Caratti v Commissioner of Taxation

The Deed 6 The parties to the Deed are the Commissioner on the one hand and, on the other, the first respondent, Mr Caratti, referred to as the taxpayer, Appley Holdings Pty Ltd as trustee for the Byford Trust, Guarantor, and Platinum Sky Pty Ltd, Guarantor. 7 The recitals state that the parties remain in dispute as to the alleged taxation liabilities as described in the Amended Assessments and Penalty Notices issued on 23 January 2015 to Mr Caratti in respect of the years of income ended 30 June 2009, 30 June 2010 and 30 June 2011. 8 In exchange for the securities given in accordance with the Deed, the Commissioner agreed to forbear from undertaking recovery action in respect of the Taxation Debt, defined to mean the amount of $10,948,507.45, upon the terms and conditions set out in the Deed. The Commissioner agreed to accept the securities in accordance with the terms of the Deed.

The facts 9 The term "Securities" was defined to mean the mortgages detailed in Item 1 of Schedule 1 to the Deed. Those mortgages were "of land over the Property specified at Item 2". 10 The "Property" as specified in Item 2 of Schedule 1 to the Deed was, first, Lot 9005 on Deposited Plan 403852 in the Marri Park Development in Byford (Lot 9005) and, second, Lot 111 on Deposited Plan 14441, located at 34 Lugg Place, Casuarania (sic) (Lugg Place). 11 A broad summary of the sequence of events is as follows. 12 Clause 3.6(b) of the Deed provides that within 45 days after execution of the Deed, the taxpayer is to provide the Commissioner with a Valuation Report of the Property prepared on or after 1 July 2015 by a registered property valuer other than Major Valuations or any valuer who had worked for or been an owner of Major Valuations. On 29 October 2015, pursuant to cl 3.6(b), Mr Caratti provided the Commissioner with valuations of the Property totalling $14,500,000. The valuation of Lot 9005 was $11 million and of Lugg Place was $3,500,000. 13 Clause 3.6(i) provides that the Commissioner "may elect to procure a Property Valuation at his own expense and the Guarantor shall provide reasonable access to the Commissioner's valuer for the purpose of conducting that valuation." 14 Clause 3.6(j) provides that where the Commissioner wished to procure a valuation which he may rely upon to invoke his right pursuant to cl 3.6(k), the Commissioner "shall provide the Taxpayer with a list of six alternative licensed property valuers, and the Taxpayer shall inform the Commissioner within five Business days of his preferred valuer from that list, or otherwise forfeit his right to nominate a preferred valuer." 15 Clause 3.6(l) provides as follows: The Commissioner must provide to the Taxpayer a copy of his instructions and any other information that the Commissioner may provide to the valuer related to that request for a valuation to be given. The Taxpayer is entitled to respond to such information and otherwise liaise with such valuer. 16 By letter dated 15 March 2017, Mr Caratti was advised that the Commissioner had elected to procure valuations of the Property. The Commissioner gave Mr Caratti a choice of six people, all of whom were employed by Opteon Property. 17 On 23 March 2017, the Commissioner informed Mr Caratti of his intention to procure a valuation of the Property engaging a valuer of his choosing, noting that he had not received an election of a valuer from Mr Caratti. 18 The valuations of the Property obtained by the Commissioner totalled $2,800,000. Lot 9005 was valued at $1,800,000 as at 9 April 2017 and Lugg Place was valued at $1 million as at 9 April 2017. 19 By letter dated 4 May 2017, purportedly pursuant to cl 3.6(k) of the Deed, the Commissioner demanded that Mr Caratti provide him with a mortgage over additional property having unencumbered equity of at least $5,850,000 within 30 days of the date of the letter (the 4 May 2017 Demand). This amount was calculated as 50% of the difference between the valuation provided by the taxpayer and the valuation obtained by the Commissioner. 