EX TEMPORE Judgment
1These proceedings are appeals under s 37 of the Valuation of Land Act 1916 against valuations of land in Pitt Street, Sydney, on which is erected an iconic heritage restricted building known as "the Moneybox" occupied by the Commonwealth Bank. In recent years the valuation of this land has been the subject of litigation in this Court and unsuccessful appeals to the Court of Appeal: Commonwealth Custodial Services Ltd v Valuer-General [2007] NSWCA 365, 156 LGERA 186; Valuer-General v Commonwealth Custodial Services Ltd [2009] NSWCA 143, 74 NSWLR 700.
2Heritage restricted land is valued annually by the Valuer-General in accordance with ss 6A(1) and 14G(1) of the Valuation of Land Act 1916, which provide:
6A Land value
(1) The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made.
14G Valuation subject to heritage restrictions under EPI
(1) Land that is heritage restricted on the date by reference to which its land value is to be determined is to have its land value determined on the basis of the following assumptions:
(a) that the land may be used only for the purpose, if any, for which it was used when the value is determined,
(b) that all improvements on that land when the value is determined may be continued and maintained in order that the use of that land as referred to in paragraph (a) may be continued,
(b1) that all improvements referred to in paragraph (b) on that land are new (without any deduction being made because of their actual condition),
(c) that no improvements, other than those referred to in paragraph (b), may be made to or on that land.
3The Valuer-General filed a notice of motion on 20 December 2010 and amended today this notice of motion to seek the following orders:
That pursuant to Rule 28.2 of the Uniform Civil Procedure Rules 2005 the Court decide the following question:
Whether on any proper method of valuation of the subject land made upon the assumptions required by section 14G of the Valuation of Land Act 1916 evidence from a quantity surveyor or like expert as to the cost at the various base dates of erecting a building on the subject land, including the building at those dates in fact standing thereon, could be relevant and therefore admissible in these proceedings.
Further or alternatively, an order pursuant to Part 31, rule 20 of the Uniform Civil Procedure Rules 2005 restricting the use of expert evidence in the proceedings, to exclude evidence of a quantity surveyor as to the costs of erecting a building on the land on the base dates of valuation including the evidence of Mr R Moir, filed 1/12/2010.
Directions generally.
4Although prayer 1 is for the determination of a separate question, the Valuer-General makes plain before me that his object is to seek appropriate directions with respect to expert quantity surveying evidence and the related conduct of proceedings.
5Since 2006 the Uniform Civil Procedure Rules Part 31 Division 2, by r 31.19 requires any party intending to adduce expert evidence at trial or to whom it becomes apparent that they or any other party may adduce expert evidence at trial, promptly to seek directions from the court. Unless the court otherwise orders, expert evidence may not be adduced at trial unless directions have been so sought. If such directions are given, the evidence cannot be adduced otherwise than in accordance with those directions.
6The main purposes of that Division are set out in r 31.17 which relevantly include:
(a) to ensure that the court has control over the giving of expert evidence,
(b) to restrict expert evidence in proceedings to that which is reasonably required to resolve the proceedings,
...
7Rule 31.20 relevantly provides:
31.20 Court may give directions regarding expert witnesses
(1) Without limiting its other powers to give directions, the court may at any time give such directions as it considers appropriate in relation to the use of expert evidence in proceedings.
(2) Directions under this rule may include any of the following:
...
(b) a direction that expert evidence may not be adduced on a specified issue,
(c) a direction that expert evidence may not be adduced on a specified issue except by leave of the court,
(d) a direction that expert evidence may be adduced on specified issues only,
...
8This regime is a substantial departure from the former practice of leaving such matters to the trial judge to determine at trial. Examples of the application of the new rules are provided by Vizzanelli v Vizzanelli [2007] NSWSC 1085 and Chapman v Chapman [2007] NSWSC 1109. In each, Brereton J, in advance of trial, refused leave to adduce expert evidence which could not inform the real issues in the proceedings. His Honour made these decisions while presiding over the Expert Witness List in the Equity Division of the Supreme Court, to which applications for directions under r 21.19 are referred, except where the case is under judicial management. That list promotes a consistent approach to such applications. Such applications may equally be made in this Court.
9If the contentious evidence is relevant and admissible, the Valuer-General proposes to call expert evidence in reply. The Valuer-General is concerned about the cost of such reply evidence, which he estimated will exceed $45,000, and about the consequential, substantial increase in the length and cost of the trial.
10The Valuer-General's supporting written submissions identify five different valuation methodologies which the applicant is said to be advancing. This is the context in which the orders are sought. The Valuer-General, through the amended notice of motion, is seeking to have the relevance of the applicant's proposed valuation methodologies determined in advance of the tender of the evidence at trial. That evidence is not before the Court at this hearing. If such a question is to be determined in advance of trial, I do not think that it can or should be decided in an evidentiary vacuum. It is better resolved under the expert evidence procedures in r 31 of the UCPR than under r 28 as a separate question.
11After discussion during the hearing this morning, the Valuer-General's preferred course now is to await the hearing and make its objection to the quantity surveying evidence when it is tendered. In order to understand the significance of such evidence, it may be anticipated that the applicant's valuation evidence, to the extent it utilises it, would also have to be before the Court. Given the potential complexity of the issue, a reserved judgment would be likely. If the evidence were to be admitted, the Valuer-General would need a reasonable adjournment in order to adduce responsive evidence. If the evidence were ruled to be inadmissible, then substantial costs and hearing time would be saved. This is an alternative course with similar effect to the course of setting aside an equivalent amount of time where the contentious evidence would be put before the Court for directions under UCPR r 31. It may be marginally preferable in this case because it will enable the Court to assess the relevance of such evidence in the full context of the applicant's evidence adduced at trial, including its valuation evidence which has not yet been finalised. Either course meets one of the applicant's objections which is that the Valuer-General's notice of motion is currently being advanced in an evidentiary vacuum and is expressed to be by reference to the universe of methodologies rather than to the particular methodologies being put by the applicant.
12The applicant does not express a preference for either course over the other. The applicant submits that, instead of either, its quantity surveying evidence should be admitted at trial subject to relevance, which would be determined in the final judgment.
13Given the main purposes of Division 2 of Part 31 of the UCPR to which I have referred at [6] above, and the potential for considerable savings in costs and hearing time if this issue were to be determined in the Valuer-General's favour, I consider that the course proposed by the Valuer-General today is appropriate. On that basis, the parties have agreed upon directions leading to the matter proceeding in this way and being heard on 16 and 17 May 2011.
14The issue in contention in these proceedings is very similar to an issue raised in a matter which I heard last week in the case of In Adam Pty Ltd v Valuer-General ( Nos 30791-93 of 2009) ( Adam ). It is a pity that the Valuer-General did not bring these similarities to the Court's attention earlier. In the interests of consistency and a sound determination, it would have been appropriate for the point in the two cases to have been heard and determined together or consecutively by the same judge. As it appears that I will now be unavailable to hear this case, the best that can now be done is to allow for limited cross-fertilisation of the point in the two cases. This can be achieved by giving directions (as agreed by the parties) that the written submissions and transcript in Adam be made available to the applicant and that the material to date on this point in these proceedings be made available to the applicant in Adam who will be given the opportunity, if it wishes, to make further submissions in light of that material.
15I make orders in accordance with the short minutes of order dated 28 March 2011 which I initial and place with the papers.
[2]
Amendments
07 March 2012 - omission of jurisdiction field
Amended paragraphs: cover page
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Decision last updated: 07 March 2012
Parties
Applicant/Plaintiff:
CFS Managed Property Ltd as Trustee for 120 Pitt Street Trust