Department of Natural Resources and Water v Buckler & Anor [2009] QLC 2

LAND COURT OF QUEENSLAND CITATION: Department of Natural Resources and Water v Buckler & Anor [2009] QLC 2 PARTIES: Chief Executive, Department of Natural Resources and Water (applicant/respondent) v. Patricia D and Patrick Buckler (respondents/appellants) FILES NO: AV2007/0858 and AV2008/0988 DIVISION: Land Court of Queensland PROCEEDING: An application for further disclosure and for certain orders to be stayed. DELIVERED ON: 20 January 2009 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mrs CAC MacDonald, President ORDER: 1. The respondents are ordered to provide forthwith to the applicant a copy of the valuation obtained for GST purposes with effect from 1 July 2000. 2. The application is refused in respect of the other specified documents. CATCHWORDS: Practice and procedure – disclosure – Land Court Rules 2000 and Uniform Civil Procedure Rules 1999 – application for further disclosure – rules 211, 223. APPEARANCES: Mr S Fynes-Clinton for the applicant Mr B Cronin for the respondents SOLICITORS: Legal Counsel, Legal Services, Department of Natural Resources and Water for the applicant DLA Phillips Fox Lawyers for the respondents -- 1 of 11 -- 2 [1] Patricia D and Patrick Buckler, who are the owners of property at Helensvale, have appealed against determinations by the Chief Executive, Department of Natural Resources and Waters of the unimproved values of their property as at 1 October 2006 and 1 October 2007, under the provisions of Valuation of Land Act 1944. This is an application by the Chief Executive, Department of Natural Resources and Water (the applicant) for orders that - (1) Patricia D and Patrick Buckler (the respondents) deliver and produce to the Chief Executive (the applicant) forthwith documents held by or on behalf of the respondents directly relevant to the issues to be determined by this Honourable Court, without limiting the generality of the foregoing, the documents referred to in Annexure A to the application. (2) That orders 8, 9 and 10 of this Honourable Court be stayed pending provision of full disclosure. (3) Such further orders as this Honourable Court deems fit. [2] On 17 July 2008, Mr RS Jones, a Member of this Court, ordered, in respect of appeal AV2007/0858, the parties to provide disclosure by way of a list of documents in their power or possession which are directly relevant to the disputed issues in the appeal, by Friday 12 September 2008. He also ordered the parties to complete inspection of the disclosed documents on 26 September 2008. On 30 October 2008, Mr Jones ordered that on or before Friday 21 November 2008, the parties provide disclosure with respect to appeal AV2008/0988 by way of a list of documents in their power or possession which are directly relevant to the disputed issues in the appeal. He also ordered the parties to complete inspection of the disclosed documents on or before 28 November 2008. [3] It appears that the respondents provided a list of documents by way of disclosure in respect of appeal AV2007/0858 by letter dated 9 September 2008 and that on 19 November 2008 the respondents provided a further list of documents in respect of appeal AV2008/0988. [4] The applicant has alleged that the respondents have not made proper disclosure of documents that are directly relevant to the determination of issues related to the correct determination of the unimproved values of the subject land pursuant to the provisions of the Valuation of Land Act 1944. [5] Annexure A to the application sought disclosure in respect of two broad categories of land – Part A identified six types of documents relating to the appeal properties; Part B sought disclosure of documents in respect of a rail corridor immediately adjoining the subject land. As a result of agreement reached between the parties prior to the hearing of -- 2 of 11 -- 3 this application and concessions made during the hearing the only categories of document over which the parties joined issue were – 1. Valuations (improved, unimproved, mortgage) undertaken within the preceding five years. 2. Advice, reports (including preliminary reports) and correspondence with the Gold Coast City Council or that Council's legal representatives in respect of the current appeal by Patrick and Patricia Dawn Buckler currently before the Planning and Environment Court (Qld) namely BD 1056/07, such documents to include but not be limited to copies of negotiations and offers to resolve the said appeal that may have been made by either party. That description was subsequently narrowed, during the hearing, by Mr Fynes-Clinton for the applicant, to the following – documents flowing between the Gold Coast City Council (including its representatives) and the respondents (including its representatives) and vice versa offering a resolution of the appeal or stating a position in respect of the appeal. 3. All offers, claims, expressions of interest and/or correspondence entered into in respect of the possible acquisition or purchase of the subject site. [6] Rule 13 of the Land Court Rules 2000 provides that Chapter 7 of the Uniform Civil Procedure Rules 1999 (UCPR) applies, with necessary changes, to the disclosure of documents in relation to a proceeding in this Court. [7] Rule 211 of the UCPR provides in part – " Duty of disclosure (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. …" [8] Rule 223 provides, so far as is relevant – "Court orders relating to disclosure (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 -- 3 of 11 -- 4 (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 in which a specified document or class of documents ceased to exist or passed out of the possession or control of the first party. (3) The court may order that delivery, production or inspection of a document or class of document for disclosure – (a) be provided; or (b) not be provided; or (c) be deferred. (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. …" [9] Rule 225 provides – "225 