Caloundra City Council v McPherson [2006] QLAC 10 (2006) 27 QLCR 23

LAND APPEAL COURT OF QUEENSLAND CITATION: Caloundra City Council v McPherson [2006] QLAC 10 PARTIES: Caloundra City Council (appellant) v. Graham Eric McPherson and Judith Helen McPherson (respondents) FILE NO: LAC2005/1214 DIVISION: Land Appeal Court of Queensland PROCEEDING: Application to admit further evidence on appeal ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 8 March 2006 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBERS: Philippides J Mr J J Trickett Mr R S Jones ORDER: The application is dismissed. CATCHWORDS: Practice and procedure – Appeal to Land Appeal Court – Application to admit further evidence – Statutory preconditions – Grave injustice – Adequate reason – Land Court Act 2000, s.56 APPEARANCES: Mr M Gynther for the appellant Mr D Gore, QC for the respondents SOLICITORS: Garland Waddington for the appellant Griffiths Parry for the respondents -- 1 of 8 -- 2 [1] This is an application by the Caloundra City Council under s.56(2) of the Land Court Act 2000, for leave to admit new evidence in its appeal against the decision of the Land Court of 26 August 2005. Background [2] On 12 December 2003, the Caloundra City Council (the appellant) resumed land described as Lot 10 on Survey Plan 107372, with an area of 73.59 hectares (the subject land) from Graham Eric and Judith Helen McPherson (the respondents). That land, situated about 7 kilometres north-west of the business centre of Caloundra, was used for grazing purposes, being largely flood prone except for a house site. The learned Member of the Land Court found that an area of 66.49 hectares was flood prone land (including 50 hectares pasture improved) and that an area of 7.1 hectares was above the Q100 flood level. [3] The principal issues in the Land Court were the comparability of sales and the valuation methodology to be adopted. After considering the sales relied on by the valuers, Mr Henderson for the respondents and Mr Carrick for the appellant, the learned Member concluded that Mr Henderson's Sales 1 and 2 (the Leacy sales), should be used to value the subject land at the relevant date because, of all of the sales evidence, they were considered to be the most comparable with the subject land. [4] Those two sales were of three adjoining surveyed parcels of land situated opposite the subject land which had been sold by the Leacy family. Sale 1, a single lot of 86.66 hectares (the Brett Leacy sale), sold on 3 March 2004. It is described by Mr Henderson as "a long parcel of flood prone grazing land with a northern frontage to the Mooloolah River." Mr Henderson analysed the sale to show an overall value of $25,387 per hectare. [5] Sale 2, of 127.902 hectares (the Ken Leacy sale), comprised two adjoining lots of largely flood prone grazing land, also with frontages to the Mooloolah River, which sold on 2 March 2004. After analysing that sale, Mr Henderson attributed $27,500 per hectare to the 117.902 hectares of flood prone grazing land and for the flood-free area of 10 hectares, he derived a value of $151,270 per hectare. [6] Although Mr Carrick, the appellant's valuer, had analysed the two Leacy sales, he did not rely on them. He did not consider that they were arm's length transactions within the meaning of the test in Spencer v The Commonwealth (1907) 5 CLR 418, because of the circumstances in which those sales took place. The background to those sales was explained in the decision of the Land Court and need not be repeated here. There was no appeal against the learned Member's finding that the Leacy sales were the most comparable sales and should be applied. -- 2 of 8 -- 3 [7] In his analysis of the Leacy sales, Mr Carrick derived a value of $23,529 per hectare for the 84.661 hectares of flood-affected grazing land and uncleared forest on the Brett Leacy land. In his analysis of the Ken Leacy sale, Mr Carrick attributed $23,529 per hectare to the 114.422 hectares of flood-affected grazing land and uncleared forest, directly applying his analysis of the Brett Leacy sale. This showed a value of $153,024 per hectare for what he had calculated to be 13.48 hectares of land above the Q100 level. [8] After further consideration of the evidence, the learned Member determined compensation at [132] in the following manner: "For the above reasons, and relying primarily on the Leacy sales, the subject's value is:  7.1 hectares flood free land at $153,000/ha $1,086,300  66.49 hectares flood prone land at $23,500/ha $1,562,515 which includes  50 hectares pasture improved grazing land at $1,000 extra/hectare $50,000 $2,698,815 Adopt $2,699,000" [9] On 23 September 2005, the Council appealed to the Land Appeal Court against the decision of the Land Court. However, the appellant did not appeal the findings that the Leacy sales should be used in the valuation of the subject land. Instead, it challenges the extent or degree of comparability of those sales when used to value that land. In the first ground of appeal, it is contended that the Land Court should have found that the Leacy land had advantages not enjoyed by the subject land, including an "advantageous river frontage". [10] The appellant brings this application to admit new evidence contained in the affidavit of Mr Carrick, sworn on 22 December 2005, regarding certain attributes of the Leacy lands which are not enjoyed by the subject land and which were not raised in the Land Court. Mr Carrick contends that those attributes enhance the value of the Leacy land when compared with the subject land, such that the rate per hectare derived from the Leacy sales would support a lower rate per hectare than that determined by the Land Court. [11] In the Court below, the learned Member adopted a piecemeal approach to the valuation, rather than an overall rate per hectare approach, because of the significant difference in value between the flood prone land and the flood-free land [119]. The learned Member adopted $23,500 per hectare (very similar to the value Mr Carrick derived from the Brett Leacy