Perpetual Nominees Limited v Department of Natural Resources, Mines and Energy

[2004] QLC 57

LAND COURT OF QUEENSLAND

CITATION:

Perpetual Nominees Limited & Ors v Department of Natural Resources, Mines and Energy   [2004] QLC 0057

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 an Order that the appellants request a non-party to produce material

DELIVERED ON:

16 July 2004

DELIVERED AT:

Brisbane

HEARD AT:

Brisbane

JUDICIAL REGISTRAR:

Mr BR O'Connor

ORDER:

The application for an order that the appellants request a non-party (PWC) to produce material to the respondent is refused. 

CATCHWORDS:

Practice and Procedure – Disclosure – Material not in possession or control of party (appellants) – Application seeking order that appellants request non-party to produce material – Application refused.

APPEARANCES:

Mr R Traves SC, for the appellants

Mr D Frazer QC for the respondent (Applicant)

SOLICITORS:

Minter Ellison  for the appellants
Legal Counsel, Legal Services, Department of Natural Resources, Mines and Energy for the respondent

1. 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.

2. As a further interlocutory step, the respondent Chief Executive seeks an order that the Court require the appellant to request a non-party (PWC – Accountants) produce to the respondent material which, according to the Chief Executive, is critical to the issues before the Court. 

3. The respondent outlines the background to this request:

   ·    A matter which has potential to interfere substantially with the efficient and timely disposition of the appeals concerns the appellants’ approach to the valuation of intangible improvements, recently included as components to be considered under the Act

   ·    The appellants retained a firm of chartered accounts, PWC, to prepare a methodology/model/mechanism (the “black box”) which enable the appellants to nominate for the purposes of their s.35A applications to the Chief Executive the value of intangible improvements

   ·    If the PWC approach is to be relied on by the appellants on the hearing of these appeals then it is clearly of critical importance that the Chief Executive be in a position to test the validity of the PWC approach.  The Chief Executive can only do that if it is in a position to have access to the PWC black box to understand the inputs processes and outputs and for that purpose to retain experts to assist in assessing both the operation of the black box and the outputs from it. 

   ·    The Chief Executive does not contend that, on the evidence so far provided, the appellants control or have in their possession the PWC black box.  However the Chief Executive seeks to obtain access to the black box in a timely and efficient manner as soon as possible to avoid the preliminary timetable fixed by the Court for the hearing of these appeals being further delayed.

   ·    The appellants have so far refused to offer assistance despite the obvious need of the Chief Executive to be able to address the issues flowing from the adoption by the appellants of the PWC black box.

   ·    The appellants contend that although they have paid for the development of the black box and procured its utilisation for the purposes of providing their valuation of intangible improvements under s.35A they are in no position to command PWC to deliver the black box.

   ·    The appellants refuse to assist the Chief Executive and the effective disposition of these appeals by the Court by making a request to PWC to ascertain whether or not it will make available the black box. 

4. The respondent points to Rules 223(4)(b)(ii) and 367 of the Uniform Civil Procedure Rules as authority for making of the order sought. Alternatively r.19 of the Land Court rules is also suggested to provide a sufficient foundation for the Order sought. The latter states:

   “Directions hearing

   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.

   (2)  Without limiting subrule (1), a party may apply for, or the court may on its own initiative make or give, 1 or both of the following -

   (a) …

   (b)an order or direction about the conduct of the proceeding, not provided for in these rules or under an Act, including an order about 1 or more of the following - ….

   (iv) disclosure by delivery or production of documents or delivery of interrogatories;”

5. The respondent also claims that the production of the black box is “directly relevant” to an issue in the proceedings. Even if it did not meet this directly relevant disclosure test which applies between parties to proceedings, the Court, it is argued, has a wider discretion under the Rules mentioned. The respondent claims that the methodology revealed in the black box is of clear relevance to the issues in the proceedings, namely the determination of the intangibles as a component of the improvements; such is a necessary step to determine the unimproved capital value under s.3(2) of the Valuation of Land Act.  The appellants challenge both the power of the Court to make the order requested – arguing it is not necessarily about the “conduct of the proceedings” – and also whether the “black box” relates to an issue that is presently before the Court.

6. For present purposes, I am prepared to hold that there exists power in the Court to make the order sought under r.19 of the Land Court Rules and that the black box relates to an issue in the proceedings.  I consider the reason for the existence of the document (black box) is directly linked to the issues in the case and the valuation approach of the appellants. 

Relevant authorities

1. The same two Queensland authorities were relied on by either party.  These are Erskin v McDowall [2001] QDC 192 and Attard v Hore [2002] QSC 437. In both these cases:

   ·    The required material was once in the possession in control of the respondent to the application but had subsequently passed to another party.

   ·    The non-party (a Government Authority) was exempt by legislation from being subjected to the non-party disclosure provisions.

   ·    The effect of the order to the respondent to the application to request production of the non-party was that the relevant material would be produced.  The respondent had a right to have such material, if requested by them.

2. The instant case is distinguishable on these three aspects.  First, the black box was never in the possession and control of the appellants.  Second, PWC could be served with a non-party disclosure order provided necessary preliminary steps had been taken.  Third, there is no right (unless the terms of the retainer to PWC provide otherwise) for the appellants to have PWC produce the material. 

3. These distinguishing features are of considerable importance.  No other authority was cited as being relevant to the particular facts of the present application.

Consideration of issues and Conclusion

1. In my view, the Orders sought should be refused for a number of reasons.  First, there appears to be no precedent for such order.  The two cases considered, while analogous, are distinguishable in three important aspects as discussed above.  Second, the non-party (PWC) was not present at the hearing of the application and did not have the benefit of presenting argument.  Third, even if a request included advising PWC that it was not required to comply with the Court Order, it is probable PWC would still feel obliged to seek its own independent legal advice and incur necessary expense.  Fourth, the eventual outcome of the course sought by the Chief Executive may result in the material not being produced and further time delays being incurred.  Fifth, having made this application and it being rejected, the respondent is now in a stronger position to seek a non-party disclosure order.  He can properly argue that he has been unable to obtain their requested material by alternative means. 

Order:

The application for an order that the appellants request a non-party (PWC) to produce material to the respondent is refused. 

BR O’CONNOR

JUDICIAL REGISTRAR