20 On 10 May 2017, Mr Graeme John MacEwan prepared a valuation report in relation to Lots 819 and 820 Bedford Street, Spalding, Geraldton (the Spalding Property), assessing the market value for the land at $5,700,000, subject to development approval from relevant authorities for development of a retirement village/aged care facility. A key assumption was that the (Spalding) Property (land) was rezoned to allow development of a retirement/aged complex. 21 By letter dated 2 June 2017, by way of satisfying Mr Caratti's obligations under the Deed and the Commissioner's 4 May 2017 Demand, the solicitors for Mr Caratti forwarded an executed mortgage in favour of the Commissioner over the Spalding Property and an executed mortgage in favour of the Commissioner over 70 Chichester Avenue, Beckenham. The latter stated that the principal sum secured was $150,000. No valuation report was provided for that property. 22 On 7 August 2017, Mr John Del Dosso of Colliers International, on instructions from the solicitors for the Commissioner, provided a valuation of the Spalding Property at $770,000 as at 15 May 2017. 23 By letter dated 11 August 2017, the Commissioner wrote to Mr Caratti stating the Commissioner's view that "as a matter of fact the additional properties which are the subject of the mortgages you have offered do not have unencumbered equity of at least $5,850,000." The letter stated that in the Commissioner's view the total unencumbered equity in the properties offered was not at least $5,850,000 and that Mr Caratti had failed to comply with the 4 May 2017 Demand. 24 In these proceedings, Mr MacEwan's affidavit, sworn 19 March 2018, annexing his valuation, was tendered and read as evidence of a document, a valuation, prepared for the purposes of the Deed and by somebody who was qualified under the terms of the Deed to prepare that document. It was not tendered in the proceedings to prove the value of the Spalding Properties. Objection having been taken, I rejected [7] and [8]-[11], apart from GJM-3. 25 An affidavit made by Mr Del Dosso, sworn 16 February 2018, annexing his valuation, was read as expert evidence. Objection having been taken, I rejected [4]-[6] of that affidavit. 26 Both Mr MacEwan and Mr Del Dosso were cross-examined. 27 Mr MacEwan was asked the following questions and gave the following answers in relation to his valuation report of the Spalding Property dated 10 May 2017. It will be recalled that Mr MacEwan assessed the market value for the Spalding Property at $5.700,000 subject to development approval from relevant authorities for development of a retirement village/aged care facility: You did not provide the present value of the property. You provided the value of the property assuming that there was going to be a retirement village. Isn't that right?---Based on it being a retirement village and age facility, yes. And, indeed, it was more than that. It was not only that there was going to be a aged facility, but also that the units in that aged facility would be sold, and profits would be made. Isn't that right?---Well, I assume that, yes. Yes. So what you're really ascribing to this property is the future value based on a series of contingencies and assumptions coming through. Isn't that right?---Under that valuation, yes. 28 I find that Mr MacEwan's valuation of the Spalding Property of $5.700,000 was the future value of that Property based on a series of contingencies and assumptions occurring in the future. I find that his valuation was not the value of the Spalding Property as at 10 May 2017. 29 In relation to Mr Del Dosso and his valuation of the Spalding Property at $770,000 as at 15 May 2017, I accept the evidence he gave, in cross-examination, as follows: And you have - would you like to proffer an explanation of the sale [of the Spalding Property] of 3.63 million that you refer to on page 8 of your valuation then?---Completely different market within Geraldton. The market in the mid-2000s in Geraldton was very strong. The price escalation was rampant. Certain values were achieved. That's not the market of today and there are pieces of evidence within my report that demonstrate such of the changes in value that have occurred between that mid-2000 era and now. 30 I accept Mr Del Dosso's valuation of the Spalding Property at $770,000 as at 15 May 2017. 31 It was an agreed fact that the Deed had gone through many drafts, with legal advice on both sides.

