Hydrox Nominees Pty Ltd v Valuer-General (No 2)
[2016] QLC 75
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Hydrox Nominees Pty Ltd v Valuer-General (No 2)[2016] QLC 75
- Add to List
Hydrox Nominees Pty Ltd v Valuer-General (No 2)[2016] QLC 75
Hydrox Nominees Pty Ltd v Valuer-General (No 2)[2016] QLC 75
LAND COURT OF QUEENSLAND
CITATION: | Hydrox Nominees Pty Ltd v Valuer-General (No 2) [2016] QLC 75 |
PARTIES: | Hydrox Nominees Pty Ltd (appellant)
v
Valuer-General (respondent) |
FILE NO/s: | LVA28-16 |
DIVISION: | General Division |
PROCEEDING: | Hearing of general application |
DELIVERED ON: | 8 December 2016 |
DELIVERED AT: | Brisbane |
HEARD ON: | Submissions closed 31 October 2016 |
HEARD AT: | Heard on the papers |
MEMBER: | WA Isdale |
ORDER/S: |
|
CATCHWORDS: | REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – NOTICE OF APPEAL – Where respondent seeks orders for disclosure in relation to sale of the land the subject of the appeal Austech Concrete Constructions Pty Ltd v Crown Consultants Pty Ltd & Anor [2013] QDC 272 (12/4015) Farr SC DCJ Hydrox Nominees Pty Ltd v Valuer-General [2016] QLC 56 Lifetime Securities (Australia) Pty Ltd v Formula Properties (Qld) Pty Ltd & Ors [2003] QSC 412, per Mackenzie J Uniform Civil Procedure Rules 1999, r 211 |
APPEARANCES: | A Storie, solicitor, Connor O'Meara for the appellant. SP Fynes-Clinton, instructed by In-house Legal, Department of Natural Resources & Mines for the respondent. |
Background
- [1]The respondent issued a routine valuation of the appellant’s land at Bucasia Road, Richmond, Mackay. The 10.873 ha parcel was valued at $15,000,000 as at 1 October 2014 as a site valuation. The appellant contends for a value of $8,150,000.
- [2]The appellant attempted to amend its notice of appeal, filed in Court on 22 January 2016, to include a claim that the land should be valued on the basis of its unimproved value, rather than its site value. The Court decided that the Notice of Appeal was not able to be amended[1].
- [3]The respondent filed this general application on 21 June 2016 and it has, at the request of the parties, been dealt with after the decision concerning the application to amend the grounds of appeal. The parties have chosen to proceed by way of written submissions, and upon those being received, the Court reserved its decision on 1 November 2016.
- [4]The respondent seeks orders for striking out paragraphs 15, 16, and 17 of the appellant’s particulars which relate to the amendment which the appellant unsuccessfully sought to make to the unimproved value. That matter has been disposed of, as already referred to, so the respondent’s application to strike out particulars relating to it is granted.
- [5]The respondent also seeks orders for disclosure as requested in its letter dated 31 May 2016 and costs of and incidental to this application on the standard basis to be agreed, or failing agreement, to be assessed. It also seeks such further or other orders as the Court sees fit.
The disclosure being sought
- [6]The respondent seeks orders to compel the disclosure requested in its letter dated 31 May 2016 to the appellant’s solicitors. The relevant part of this letter is in the following terms:[2]
“After review of the Appellant’s list of documents and copies provided, the Respondent is of the view that the Appellant has not adequately disclosed documents that are directly relevant to the issues in the proceeding and in their possession or control.
Accordingly the Respondent requests further disclosure of the following documents in relation to the subject property:
- All contracts, including option deeds regarding the acquisition of the subject property on or about 2010 – 2011.
- Detailing of option fees and any other fees or charges associated with the purchase and breakdown of GST component;
- All third party contractual arrangements made concerning the property e.g. fund-through arrangements;
- Development Agreements between Hydrox Nominees Pty Ltd and Laurence Lancini Constructions Pty Ltd dated 05/09/2011;
- All valuation report (sic) including but not limited to due diligence, site value for rating and taxing purposes, asset value, financial reporting, and disposal from pre-purchase dated 2010 to 2015.
- Board papers, reports, approvals, meeting minutes and any other board document related to Hydrox Nominees and Woolworths Limited regarding the site.
- All documents relating to development costs, bill of quantities, estimates and assessments for internal and external site works including but not limited to:
- Construction of Holt Road Roundabout entry;
- Mackay-Bucasia Road works including slip lanes, turning lane, stormwater and drainage;
- Site works including cut, fill, geotechnical studies and reports;
- Private sewer and rising main including negotiations with Bunnings regarding potential to share costs;
- Construction of structural improvements;
- Internal roadworks;
- Additional site works and external works to be completed as part of future stages.
