Commonwealth Managed Investments Limited v Department of Natural Resources, Mines and Energy
[2004] QLC 77
•13 August 2004
LAND COURT OF QUEENSLAND
CITATION: Commonwealth Managed Investments Limited & Ors v Department of Natural Resources, Mines and Energy [2004] QLC 0077 PARTIES: 1. Commonwealth Managed Investments Limited (AV2002/0274)
2. AMP Life Limited (AV2002/0281 and AV2004/0027)
3. AMP Life Limited (AV2002/0282)
4. Trust Company of Australia Ltd (AV2002/0283 and AV2004/0026)
5. Challenger Property Nominees Ltd (AV2002/0284 and AV2004/0029)
6. ISPT Custodians Pty Ltd (AV2002/0294
7. Perpetual Nominees Ltd (AV2002/0335 and AV2004/0036)
8. Perpetual Trustee Company Ltd (AV2002/0336 and AV2004/0030)
9. NE Christie (NSW) Pty Ltd (AV2002/0337 and AV2004/0032)
10. Trust Company of Australia Ltd (AV2002/0810)
(applicants)v. Chief Executive, Department of Natural Resources, Mines and Energy
(respondent)FILE NOS: 1. AV2002/0274
2. AV2002/0281 and AV2004/0027
3. AV2002/0282
4. AV2002/0283 and AV2004/0026
5. AV2002/0284 and AV2004/0029
6. AV2002/0294
7. AV2002/0335 and AV2004/0036
8. AV2002/0336 and AV2004/0030
9. AV2002/0337 and AV2004/0032
10. AV2002/0810DIVISION: Land Court of Queensland PROCEEDING: Decision on Application for further directions DELIVERED ON: 13 August 2004 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Dr NG Divett ORDER: 1. The appellants and the respondent, within 14 days of the date of this Order, file and serve upon each other, with copies to the Court, particulars in a clear and easily understood form, of the identification of the sales relied upon in these matters, including the basic details of each sale including:
· The identity of the property
· The date of the sale
§ The purchase price and any other considerations, amount and factor to be considered in analysing the sale.
The evidence of both parties to be restricted to the sales exchanged, unless further sales are found to influence the valuations. Any further sales disclosed are to be exchanged within 7 days of those sales becoming known to either party.
2. The appellants and the respondent, within 14 days of the date of this Order, are to file and serve upon each other, an indication of their understanding of the highest and best use of the subject lands.
3. In respect of the appellants grounds of appeal dealing with compliance with the Valuation of Land Act 1944 (ground 5), I believe that the response so far provided by the appellants adequately clarifies the matters at issue and I make no further order on those matters.
4. In the matter of the impact of s.3(2) upon any determination of the added value of improvements determined under that section, I order that the appellants, within 14 days of the date of this order, provide to the respondent any further particulars about the value of the improvements upon the subject lands, which are in addition to the current matters for disclosure already exchanged. In the event that the appellants’ advice is that there is in fact no additional documents relating to any determination of both the improved values and the value of the improvements upon the subject lands, then the appellants to provide a further statutory declaration to that effect. In the event, unless the Court approves otherwise, the matters will be restricted to the evidence exchanged.
5. In respect of the later valuations at 1 October 2002 any further orders about disclosures in those matters will be the subject of a further application from the respondent, unless those matters are resolved by consent between the parties.
CATCHWORDS: Practice and procedures – Further and better particulars – Need to provide particulars prior to the exchange of technical reports – Extent of sales adopted – Both parties to exchange basic sales information.
Practice and procedures – Further and better particulars – Information about improved value and improvements – Section 3(2) application – Relevance to issue in dispute – Appellant to provide disclosure where available.
Practice and procedures – Disclosure – Purpose of s.3(2) calculation – History of legislation – Intentions of Parliament – Disclosure of relevant documents ordered.APPEARANCES: Mr K Rose for the appellants
Mr T Quinn for the respondentSOLICITORS: Gadens Lawyers for the appellant
Mr J O’Rourke of Department of Natural Resources, Mines and Energy for the respondent
Decision on Application for Further Directions:
Background:
This is in respect of applications by the appellants, and cross-applications by the respondent, seeking orders which might expedite the hearing of the merits of the appeals, which are set down before the Court commencing 27 September 2004, and continuing on 11 October 2004 and also 25 October 2004.
These revaluation matters deal with ten CBD buildings at:
· AV2002/0274 – 515 Queen Street (the Marriott Hotel)
· AV2002/0281 and AV2004/0027 – 60 Edward Street
· AV2002/0282 – 295 Elizabeth Street
· AV2002/0283 and AV2004/0026 – 100 Edward Street
· AV2002/0810 – 369 Ann Street
· AV2002/0284 and AV2004/0029 – 30 Makerston Street
· AV2002/0294 – 100 Creek Street
· AV2002/0335 and AV2004/0036 – 300 Queen Street
· AV2002/0336 and AV2004/0030 – 85 George Street
· AV2002/0337 and AV2004/0032 – 300 Adelaide Street
Subsequent to the hearing of the applications on 15 July 2004, the Court was advised on 29 July 2004 that the matter of AV2002/0282 (295 Elizabeth Street) was settled after a s.68 agreement, and that matter has now been removed from the list for hearing. It is also noted that matter of AV2004/0036 (300 Queen Street) is currently to be determined whether the Court has jurisdiction to hear that matter.
