Mirage Resorts Holdings Pty Ltd (as Trustees for Gold Coast Resort Trust) v. Chief Executive, Department of Natural Resources
[1998] QLC 51
•19 May 1998
LAND COURT,
BRISBANE
19 May 1998
Re: Appeal against Annual Valuation - Valuation of Land Act 1944 - Valuation Roll No: 13229 - Local Government: Gold Coast City (AV98-11).
Mirage Resorts Holdings Pty Ltd
(as Trustees for Gold Coast Resort Trust)
v.
Chief Executive, Department of Natural Resources
APPLICATION ON SUBPOENAS
D E C I S I O N
having any reference to the above matter and so attend from day
to day until the said matter be disposed of. "
Following representations it was agreed to hear an application from the appellant in respect of the above two subpoenas on Friday, 15 May 1998. The hearing of the application was heard in Chambers. The notice of the application asked for the two subpoenas to be set aside on the following grounds:
" 1. The subpoenas are an abuse of the Court's process whereby:
(a) the documents sought by the subpoenas bear no relevance to the issues in dispute between the parties; (b) the subpoenas have not been issued bona fide for the purpose of obtaining relevant evidence; (c) the subpoenas have been issued for the purpose of obtaining discovery against a third party, Mr Grant Murdoch; (d) the subpoenas have been issued for a purpose which is impermissible namely 'fishing'; (e) compliance with the subpoenas would be oppressive; (f) the subpoenas are too wide and require the persons named thereon to exercise judgment as to what documents to produce; (g) the subpoenas have been issued for an ulterior purpose as the Respondent has express powers pursuant to Section 80 of the Valuation of Land Act 1944 to have obtained any or all of the documents sought to be produced prior to the issue of the valuation on the land the subject of the Appeal AV 98-11 on the 10th March 1997. "
The respondent resisted the application claiming that until just prior to the hearing in Chambers on 15 May 1998, the respondent had been unaware of the grounds of the application and the application had not been supported by an affidavit as required by the rules of the Land Court (Rule 21), and had not been supplied at least four days prior to the hearing of the application (Rule 22).
| Mr GR Allan, Counsel, appeared for the appellant. Mr T Quinn, Counsel, appeared for the respondent. | In order to examine the application fully I will now deal with each ground separately: | |
|
In the Spencer Motors matter, Waddell J asked the question posed in Waind v. Hill [1978] 1 NSWLR 372, where Moffitt P said at page 383:
"
The critical question for present purposes, however, arises in relation to this second step, as to the exercise of the power of the judge to permit inspection. Does he have a judicial discretion to permit the use of the documents in any such way as he considers will aid a proper decision of the issues between the parties, by facilitating the elucidation of the truth in respect of relevant facts, or is his power restricted, so the documents can only be used in a more limited way, so access is given to them only to enable their tender in evidence or in some of the other limited ways submitted? "
Waddell J went on to say in respect of Moffitt P at page 927:
"
His Honour goes on to explore the questions posed at pages 383, at 384. His views may, perhaps be summarised by saying that inspection should be granted so far as it is necessary in the proper conduct of the litigation and this means where it is reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case. In my opinion this is the test which should be applied to the question whether the present subpoenas are oppressive or are an abuse of process in the sense submitted. "
Mr Allan also seeks support in Purnell Bros Pty Ltd v. Transport Engineers Pty Ltd (1984) 73 FLR 160, where a subpoena was found to be not relevant to any issue which might arise in the proceedings. That matter dealt with the winding up of a company by an official liquidator, and the documents subpoenaed related to whether the liquidator had been validly appointed, and whether an order for examination had been prepared not for the purpose of winding up the company, but for some ulterior purpose. Powell J found at page 175:
" 1. the documents, production of which - if they exist - is sought, could not, in my view, be relevant to any issue which might legitimately arise on the hearing of the notice of motion filed 16 July last; it following, that the subpoena was not issued for any legitimate forensic purpose; and 2. the issue of the subpoena will, in any event, serve no useful purpose, since, in the circumstances of this case, the Commissioner is neither entitled, nor can he be compelled, to produce the documents in question. "
The issue in the current matter is whether the documents requested may be relevant to the considerations of the unimproved value of the subject. Mr Quinn argues that the subpoena seeks documents which relate to the improved or unimproved value of the subject, and which may provide a wider understanding for the Court of the appellant's consideration of those values for some other purpose. He notes that, while valuation practice is not seen as an exact science, being more of an exercise of experience and skill, it may be that, for some other purpose, the appellant has records which disclose that the appellant has advice in respect of the value of the land, which does not support its current unimproved value led for the current matter.