- Costs involved in achieving impact assessable Development Approval, including additional studies, including but not limited to DAs 2007-553 and 2010-24.
- Evidence of who commissioned and paid for Development Approvals. (All Development Approval related materials including studies e.g. traffic, environmental)
- Planning and Environment Court appeal costs relating to the subject’s DA, including who paid appeal costs. Including but not limited to Appeals 2891, 2913 and 12743 of 2009;
- Documents relating to Infrastructure Agreement negotiations regarding the developed site area and balance undeveloped site area;
- Stormwater treatment project budget;
- Documents regarding the additional land purchase cost for off-site stormwater treatment;
- Cost of demolition/disposal of dwelling previously located on Lot 3 SP111688;
- Infrastructure Agreement with Council;
- Full Feasibility reports and calculations, including After Tax Feasibility Summary;
- Project Summary costs to date;
- All leasing information and agreements.”
- [7]Items 1 and 2 have previously been consented to so they do not need to be considered. Items 11, 12, 14 and 15 are, subject to some reservations, not opposed so their resolution poses no difficulty. The other matters remain in issue. It will be convenient to deal with them seriatim, having first set them out completely so that their intent may be appreciated.
The applicable law
- [8]The parties agree that disclosure in this proceeding is governed by Rule 211 of the Uniform Civil Procedure Rules 1999 (UCPR), which provides that:
211 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.
Note— Under the Acts Interpretation Act 1954, schedule 1—
document includes—
- (a) any paper or other material on which there is writing; and
- (b)any paper or other material on which there are marks, figures, symbols or perforations having a meaning for a person qualified to interpret them; and
- (c)any disc, tape or other article or any material from which sounds, images, writings or messages are capable of being produced or reproduced (with or without the aid of another article or device).
- (2)The duty of disclosure continues until the proceeding is decided.
- (3)An allegation remains in issue until it is admitted, withdrawn, struck out or otherwise disposed of.
- [9]There is no dispute between the parties in regard to the meaning of r 211. Whether or not a document is directly relevant to an allegation in issue turns on whether or not it tends to prove or disprove the allegation.[3]
The respondent’s submissions
- [10]The respondent submits that, by its statement of facts, matters and contentions in response filed on 15 April 2016, it has put into issue the analysis and application of a sale of the subject land itself. That was the sale to the present appellant in January 2011. The documents that it seeks relate to what was taken into account by the appellant in making its decision to purchase the land. Likely development costs and returns, it is submitted, are relevant to that decision and will allow the sale to be properly analysed. This will allow the Court to ascertain the value of the land on 1 October 2014. If there are to be arguments about costs of improvements not equating to added value, the respondent submits that they will be a matter for trial and not relevant to disclosure.
- [11]Between the date of sale to the appellant and the valuation date, site improvements and other works were carried out on the subject land.
- [12]In relation to the matters still in issue, items 3 to 17 of the letter dated 31 May 2016, the respondent submits:
3. All third party contractual arrangements made concerning the property e.g. fund-through arrangements.
“The request is limited to documents brought into existence to acquire rights for the development of the site to its highest and best use as agreed. These documents will provide directly relevant evidence about the additional fees (such as option fees, development fees, transfer by direction fees and others) paid by purchaser which in turn affected:
- (i)The purchase price fixed on by the purchaser for the land unimproved; or
- (ii)The value added to the land between sale date and valuation date as development risk for the highest and best use was overcome.”
4. Development Agreements between Hydrox Nominees Pty Ltd and Laurence Lancini Constructions Pty Ltd dated 05/09/2011.
“This class of documents will contain evidence of the costs of the development agreements between the purchaser and Lancini, who was involved (to the knowledge of the respondent’s valuer) in the development of the internal and external works on the site.
Any development fees paid by the purchaser would be additional costs to that of the purchase price of the subject in its unimproved state and therefore relevant to analyse the sale and apply it to derive a (logically, increased) site value of the subject as at valuation date.”
5. All valuation report (sic) including but not limited to due diligence, site value for rating and taxing purposes, asset value, financial reporting, and disposal from pre-purchase dated 2010 to 2015.
“The appellant’s submission is misapprehended as it has failed to grasp the purpose of the request for disclosure.
The appellant, who was the purchaser of the subject property and a publicly listed company, is more likely than not to have relied on a number of documents (including those requested above) prior to the purchase of the site.
This class of documents enables the respondent’s valuer to understand what was in the mind of the purchaser at the time of sale and what documents were relied on to determine the price at which it decided to purchase the site.