The parties' submissions 32 The applicants submitted that the question of ambiguity did not arise. Where the Deed used general words such as "valuation" or "Property Valuation", those words should be construed and understood by reference to the defined terms. The applicants referred to the definition of "Equity Value" in cl 1.1 of the Deed, defined as follows: Equity Value means the market value of the asset that is or is to be subject of a Security (as determined be (sic) a market valuation from a licensed valuer engaged by the Taxpayer at the Taxpayer's cost) less the amount of any debt that is to take priority to the Security. For example if the market value of the Security Properties is $6,000,000.00 and the priority debt amount of the First Mortgagee is $2,000,000.00 then the Equity Value of the Security Properties is $4,000,000.00. 33 The applicants submitted that it was apparent from the definition of "Equity Value" that the parties contemplated that they would not become engaged in a costly dispute involving experts and expert evidence to determine the market value of the Securities and expressly set out other mechanisms in cl 3 of the Deed to protect their respective rights. No methodology was prescribed before a valuation would qualify as a "market value for an asset" other than the valuation be a "market valuation from a licensed valuer engaged by the Taxpayer at the Taxpayer's cost." Mr MacEwan was such a person at the time he prepared the valuation reports. 34 The language of the Deed made it clear, the applicants submitted, that the parties considered the problem of establishing the value of the Securities and deliberately included tiebreaker provisions in cl 3.6 that relied on Valuation Reports and Equity Value rather than requiring that the parties establish an actual value of the Property at any given point in time. The methodology adopted was sensible given the exigencies of the property market in Western Australia. 35 The applicants submitted that, by cl 3.6(i), the Commissioner could elect to obtain his own Property Valuation but the Deed did not operate to give him a power to pick and choose between his and the applicants' valuations of individual properties that made up the Property. By cl 3.6(j), the Commissioner was first to provide to Mr Caratti a list of six alternative licensed property valuers and Mr Caratti was to be given the opportunity to choose a preferred valuer from that list. 36 Clause 3.6(k) set out what was to happen if the valuation of the Property obtained by the Commissioner differed from the applicants' Valuation Report and that valuation resulted in the Equity Value being less than $10.3 million. 37 "Unencumbered equity" was not a defined term but on the basis of the definition of "Encumbrance" it would have been understood to mean any of the remaining equity in the property after subtracting from its market value all the mortgages or charges over that property. That was apparent from the definition of "Encumbrance" and "Equity Value". 38 The applicants submitted that the Deed did not contain any requirement as to the form or methodology to be used by a licensed valuer other than the Valuation Report be prepared on or after 15 July 2015 by a registered property valuer other than a proscribed valuer. Once that occurred, and the Equity Value of that security was sufficient, then the taxpayer's obligation to provide security was satisfied and no further dispute over the quantum of the security could arise under the Deed. The provisions of cl 3.6 were not iterative. The purpose of cl 3.6(k) was to reach a compromise if the Equity Value of $10.3 million was reached on the applicants' valuation of the Property but not on the Commissioner's valuation of the Property. If the Commissioner's valuation reached an Equity Value of more than $10.3 million then the requirement for additional security for the Taxation Debt was not engaged. The applicants referred to McGrath v McGrath [2012] NSWSC 578, Lahoud v Lahoud [2010] NSWSC 1297, Holt v Cox (1994) 15 ACSR 313 and Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314. 39 The applicants submitted that if the Court held that cl 3.6(k) was construed such that the definition of "Equity Value" was not to apply such that the clause required the Securities and the additional property to be found by the Court as a fact to be at least of $5.85 million, then the Securities and the additional property should be found to have that market value on the evidence before the Court, being the valuations of Mr MacEwan in 2016 and 2017 on the basis that Mr MacEwan was a licensed, certified, practising valuer who prepared a Valuation Report for the purposes of the Deed after 1 July 2015. The provisions of cl 6.3(d) were not iterative and the process could not be repeated indefinitely. 40 The applicants submitted that the language of the Deed precluded the Court from going behind the valuation prepared by a registered valuer and directing its own mode of valuation because the Deed set out a methodology or mode of arriving at a market value for the purposes of the Deed. Only if the Deed was silent as to the mechanism the parties were to adopt to establish a valuation for the property would it be open for the Court to adopt any means for establishing that value, including hearing evidence from expert witnesses with respect to the Valuation Report prepared by Mr MacEwan. The applicants submitted that the Deed did not allow the Commissioner to challenge the applicants' Valuation Report. 