Mr K Rose of Gadens Lawyers appeared for the appellants. Mr T Quinn of counsel, instructed by the Department of Natural Resources, Mines and Energy appeared for the appellants.
History of the appeals –
Interlocutory steps to clarify the major issues between the parties were heard on 11 April 2003, and 23 July 2003, with a preliminary conference before the Judicial Registrar of the Court on 2 June 2003. Following the directions hearing on 25 July 2003, by consent of the parties directions were issued on 25 July 2003 in respect of:
· A request for particulars by the respondent
· The appellant to provide particulars of the grounds of appeal
· Both parties to provide relevant disclosure of documents
· Inspection of disclosure documents to be provided by each party.
At a further directions hearing on 31 October 2003 before the Judicial Registrar, the matter of disclosure and whether there had been sufficient compliance with the Court Order of 25 July 2003 was further discussed. At a further mention on 28 November 2003, counsels for both parties advised the Court that some progress in limiting the issues between the parties appeared possible, and the matter was further adjourned to allow for further discussions. The current applications for Court Orders in respect of the expediting of the matters was heard before the Member on 29 June 2004, at which the jurisdictional matter of AV2002/0337 (300 Adelaide Street) was heard. A decision on that matter was handed down on 28 July 2004. A further directions hearing in respect of the current matters was heard on 15 July 2004.
The Appellants’ application
By general application of 22 June 2004 the appellants seek the leave of the Court for orders to be made in respect of:
1. A request for a date for hearing
2. The hearing of all ten matters to proceed in conjunction
3. The advisability of evidence being accepted and relied upon in all appeals where relevant to the different properties
4. Any further orders that the Court deems necessary to expedite the resolution of the real issues in the matter.
Following the application hearing on 29 June 2004, by consent, the Court issued the following orders:
1. That file references AV2002/0335 and AV2004/0036 be listed for hearing for two days commencing 27 September 2004;
2. That the exchange of expert reports be implemented 21 days prior to the commencement of the hearing and a copy of those reports be filed at the Land Court at that time in accordance with r.23 of the Land Court Rules 2000; and
3. The remaining matters be listed for a five day hearing commencing Monday 11 October 2004 and to continue for a further five day hearing commencing Monday 25 October 2004.
The respondent’s cross-application –
The respondent seeks further orders to compel compliance with the Court Orders of 25 July 2003 in respect of disclosure, noting that at the date of the hearing of the applications only 17 relatively formal documents so far have been exchanged. The affidavit of Mr John Brian O’Rourke, solicitor for the respondent, further advises that in respect of four properties there have been no disclosures at all. Mr O’Rourke further argues that in respect of those four properties there is no disclosure in respect of the financial performance of the assets or any documents relating to depreciation records.
The respondent further seeks orders in respect of the compliance with the Court Order of 25 July 2003, noting that there has been inadequate compliance with the further and better particulars about the specific grounds of appeal. Those grounds specifically relate to the comparable sales evidence to be relied upon; details of the improvements upon the lands and their age and cost; and the relevant methods of assessment in dispute. Specific details of the particulars requested are detailed in the respondent’s extensive application document.
At the hearing on 15 July 2004 it was agreed by both parties that particulars in respect of the ground of appeal dealing with the “development potential” of the respective properties, provides no further problems as that ground of appeal is now abandoned on all matters by the appellants. (Transcript 59).
The Key Issues –
The key issues appear to revolve around the different interpretations about the level of compliance, or otherwise, with the orders of the Court of 25 July 2003. The appellants argue that the disclosure has been provided by them in respect of their understanding of the key issues in the matter. The respondent rejects that conclusion, noting that the appellant has so far resisted providing the level of detail needed by the respondent in accordance with the Court Orders. I will therefore examine those two scenarios under the headings of Further Disclosure and Further and Better Particulars.
A - Further and Better Particulars –
Before considering the level of disclosure which should apply in these matters, it is important to clarify the extent of particulars which need to be addressed. Having clarified the matters at issue involved in each valuation, then a sensible identification of relevant documents addressing those issues can be made, and exchanges then implemented. The particulars requested by either party have been separately identified, and form the basis of the subsequent exchanges between the parties, and I will identify only those issues now raised by the parties which appear to have not been adequately exchanged.
For the record the Court Orders of 25 July 2003 were as follows:
1. The Solicitors for the Respondent are to deliver to the Solicitors for the Appellant a request for particulars by 1 August 2003.
2. The Appellant is to file and serve proper particulars of the grounds of appeal as stated in the Notice of Appeal on or before 22 August 2003.
3. Each party make disclosure of documents by serving a list of documents on the other party on or before 19 September 2003.
4. Each party provide inspection of documents disclosed by it on or before 10 October 2003.
5. The matter will be listed for further directions on Friday, 31 October 2003.
(Subsequently heard on 28 November 2003 – see para [6]).
