
"As a general rule costs should follow the event, and a successful party should obtain all of the costs of the action even though it failed to establish some of the alternative heads of its claim."
[19] Reference has also been made by Mio Art to the respondent's failure to agree to have the question of the mathematical error determined by mediation or negotiation. In this regard, Mio Art expressly referred to the reasons of Fryberg J in the Court of Appeal where he indicated his hope that the parties could resolve the issue "without the need for a further hearing".[22]
[20] We note that Justice Fryberg then went on to say:[23]
"If the hearing is necessary, no doubt that the Land Appeal Court will take into account not only the circumstances of the further hearing but also the cause of the misapprehension giving rise to the need for it, in determining the costs of that hearing."
[21] Greener Investments contend, as its primary submission, that it should recover its costs as a successful appellant. In the alternative, it has referred the court to the case of X and Y (by her tutor X) v PAL.[24]
[22] X and Y was a complex case. It involved four key issues, which the court referred to as issues (a), (b), (c) and (d). The court noted that in excess of 95% of the court's time on appeal was taken up with issue (b), on which the appellants were unsuccessful both at first instance and on appeal. Although the appellants were successful on points (a), (c) and (d), the award of damages was only small. Had the appellants been successful on issue (b), the damages would have been very large. The respondents sought orders that the appellants pay a large proportion of the respondent's costs. After making reference to the principles set out by Toohey J in Hughes and the court rules, Clarke JA (with whom Mahoney JA and Meagher JA agreed) had this to say:[25]
"Although in this case there is much to be said for the view that the normal rules should apply I am persuaded by Mr Sperling, that as the major contest between the parties concerned the issue upon which the appellants failed, it is appropriate to make a different order. I will not, however, accede to his application that the appellants pay a large proportion of the respondents' costs. The overriding objective must be to make an order which is appropriate to the justice of the case. Bearing in mind the fact that the appellants were required to contest the case in order to recover an award, that no offer of compromise was made and that the appellants were successful in three of the four issues litigated I have concluded that it is appropriate that they receive 50 per cent of their costs of the trial and the pretrial procedures."
[23] In reaching a decision in this matter, the court is mindful of the fact that the specific provisions of s.34(1) of the Act apply rather than the UCPR. It is clearly open to this court to reach a decision on costs on the principles as outlined by Toohey J in Hughes. However, this court is aware of the words of caution expressed by Toohey J:[26]
"10. There is no difficulty in stating the principles; their application to the facts of a particular case is not always easy. Also it is necessary to keep in mind the caveat by Jacobs J. in Cretazzo v. Lombardi at 16. His Honour sounded what he described as 'a note of cautious disapproval' of applications to apportion costs according to the success or failure of one party or the other on the various issues of fact or law which arise in the course of a trial. His Honour commented:
'But trials occur daily in which the party, who in the end is wholly or substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues'."
[24] It is also appropriate to consider Toohey J's final reasoning in Hughes:[27]
"15. ... I approach the matter on the basis that the applicant succeeded substantially in what he set out to achieve through his application. He failed on some issues in circumstances where, not only should he not have the costs of those issues, but there should be some compensation to the respondents for the time taken in meeting those issues both prior to and at the hearing.
16. In my view justice would be served by awarding the applicant 75% of his costs. ... "
[25] In the circumstances of the matter at hand, there is no doubt that the appellants were justified in having the mathematical error considered by this court as such consideration resulted in the award in their favour increasing by $1,400,000.
[26] Specifically as regards the application by Greener Investments for costs, that application can be quickly dealt with. Greener Investments did not appear at the further hearing; nor did it supply any submissions to this court at the further hearing. It was content to let Mio Art take the running of the matter. As it participated in no meaningful way in the further hearing, there is no basis on which it should receive any order as to costs. We now turn to consider Mio Art's application for costs.
[27] It is not entirely accurate to say that the respondent conceded issue 1. At the further hearing, it contended orally for a total adjustment in the assumed GFA of 1,900 square metres.[28] In any event, it contended that no additional amount should be payable. Neither position was accepted by this court.
[28] Issue 3 reflects a submission which was simply consequential on the acceptance of Mio Art's position on issue 1 and issue 2. It reflected a linear or arithmetically proportional adjustment in the assessment of the value of the land, based on the increase in assumed GFA. The respondent in its written submissions contended that that course should not be adopted. It offered no alternative position. The determination of the appeal was not the result of a strictly proportionate approach to the adjustment of value; but the result was not far removed from the application of this approach. It can hardly be said that the respondent succeeded on issue 3.
[29] While a meditation or negotiation may have led to a resolution of any issue outstanding after the decision of the Court of Appeal, the increase in compensation sought by Mio Art suggests that such a resolution was less than likely. In these circumstances, not much weight can be placed on its contention that the respondent should have participated in a mediation or negotiation.
[30] Mio Art and the respondent have each enjoyed a degree of success. The stance taken by the respondent in arguing that the mathematical error made no difference to the overall award made it necessary for Mio Art to pursue the further hearing. However, in so doing, they far overstated the extent of the mathematical error.
[31] Taking all of these factors into account, we are of the opinion that the respondent should pay 75% of the appellant Mio Art's costs, including any reserved costs, of and incidental to the further hearing on the standard basis, such costs to be agreed or, failing agreement, to be assessed by a costs assessor of the Supreme Court. Pursuant to s.34(3) of the Land Court Act 2000, this order may be made an order of the Supreme Court and enforced in the Supreme Court.
1. The respondent pay 75% of the appellant Mio Art's costs of the further hearing, including any reserved costs, on the standard basis, such costs to be agreed or, failing agreement, to be assessed by a costs assessor of the Supreme Court.
2. Pursuant to s.34(3) of the Land Court Act 2000 this order may be made an order of the Supreme Court and enforced in the Supreme Court.
3. There be no order as to costs of the further hearing with respect to the appellant Greener Investments Pty Ltd (In Liquidation).
[1] Mio Art Pty Ltd v Brisbane City Council (No 2); Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council (No 2) [2012] QLAC 005.
[2] Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234; [2012] 2 Qd R 1.
[7] Respondent's submissions paragraph 8.
[8] Respondents submissions paragraph 10.
[14] See, for instance, AAD Design at paragraph 9.
[15] [2012] QCA 152 at paragraphs 20-24.
[16] (1010) LGERA 153 at paragraphs 19-21.
[17] [2012] QCA 102 at paragraphs 5-9.
[18] Respondent's submissions paragraph 16.
[22] [2011] QCA 234; [2012] 2 Qd R 1 at 30.
[24] Unreported, NSW Court of Appeal, 7 June 1991 (BC 9101914). It should be noted that Greener Investments in their submission used the incorrect case citation (that of the substantive decision in the matter).
Mio Art Pty Ltd
Brisbane City Council
(2010) 175 LGERA 153
(1975) 13 SASR 4
(1998) 193 CLR 72