COUNCIL OF THE MUNICIPALITY OF CANTERBURY v SCARF SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, CLARKE and MEAGHER JJA 16 October 1990, 16 October 1990 [1990] NSWCA 47 LAND and ENVIRONMENT — LOCAL GOVERNMENT ACT — VALUATION — RESUMPTION — COSTS — ERROR OF LAW — NO QUESTION OF PRINCIPLE Clarke JA In March and July 1989 Bignold J, sitting in the Land and Environment Court of New South Wales, heard a claim for compensation brought pursuant to s536B-C of the Local Government Act by the present respondent against the appellant, the Council of the Municipality of Canterbury. On 9 August 1989 he gave his judgment whereby he determined compensation in the sum of $190,000. In his reasons for judgment he concluded by saying: "The applicant having been successful in its claim is entitled to an order for costs except for costs incurred on the reopening of the hearing in respect of which there shall be no order for costs." The appellant (that is the Council, and I shall continue to refer to it as "the Council") has appealed against the costs order which is expressed in the paragraph I have set out. While there are a number of grounds of appeal, there are two essential challenges to it. The first is that his Honour erred in failing to allow the parties to argue the question of costs and the second and substantive point is that his Honour erred in law in making his award of costs. In order to understand those points, it is necessary to say something more about the facts leading to the litigation. The respondent's land, which is known as 53 Evaline Street, Campsie, was resumed by notice published in Government Gazette Number 37 of 4 March 1983 pursuant to s102 of the Public Works Act 1912. The respondent lodged a claim for compensation in accordance with s103 which applies by virtue of s536C of the Local Government Act in the present circumstances. The Council sought a valuation from the Valuer General as it was obliged to do by the Public Works Act. That valuation was supplied in due course and in it the Valuer General valued the land at $195,000. Upon receiving that valuation, the Council sent it to the respondent together with, and under cover of, a letter of 14 October 1987. In that letter it offered to pay to the respondent $195,000 compensation in accordance with the statutory valuation. However, while the circumstances in which this occurred do not appear in the evidence, it would appear clear that the respondent rejected the offer and sought to claim a much larger amount. In any event, it maintained its claim for compensation in the Land and Environment Court and this action constituted a clear rejection of the offer and there does not appear from the transcript to have been any reference to it during the hearing. The offer was, however, annexed to the application which was lodged by the respondent initially and I am prepared to assume for present purposes that it was before the Court even though it does not appear to have been tendered, although the statutory valuation certainly was. 2 UNREPORTED JUDGMENTS However, as I have indicated, I am prepared to assume that the Court was cognizant of the fact that the Council had been prepared to pay compensation in the sum of $195,000. When the trial opened there was an application by the Council for further time which resulted from the very late service of valuation reports upon which the respondent wished to rely. This application was acceded to and thereupon counsel for the Council sought to reserve the costs which had, in effect, been wasted by the late service of the report. Later during the hearing the respondent sought and was granted leave to reopen and, when that occurred, his Honour expressly reserved the question of costs occasioned by the reopening. However, there was no other reference to costs during the hearing and there is no mention of costs in the latter parts of the transcript. Counsel has informed the Court - and the Court will of course act upon this information - that at the end of the addresses neither counsel made specific reference to the question of costs. Both counsel simply addressed on the correct valuation figure. The judgment was, as I earlier indicated, reserved and counsel for the Council was present when the judgment was published in court. After this occurred there was no reference by any person to the costs order which had been made by his Honour, nor was there any application made for his Honour to reconsider that costs order in the light of the fact that there had been no earlier addresses on the issue. These are the broad circumstances in which, subject to one matter, the present questions fall to be determined. One other matter which is of direct relevance is that at the hearing the Council did not simply seek to support the statutory valuation of $195,000, nor did it offer, so far as can be seen, to pay that amount of compensation. Instead it led evidence from two valuers in support of a valuation of $85,000. For its part, the respondent led evidence in support of a valuation of $300,000. The contest between the parties upon which his Honour was required to adjudicate was whether the proper figure was $85,000 at the low end, $300,000 at the high end or somewhere in between. His Honour decided on the figure of $195,000, as I have said. In all those circumstances, I do not think that the Council has made out the claim that his Honour was in error in failing to allow the parties to argue costs. Nothing which his Honour did at the end of all the evidence denied either counsel the right to make whatever submissions he wished on the question of costs. The course which was adopted, which was not unusual, was that counsel simply addressed on the fact of the litigation and made no reference to costs. It cannot, however, be said that his Honour declined to allow counsel to address on costs. It is true to say that his Honour published his reasons for judgment and made his orders without any specific argument on the question of costs, notwithstanding that there had been an earlier reservation of the costs of re-opening and a claim by one counsel for costs to be reserved in another respect, but there does not appear to me to have been any reason why his Honour could not, in the light of the addresses of counsel, determine that a costs order be made, such order being that which he