Consequences of nondisclosure (1) If a party does not disclose a document under this part, the party – (a) must not tender the document or adduce evidence of its contents, at the trial without the court's leave; and (b) is liable to contempt for not disclosing the document; and (c) may be ordered to pay the costs or a part of the costs of the proceeding. (2) If a document is not disclosed to a party under this part, the party may apply on notice to the court for – (a) an order staying or dismissing all or part of the proceeding; (b) a judgment or other order against the party required to disclose the document; or (c) an order that the document be disclosed in the way and within the time stated in the order. (3) The court may, in an order under subrule (2)(c), specify consequences for failing to comply with the order." [10] The subject land comprises Lot 43 on SP180511 with an area of approximately 21.0604 hectares, and Lot 18 on RP 868223 which has an area of 64.9049 hectares. The land is -- 4 of 11 -- 5 situated at Helensvale in the City of Gold Coast. Lot 19 is currently used as a golf driving range and Lot 18 is the site of the Helensvale Golf Course. [11] On 8 May 2007 the respondents obtained a preliminary approval from the Gold Coast City Council for a mixed density residential development on the subject land. That approval is the subject of an appeal to the Planning and Environment Court which was filed on 3 July 2007 but which has not been determined. Section 3.1.5 of the Integrated Planning Act 1997 provides that although the preliminary approval approves development to the extent indicated it does not authorise that development to occur. Final development permits containing more comprehensive details of the permitted development must be obtained before the development can commence. [12] I turn now to consider each of the categories of document sought by the applicant. The first category was valuations (improved, unimproved, mortgage) undertaken within the preceding five years. [13] The principal issue for determination by the Land Court in these appeals is the unimproved values of the subject land as at 1 October 2006 and 1 October 2007. In support of this application, the applicant relied on an affidavit by Mr DR Bale who is a registered valuer employed by the applicant department. Mr Bale deposed that the respondents and associated companies had substantial landholdings in the Gold Coast area and in his experience they frequently seek expert valuation advice in respect of property which they own. He said that he was aware that offers to purchase the subject property had been made in recent years and that a Mr Lloyd Parsons of the firm Herron Todd White is retained generally to advise the respondents in respect of valuation matters. In Mr Bale's view, it was inconceivable that professional investors such as the respondents would make decisions regarding their properties without the advice of their valuation experts. As the subject property is reasonably lightly improved, Mr Bale's professional opinion was that recent valuations of the subject property were directly relevant to the issues to be determined by the Court. [14] In response to the application for further disclosure, an affidavit of Mr MF Marshall was filed on behalf of the respondents. Mr Marshall is a member of the firm DLA Phillips Fox Lawyers which acts on behalf of the respondents and he is responsible for the conduct of the appeal. Mr Marshall deposed that he had been informed by Mr Patrick Buckler (one of the respondents) that the only valuation obtained by Mr Buckler with respect to the subject property in recent years was for GST purposes with effect from 1 July 2000 when the Goods and Services Tax was introduced. No other valuations have been obtained. Mr Marshall also said that he was of the view that any such valuations -- 5 of 11 -- 6 would be irrelevant as none were obtained or would have been obtained for the unimproved capital value with regard to the particular requirements of the Valuation of Land Act. [15] The effect of this evidence is, in my view, that the applicant has not demonstrated that there is an objective likelihood that any valuation exists other than the GST valuation referred to by Mr Marshall. Indeed, at the hearing of the application, the applicant did not seek to pursue Mr Bale's evidence that it would be inconceivable that other valuations did not exist. [16] The question is whether the 2000 GST valuation was directly relevant to the matters in issue between the parties. It is accepted that the term "directly relevant" as used in Rule 211(1)(c) means something which tends to prove or disprove the allegation in issue.1 Mr Fynes-Clinton submitted that a distinction should be drawn between the relevance of evidence and the weight to be given to it. For the purposes of this application, the only issue was whether the 2000 GST valuation was directly relevant to the proceedings. The weight to be given to the valuation was a matter for the trial of the proceedings. [17] Section 3(1)(b) of the Valuation of Land Act provides that "unimproved value" of improved land means the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of the Act, the improvements did not exist. The effect of the section is that it is the market value of the notionally unimproved land that is to be ascertained.2 [18] For the GST valuation to be relevant to the issues in these appeals, the valuation should assess the market value of the land. Mr Fynes-Clinton, while disclaiming any particular knowledge of the GST legislation, said that he was aware that developers pay GST under a margin scheme on the increased value of development land. For that exercise it was necessary to establish a base value, which Mr Fynes-Clinton understood to be market value. Mr Cronin, for the respondents, also said that the valuation would be of market value. [19] I have accepted, therefor, that the GST valuation assesses the market value of the subject land. [20] However, Mr Cronin said that the valuation was irrelevant because it assessed the value of the land and improvements as at 1 July 2000. Since that date, a new planning scheme 1 Robson v REB Engineering Pty Ltd [1997] 2 QdR 102 at 105. 