Earl v Valuer General of New South Wales

[2004] NSWLEC 95

Land and Environment Court

of New South Wales

CITATION:

Earl v Valuer General of New South Wales [2004] NSWLEC 95

PARTIES:

APPLICANT
Peter John Earl

RESPONDENT
Valuer General of New South Wales

FILE NUMBER(S):

30836 of 2003

CORAM:

Talbot J

KEY ISSUES:

Appeal :- failure to provide a full and fair heaing - adjournment denied

LEGISLATION CITED:

Land and Environment Court Act 1979 s 22, s 36, s 56A

CASES CITED:

Brown and Another v Petranker (1991) 22 NSWLR 717;
Coulton and Others v Holcombe and Others (1986) 162 CLR 1;
House v The King (1936) 55 CLR 499;
Mobil Oil Australia Proprietary Limited v The Commissioner of Taxation (1963) 113 CLR 475;
Sali v SPC Ltd and Another (1993) 67 ALJR 841;
The State of Queensland and Another v J L Holdings Pty Limited (1996-1997) 189 CLR 146;
University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481

DATES OF HEARING:

12/03/2004

DATE OF JUDGMENT:

03/19/2004

LEGAL REPRESENTATIVES:

APPLICANT
Mr F Santisi (Barrister)
SOLICITORS
Palany & Partners

RESPONDENT
Mr J S Whyte (Barrister)
SOLICITORS
Crown Solicitor's Office

JUDGMENT:

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

30836 of 2003

Talbot J

19 March 2004

Peter John Earl

Applicant
v

Valuer General of New South Wales

Respondent

Judgment

Introduction

1 On 31 October 2003 a hearing of an appeal by the applicant against the determination of an objection to a land valuation made by the Valuer General in respect of No. 2414 Thunderbolts Way, Gloucester (“the property”) commenced before Commissioner Hussey.

2 At a callover on 11 August 2003 the appeal was set down, by consent, for one day and directions were made for the filing and serving of expert evidence and that the experts confer by 10 October 2003 with a joint report to be filed on 17 October 2003.

3 At the commencement of the hearing on 31 October 2003 the applicant filed a notice of motion seeking an order that the hearing date be adjourned to a date to be fixed at the property. The notice of motion was supported by affidavits sworn by the applicant and by his solicitor.

4 The evidence disclosed that the first valuer approached by the applicant to support his case had already been retained by the respondent. A second valuer informed the applicant’s solicitor that he would not be in a position to prepare a valuation and report within the required timeframe in order for the matter to proceed on 31 October 2003. A copy of a valuation by a third valuer was received by the applicant and his solicitor on 21 October 2003. The Court’s direction made by the Registrar on 11 August 2003 required the applicant to file and serve expert evidence by 15 September 2003. The applicant was not satisfied with the report received from the third valuer, Jim Weir AAPI, of Peter Aulbury and Associates in Forster. The applicant pointed out a perceived misdescription of the property to Mr Weir who amended his report taking into account the new information provided by the applicant. The evidence is not clear on the point but both valuation reports by Mr Weir were forwarded to the respondent. The error became apparent to Mr Weir when he attended a joint conference with the valuer retained by the respondent. The applicant’s solicitor says that Mr Weir became upset, revoked his retainer and declined to appear in the Court on 31 October 2003.

5 The respondent opposed the application for an adjournment and on-site hearing on the basis that the circumstances in which the applicant found himself arose solely as a consequence of the applicant’s dissatisfaction with the original valuation. Counsel appearing for both parties made submissions to the Commissioner. Apart from the affidavits referred to above the only evidence before the Commissioner was a letter dated 23 May 2003 addressed to the applicant by Land and Property Information disallowing his objection, the original Notice of Valuation, a Statement of Evidence by Valuer Andrew Hood AAPI instructed by the State Valuation Office and a letter from the Crown Solicitor’s Office New South Wales to the applicant’s solicitors dated 29 October 2003 enclosing a copy of the expert report relied upon by the respondent and indicating that the respondent would not consent to any adjournment application. Neither a statement of evidence from Mr Weir nor a joint report prepared by both valuers following the joint conference was produced.