Mr Rose argues that the appellants continue to remain uncertain about the following “matters in issue”:
1. The extent, nature and use of comparable sales;
2. The highest and best use of the subject properties;
3. Whether s.3(2) assessment is relevant to the valuations?
4. Whether the principles included in the decision of Department of Natural Resources and Mines v QNI Metals Pty Ltd ((LAC 2002/0038) 12 September 2002, to be reported) had been considered by the respondent?
Mr Rose argues that the only explanation by the Chief Executive in his reasons for the decision on the objection from the owners were very general and standard in nature. Because of those imprecise explanations from the Chief Executive, the grounds of appeal from the appellants have by necessity needed to be broad and inclusive. Mr Rose argues that if the respondent now clarifies the specific reasons for the difference of opinions in the matters, then those issues can be fully addressed and appropriate disclosures made.
In respect of particulars of the comparable sales used by the appellants, Mr Rose argues that the law does not require any explanation of its evidence prior to the 21 days required in respect of the exchange of any valuer’s technical report before the date of hearing. Mr Rose argues that precedents direct only that particulars should be provided generally to enable the other parties to prepare for trial. He argues that the respondent knows that the case it has to meet involves the comparable sales used by the respondent, and also the relevance of a s.3(2) calculation.
Mr Rose concedes that a preliminary black and white photocopy of a sales schedule and map has been provided by the respondent, but he argues those details are so imprecise as to not provide full comprehension of their intent. Mr Quinn advises that the appellant has so far refused to provide any prior evidence of the sales relied upon by the appellants. Mr Quinn provides a copy of the respondent’s preliminary schedule and map to the Court (Exhibit 4). While those copies, after some detailed examination, do provide an indication of the ten properties involved, plus a further eight sales of residential developed sites, they are at a standard of quality something less than what should be expected in matters of this nature. However they are certainly better than any similar particulars yet to be provided by the appellants in respect of the comparable sales relied upon by them.
Mr Quinn does not seek detailed analysis of the appellants’ sales, which he agrees would later be the subject of detailed cross-examination in evidence. He merely seeks the identification of the sales and their basic details such as included in the respondent’s outline in paragraph 3.1 of 28 November 2003 (Exhibit 3). I believe such a request is reasonable, and will form part of these directions, as those exchange particulars will ensure that both parties have an opportunity to be fully informed of all matters prior to exchanging the detailed separate analyses of the valuers by either party.
The relevance of any sales, whether that relates to the stated intentions of the purchaser or otherwise, will be the subject of later evidence at the hearings. Mr Rose later agreed that it would be appropriate for both parties to exchange the basic evidence of the sales used, and for the evidence to be restricted to those sales exchanged, subject to either party reserving the right to exchange any other sale which might later become relevant, and which could have an impact upon any conclusions. (Transcript 29). I believe that is also a sensible approach.
I turn then to the respondent’s request for further particulars in respect of the method of valuation as encapsulated generally in Ground 5 of the respective Notices of Appeal, and as detailed in paragraph 6.1 to 6.5 of the respondent’s outline of 28 November 2003. (Exhibit 3). In addition to those responses of the appellants in respect of the grounds of appeal, Mr Rose further adds the additional specific issue about whether the use of a calculation using s.3(2) was ever applied, and whether that is therefore now relevant, in the determination of the unimproved value of the subject lands.
In the matter of the response from the appellants to the respondent as detailed in paragraph 6.2, I believe that the appellant has clearly identified the nature of the issues to be argued. The legal reasons and principles I believe should be the subject of legal argument during the hearing of the merits. In respect of whether the respondent has considered the principles flowing from the decision of the Land Appeal Court in QNI Metals Pty Ltd, I believe those are also matters which are best addressed by legal argument at the hearing. The respondent now knows the thrust of the appellant’s case as outlined in A, B, C and D. In respect of the issue covered in paragraph 6.3, I believe that once the sales evidence to be relied upon, as discussed previously, is clarified, then the issue of scarcity is a matter for further clarification during the hearing. Particulars of previous court decisions underlying the issues to be argued are a matter for legal argument by the very experienced counsels representing the parties in these matters.
The remaining particulars to which the respondent seeks clarification is in respect of the details of Ground 3, involving clarifications as outlined in paragraph 4 of the respondent’s outline of 28 November 2003. Those particulars seek clarification of the nature and extent and history and cost of improvements upon the land. As outlined in para [38] of this decision, the current disclosure of documents in respect of this issue is really at the heart of this disagreement. It would be fair to say, in my opinion, that the appellants see the matter of further particulars in this issue as perhaps a “fishing” exercise. The respondent by comparison appears to have concerns of a belated argument in respect of an extensive reference to previously unknown site works or other improvements.
