Perpetual Trustee Company Ltd v Department of Natural Resources and Mines
[2006] QLC 8
•20 February 2006
LAND COURT OF QUEENSLAND
CITATION: Perpetual Trustee Company Ltd & Ors v Department of Natural Resources and Mines [2006] QLC 8 PARTIES: Perpetual Trustee Company Limited, Trust Company of Australia Limited, Multiplex 324 Queen Street Landowner Pty Limited and SPB Developments Pty Limited, Multiplex 240 Queen Street Landowner Pty Ltd, ING Office Custodian Pty Limited, ING Management Limited as Responsible Entity
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2005/0802-0807 DIVISION: Land Court of Queensland PROCEEDING: An application for disclosure or for affidavits under Rule 223(2) DELIVERED ON: 20 February 2006 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER Mr JJ Trickett, President ORDERS: On or before 27 February 2006, pursuant to Rule 223 of the Uniform Civil Procedure Rules 1999, each of the following appellants file and serve on the respondent an affidavit stating:
(a) Appellant Multiplex 240 Queen Street Landowner Pty Ltd (Appeal AV2005/0805) the circumstances in which the documents requested in Items 1 and 2 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(b) Appellant ING Management Limited as Responsible Entity (Appeal AV2005/0807) the circumstances in which the document requested in Item 4 and the contract of sale requested in Item 10 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(c) Appellant Trust Company of Australia Limited (Appeal AV2005/0803) the circumstances in which the documents requested in Items 12 and 13 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(d) Appellant Multiplex 324 Queen Street Landowner Pty Ltd & SPB Developments Pty Ltd (Appeal AV2005/0804) the circumstances in which the documents requested in Items 16 and 17 and the contract of sale requested in Item 18 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(e) Appellant ING Office Custodian Pty Limited (Appeal AV2005/0806) the circumstances in which the contract of sale requested in Item 21 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
CATCHWORDS: Practice and procedure – Disclosure – Land Court Rules and Uniform Civil Procedure Rules – Application for further disclosure alternatively Rule 223(2) affidavits explaining circumstances in which documents ceased to exist or passed out of the possession or control of the appellants – Tests to be applied APPEARANCES: Mr R Anderson, counsel for the appellants
Mr S Fynes-Clinton, counsel for the respondentSOLICITORS: Gadens Lawyers for the appellants
Legal Counsel, Legal Services, Department of Natural Resources and Mines for the respondent
This is an application by the respondent for an order for disclosure of documents.
Background:
The appellants have appealed against the valuations applied to their lands by the respondent as at 1 October 2003, under the provisions of the Valuation of Land Act 1944. The valuations are in respect of six properties situated in the Brisbane Central Business District (the subject lands). On 3 November 2005, the Court ordered that each party make disclosure by providing to the other party a list of documents. It seems that the appellants made some disclosure on 18 November 2005. However, by letter of 23 January 2006, the respondent complained that the appellants have not complied with the order for disclosure. In respect of five of the appeals is a list of documents which the respondent believes are, or should be, in the possession of the appellants or their agents, which are directly relevant to the appeals. That list comprises 22 "items" in respect of which the respondent alleges the appellants have not made disclosure.
A response to the respondent's letter was made by the appellants' solicitors on 27 January 2006. With a few exceptions, the appellants' general response was to the effect that "the appellant has made enquiries and investigations and is unable to locate the document referred to. The appellant believes that the document is not in the possession or under the control of the appellant." The exceptions were Item 20, where the document had been disclosed, Items 12 and 13, relating to matters referred to in the already disclosed contract of sale, and Items 19 and 22, which sought details of the refurbishment of two of the subject properties. The relevant appellant's response to Items 12 and 13 was that to date it has been unable to locate copies of the documents. The relevant appellants' response to Items 19 and 22 was that in each case the refurbishment was carried out before the appellant purchased the property and the relevant documents were not in the possession or under the control of the appellant.
