AMP Henderson Global Investors Limited and Others v Valuer General; AMP Henderson Global Investors Limited v Valuer General

APPLICANT AMP Henderson Global Investors Limited (ABN 59 001 777 591)

RESPONDENT The Valuer General FILE NUMBER(S) : 31066 of 2002; 31069 of 2002 CORAM: Cowdroy J KEY ISSUES: Valuation of Land :- Costs - proceedings conducted before enactment of Pt 16 Div 2 r 4 of the Land and Environment Court Rules 1996 Corporations Act 2001 (Cth), s 256B Land and Environment Court Act 1979, s 69(2) LEGISLATION CITED: Land and Environment Court Rules (Amendment No 8) 2003 Land and Environment Court Rules 1996, Pt 16 Div 2 r 4 Superannuation (Resolution of Complaints) Act 1993 (Cth), s 36, s 37 Valuation of Land Act 1916, s 37, s 40(2) AMP Henderson Global Investors Limited and Others v Valuer General; AMP Henderson Global Investors Limited v Valuer General [2004] NSWLEC 19; Galvin v Forests Commission of Victoria [1939] VLR 284; Gee v Port Stephens Council (2003) 131 LGERA 325; Kibble v Deputy Federal Commissioner of Land Tax (1920) 27 CLR 316; CASES CITED: Maurici v Chief Commissioner of State Revenue (2002-2003) 212 CLR 111; Maurici v Chief Commissioner of State Revenue; Chief Commissioner of State Revenue v Maurici (2000-2001) 51 NSWLR 673; Maurici v Chief Commissioner of State Revenue and Anor (No 5) (2001) 119 LGERA 395; Maxwell v Murphy (1956-1957) 96 CLR 261; Murray Publishers Pty Limited v Valuer-General (1993) 84 LGERA 13; Perpetual Trustee Co Ltd v Valuer-General (2001) 115 LGERA 287 DATES OF HEARING: 03/06/2004 EX TEMPORE 06/03/2004 JUDGMENT DATE :

APPLICANT Ms Jayne Jagot (Barrister)

SOLICITORS Mallesons Stephen Jaques LEGAL REPRESENTATIVES: RESPONDENT Mr J. Maston (Barrister)

SOLICITORS Crown Solicitor

JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 31066 of 2002 31069 of 2002

3 June 2004 31066 of 2002 AMP Henderson Global Investors Limited (ABN 59 001 777 591) First Applicant 255 George Street Investment A Pty Limited (ABN 68 064 751 471) Second Applicant 255 George Street Investment B Pty Limited (ABN 81 064 751 588) Third Applicant v The Valuer General Respondent 31069 of 2002 AMP Henderson Global Investors Limited (ABN 59 001 777 591) Applicant v The Valuer General Respondent Judgment No. 2 - costs

1 On 18 February 2004 judgment was delivered in these proceedings: see AMP Henderson Global Investors Limited and Others v Valuer General; AMP Henderson Global Investors Limited v Valuer General [2004] NSWLEC 19. In each case the proceedings were dismissed. Costs had not been argued and accordingly the Court ordered that the unsuccessful applicants pay the costs of the respondent unless an application was made within 21 days to vary such order. Pursuant to the leave granted, the applicants have applied to have such order vacated and seek an order that each party pay its own costs. The respondent submits that the unsuccessful applicants should pay the respondent's costs and therefore opposes the application. 2 On 19 December 2003 the Land and Environment Court Rules (Amendment No 8) 2003 was gazetted: see Government Gazette No 197 of 19.12.2003, p 11546. Pursuant to such amendment rule 4 contained in Pt 16 Div 2 of the Land and Environment Court Rules 1996 ("the Rules") became operative on 2 February 2004. It relevantly provides:- 4 Costs in certain proceedings (1) This rule applies to the following proceedings in classes 1, 2 and 3 of the Court's jurisdiction: … (c) proceedings under s 37 of the Valuation of Land Act 1916 , … (2) No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable. 3 Prior to the introduction of such rule, the Court's Practice Direction Number 10A ("the Practice Direction") provided:- The practice of the Court is that no order for costs is made in valuation appeals, farmland rating appeals (and other rating appeals), and subdivision appeals in class 3 of the Court's jurisdiction, unless the circumstances are exceptional. 4 These proceedings were conducted whilst the Practice Direction was current. However in Maurici v Chief Commissioner of State Revenue; Chief Commissioner of State Revenue v Maurici (2000-2001) 51 NSWLR 673 the Court of Appeal held that the Practice Direction could not apply to an appeal to this Court since it purported to impose a rigid fetter on the judicial discretion to award costs conferred by s 69(2) of the Land and Environment Court Act 1979 ("the Court Act").