In respect of whether the use of s.3(2) during the initial valuation determination should be an issue for disclosure, I note that s.3(2) is seen by Mr Rose as merely a secondary issue to the current matters for disclosure. He argues that if s.3(2) was in fact a matter that should have been considered by the respondent, and for whatever reason that had not been undertaken in the initial valuations, then the current valuations may prove to be legal nullities, a strategy that the appellants reserve their right to argue at the hearing. While s.3(2) may be an issue to be argued by the respondent, if it was not part of the initial determination, then Mr Rose argues that it should not be the subject of disclosure as an interlocutory procedure. Mr Rose notes that s.3(2) has not been mentioned by the respondent in any of the reasons for the decisions on the objections.
Now whether the respondent did consider the application of s.3(2) in the original valuation is a matter for the Chief Executive. Mr Quinn argues that it is within the skills of qualified valuer to consider such implications upon the final unimproved value adopted. Certainly that would be a fairly straight forward procedure when dealing with the less complex valuations. A more fulsome consideration of s.3(2) was likely to be required when dealing with more complex matters, such as the major shopping centres and the central business district properties reflected in the current matters. However such detailed studies would likely become a significant use of technical resources of the Chief Executive. The evidence would suggest that s.3(2) has only recently occupied the minds of the valuers, perhaps reflecting the limited professional resources to undertake the full analysis of improvements upon major land developments. But that is really a matter for consideration by the Chief Executive. Should any resulting higher unimproved values result from a s.3(2) approach, the extra resources needed must be balanced against the available revenues likely to flow to the government.
Mr Rose sees a s.3(2) calculation more in the form of a “reverse hypothetical” process, (Transcript 37), with all of the problems inherent in such matters such as, for example, allowances for discounting rates and interest charges etc. He notes that courts have been cautious about applying such approaches when determining unimproved values. Mr Quinn responds by noting that s.3(2) is enshrined in the legislation, and as such it clearly directs the law on such matters.
In seeking guidance about the intentions of Parliament when s.3(2) was introduced into the Act, I note that s.12(1)(b) of the original Valuation of Land Act when first proclaimed on 29 June 1946, contains similar wording to the current s.3(2). I note also that the added value of the improvements was similar then in s.12(2)(b) to those provided in the current s.5(1) and 5(2). Clearly the original intentions of the Queensland Parliament were then, and have continued, to require considerations of the requirements of s.3(2) when valuing the unimproved value of land.
The history of legislation dealing with unimproved value is to be found in the Commonwealth of Australia Land Tax Assessment Act 1910. Under that Act s.3 defined “unimproved value” in much the same terms as currently enshrined in s.3(1)(b) of the current Acts. Following a decision of the High Court in The Commissioner of Taxation v Nathan [1913] 16 CLR 654, it was held that the unimproved value of the Albion Racecourse in Brisbane should be determined on the basis of the sale of the property as a racecourse, less the added value of the improvements, and not as the ordinary price of land in the district. The High Court saw that the unimproved value of the racecourse, as it had been sold to the owner (Nathan), included the intangible value of a permit to conduct a racecourse. That decision on appeal in favour of the Commonwealth was seen as supportive of the principle enshrined originally in the legislation in respect of liability for taxing revenue.
However in a later decision before the Privy Council in Tooheys Limited v. The Valuer-General (1925) AC 439, Their Lordships overturned the previous understanding of the law, determining that the unimproved value of hotel licence land in Sydney should be determined as if “the improvements were to be left entirely out of view” (p. 443). That decision ruled that the unimproved value was to exclude any consideration of the value of the licence.
In a later matter of McGeogh v Federal Commissioner of Land Tax [1929] 43 CLR 277, the High Court considered the implications of the eradication of prickly pear infestation upon grazing land at Roma in Queensland. The subject land had incurred considerable cost in eradicating the prickly pear, and the owner sought those costs as improvements upon the land. Knox CJ and Dixon J by majority decision found that the eradication of the prickly pear was an improvement on the land, and the unimproved value of the land should reflect the value of the land as if the “improvements” had not been made. In testing that approach the Court distinguished the Toohey decision, noting with some concern the decision of the Privy Council which had ruled contrary to the long settled view of the Australian Courts (p.292). In his minority decision Isaacs J said at 304:
“If Toohey’s case is to be faithfully applied, as I conceive it my plain judicial duty to do, without questioning its accuracy, even if I did not agree with it, I do not see how any of those prior decisions can be regarded as authoritative. I do not attempt to overrule them in this regard; the Privy Council has done that I simply follow the ultimate tribunal.”
The outcome of the concerns expressed by such pre-eminent legal minds as the High Court on such an issue, possibly led the Commonwealth Government to consider clarification of the intent of the Act, which resulted in the Land Tax Amended Act 1930. That Act in s.2(ii) introduced the words that are now enshrined in s.3(2) of the current Act.
The purpose of those amendments in 1930 may be gleaned from the record of Hansard, where the Federal Treasurer, (Mr Theodore) in his second reading speech, advised the Parliament that the amendments were aimed at preventing the very heavy loss of revenue which would flow from following the recent High Court decisions, including McGeogh. The Treasurer noted that the new definition of unimproved value “will ensure the expression of the intention of Parliament” (p.189). Later in the Senate the Vice President of the Executive Council noted that the amendments will “state in clear and unequivocal terms the intentions of the framers of the original Act” (p.283). Senator Daley went on to note that unimproved values will normally be assessed by reference to sales of unimproved land where possible, “but that is not a final test; but merely an approximate starting point” (p.286).
