Perpetual Nominees Limited v Department of Natural Resources, Mines and Energy
[2004] QLC 72
•20 August 2004
LAND COURT OF QUEENSLAND
CITATION: Perpetual Nominees Limited & Ors v Department of Natural Resources, Mines and Energy [2004] QLC 0072 PARTIES: Perpetual Nominees Limited; Commonwealth Funds Management Limited; Permanent Trustee Australia Limited as Trustee and Commonwealth Bank Officers Superannuation Corporation Pty Ltd as Trustee; Perpetual Nominees Limited; CPT Manager Limited as Trustee; AMP Life Limited; PT Limited; Kent Street Pty Ltd as Trustee, Westfield Management Limited and AMP Pacific Fair Pty Ltd as Trustee; AMP Life Limited and Westfield Management Limited; Queensland Investment Corporation; QIC Robina Pty Ltd
(appellants)v. Chief Executive, Department of Natural Resources, Mines and Energy
(respondent/applicant)FILE NOS: AV2003/0798; AV2003/0799; AV2003/0804; AV2003/0802; AV2003/0800; AV2003/0806; AV2003/0796; AV2003/0803; AV2003/0795; AV2003/0797; AV2003/0805; AV2003/0801 DIVISION: Land Court of Queensland PROCEEDING: Application for Orders for further disclosure DELIVERED ON: 20 August 2004 DELIVERED AT: Brisbane HEARD AT: Brisbane JUDICIAL REGISTRAR: Mr BR O'Connor ORDERS: 1. Within seven (7) days of this decision, the relevant appellant will disclose to the respondent contracts in relation to the acquisition of the Chermside appeal property by the appellant on or about 23 December 1996.
2. Within fourteen (14) days of this decision, the respondent will disclose to the appellants any documents or other written material used by officers of the Department of Natural Resources, Mines and Energy to brief the Minister on the operation of the cap in Regulation (5) and the appropriate figure to adopt for the cap.
CATCHWORDS: Practice and Procedure - Application for further disclosure - Earlier contract of sale of subject land - Alleged briefing of Minister by departmental officers - Disclosure ordered APPEARANCES: Mr S Doyle SC for the applicants
Mr D Frazer QC for the respondent
SOLICITORS: Minter Ellison for the appellants
Legal Counsel, Legal Services, Department of Natural Resources, Mines and Energy for the respondent
The appellants have lodged appeals under the Valuation of Land Act 1944 against determinations by the Chief Executive of the unimproved value of various parcels of land throughout the State. All properties have situated on them major shopping complexes. The relevant date of valuation in all appeals is 1 October 2002. Three of such appeals will be heard at hearings set to commence on 20 October 2004.
By applications of 4 August 2004 (by respondent) and 5 August 2004 (by appellants), further disclosure has been sought against the other party. After the hearing of these applications on 12 August 2004, only two items remain outstanding.
First, the respondent seeks contracts in relation to the acquisition of the Chermside appeal property (AV2003/0803) by the relevant appellant on or about 23 December 1996.
Second, the appellant seeks any documents or other written information whereby officers of the Department of Natural Resources, Mines and Energy briefed the Minister on the inclusion of the 20% cap figure in Regulation 3 of the Valuation of Land Regulations 2003 (made pursuant to s.35A(5) of the Valuation of Land Act 1944).
I will deal with these requests in turn.
The 1996 Chermside Sale
Parties' Submissions
Respondent's Submission
The process of use of comparable sales of property is now firmly established when considering the valuation of land, be it improved or unimproved. The process involves making adjustments in a principled way to adduce a value for the subject property at the relevant date. The fewer adjustments that have to be made, the greater degree of confidence the process will attract. Where there is a sale of the subject, that provides cogent evidence in relation to the value of the subject.
In assessing the degree of comparability of transactions, the difference in time of a transaction and any change in the physical features and environment over time may also need to be considered.
In this case, the evidence shows that the appellant in the Chermside appeal has advanced, as part of its application under s.35A, details of the cost of construction of the improvements made on the subject land from the date on which the subject land was purchased by the appellant, as evidence of the value of the improvements on the subject land at the relevant date.
In those circumstances, it is clear that the acquisition of the subject land and its subsequent development by the appellant is directly relevant to the matters in issue in this appeal.
The respondent also stresses that the Chief Executive is now engaged in the forensic exercise of having to prepare valuation reports over and above the reports or the valuation exercise done for the ordinary valuation process and any objection (Transcript p.21). At this stage more focus is given to the matter. The respondent also argues that in an earlier affidavit of Mr O'Rourke (1 June 2004, par. 45) mention was made that of the 1996 sale and the fact that it was likely to be a useful one because of its being a sale for major redevelopment purposes (Transcript p.21).
