Perpetual Nominees Limited v Department of Natural Resources, Mines and Energy
[2004] QLC 58
•16 July 2004
LAND COURT OF QUEENSLAND
CITATION: Perpetual Nominees Limited & Ors v Department of Natural Resources, Mines and Energy [2004] QLC 0058 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 and better particulars and further and better disclosure DELIVERED ON: 16 July 2004 DELIVERED AT: Brisbane HEARD AT: Brisbane JUDICIAL REGISTRAR: Mr BR O'Connor ORDER: 1. The appellant within 42 days of the date of this order is to file and serve further and better particulars as listed:
(a) In regard to the basis of interstate valuations referred to in Schedule 1 of the Appellant’s Response to Request for Particulars, the appellants will identify the dates of the statutory valuations, the amounts and the statute pursuant to which the relevant valuation was made.
(b) In respect of Ground 16 of the Grounds of Appeal the appellants are to supply statutory valuations relied on by reference to the relevant centre, the value assessed, the date of assessment and the statute pursuant to which it was carried out.
(c) In respect of Ground 18 and Schedule 3, the appellants are to provide what they consider to be the relevant catchments and also what shopping centres are considered to be in competition.
(d) In respect of Ground 19, the appellants are to provide details of natural features of each subject land and surrounding locality affecting the suitability of their land.
2. The appellants, within 42 days of this order, deliver and produce to the respondent by way of disclosure the following documents held in their possession or under their control.
(a)(i) Town planning advice concerning the planning status of the Centres and planning issues upon the acquisition of the Centres.
(ii) Town planning advice obtained from time to time in relation to planning issues relevant to the redevelopment and expansion of the Centres.
(iii) Documents held by Westfield Management in respect of Sales A and K in Schedule 2 concerning planning and other issues concerned with the development of those sites including the extent and forecast of external works.
(iv) Documentation held by Westfield Management Limited which comprises planning applications in relation to Sales A and K in Schedule 2 and planning reports and studies concerning various retail catchments but not in the more remote localities of the Gold Coast and Helensvale areas.
(b) Documentation in relation to the Banfield Street (Chermside) sale and purchase of land at North Lakes and studies and valuations made in order to justify both sales.
(c) Documentation in relation to the purchase of the Robina sales B to J in Schedule 2 and valuations made in order to justify them.
(d) Specific documentation relating to redevelopment and expansion plans including retail and market studies.
(e) Specific higher level records relating to past and future capital expenditure.
CATCHWORDS: Practice and Procedure – Further and better particulars – Purpose of such – Jurisdiction of Court to make order – Uniform Civil Procedure Rules or Land Court Act and Rules – Application granted in part.
Practice and procedure – Further disclosure application – Test of direct relevance to issue in proceedings – Criteria for deciding issues in Valuation of Land Act appeals – Validity of opinion evidence of solicitor to support disclosure – Application granted in part.APPEARANCES: Mr S Doyle SC, with him Mr R Traves SC, for the applicants
Mr D Frazer QC, with him Mr T Quinn 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.
As a further interlocutory step in the proceedings, the respondent has now made application lodged on 28 May 2004 for further and better particulars and further and better disclosure. Following exchange of correspondence between the parties under Rules 444 to 446 of the Uniform Civil Procedure Rules (UCPR) an affidavit of Mr JB O'Rourke, Principal Legal Officer, Department of Natural Resources, Mines and Energy, was filed. This affidavit details the matters on which the particulars and disclosure are sought.
In this present decision, reference is made at various places to certain of the grounds of appeal without their setting out such grounds. A full copy of the grounds of appeal is appended as Annexure A. For similar reasons Schedules 1, 2, 3 and 4 of the appellants’ response to request for further particulars are included as Annexure B.
PARTICULARS
There are a number of requests for particulars which the appellants indicate they wish to provide but are unable to do so at this time. Further, there are a number of requests in respect of which particulars have been provided since the Rule 444 letter of 24 May 2004. These would have overlapped the affidavit of Mr O'Rourke and the requests in the latter must now be considered in that light.
Non-contentions Particulars
The appellants acknowledge that they will now provide particulars in the following categories:
(a)The sum representing the improved values contended for by the appellants. Further that the appellants will give to the respondent reasonable details of the derivation of the improved values.
(b)The nature of intangible improvements.
(c)The extent of intangible improvements.
(d)The value of intangible improvements.
(e)Details and value of the offsite works for Pacific Fair, Runaway Bay and Indooroopilly.
(f)The properties to which reference will be had in asserting the cap is invalid.
Jurisdictional issue
The appellants have raised a series of issues as to the jurisdiction of the Court to make an order for particulars in appeals of the current nature. The issues may be outlined as follows:
· The nature of an “appeal” under the Valuation of Land Act 1944. Is it 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 the LCR? Do they empower the Court to issue particulars under such?
