Talacko & Ors v Talacko [2008] VSC 313

Supreme Court of Victoria|2008-08-22|Before: OSBORN J

Directions as to valuation issues - including resolution of identity of relevant properties.

1 The plaintiffs seek directions as to valuation evidence in accordance with the document entitled "Plaintiffs' Proposed Directions for Valuation Evidence" dated 20 June 2008.

3 After discussion before me, the valuation of the Dresden properties was not pursued because they are and relevantly have been held in the proportional entitlements for which the plaintiffs contend.

4 It seems to me that in the first instance the plaintiffs are entitled to adduce evidence:

(a) as to the market value of land as at the date of trial, in which the defendant has an interest and in respect of which they claim a partial beneficial interest pursuant to the original amended claim; and

(b) as to income derived up until the date of trial in respect of which they claim a partial beneficial entitlement.[1]

5 Counsel for the defendant objects that there is a threshold question as to the definition of the properties in respect of which the plaintiffs may claim. This question turns on the proper construction of clause 6 of the terms of settlement. An essential question is whether such properties are limited to those particularised under paragraph 24 of the original amended statement of claim. The defendant contends that it was these properties which were the subject of the claim forming the subject of settlement.

6 Other issues also arise with respect to the description of the defendant's interest in the Hastalska 15 and Melantrichova 11 land, in paragraph [24] of the original amended statement of claim. Questions also arise as to whether certain interests purchased by the defendant fall within the ambit of the relevant description. These issues are not presently the subject of articulation in the defendant's second further amended defence of 26 July 2008. They appear to me to be an alternative to the pleading in [54A].

7 I accept that a question arises as to the extent of the properties in respect of which the plaintiffs are entitled to claim. There is, however, no dispute the claim embraces the core central Prague properties, which it appears are the most valuable.

(a) facilitate resolution of the construction point; and

(b) put in place a framework for the initial preparation of evidence relating to the central Prague properties.

9 Counsel for the defendant opposes an order for a joint conference seeking to agree to a joint valuer or assessor. There seems little or no point in making such an order in the circumstances.

10 He further opposes the appointment of a joint valuer or assessor by the Court from a list of nominees put forward independently by each party.

11 He submits that each party should be entitled to put forward its own valuation evidence.

12 He accepts that if this course is followed, the defendant should be required to produce valuation reports before the plaintiffs.

(a) The appointment of opposing valuers will increase the cost above that which would be incurred if a single assessor were appointed, but it is the defendant who is prima facie at greatest risk with respect to such costs;

(b) The defendant's position is that the current market value of the properties is the product of betterment resulting from improvements carried out by the defendant. It is accordingly said to be necessary to assess not only the current market value of the properties, but also to assess the contribution of the defendant to such betterment;

(c) The latter issue turns on evidence available only to the defendant, and in respect of which it is desirable the defendant state his case at the outset of the valuation exercise.

14 The assessment of income derived in respect of the properties will also require a process of discovery of financial records. It is logical to undertake this process simultaneously with the initial valuations, in order to clarify what expenses incurred by the defendant are said by him to be properly set off against income (to which the plaintiffs would otherwise have a claim), and what expenses are to be characterised as capital applied to the improvement of the properties in issue.

15 Subject to further submissions of counsel I propose to order:

(1) that the question of what properties and interests in such properties are referred to in paragraph 6 of the terms of settlement dated 23 February 2001, be the subject of further pleading, by way of amended defence as the defendant may be advised, within 28 days;

(2) valuations in the proceeding be prepared and provided in accordance with Order 44.03 of Chapter 1 of the Rules of the Supreme Court;

(3) that within 76 days the defendant file and serve any expert opinion on which he seeks to rely with respect to the market value of the whole of the defendant's current interest and any lesser interest which the defendant contends is relevant, in:

(4) the defendant within 76 days give discovery of all documents relating to income derived from the said properties by the defendant since the acquisition by him of any interest in each such property.

16 The question of whether the construction of paragraph 6 of the terms of settlement insofar as the identity of the properties properly forming the subject of further claim is concerned, should be tried by way of a preliminary issue or whether further and other directions should simply be made with respect to valuation, will have to be resolved when the issues are better pleaded.

[1] See the claims made at [26] of the original Amended Statement of Claim dated 18 May 2000.

At a glance

Court

Decision date

Before

Source

Judgment (28 paragraphs)

Parties