The hearing of the application
The respondent did not pursue the request for certain documents to which objection to disclosure had been taken by the appellants on the grounds of relevance, nor in respect of Item 20 already disclosed. However, the respondent maintained the application, seeking orders for disclosure of all other documents identified. As an alternative, in view of the appellants' general response, the respondent seeks an order pursuant to Rule 223(2) of the Uniform Civil Procedure Rules 1999 (the Uniform Rules), that the relevant appellant in each case file and serve on the respondent an affidavit stating -
(a)that the document or class of document sought does not exist or has never existed; or
(b)the circumstances in which the document or class of documents ceased to exist or passed out of the possession or control of the appellant.
Mr Anderson, counsel for the appellants, opposed the application for the order for Rule 223(2) affidavits. He contends that some of the documents requested were not properly the subject of a request for disclosure. In this category are the requests concerning the purchase by the present owner (the appellant in each case) including "details of decision-making process for the acquisition of the property, including board reports and approval to purchase" in Items 3, 10, 15, 18 and 21.
However, Mr Fynes-Clinton advised that the respondent had abandoned those specific requests, although the requests for other documents, such as valuations, feasibility analyses and due diligence reports, were maintained.
Mr Fynes-Clinton contends that the remaining documents sought fall into three classes. Class 1, comprising Items 1, 2, 4, 11, 12, 14, 17, 19 and 22, relates to cost estimates and surveys and reports by quantity surveyors and others, which disclose information in the possession of the appellants concerning the scope and costs of work carried out, or which may be carried out, on buildings on the subject lands. He contends that these documents are relevant.
Class 2, Items 3, 10, 13, 15, 18 and 21, concern contracts of purchase, valuations, documents covering the acquisition of the subject properties, which disclose information relating to the purchase of five of the subject lands. Mr Fynes-Clinton submitted that the inference is overwhelming that such documents exist, citing as an obvious example the contracts of sale of each of the properties. It seems that the contracts for the purchase of two of the subject lands were disclosed on 18 November 2005.
Class 3, Items 5 to 9, Mr Fynes-Clinton submits, are documents alleged to be in the possession of the appellants, setting out details of lease incentive arrangements for the property at 239 George Street (appellant ING Management Limited as Responsible Entity). Mr Fynes-Clinton goes on to contend that the already disclosed tenancy schedules refer to various incentives.
It is evident that a number of the documents sought clearly exist, or have existed, as they are referred to in documents already disclosed. These documents are identified in Items 1, 2, 4, 12, 13, 16 and 17. As for the other documents, Mr Fynes-Clinton submits that the inference can be drawn that such documents were prepared by and may physically reside with the contractors or consultants who prepared them, even if copies are not held by the appellants. Such documents, he argues, may be within the control of the appellants in the sense that, if asked for, they would be provided.
The respondent relies on the affidavit sworn on 19 October 2005, of Mr John O'Rourke, solicitor for the respondent, who deposed that in his professional experience, public companies such as the appellants, obtain valuations of land and improvements and other expert advice as to value and also maintain records relating to such matters, in addition to accounts and records relating to the financial performance of a property. Therefore, it is argued that these requests are not vague or uncertain, nor are the requests simply a fishing expedition.
While conceding that Mr O'Rourke's assertions do not affirmatively establish the existence of the documents sought, Mr Fynes-Clinton argues that they give rise to an inherent and objective likelihood that some or all of the documents requested do exist. The test, he submits, is not that some sort of compelling evidence be shown that they exist; the Rule 223 test is whether the Court is satisfied that there is an objective likelihood that documents exist and went out of the possession or control of the appellants.
To add force to his submissions, Mr Fynes-Clinton refers to a letter from the appellants' solicitors dated 3 February 2006, disclosing further documents, which the letter states "… were located by our client yesterday and were then provided to us." (Exhibit6) Therefore, he submits, despite the denials contained in the letter of 27 January 2006, a more dedicated and focussed effort on the part of the appellants would locate relevant documents which were not included in their primary disclosure. This, he contends, adds credibility to the respondent's submission that an unsworn statement by the appellants' solicitors is not sufficient.
In the circumstances, Mr Fynes-Clinton submits, the relevant appellants should be required to file and serve affidavits under Rule 223(2) of the Uniform Rules, detailing the searches and inquiries undertaken and the basis for asserting that the documents are not in the possession or under the control of the relevant appellant.