Consideration of issues
The nature of an appeal under the Valuation of Land Act was considered in Van Amstel v. Lands (1997) (17 QLCR 27) where the Court stated at 43:
“The word ‘appeal’ is not defined in the Act but would generally refer to a process to rectify a claimed erroneous decision either of a Court or of an executive authority. An appeal under the Valuation of Land Act is an appeal against a decision of the Chief Executive, that is against an executive authority, but is not an appeal (perhaps better termed as an “application”) which, when lodged, is at large for the Act in the form of s.45(3) and (4) or s.56(1) and (2), expressly provides for grounds of appeal and imposes a burden of proof. The function of the Court in the circumstances of such an appeal is therefore judicial in the form of exercising an original jurisdiction …”
Section 67(1) of the Valuation of Land Act states that the LCA and the LCR apply for the purposes of an appeal under s.55, 64 or 65. In my view, such an appeal could properly be considered an originating application under r.7 of LCR (or at least the equivalent of such). Relevantly, the details required to be provided under the originating application under r.8(2) are also required to be provided in a Valuation of Land Act appeal. By virtue of s.67 of the Valuation of Land Act the relevant LCA and LCR provisions would then apply to govern the subsequent proceedings.
The next question is whether the UCPR provisions on particulars relating to pleadings (Ch.6 Part 3) should be incorporated to cover the current application for particulars. Rule 4 of the LCR states:
“4.(1) If these rules do not provide for a matter in relation to a proceeding in the court and the Uniform Civil Procedure Rules 1999 (the “uniform rules”) would provide for the matter, the uniform rules apply in relation to the matter with necessary changes.”
Rule 4(2) makes an “application” the equivalent of a “claim” under the UCPR. The recent decision of Chief Executive, Department of Natural Resources and Mines v ISPT (unreported 31 October 2003) effectively held that the UCPR provisions on particulars relating to pleadings applied to an application for particulars similar to the current one. The case specifically referred to rules 157 and 161.
Counsel for the appellant in the present cases advances a strong argument that an “application” becomes the equivalent of a “claim” under the UCPR; however, a claim is not a pleading under such rules but is something of a less detailed nature done at an earlier stage. Hence, it is argued, it is not appropriate to incorporate the relevant provisions on particulars relating to pleadings from the UCPR.
The appellants’ argument was probably not before the Court in the ISPT case. However, that decision is not patently incorrect as more detailed grounds in an appeal as required under r.8(2)(d)(ii) of LCR may in reality amount to something more in the nature of a statement of claim or pleading by the appellant. In any event, I consider a decision of the Judicial Registrar must follow that of a Land Court member unless the latter decision is distinguishable or made per incuriam. (Section 31 of the LCA makes a decision of a Judicial Registrar appealable to a single Land Court member).
Given the conclusion above on the nature of an appeal under the Valuation of Land Act being equivalent to an originating process rather than the traditional appeal from within the court hierarchy, it follows that the appeal provisions of the UCPR are not relevant to the present case.
Even if the UCPR particulars provisions were not considered to presently apply, there appears adequate scope under s.22 of LCA and r.19 of LCR to allow the Court to issue orders for particulars.
“22.(1) To the extent a matter about Land Court procedure is not provided for by the rules, the matter may be dealt with by a direction under subsection (2) or (3).
(2) The president may issue directions of general application about the procedure of the court.
(3) A member may issue directions about a particular case before the court when constituted by the member.”
r.19 of LCR:
“19.(1) At any time after an originating application for a proceeding is filed –
(a)any party may apply to the court for a hearing about an order or directions about the proceeding (a “directions hearing”); or
(b)the court may order the parties to attend a directions hearing.”
It should also be noted that r.27(g) of the LCR empowers the Judicial Registrar to issue an order for further particulars and s.29(2) of LCA enables the Judicial Registrar to exercise all the jurisdiction and powers of the Land Court in such matters.
My conclusion is thus that there is sufficient power under the LCA and the LCR for the Court to issue particulars in the current cases. Whether they issue for the specific matters requested will be considered shortly.
The Wider Law
The previously mentioned Land Court decision of ISPT provides a useful overview of legal considerations in the granting of an order for particulars. Key observations include:
· “[p]articulars fulfil an important function in the conduct of litigation. They define the issues to be tried and enable the parties to know what evidence it will be necessary to have available and to avoid taking up time with questions that are not in dispute. On the one hand they prevent the injustice that may occur when a party is taken by surprise; on the other they save expense by keeping the conduct of the case within due bounds. These considerations are no less important in revenue cases than in other cases” (Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214 at 219).
· “The openness afforded by adequate particulars facilitates effective resolution of the dispute. Discovery becomes more efficient. It need be directed only to the issues as they are refined by the particulars …” NRNQ v MEQ Nickel Pty Ltd [1991] 2 QdR 592 at 595
· In complex matters, it is considered that it is appropriate, in principle, to order that further and better particulars be provided, with a view to promoting efficient conduct of the litigation (see, for example, Kumali Holdings Pty Ltd v Chief Executive, Department of Natural Resources and Mines, unreported, Land Court, 27 April 2001 at [34]).
· Although the information sought may become available in experts’ reports at some later stage of the proceeding, that is not a reason why the particulars should not be provided at this stage, to facilitate the progress of the matter. “These days particulars may require the disclosure of information in such detail as to indicate the mode by which a case may be proved. … And that particulars will disclose the evidence to be adduced at trial is not of itself a sufficient justification for refusing them.” (NRNQ v MEQ Nickel, at 595).
Other Requests for Particulars
In respect of the request for further particulars, the appellants contend that they are not obliged to give further and better particulars as to.
