Challenger Property Asset Management Pty Ltd v Stonnington City Council and Valuer General Victoria

[2010] VSC 298

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

VALUATION, COMPENSATION & PLANNING LIST

No. 2702 of 2010

CHALLENGER PROPERTY ASSET MANAGEMENT PTY LTD and CHALLENGER LISTED INVESTMENTS LTD	Plaintiffs
v
STONNINGTON CITY COUNCIL	First Defendant
and
VALUER GENERAL VICTORIA	Second Defendant

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 June 2010
DATE OF RULING:	25 June 2010
CASE MAY BE CITED AS:	Challenger Property Asset Management Pty Ltd & Anor v Stonnington City Council and Valuer General Victoria
MEDIUM NEUTRAL CITATION:	[2010] VSC 298

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VALUATION AND COMPENSATION – Uplift application from Victorian Civil and Administrative Tribunal – Plaintiffs to this proceedings in substance the applicants to Victorian Civil and Administrative Tribunal proceeding – Victorian Civil and Administrative Tribunal bound to act according to substantial merits of the case - Valuation of Land Act 1960 ss 22, 23, Victorian Civil and Administrative Tribunal Act 1998 ss 97, 98

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D J Batt	Gadens Lawyers
For the First Defendant	Mr J Pizer	Maddocks
For the Second Defendant	Mr G Garde QC	Victorian Government Solicitor’s Office

HIS HONOUR:

1. In this matter the plaintiffs make application pursuant to s 23 of the Valuation of Land Act 1960 for an order that the matter, that is currently the subject of an application before the Victorian Civil and Administrative Tribunal (‘VCAT’) in proceeding L32/2009, be treated as an appeal to this Court. Section 23(3) and (4) provide:

(3)In addition to sub-s (1) a matter that is or could be the subject of an application under s 22 may be treated as an appeal to the Supreme Court, if on the application of any party the court is satisfied that the matter raises questions of unusual difficulty or of general importance.

(4)For the purposes of sub-s (3) a party includes a person who would be a party if the matter were the subject of an application under s 22.

1. Section 22 provides for application to VCAT for review of decisions relating to valuations of land made for rating purposes.

1. The affidavit material filed in support of the application both by the plaintiffs and the Valuer General demonstrates that this is a matter which is appropriately uplifted to this court. There is no dispute with respect to this on behalf of the first defendant but Mr Pizer has questioned whether the application to this court can properly be made. In particular, he questions whether the application is being made by a party to the VCAT proceeding in the sense contemplated by s 23.

1. The background circumstances to that submission are set out in the affidavit of Patrick John Walsh sworn 19 May 2010 at paragraphs 5 to 12.  The plaintiffs are, and as at 1 January 2008 were, the registered proprietors of the land described in Certificate of Title Volume 10579 Folio 645, being the land situated at 500 Chapel Street, Prahran, Victoria and known colloquially as The Jam Factory.  The property is a substantial holding in excess of 19,000 square metres.  It has extensive improvements including a shopping centre with some 15 cinemas and 35 specialty shops and a large car park.  The second plaintiff is and, as at 1 January 2008, was the responsible entity of the Challenger Diversified Property Trust 1.  Both now and as at 1 January 2008, the second plaintiff's interest in the property is and was held by it in its capacity as responsible entity of the trust.

1. In 2008, the first defendant assessed the site value of the property as at 1 January 2008 as $48,176,000 and the capital improved value as at 1 January 2008 as $103,885,000. That assessment was comprised in rate and valuation notices which are exhibited to the affidavit of Mr Walsh. They are directed to ‘Challenger Diversified Property Trust 1’. Objection was made to such valuations on the basis that they were too high and council disallowed the objection. On or about 22 January 2009, application was made to VCAT pursuant to s 22 of the Act seeking review of council's decision to disallow the objections. The application is also exhibited to Mr Walsh's affidavit. It is made in the name of the trust, identified in the valuation notices, but commences with the statement, ‘We act on behalf of Challenger, the owner of the above mentioned property.’ The application became the subject of proceeding L32/2009 in the tribunal. Mr Walsh's affidavit states that although the named applicant in the tribunal proceedings is the trust, the plaintiffs should have been named as the true applicant, they being the registered proprietors of the property. It is apparent that the name stated in the application for review is responsive to the rates and valuation notices issued by the first defendant. As Mr Batt has submitted to me, it is also apparent the named applicant before VCAT is not a legal entity. Further, the application was expressly made on the basis that the applicant was the owner of the land. That owner was simply referred to as ‘Challenger’ in the body of the application. I am satisfied this was intended to refer to the registered proprietors.