sale) for the flood prone land and $153,000 per hectare for the flood-free land, in determining the value of the subject land. The learned Member mentioned that she could see no reason to draw a distinction between the value of the flood prone land on the -- 3 of 8 -- 4 subject land as compared with that on the Ken Leacy sale, because they appeared on the flood maps to be subject to a similar degree of flooding [127]. The Evidence sought to be admitted [12] In his affidavit sworn on 22 December 2005, Mr Carrick states that because of the circumstances surrounding the Leacy sales he had concluded that they did not conform to the test in Spencer's case and he did not apply those sales. Having come to that conclusion, he states "I did not analyse the attributes" of the Leacy sales in any detail or provide a "detailed qualitative analysis of the characteristics and attributes of the Leacy sales." [13] Mr Carrick's affidavit seeks to establish that –  the Leacy sales have extensive frontage to the Mooloolah River;  the river is accessible for boating and fishing from the Leacy properties;  the river is navigable to its mouth;  the river water is suitable for watering cattle;  the tree-lined river frontage has picturesque and aesthetic values;  these attributes enhance the value of the Leacy land when compared to lands, such as the subject land, which does not have river frontage;  these attributes of the Leacy land would support the application of $20,000 per hectare (rather than $23,500 per hectare found by the Land Court) for the flood prone area of the subject land. [14] The appellant contends that if admitted, this further evidence of Mr Carrick will be relevant to the first ground of appeal concerning the superiority of the flood prone area of the Leacy land compared with the flood prone area of the subject land. The Relevant Legislation [15] Section 56 of the Land Court Act 2000 provides: (1) An appeal in the Land Appeal Court must be decided on the evidence on the record of the proceeding in which the decision appealed against was made. (2) However, the court may admit new evidence if – (a) the court is satisfied admission of further evidence is necessary to avoid grave injustice; and (b) the party applying to have further evidence admitted gives the court an adequate reason for the evidence not previously being given; and (c) application to have further evidence admitted is made before the hearing of the appeal." -- 4 of 8 -- 5 The Arguments [16] In this case there is no argument regarding the tests to be applied for the admission of new evidence. To satisfy the requirement of s.56(2)(a), it is well established that an applicant must demonstrate that there exists a real prospect that the new evidence will affect the decision of this Court on the issue and only if the evidence goes that far can it be said that to proceed to a contrary result without it would result in a grave injustice: Barns v Department of Transport (1995) 15 QLCR 544 at 549. Here, the evidence sought to be admitted is intended to demonstrate the superiority of the flood prone area of the Leacy sale properties over the flood prone area of the subject land. [17] Counsel for the appellant, Mr Gynther, submits that by not having that evidence the Land Court was placed in a position where it reached an incorrect result in the rate per hectare which was applied to the flood prone area. He argues that if the proposed evidence was admitted, there was a real prospect that the rate per hectare would be reduced. [18] It is submitted that the learned Member may well have been misled by the evidence of Mr Henderson as to whether the river frontage was an advantage because Mr Henderson contended that the Leacy lands with their river frontage flooded before the subject land. It is argued that Mr Henderson later conceded that the flood maps showed no difference in the flooding on the Leacy lands and on the subject land. [19] As against that, Mr Gore QC, counsel for the respondents, argues that the Land Court had sufficient evidence to enable the learned Member to make the findings which were made. There was evidence before the Court of Mr Carrick's analyses of the two Leacy sales, which demonstrated a lower value per hectare for the flood prone land than Mr Henderson's analyses of the same two sales. [20] The appellant argues that Mr Carrick did not rely upon his analyses of the Leacy sales for reasons which have been explained, and his analyses were only tendered during the cross- examination of Mr Henderson in order to refute that valuer's analysed value of the flood prone land. However, Mr Gynther submits, there is a distinction between analysing the sale and analysing the attributes of the sale lands compared with those of the subject land. It is argued that Mr Carrick did not address those attributes, because he had not applied the sales to value the subject land. [21] In our view, it cannot be said that there is a real prospect that if the new evidence was admitted it would affect the decision. We appreciate that there is a distinction between analysing the Leacy sales to arrive at a value for the flood prone land and not applying those values, and weighing the relative attributes of the sales and subject land. However, in our view, the findings made by the learned Member below were open on the evidence. -- 5 of 8 -- 6 It is clear that she was aware that the sales had river frontage, while the subject land did not. It was also open to her on the evidence to conclude that Mr Henderson was correct in discounting the advantages of river frontage, because that land flooded before lands further from the river. While the flood maps indicate the extent of flooding on the various lands, they do not indicate the timing of the flooding. Without evidence to the contrary, it was certainly open to the learned Member to conclude that the sale lands would flood before the subject land. The evidence sought to be admitted would not change that. [22] Therefore, in our view, it has not been demonstrated to our satisfaction that there exists