(a)the terms and conditions referred to in Appeal Ground 14;
(b)the bases of interstate valuations referred to in Schedule 1 of Appellant’s response to Request for Particulars;
(c)"explanations" of comparable sales in Schedule 2 of Appellant’s response to Request for Particulars:
-how the purchase was approached by the purchaser;
-the purchaser's perception of the potential use of the property intended to be achieved following its purchase;
-the basis and cot for achievement of that intended use;
-information to assist in the understanding of the North Lakes sale;
-how the comparable sales ought to be analysed and compared for the purpose of determining the value of the appeal properties;
(d)Ground 16 - relativity:
-the basis upon which the appellants contend comparisons should be made between the subject and the sales;
-the appropriate relativity between the subject and the other valuations; and
-the factors which the appellants rely upon in order to make such comparisons and assert such relativity;
(e)details of catchment, competing "existing shopping centres" for the purposes of Ground 18 and Schedule 3
(f)natural features of the subject land and surrounding locality for the purposes of Ground 19.
Consideration of Outstanding Requests for Particulars
(a)Terms and conditions referred to in Ground 14
Respondent's Submission
The sale of a shopping site of the scale of those which are the subject of the within appeals would be likely to involve some intricate special conditions. Until the appellants provide particulars of what they assert are the relevant reasonable terms and conditions, the Chief Executive does not know whether there is a substantial issue which may arise by reference to this aspect of Ground 14. In particular, given the content of Ground 10(a), there may be a substantial issue concerning special conditions relating to planning approvals.
Appellants' Submission
The relevant words in Ground 14 about which the request is made are from s.3(1) of the Act. The appellants do not, by properly referring in the appeal ground to the words of the statute, intend to raise some mystical hypothetical sale. Moreover, the matter is one for experts. If there is a special term which is to be raised in respect of a particular centre, that term will be identified in the expert's report.
Conclusion
Given the appellants' claim that they do not have in mind any hypothetical sale of a major shopping centre with relevant reasonable terms and conditions, that they merely refer to the relevant wording of the Act (s.3(1)) and any special condition will be identified in experts' reports, no further particulars need to be provided on this matter at this stage.
(b)The Basis of Interstate Valuations referred to in Schedule 1
Respondent's Submission
The respondent claims he does not know the basis of valuations of interstate properties referred to by the appellants in Schedule 1 to their particulars and until particular properties are provided, he is not in a position to respond to this ground of appeal.
Appellants' Submission
The interstate valuations are statutory valuations. The appellants will identify the dates of the statutory valuations, the amounts and the statute pursuant to which the relevant valuation was made. That is sufficient to identify the relevant valuations. Otherwise the basis of the valuations is not a matter within the knowledge of the appellants as ought to be self evident. Whether or not the subject valuation achieves appropriate relativity with the others is a matter for experts and the Chief Executive is as well placed as the appellants to prepare this aspect of the appeals.
Conclusion
The information offered by the appellants is all that needs to be produced at this stage. The comparisons are a matter for expert valuers.
(c)Explanations of Comparable Sales in Schedule 2
Respondent's Submission
The appellants have provided particulars of a number of comparable sales which are set out in Schedule 2 to their particulars. One or other of the appellants is a party as purchaser to all but one of the 12 comparable sales identified in Schedule 2. Those appellants are therefore well placed to explain how the purchase was approached by the purchaser and the purchaser's perception of the potential use of the property intended to be achieved following its purchase and the basis and cost for achievement of that intended use.
Appellants' Submission
This request is inappropriate for a number of reasons. First, the appellants assert that the sales are comparable. The appellants do not mount a case against the respondent based on a particular state of mind of the purchaser or how the purchaser perceived the potential use of the property. If the respondent wishes to make out a case that the relevance of a sale is affected by the subjective perceptions of the purchaser, then it is for it and not for the appellants to particularise it. Second, the Chief Executive seeks evidence by particulars. Requests for particulars are normally made in respect of facts material to the case of the opponent, not in the form of a request for an explanation. Third, the form of the request is otherwise inappropriate. What does a request relating to how the purchase was approached by the purchaser mean? Fourth, the information requested is largely immaterial or of limited use because it is the objective meeting of the minds at an agreed price which is critical, not the subjective state of minds of the parties to a comparable sale. Subjective states of mind are at best secondary issues and generally not an issue at all.
Conclusion
The request is largely more one of an explanation rather than for additional information or facts material to the case of the appellants. As currently sought, the request for particulars is refused.
(d)Relativity
Respondent's Submission
In order to obtain expert advice and brief counsel as to this aspect of the appellants' case, it is necessary to understand the basis upon which the appellants contend that comparison should be made between the subject and the sales and the appropriate relativity between the subject and other valuations and the factors which the appellants rely upon in order to make such comparisons and assert such relativity. The information provided to date by the appellants is not sufficient to allow the respondent to brief counsel or expert witnesses as to the basis of the appellants' case.
Appellants' Submission
Relativity is a matter for expert evidence. The approach of the Courts has generally been to regard the maintenance of relativity as desirable but that the use of the principle of relativity should not be preferred to the exclusion of relevant sales evidence. The appellants will identify the statutory valuations relied upon by reference to the relevant centres, the value assessed and the date of assessment and the statute pursuant to which the valuation was carried out. That is sufficient. The use to which those valuations are put is a matter for experts. The respondent is quite able to proceed now to analyse those valuations against his own valuations of the subject centres. It would be oppressive and then abuse of function of particulars for the appellants now to be required to answer the request.