2 Stubberfield v Valuer General [1991] 1QdR 279 at 283. -- 6 of 11 -- 7 had been introduced in 2003 and a shopping centre had been built next door to the subject land in 2006/2007. [21] Mr Fynes-Clinton submitted that although the valuation was dated and the assessed value would not be applicable in 2006/2007, the valuation was, nevertheless, relevant as it would establish a bottom line for the valuations in issue and would show the reasoning process adopted by the valuer. Moreover, since the subject land is relatively lightly improved, a valuation of the improved land would deal with a number of matters of direct relevance to the issue of unimproved value. Further, s.3(2) of the Valuation of Land Act should be taken into account.3 [22] I consider that a valuation that assesses the market value of an improved property is not irrelevant to the determination of the unimproved value of the land. However, Mr Cronin says that the valuation is too dated to be relevant to the present appeals.4 In my view, since the valuation assesses the market value of the subect property, it is relevant to the issues in the appeals although it may well be that little weight can be given to the valuation. It should, therefore, be disclosed. [23] The second category of documents in respect of which the applicant sought further disclosure was in respect of documents flowing between the Gold Coast City Council and the Bucklers offering a resolution of the appeal or stating a position in respect of the appeal. [24] The appeal to the Planning and Environment Court was lodged on 3 July 2007. A copy of the directions made by the Court in respect of that appeal was exhibited to Mr Bale's affidavit and indicates, in part, that the Bucklers were ordered to deliver to the parties a list of disputed issues by 19 December 2008. [25] Mr Cronin advised that no such list had yet been compiled by the respondents or their representatives. There is no other evidence that there are any documents in existence of the type referred to in this part of the application. The respondents have delivered two lists of documents. A list of documents is conclusive and there must be something more than mere suspicion to justify granting relief to a party complaining of incomplete 3 Section 3(2) provides - "However, the unimproved value shall in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act." 4 The application sought disclosure of valuations etc undertaken within the preceding 5 years. Although the respondents submitted that the GST valuation was too dated to be relevant, no point was taken that it had been made outside the timeframe specified in the application. -- 7 of 11 -- 8 disclosure.5 Accordingly, I am not persuaded, on the evidence before me, that there is an objective likelihood that such documents are in existence. [26] The third category of documents concerns all offers, claims, expressions of interest and/or correspondence entered into in respect of the possible acquisition or purchase of the subject site. [27] Mr Marshall's affidavit indicates that he had been informed by Mr Patrick Buckler that the respondents have owned the subject property since the 1970s and that since that time they have received numerous offers to purchase the property although the property has never been offered for sale. None of the offers has resulted in a completed sale of the subject land. [28] Should any documents relating to these offers be disclosed? In McDonald v Deputy Commissioner of Land Tax (NSW)6, the High Court held that an offer by the owner of land to sell the property to a third party at a particular price was not admissible as evidence of the value of the land where the offer had not been accepted. The Court said that the offer was not evidence of what the relevant legislation requires, namely the price which a willing buyer would give, supposing the seller announced reasonable conditions. At most it is evidence of the owner's bona fide belief at that time as to the value of his land. Further, the refusal by the person to whom the offer was made to accept it, even if specifically on the ground of excessive amount, was no more than an expression of his opinion on the point.7 The Court also held that evidence of an offer to purchase land in the vicinity of the plaintiff's land was not admissible as evidence of the value of the plaintiff's land.8 [29] In Goold v Commonwealth of Australia9, Wilcox J of the Federal Court reviewed the authorities. He noted that Isaacs J did not discuss the admissibility of an offer relating to the land to be valued although the case is authority that an offer to sell that land was inadmissible.10 Wilcox J went on to say11 - "Because of matters such as these, even a genuine offer cannot be regarded as direct evidence of value. But it seems to me that, once the court is satisfied about genuineness, an offer by an arms-length party to purchase the land under valuation is something that the judicial valuer ought to take into account in considering the possibility of a sale at a price different from that indicated by conventional evidence, such as an analysis of comparable sales, or of a hypothetical development, or a calculation of the capitalised value of the rental return. How much weight should be given to such an offer is a 5 Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 QdR 276 at 283. 6 (1915) 20 CLR 231. 7 At 237. 8 At 240. 9 (1993) 79 LGERA 407. 10 At 416. 