Mr Quinn specifically notes that, as a registered company, the appellant is bound by Legislation to provide documented reports for Company Law purposes, which may throw light upon the estimated value of the subject for that purpose. He claims that the subpoena is quite specific in that it seeks documents which relate to the method and quantum of any report on the value of the land. As the history of the development of the land extends only backwards until the mid-1980s, he believes that the provision of any relevant document would be easily identified and should not be an onerous task for the appellant. Mr Allan argues that, in the context of an annual valuation, and the relevant dates for the consideration of valuation evidence, the requiring of valuation reports back beyond a reasonable period of time is not relevant to the determination of the unimproved value at the date of the valuation at 1 October 1996.
In this regard I note that the matter of an annual valuation at 1 January 1995, was determined by this Court on 27 June 1997 (see AV95-317). In that matter the evidence led occupied one day of hearing and the learned Member noted that the major issue in the matter related to the highest and best use of the land, and the methods of valuation adopted by the parties (page 11). At the callover of this matter on 5 March 1998, it was signalled by the parties that the hearing was likely to extend for four to five days. From this it may be concluded that the method of valuation and the highest and best use is still a matter of serious dispute. Any evidence that might further illuminate the Court on those issues would appear to be relevant to this matter.
(b) The Purpose of the Relevant Information -
The purpose of seeking the documents has already been covered in considering their relevance to the matter. Mr Quinn argues that the appellant intends exploring the architectural and planning history of the development back to the 1980s statements of Mr McInnes and Mr Brooks). He argues that a similar examination of the historical record of the approaches to the valuation methodology would also assist the Court in understanding the matter fully. He also argues that in determining the highest and best use of the site, any previous conclusions by expert technical advisers to the appellants should also assist the Court.
Mr Allan argues that the purpose of obtaining out-of-date valuation advice can have no relevance to determining the unimproved value of the subject at the relevant date. As it is an annual valuation he claims the old documents would do nothing more than cause delay and confusion to the hearing.
In seeking to understand the purpose of any documents that may relate to any method of valuing the land, and its improvements, I note that in seeking to define the unimproved value of the land, Section 3(2) states:
" 3.(2) However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of the improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act. "
On the evidence provided I believe the purpose of the subpoenas has a direct relationship to the matter to be determined.
(c) Discovery from a Third Party -
Mr Allan argues that the subpoena against Mr G Murdoch constitutes a request for discovery from a third party, or "stranger" to the matter. Mr Murdoch of Deloitte Ross Tomahtsu, is the appointed auditor of Mirage Resorts Holdings Pty Ltd. Mr Allan seeks support in Spencer Motors supra which found that a subpoena to a person not a party to proceedings should be held to be oppressive or an abusive process if the production of the documents which it describes is excessively burdensome and the documents appear not to be sufficiently relevant to the proceedings. That was also supported in Southern Pacific Hotels Services Inc v. Southern Pacific Hotel Corporation Limited [1984] 1 NSWLR 710, which held that a subpoena which imposes upon a stranger the task of forming a judgment whether a document relates to issues between the litigants imposes an obligation upon the stranger tantamount to discovery and is, for that reason, an abusive process. However, a subpoena requiring production of documents "relating to" a specified subject matter may not be objectionable.
Mr Allan argues that Mr Murdoch is in fact a "stranger" to the appellant, in that his sole task is the statutory role of auditor under the Legislation. As such his task is merely to audit the records and the statements of the company.
