Ringrow Pty Ltd v BP Australia Ltd

REASONS FOR JUDGMENT 1 The applicants tender documents 89 and 94 in the applicants' bundle of primary documents (Exhibit A). The tender is objected to by Mr Walton SC, counsel for the respondent. The documents are valuations of the service station known as "BP Lansvale" prepared by Max Henderson and Barry Coad of David Nelson & Partners Pty Ltd on the instructions of St George Bank Ltd. The date of the first valuation report is 12 November 2001; the date of the second is 13 September 2002. 2 The first report values the service station as at 2 November 2001 at $1,800,000. The second report values the service station as at 3 September 2002 at $2,400,000. Both in form, and as a matter of substance, the second valuation is an update of the first which takes into account improvements made to the service station after the first report. 3 Each report states that the highest and best use of the property is the service station/convenience store outlet. Each report states that it was prepared on a 'going concern' basis including 'real estate, goodwill, plant and equipment etc and assumes no leased equipment'. There is no apportionment of value between these items. 4 The valuation report of 13 September 2002 values the freehold of the service station known as 'BP Lansvale' on a going concern basis, for mortgage purposes, at $2,400,000 as at 3 September 2002. The valuation was conducted on three bases which are described in the report. One of those bases was called an 'investment basis' which was used as a check. That method assumed that the property was let on a minimum 5 plus 5 year lease at a rental of $200,000 per annum, leaving the remaining profits of the business (estimated at $230,000) for the lessee as the operation of the service station. The report assesses the leasehold value of the goodwill, including plant and equipment as being about ('say') $300,000. 5 The applicant does not propose to call either Mr Henderson or Mr Coad to give evidence. It is common ground that the effect of s 59 of the Evidence Act 1995 (Cth) ('the Evidence Act') is that the reports are inadmissible unless they fall within the exception to the hearsay rule for business records established by s 69 of the Evidence Act, subject to the general discretion to exclude evidence contained in s 135 of the Evidence Act. 6 The second Further Amended Statement of Claim ('the FASC') at [27] alleges that on or about 19 June 2003 BP served a Notice of Intention and Nomination on the applicant by which it seeks to purchase BP Lansvale at a price which, pursuant to cl 2.5 of the Option Deed (Exhibit A p 450) does not include any allowance for any goodwill attaching to the service station business conducted at the site. This is alleged at [29] to give rise to an unconscionable forfeiture of property against which the applicant seeks relief. During the course of argument, leave was granted to amend [27] to allege that the relevant date is 17 December 2002, or alternatively 19 June 2003. 7 The 'fact' which Mr Holmes QC seeks to prove by the tender of the valuations was identified by him as being that there was at the relevant date valuable goodwill attaching to the service station business, the benefit of which will be forfeited by the operation of cl 2.5 of the Option Deed. Whether that is the effect of cl 2.5 is a matter for final submissions. An issue between the parties is whether there was any valuable goodwill in relation to the service station business as at the relevant date. In Mr Holmes' submission one can deduce from the entirety of the valuation that the valuers attributed a positive value to the goodwill of the service station business, although there is no specific assertion in the document to that effect. Although the second valuation speaks as of 3 September 2002, it is submitted to be some evidence as to the position at the relevant date. 8 Later in his submissions Mr Holmes QC shifted his ground. He referred to the check valuation conducted on an investment basis and contended that this was a specific assertion on the part of the valuers that the goodwill attaching to the service station business had a substantial value. 9 The following issues arise: (i) whether the valuation reports are, or form part of, records kept by a person, body or organisation in the course of, or for the purposes of, a business either now, or in the past: s 69(1)(a)(i) and (ii); (ii) whether the representations in the document were made or recorded in the course of, or for the purposes of, the business: s 69(1)(b); (iii) whether the representations were made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact within the meaning of s 69(5); s 69(2)(a); and (iv) the effect of s 135.