Conclusion
The appellants are only required to supply statutory valuations relied on by reference to their relevant centres, the value assessed, the date of assessment and the statute pursuant to which the valuation was carried out. Additional aspects of relativity are matters for subsequent expert advice.
(e)Details of Catchment, Competing Existing Shopping Centres for Purposes of Ground 18 and Schedule 3
Respondent's Submission
The Chief Executive intends to brief a retail economist in order to deal with issues of the kind referred to in Schedule 3 Part 2 of the appellants' particulars. However, the information there set out is of a quite general nature and does not allow the respondent to prepare suitably detailed briefs, eg the particulars provided attempt no definition of catchment or what are recognised or asserted by the appellants to be competing existing shopping centres. It is apprehended that it is likely there may be a substantial debate as to the identification of the relevant catchments and what are competing shopping centres.
Appellants' Argument
Ground 18, in effect, asserts that the Chief Executive failed to properly apply Tetzner's (1958 AC 50) case when carrying out his statutory valuation. It is disingenuous of the respondent to complain of an absence of particulars in this respect while declining to answer interrogatories concerning its methodology, after only incomplete disclosure and in circumstances where he will know what factors of this nature he did and did not take into account. The experts will obviously identify those relevant of importance to their opinions. The Chief Executive is now in a position to identify those matters which he thought were relevant when he performed his statutory valuation and anything else of which he has since become aware. The appellants will do the same and points of difference can then be debated. Finally, there must be a real doubt that the interests of justice are well served where the appellants must firstly identify matters of this nature sought before the Chief Executive identifies what he indeed did take into account.
Conclusion
Given the matters referred to in Schedule 3, Part 2, the appellants are to provide, by way of particulars, what they consider to be the relevant catchment and also what shopping centres are considered to be in competition. Explanation of the effects of these items and the weight to be given is a matter for later expert consideration. Other aspects on this request are more a matter of later expert consideration.
(f)Natural Features of the Subject Land and Surrounding Locality for the purposes of Ground 19
Respondent's Submission
The particulars provided by the appellants to date are essentially generic in nature in respect of each of the 12 shopping centres concerned.
No details are provided with respect to any particular shopping centre and information provided is inadequate to allow a proper brief to either counsel or potential expert witnesses to explain the points intended to be raised by the appellants.
Appellants' Submission
The appellants make a similar submission to item (e) above.
Conclusion
The appellants are to provide details of the natural features of each subject land and surrounding locality affecting the suitability of the land. Explanation of how they so affect and appropriate weight is a matter for later expert evidence.
ORDER
The appellant within 42 days of the date of this order is to file and serve further and better particulars as listed:
(a)In regard to the basis of interstate valuations referred to in Schedule 1 of the Appellant’s Response to Request for Particulars, the appellants will identify the dates of the statutory valuations, the amounts and the statute pursuant to which the relevant valuation was made.
(b)In respect of Ground 16 of the Grounds of Appeal the appellants are to supply statutory valuations relied on by reference to the relevant centre, the value assessed, the date of assessment and the statute pursuant to which it was carried out.
(c)In respect of Ground 18 and Schedule 3, the appellants are to provide what they consider to be the relevant catchments and also what shopping centres are considered to be in competition.
(d)In respect of Ground 19, the appellants are to provide details of natural features of each subject land and surrounding locality affecting the suitability of their land.
DISCLOSURE
In considering the application for further disclosure it is convenient to adopt the headings used in the affidavit of Mr JB O’Rourke on behalf of the respondent sworn on 1 June 2004. This is so even though one of the items, the PWC model, will be considered in a separate later decision and the appellants have provided or will provide certain requested material. Material in the latter category includes the following:
(a)any planning approvals within the possession or control of the appellants including certificates;
(b) contracts of sale relied as comparable in respect of Robina being schedule 2 to appellants’ response to request for particulars (Schedule 2) Items B to J
(c)the transaction documents which deal with the North Lakes site being schedule 2 Item K
(d)depreciation schedules referred to in the section 35A application and
(e)where update valuation reports have been provided, the full valuation reports upon which they were based.
The Relevant Law
Rule 13 of the LCR provides that Chapter 7 of the UCPR applies, with necessary changes, to the disclosure of documents in relation to a proceeding in the Land Court. Rule 211 of the UCPR provides that:
"(1) A party to a proceeding has a duty to disclose to each other party each document -
(a) in the possession or under the control of the first party; and
(b) directly relevant to an allegation in issue in the pleadings; and(c) if there are no pleadings - directly relevant to a matter in issue in the proceeding.
…"
Rule 223 provides that:
"(1) The court may order a party to a proceeding to disclose to another party a document or class of documents by -
(a) delivering to the other party in accordance with this part a copy of the document, or of each document in the class; or
(b) producing for the inspection of the other party in accordance with this part of the document, or each document in the class.
…
(4) An order mentioned in subrule (1) or (2) may be made only if -
(a) there are special circumstances and the interests of justice require it; or
(b) it appears there is an objective likelihood -
(i) the duty to disclose has not been complied with; or
…"The above provisions were explained in Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 QdR 276 at pp.282-283 where Pincus JA said:
“The law in this State differs from that laid down by Brett L.J. in Compagnie Financiere du Pacifique v Peruvian Guano Co. (1882) 11 Q.B.D. 55, in that if a document is not 'directly relevant' to an allegation in issue it need not be disclosed. It is not enough, to justify an order for disclosure, to hold the opinion that 'it is reasonable to suppose [that the document] contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary'. Nor, if a document sought is not directly relevant to an allegation in issue, does it matter whether or not it is a document which may fairly lead [the party requiring discovery] to a train of inquiry, which may have either of these two consequences': see per Brett L.J. at 63.