6 After hearing submissions from both counsel in relation to the adjournment application, the Commissioner invited the tender of the respondent’s evidence because he said he wanted to consider the evidence in light of the respondent’s submission that it was in a position to proceed with the case. When the

abovementioned documents were tendered and accepted as exhibits Mr Whyte, who appeared for the respondent, informed the Commissioner “That’s the respondent’s case” . Mr Whyte said he objected to the tender of the joint report by the valuers as Mr Weir was not available for cross-examination.

7 After rejecting the utility of a site inspection in the circumstances of the case, the Commissioner made the following observation:-

It seems to me that the Court case management is not well served by adjourning the matter. The matter is set down for today, the Court is ready to go. I have had a look at that report and it’s a matter that technically can be dealt with and the respondent’s expert is available for cross examination. I’ve looked through that report and whilst there’s some differences there’s nothing unusual about that. The methodology and the basis for coming to that conclusion can be tested and that can be done today so as far as I’m concerned the application for adjournment is denied. I’ll adjourn the matter briefly. We can have the morning tea break now if you wish to decide how we proceed.

8 After Mr Santisi, who appeared for the applicant, attempted to tender evidence in the applicant’s case, including a letter from a local real estate agent and stock and station agent and a report by Mr Weir, the Commissioner took a short adjournment to enable the parties to “sort out” how the matter should proceed because he did not intend to grant the adjournment.

9 After the short adjournment Mr Santisi made the following submission:-

Yes, Commissioner, one other application if I could and that is an application that the matter by adjourned on the undertaking of Mr Earl to pay the reasonable costs, either agreed or assessed, thrown away by the adjournment. Naturally I appreciate that my friend has a witness here and that would include the costs of disbursements. In my submission there’s no prejudice to the respondents if there’s an undertaking to pay costs agreed and/or assessed for the throwing away of today’s hearing and the disbursements associated with that by reason of an adjournment. So I make that further application on instructions.

10 Following further submissions the Commissioner made the following finding:-

It does seem to me though that reading the court file this matter has been characterised by delays. It appears the expert reports weren’t filed and served by the date set down by the Registrar. The joint report wasn’t filed by the date set down again by the Registrar and I really do think that in terms of case management and the scale of this application the parties should have been ready to go today and the Court can exercise some discretion if the reports don’t comply with the practice direction if the parties can deal with it. I understand the Valuer General can deal with these reports, they’re ready to go, so I think that either you present your case today as best you can, otherwise I’m not going to adjourn the matter.

11 Further attempts to tender evidence and to call Mr Earl to provide a description of the property were rejected by the Commissioner following objections made by Mr Whyte. Discussions between the Commissioner and counsel took place on the prospect of the respondent’s valuer being made available for cross-examination. In the course of that discussion the Commissioner made the following observation:-

Well, the parties were directed to have the experts confer and that report was to be finished by 17 October. If there was some particular problem at that time there was ample time to bring that before the Registrar or a judge of the Court and sought out the further date. It’s too late to adjourn the matter for those reasons this morning.

12 Although not expressly stated it appears the Commissioner accepted the following submission made by Mr Whyte:-

The only question in my submission or the only issue that faces the Court now, Commissioner, in my submission is this: That the appellant, the applicant in these proceedings, simply has not discharged the onus required and again in my submission there is nothing else that this Court can do other than confirm the decision to which the appeal relates pursuant to s 40(1A) of the Valuation of Land Act.

