Roggiero v Valuer General

Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Bonim Stanmore Pty Ltd v Marrickville Council (2007) 156 LGERA 12 Botany Bay City Council v Farnworth Holdings Pty Limited [2004] NSWCA 157 CASES CITED: Farnworth Holdings Pty Limited v Botany Bay City Council [2003] NSWLEC 177 Hillman v The Valuer-General (1938) 14 L.G.R. 14 Mifsud v Campbell (1991) 21 NSWLR 725 Segal and Another v Waverley Council (2005) 64 NSWLR 177 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

APPLICANT Ms K M Dulhunty SOLICITORS N/A LEGAL REPRESENTATIVES: RESPONDENT Ms M Carpenter SOLICITORS I V Knight, Crown Solicitor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT Introduction 1 His Honour: This is an appeal brought by the Valuer General ("VG"), pursuant to s.56A of the Land & Environment Court Act 1979 ("the Court Act"), in respect of a decision by Acting Commissioner David Parker in a valuation objection appeal brought by the Applicant in Class 3 of the Court's jurisdiction on 27 September 2007. 2 Until the hearing of this appeal before me Mr Roggiero had appeared for himself, but on the hearing of this appeal he was represented by counsel (Ms Dulhunty). No Appearance has yet been filed by any solicitor acting on his behalf. Ms Carpenter of counsel appeared for the VG in both proceedings. 3 The VG contends that the Acting Commissioner erred in law in that he either failed to give reasons at all, or provided reasons which are not adequate. The VG further contends that the Acting Commissioner failed to apply s.40(2) of the Valuation of Land Act 1916 ("the VOL Act"), which imposes the onus of proof on the Applicant, and that he determined the valuation at a lesser number in the absence of any (expert valuation) evidence to support a lower valuation. 4 Put at its simplest, the VOL Act allows certain persons to "object" to a valuation by the VG, have that objection determined by the VG, and, if dissatisfied with the VG's determination of the objection, bring an appeal to this Court. The Court's powers are set out in s.40 of that Act: "(1) On an appeal, the Land and Environment Court may do any one or more of the following: (a) confirm or revoke the decision to which the appeal relates, (b) make a decision in place of the decision to which the appeal relates, (c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision. (2) On an appeal, the appellant has the onus of proving the appellant's case." 5 The VG's valuation to which objection was taken in this case valued the Applicant's property (Lot B in DP101314, at 18 Collaroy Street, Collaroy Beach) at $790,000, as at the base date 1 July 2006. The objection was disallowed. Mr Roggiero contended in his appeal to this Court for a valuation of $670,000, and the Acting Commissioner determined the valuation at $750,000.

The Section 34 Conference 6 On 30 November 2007 Jagot J (as List Judge) referred the parties to the Registrar for the appointment of a conciliation conference under s.34 of the Court Act, which was duly set down for 2pm on 13 February 2008 on the subject land. Section 34 relevantly provides that, in the absence of an agreement being reached between the parties at such a conference: "… (4) … the Commissioner must terminate the conciliation conference and: (a) unless the parties consent under paragraph (b), must make a written report to the Court: (i) stating that no such agreement has been reached and that the conciliation conference has been terminated, and (ii) setting out what in the Commissioner's view are the issues in dispute between the parties, or (b) if the parties consent to the Commissioner disposing of the proceedings, must dispose of the proceedings: (i) following a hearing, whether held forthwith or later, or (ii) with the consent of the parties, on the basis of what has occurred at the conciliation conference. (5) The Commissioner, when giving his or her decision under subsection (4) (b), is to give reasons for the decision: (a) in writing, or (b) orally and recorded by means that can be reproduced." 7 The s.34 conference duly occurred on site, but no agreement was reached. The parties agreed that Acting Commissioner Parker should proceed to determine the matter as provided in s.34. Accordingly, Acting Commissioner Parker was obliged to move towards a binding decision under s.34(4)(b), and give his reasons in accordance with s.34(5). 8 There are many documents in the Court file and nothing to indicate to me which, if any, were tendered in evidence before the Acting Commissioner. The parties are, however, agreed that the following three documents in the Court file were formally tendered to the Commissioner on site:

(i) Letters dated 12 and 13 February 2008 from Mr Roggiero to the Department of Lands regarding information obtained from local real estate agents who have sold property in the Collaroy district, in support of the contended value of $670,000. Also attached are rate notices dated 31 August 2006 and 31 August 2007. (ii) A report apparently tendered by the VG and provided to him by Westlink Consulting dealing with the subject property and nine comparable sales. (iii) A " Statement of Basic Facts" filed on behalf of the VG on 23 November 2007, to which are attached details of 11 comparable sales, some of which are common to Item (ii). 9 A copy of the VG's determination of the objection in this case, dated 1 August 2007, appears in the Court file. It presumably was seen by the Acting Commissioner, but it was apparently not tendered as an exhibit. 10 Acting Commissioner Parker noted on the Court file cover on 13 February 2008 "s.34 Mediation & disposal of proceedings without further hearing", and provided to the Registrar the following written report, noting that no agreement had been reached at the on-site conference: "Outcome of conference: Following a conciliation conference under s34 of the Land and Environment Court Act 1979, the parties have been unable to agree. The parties have consented to my disposing of the proceedings without a further hearing under s 34(3)(b)(ii) of the Act. The parties have consented to my having regard to all matters considered in the prior conciliation conference. The conciliation conference traversed a wide arrange of valuation issues relevant to the matter and considered the comparable evidence provided in some considerable detail. Directions: Having regard to the comparable evidence provided, it's (sic) relativity to the location of the subject property and making due allowance for the issues raised by the parties, I determine the valuation to be $750,000 with orders to be made to that effect." 11 An "Order" dated 13 February 2008 was sent to the parties by the Registrar in the following terms on 18 February 2008: " The Court orders that : 1. Having regard to the comparable evidence provided, it's (sic) relativity to the location of the subject property and making due allowance for the issues raised by the parties, I determine the valuation to be $750,000." 12 There is no transcript or other record of the proceedings. No tape or digital audio recorder was seen to be used at any stage. There appears to have been no further argument of the matter in the Court or in writing. There are no "reasons" other than the contents of the "order". 13 Counsel for Mr Roggiero says that her client was happy with the process and the outcome. 14 The Crown Solicitor, acting for the VG, contacted the Registrar on or about 20 February 2008 by email in these terms: " Acting Commissioner Parker presided over the s.34 conference in this matter on 13 February 2008. Orders have now been made determining the land value in the amount of $750,000 as at 1 July 2006.

To allow me to properly advise my client (Respondent), could you please ascertain if reasons for the decision will follow". 15 The Registrar, after contacting Acting Commissioner Parker, emailed the parties on 25 February 2008 in these terms: " Acting Commissioner Parker advises that there will be no written judgment issued in this matter.

The Acting Commissioner gave the parties an outline of his reasons and rationale at the time of the decision".

16 Unlike the Applicant, the VG is clearly dissatisfied with both process and outcome, and brought this appeal on 12 March 2008, seeking in the Notice of Appeal the following orders: " 1. The respondent's appeal be upheld; 2. The orders of the Court dated 13 February 2008 be set aside; 3. The applicant's application be dismissed; 4. In the alternative, the matter be remitted to a Commissioner for the Commissioner to determine in accordance with the decision of the Court; 5. Costs of the appeal." 17 Counsel for Mr Roggiero asks in her written submissions that the VG's appeal be dismissed and that the VG be ordered to pay the Applicant's costs. If the VG's appeal were to succeed, the Applicant agrees that the challenged valuation of the property should be remitted to a different Commissioner for determination again. 18 On behalf of the Applicant, Ms Dulhunty submitted that:

(i) Mr Roggiero is an architect with extensive experience in the building industry. He presented to the Acting Commissioner a detailed argument for a lower valuation. (ii) The material before the Acting Commissioner clearly sets out the issues between the parties. It included information as to the physical nature of the land and the adjoining lots, their size, and the fact that the VG put the same valuation on each. (iii) The Commissioner referred to that evidence in making his order and thereby provided reasons for his decision. (iv) A valuation appeal like this does not demand of the Commissioner the provision of any more extensive reasons than are included in the order. The order shows that the Acting Commissioner has considered the evidence, carried out a site inspection, and heard submissions. All that was required of the Commissioner was the making of a clear finding. (v) The onus provision in s.40(2) of the VOL Act is not " absolute ", and, once the appellant has raised doubts as to the validity of the valuation, as occurred here, the onus of showing that a proper valuation process was undertaken and was not arbitrary shifts to the VG. The submission continues " s.40(2) is no more than a direction to persons coming to the Land & Environment Court, such persons often being lay persons, as to the need to provide some evidence ". 19 Ms Carpenter told the Court on this appeal that she made a submission on site that the Commissioner should consider and follow the decision of the Land & Valuation Court (Roper J) in Hillman v The Valuer General (1938) 14 L.G.R 14 ("Hillman"). It is not clear from the "order" whether or not that submission was considered, let alone upheld or rejected. Hillman is authority for the proposition that "comparable sales" is the appropriate guideline for the valuer to increase or decrease a valuation, be that the VG, or the judicial valuer on appeal. 20 Ms Carpenter also contends that, as the Applicant has no expert valuation qualifications, and brought no expert valuation evidence, to support his contention as to value, the Acting Commissioner could not have been satisfied that the Applicant had discharged the onus imposed on him by s.40(2) of the VOL Act. The Principles 21 A most useful discussion of s.56A appeals, and of the distinction between questions, issues or errors of fact and/or of law, is to be found in the judgment of Biscoe J in Bonim Stanmore Pty Ltd v Marrickville Council (2007) 156 LGERA 12, at pars [6]-[16]. 22 The judicial duty is to state the ground or grounds upon which a decision rests and a failure to do so amounts to an error of law. Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 ("Soulemezis"), per McHugh JA at 277f. There should be a focus on the key points taken and the submissions made in relation to them. The duty extends to expressing findings upon issues which are critical to the case. Mifsud v Campbell (1991) 21 NSWLR 725 ("Mifsud"), per Samuels JA at 728. 23 In Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 ("Beale") at 443-4, Meagher JA said there were three fundamental elements in an adequate statement of reasons: " First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it …

Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached …

Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found". 24 Meagher JA also made clear in Beale that a judicial officer does not have to make explicit findings on each disputed piece of evidence, nor on every argument and submission as "the giving of overly elaborate reasons can serve to undermine public confidence in the judiciary and the judicial system". 25 In Mifsud, Samuels JA said at 728: "It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case". 26 In Soulemezis, McHugh JA said at 278-9: "a judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles … without the articulation of reasons, a judicial decision cannot be distinguished from an arbitrary decision… the giving of reasons … enables the basis of the decision to be seen and understood both for the instant case and for the future direction of the law". 27 These well known authorities of the Court of Appeal were recently reviewed by Tobias JA in Segal and Another v Waverley Council (2005) 64 NSWLR 177. His Honour identified (at [27] and [67]) three purposes served by the giving of reasons, fairly summarised in the VG's written submissions as follows: "(i) it enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge's decision; (ii) the giving of reasons furthers judicial accountability; and (iii) the giving of reasons enables practitioners, legislators and members of the public to ascertain the basis upon which like cases will probably be decided in the future."

28 Lloyd J held in Farnworth Holdings Pty Limited v Botany Bay City Council [2003] NSWLEC 177 ("Farnworth"), that the requirement to provide reasons does not necessitate a tedious examination of the detailed evidence or a minute explanation of every step of the reasoning process, but it does require the exposure of the decision maker's train of thought. His Honour went on to opine that the responsibility of a lay Commissioner in this Court is not as onerous as the duty imposed on a judge. On appeal, the NSW Court of Appeal, in Botany Bay City Council v Farnworth Holdings Pty Limited [2004] NSWCA 157, at [11], Ipp JA (with whom Bryson JA and Cripps AJA agreed) expressly disagreed with Lloyd J's view in this respect, reinforcing the serious obligation imposed on a Commissioner of this Court to give proper reasons in a matter like this. Findings and Conclusion 29 Satisfaction with the s.34 process, and with the outcome, does not relieve the Acting Commissioner of the obligations to observe the requirement of s.34, and the common law duty, to give reasons, nor of the obligation for those reasons to adequately expose the reasoning which led to the conclusion embodied in the order. That conclusion may well be correct and just, but the parties and the community are entitled to know how it was reached, not just what he may have looked at. Justice must not only be done, it must also be clearly seen to be done. How the Hillman principle was applied in this case, or why it was not, would normally be explained in reasons. That is but one rationale for the requirement that reasons be given. 30 It may be said that in his order Acting Commissioner Parker made clear what he looked at and the conclusion he came to, but the process of his reasoning is not explained at all, and is left totally to speculation, albeit that he was not required to give an exhaustive outline of all the steps he took in that process. He may well have made the findings of fact which would be crucial to the outcome, but that is not clear from the published order. The parties were entitled to know which arguments succeeded and why others did not, and which evidence was persuasive and which was not, and why. 31 As decided by Beale, the reasons themselves do not need to be lengthy or elaborate, but a comment like "making due allowance for the issues raised by the parties" does not help this Court on appeal, or the parties, let alone the community, to understand the outcome of this case. 32 The Court Act s.34(5) imposes a statutory requirement for the giving of reasons in writing in a case dealt with under s.34(4)(b), but the issuing of the "order" is not the giving of reasons at all. If I am wrong in that view, I have also concluded that the contents of the "order" are, in any event, inadequate reasons, falling far short of what the cases I have quoted require. 33 The Acting Commissioner's "order" states a conclusion and indicates some matters which he may have considered in reaching that conclusion, but it does not amount to a statement of "reasons" as understood by the authorities and required by the statute under which the process of adjudication was undertaken. 34 No authority is cited in support of the extraordinary submission that s.40(2) of the VOL Act reverses the onus when the VG's valuation is attached (see par [18(v)]), and I reject it absolutely. The onus lies clearly on the challenger and must be discharged by leading evidence probative of some error or of a better view. I cannot be satisfied that the evidence led by the Applicant before the Acting Commissioner was appropriately expert in character to support the Acting Commissioner's conclusion. Nor can I be satisfied, for example, that there was no breach of procedural fairness, such as taking into account some irrelevant matter. However, it is beyond doubt that the Applicant bears the onus. 35 The VG's appeal should be upheld and the Acting Commissioner's order of 13 February 2008 set aside. Mr Roggiero's challenge to the VG's valuation should be remitted for determination afresh by another Commissioner of the Court. 36 As both parties are equally disadvantaged by the failures of the Acting Commissioner in dealing with this case, each party should pay its own costs. Orders 37 The orders of the Court on this appeal will, therefore, be:

(i) The VG's appeal under s.56A of the Court Act is upheld. (ii) The order of the Acting Commissioner dated 13 February 2008 is set aside. (iii) The matter is remitted for determination by a different Commissioner of the Court, according to law and with regard to these reasons. (iv) Each party is to pay its own costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.