The request is not widely or oppressively drawn. It is limited by its terms to documents which in fact existed as at valuation date, which would have been available to a prudent purchaser under ordinary due diligence contractual arrangements, and which would have informed the mind of a Spencer purchaser about matters relevant to the risks and opportunities associated with a purchaser of the land.
The fact that they include expressions of valuation opinion by others does not make them irrelevant. To the extent that the documents disclose (sic) contain statements of fact or opinion going to matters affecting the valuation of the subject land, the respondent can then determine how to prove them up at trial including (but not limited to ) having recourse to s 7 of the Land Court Act 2000.”
6. Board papers, reports, approvals, meeting minutes and any other board document related to Hydrox Nominees and Woolworths Limited regarding the site.
“This class of documents will disclose what was in the mind of the purchaser at the time of sale and what information was relied (sic) to determine the market price and subsequent purchase price of the site.
The request was intended to refer to and should be read as referring to documents relating to “the purchase of the site”, rather than “the site”. That refinement does not change the nature of the request, it merely makes explicit what was already implicit, as documents unrelated to the purchase decision are self-evidently irrelevant.”
7. All documents relating to the development costs, bill of quantities, estimates and assessments for internal and external site works including but not limited to:
- Construction of Holt Road Roundabout entry;
- Mackay-Bucasia Roadworks including slip lanes, turning lane, stormwater and drainage;
- Site works including cut, fill, geotechnical studies and reports;
- Private sewer and rising main including negotiations with Bunnings regarding potential to share costs;
- Construction of structural improvements;
- Internal roadworks;
- Additional site works and external works to be completed as part of future stages.
“This class of documents discloses the costs incurred by the unimproved purchaser or related entitles to bring the sale property up to the point as it existed at the date of valuation as a site that was:
- (i)internally, site improved; and
- (ii)externally, provided with necessary external infrastructure (required to be provided by the purchaser/developer), to permit its immediate development with non-site improvements for the agreed highest and best use.”
8. Costs involved in achieving impact assessable Development Approval, including additional studies, including but not limited DAs 2007-553 and 2010-24.
- Evidence of who commissioned and paid for Development Approval. (All Development Approval related materials including studies e.g. traffic, environmental)
“This class of documents discloses costs which are relevant to the added value created between sale date and valuation date on the same basis as those in the previous category.
As purchased, the site required an impact assessable, material change of use approval before development for the highest and best use could commence. The purchaser on valuation date would not need to incur those costs again, and the vendor would rationally seek to recover (at least) the amount of cost so incurred as part of the sale price on valuation date, as it would have been imprudent to incur those costs unless the outcome added value for the highest and best use. The development approval was required in order to achieve that use.”
9. Planning and Environment court appeal costs relating to the subject’s DA, including who paid appeal costs. Including but not limited to Appeals 2891, 2913 and 12743 of 2009.
“As at the valuation date, these costs had been incurred and were known.
As for the preceding category, the vendor would rationally seek to recover (at least) the amount of cost so incurred as part of the sale price on valuation date, as it would have been imprudent to incur those costs unless the outcome added value for the highest and best use. The development approval was required in order to achieve that use.”
10. Documents relating to Infrastructure Agreement negotiations regarding the developed site area and balance undeveloped site area.
“Given the appellant does not object to an order for the disclosure of the infrastructure agreement referred to in paragraph 40 of its submissions, the respondent does not press this request further.”
11. Stormwater treatment project budget.
“The appellant does not object to an order for the disclosure of this class of documents.”
12. Documents regarding the additional land purchase cost for off-site stormwater treatment.
“The appellant does not object to an order for the disclosure of this class of documents.”
13. Cost of demolition/disposal of dwelling previously located on Lot 3 SP111688.
“This class of (sic) discloses an aspect of the actual development costs of the subject site (other than for non-site improvements) as a Masters store incurred before the valuation date. As the subject sale was purchased in its unimproved state, it was required to demolish or dispose of the dwelling before the development could commence.
The costs of the demolition or disposal are an essential part of the proper analysis of the sale of the subject, which was unimproved for practical valuation purposes because the existing improvements added no value for the highest and best use. The demolition costs were necessarily incurred by the purchaser in order to achieve the highest and best use and, thus formed part of the true cost paid to acquire a site suitable for development.”
14. Infrastructure Agreement with Council.
“The appellant does not object to an order for the disclosure of this class of documents.”
15. Full Feasibility reports and calculations, including After Tax Feasibility Summary.
“The respondent understands that the appellant has no objection to orders requiring disclosure of documents in this class.”