Mr Quinn counters that argument claiming that, in the event of the appellant, for whatever reason, being unable to locate any certified statement or report, then Mr Murdoch may be able to so confirm its existence, and the contents of its findings. Mr Quinn relies upon Greyhound Australia Pty Ltd and Others v. Deluxe Coaches Pty Ltd and Others (1986) 11 FCR592. The key to that finding is to ascertain the purposes of the subpoena in considerations of justice and convenience to require the production of relevant documents at some particular time. In that matter Pincus J found at page 597:
" The mere fact, however, that one of the limitations included in the description in the subpoena is that the documents must relate to a particular subject matter does not necessarily render it oppressive, as long as the subpoena specifies with reasonable particularity the documents which are required to be produced. "
In the context of the Purnell Bros Pty Ltd v. Transport Engineers Pty Ltd (supra) the context of being a "stranger" to the case related to a notice of motion by the Deputy Commissioner of Taxation seeking approval to set aside the subpoena to produce documents. The Court upheld that the Deputy Commissioner was a stranger to the issue between the parties, and saw "the position of the Commissioner as very much akin to that of a witness who cannot give relevant evidence" (page 179). I see no reason why Mr Murdoch could not supply documents, if there are any, which demonstrates his execution of his statutory role.
On the general matter of discovery of documents by this Court, I am also drawn to the findings of the Land Appeal Court in DRV Cox v. Commissioner of Water Resources [1992-93] 14 QLCR 304. In that matter the powers of the Land Court to direct discovery of documents in an interlocutory proceeding prior to the hearing were found to be constrained by the lack of any specific direction in the Legislation governing the Court.
While this Court may consider certain extrinsic material such as the Second Reading Speech of the Minister when introducing the Legislation, the lack of any specific direction in respect of discovery cannot be assumed by the Court. The Land Court is a statutory court and its jurisdiction and powers are conferred by statute.
However the matter of "discovery" as an interlocutory proceeding prior to a hearing, is to be contrasted with the lawful direction under a subpoena "duces tecum" where the person subpoenaed must present himself to the Court, together with such documents specially required in accordance with Form 2 of the Rules of the Court (Rule 9). That difference was also noted by the Land Appeal Court in the Cox matter at page 319.
(d) Use for an Impermissible Purpose -
The matter of "fishing" for unspecified information was also raised by Mr Allan, noting the former references, but also raising the findings of R v. Wilkey, ex parte Cooke (1991) 2 Qd R 447. The practice of seeking the discovery of unspecified documents in the hope of merely eliciting some new evidence upon which to base a case, or whether he has a case at all (page 453), has been rejected by many courts. The test of whether the matters being sought have some substance, are to be found in the purpose and wording of the subpoena in each case.
In the current matter the respondent seeks documents, etc., that relate to a specified area of interest, i.e. the improved or unimproved value of the subject land. I do not see that request in the context of merely being a fishing exercise.
(e) The Subpoenas are Oppressive -
The matter of subpoenas which are too wide in their context, thus providing an onerous burden upon the person subpoenaed, have formed the basis for rejection by the courts. Mr Allan draws support for such an action in the findings of Barnes Milling Ltd v. Brisbane City Council (1979) 6 QLCR 217; Spencer Motors Pty Ltd v. LNC Industries Ltd (supra); and also in Southern Pacific Hotel Services Inc v. Southern Pacific Hotel Corporation Ltd (supra). However, while the Southern Pacific matter dealt with the onerous burden imposed upon a person where a judgment about the relevance of a document was involved, it also clarified that a subpoena which was more specific in its requirements may not be objectionable.
In the current matter the subpoenas are quite specific in that they refer to documents only relating to the improved or unimproved value of the subject. As noted previously, the findings of Greyhound Australia Pty Ltd and Others v. Deluxe Coaches Pty Ltd and Others (supra) support that conclusion.
In view of the selective nature of the subpoena Mr Allan concedes that the scope of the subpoena could not be considered as too wide, except perhaps in the context of the period of time relating to the subpoena. He claims that, as an annual valuation must, by its nature, relate only to an unimproved value at a specific time and period, the need for valuation or other reports, extending back beyond a reasonable period would not be relevant. Mr Quinn agrees that, when the hearing commences, he may be able in discussions with Mr Allan, to restrict the period for examination, subject to the nature of any documents disclosed, should they occur.