Applicants' submissions 5 The applicants' submissions acknowledge that the Court is bound to apply the provisions incorporated as rule 4 of Pt 16 Div 2 of the Rules. However they submit that the Court should find that it is not fair and reasonable to order them to pay the costs of the respondent. The applicants submit that even prior to the introduction of Practice Direction 10A the Court usually made no order as to costs in valuation appeals. Stein J in Murray Publishers Pty Limited v Valuer-General (1993) 84 LGERA 13 observed that valuation appeals are of an administrative nature and "devoid of complex legal principles": see p 16. His Honour distinguished such appeals from other proceedings heard in class 3 of the Court's jurisdiction such as compensation for compulsory acquisition. His Honour said (at p 18):- In my opinion, the practice of the Court in valuation cases should be that no order for costs be made unless exceptional or special circumstances are shown to exist. 6 The applicants' submissions that no order for costs should be made is predicated upon the usual practice of the Court as contained in Practice Direction 10A which was current when the proceedings were commenced and heard. Additionally they submit that the proceedings involved no question of law and were administrative in nature. 7 It is also submitted by the applicants that the appeal was dismissed because of the Court's finding that the onus of proof imposed by s 40(2) of the Valuation of Land Act 1916 ("the Valuation Act") was not discharged. The applicants raise additional matters, namely that the proceedings were conducted efficiently; that in an administrative appeal it is inevitable that one party's evidence will be rejected and that it would not be fair and reasonable to impose an order for costs upon the unsuccessful party merely because of such finding; that Pt 16 r 4(2) of the Rules cannot mean that costs follow the event and that the insertion of such rule confirms the policy objective that costs do not simply follow the event in administrative appeals brought pursuant to a statutory right such as s 37 of the Valuation Act; the announcement and commencement of Pt 16 r 4 of the Rules occurred after the case had been heard and this fact should be given significant weight when the Court exercises its discretion.

Respondent's submissions 8 The respondent submits that the proceedings involved two appeals involving statutory land values amounting to $128,000,000 being major landmarks in the Sydney City commercial district. These proceedings were the first to follow the decision of the High Court of Australia in Maurici v Chief Commissioner of State Revenue (2002-2003) 212 CLR 111 and the respondent submits that the decision could have set an important precedent. 9 As to the conduct of the proceedings the respondent submits that after the first two days of an eight day hearing it was "determined that effectively the whole of the expert opinion evidence of the applicants' was inadmissible". The respondent submits that the further evidence adduced by the applicants did not advance their arguments. Further the respondent submits that the issues raised involved questions of law, or of mixed fact and law, namely the proper application of the High Court's Maurici decision; the appropriateness and reliability of the applicants' valuer's analysis of improved sales; whether the High Court of Australia's decision in Kibble v Deputy Federal Commissioner of Land Tax (1920) 27 CLR 316 applied to the analysis of improved sales; whether the concept of Transferable Heritage Floor Space as provided by the Central Sydney Local Environmental Plan 1996 should be applied otherwise than as determined in Perpetual Trustee Co Ltd v Valuer-General (2001) 115 LGERA 287 at p 299; whether the differences between the parties concerning the valuation of the subject properties was "marginal", the respondent contending that there was a substantial difference in each case. Accordingly the respondent submits that the issues involved were significant and that the applicants were unsuccessful in respect of each issue. 10 The respondent relies upon the observations of the High Court of Australia in Maxwell v Murphy (1956-1957) 96 CLR 261 wherein a distinction was drawn between the effect of the operation of a new law creating substantive rights compared to a new law relating to procedural matters: see also Galvin v Forests Commission of Victoria [1939] VLR 284. 11 The respondent has made numerous submissions concerning the interpretation of the phrase "fair and reasonable" based upon various statutes such as the Corporations Act 2001 (Cth) s 256B, the Superannuation (Resolution of Complaints) Act 1993 (Cth), s 36 and s 37 and various authorities.