16. Project summary costs to date.
“Given the appellant does not object to an order for disclosure of documents as stated in paragraphs (11) and (12) above, the respondent no longer seeks disclosure of this class of documents.”
17. All leasing information and agreements.
“Given the appellant does not object to an order for the disclosure of documents as stated in paragraph (14) and further responses above, the respondent no longer seeks disclosure of this class of documents.”[4]
- [13]The respondent submits that its application for disclosure relates only to documents which are relevant to properly analysing and applying the sale of the (relevantly unimproved) subject as at the date of sale to infer a value for the site improved (and “development approved”) subject as at the date of valuation.
The appellant’s submissions
- [14]The appellant submits that the respondent is directing attention to three areas:
- Its decision to buy the land in January 2011 in an effectively undeveloped condition;
- The site works which it conducted; and
- The site’s development potential on 1 October 2014, the date of valuation.
- [15]It is submitted that the respondent has only put in issue the extent of works that would be required on the vacant, undeveloped portion of the land, as distinct from what was done on the part that has been developed.
- [16]It is also submitted that the amount paid in the past to carry out site works so as to bring the land to its condition on the date of valuation is not relevant to what a hypothetical prudent purchaser would pay for the land on 1 October 2014.
- [17]The particulars of the Grounds of Appeal state that the land was improved by a Masters home improvement store and associated access and car parking, which covers part of the land. The balance of the land is vacant and will require significant earthworks in order to be utilised for the approved use as a homemaker centre. It is surrounded by sugar cane fields on the outskirts of Mackay.
- [18]The appellant has considered each of the numbered categories of documents in respect of which disclosure is sought. It submits:
- The category is too broad, relating generally to the land, and is not limited in time. It is not shown how this class of documents would tend to prove or dispose an allegation in issue. It is onerous and oppressive.[5]
- This post-dates the sale in January 2011 and it is not shown how it is relevant to proof of an allegation.
- This is irrelevant as it amounts to an opinion of a valuation expert not called in these proceedings.
- As per 3 above.
- The cost of site works in existence at the date of valuation has not been put in issue and is not relevant.
- This is prior to the valuation date and would not be relevant to the hypothetical prudent purchaser at the valuation date.
- These appeals were commenced in 2009 and concluded on 10 June 2011, well before the valuation date and not long after the sale to the appellant. It is not shown how this class of documents would be relevant to the proof of an allegation.
- It is not shown how this would be relevant to proof of an allegation.
- It is not precisely clear what this request relates to. To the extent it relates to the Farr Engineers documents referred to in the disclosed Project Budget for Stormwater Works of 14 September 2015, which appears to be indicated by the (sic) paragraph 40 of the Respondent’s submissions, the Appellant has no objection to orders requiring those documents to be disclosed, to the extent those documents are in the Appellant’s possession or under its control.
To the extent that the request is more broad than that, the request fails to identify with sufficient particularity what else is being sought.
- To the extent this is a reference to the land purchase cost identified in the disclosed Project Budget for Stormwater Works of 14 September 2015, the Appellant has no objection to orders requiring the documents to be disclosed, to the extent they are in the Appellant’s possession or under its control.
To the extent that it is a reference to something else, the Respondent has failed to sufficiently identify the basis upon which it is discoverable.
- This was not put in issue and is not relevant.
- It is not precisely clear what this request relates to. To the extent it relates to the infrastructure agreement referred to in the disclosed CBRE valuation of 29 June 2014, which appears to be indicated by the (sic) paragraph 39(a) of the Respondent’s submissions, the Appellant has no objection to orders requiring that documents to be (sic) disclosed, to the extent it is in the Appellant’s possession, or under its control.
To the extent that the request is more broad than that, the request fails to identify with sufficient particularity what else is being sought.
- There is no objection to orders requiring disclosure of documents of this class.
- This has not been put in issue and is not relevant.
- As acknowledged by the Respondent, leases are to be excluded from consideration in a Site Valuation.
The request is drawn broadly and is unlimited in respect of time and will clearly include documents that have no actual or potential relevance to allegations in issue in the proceeding
The Respondent has otherwise failed to identify how this class of documents tends to prove or disprove an allegation in issue in the proceeding.”
- [19]The appellant submits that orders should be made for disclosure in relation to items numbered 11, 12, 14 and 15. Apart from these matters, the application, it is submitted, should be refused.
Resolution
- [20]Each of the numbered categories will now be dealt with:
3.
The assertion is that the sale of the subject land to the appellant on January 2011 is of assistance in determining its value on the relevant date, 1 October 2014. The question is whether this class of documents is directly relevant to value. The request is limited to documents brought into existence to acquire rights for the development of the site. When so limited, which only became clear in the respondent’s reply submissions, it is necessarily time limited by reference to the sale in 2011. The request is therefore not so broad as to be oppressive and is directly relevant as required by r 211. Disclosure of these documents is ordered.