However, while I consider the nature of the subpoenas in this instance to be relevant and not onerous, it raises the matter of the sensitivity of any "commercial in confidence" documents which may be disclosed as a consequence. While there may, or may not, be any documents which could have some influence on the commercial activities of the subject, their disclosure in Court as a consequence of this hearing, should not be allowed to prejudice the business operations of the appellants.
The "commercial in confidence" nature of business decisions was noted in Nerang Pastoral Company Pty Ltd v. Chief Executive, Department of Natural Resources (AV93-265), 3 July 1997, unreported, where the learned Member said at page 14:
" In striking a value of land for the purposes of the Valuation of Land Act, it is not appropriate to take into account idiosyncratic or subjective matters such as a business decision or the financial capacity of the landowner in putting the land to its highest and best use. "
The matter of sensitivity of any documents that may be disclosed was also discussed in Morgan v. Morgan [1977] 2 All ER 515, where an application to set aside a subpoena was upheld on the grounds that a person, not a party to the proceedings, would be oppressively impacted if he was to be forced to disclose documents which would invade his privacy. That matter related to a divorce settlement and the disclosure of assets of the third party. In spite of any possible relevance of the impact of those assets at some future time, the privacy of the third party was seen to be paramount. In the current matter the documents sought could have a more direct impact upon the valuation of the subject, however the privacy of any "commercial in confidence" information would need to be considered.
Both parties agree that in the event that some documents were disclosed, which proved to be of a confidential nature to the appellant, then there were procedures available to the Court to consider those particular documents by a protective order, or for that evidence to be heard in closed court.
Finally in considering whether the subpoena is too onerous, I note the findings of Greyhound Australia Pty Ltd (supra) which concluded that the important feature of the subpoena in respect of whether it was onerous or not, related to the specific nature of the request. It was also found in Marra Developments Ltd v. The Companies Act (1979) 4 ACLR 153 that a subpoena issued to a third party in general terms, in the absence of evidence that such a demand by a subpoena creates oppression, in fact is not necessarily oppressive in any sense (page 155). On balance I find that the subpoenas are not onerous or oppressive.
(g) The Use of Express Powers -
Finally I consider the matter of whether the Chief Executive should have already been able to exercise the requiring of any relevant documents under the Act, and whether the subpoenas are therefore unnecessary in the circumstances. Mr Allan argues that in exercising his responsibilities to determine the valuation, either prior to his initial determination, or as part of an objection hearing, the Chief Executive had the power to call for any relevant documents under Section 80 of the Act which says:
" 80.(1) The Chief Executive may by notice in writing require any person, whether an owner or not, to attend and give evidence before the Chief Executive, or before any officer authorised by the Chief Executive in that behalf, concerning any land, and to produce all books, documents, and other papers whatsoever in the person's custody or under the person's control relating thereto. (2) The Chief Executive may require the evidence to be given on oath, and either verbally or in writing and for such purpose or the officer so authorised by the Chief Executive may administer an oath."
Mr Allan argues that, as the Chief Executive had not previously considered it necessary to seek the documents now requested, it is unreasonable to now do so as a further step in seeking to find any possible additional evidence for the hearing. There would appear to be no direct precedents in consideration of this material. However, Mr Quinn argues that it would be an unwise exercise in pursuing public policy if it was to be determined that the Chief Executive, in the event of not exercising his powers under Section 80, then abrogated his right to use the powers of the Court to issue a subpoena for further key evidence.
Clearly, Section 80 provides powers for the Chief Executive to obtain information which he considers necessary. It is to be noted that the Chief Executive "may" seek the documents, and the powers are therefore discretionary and depend upon his perceived need to go beyond the evidence already in his keeping. It would indeed be a very onerous task, and I suggest not in the public interest, if the Chief Executive was to require such documents on even a reasonable number of properties which are the subject of an annual valuation.
I note that an annual valuation of the entire State involves in excess of 1.3 million parcels, many of which have varying levels of complexity, and involve considerable quanta of the valuation. I believe that subsequent use of a subpoena would be a prudent use of public resources, rather than for the Chief Executive to only rely upon Section 80.