In that reading of the Bill the Senate rejected some amendments in view of concerns of the opposition, and requested the Lower House to reconsider the far reaching effects of the proposed amendments. Following further consideration by both Houses, the provisions dealing with unimproved value were approved as proposed by the Government. However the introduction of the amendment, which is now s.3(2) in this matter, was of major concern to the opposition at that time. It was noted for example by the Member for Kooyong (Mr Latham), that the cost of clearing and improving land may be greater than the value they bring to the land (p.933). Concerns were also raised by the Opposition in respect of clarification about “intangible causes” which might affect the unimproved value of lands (p.936); a matter clarified by the Treasurer when, speaking of his legal advice, he said at p.937:
“There, counsel laid it down that it had been the universal practice, until the Toohey's case in 1925, to proceed upon those presumptions and to arrive at the unimproved value by that process, which, to any reasonable man would seem to be the only practical way to ascertain it, so long as provision is made to exclude from consideration those extraneous influences that might otherwise inflate the unimproved value, such as the intangible values of which the Honourable Member for Wakefield (Mr Hawker) has been speaking. Those intangible values certainly are of great importance, because we do not want the department to follow a practice that would establish a fictitious value for unimproved land – a kind of legal fiction that assumes for taxation purposes a value that does not exist.”
Clearly the intentions of the Parliament were clear that the current wording of what is now s.3(2), was meant to form the basis of the determination of unimproved value. Whether that approach was adopted, or the method outlined in s.3(1)(b) is adopted, is a matter of the available evidence of value.
The effect of the above amendments of the 1930 Act were considered in a later matter before the High Court of Russell v Federal Commissioner of Taxation [1933-34] 50 CLR 182. The Full Court noted at p.194 that two different methods of ascertaining unimproved value are prescribed; firstly assuming that the improvements “do not exist”, and secondly by deducting the valuer of improvements from the improved value. The Court emphasised that while the two methods of estimation of improvements are provided, the lower value of the improvements so calculated is to be adopted, in accordance with what is now s.3(2) in the current matter.
Whether the respondent initially considered the implications of s.3(2) in the original valuations is irrelevant to the current matter at this time. The law directs that some consideration “shall” be given to its application in determining the unimproved values. On that basis I see the matter of improvements upon the subject land is a matter for disclosure of documents, should they exist. The evidence so far is that some of that information has been voluntarily exchanged with the respondent. On the other properties Mr Rose says, on instructions from his appellants, that some of the data now sought has either never been available or has been misplaced. To that end Mr Rose provides a list of agents’ names for each appellant who can testify to the availability, or otherwise, of any relevant documents. That may now be a matter for subpoena by the respondent. But clearly the implications of s.3(2) is an issue between the parties, and therefore subject to disclosure.
In respect of particulars relating to the 1 October 2002 valuations, I accept that those matters have not yet been the subject of the normal interlocutory steps. I also note that if the normal period of exchange was to occur on those matters, 21 days prior to a hearing date, then there could be problems in satisfying those exchange dates before the first case is concluded. To that end it would be to the advantage of both parties if the 21 day exchange rule was shortened, at least to allow the technical experts to benefit from the argument and cross-examination of the first matter to be heard on 27 and 28 September 2004.
In respect to the later valuations at 1 October 2002, the matter of intangible improvements is a separate issue under s.35(a) for those appeals, and particulars of those intangible improvements would be the subject of disclosure in those matters. However as outlined in para [54] an alternative solution proposed by Mr Quinn may overcome any problems in this regard.
The Appellants’ argument –
Fundamental to the appellants’ argument in respect of providing further disclosure of documents in this matter, is their understanding of the purpose of disclosure. Mr Rose argues that disclosure is required by the Courts, to ensure, that in accordance with r.5 of the Uniform Civil Procedures Rules 1999, there is just and expeditious resolution of the real issues between the parties, with a view to minimising the expense of the litigation. Mr Rose argues that in order to achieve that overriding purpose, it is important that the real issues at stake be identified. Mr Rose confirms that the appellants have no concerns in providing full disclosure, where those issues are clarified.
Mr Rose advises that some of the appellants have provided disclosure beyond the key issues, in order to expedite resolution of their matters. In response to a request from Mr Quinn for confirmation of the level of investigation of relevant documents for disclosure, Mr Luke Douglas Hinkfuss, a solicitor of Gardens Lawyers acting for the respective owners, provided a further affidavit on 28 July 2004 confirming the nature and names of the appellants’ agents who provided information about the disclosure matters.
In respect of Mr Quinn’s reliance on directions found in Department of Natural Resources and Mines v ISPT Pty Ltd (AV2002-0773), 31 October 2003, unreported, Mr Rose questions whether the facts of that matter were in effect misleading to the learned Member at arriving at her orders for disclosure. Mr Quinn rejects that assertion, and advises that he will reserve his submissions on that matter until his reply about the effects of the ISPT decisions. Mr Rose confirms that it is the appellant’s argument that as s.3(2) was not a part of the initial valuation procedure, or the objection process, then it is not an issue for disclosure between the parties.