a real prospect of the new evidence affecting the decision. Therefore, it cannot be said that admission of the further evidence is necessary to avoid grave injustice. [23] As for the "adequate reason" pre-condition in s.56(2)(b) for the evidence not being given in the Land Court, Mr Gynther submits that Mr Carrick's affidavit explains that he did not include the proposed evidence in his report, because his professional focus was directed to the sales which he thought should be used for comparison with the subject land. There was, he contends, a difference between analysing the background to the Leacy sales and applying them, which would require an adjustment to the analysed rate per hectare, because of the attributes of the sales. As Mr Carrick did not apply the sales, Mr Gynther argues, he did not have to consider their attributes when compared with the subject land. [24] Mr Gynther contends that the evidence of Mr Carrick's analysis of the Leacy sales was given only to refute Mr Henderson's evidence as to the value of the flood prone land. Mr Carrick had not suggested that his analysed rate per hectare should be applied directly to the subject land. [25] Mr Gore QC submits that the new evidence sought to be introduced could have been obtained before the hearing in the Land Court. Indeed, most of it appears to be knowledge which Mr Carrick already had or, at the very least, would have been able to be obtained with only reasonable effort and diligence. [26] In our view, the appellant has not been able to establish the second pre-requisite of s.56(2) that adequate reason be provided as to why the evidence was not given in the Land Court. For the following reasons, we are satisfied that the evidence sought to be admitted was within the knowledge of Mr Carrick. If it was not, he certainly could have found out. [27] The attributes sought to be put in evidence are that the sales had extensive frontage to the Mooloolah River. That is already in evidence. Secondly, it is sought to advance evidence that the river is accessible for boating and fishing from the Leacy lands. It is absolutely clear from Mr Carrick's own affidavit that that was already known to him at the time of the trial. Thirdly, it is sought to advance evidence that the Mooloolah River is navigable -- 6 of 8 -- 7 from the Leacy lands to its mouth. Mr Carrick has been undertaking valuation work for the Leacys for many years. In his affidavit, he states that he was recently informed by a tour operator that the river was navigable to that extent. However, in our view, it would be unusual if Mr Carrick did not realise that the river was navigable. Fourthly, it is sought to advance evidence that the river frontage of the Leacy properties is suitable for watering cattle. Once again, it would be most unusual if Mr Carrick was not aware of that attribute and it is certainly something that he could easily have ascertained. After all, Mr Carrick deposes to the fact that in the process of preparing his report he had inspected the Leacy lands. [28] Finally, it is sought to advance evidence that the tree-lined Mooloolah River frontage of the Leacy properties provides picturesque and aesthetic values not enjoyed by the subject land. Once again, that is something which would have been within the knowledge of Mr Carrick. [29] Mr Gore QC argues that if a party chooses to conduct the case on one basis, it would be difficult for it to show that the exclusion of evidence that was open to it in the Land Court, would result in a grave injustice. It would be even more difficult to establish an "adequate reason" for the evidence not being given. In this case, the appellant did run an alternative case; Exhibits 20 and 22 were produced in cross-examination of Mr Henderson as an alternative to the values he derived from the Leacy sales. The implication is that if the appellant loses its primary point regarding the Leacy sales, these are the figures that should be applied. [30] The appellant conducted its case on one basis without recourse to the evidence now sought to be relied upon, and lost. The learned Member found that Mr Carrick's approach to the Leacy sales was wrong. It is not open to the appellant to now seek to conduct its case on another basis by accepting that ruling, but contending that the learned Member was wrong in the application of those sales to the subject land for reasons which were available to its witness at the Land Court hearing. [31] It is abundantly apparent that this evidence was not presented to the Land Court because the appellant had run a case in that Court that the Leacy sales should not be applied for the reasons given by Mr Carrick. However, the learned Member found otherwise, that those were the most comparable of all the sales evidence. The appellant does not challenge that finding, but now says that the learned Member applied a value which was excessive in comparison to the analysed values derived from the Leacy sales and now wants to have fresh evidence admitted to demonstrate those advantages. In other words, -- 7 of 8 -- 8 the appellant failed to countenance a position where its approach would be rejected and did not fully address an alterative position if that was found against. [32] Notwithstanding the approach taken by Mr Carrick to the Leacy sales, it was open for the advantages of the sales when compared with the subject land and the consequences thereof to be put to Mr Carrick, and the Land Court urged not to directly apply those sales. However, having chosen to conduct its case that way, it is now very difficult for the appellant to show adequate reason why the evidence sought to be admitted was not given in the Land Court below. For the appellant to succeed in having the fresh evidence admitted, it must demonstrate adequate reason for not leading it below. In our opinion, it has not done so and this application should be dismissed. Order The application is dismissed. We shall hear submissions as to costs. PHILIPPIDES J JJ TRICKETT PRESIDENT OF THE LAND COURT R S JONES MEMBER OF THE LAND COURT -- 8 of 8 --