found appropriate in the circumstances; nor do I think it can be said that there was any stage after addresses when counsel were denied a right to address on costs. It seems to be clear - and indeed appears to have been accepted in this Court - that counsel could have, immediately upon publication of the judgment, sought to have his Honour vary or withdraw the costs order, it not having been taken out, so that he could make specific submissions upon the question of costs. Nothing URJ COUNCIL OF THE MUNICIPALITY OF CANTERBURY v SCARF (Clarke JA) 3 of that sort occurred and I do not think it is accurate to say that counsel were denied the opportunity to address on costs. What occurred in this case was not unusual at all. It is quite usual to find that counsel address simply on the issues on the case and a costs order is made almost as of course. However, where counsel wish to suggest that there are some considerations which should be taken into account in making a costs order the obligation is upon.counsel to raise the matter clearly with his Honour or, at the very least, to ask his Honour to hand down his judgment and to reserve the question of costs until after the judgment has been handed down and the parties have had an opportunity to be heard on that question. This was not done in this case and, in the circumstances, I do not think it is correct to say his Honour erred. The second and substantive ground argued by the Council was that his Honour's discretion had miscarried. It should be observed at the outset that appeals from orders of this type are only permitted on questions of law and so the threshold issue is whether the Council is able to demonstrate any error of law which vitiates his Honour's costs order. The argument that was sought to be advanced was as follows: The Council sought and obtained a statutory valuation; it then made an offer to pay compensation in accordance with that valuation in the sum of $195,000; if the respondent had accepted that offer there would have been no occasion for the payment of any legal costs; in the event the respondent did not accept that offer but put both itself and the Council to legal expense in seeking to support a valuation of approximately $300,000; it failed to persuade the Tribunal that that was the correct valuation and, in the result, was awarded compensation less than the amount initially offered by the Council. Therefore, according to the submission, all the costs of the litigation had been brought about by the respondent's unsuccessful attempt to recover more than it had been offered by the Council. For these reasons the obligation to pay legal costs had been unnecessarily caused by the respondent who should, therefore, be ordered to pay the costs. There is, of course, another view of the matter and that is this: The Council did not simply seek to support the statutory valuation, but urged a case that the compensation should be assessed at $85,000. It was unsuccessful in pressing those submissions and, while the respondent was equally unsuccessful in sustaining a valuation of $300,000, the amount actually awarded was greatly in excess of the valuation for which the Council argued. In that sense the respondent was the clear victor. It succeeded in having the Court reject the low figures put forward by the Council. They are the competing views as to the considerations which should have influenced the final order. It seems relatively clear that his Honour took the view that the litigation before him concerned the question whether the valuation should be $85,000 or $300,000 and, in view of the fact that his conclusion was that the land was worth more than $85,000, considered that the respondent was the victor and was entitled to an order for costs qualified in the respects he mentioned. In these circumstances it is somewhat difficult to ascertain any error of law. If there is an error - and I am far from persuaded that there is one - it is in the nature of a factual mistake. His Honour mistook, according to the argument, the real victor in the case. If his Honour did so, he made a mistake of fact. It was said, however, that the order was unjust and such as could not reasonably have been awarded on the facts of the case. Even assuming that that were so, his Honour's mistake in making such an order could, at best, be described as a perverse 4 UNREPORTED JUDGMENTS decision which, as has been held in this Court, does not raise an issue of law. (See Azzopardi v Tasman UEB Industries Ltd, (1985) 4 NSWLR 139, at 156-7.) Counsel also sought to argue that, within the meaning of House v The King, 55 CLR 499, at 504-5, there had been an erroneous exercise of discretion by his Honour. But a discretion can miscarry either as a result of an error of law or an error of fact. As I have sought to point out, the argument here is that his Honour's discretion miscarried because he failed correctly to appreciate the facts. The mistake which is suggested is, in my opinion, solely a mistake of fact from which an appeal does not lie to this Court. For these reasons, in my opinion, the appeal should be dismissed with costs. Priestley JA I agree. Meagher JA I also agree. The dismissal of the appeal in the present circumstances seems to be inevitable. For our jurisdiction to interfere depends on the existence of an error of law and no error of law was demonstrated. Even if his Honour's discretionary judgment were demonstrably unsound, no error of law would, simply by virtue of that fact, be involved; just as the fact that a finding is perverse does not mean that it constitutes an error of law. Questions of the weight or relative significance to be accorded to some relevant consideration on which the discretionary judgment is based do not constitute errors of law. This is to be contrasted with the principles on which an appellate court may review a discretionary judgment, which principles do not apply where the appeal is limited to questions of law. In any event, it has not even been faintly demonstrated that his Honour's order was in any way unjust or unsound. The order of the Court, therefore, is that the appeal is dismissed with costs. Counsel for the Appellant: G EUNDERWOOD Counsel for the Respondent: DM LLOYD and J A DARVALL Solicitors for the Appellant: C DON SERVICE and CO Solicitors for the Respondent: BOWEN and GERATHY