New South Wales Golf Club v Valuer General New South Wales

The Application of the Rule 12As previously framed, the predecessor rule in the Land and Environment Court Rules (Pt 16, r 4(2)) stated : "No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a cost order is, in the circumstances of the particular case, fair and reasonable." The change in wording from "in the circumstances of the particular case" to "in the circumstances" in the present rule widens the discretion to depart from the presumption underlying the rule. 13As to the general rule under Part 42.1 of the Uniform Civil Procedure Rules, noted at [2] above Young JA (McColl JA concurring) said, in Hastings Point Progress Association Inc. v Tweed Shire Council [2010] NSWCA 39, 172 LGERA 157 at [18] : "The Rule speaks for itself. However, judicial exposition has noted that it means that a person seeking to displace its prima facie effect must show that there is something out of the ordinary in the case to justify the departure : see eg New South Wales v Gebethner [2009] NSWCA 237." (Emphasis added) 14Similarly, in applying rule 3.7 of this Court's rules, I accept that the rule must speak for itself. In the ordinary case the presumptive rule applies. As Spigelman CJ said in Port Stephens Council v Sansom [2007] NSWCA 299, 156 LGERA 125 at [48] : "The starting point must be the presumptive rule that there will be no order as to costs." From that starting point, to apply the reasoning of Young JA in Hastings Point, noted at [13] above, there must be something out of the ordinary to justify a finding that it is fair and reasonable to depart from the presumptive rule. 15The rule applies not only to appeals under the Valuation of Land Act but also to a variety of matters within the Court's jurisdiction which would be properly described as administrative appeals. As Spigelman CJ observed in Port Stephens Council v Sansom at [21], the Court is, simultaneously, both a court of law and an administrative tribunal. However, his Honour also noted that when the court is performing an administrative tribunal function, "the usual approach to administrative decision making, where there is no general tradition of costs being awarded, is clearly more applicable." 16I reject the Club's submission that the appeal was a form of judicial review. In judicial review cases the question is whether the original decision maker made a legal error in coming to the decision in the sense described in House v The King (1936) 55 CLR 499 at 505 : "It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed ..." 17This was a statutory or administrative appeal : s 37 Valuation of Land Act Maurici v Chief Commissioner of State Revenue (No 8) [2007] NSWLEC 37, 155 LGERA 115 at [77]. It was a hearing de novo : s 39, Land and Environment Act 1979. Fresh evidence which was not before the decision maker was able to be called, in contrast to judicial review proceedings where only the material that was before the decision maker can generally be considered. I thus respectfully adopt the distinction made by Spigelman CJ in Port Stephens Council v Sansom noted at [15] above, in accepting that the rule expresses the usual approach to costs in administrative decision making. 18In addition to the fact that proceedings to which the rule applies can be characterised as administrative appeals, the rule is rationalised on the basis that persons should not be discouraged from exercising their statutory right of appeal by the prospect of an adverse costs order. This rationale has been expressly recognised in planning appeals : Sansom, at [23], Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103, 158 LGERA 224 at [10]. The rule also underlies a "no discouragement" principle in valuation appeals : Maurici at [70], [78], St Marys Land Ltd v Valuer-General of New South Wales [2011] NSWLEC 2. 19I now turn to consider the remaining matters on which the Club relies. 20I do not consider that the Valuer General's unsuccessful application for summary judgment against the Club makes it fair and reasonable to attract an order for costs. The argument occupied about 2 hours on the first morning, it was a reasonably arguable application, and if it had been successful it could have saved the following two days of hearing. 21As to the Club's submission noted at [5] above, the Valuer General's valuer, Mr Dupont, had provided a lengthy and detailed report of unusual thoroughness, in which he had researched and examined four valuation methods. It is apparent that Mr Dupont used each method as a cross check on the validity of his conclusion. I accept the Valuer General's submission that this is not a basis for finding that it is fair and reasonable to depart from the presumptive rule on costs. The fact that Mr Dupont did not include all of the Club's trading figures in his valuation based on potential income was, in the overall result, inconsequential. 22The Valuer General's construction of s 14I of the Act and the application of that section to the terms of the Crown lease was not accepted. Nevertheless, the submissions advanced on behalf of the Valuer General in support of his preferred construction were clearly open and not without some merit. If it were otherwise then there may be an argument to depart from the presumptive rule, but this circumstance does not justify a departure in this case. 23I have referred to the figures for which the parties contended - a valuation of $6.01 million by the Valuer General, compared with $2.5 million which was the Club's initial contention but which was amended during the hearing to a nil valuation based upon the evidence of its valuer, Mr Dundas, namely that a hypothetical purchaser, given the terms of the Crown lease, would not be prepared to pay anything more. The Club submits that the Court's adoption of the latter figure is exceptional : that is, it is a result that amounts to something out of the ordinary. 24Whilst I accept that a reduction in the Valuer General's valuation from $6.01 million to nil is exceptional, that fact alone does not make it fair and reasonable to depart from the presumptive rule. Any departure from the presumptive rule must be fair and reasonable "in the circumstances". The circumstances here are not only the fact of the determination of the value as nil, but also the reason for that determination. The result was largely determined by the construction of s 14I of the Act and its application to the terms of the Crown lease, and to a lesser extent, the actual trading figures of the Club. I have found at [22] above that the Valuer General's submissions in support of his preferred construction of s 14I and its application to the Crown lease were open and not without some merit, which would not of itself justify a special order as to costs. As this was the basis for the ultimate finding, then in these circumstances the end result, although exceptional, does not make it fair and reasonable to depart from the presumptive rule. 25The Club's analogy to cases of compensation for compulsory acquisition is attractive - the nature of the challenge being the same (being a challenge to a statutory valuation), as is also the nature of the evidence, the submissions and the judicial analysis. There, however, the comparison stops. In compulsory acquisition cases the landowner and/or tenant has been deprived of ownership of his interest in the land, often unwillingly. Although an objector to a valuation under the Valuation of Land Act is required to pay a compulsory levy based on the valuation also unwillingly, he retains his interest in the land. Moreover, rule 3.7 expressly applies to appeals under the Valuation of Land Act. If the Club's submissions were accepted it would reverse the object, scope and purpose of the rule.

CONCLUSION AND ORDERS 26I conclude, therefore, that despite the carefully reasoned submissions on behalf of the Club, I am not persuaded that it is fair and reasonable in the circumstances to depart from the presumptive rule. The orders are:

1. The applicant's notice of motion for costs is dismissed.
2. The applicant must pay the respondent's costs of the motion.

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