The appellants' contentions
Mr Anderson conceded that specific and identified documents which have been referred to in documents already disclosed and which would appear to have been in the possession or under the control of the appellants, could be the subject of affidavits under Rule 223(2), if the Court considered it necessary. Such documents were those referred to in Items 1, 2, 4, 16 and 17.
However, he argued that the remaining requests were in respect of a category of documents concerning which there was no evidence that they exist, or that they are in the possession or under the control of the appellants. The onus, he submits, is on the respondent to demonstrate that affidavits are appropriate.
Mr Anderson further submits that the respondent asks the Court to assume that the appellants have not complied with the duty of disclosure which is upon them and which they realise is a continuing one. He contends that there is nothing to indicate that the appellants ought to be compelled to swear affidavits, when assertions from their solicitors ought to suffice.
Mr Anderson submits that some of the requests for documents dealing with the purchase of each of the appeal properties by the appellants are so broad as not to be proper requests. This includes the remaining parts of Items 3, 10, 15, 18 and 21.
As for documents relating to lease incentives paid by the appellants to their tenants, rental rebates, fitout contribution, rental incentives, replacement cost estimate and building refurbishment details, in Items 5 to 9, 11 to 14, 16, 17, 19, 20 and 22, Mr Anderson submits that although an attempt had been made to identify with greater precision the information required, the respondent has failed to objectively identify that the documents exist, or that they were once in the possession of the appellants but no longer are.
Mr Anderson went on to submit that no adverse inference can be drawn from the further disclosure of 27 January 2006. The appellants' response letter had said that they had made inquiries and most of the documents are not in the possession or under the control of the appellants. Therefore, he contends, it is not surprising that more documents appear. The duty of disclosure is taken seriously by the appellants and unless the Court assumes that the appellants have not complied with the duty of disclosure, in Mr Anderson's submission, correspondence from their solicitors should be sufficient.
The legal principles
The valuations under appeal were made by the respondent under s.3 of the Valuation of Land Act 1944. Traditionally, such valuations have been made under s.3(1)(b) by ascertaining the unimproved value of the land to be valued by comparison with unimproved values derived from the analyses of sales of comparable lands. However, in recent cases it has been contended that the respondent may, or must, also arrive at an unimproved value under s.3(2) of the Act, by determining the improved value of the land and then deducting the value of improvements: Department of Natural Resources and Mines v ISPT Pty Ltd [2003] QLCR 0074 and the cases therein.
Most of the documents requested in the present case could assist in determining the improved value of the subject lands. As was said in the ISPT case at [44]:
"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."
It was held there that all such documents should be disclosed.
As I understand it, apart from those requests that the respondent has expressly abandoned, there is no real argument about the relevance of the documents requested. Rather the issues here are as to the existence of some of the requested documents or, if they ever existed, whether they are in the possession or under the control of the appellants.
The rules relating to disclosure in Chapter 7 of the Uniform Rules apply to proceedings in the Land Court with necessary changes: Rule 13 of the Land Court Rules 2000. Rule 211 of the Uniform Rules relevantly provides:
"(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.
(2)The duty of disclosure continues until the proceeding is decided."
Rule 223 of the Uniform Rules provides:
"(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 the document, or each document in the class.
(2) The Court may order a party to a proceeding (the 'first party') to file and serve on another party an affidavit stating –
(a) that a specified document or class of documents does not exist or has never existed; or
(b) the circumstances which a specified document or class of documents cease to exist or passed out of the control of the first party.
(3)…
(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
(ii)a specified document or class of documents exists or existed and has passed out of the possession or control of a party."
Apart from where disclosure had been made (Item 20) and those parts of Items 3, 10, 15, 18 and 21 now abandoned by the respondent, the solicitors for the appellants have given the general response quoted earlier that despite enquiries and investigations the appellants have been unable to locate the documents and believe that the documents are not in their possession or under their control.
As I understand the argument, the respondent does not go so far as to allege that the appellants have failed to comply with their duty of disclosure. However, particularly as further documents have been disclosed, it is argued that each of the appellants should be required to prepare a Rule 223(2) affidavit, as that would focus upon the required documents and may result in a more diligent search being undertaken.
The real issue quite simply is whether or not the assertions of the appellants' solicitors are sufficient, or whether each of the appellants should be required to provide an affidavit under Rule 223(2).