No doubt this deliberate narrowing of the obligation to provide disclosure makes it all the more important that practitioners and their clients earnestly fulfil their obligations under the rules relating to the topic; but drawing attention, as Mr Wilson does, to a chance that a particular category of undisclosed documents may help one side's case will not necessarily provide a basis for an order for further disclosure."
Further, in Robson v REB Engineering Pty Ltd [1993 No. 96] 2 QdR 102 Demack J made observations on the term "directly relevant":
"My opinion is that the word 'directly' should not be taken to mean that which constitutes direct evidence as distinct from circumstantial evidence. Rather, 'directly relevant' means something which tends to prove or disprove the allegation in issue."
The ISPT Case
Observations in the recent decision of Chief Executive, Department of Natural Resources and Mines v ISPT Pty Ltd as Trustee [2003] QLC 0074 are also relevant to the wider disclosure issues in Valuation of Land Act matters before the Land Court. Such observations, relevant to the current disclosure application, include:
(a)There is no reason why the appellant should not make disclosure of relevant documents at this earlier stage of the proceedings. The LCR now have provision for pre-trial procedures to be implemented, and those procedures can ensure that there is mutual exchange of information in due course. [40]
(b) While s.5(1) provides that "value of the improvements" means the added value which the improvements give to the land, irrespective of their cost, s.5(1) is qualified by s.5(2) which provides that the added value shall in no case exceed the amount that should reasonably be involved in effecting such improvements as at the relevant date. In so far as the order for disclosure sought by the respondent relates to those matters, any such documents that are within the possession or control of the appellant are relevant to the determination by the Court of the unimproved value of the land. [41]
(c) On the basis that the valuation may be carried out by reference to s.3(2) of the Act, documents relevant to ascertaining the nature, extent, value and cost of the improvements on the subject land as at the relevant date are "directly relevant" to the matter in issue. [44]
(d)As a general principle, the appellant should disclose those documents which are relevant to the determination of the value of the property either at the relevant date, or at some other date from which the value as at the relevant date can be assessed. [46]
The Issues in the Cases
In Land Court cases such as the present where there are no pleadings (in the traditional UCPR sense) which would define the issues, it becomes necessary to consider what material or factors perform the equivalent function. Both counsel properly point to the Notice of Appeal and particulars as a valid starting point. Further matters referred to by counsel for the respondent also form a justifiable basis for defining issues of Valuation of Land Act cases. These include:
· The legislative requirements themselves which require the determination of the unimproved capital value (UCV) of the appeal land.
· Determination of components necessary to derive such – eg valuation of improvements if a s.3(2) methodology is to be applied.
· Use of proper comparable sales evidence to adequately arrive at a UCV. (To this end, it is proper to investigate the purchasers’ objective considerations in entering upon such sales transaction to assess whether the sale may be in some way tainted).
Appropriate Orders
Counsel for the appellants have suggested that the appropriate process after the hearing of detailed submissions on proper disclosure required of the appellant was for the Court to make an order for further disclosure by the appellants. This would include the matters that the appellants conceded at the hearing should now be disclosed.
Counsel for the respondent proposes a more detailed course. As detailed written and oral argument has already taken place before the Court on the various categories where disclosure is sought and, as it is likely that the outcome of some of the debated categories will not be agreed upon, the Court should now rule on them to avoid further debate.
I have accepted the respondent’s suggested approach as the most expedient course to progress the case. It should not matter if some of my rulings have been overtaken by agreement or other cooperative action between the parties since the hearing.
In certain of the categories the appellants claim that the material sought is too wide e.g. it is said the expression from “time to time” could go back some 20 years. If material in a category is held by the Court to be disclosable in principle, in my view, the party who has a duty to disclose should make a judgment on whether a particular item directly relates to an issue in question. It does not appear possible to draw some arbitrary timeframe or the like to determine production or otherwise. If a particular matter is in doubt, the Court could make a specific ruling at a later stage.
Mr O’Rourke’s opinion evidence
The appellants challenge various parts of Mr O’Rourke’s affidavit of 1 June 2004 where he makes certain claims based on his “professional experience”. (It is also claimed sufficient factual basis is not established for such opinions). This experience is based on a legal background including periods as solicitor with a major life insurance company, a local authority and, since 1990, with the Department of Natural Resources. During the latter time Mr O’Rourke has been involved with a number of significant valuation appeals. The appellants claim this composite experience does not equip him to express opinion on matters such as practices employed in the planning and development of major shopping centres.
In my view, there is not sufficient basis established for Mr O’Rourke to confidently express the likely conclusions on the PWC retainer conditions. However, given the course now to be taken on this PWC category, Mr O’Rourke’s opinion ceases to be a current issue.
Also, I do not consider a sufficient basis has been established for the assertion that the appellants have access to “documents identifying new concepts and designs”. (para 73 of Affidavit).
As regards the other matters where Mr O’Rourke expresses views based on his professional experience, I am prepared to allow the challenged parts into evidence on the grounds that:
· the Land Court is guided by the principles of equity and good conscience and not bound by the strict rules of evidence (LCA s.7)
· most if not all of the opinions do not really relate to substantial technical issues where detailed industry knowledge would be necessary to draw likely conclusions. Valid inferences could properly be drawn from the evidence available by the Court or by a person of Mr O’Rourke’s legal experience.
