Atkinson & Atkinson v Ebonstone Pty Ltd & Ors [1992] QCA 10

IN THE COURT OF APPEAL [1992] QCA 010 SUPREME COURT OF QUEENSLAND No. 85 of 1991 Before the Court of Appeal The President Mr Justice McPherson Mr Justice Thomas BETWEEN: JAMES LESLEY ATKINSON and MERLE ATKINSON (Plaintiffs) Appellant - and - EBONSTONE PTY. LTD. (First Defendant) Respondent JUDGMENT - THE COURT Delivered the 3rd day of March 1992 MINUTE OF ORDER: CATCHWORDS PRACTICE - PLEADING - Appeal from order striking out claim for declarations against respondent that rental determination invalid - matter sufficient to establish valuer negligent - whether any basis for claims shown in pleading - whether court ought to interfere with order below. Counsel: J. Curran for the Appellants P. Applegarth for the Respondents Solicitors: Cranston McEachern & Co for the Appellants O'Shea Corser and Wadley for the respondents. Hearing dates: 20 and 21 February, 1992 -- 1 of 6 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND No. 85 of 1991 BETWEEN: JAMES LESLEY ATKINSON and MERLE ATKINSON (Plaintiffs) Appellant - and - EBONSTONE PTY. LTD. (First Defendant) Respondent JUDGMENT - THE COURT Delivered the 3rd day of March 1992 The appellants leased premises from the respondent and, by the terms of their agreement, the rent payable (in the circumstances which have occurred) is the current rental value determined by a valuer appointed by the President of the Australian Institute of Valuers, Queensland Division. The lease contains various provisions concerning the basis upon which the current rental value must be determined by the President's Valuer, as he is described, and provides that he is to "act as an expert not as an arbitrator and his decision shall be final and binding on both parties ... ". The appellants contend that the valuation carried out by the Presidents' Valuer was performed negligently and that, in consequence, the appellants have "suffered loss and damage being the excess in rent attributed to the subject premises ... over and above the current rental value ...". A District Court action has been commenced by the appellants against the President's Valuer seeking damages for negligence. Somewhat inconsistently, unless the claims are intended to be pursued in the alternative, the appellants have joined in the District Court action a claim against the respondent lessor for declarations that the "purported determination of the valuer is invalid" and that the current rental value is a sum nominated by the appellants. No -- 2 of 6 -- apparent basis is established for a further claim for relief under sub-s 124(2) of the Property Law Act 1974 (as amended) which is mentioned in the District Court Plaint. A Judge of the District Court struck out the appellants' claim against the respondent and the appellants have appealed to this Court. Notwithstanding their contention that the President's Valuer's determination is invalid, the appellants continue to insist that the lease is still on foot, It was not explained how the lease survived in the absence of a binding provision as to rent. Perhaps the answer might be temporarily found in provisions in the lease which provide what rental is to be paid on an interim basis while the machinery for the determination of rental is implemented. However, at best for the appellants, that assumes that the means remain for a rental determination under the lease. Each stage of the process leading to such a conclusion poses considerable difficulty for the appellants. It is sufficient to note the following. The appellants must first succeed in establishing their claim to have the rental determination made by the President's Valuer declared invalid or at least set aside. At its broadest, the contention upon which this claim was grounded was that it would be sufficient to establish that the President's Valuer was negligent, as asserted against him in the appellants' pleading. Modern authority does not support such a view: see, for example, Legal & General Life of Australia Ltd. v. A. Hudson Pty. Ltd. (1985) 1 NSWLR 314, 335-336; Wickham Properties Pty. Ltd. v. Astor Motel Pty. Ltd. (1991) Q Conv. R. 54-391; Crusader v. Santos (Full Court of the Supreme Court of South Australia, unreported, No.2635 of 1989, 18 June 1989. Some complications may be able to introduced into the consideration of such issues. For example, s57 of the Property Law Act forms an important part of the appellants' argument. Essentially, it seemed to be asserted that s57 applies to the President's Valuer's determination, which was therefore not "final and binding" as the lease states, but only "prima facie evidence" of the current rental value and -- 3 of 6 -- 3 thus of the rent agreed to be paid. However, even if a further assumption favourable to the appellants be made that s57 is applicable, it does not seem to lead to where the appellants seek to arrive. The only advantage of s57 to the appellants seems to be as a means for them to establish by evidence that the President's Valuer's determination is invalid or should be set aside. Their fundamental claim is that the President's Valuer's determination is invalid, not that it is "prima facie evidence". There is nothing to indicate that s57 is needed if a sufficient basis for invalidity or setting aside is properly put in issue. Conversely, nothing in s57 widens the grounds upon which such a claim might be based consistent with Legal & General Life of Australia Ltd v. A. Hudson Pty. Ltd. and the other cases referred to above. According to Legal and General Life of Australia Pty. Ltd. v. A. Hudson Pty. Ltd., the appellants must assert and prove that the President's Valuer's determination was not in accordance with their lease with the Respondent. The appellants have not pleaded that the lease contained an implied term which would have been breached if the President's Valuer's determination has been made negligently, and Legal & General Life of Australia Ltd. v. A. Hudson Pty. Ltd. at p.336 D-F is inconsistent with such a conclusion. Although some allegations made by the appellants against the President's Valuer might perhaps be able to be converted to suitable allegations against the respondent, no attempt has been made to do so to this point. It might be that there is some wider basis upon which the appellants can attack the President's Valuer's determination if it is what has been described as a "speaking valuation": see, for example Mayne Nickless Limited v. Solomon (1980) Qd.R.171. It is unnecessary to pursue that question at this point since again no such allegation is pleaded. Nor is there any allegation of any other ground, such -- 4 of 6 -- 4 as fraud or collusion, upon which the President's Valuer's determination might conceivably be attacked on a recognized basis. Even if the appellants were to overcome the first hurdle and set up a case which could lead to a decision that the President's Valuer's determination is invalid or should be set aside, their difficulties are not at an end. As stated above, the present claim seeks not only to invalidate the President's Valuer's determination but also to maintain the lease despite the absence of any agreed rent. The claim as pleaded seeks to have the current rental value - and thus the rent agreed to be paid - determined by the Court. However, the appellants were unable to suggest any basis upon which the District Court could perform such a function. Reference was then made to the possibility that the appropriate order might be that the respondent join with the appellants in having a further determination of the current rental value. However, the appellants were unable to point to any authority to indicate that such a course was possible in the District Court or otherwise and there seem to be problems with such an approach. Even if the contractual provisions relating to the determination of the rent payable by the appellants to the respondents have not been fully effectuated, at least validly, those provisions have been implemented at least to the point where the President's Valuer has been appointed and has become, in effect, a named person agreed by the parties to determine the current rental value. The appellants were unable to suggest how it was possible to retreat beyond that point or, if that could not be done, how the President's valuer could be obliged to perform a further determination of current rental value. In any event, no such case is presently pleaded. In all the circumstances, this Court should not interfere with the order made in the District Court to strike out the appellants' claim against the respondent. The appellants are not precluded from a subsequent attempt to rejoin the respondent in the District Court action or -- 5 of 6 -- 5 from bringing a further action against the respondent if they are able to formulate a claim in accordance with the law. The order of the Court is that the appeal be dismissed with costs. -- 6 of 6 --