41 The applicants referred to Hall v Busst [1960] HCA 84; 104 CLR 206 at 222 per Fullagar J as follows, referring to a dictum of Sir William Grant in Milnes v Gery (1807) 14 Ves. Jun. 400 at 407; 33 ER 574 at 577: The Master of the Rolls, distinguishing the case of a sale at a valuation to be made by a named person, said: "The case of an agreement to sell at a fair valuation is essentially different. … In that case no particular means of ascertaining the value are pointed out: there is nothing therefore precluding the Court from adopting any means, adapted to that purpose." 42 The applicants contended that the Deed was essentially the same as an agreement to sell at a valuation to be made by a named person. 43 The applicants also submitted that the discontinuance of previous proceedings between the parties by consent in November 2016 gave rise to an issue estoppel and the Court's powers to deal with abuse of process remained applicable. The applicants submitted that the respondent abandoned his pleadings in relation to the quantum of securities and an alleged breach of the Deed when he consented to the matter being "dismissed". Where the parties have had a claim dismissed by consent, the applicants submitted, their right again to invoke the jurisdiction in respect of that same claim cannot be unlimited if the public interest in the efficient use of Court resources and the rights of other litigants were to be given true recognition. The applicants referred to Mango Boulevard Pty Ltd v Spencer [2010] QCA 207 at [144]-[146] and Batistatos v Roads & Traffic Authority of New South Wales [2006] HCA 27; 226 CLR 256 at [65]. 44 The Commissioner submitted that the central question was whether, under cl 3.6(k) of the Deed, the applicants provided "a mortgage over additional property which has unencumbered equity of at least" $5,850,000. 45 The Commissioner submitted that cl 3.6(k) did not use the defined terms "Encumbrance" or "Equity Value". Nor did it incorporate those defined terms by reference. The language used by the parties was couched in the present tense. 46 The Commissioner submitted that it was clear that the construction of cl 3.6(k) ought to take place by reference to the actual words used in the clause and not by reference to defined terms not used in the clause. The central pillar of the applicants' approach was to seek to read the defined terms "Encumbrance" or "Equity Value" into cl 3.6(k) where there were no words to support that contention. 47 Turning to the clause, the Commissioner submitted there was no dispute that there were competing valuations and that the applicants' valuation of the Property was less than the Commissioner's valuation of the Property. It was not suggested that cl 3.6(k) of the Deed was not engaged. 48 Once engaged, the Commissioner submitted, the balance of cl 3.6(k) had to do with actual value of the additional property, a mortgage over which would be required, and not its valuation. It was not a "tiebreaker" provision for use in a contest of valuations but was a provision intended to ensure that the Taxation Debt was secured to an appropriate extent. If it were a tiebreaker provision of the kind contended for by the applicants, the provision would be meaningless, in that the Commissioner's security would be based not on actual value but the provision of a valuation without any recourse for the Commissioner to impugn such valuation. Such a result was inimical to the purposes set out in the recitals to the Deed. Further, there were no words that supported the reading for which the applicants contended. If the parties had intended to incorporate the defined terms, they would have used those defined terms. If the parties wanted cl 3.6(k) to be a tiebreaker in a contest of valuations, they would have used different language. 49 The Commissioner submitted that his construction was supported by the words used by the parties, which required the applicants to "provide a mortgage" over "additional property which has unencumbered equity" of at least half the difference between the competing valuations. 50 The Commissioner submitted that the applicants were required to provide security over property, the value of which (less the value of any debt, financial liability or charge) would, in fact and at the time it was provided, equal "at least" half of the difference between the competing valuations supplied in accordance with the mechanism that applied before the engagement of cl 3.6(k). They did not do so. 51 The Commissioner submitted that the use of the present tense informed the Court's approach to assessing the valuation materials that the parties had filed. They required a determination as to the value of the Spalding Properties at the time cl 3.6(k) was engaged, rather than some future value based on unsubstantiated hypotheticals as to future use. 52 In relation to issue estoppel and the Court's powers to deal with abuse of process, the Commissioner referred to r 26.14 of the Federal Court Rules 2011 (Cth) which provides: 26.14 Effect of discontinuance Discontinuance under this Division cannot be pleaded as a defence to a proceeding in relation to the same, or substantially the same, cause of action. Note: The Court may permit a party to discontinue on terms inconsistent with this rule - see rule 1.35. The Commissioner also referred to SZFOG v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1374; 88 ALD 138 and to Kermani v Westpac Banking Corporation [2012] VSCA 42; 36 VR 130.