13 After Mr Santisi made the suggestion that the Commissioner might defer the matter pending an application to a Judge of the Court on the issue of an adjournment the Commissioner stated as follows:-

Well I’m going to determine the matter now. It’s unfortunate that there’s not an expert report but it seems to me that there’s not an expert report but it seems to me that in initiating the proceedings for the appeal there’s a responsibility on the applicant to present a reasonable case to show that the valuation is too high for the property. I see from the court records that the appeal was lodged in late July which enabled reasonable time to get advice on preparing a case and presenting it. It seems from the submissions made that there were some efforts to get an expert to do certain work but that expert has declined at the last minute to support the reports but in any case there seems to be – the running of the case so far or the running of the expert reports is characterised by delay and even though the property is a little remote from Sydney nevertheless it’s just another valuation appeal and I would think that appropriately qualified experts, valuers, could comfortably deal with and they should have been in a position to deal with that today. The Valuer General’s valuer and valuation report is available and this court is in a position to deal with it today.

14 Mr Santisi then made an application for the matter to be adjourned until 2:00pm so that inquiries could be made as to whether Mr Weir could be persuaded to attend later in the day. Following a further short adjournment, Mr Santisi made the following submission:-

Thank you Commissioner for that time. Mr Weir has indicated now that he’s prepared to give evidence but he’s unable to be here by two o’clock or even three o’clock because of the distance between Forster and Sydney. He’s happy to give telephone evidence. I’ve made inquiries of the registry and they indicate that court 3B if they’re informed of any direction from you Commissioner they could have that ready by two o’clock whereby he can be contacted and be present at the other end on the telephone to give evidence over the telephone and be cross-examined and a doctor’s report over the telephone. I note that he is an expert. The issue of having the witness in the witness box and observing his demeanour in my submission is not a relevant one in the instance of an expert. This person is bound by a code of conduct and he’s here on instructions and to assist the court on matters of technical expert so my application is to take the evidence of Mr Weir by way of telephone conference given his distance and given the circumstances which have unfolded since yesterday and now his willingness to give evidence.

15 The Commissioner indicated that he could see no utility in hearing evidence from Mr Weir over the telephone, even if that could be arranged.

16 The Commissioner finalised the matter in the following way:-

1 I am going to complete the matter now and I will not repeat what I said before we just had that last submission, because I want to give the applicant every opportunity to present their case today but there has just been problems and I think that those problems are not sufficient to adjourn the matter any further, because looking at the timetable on the Court file there has been adequate opportunity to present a reasonable case that could have been dealt with and fairly assessed.

2 As it turns out, I have the report of Mr Hood, who is a registered valuer. There is no expert challenge to his report and his report seems to follow reasonable methodology accepted in the valuation of properties whereby he compares other comparative sales in the area and he subdivided the area into the clear grazing land, the undulating land and the hilly land and he seems, in my opinion, to have done a fair assessment of that. He confirms the VG valuation is not too high and as I said, in the absence of any challenge, I accept that evidence.

3 On that basis then the Court’s order is:

1. That the appeal is dismissed.
2. The exhibits remain on the Court’s file.

17 The applicant now appeals against the decision by Commissioner Hussey pursuant to s 56A of the Land and Environment Court Act 1979 (“the Court Act”) upon the following grounds:-

a) The Commissioner’s discretion to refuse to grant an adjournment to the applicant is miscarried.

b) The Commissioner’s discretion to refuse to grant an adjournment to the applicant miscarried in all the circumstances.

c) The Commissioner’s discretion to refuse to allow the applicants evidence to be taken by telephone conference miscarried in all of the circumstances.
d) The Commissioner erred in not allowing the respondent’s expert to be cross examined.

e) The Commissioner erred in relying on the respondent’s expert’s evidence in its form.

f) The Commissioner placed too much weight in case management as to the determination of the matter on its merits.

g) The Commissioner failed to exercise his power under section 68 of the Land and Environment Court Act 1979 such as to do justice between the parties.

h) The Commissioner failed to exercise his powers such as to do justice as between the parties as the Commissioner failed to follow the procedures noted at Section 38 of the Land and Environment Court Act 1979, in refusing to grant an adjournment or an adjournment on terms.
Whether the exercise of the Commissioner’s discretion miscarried