4.
This class of documents will be relevant to ascertaining the site value attributable to the sale. The site value may, when this class of documents is considered, be different from the sale price so this material would be directly relevant to the applicability of the sale. It cannot be excluded simply if it relates to the expenses after the sale date so long as it relates to the usefulness of the sale in determining site value on the date of valuation. Disclosure of these documents is ordered.
5.
Valuation reports which will be the opinions of experts who are not to be called in the present proceeding are not relevant so their disclosure will not be ordered. Relevant facts which they might contain are likely to be sourced from the material which is required to be disclosed.
6.
In reply submissions, this request was limited to “the purchase of the site”. When so limited, it is not oppressive or irrelevant and will be directly relevant to ascertaining the applicability of the sale in determining the value on the valuation date. This will allow the purchaser’s decision to purchase the land to be examined as to the matters which influenced it and affected the price paid. This disclosure is ordered to be provided.
7.
The objection that the cost of the site works has not been put in issue is not persuasive. The disclosure sought goes beyond cost and includes the works done, which are directly relevant to the usefulness of the sale. The reasonableness of these costs would also be directly relevant to the use of the sale. This disclosure is ordered.
8.
It is not a persuasive objection that such development approvals as exist pre-date the valuation date and would not be relevant to a prudent purchaser. They may be shown to have added value to the land and would be directly relevant to the use of the sale. This disclosure is ordered.
9.
The appeals were concluded on 10 June 2011. The submission that the vendor would seek to recover the costs incurred, as part of the sale price, is not of direct relevance to the use of the sale. This is because the approvals, where appeals were concluded after the purchase date in January 2011[6], have not been shown to be inevitable at the purchase date; on the material provided to the Court. The costs of the appeals have therefore not been shown to be directly relevant to the usefulness of the sale. The costs incurred may not have been recoverable if the appeals were unsuccessful. Accordingly, this disclosure will not be ordered.
10.
The respondent does not now persist with this request so it is not necessary to determine it.
11.
This request has been clarified to relate to the Farr Engineers documents referred to in the disclosed Project Budget for Stormwater Works of 14 September 2015. There is no objection to this to the extent that those documents are in the appellant’s possession or under its control so this disclosure is ordered.
12.
This request has been clarified to refer to the land purchase identified in the disclosed Project Budget for Stormwater Works of 14 September 2015. There is no objection to this to the extent that those documents are in the appellant’s possession or under its control so this disclosure is ordered.
13.
This is submitted to have not been put in issue and to be irrelevant. This is not persuasive as the costs of removing the dwelling are an essential part of the proper analysis of the sale so are directly relevant to its usefulness. This disclosure is ordered.
14.
This request has been clarified to relate to the infrastructure agreement referred to in the disclosed CBRE valuation of 29 June 2014. There is no objection to this to the extent that those documents are in the appellant’s possession or under its control so this disclosure is ordered.
15.
There is no objection to orders requiring disclosure of documents of this class so this disclosure is ordered.
16.
The respondent does not now persist with this request so it is not necessary to determine it.
17.
The respondent does not now persist with this request so it is not necessary to determine it.
Costs
- [21]The respondent has sought an order that its costs be paid by the appellant on the standard basis, to be agreed or, failing agreement, to be assessed. The parties have each achieved some success so costs will be reserved so that submissions may be made at the conclusion of the substantive proceeding.
Orders:
- Particulars 15, 16 and 17 of the grounds of appeal, which relate to an unimproved valuation, are struck out.
- The appellant is to provide disclosure in the matters and to the extent described in these reasons within 15 business days of the date of this decision.
- Costs are reserved.
WA ISDALE
MEMBER OF THE LAND COURT
Footnotes
[1]Hydrox Nominees Pty Ltd v Valuer-General [2016] QLC 56.
[2]Exhibit ‘PSP008’ to Affidavit of Predev Shivneil Prasad filed 21 June 2016.
[3]Austech Concrete Constructions Pty Ltd v Crown Consultants Pty Ltd & Anor [2013] QDC 272 (12/4015) Farr SC DCJ.
[4]Respondent’s Reply Submissions filed 31 October 2016.
[5]Lifetime Securities (Australia) Pty Ltd v Formula Properties (Qld) Pty Ltd & Ors [2003] QSC 412, per Mackenzie J.
[6]Respondent’s submissions filed on 8 September 2016, para 25. Appellant’s submissions filed on 24 October 2016, para 6.