Kalambaka Pty Limited v Minister Administering the Environmental Planning and Assessment Act 1979

RESPONDENT: Minister Administering the Enviornmental Planning and Assessment Act 1979

30114 of 2008 APPLICANT Tiako Pty Limited

RESPONDENT: Minister Administering the Enviornmental Planning and Assessment Act 1979

FILE NUMBER(S) : 30068; 30069; 30114 of 2008

KEY ISSUES: EVIDENCE :- Whether pre-trial valuation reports admissible - whether prepared in connection with an attempt to negotiate a settlement of a "dispute", within the meaning of s 131(b) Evidence Act 1995 - whether evidence adduced in the proceeding is likely to mislead the Court unless evidence of earlier valuation report is adduced to contradict or qualify that evidence within the meaning of s 131(2)(g) Evidence Act.

Evidence Act 1995, ss 3(1)(e), 131(1)(b), 131(2)(g) LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 Land and Environment Court Act 1979, s 38(2)

APPLICANTS: Mr J Robson SC SOLICITORS Deacons LEGAL REPRESENTATIVES: RESPONDENT: Mr A Galasso SC SOLICITORS DLA Philips Fox

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

30068 of 2008 KALAMBAKA PTY LTD v MINISTER ADMINISTERING THE ENVIRONMENTAL PLANNING AND ASSESSMENT ACT 1979

30069 of 2008 SALT KETTLE PTY LIMITED v MINISTER ADMINISTERING THE ENVIRONMENTAL PLANNING AND ASSESSMENT ACT 1979

30114 of 2008 TIAKO PTY LIMITED & ANOR v MINISTER ADMINISTERING THE ENVIRONMENTAL PLANNING AND ASSESSMENT ACT 1979

EX TEMPORE JUDGMENT ON VOIR DIRE 1 HIS HONOUR: I am hearing an application for the determination of compensation for the compulsory acquisition of lands pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act). Objection has been taken by the respondent to the admissibility of evidence in cross-examination given by the respondent's valuer, Mr Watt, concerning two previous valuations relating to the subject lands which he carried out for the respondent in or about, respectively, March and November 2006. In order to determine admissibility, I received that evidence on the voir dire. 2 The objection is based on s 131(1)(b) of the Evidence Act 1995. Section 131 provides:

(a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute, or

(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute." 3 Under the Land and Environment Court Act 1979, s 38(2), the rules of evidence do not apply in proceedings such as this in class 3 of the Court's jurisdiction. However, the respondent submits that s 131(1)(b) of the Evidence Act should be applied by analogy. I accept the submission. I consider that the analogy is fair, bearing in mind the statutory policy of encouraging settlements between parties in dispute by protecting settlement communications and related documents from disclosure. 4 The evidence on the voir dire relating to admissibility consists mainly of correspondence in 2006, all marked "without prejudice", from the New South Wales Department of Planning prior to statutory offers under the Just Terms Act in November 2007 and prior to the later commencement of these proceedings. There is also an antecedent email in March 2006 from the respondent's valuer, Mr Watt, to the applicant's planner, Mr Waight, seeking certain information. It is common ground that without prejudice letters in the same terms as those before the Court were sent in relation to all three of the subject properties.

5 The first letter is from the Department of Planning to Mr Waight and is dated 24 April 2006, stating:

"In light of a valuation report by the Department's consultant valuer, it is considered that the property to be acquired has a value of $76,000 GST exclusive and purchase at this amount has been approved...