Consideration 53 I consider first the applicants' contention that the discontinuance of the proceedings by consent in November 2016 gave rise to an issue estoppel and the Court's powers to deal with abuse of process remained applicable. 54 In my opinion there is a short answer to this point which is that, without more, discontinuance, here discontinuance by consent, as opposed to dismissal, does not found an issue estoppel or an abuse of process: see r 26.14 of the Federal Court Rules. In addition, as in SZFOG at [28], the applicants have adduced no evidence of any oppression or unfairness. Indeed it is the applicants who have brought the present case and not the respondent Commissioner. 55 I see nothing of present relevance in the general reference in Batistatos at [65] to the principles respecting abuse of process. That case concerned the commencement of proceedings in negligence against the council and the road construction authority some 29 years after a road accident, the High Court holding that the lapse of time was so serious that a fair trial was not possible. Neither do I see anything of present relevance in Mango Boulevard, which did not concern discontinuance, or discontinuance by consent, of earlier proceedings. 56 I accept that the categories of abuse of process are not closed, see Kermani at [94], but here there has been no re-litigation of matters determined in a previous proceeding. Mere discontinuance does not constitute abuse of process. 57 I reject the applicants' submissions founded on the bare discontinuance of the earlier proceedings. 58 Turning to the Deed, in my opinion, cl 3.6(k) was engaged, in that a valuation procured by the Commissioner indicated that the valuation of the Property, meaning the properties Lot 9005 and Lugg Place, was less than the valuation provided by the taxpayer or the guarantors. 59 There is no doubt that there was a written demand from the Commissioner, being the 4 May 2017 Demand. 60 The next question is whether the taxpayer, within 30 days of the written demand, provided "a mortgage over additional property which has unencumbered equity of at least" $5,850,000. 61 In my opinion, this is a question of fact, that is, whether the mortgages provided were mortgages over additional property having that unencumbered equity. 62 I do not accept that the definition of "Equity Value" is to be read into cl 3.6(k), as contended by the applicants. First, those words do not appear in cl 3.6(k). Secondly, the purpose of cl 3.6(k) is, as its language makes clear, to deal with a difference between the Commissioner's valuation and the valuation provided by the taxpayer or guarantor. The resolution is by reference to unencumbered equity of at least half the difference between those valuations. 63 I turn to consider the authorities relied on by the applicants. 64 Legal & General Life of Australia Ltd concerned a lease providing that the initial rental of $88,800 per annum should be subject to two yearly revisions which, in the event of disagreement, were to be made by a "qualified valuer … acting as an expert and not as an arbitrator …". A company was appointed to make the revision. It decided that the revised rent should be $141,200 per annum. The lessee did not accept that that decision was binding on it, and sought a declaration that it was not. In that context, McHugh JA said, at 335-336: In my opinion the question whether a valuation is binding upon the parties depends in the first instance upon the terms of the contract, express or implied… [I]t is easy to imply a term that a valuation must be made honestly and impartially. It will be difficult, and usually impossible, however, to imply a term that a valuation can be set aside on the ground of the valuer's mistake or because the valuation is unreasonable. The terms of the contract usually provide, as the lease in the present case does, that the decision of the valuer is "final and binding on the parties". By referring the decision to a valuer, the parties agree to accept his honest and impartial decision as to the appropriate amount of the valuation. They rely on his skill and judgment and agree to be bound by his decision… While mistake or error on the part of the valuer is not by itself sufficient to invalidate the decision or the certificate of valuation, nevertheless, the mistake may be of a kind which shows that the valuation is not in accordance with the contract. A mistake concerning the identity of the premises to be valued could seldom, if ever, comply with the terms of the agreement between the parties. But a valuation which is the result of the mistaken application of the principles of valuation may still be made in accordance with the terms of the agreement. In each case the critical question must always be: Was the valuation made in accordance with the terms of a contract? If it is, it is nothing to the point that the valuation may have proceeded on the basis of error or that it constitutes a gross over or under value. Nor is it relevant that the valuer has taken into consideration matters which he should not have taken into account or has failed to take into account matters which he should have taken into account. The question is not whether there is an error in the discretionary judgment of the valuer. It is whether the valuation complies with the terms of the contract. (Original emphasis.) 65 I accept that whether a valuation is binding upon the parties depends in the first instance upon the terms of the contract, express or implied. However, I see no relevant similarity between the terms of the lease there under consideration and the present Deed. Here the parties have not agreed that the valuation report provided by the taxpayer was to be "final and binding on the parties". Neither have the parties referred or agreed to refer the decision to the taxpayer's valuer, or agreed to be bound by his decision. 