Findings 12 The Court will apply the provisions of Pt 16 Div 2 r 4(2) of the Rules in its determination of the discretion to award costs in these proceedings. 13 Unlike the facts referred to by Stein J in Murray Publishers, the issues involved in the proceedings raised intricate questions of mixed fact and law. The fact that the hearing extended over many days and concerned not only divergent expert opinion but conflicting submissions concerning the application of the evidence demonstrates that the administrative appeal was one of complexity. 14 The proceedings were commenced and conducted by the parties at a time when Practice Direction 10A existed, although the Court of Appeal in Maurici had rejected the Practice Direction as fettering the Court's discretion. Since the delivery of judgment in those proceedings, Lloyd J in Maurici v Chief Commissioner of State Revenue and Anor (No 5) (2001) 119 LGERA 395 reconsidered the principles relating to the exercise of the Court's discretion as to costs in valuation appeals and considered the findings of Stein J in Murray Publishers observing at p 400 as follows:-

His Honour [Stein J] reviewed the then practice of the Court in valuation and similar appeals and concluded that the preponderant (but not unanimous) practice was that there should generally be no order for costs in such appeals. I conclude from this that there is a general tendency against the making of orders as to costs in administrative appeals. 15 In exercising his discretion Lloyd J at p 401 said:- In my opinion, in the exercise of the Court's unfettered discretion under s 69(2) of the Land and Environment Court Act and having regard to: (1) the fact that the proceeding is to be regarded as an administrative appeal; (2) that the preponderant weight of authority in this Court (pre-dating cl 10A of the Land and Environment Court Practice Direction 1996 ) is that costs are not generally awarded in such administrative appeals; (3) that the ordering of costs would present prospective applicants with the unpalatable prospect of not only meeting their own costs but also the costs of the respondent if they were unsuccessful; and (4) the particular facts and circumstances of the present case … I am inclined to the view that there should be no order as to costs.

16 It is apparent that the Court has now to consider only one question, namely is it fair and reasonable that an order for costs should be made against the applicants. Each of the issues identified by Lloyd J are matters to be considered by the Court in the exercise of its discretion. 17 Complex legal issues were raised by each of the parties, as evidenced by the fact that both parties sought this hearing to be heard by a judge of the Court. It could not be said that this appeal comprised proceedings of an uncomplicated nature nor "devoid of complex legal principles" as envisaged by Stein J in Murray Publishers. The Court could have treated these proceedings as being no different to normal adversarial proceedings wherein the Court would find that a costs order in favour of the successful party is fair and reasonable: see Gee v Port Stephens Council (2003) 131 LGERA 325. 18 However circumstances exist which warrant the Court declining to make a final costs order in favour of the respondent. These proceedings were conducted before the enactment of Pt 16 Div 2 r 4 of the Rules. The Court accepts therefore that the applicants instituted the appeal and conducted it on the basis that there existed a strong prospect that the Court would make no order for costs in the event that the appeals were dismissed, particularly given the considerations discussed by Lloyd J in Maurici (No 5) set out above. 19 Accordingly the Court will set aside the provisional order made in the Court's judgment dated 18 February 2004 and instead will make no order for the costs of these proceedings.

1. ORDER that the provisional order for costs being order number 3 made on 18 February 2004 be vacated;

2. ORDER that there be no order as to costs in proceedings 31066 of 2002;

3. ORDER that there be no order as to costs in proceedings 31069 of 2002.

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