Australia: Costs ordered in circumstances where an appeal was neither frivolous nor vexatious, however the conduct of the appellant caused the Valuer-General unreasonable trouble and expense

In brief

The case of Alceon Captarans JV Pty Ltd v Valuer-General [2017] QLC 30 concerned an application for an order for costs made by the Respondent, Valuer-General, after the Appellant, Alceon Captarans JV Pty Ltd, decided to withdraw its appeal against the Respondent's determination that the value of the subject land was $6,500,000.

The Court found that the Appellant should pay the Valuer-General's costs of the appeal incurred after the first directions order was made on 17 March 2016 having regard to the Appellant's conduct subsequent to that order.

The Court considered the Appellant's conduct in the appeal particularly in relation to the issue of disclosure

On 17 March 206, orders were made in respect of the conduct of the appeal, which included the following order in respect of disclosure:

"(a) Disclosure and inspection of documents in the parties possession or control directly relevant to the issues in the proceedings; ..."

The Appellant's agent, on behalf of the Appellant, provided disclosure on 14 April 2016, 11 May 2016, 16 May 2016 and 10 June 2016. However, the Respondent contended that the Appellant's disclosure was not adequate and the matter was brought back to the Court for further review and directions on 13 June 2016.

The Court relevantly ordered on 13 June 2016 that:

  • the Appellant provide further disclosure by 24 June 2016; and
  • the parties' experts provide a joint report and statements of evidence by 20 July 2016.

Subsequently, the Appellant appointed a solicitor to act on its behalf and the solicitor filed a notice of appointment of solicitors on 27 June 2016.

The Respondent made an application for further disclosure on 21 July 2016 and a request for costs to be reserved, which was set for hearing on 1 August 2016.

On 22 July 2016, the solicitor for the Appellant provided further disclosure.

A without prejudice meeting between the Appellant and the Respondent was held on 29 July 2016 and the Appellant subsequently filed a notice of discontinuance on 1 August 2016. The notice of discontinuance was foreshadowed by the Appellant in a letter from the Appellant's solicitor to the Respondent sent on 29 July 2016.

At the time the letter of 29 July 2016 was sent to the Respondent, the parties' experts were required to deliver a joint expert report. Also, the parties were required to deliver statements of evidence and exchange with each other in accordance with the order made on 13 June 2016. The Court presumed that some of the work in relation to those steps would have been commenced at the time the letter of 24 July 2016 was sent.

The Court did not consider the Appellant's conduct in the appeal to be either vexatious or frivolous

The Appellant submitted that an inference could not be drawn that the appeal was commenced without merit. In its submission, the Appellant asserted that:

  • the prospects of success of the proceeding evolved in the course of the proceeding as the Appellant received the particularisation of the Respondent's case and the Respondent's disclosure material after the commencement of the appeal and before the discontinuance of the appeal;
  • the Appellant's decision to discontinue the proceeding was influenced not only by the prospects of success but also by the changing circumstances of the Appellant;
  • a letter of 29 July 2016, which indicated that the Appellant's instruction to withdraw the proceeding "emerged as a result of advice that we have recently given it in relation to the appeal and its prospects in the appeal", was not an acknowledgement by the Appellant that the appeal was commenced without merit.

The Court considered whether the Appellant's conduct in the appeal was frivolous or vexatious and therefore whether the Court would be able to exercise its discretion to award costs against the Appellant in accordance with section 34 of the Land Court Act 2000.

In determining whether the Appellant's conduct in the appeal was frivolous or vexatious, the Court considered the case of Mudie v Gainriver Pty Ltd (No. 2) [2003] 2 Qd R 271 at [36] in which it was found that "unquestionably, something much more than lack of success needs to be shown before a party's proceedings are frivolous or vexatious".

The Court also considered the case of Re Cameron [1996] 2 Qd R 218 in which Fitzgerald P observed that:

"... 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 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" (at page 3).

Having considered those cases, the Court found that the Appellant's conduct in the appeal was neither frivolous nor vexatious.

The Respondent submitted that the absence of legal advice in the Appellant's list of disclosure indicated that legal advice was not obtained by the Appellant prior to commencing the appeal and that "the Court should conclude that the appeal was commenced without any, or any proper, consideration of whether there was any demonstrable error in the respondent's valuation, or whether the appellant would be able to prove the allegations contained in its notice of appeal" (at [45]).

The Court did not consider it necessary for the Appellant to obtain legal advice in writing prior to commencing the appeal, although it would have been prudent to do so.

The Court found that the Appellant caused the Respondent to incur unreasonable costs in attempting to comply with the orders while dealing with inadequate disclosure by the Appellant

In determining whether the Court would make a costs order against the Appellant in accordance with section 171 of the Land Valuation Act 2010, the Court considered whether there was some failing by the Appellant in the conduct of the appeal.

The Court found that up to the time when the first order was made on 17 March 2016, the Appellant's conduct was nothing unusual for a party protecting its statutory right granted under the Land Valuation Act 2010. However, the Appellant's failure to provide adequate disclosure in accordance with the subsequent orders and to withdraw the appeal late in the process caused the Respondent "unreasonable trouble and expense in attempting to comply with the orders of the Court".

Accordingly, the Court ordered that the Appellant pay the costs of the appeal incurred by the Respondent after 17 March 2016.

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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