Solicitors: Maddocks Lawyers (Plaintiff)
JLC Law Group (1st and 2nd Defendant)
Crown Solicitors Office (3rd Defendant)
File Number(s): 2018/193605
[2]
EX TEMPORE Judgment REVISED
Mr Tomasetti SC for the plaintiff reads the affidavit of David Lunney, certified practicing valuer, sworn on 5 September 2018, which I am informed, was served in accordance with practice directions given by the Court in November 2018. Mr Hemmings SC for the first and second defendants objects, first to the whole of the affidavit being received or read in evidence, and secondly to specific passages in the affidavit, if I am satisfied that expert evidence of this type is otherwise admissible in these proceedings.
It is important to bear in mind at the outset that I am concerned with the question of whether, ultimately, the third defendant, being the Valuer‑General by his delegate, when he made a determination of the compensation payable on the resumption of land fell into jurisdictional error. It is important for me to bear in mind that I am concerned solely with the question of whether the determination made by the delegate of the Valuer‑General conformed to law. The law in this regard is to be sourced very substantially, if not solely, to two statutes to which I have been taken during the course of the hearing so far. They are, not in order of importance, the Valuation of Land Act 1916 (NSW) ("the Valuation Act"), and the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ("the Just terms Act"). The dispute between the parties concerns the valuation of land formerly owned by the first and second defendants which was acquired under the terms of the Just Terms Act by the plaintiff, the Blacktown City Council. The entitlement to compensation is dealt with, centrally, in ss 54, 55 and for present purposes, 56 of the Just Terms Act.
Section 54(1) is in the following terms:
"The amount of compensation to which a person is entitled under this part is such amount as, having regard to all relevant matters under this part, will justly compensate the person for the acquisition of the land."
Section 55 identifies the relevant matters for assessing the compensation payable. It lays down, to borrow the language currently preferred by some Judges of Appeal, the mandatory considerations to which the Valuer‑General must have regard in making the assessment required by s 54 of the Act. For present purposes, it is sufficient that I refer to para (a) of s 55, which requires regard to be had to the market value of the land on the date of its acquisition. Section 56 is a definitional provision, which defines the market value of land in terms which largely, perhaps not wholly, pick up the meaning of that concept as it was understood by the general law dealing with former iterations of statutes concerned with compensation for governmental resumption of private land. It is sufficient for me for present purposes to refer to what I have been informed by learned senior counsel is the seminal case in Australian jurisprudence: Spencer v Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82.
One of the challenges in this area for the uninitiated is the line of authority to which I have been taken, that, perhaps not surprisingly, given some thought, indicates that legal concepts in this area are informed by principles of valuation, at least to some extent. As an example of that, I was referred to the decision of a unanimous High Court in Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8 which was concerned with the valuation of land under s 6(A)(1) of the Valuation of Land Act 1916 (NSW), at least as it then was.
It is important, however, for me to bear in mind the different area of discourse. I am concerned, as I have said, with the question of whether the valuation made in this case is legally valid, to put it informally. That was a case concerning a merits appeal to the Land and Environment Court, which ultimately found its way to the High Court on a subsequent point of law appeal., And it should be borne in mind that in some of the cases, the context is quite different from judicial review. On appeals to the Land and Environment Court, even under the present regime, as I have been reminded, by a landowner, a true merits appeal where fact and law is open to review is available. Other than factors which may be referred to as jurisdictional facts, limited factual matters are at play in the sphere of judicial review of administrative action.
I have been taken to a case which illustrates that in appropriate circumstances, evidence of fact may be admitted beyond the material which was before the administrative decision maker at the time of the making of the decision: Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22; [2015] HCA 15. Wei concerned, as so many of the leading cases in this area do these days, immigration law and the powers of the administrative tribunals which administer that law.
In Wei, which arose in the original jurisdictional of the High Court, a holder of a student visa successfully challenged the decision of the relevant tribunal under the Migration Act 1958 (Cth). The student's visa was cancelled because inquiries made by the administrative decision maker indicated that he was not, as he was required to be as a condition of his visa, currently enrolled in an eligible course. Those inquiries miscarried because the relevant university had failed to upload the details of the student's enrolment onto a program where it was required to be maintained. Gaegler and Keane JJ at [35] referred to "satisfaction" of the decision maker, being the statutory requirement involved for a valid exercise of the statutory power, in these terms:
"The satisfaction required to found a valid exercise of the power to cancel a Visa...is a state of mind. It is a state of mind which must be formed reasonably and on a correct understanding of law. Equally, it is a state of mind which must be untainted by a material breach of any other express or implied condition of the valid exercise of that decision‑making power. The imperative duty imposed on the (university) is such a condition."