1. It seems there are two ways forward. Either this Court can accept the underlying reality of the situation or it can adjourn the current application in order that the documents before VCAT be amended. If the matter were remitted to VCAT for amendment, I am satisfied that that amendment would occur pursuant to s 127 which provides the power to amend documents. It would not involve an application for joinder of parties pursuant to s 60. In other words, the underlying point goes to the naming of the owners who have applied to VCAT rather than the substance of the parties before it. If this be so then the plaintiffs are already in substance the applicants to the VCAT proceeding and parties to it in the relevant sense. VCAT is in turn bound to act according to the substantial merits of the case,[1] and must conduct each proceeding with as little formality and technicality as the requirements of the Victorian Civil and Administrative Tribunal Act 1998 and the enabling enactment and a proper consideration of the matters before it permit.[2]

   [1]Victorian Civil and Administrative Tribunal Act 1998 s 97.

   [2]Victorian Civil and Administrative Tribunal Act 1998 s 98.

1. Mr Garde has also drawn my attention to the provisions of s 23(4) of the Valuation of Land Act. Under s 23(4) a party, for the purposes of the present application to this Court, is defined to include a person who would be a party if the matter were the subject of an application under s 22 to VCAT. I am satisfied that (if I am wrong in concluding the plaintiffs are already party to the VCAT proceeding) then if the matter proceeded before VCAT, the plaintiffs in the present proceeding would be parties to that application. Conversely the currently named entity could not be said to be a party because it is not capable of proceeding in its own name. Having reached these conclusions, I am satisfied that it is not necessary to send the matter back to VCAT and that it is possible for this Court to make an order pursuant to s 23(3). As I have stated already, there is no real contest that the proposed uplift of the proceeding is appropriate and, accordingly, I propose to make an order pursuant to s 23(3) and to give appropriate directions for the further conduct of the proceeding.

1. I propose to make directions generally in accordance with the framework submitted by Mr Batt but subject to some qualifications.  I agree firstly that mediation is appropriate.  It seems to me that whatever may be the case in relation to capital improved value, that the issue of site value should be mediated and I will make orders to provide for mediation in the form usually adopted in this list. 

1. Secondly, I accept that the plaintiffs are entitled to avoid the splitting of the proceeding.  Although from the point of view of the Valuer General that would be convenient, the plaintiffs are seeking to appeal on the basis of a factual matrix that they wish to explore in an appeal which relates both to site value and capital improved value and I would not readily deprive them of that entitlement.  Having said that, I accept Mr Garde and Mr Pizer's submission that the matter should be expedited as far as possible and I will endeavour to do that. 

1. Insofar as costs are concerned, it seems to me that the costs of this application, and the costs of the proceeding at VCAT should be reserved.  I can see arguments on both sides, but there is a question as to whether unnecessary costs have been incurred, and I am not disposed to finally resolve that issue at this point in time.  Accordingly, the question of costs will go over to another day, and will ultimately be resolved in the context of the outcome of the whole of the proceeding.

1. I will make orders, firstly in accordance with proposed order 1, for the matter to be treated as an appeal to the Supreme Court of Victoria.  Secondly that the documents filed in VCAT stand as documents filed in the Court on the appeal.  Thirdly, that there be a mediation, and I would normally order that the costs of the mediation in the first place be borne equally by the parties, and otherwise I will make an order to the general effect of paragraph 3.

1. I will seek to fix a date for hearing, and to fix a timetable for submissions, which reflects that date for hearing.  I will reserve the costs of this application, and of the proceeding in VCAT.

1. I will reserve liberty to apply.