Australia: Land Court of Queensland found that making a vigorous case is not inconsistent with the duties of a model litigant

In brief

The case of Suncorp Metway Insurance Pty Ltd v Valuer-General (No.3) [2017] QLC 53 concerned an application for costs made by Suncorp Metway Insurance Pty Ltd after its appeal against a valuation under the Land Valuation Act 2010 (LVA) was successful. The Appellant alleged that the Valuer-General's conduct was frivolous or vexatious and that the Valuer-General failed to properly discharge its responsibilities during the course of the appeal. In particular, the Appellant alleged that the Valuer-General's conduct was frivolous because it engaged in conduct that was unmeritorious.

The Appellant appealed to the Court against a valuation by the Valuer-General under the LVA. The Appellant was successful and it applied for an order for costs. The Appellant contended that the Valuer-General relied upon groundless assertions to justify the valuation of the land and by doing so brought serious and unjustifiable trouble to the Appellant and expense to correct the valuation.

The Court found that the Valuer-General's conduct was not frivolous or vexatious or unmeritorious. The Valuer-General was simply found to be unsuccessful. By presenting a vigorous case in defence of the valuation, the Valuer-General's conduct was not inconsistent with the duties of a model litigant. The Valuer-General had not failed to properly discharge its responsibilities during the course of the appeal and as a result the Appellant's application for costs was refused.

The Court found that when using its discretion to make an order for costs, the Court shall not take into consideration circumstances that are not provided for under section 171(2) of the Land Valuation Act 2010

The Valuer-General submitted that the concept of "unmeritorious conduct" is not relevant for the purpose of determining whether costs should be awarded as the Court is not required to take into consideration any circumstance not mentioned in section 171(2) of the LVA. The Valuer-General contended that the Court only has a discretion to make an order for costs if one of the circumstances under section 171(2) of the LVA is enlivened.

The Court agreed and rejected the Appellant's submission that it was entitled to costs because "unmeritorious conduct" is not an applicable consideration under section 171(2) of the LVA.

The Court considered the parties submissions about whether the conduct was frivolous or vexatious

Relying upon the Court's decision in Brisbane Square Pty Ltd v Valuer-General [2015] QLC 40, the Appellant contended that the words "frivolous or vexatious" "should be given their normal meaning". In particular, "a party relying upon groundless assertions and putting parties to serious and unjustifiable trouble can be sufficient".

As such, the Appellant submitted that the Valuer-General's conduct was frivolous or vexatious during the course of the appeal for the following reasons:

• The Valuer-General 's valuation was originally $39,500,000 and was reduced during the course of the appeal to $34,500,000. The Court found that the valuation should be $13,800,000, which suggested that there was a gross error by the Valuer-General.
• The Valuer-General valued the wrong thing.
• The Valuer-General included leases at a late stage in the proceeding and by doing so acted contrary to a model litigant.
• The Valuer-General's valuation evidence was of poorly analysed or unsuitable sales.
• The Appellant was put to serious and unjustified trouble and expense to correct the Valuer-General's valuation.

The Valuer-General submitted that the circumstances set out in section 171 of the LVA were not enlivened in this case and as such the Court was not required to exercise its discretion to award costs. The Valuer-General relied on the following reasons in support of its position:

• The Appellant's real objective was to establish that the land was valueless or had a nominal value, such as one dollar.
• The Courts routinely accept the evidence of one party and reject evidence from the other.
• The ultimate valuation of $13,800,000 was far from the zero value or one dollar value contended by the Appellant.
• The Court found that the value of $13,800,000 would be likely to represent the value at the lower end of the highest and best use of the land.
• The Court found some usefulness in the Valuer-General's expert's valuation.
• The Court did not fully adopt the evidence of either valuer.
• There was no evidence of any additional expense having been incurred as a result of the Valuer-General's conduct.
• Costs are not punitive.

The Court found that in determining whether conduct is frivolous or vexatious the Court is to have regard to the context of the case as a whole

The Court observed that when deciding what makes legal proceedings vexatious, the relevant test to be applied is that from the decision of O'Shea v Cameron [1996] 2 Qd R 218. In that case it was held that "the broad test potential 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."

The Court observed that the Valuer-General did not commence the appeal and therefore did not commence action for any improper purpose. The Valuer-General relied on expert evidence to justify its valuation and, although the evidence was unsuccessful, it was of some use.

Looking at the Valuer-General's conduct in the context of the whole case, the Court was not satisfied that the Valuer-General's conduct was frivolous or vexatious or that the Valuer-General failed to properly discharge its responsibilities in the appeal.

For these reasons, the Court found that there was no basis for the Court to exercise its discretion to award costs under section 171(2) of the LVA and rejected the Appellant's submission that there should be an order as to costs.

• The Court went on to state that it would not have exercised its discretion to award costs in favour of the Appellant for the following reasons:
• The Appellant originally contended for a nil or nominal valuation yet the Court ultimately found that the appropriate value was $13,800,000.
• The Appellant did little to assist the Court to arrive at the correct valuation.
• The conduct of the Valuer-General was directed towards assisting the Court.
• The conduct of the Valuer-General did not lengthen the proceeding or put the Appellant to additional expense.
• The Appellant simply presented its case which it prepared from the outset.

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