Mr Rose argues that r.209 of the Uniform Rules is not relevant in this matter, and he relies upon r.782 and r.784 as discussed previously. Mr Rose argues that because the appeal has a known starting point in respect of the decision of the Chief Executive on the valuation, then under r.784 the Chief Executive should provide to the Court on the filing of an appeal, all of the relevant documentation in relation to the decision on objection. He notes that the appeal is not an adversarial litigation, but an appeal against a decision made by the respondent. Mr Rose also advises that a request for reasons under the Judicial Review Act has already been denied by the Chief Executive, who relies upon the discretionary nature of s.43 of the Valuation of Land Act, which states that the decision on the objection may be made “in such a manner and to such extent as the Chief Executive deems proper”.
In respect of the level of disclosure so far completed, Mr Rose notes that documents provided by the appellants include, among others, a valuation report and an insurance cost replacement report for the Marriott Hotel site. He advises that the documents currently exchanged are “the totality of what is available”. (transcript 39).
To support his argument Mr Rose refers to the matter of Spyer v Cuddles ‘N’ Mum Franchise Pty Ltd (FCA 1563, 20 December 2002). In that matter Lindgren J dismissed the applicant’s request for further discovery in which they argued that the previous level of documents provided was, in their view, inadequate. The facts in that matter were that the Court had ordered each party to serve and file a list of categorisation of documents and later a verified list of documents; and two months later ordered the parties to also complete supplementary discovery. Following both orders of the Court, certain lists of documents were filed for discovery. The applicant then sought an application for a further order of particulars, arguing that there may be more bank records not yet disclosed.
Lindgren J noted at para [33] that he did not believe there are grounds for belief that further relevant documents have not been discovered; and even if there was some grounds for such a belief, they are so slight and unpersuasive so as to change his exercise of discretion in dismissing the further application. Lindgren J further noted in para [36] that the NAB Bank was so conscious of the need to discover relevant documents, that it had even provided similar documents of other franchise, which were related to the appellant franchise, but not the subject of the particular request for further discovery. Those facts appear to mirror the circumstances now reported by Mr Rose.
In the current matter I believe that the series of affidavits by the legal representatives of the NAB in Spyer are similar to those provided by Mr Hinkfuss. However I believe there is some distinction in respect of the level of difference between the grounds of belief that further documents may be available in the current matter, compared to the “slight and unpersuasive” nature in Spyer.
In the current matters the existence of further documents in relation to major capital works such as these central city hotel and buildings is a more likely possibility. The financial management and accountabilities of the owners of such major buildings would, in my opinion, demand of their accountants more precise documentation and recording. I agree with Mr Quinn that on balance it is most surprising that further financial records are not available. However, as the Court is presented with statutory declarations to that end, it may be more appropriate for that matter to be settled during the hearings.
The Respondent’s argument –
Mr Quinn argues that in spite of the Court Order of 25 July 2003 the appellants have so far failed to provide disclosure on several matters. Mr Quinn argues that disclosure of this kind has been made in various proceedings before this Court, noting in particular the decisions of Department of Natural Resources and Mines v ISPT Pty Ltd (supra); Department of Natural Resources and Mines v Sabina 3 Gorge Corporation (V00-43 & Ors, 12 April 2001, unreported); and also Kumali Holdings & Anor v Department of Natural Resources and Mines (V98-77 & Ors, 27 April 2001, unreported). Mr Quinn notes that those decisions of this Court highlighted the need to expose and narrow the issues, thus avoiding any element of surprise, an objective similar to the current matters. In any case Mr Quinn argues that the orders of the Court have issued, and there has been no application by the appellants in the current matters to seek leave to waive those orders. On that basis he argues that compliance is a necessity, and under the Uniform Civil Rules 1999 (the Uniform Rules) sanctions for non-compliance may be made at the discretion of the Court. Mr Quinn further notes that if a party does not disclose certain documents, then under r.225(1) they may not be tendered other than at the leave of the court. Mr Quinn notes that those orders bind both the appellant and the respondent in this matter.
Mr Quinn acknowledges that the Court noted in Kumali that elaboration of the details required to prepare for a complex valuation matter would be different to those required for a more simple valuation matter, such as a small domestic valuation. He notes that the current matters are complex commercial properties in the centre of Brisbane, and the detailed valuations of those matters require much more elaboration and preparation than usually found in smaller matters.
In respect of compliance with disclosure on matters relating to any application of s.3(2) of the Act, Mr Quinn further refers to the recent decision of the Judicial Registrar of this Court in South East Queensland Water Corporation Limited v Department of Natural Resources, Mines and Energy (AV2003/0230 & Ors), 4 March 2004, unreported. I note those orders are consistent with the court orders of 25 July 2003 in the current matter.
In respect of disclosure of activities under s.3(2) of the Act, Mr Quinn argues that there is nothing in the Act which precludes a valuation under s.3(2), even if the previous valuation had not made any special reference to that direction of the legislation. He notes that the law is the law, where directions of the legislation direct either party how a valuation under the Act is to be made. He notes that s.3(2) specifically states about an unimproved value:
“3.(2) However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act.”