Appellants' Submission
While the Chermside sale is of the subject land, it is not a sale of unimproved or lightly improved land. It is not relied on by the respondent as a comparable sale and it is not relied on by the appellants as a comparable sale. That is, no one asserts that it is relevant, let alone directly so. The improvements on the land at the time of the sale were not identical with the improvements at the date of valuation. The application must fail, taking into account the test of direct relevance.
Conclusion
For disclosure of the 1996 (December) contract to be ordered, "direct relevance" to an issue in the proceeding must be established (see decision in relation to this same appeal of 16 July 2004 [2004] QLC 0071 on aspects of further disclosure for provisions in the Rules (UCPR) and authorities on relevant tests). Is a 1996 contract of the subject site of evidentiary value in determination of a value as at October 2002?
In my view, direct relevance of the 1996 contract can be established for a number of reasons (the weight ascribed to such contract at the eventual hearing can be a matter of later legal argument). First, a sale of the subject property is considered to be the best evidence of value, with adjustments for the considerable time difference able to be the subject of later expert evidence by valuers. Second, there is likely to be a scarcity of other worthwhile local sales evidence at the hearing. Third, the fact that neither side nominated the 1996 sale as a relevant sale initially is not critical - it is open to the Chief Executive to lead additional evidence or different evidence at the hearing (see AMP Life Limited & Ors v Department of Natural Resources and Mines, [2002] QLC 099, 18 December 2002). Fourth, there is likely to be evidence before the hearing of value of improvements made between the sale date and the date of valuation for the disputed assessment. This will assist in making necessary adjustments to the 1996 sale figure.
Ministerial Briefing on Cap
Parties' Arguments
Appellants' Submission
Appeal Ground 13 raises the question of the validity of the cap made in the Regulation (5). This ground is still a live one, having neither been struck out nor abandoned.
The appellant argues that, as the cap, as made, operates capriciously, it cannot have been within the contemplation of Parliament, having regard to the intended purpose of the cap (as nominated in the Minister's Second Reading Speech). To examine that, it is necessary to examine the documents relating to the Department's advice to the Minister which show what the Department thought it was doing.
The Department did not expect the cap to operate capriciously because it would have advised the Minister that this cap would work in a particular fashion. It is then able for the appellants to demonstrate how the cap operates and the way the cap was expected to operate as being two different things.
The respondent says that the making of the cap was not the respondent's responsibility. However, for disclosure, the issue is not whether it was the respondent's responsibility to create the cap by way of statutory regulation, but whether the respondent has any documents directly relevant to the matter, including any documents about the recommendation or advice given to Government for the 20% figure adopted in the valuation.
It is not conceivable that the authority responsible for the valuation process would have had no input into the determination of the figure or that it would have no documents about the approach adopted.
Respondent's Submission
The respondent argues that the making of the Regulation (5) is more a matter for Government rather than the individual Minister; there has been no allegation that the cap was made in the exercise of bad faith or anything like that; the particulars which have been given confine the complaint to the cap operating capriciously, that is that it affects the properties inappropriately; and, objectively speaking, it is unlikely that there will be any more documents in existence about the capricious or unreasonable operation of the cap.
Conclusion
As with the Chermside sale contract, the relevant test for disclosure is that of "direct relevance". Would written material evidencing departmental briefing to the Minister on the appropriate percentage (20%) to apply via regulation to the cap be relevant in arguing the merits of such a figure at the eventual hearing?
My view is that disclosure of such material is again justified for a number of reasons.
First, the relevant ground of appeal is still specifically in contention. It has not been abandoned or otherwise disposed of. (An attempt by the Chief Executive to have the matter determined as a preliminary point was disallowed by the Court in an earlier decision). Second, the merits of the cap validity can be argued at the hearing; all that is being sought here is the relevant information to argue such. Third, no public interest privilege was argued by the Chief Executive to protect such information. (Compare argument in Anchorage Farming Pty Ltd v Chief Executive, Department of Natural Resource and, Mines (Land Court, 13 June 2001), applying the test enunciated by the High Court in Sankey v Whitlam [1978] 142 CLR 1). Ultimately, it is up to the Court to decide if such a privilege is to apply, (assuming it is claimed) balancing public interest against the Court's needs in the administration of justice. Fourth, it is only the departmental briefing that is sought by the appellants. There is no claim for briefings that may have been provided by ministerial advisers attached to the Minister's office.
If no relevant documents are in existence, the Chief Executive can provide a suitable understanding to the appellants to this effect.
Orders
1.Within seven (7) days of this decision, the relevant appellant will disclose to the respondent contracts in relation to the acquisition of the Chermside appeal property by the appellant on or about 23 December 1996.
2.Within fourteen (14) days of this decision, the respondent will disclose to the appellants any documents or other written material used by officers of the Department of Natural Resources, Mines and Energy to brief the Minister on the operation of the cap in Regulation (5) and the appropriate figure to adopt for the cap.
BR O'CONNOR
JUDICIAL REGISTRAR
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