18 It is the applicant’s case that the Commissioner, by not allowing the matter to proceed by telephone evidence and in the alternative allow the tender of the material upon which the applicant relied or to allow cross-examination of the respondent’s witness, failed to deal with the matter completely and finally on the merits as required by s 22 of the Court Act. Furthermore, the Commissioner failed to do justice between the parties by not adjourning the matter, by not admitting the evidence of the applicant and assigning it due weight notwithstanding the unavailability of the expert witness and by refusing the applicant the opportunity to test the respondent’s expert evidence.

19 In effect, the conduct of the proceedings and the determination of the appeal by the Commissioner resulted in an injustice. It is submitted by the applicant that the Commissioner failed to do justice between the parties in rejecting each and every application or any one or more of them made on behalf of the applicant, such that the Commissioner’s discretion was exercised on wrong principle and miscarried so that justice was not done.

20 In House v The King (1936) 55 CLR 499 in their majority judgment Dixon, Evatt and McTiernan JJ identified established principles by which an appeal against an exercise of discretion should be determined as follows:-

If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

21 In Mobil Oil Australia Proprietary Limited v The Commissioner of Taxation (1963) 113 CLR 475 Kitto J said at 504 as follows:-

What the law requires in the discharge of a quasi-judicial function is judicial fairness.

22 In Sali v SPC Ltd and Another (1993) 67 ALJR 841 at 849 Toohey and Gaudron JJ recognised case management as a proper consideration in determining how a case should be conducted. These remarks were subsequently confined to cases where the principles of case management may have a particular relevance by the majority in The State of Queensland and Another v J L Holdings Pty Limited (1996-1997) 189 CLR 146 at 154 when Dawson, Gaudron and McHugh JA concluded:-

But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim.

23 Finally, in finding that the matters referred to by the primary judge were insufficient to justify refusal of an application to amend the defence, their Honours observed in JL Holdings at p 155 as follows:-

Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application.

24 Relying upon what was said in House v The King when dealing with the question whether leave should be granted to recall a witness, Clark JA (with whom Handley JA and Waddell A-JA agreed) in Brown and Another v Petranker (1991) 22 NSWLR 717 at 728 identified the overriding principle governing discretionary judgments as follows:-

In my opinion there is an overriding principle which should be applied and that requires the court to inquire whether the interests of justice require that leave be granted or refused.

25 The principles regarding the finality of litigation embraced by the High Court in University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481, particularly at 483, and Coulton and Others v Holcombe and Others (1986) 162 CLR 1 do not arise in the present case as the appellant does not seek to raise any new argument or present an issue that was not before the Commissioner.

26 Although the failure to grant an adjournment is in one sense the exercise of discretion on a point of practice and procedure nevertheless if the refusal of an adjournment results in an apparent miscarriage of justice it amounts to an error of law. In this case the alleged miscarriage of justice lies in the determination of the appeal by the order of the Commissioner that the appeal be dismissed. The exercise of the discretions in the manner complained of led to the determination of legal rights in circumstances where the applicant was effectively deprived of an opportunity to present his case.

27 Although the problems for the applicant arise indirectly as a consequence of his solicitor’s lack of care by causing the earlier valuation to be served nevertheless the expert witness, Mr Weir, appears to have adopted a course contrary to the expectations raised by the Court’s Expert Witness Practice Direction. The practice direction specifically provides for circumstances where an expert changes an opinion and for the discharge of a primary duty to the Court to provide impartial and independent advice notwithstanding instructions to the contrary. Notwithstanding the shortcomings in the professional assistance afforded to him, the principles of natural justice and procedural fairness demand that Mr Earl, as a party to the proceedings, must be given a just hearing and a fair opportunity to present his case. Notions of fairness require that judgment be given only after a full and fair hearing. The facts in this case squarely raise the issue of whether the determination by the Commissioner to dismiss the appeal was made after a fair hearing whereby both parties were given an opportunity to present their case.