11 At 417. -- 8 of 11 -- 9 question to be determined by reference to the facts of the case. In some cases, the appropriate weight may be minimal; in others considerable. … It is true that, in McDonald, Isaacs J went beyond the matter requiring the Court's determination. Although they were obiter dicta, his comments about offers over other land must be accorded respect. But in considering them, it must be remembered that his Honour was discussing the use of offer evidence as direct evidence of value, not the use of offer evidence as an indication of the existence of a person willing to pay a higher price than market price. Bearing these matters in mind, it seems to me that, despite the absoluteness of Isaacs J's language, he should not be understood to have intended to exclude all offer evidence in all cases." [30] As indicated previously the primary issue for determination in these appeals is the unimproved values of the subject land, that is the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require assuming that the improvements did not exist as at the date of valuation. In Stubberfield v Valuer General12 Carter J said "In Spencer v The Commonwealth (1907) 5 C.L.R. 418 the High Court propounded the proper test for the assessment of land value. It is the price which a willing purchaser would at the date in question have had to pay to a vendor not unwilling, but not anxious to sell. It seems to me that that test finds statutory expression in the Valuation of Land Act. In defining "unimproved value" for the purposes of the Act, it recites that that value is the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require. In simple terms it is synonymous with the market value of the land." [31] Although the High Court in McDonald's case was not dealing with the case of an offer to purchase the subject land, I consider that it follows from the Court's reasoning that an offer to purchase the subject land which does not result in a contract is not evidence of the market value of the land. In the same way as an offer to sell by the owner of the land is not evidence of the price which a willing buyer would give, an offer to buy the subject land is not evidence of the price the willing seller is prepared to accept. I therefore do not consider that any documents relating to such offers are directly relevant to the matters in issue in these proceedings and they are not therefore required to be disclosed by the respondents. That conclusion is not, in my opinion, inconsistent with Wilcox J's remarks in Goold's case. As quoted above, Wilcox J said that a genuine offer cannot be regarded as direct evidence of value although it may be evidence of the possibility of a sale at a price different from that indicated by conventional evidence such as an analysis of comparable sales or of a hypothetical development or a calculation of the capitalised value of the rental return. [32] The second type of document referred to under this heading was any document in relation to the possible acquisition or purchase of the subject site. 12 [1991] 1QdR 279 at 283. -- 9 of 11 -- 10 [33] The evidence relied on by the applicant to establish that such document or documents were in existence was a copy of a letter exhibited to Mr Bale's affidavit. The letter which is dated 11 September 2007 was written by the acting supervisor Operational Services for the Chief Executive Officer. It seems that this letter has come from the Gold Coast City Council although that is not apparent on its face. The letter is addressed to Legalink Pty Ltd and provides information about the fees for a "Building Details" search. The subject of the letter is described as "Devine Limited purchase from Buckler, Real Property description Lot 43 SP 180511. Property situated at: Country Club Drive, Helensvale". [34] The applicant submitted that this letter demonstrated that Devine Limited had purchased Lot 43 (part of the subject land) and that therefore any documents associated with that purchase should be disclosed by the respondents. Mr Marshall's affidavit says that although the respondents were aware that a number of companies, including Devine Limited, had conducted extensive enquiries with respect to the property, the investigations by prospective purchasers did not result in the property being sold. [35] In my opinion a concluded contract to sell the subject land may be evidence of the value of the land even though that contract was not finally completed by transfer of the property to the purchaser. Whether such a contract does provide evidence of value will depend in part on the reasons that the contract was terminated and it may also depend on the terms of the contract itself.13 Prima facie, therefore, such a concluded contract would be directly relevant to the issue of the value of the subject land and should be disclosed. [36] Mr Marshall's affidavit says that the subject property has not been sold. It is not clear whether that means that no concluded contract was ever entered into. The copy letter referred to above does indicate that there may have been a contract in existence in respect of at least Lot 43 of the subject land. The evidence is not, however, sufficient to persuade me that there was such a concluded contract because the letter is written by a third party, there is no evidence as to the source of the information and there is no indication as to whether the alleged contract was in writing. Further, the context in which the letter was written is not clear - for example, the enquiry may well have been part of general searches carried out prior to a proposed purchase. [37] My conclusion is that the only document to be disclosed by the respondents is the document referred to as the valuation obtained for GST purposes with effect from 1 July 2000. [38] The application for a stay of certain orders of this Court will be dealt with following submissions from the parties on the delivery of this decision. 13 See the discussion in Hall and Hedge v Chief Executive, Department of Transport (Land Court, unreported, 14 November 1997) at 76, 77. -- 10 of 11 -- 11 Orders 1. The respondents are ordered to provide forthwith to the applicant a copy of the valuation obtained for GST purposes with effect from 1 July 2000. 2. The application is refused in respect of the other specified documents. CAC MacDonald PRESIDENT OF THE LAND COURT -- 11 of 11 --