· While Mr O’Rourke’s distant insurance experience is of little relevance, his local authority experience (on planning matters) and his more recent Land Court experience in valuation matters provide reasonable foundation for the type of opinion evidence he expresses.
Matters on which Disclosure is sought.
The PWC model.
The respondent concedes that the PWC model (created by PWC - Accountants) is not in the current possession or control of the appellants. It thus cannot be the subject for an order for disclosure under the present application. What the respondent has now sought is for a Court direction that the appellants request PWC to supply the “model” to the respondents. This question was subject to detailed argument on a separate occasion (Friday 18 June 2004) and a separate court decision will issue in this matter.
As regards what has been described as Category 1 – disclosure of documents containing the data provided to PWC which the latter used to develop the model – and Category 3 – provision of data to test the operation of the model - relevant material was supplied to the respondent’s on a composite disc under covering letter on 1 June 2004. The respondent has raised a technical point as to whether this is adequate discovery of the material in Categories A and C or should copies of the actual material supplied to PWC have been produced (if it was in hard copy form). I do not propose any order for further disclosure on this matter at present.
Perverse operation of 20% Cap Regulation
On this matter the appellants indicate that they rely on the centres the subject of the appeals to make out the relevant facts. The relevant documents are the documents in each appeal. No further disclosure is required.
Planning and other approvals
This request can be broken down into four parts.
(a)Town planning advice concerning the planning status of the centres and planning issues upon the acquisition of the centres.
Respondent’s submission
It is unlikely that the current owners would have expended very large sums involved in acquisition of the shopping centres without obtaining town planning certificates and planning advice concerning the planning status of the centre and planning issues.
Appellants’ submission
The appellants have now agreed to provide the relevant planning approvals and certificates.
The application for disclosure should fail for two reasons. First the obligation is upon the respondent to show an objective likelihood that the classes of document exists in respect of each centre, and secondly, that they are directly relevant. The material fails to do so. Mr O’Rourke reveals no expertise in respect of acquisition or operation of shopping centres. Moreover while it is no doubt the case that a purchaser of a shopping centre would be mindful of its use, it is by no means self-evident that upon the acquisition an owner would have obtained planning advice concerning the planning status of the centre and planning issues.
Conclusion
Give the size of the centres in the various appeals and the amounts of money likely to have been exchanged upon acquisition, there appears an objective likelihood that planning advices, in addition to approvals and certificates would have been obtained. Such would be directly relevant to at least Ground 10 of the appeals.
Disclosure in this (sub) category is granted.
(b) Town planning advice obtained from time to time in relation to planning issues relevant to the redevelopment and expansion of the centres.
Respondent’s submission
It seems quite likely that the owners will from time to time have obtained further advice in relation to planning issues relevant to redevelopment and expansion of the centres.
Appellants’ submission
This request is in effect covered in the previous response. It is not established that (1) there are such documents; (2) that they are directly relevant to any issue and (3) that a category of limit of time as this request of category can be even faintly arguably correctly relevant.
Conclusion
For reasons similar to sub category (a), disclosure is granted. The time limitation considerations are discussed under the heading “Appropriate Orders” above.
(c) Documents held by Westfield Management in respect of Sales A and K in Schedule 2 concerning planning and other issues concerning the development of those sites including the extent and forecast cost of external works.
Respondent’s Submission
The appellant, Westfield Management Limited, being the purchaser of the appellants’ comparable sales A and K is most likely to have obtained and accumulated significant documentation relating to planning and other issues concerning the development of those sites including the extent and forecast cost of external works. Such material and documentation relating to the cost thereof is likely to be of some considerable assistance in assessing the quantum of costs which the appellants apparently intend to claim by reference to Ground 10.
Appellants’ submission
(1) The application fails to properly identify any document or class of documents
(2)The respondent fails to show that such a document or class of documents should have been disclosed.
(3)Descriptions are too wide and imprecise.
(4)The imprecision cloaks a failure by the respondent to show how a document or class of documents of the nature described is or are directly relevant to issue in the proceedings.
What is sought is information apparently from whatever time in history the appellants may have it of the development of these other sites including any costings. It is to stretch to the extreme the concept of relevance, let alone direct relevance to say such as discoverable.
Conclusion
The appellants have agreed to disclose documents that will show costings for site works and other external works (confined to higher order documents). It is considered there is an objective likelihood of there being in the appellant’s (Westfield) possession and control documentation on planning and other development issues on these comparable sale sites. The relevance of comparable sales as directly relating to issues in dispute is noted under the heading “Issue in the cases” above. Time limitations are discussed under the heading “Appropriate Orders” above.
Disclosure is granted in this sub category.
(d) Documentation held by Westfield Management Limited which comprises planning applications in relation to each of sales A and K in the Schedule 2 and planning reports and studies concerning the various retail catchments on the Gold Coast and north thereof in relation to the Helensvale Shopping Centre site. Such material will relate to catchments including Runaway Bay and Pacific Fair. Not only such material is requested, but documents relating to the cost thereof.