Mr Quinn also argues that while s.36(6) empowers the Chief Executive to obtain detailed specific information from an owner in respect of a valuation, even if that was not initially requested when preparing the initial valuations that were issued prior to objections from owners, the Act does not preclude the respondent from further seeking that type of information, subsequently in respect of either the Notice of Objection or a subsequent appeal.
In respect of any claim by the appellant that Uniform Rule 782 and 784(3) should guide the provision of disclosure; thus restricting the parties to “all documents used or relevant to the proceedings from which the appeal is brought”, Mr Quinn argues that those rules relate more correctly to an appeal against a judicial decision. He argues in effect that that is to be distinguished in the current matters which relate to appeals against an administrative or statutory decision by the Chief Executive. In those circumstances it is the responsibility of the appellants to prove their grounds of appeal, and there is no justification at that stage for the Chief Executive to substantiate his valuation, or his method of valuation. Mr Quinn argues that r.209 is the appropriate guidance in these matters, which is akin to a claim against a determination by the Chief Executive.
In respect of any request by the appellants for mutuality in the provision of disclosure or particulars of documents in these matters, Mr Quinn notes that the old rules of the Supreme Court Practice of Queensland (May 1999) noted at section [23.1.21] that “particulars are not ordered to be given to a pleading which merely puts the opponent to proof”; and “the court will not order particulars where the burden of proof lies on the appellant”. Mr Quinn argues that supports his argument that the respondent is not bound to provide any advice as an interlocutory procedure on whether s.3(2) of the Act had been previously considered by the Chief Executive in originally determining the current matters. That was clarified by the Judicial Registrar in Kumali at para [24].
The matter of whether a respondent department could reserve its leading of evidence in respect of its final position on a matter of resumption was considered by the Court of Appeal in Commissioner of Railways v Buckler [1996] 1 QdR 18, at 24, per McPherson J. While that matter proceeded under a different head of legislation, the implications of a party delaying particulars of its case where the onus lies upon the appellant would appear to support the conclusions of Mr Quinn. However, advice from Mr O’Rourke to the appellants on 14 July 2004, confirms that s.3(2) will be part of the respondent’s case when the merits of the matters are heard before the Court. Mr Quinn also notes that it is irrelevant for the appellants to argue that if s.3(2) was not originally used, therefore it is not relevant for considerations later. Section 66 of the Act directs the Court to determine the correct valuation in light of all the evidence provided. As s.3(2) is the law, then its consideration is a matter for attention.
In specific reference to the matter of disclosure now required for the valuations at 1 October 2002, Mr Quinn notes that those matters are subject to the amendment of Amendment Act 35 of 2003 in respect of the application of s.35A, where as the 1 October 2001 valuations were not so impacted. Mr Quinn argues that it is not adequate for the appellants to claim that the disclosures and particulars are similar for the appeals under the two succeeding years. However he agrees that if the appellants were to provide a formal declaration to that effect, thus protecting the respondent from surprises at the hearing, then that issue could be resolved. Meanwhile Mr Quinn indicates that a belated request for a specific order in respect of disclosures by both parties under each of those later appeals will be forthcoming, unless the appellants mutually agree to provide such details by consent, following the current directions hearing.
In respect of the wider applications of disclosure in Land Court matters, Mr Quinn directs me to the findings of the Judicial Registrar in South East Queensland Water Corporation v Department of Natural Resources and Mines (supra). He notes that in that matter the Judicial Registrar summarised the observations in the ISPT decision at para [10]. While I will not repeat those observations, matters of particular relevance to the current matters may be summarised as follows:
· The Chief Executive is not bound to his initial valuation methodology
· The Chief Executive is not bound to any reason stated to an owner
· The appellant can be required to provide disclosure of relevant documents at an earlier stage
· The respondent is entitled to consider the valuation exercise under s.3(2)
· Any documents related to the value of improvements upon the subject land, which are within the control of the appellants are discoverable, including any methodology adopting section 3(2).
To summarise the respondent’s application for further disclosure of relevant documents, Mr Quinn argues that it is very difficult to conceptualise that owners of such significant buildings that occupy most of the subject lands, particularly those of relatively recent construction such as the Marriott Hotel, would not maintain records of depreciation schedules for fiscal reasons. He foreshadows that if the appellants continue to advise that there are no such property records, then the possible cross-examination of the owners’ agent was likely to become a protracted exercise during the actual hearings. Mr Quinn argues that relevant records being provided was likely to result in significantly reduced costs for both parties, which he notes is the purpose of discovery.
Mr Quinn accepts that there may be certain matters protected by professional privilege in some documents; but argues that the normal procedure of blanking out such confidential matters provides ample protection. Mr Quinn argues that if the correspondence with owners in respect of the information requested is seen as privileged, then it is not appropriate to seek to use that as evidence before the court. Mr Rose undertook to clarify his instructions on those matters, and further advise the court if there was any divergence from Mr Hinkfuss’ affidavit of 14 July 2004. The later affidavit of 28 July 2004 by Mr Hinkfuss confirms Mr Rose’s understanding of the extent of relevant documents in respect of improvements upon the lands.