66 The applicants referred to Holt v Cox as authority for the proposition that even if there was a mistake in the methodology, if the instructions were not explicit as to the methodology, then a party could not impugn a finding. That case concerned whether an auditor had validly determined a "fair price", in accordance with the articles of association, at which five "A" class shares in F P Leonard Advertising Pty Ltd must be offered to the existing shareholders. Justice Santow held that the auditor was acting as an expert rather than an arbitrator and, at 333, applied Legal & General Life of Australia, that is, where a valuation is made as an expert, the issue of whether it is binding on the parties depends on the terms of the contract. It was held that if the contract, expressly or impliedly, provides that the decision of the valuer is "final and binding on the parties", a valuation made in accordance with the terms of the contract will be binding as between the parties, even if made negligently, or in mistaken application of the principles of valuation, including failing to consider relevant matters or misvaluing the asset. Where a contract does not expressly use words to the effect that the valuer's determination should be final and binding, it will come down to the terms of the particular contract as to whether this should be implied. However, the effect of an agreement by the parties that the matter should be determined by a valuer, in the absence of an indication in the contract to the contrary, will generally be that the parties have agreed to accept the valuer's decision as final and binding, provided he or she acted honestly, impartially and in accordance with the terms of the contract. I repeat the comments I made in relation to Legal & General Life of Australia at [65] above. 67 Lahoud v Lahoud was a case involving an accountant's audit under cl 2 of a Deed of Settlement, giving each party a right (in the same terms as had the Terms of Settlement) to elect to have an audit carried out. At [42], Ward J, as her Honour then was, applied Legal & General Life of Australia, noting that it was accepted by the parties by way of general principle that, absent actual fraud or collusion, an expert determination will be rendered ineffective and liable to be set aside only if it is affected by a mistake which renders it not in accordance or in conformity with the contractual contemplation of the parties in the sense considered in Legal & General Life of Australia; and that apprehended bias is not sufficient (Andrews v Queensland Racing Ltd [2009] QSC 364, McMurdo J). Again, I see no relevant similarities between that Deed of Settlement and the present Deed. 68 In McGrath v McGrath, Pembroke J applied Legal & General Life of Australia at [11]. His Honour said, in relation to the process by which the parties agreed that the defendant's shares in a holding company should be bought out, that process requiring a valuer to be appointed and instructed to determine the fair market value of the Group: When the parties identified and agreed on Mr Collins as the proposed Valuer, they did so because they relied on his skill and judgment. They implicitly agreed to accept his honest and impartial decision as to the value of the McGrath Group. So long as Mr Collins, when appointed and instructed, carries out his engagement in accordance with the terms of the Shareholders Agreement and the Heads of Agreement, and arrives at his decision honestly and in good faith, the parties will not be able to re-open it and will be bound by the result. Mistake or error by Mr Collins in the process of valuation will not invalidate his decision: Legal & General Life of Australia v A Hudson Pty Ltd (1985) 1 NSWLR 314 at 334-336 (McHugh JA). On the other hand, if he asks himself the wrong question or misconceives his function, he will not have performed the task required of him by the contract: TX Australia Pty Ltd v Broadcast Australia Pty Ltd [2012] NSWSC 4 at [23] (Brereton J); AGL Victoria Pty Ltd v SPI Networks (Gas) Pty Ltd [2006] VSCA 173 at [51]. 69 In contrast, under the present Deed, the parties have not agreed on anyone as the proposed valuer and in my opinion have not, therefore, expressly or impliedly agreed to accept Mr MacEwan's decision as to the value of the Spalding Property. 70 The applicants referred also to Dobbs v National Bank of Australasia Ltd [1935] HCA 49; 53 CLR 643 at 651, but that case concerned a contract which provided that a certificate signed by a bank manager "shall be conclusive evidence of the indebtedness at such date of the customer to you". Even by analogy, this authority does not assist the applicants. 71 In Hall v Busst at 222, relied on by the applicants, the issue being considered by Fullagar J was whether any agreement for sale "at a fair value" would be enforced in equity. His Honour said it would be quite contrary to principle to so hold. In any event, the present Deed does not involve a sale at a valuation to be made by a named person. In my opinion, the analogy the applicants seek to make does not hold. 72 In summary, the Commissioner wished to, and did, procure a valuation for the purpose of invoking his right pursuant to cl 3.6(k) of the Deed. That valuation indicated that the valuation of the Property was less than the valuation provided by the taxpayer or guarantor. The taxpayer provided a mortgage over additional property, the Spalding Property, but that additional property did not have an unencumbered equity of at least half the difference between the Commissioner's valuation and the valuation provided by the taxpayer or guarantor. The clause does not use the defined terms contended for by the applicants. This is not a question of "going behind" a valuation but of determining what is the unencumbered equity of the additional property. As I have said, this is a question of fact. Neither is this a case where the parties have agreed to be bound by a valuation. 73 Although not necessary to my conclusion, I repeat my finding, at [28] above, that Mr MacEwan's valuation of the Spalding Property of $5.700,000 was the future value of that Property based on a series of contingencies and assumptions occurring in the future and that his valuation was not the value of the Spalding Property as at 10 May 2017.

Conclusion 74 For these reasons, the application is dismissed, with costs. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.