In addition, the Department is prepared to make a further payment of $2,500 inclusive of GST towards your clients' legal costs plus reimbursement of reasonable valuation fees, if incurred, arising out of the sale to the Department". It was then said that the "offer" was made subject to certain conditions. The letter concluded by stating:

"Please let me know whether you are prepared to accept this total amount of $78,500 for the sale of your property. This purchase would be on the basis that such amount is in full satisfaction of all claims for compensation for the property arising out of the acquisition." 6 On the same day, a letter in substantially the same terms was sent by the Department to the applicant's solicitors, Deacons. 7 On 1 May 2006, the Department wrote a letter to Mr Waight which stated:

"In light of the valuation report by the Department's consultant valuer, it is considered that the property to be acquired has a value of $450,000 GST exclusive and purchase at this amount has been approved." This letter then referred to an offer and continued in substantially the same terms as the earlier letter of 24 April 2006. 8 On 13 November 2006, the Department wrote to Mr Waight enclosing plans for the latest proposal for acquisition to thirty metres from the mean high water mark. The letter stated that their valuer, Mr Watt, was currently reassessing his valuations and that on receipt the Department will issue fresh letters of offer. 9 On 8 December 2006, the Department wrote to Mr Waight stating:

"In light of the valuation report by the Department's consultant valuer, it is considered that the properties to be acquired have a total value as a consolidated development site of $215,250 GST exclusive and purchase at this amount has been approved." The letter then referred to an offer and continued in similar terms to the earlier offers. The area of the lands referred to in the letter was the area later compulsorily acquired which is the subject of these proceedings. The earlier offers had related to a larger area which included the acquired lands. 10 The Just Terms Act has as one of its objects "to encourage the acquisition of land by agreement instead of compulsory process": s 3(1)(e). Consistently with that salutary object, this correspondence came into existence. 11 In these proceedings, the respondent tendered a valuation report by Mr Watt that values the acquired lands at $82,800. That is substantially less than Mr Watt's valuation of about $215,000 for the same lands that formed the basis of the December 2006 offer. Mr Watt in cross-examination proffered an explanation, being at least in part that the latter valuation was based upon different information than was available to him for the valuation tendered in the proceedings. It has also been said on behalf of the respondent that the underlying zoning upon which Mr Watt acted at the time of the earlier offers was City Edge, whereas it is now agreed between the planners that it is Open Space (or perhaps Environmental Protection), which does not permit residential development. Ultimately, such considerations may, or may not, serve to distinguish the 2006 valuations, if they were to be admitted, from Mr Watt's valuation which has been tendered in these proceedings.

12 However, the legal issue at the moment concerns s 131(1)(b) of the Evidence Act which, as I have indicated, I am prepared to apply by analogy even though the rules of evidence do not strictly apply in these proceedings.

13 The starting point is that, in its terms, s 131(1)(b) only applies if the document has been prepared in connection with an attempt to negotiate settlement of a "dispute". The evidence before me does not establish that there was a dispute, in the sense of any disagreement between the parties, at the time the letters were written. Certainly there was a dispute, in the sense of disagreement, subsequently; but that is not to the point. The respondent submits that "dispute" does not mean disagreement, but the broader topic of the proposed acquisition of land. No authority was cited by either party as to the meaning of "dispute". I am of the view that it means substantial disagreement. On that view, s 131(1) is not engaged.

14 If I am in error, I am of the opinion that in the circumstances of this case s 131(2)(g) would apply to exclude s 131(1) at least in relation to Mr Watt's November 2006 valuation. Section 131(2)(g) provides:

"(2) Subsection (1) does not apply if: …

(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence". 15 It seems to me that that the evidence in Mr Watt's report tendered in these proceedings is likely to mislead the Court in the sense that the Court, if uninformed of the existence of any earlier valuation by Mr Watt, would think that this is the only valuation opinion that he has expressed relating to the subject lands. His November 2006 valuation assessment relates to the subject lands and is considerably higher than the valuation assessment in his report tendered in evidence in these proceedings. His evidence in that regard in cross-examination was adduced by the applicants to contradict or to qualify his valuation report tendered in the proceedings. Therefore s 131(2)(g) is engaged. 16 It may be that, at the end of the day, the difference between the valuation in his report tendered in these proceedings and in his November 2006 report can be rationalised; but that is another issue.

17 For these reasons, I overrule the objection and admit the evidence of Mr Watt to which I have referred.

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