Their honours went on to hold that:
"The delegate's satisfaction that the plaintiff was in breach of the Visa condition, that he be enrolled in a registered course was formed by a process of fact‑finding which was tainted by [the university's] antecedent breach of its duty [under the Act]. The delegate reached that satisfaction because the delegate found as a fact that the plaintiff was not enrolled in the registered course."
Their Honours held that that mistake, clearly one of fact, amounted to jurisdictional error. A state of satisfaction of an administrative decision‑maker in such circumstances may well be a jurisdictional fact susceptible to the admission of contrary evidence in proceedings for judicial review.
In Allianz Insurance Australia Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 Basten JA commented that, in a case of judicial review involving a ground of jurisdictional error, any evidence relevant to proving the error is admissible. His Honour made that comment in the context of distinguishing such cases from cases based upon error of law on the face of record, which this case is not, where the materials available to the reviewing Court are strictly limited.
An obvious example of a case where evidence will be admissible is a case where it is necessary to prove the jurisdictional error of procedural fairness because a party entitled to appear and be heard received no notice of the hearing.
On the basis of those cases, I ruled that certain material which indicated a misapprehension of fact on the part of the contract valuer in relation to the sale price of a comparable property was admissible. I admitted this evidence on the basis that that matter will ultimately be relied upon as constituting jurisdictional error. Whether it does or does not will be a matter that can only be determined, as I have already remarked, at the end of the case. However, it seemed to me that the evidence was admissible as being capable of being probative if that matter was, in the end, legally capable of demonstrating jurisdictional error.
It does not follow from that ruling or from what I have said so far that all evidence which may touch upon matters in issue is admissible. The province of this area of the Court's work is, of course, the law and virtually every case of authority reminds, to put it mildly, trial judges of the need to ensure a strict and complete legalism in the assessment of whether the decision conforms to the law. This is always coupled with an admonition that the Court is not concerned with merits review.
The gravamen of Mr Lunney's affidavit is the expression of his opinion that the use made by the decision‑maker of what the decision‑maker took to be comparable sales after the publication of a draft amendment to a relevant planning document miscarried, to put it in neutral terms.
Now, I have already referred to the extent to which I may be persuaded that, having regard to the authorities I have adverted to, that valuation principle informs the legal meaning of market value. However, it does not follow from that consideration that evidence on a judicial review application is admissible from a registered valuer as to what those principles are. It is not, in my judgment, relevant in a case of this type where I am concerned with the limited area of legality I have identified that there should be evidence from a number of valuers debating what is required of a valuer who is acting as the agent of the decision‑maker to produce a valuation upon which the decision‑maker will act in assessing the compensation.
I should say that I have already received, because they were before the decision‑maker, the submissions that were put on behalf of each of the active parties to the contract valuer, before the final determination was made. It might be said that the evidence to be read or sought to be read is no more than amplification in a formal legal document of the arguments that Mr Lunney put before the contract valuer when the decision‑making process was underway. But I accept that does not touch about the question of whether a reformulation or amplification of his views is admissible.
At the end of the day, the question of what s 56 means about market value of land and what the appropriate methodology for determining that market value must be found necessarily, in my opinion, in the words of the statute, at least for present purposes. Doubtless, in an appeal to the Land & Environment Court by the landowner against an assessment of compensation with which the landowner was unhappy, evidence could be led of all matters relevant to the question of what is the proper valuation of the land in question. However, this is not such a case as I have been at pains in this judgment to make clear and I am of the view that the evidence of Mr Lunney as to what the principles of valuation are and how a valuer should go about his or her business is not relevant evidence which can be admitted. Those questions must depend upon legal considerations for the purpose of this case and, therefore, I reject the evidence of Mr Lunney.
Nothing I have said should possibly be taken as being other than a legal ruling on the admissibility of his evidence. I accept that Mr Lunney is a certified, registered valuer of substantial learning and standing in his profession. That is not the question.