Respondent’s submission
It is quite likely that the appellant Westfield Management Limited will have made planning applications in relation to each of those sites and will have obtained planning reports and studies concerning the various retail catchments. Such material and documentation relating to the cost thereof is likely to be of some considerable assistance in assessing the quantum of costs which the appellants apparently intend to claim by reference to Ground 10.
Appellants’ submission
Much of what was said in the preceding paragraph applies here. There is however a further aspect which makes it more difficult for the respondent to discharge the onus of establishing relevance. Sales A and K are the North Lakes and Banfield Street (Chermside) sales. They do not concern catchments south of Brisbane. The retail catchments of the Gold Coast near Helensvale are very remote from them. The respondent contends such documentation would be directly relevant to the cost of and time taken in obtaining development approval. Such a contention lacks probative value. In any event this is a train of inquiry contention. It is not directly relevant to that issue. It is best indirectly relevant which is not enough to justify making an order for disclosure.
Conclusion
Similar considerations apply as discussed in (c) above except that studies in relation to areas on the Gold Coast and Helensvale appear to be too remote in location in relation to the comparable sales. Disclosure in these more remote catchment areas is disallowed.
Planning applications and documentation on catchment areas in the vicinity of the two sales are to be disclosed. Time limitations as discussed under the heading “Appropriate Orders” also apply here.
North Lakes (Mango Hill) and Banfield Street (Chermside) comparable sales
Respondent’s submission
The respondent seeks disclosure of documents in relation to Banfield Street (Chermside) sale and purchase of land at North Lakes. They argue the appellants had previously in earlier appeals acknowledged an obligation to disclose such material. (Affidavit of Graeme Smith lodged 7 April 2003).
Appellants’ submission
There is no evidence that the appellants previously accepted an obligation to disclose materials suggested by the respondent. The existence of such material is not established nor is direct relevance.
Conclusion
The transaction documents are agreed to be discovered. The additional documentation referred to in the Affidavit of Mr Smith is likely to exist and would seem directly relevant in any proper-analysis of these comparable sales. Order for disclosure is granted.
Robina
In respect of Robina and sales B – J in Schedule 2, substantial documentation is sought in relation to those purchases and the studies and valuations likely to have been made in order to justify them.
Respondent’s submission
Notwithstanding that the appellant QIC Robina itself relies on nine sales to which it was itself a party, it does not appear to have disclosed even the contracts of sale pursuant to which it purchased those sale properties. It seems to be quite unlikely given that the sales are said to have occurred in June 2002 that the appellant QIC Robina would not still have substantial documentation in relation to those purchases and the studies and valuations likely to have been made in order to justify them.
Appellants’ submission
Again it is to be recalled that these are not subject properties but what are said to be comparable sales. The transaction documents, sale contracts and the like will be or have been discovered. What is sought is information apparently from whatever time in history the appellants may have it of the development of these other sites. Such is to stretch the extreme of the concept of relevance let alone direct relevance to say that this is discoverable.
Conclusion
The appellants now agree to provide disclosure of documents that will show costings into site works and other external works (confined to higher order documents). The additional material sought is considered to be of direct relevance to a proper analysis and understanding of these comparable sales. Time limitations discussed in “Issues in the cases” above are relevant here. Disclosure is allowed subject to that qualification.
Depreciation schedules on reports relating to depreciation of buildings and associated plant and equipment
The appellants have now agreed to provide disclosure of documents which show the depreciation allowance at the relevant date.
Redevelopment and expansion plans
Documents are sought indicating the future plans for redevelopment of the existing improvements including documents in the nature of reports and other material dealing with redevelopment prospects. Further retail and market studies are sought which are likely to be obtained from time to time in order to inform decision making and strategic planning with respect to topics including those referred to in Schedule 3 of the particulars.
Respondent’s submission
It is considered that documents held by or on behalf of the appellants indicating future plans for redevelopment of existing improvements are material to an informed assessment of the present value of any existing improvements or related plant and equipment which may be scrapped in any intended redevelopment.
Appellants’ submission
(i) the respondent does not demonstrate the existence of any relevant class of documents. The descriptions are too wide and imprecise.
(ii)this imprecision cloaks a failure by the appellant to show a document or class of documents of the nature described is or are directly relevant.
Again at best studies, if they exist, could be someone’s opinion about things which are obviously not directly relevant to the issues in this appeal.
Conclusion
Redevelopment plans are considered directly relevant to a s.3(2) valuation methodology. Specific documents relating to redevelopment plans should be disclosed. Retail and market studies, even if more in the nature of opinion evidence, should also be disclosed as such would be likely to influence such future plans. Again, time limitations would apply.
Records relating to past and future capital expenditure
Respondent’s submission
It is likely that the appellants will maintain records relating to expenditure and will have management reports and other forecasts concerning past and future capital expenditure.
Appellants’ submission
(i) Relevant documents have already been disclosed. Actual capital expenditure has been recorded in the financial records and disclosed. There is no demonstrated relevance of documents which record that expenditure at any time in history of the shopping centre. Moreover the request seeks capital expenditure even if it was for improvements which were removed at any time in the history of the centre.
(ii)Beyond that the respondent does not demonstrate the existence of any relevant class of documents.
(iii) Again the imprecision cloaks a failure by the applicant to show how a document or a class of documents is directly relevant to an issue in the proceedings.
Conclusion
The appellant states actual capital expenditure has already been disclosed. Specific higher level documents on future capital expenditure also seem as relevant as plans for future development. (See previous heading). They should also be disclosed, but not matters that are more in the nature of opinion evidence. Time limitations considered under the heading “Issues in the case” also apply here.