The requirement for a party to disclose relevant documents is a serious one. Under Rule 211, each party has a duty to disclose such documents to the other party and that duty is ongoing. Furthermore, under the Uniform Rules there are consequences for non-disclosure of documents, including in Rule 225(1):
·prohibiting the later tender of the document or adducing evidence of its contents without the Court's leave;
·being liable to contempt for not disclosing a document;
·costs;
·further consequences are provided for in Rule 225(2).
In addition, Rule 226 requires the solicitor having conduct of the proceeding to give the Court a certificate stating that the duty of disclosure has been explained fully to the party the solicitor represents.
In this case, there is no evidence that the appellants or their solicitors have not taken their duty of disclosure seriously. In terms of Rule 223(4), there is nothing to suggest that the appellants have not complied with their duty of disclosure, or that it appears that there is an objective likelihood that a document or class of documents exists or existed and has passed out of the appellants' possession or control. Instead of drawing an adverse inference from the later disclosed documents, it could be an example of the appellants taking their ongoing duty seriously; further documents had come to light and had been disclosed.
Therefore, apart from those documents in respect of which the disclosure by the appellants on 18 November 2005, had revealed that certain documents did exist, but which the appellants say (through their solicitors) that they are as yet unable to locate or which they believe are not in the possession or under the control of the appellants, in my view, no affidavit is required. The respondent assumes that such documents exist, based on Mr O'Rourke's affidavit, but something more than mere suspicion is required to justify granting relief to a party complaining of incomplete disclosure. Any such documents have not been sufficiently identified for me to be satisfied that affidavits under Rule 223(2) are required.
Counsel for the appellants concedes that in respect of Items 1, 2, 4, 16 and 17, an affidavit could be required if the Court considered it necessary. In addition, Items 12 and 13 request documents referred to in a contract of sale already disclosed and which the appellant says it is unable to locate. In my view, as these identified documents existed and prima facie would seem to have been in the possession or under the control of the appellants and as they are relevant to the issues in these matters, some further explanation is required from the appellants as to why they are not disclosed.
In addition to those items, I would add one further category of documents. It seems that each of the five appeal lands, in respect of which disclosure is requested, was purchased by the present appellants within the last few years. Items 2 and 12 indicate that two of the contracts have been disclosed. Contracts of sale were requested in respect of:
239 Queen Street, date of contract 26 June 1997;
324 Queen Street, date of contract 29 June 2001;
140 Creek Street, date of contract 19 March 1998.Clearly, those contracts are relevant to establishing the improved value of each of those lands and prima facie should be in the possession of the relevant appellants. In such circumstances, an explanation is required as to why the purchaser in each case is unable to make disclosure.
In respect of the remaining items requested, I have come to the conclusion that no Rule 223(2) affidavits are required. However, that does not affect the ongoing duty upon the appellants to disclose all relevant documents in their possession or under their control. As was held in the ISPT case at [44], all documents relating to the improved value of a property or to ascertaining the nature, extent, value and cost of the improvements on the subject lands as at the relevant date, are directly relevant to the matters in issue and such documents must be disclosed.
Orders
On or before 27 February 2006, pursuant to Rule 223 of the Uniform Civil Procedure Rules 1999, each of the following appellants file and serve on the respondent an affidavit stating:
(a)Appellant Multiplex 240 Queen Street Landowner Pty Ltd (Appeal AV2005/0805) the circumstances in which the documents requested in Items 1 and 2 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(b)Appellant ING Management Limited as Responsible Entity (Appeal AV2005/0807) the circumstances in which the document requested in Item 4 and the contract of sale requested in Item 10 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(c)Appellant Trust Company of Australia Limited (Appeal AV2005/0803) the circumstances in which the documents requested in Items 12 and 13 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(d)Appellant Multiplex 324 Queen Street Landowner Pty Ltd & SPB Developments Pty Ltd (Appeal AV2005/0804) the circumstances in which the documents requested in Items 16 and 17 and the contract of sale requested in Item 18 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
(e)Appellant ING Office Custodian Pty Limited (Appeal AV2005/0806) the circumstances in which the contract of sale requested in Item 21 of the respondent's letter of 23 January 2006 ceased to exist or passed out of the possession or control of the appellant.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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