Summary –
In support of the principle that further and full discovery should be required in respect of the improvements upon the lands, Mr Quinn relies upon Natural Resources and Mines v ISPT Pty Ltd (supra), relevantly at paras [40], [41] and [44]. I note also that in ISPT the learned Member consider, among others, the findings of NRMQ v MEQ Nickel Pty Ltd [1991] 2 QdR 592, at 595. In that matter Byrne J ordered that further and better particulars of a counter-claim be provided, although he emphasised that such particulars must not include the identity of the individuals with relevant knowledge. I note however that while the general thrust of Byrne J decision was not challenged, a later decision of the Court of Appeal in Australian Commercial Research and Development Ltd v Commonwealth of Australia [1995] 2 QdR 336, decided that in certain circumstances, where the state of mind or intentions of a corporation are to be understood, then in appropriate cases it may be relevant to provide particulars sufficient to identify the individual possessing that state of mind. (p.4).
However in the current matter I believe that Byrne’s J understanding of providing the further particulars in NRM v NEQ Nickel Pty Ltd is relevant in the current matter. While Mr Rose suggests that the learned Member may have been misled in the ISPT matter, I see no reason for not concluding in a similar manner in the current circumstances.
I note also the most recent decision in the ongoing matters dealing with the major shopping centres in Queensland in Perpetual Nominees Ltd & Ors v Department of Natural Resources, Mines and Energy [2004] QLC 0058, 16 July 2004, unreported. In those matters the Judicial Registrar determined orders of the Court in respect of further and better particulars in relation to various specific grounds of appeal, and in particular in respect of details of natural features of each subject land. The Court also ordered disclosure of relevant planning advice in respect of the acquisition and development of the sites, certain comparable sales, and certain redevelopment works.
The appellants in those matters agreed to provide certain non-contentious particulars such as the sum representing the improved values contended by the appellants; reasonable details of the nature extent and value of intangible improvements; together with details and values of certain offsite works.
The Judicial Registrar also considered the following issues which also have relevance in the current matters:
· The nature of an “appeal” under the Valuation of Land Act 1944 is within the scope of an originating application under the Land Court Rules 2000 (LCR).
· Can the UCPR provisions on particulars be incorporated under r.4 of the LCR?
· If the UCPR provisions are to be incorporated, is it the “appeal” provisions rather than the particulars on pleadings – provisions that should be applied?
· What is the relevance of s.22 of the Land Court Act 2000 (LCA) and r.19 of LCR? Do they empower the Court to issue particulars under such?
The Judicial Registrar concluded that an appeal could properly be considered as an originating application; that r.4(2) of the LCR makes an “application” the equivalent of a “claim” under the common rules; but argues that as a “claim” is something less than a “pleading” usually at an earlier stage, then the Uniform Rules dealing with pleadings are not relevant to the application in that matter. The appeal is therefore seen as an originating process, rather than appeal against a judicial decision. The Judicial Registrar then concluded that guidance of the LCR, in particular rr.19, 22 and 27(g), and also the LCA s.29(2), provides ample powers for the Court to exercise its discretion in issuing particulars in those cases. I believe a similar conclusion prevails in the current matters. On that basis I believe that the orders of the Judicial Registrar of 25 July 2003 are well founded. In summarising these matters, I make the following orders:
Orders:
1. The appellants and the respondent, within 14 days of the date of this Order, file and serve upon each other, with copies to the Court, particulars in a clear and easily understood form, of the identification of the sales relied upon in these matters, including the basic details of each sale including:
· The identity of the property
· The date of the sale
§The purchase price and any other considerations, amount and factor to be considered in analysing the sale.
The evidence of both parties to be restricted to the sales exchanged, unless further sales are found to influence the valuations. Any further sales disclosed are to be exchanged within 7 days of those sales becoming known to either party.
2. The appellants and the respondent, within 14 days of the date of this Order, are to file and serve upon each other, an indication of their understanding of the highest and best use of the subject lands.
3. In respect of the appellants grounds of appeal dealing with the compliance with Valuation of Land Act 1944 (ground 5), I believe that the response so far provided by the appellants adequately clarifies the matters at issue and I make no further order on those matters.
4. In the matter of the impact of s.3(2) upon any determination of the added value of improvements determined under that section, I order that the appellants, within 14 days of the date of this order, provide to the respondent any further particulars about the value of the improvements upon the subject lands, which are in addition to the current matters for disclosure already exchanged. In the event that the appellants’ advice is that there is in fact no additional documents relating to any determination of both the improved values and the value of the improvements upon the subject lands, then the appellants to provide a further statutory declaration to that effect. In the event, unless the Court approves otherwise, the matters will be restricted to the evidence exchanged.
5. In respect of the later valuations at 1 October 2002 any further orders about disclosures in those matters will be the subject of a further application from the respondent, unless those matters are resolved by consent between the parties.
NG DIVETT
MEMBER OF THE LAND COURT
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