28 Not only did the Commissioner reject any evidence on behalf of the applicant he refused counsel representing Mr Earl an opportunity to test the evidence of the respondent, at least by cross-examination. The Commissioner was aware that the expert valuer engaged to give evidence in support of the applicant’s case had refused to attend the hearing and that the applicant had been notified of this only the day before. The application for an adjournment was made on the basis that the applicant would accept responsibility for the costs incurred by the respondent as a consequence of the adjournment. No prejudice to the respondent, a government authority, was mooted except that the respondent and its witnesses were ready to proceed on 31 October 2003. Any prejudice in that respect could be adequately and justly dealt with by an appropriate costs order even if that meant referral to a Judge as foreshadowed by Mr Santisi during argument. The importance of the efficient conduct of the Court’s business by case management cannot justify the refusal of an opportunity by a party to present any case at all.

29 I am satisfied that the decision to dismiss the appeal was made in circumstances where the applicant, as a party to the proceedings, was denied procedural fairness when the Commissioner exercised his discretions in relation to the application for adjournment and the presentation of evidence so that there was a failure to give the applicant the opportunity of adequately presenting his case contrary to the interests of fairness and justice.

Costs

30 I do not understand the applicant/appellant to raise any argument that the respondent is not entitled to an order for costs in respect of the hearing before the Commissioner. It would be a proper exercise of the judicial discretion in relation to costs (irrespective of whether that determination is made on the basis of exceptional circumstances or whether in the circumstances it is reasonable for the applicant to pay the respondent’s costs) to make an order that the applicant pay the costs of the respondent in respect of the hearing on 31 October 2003.

31 Notwithstanding that the applicant/appellant has been successful in these proceedings pursuant to s 56A of the Court Act and that the respondent has argued that the appeal be dismissed, in my opinion, the actions of the appellant and those advising him led to the creation of a set of circumstances which could make it seem fair and reasonable for the appellant to pay the respondent’s costs of this appeal. The alternative would be to make no order as to costs. This alternative would be justified on the basis that the respondent, notwithstanding its position as a government authority, has taken every opportunity to achieve maximum tactical forensic advantage in the conduct of the litigation, which is intended to be an appeal on the merits. Although the appellant did nothing to enhance his cause leading up to the hearing before Commissioner Hussey by ignoring Court directions and allowing preparations for the hearing to continue irrespective of the state of the evidence, the respondent’s conduct of this appeal, by strenuously opposing the prospect of a re-hearing instead of making a submitting appearance is, in my view, unreasonable and unjustified. The Court in no way condones the actions of either party in respect of the dismal way in which the whole of the case has been conducted heretofore, particularly having regard to the apparent minor discrepancy between the opinions of the respective valuers. The costs incurred are obviously out of all proportion to the nature of the dispute. In the circumstances the appropriate course is for there to be no order as to costs in respect of this appeal.

Formal orders

32 Pursuant to s 56A of the Court Act I propose to remit the matter for determination by a Commissioner pursuant to any direction made by the Chief Judge under s 36 of the Court Act. The matter will be listed before the Registrar for the purpose of a callover and directions in respect of the filing and service of evidence.

33 The formal orders of the Court are as follows:-

(1) Appeal pursuant to s 56A of the Land and Environment Court Act 1979 is allowed.

(2) The matter is remitted for determination by a Commissioner in accordance with directions made by the Chief Judge pursuant to s 36 of the Land and Environment Court Act 1979.


(3) The matter is listed for callover before the Registrar at 9:00am on 30 March 2004 for directions.

(4) The applicant is ordered to pay the costs of the respondent in respect of the hearing before Commissioner Hussey on 31 October 2003.

(5) No order as to costs in respect of the appeal made pursuant to s 56A of Land and Environment Court Act 1979.

(6) The exhibits may be returned.