Appellants’ valuation reports
Respondent’s submission
It is likely that the appellants would obtain valuation reports on a regular basis possibly twice yearly and generally at least every 12 months. Disclosure of such reports on either side of the valuation date is sought to establish a range.
Appellants submission
(i) the request contemplates the disclosure of opinion of third parties as to the value of a centre for purposes differing from a statutory value on dates unspecified but not on a valuation date.
(ii)the opinions of such third parties could not be binding on the appellants nor could they constitute admissions.
(iii) opinions of third parties are not sales.
Conclusion
As the valuations sought are not at the relevant date, may not be by the valuers to be used by the appellants in the current appeals, and may be for different statutory purposes, they are not considered directly relevant to the appeals. Disclosure is refused. The comments of the Land Appeal Court in Department of Natural Resources and Mines v QNI Limited [2002] QLAC 72 12 September 2002 are relevant:
“The appellant sought to rely on two valuations of various properties, including the subject, prepared for the respondent in accordance with Accounting Standard AASB1010 and S294(4) of the Corporations Law, in support of its (the appellant’s) submissions as to the unimproved value of the subject land. The valuations, which were made as at 19 May 1995 and 30 June 1998 assessed the “market value for existing use” of the land and buildings. It appears that the term “market value for existing use” is used to describe the value of an asset to a business, on the basis that the business is viable and continuing with its current activities as at the date of valuation. Because of the approach we have taken in deciding this appeal, we do not consider these valuations to be relevant. In any event, even if they might have been relevant, we do not consider that valuations of this nature will rarely be any assistance to the Court in determining the unimproved value of land pursuant to the Valuation of Land Act, unless the valuers who wrote the reports are called to give evidence in support of the valuations.”
Balance sheets, financial statements and business records
Respondent’s submission
The appellants in the ordinary course of their business will produce balance sheets which include the value of assets held including the shopping centres in question. The appellants have generally not made disclosure of such balance sheets or the financial reports containing and commenting upon them. Access to such material is sought by way of disclosure and it is also sought to rely on such records as involving admissions by the appellants as to the value of the assets in question.
Appellants response
(i) the request is inappropriately wide. In its form it requires the disclosure of all balance sheets and financial reports.
(ii)the stated reason for the request is on the basis of the information written in those documents constitutes admissions. The respondent does not say what might constitute an admission. At least there is no evidence to show any admission is made and fails to show how anything contained in the documents referred to are directly relevant to the statutory valuation exercise.
Conclusion
As the requested material relating to balance sheets and financial representations would seem to have been prepared for a different purpose to the statutory valuation at issue under appeal, it is considered they are not directly relevant to the appeal issue. Again the comments in the QNI decision quoted above are relevant. Disclosure application is refused. As to the other financial documents obtained over time it is considered such is too wide a request. Again disclose is refused.
Income from sale of electricity, provision of Asset and Centre Management Services
The appellants have agreed to provide documents within this description which are properly disclosable limited to higher order documents. This is considered appropriate disclosure.
Repairs and maintenance expenditure
The appellants have agreed to supply documents within this description which are properly disclosable.
Documents identifying new concepts in design in relation to shopping centre development and fitout
Respondent’s submission
It is most likely that the appellants will have access to documents identifying new concepts and designs in relation to shopping centre development and fitout which will be highly material to an assessment of the obsolescence or currency of the actual improvements in place for which the appellants are claiming allowances based on new replacement costs subject to what are relatively modest capital expenditure adjustments.
Appellants’ submission
(i) There is no attempt to identify any categories of documents which are said to exist.
(ii)None of them are directly relevant to any issue raised in the Notice of Appeal. This is plainly a fishing expenditure.
Conclusion
This request is considered too wide and direct relevance to the appeal issues is not established. As mentioned earlier, this category is one area where it is considered beyond Mr O’Rourke’s claimed expertise to proffer opinion. The request is more in the nature of a fishing expenditure. See Cheque Exchange (Australia) Pty. Ltd. V Llewellyn [2000] QSC 138 para 31. Disclosure is refused.
ORDERS:
The appellants, within 42 days of this order, deliver and produce to the respondent by way of disclosure the following documents held in their possession or under their control.
(a)(i)Town planning advice concerning the planning status of the Centres and planning issues upon the acquisition of the Centres.
(ii)Town planning advice obtained from time to time in relation to planning issues relevant to the redevelopment and expansion of the Centres.
(iii) Documents held by Westfield Management in respect of Sales A and K in Schedule 2 concerning planning and other issues concerned with the development of those sites including the extent and forecast of external works.
(iv) Documentation held by Westfield Management Limited which comprises planning applications in relation to Sales A and K in Schedule 2 and planning reports and studies concerning various retail catchments but not in the more remote localities of the Gold Coast and Helensvale areas.
(b) Documentation in relation to the Banfield Street (Chermside) sale and purchase of land at North Lakes and studies and valuations made in order to justify both sales.
(c) Documentation in relation to the purchase of the Robina sales B to J in Schedule 2 and valuations made in order to justify them.
(d) Specific documentation relating to redevelopment and expansion plans including retail and market studies.
(e) Specific higher level records relating to past and future capital expenditure.
BR O’CONNOR
JUDICIAL REGISTRAR
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