In any case Section 80 refers only to the Chief Executive, and has no binding authority upon this Court. Indeed it would be a serious imposition upon any Court to so restrict its appropriate powers to seek any relevant information which could influence the lawful conclusion to the matter. I find Section 80 has no impact upon this Court's authority to require the subpoena to be addressed.
Conclusion:
| Having considered the submissions by the parties I find no evidence to uphold the which may be relevant shall be to the extent only as they relate to his official role as a statutory auditor of Mirage Resorts Holdings Pty Ltd (as trustee for Gold Coast Resort Trust) in respect of the subject property. application for rejection of the subpoenas. The application is rejected. |
(NG Divett)
Member of the Land Court
Introduction:
On 23 December 1997, the appellant appealed to the Land Court under Section 55 of the Valuation of Land Act 1944 against the valuation determined by the Chief Executive for land located at The Spit, Gold Coast, and described as Lot 239 on Plan of Survey WD 6317, Parish of Gilston. The land is occupied by the Sheraton Mirage International Hotel under Non- Competitive Lease (NCL 6/2508B).
Following a callover on 5 March 1998, the matter was set down for hearing for an estimated four to five days from Monday, 18 May 1998. Following a request from the respondent for an adjournment, it was agreed by the parties for the hearing to commence on Wednesday, 20 May 1998, with a likely finalisation date of Tuesday, 26 May 1998.
On Tuesday, 12 May 1998, subpoenas were issued to Mirage Holdings Pty Ltd and also to Alan David Grant, Grant Murdoch and Richard Summerville Cameron requesting those parties to appear at the Land Court on 20 May 1998. The purpose of the subpoenas were to require the parties to testify what they knew of the above matters and to provide:
"
Books, papers, deeds, and documents, particularly any balance sheet, financial report, or other document stating the value improved or unimproved of the land occupied by the Sheraton Mirage International Hotel, or any part thereof, at The Spit, Main Beach, which may be in your possession under your control
The Application:
Mr Allan acknowledges that the application has not strictly followed the Rules of the
| (1) | Irregularities of the Application - |
Before dealing with the merits of the application, I consider first whether the application is in fact a lawful use of the subpoena in accordance with the Rules of the Land Court. As acknowledged by the appellant the strict process established by Rules 21 and 22 has not been complied with. The respondent is entitled to feel disadvantaged with the lack of any affidavit outlining the grounds of the application. Because of the very late exchange of the appellant's statement on 15 May 1998, and the lack of any affidavit, the respondent had little time to prepare for the hearing of the application.
The purposes of Rules 21 and 22 are to avoid any ambush approach to considering the merits of the application. Mr Allan has apologised to the Court for overlooking the requirements of the Court Rules and has asked the Court to exercise its discretion under Rule 31.
Mr Quinn has sought support for the application to be rejected in the decision of the Land Appeal Court in GE Cominos and Co Pty Ltd v. Valuer-General (AV93-213), 15 August 1996, unreported. That involved a valuation at 31 March 1992. In that matter the evidence of the valuer for the appellant (Mr Gould) was questioned by the respondent in as much as Mr Gould had in May 1992 separately provided a valuation for mortgage security purposes of a key sale (Woolworths).
In the Cominos case Mr Gould argued that the balance of a lease of 18 years for the Woolworths' land was a benefit rather than a detriment. However in the valuation for mortgage purposes in May 1992, Mr Gould saw the long-term lease as an encumbrance upon the Woolworths' property (Page 11). The Land Appeal Court noted inconsistencies in the evidence of the technical experts, and in its decision set out clearly what the Court expects from such experts (Page 21).
The relevance of that finding to the current matter is whether any similar inconsistency,
I accept that Rules 21 and 22 are quite specific in that they establish the imperative nature
of the direction to provide the grounds of the application and the affidavit. In the absence of
Rule 31, I would have no power to consider the application in Chambers under Rule 20(X).
for whatever purpose, might occur in any documents, if they occur, for the subject land. the interests of the appellant I determine to accept the application for consideration on its merits.
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