Australia: Queensland Land Court dismisses application for costs after determining conduct did not bear the hallmarks of frivolity or vexatiousness

In brief

The case of The Trust Company Limited v Valuer-General [2017] QLC 29 involved an application for costs in the Queensland Land Court. The issue before the Court was whether an order for costs on the standard basis should be made in favour of the Valuer-General, following the Trust Company Limited filling a notice of discontinuance that was not consented to.

The Appellant withdrew from an appeal against a decision of the Valuer-General following a joint meeting of experts. The Valuer-General sought costs on the basis that the Appellant had engaged in vexatious or frivolous conduct that necessitated its participation in needless interlocutory proceedings which incurred unwarranted costs.

The Court found that it was entirely reasonable for the Appellant to withdraw from the proceedings following a re-evaluation of prospects after the experts' meeting. The Appellant had not behaved in a frivolous or vexatious manner by promptly providing notice of its intention to withdraw from the proceeding.

The Valuer-General engaged expert witnesses and participated in interlocutory proceedings in response to the Appellant's actions

The parties attended a preliminary conference before the Judicial Registrar within two months of the Appellant filing a Notice of Appeal. The matter was listed for a directions hearing at which interlocutory orders were made. The parties exchanged lists of documents and the Appellant served its grounds of appeal within a month of the directions hearing.

Soon after the Valuer-General filed and served its statement of facts, matters and contentions. The matter was listed for review on 10 June 2016 and expert witnesses were named. A consent order was made requiring, among other things, a meeting of the experts. The Appellant wrote to the Valuer-General four days after the meeting to seek its consent to withdraw from the proceedings.

The Valuer-General claimed costs on the basis that it was forced to incur harm by responding to the Appellant's frivolous or vexatious conduct

The Valuer-General made submissions that the Appellant's participation in interlocutory steps prior to seeking to withdraw the appeal caused harm and amounted to frivolous or vexations conduct. The Valuer-General's submissions specifically argued that the Appellant's conduct forced the following to occur:

  • proceedings that could have been avoided if the Appellant withdrew at the conclusion of the Court supervised preliminary conference;
  • the unreasonable, unnecessary and unjustified preparation of a response in the proceedings;
  • an inappropriate and inefficient use of the Court's resources.

The Court found that frivolous proceedings and vexatious proceedings are not the same thing. The Court stated that a proceeding is frivolous if it is brought without any real prospect of success, whereas a proceeding is vexatious if it is brought with a purpose of embarrassing or prejudicing the other party.

Whilst the Court has an unfettered discretion to award costs its decision must be supported by an explanation and have been made for compensatory rather than punitive purposes

The relevant basis for the Court's power to award costs is under section 34 of the Land Court Act 2000. Rule 18 of the Land Court Rules 2000 relevantly provides that if an Appellant withdraws from proceedings, the Court may order the Appellant to pay the costs of the party to whom the discontinuance or withdrawal relates if the party has not consented to the discontinuance and the costs of the other party are caused by the discontinuance or withdrawal.

The Court noted that whilst section 34 of the Land Court Act 2000 provides the Court with unfettered discretion to award costs it is a decision that must be exercised judicially and be supported by explanation and substantiation.

The Court held that the power to award costs is not punitive. It is a compensatory power that seeks to award costs to the successful party to cover the expenses it has incurred as a consequence of the legal proceedings. The Court held that the engagement of an expert and that expert's attendance at a meeting of the parties amounted to a serious commitment.

The Valuer-General drew the Court's attention to decisions in which costs were awarded for various failings on the behalf of particular parties

The Valuer-General made submissions citing that the Land Appeal Court has generally emphasised the desirability of easy access to the Land Court to air grievances. The Valuer-General cited a number of cases in which the Court held that such access should be available without fear or costs being awarded except in special circumstances.

The Valuer-General's submission also drew the Court's attention to two cases in which costs were awarded. In Chief Executive, Department of Natural Resources and Mines v Sabina Three Gorges Corporation Ltd [2001] QLC 26 the Court awarded costs after finding that the Appellant's withdrawal was driven in part by a failure of strategy which treated the proceedings as a test case.

In Permanent Trustee Australia Ltd as Trustee and Anor v Department of Natural Resources and Mines [2002] QLC 93 the Court awarded costs after a notice of discontinuance was filed 10 days prior to a set hearing date, without explanation and after several prior adjournments and interlocutory proceedings.

The Court held that the cases cited by the Valuer-General were of little utility to the current proceedings.

The Court found that the Appellant acted promptly and reasonably after re-evaluating its position following the joint experts' meeting

The Court found that the Appellant acted promptly by filing the notice of discontinuance within four business days of the experts' meeting. The Court held that it was reasonable to conclude that the Appellant had given proper consideration to its prospects following the joint expert meetings.

In light of these findings the Court held that there was no material before it that would satisfactorily support a determination that the appeal against the Valuer-General's valuation was frivolous, or doomed to fail before it was commenced. Accordingly, the Court ordered that the application for costs be refused.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Ian Wright
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