I move on then briefly to the specific objections that were taken. I must say, for myself, reading Mr Lunney's affidavit, I do not feel any better informed about the principles of valuation law. The opinions expressed seem to me to fall into the category of ipse dixit as Heydon JA famously put it in Makita v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305. I accept that there are occasions when such statements may, contrary to what his Honour said in that case, be admissible. The High Court pointed out in Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21 that in the case of a diagnosis made by a specialist surgeon, little by way of explanation might be required to justify the admission of the evidence. But, generally speaking, the conditions of admissibility of expert evidence, are first relevance, I have ruled upon that, but, secondly, compliance with the conditions of s 79 of the Evidence Act 1995. Those conditions include the important consideration that the opinions expressed are substantially or wholly based upon the specialised knowledge of the expert and that so much is demonstrated on the face of the expert's report. Now, I can accept as I remarked during the course of the dialogue with senior counsel, that some matters must be self‑evident. That does not make them inadmissible: see s 80 of the Evidence Act. On the other hand, it is necessary to demonstrate admissibility as the High Court emphasised in Hawchar, and as Heydon J emphasised in Makita, by reference to the reasoning process disclosed in the report. The disclosed reasoning process should demonstrate how the statements of opinion which are propounded are based upon the expert's specialised knowledge.
Doubtless in all areas of expertise there is often room for differences of opinion between experts as to principle Commonly, in order to properly discharge the expert function in accordance with the ordinary standards of learning and competence displayed by reasonable members of that learned profession such differences will need to identified and discussed. In the area of administrative law, however, I venture to suggest that, to the extent to which expert opinion may inform the legal requirements of the statute, the opinion must relate to clearly established rules that admit of no difference of opinion.
To the extent to which differences of opinion are tolerated or available, or to the extent to which there is scope for differences of opinion between experts, those areas tend to identify themselves, almost incontrovertibly I would think, as raising questions of fact rather than questions of law. And having made those overly long introductory remarks, I will deal with the rulings in relation to the specific matters.
I acknowledge, as I have said, that there has been a direction that objections be notified in advance of the hearing, and I accept, as Mr Tomasetti argues, that that is not only for efficiency reasons but also so that the parties may know what the objection is and have the opportunity of addressing them before the hearing. Having said that, I will deal with the matters that were specifically raised with me, briefly, given what I have said about the fundamental question.
Paragraph 8 is objected to. I will not set it out. However I can accept it as self‑evident that the promulgation of a draft amendment, that is to say a proposed change to the planning law, is capable of having an effect upon the value of land affected by it. How that matter should be taken into account and affect an opinion as to value is a matter upon which minds may properly differ. But in any event, with great respect, I am not satisfied that the expert has fully disclosed the reasoning process for his opinion that the promulgation of a draft is a matter required to be taken into consideration to determine the market value of the land. I emphasise "to determine," and I would reject para 8.
Paragraph 11 is a matter which Mr Tomasetti tells me was not notified when the list of objections were served, and had it been he may have taken steps to rectify any perceived susceptibility to objection in the paragraph. It is in these terms:
"In order to determine if transactions of similarly zoned land are comparable, it is necessary to have regard to the relevant facts of the transaction and to make inquiries to ascertain the details of the sales and determine the market value which those sales represent." (My emphasis.)
There is no ground of jurisdictional error pleaded in the summons or amended summons, which elevates a failure to make specific inquiries on the part of the contract valuer as a species of jurisdictional error. At para 15, Mr Lunney goes on to describe in detail what, in his opinion, those inquiries should consist of.
I was taken to the amended summons, and in particular the first ground of complaint, which is to the effect that the decision‑maker acted irrationally, unreasonably and contrary to correct valuation principles by failing to consider the "Schofields sale", as it has been referred to. It must be said that there were no particulars provided of that composite allegation of irrationality, unreasonableness and contrariness to valuation principle, which picks up the specific complaints made at paras 11. Even amplified by para 15 of the affidavit, I would have rejected para 11 as being outside the ambit of the summons as it presently stands.
Paragraph 17 also goes on to indicate the type of inquiries, said to be reasonable by Mr Lunney, which could have been made to ascertain the true position in relation to the sale price of the "Schofield property". Again I am of the view that that is really a factual matter, but to the extent to which the law required those specific inquiries be made, I am satisfied it is outside the pleadings.
So far as par 21(d) is concerned, Mr Lunney, I must say without explaining why in terms that I can understand, refers to the effect of s 56 of the Act upon matters which must be taken into account in relation to a valuation. I am inclined to agree with Mr Tomasetti that when an expert operates in an area which is informed by legal requirements, the expert may have to refer to those matters of law to explain her or his opinion. Whether of course the expert's understanding is correct will be a matter which may inform a decision about the weight to be afforded the opinion. In the end matters of law are solely matters for the Court, but I would not have thought that the reference to the Act of itself made subpar (d) of par 21 inadmissible. On the other hand, the explanation could have been usefully amplified to make clear that Mr Lunney's opinion was wholly or substantially based upon the expert's specialised knowledge.
I reject the affidavit of Mr Lunney of 6 September 2018.
[3]
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Decision last updated: 15 February 2019