Tenstat Pty Limited v New South Wales Valuer-General

Land and Environment Court (NSW)|2002-02-20|Before: Talbot J

The applicant contends that the determination of land value by the Valuer-General is too low.

The demise to McWilliam's Wines is subject to the full effect of the covenants shortly noted as follows:- 1. That the Lessee covenants with the Lessor to pay rent.

And to pay taxes and any imposition and outgoings of whatsoever nature which are at any time during the term payable in respect of the demised premises or the user or occupation thereof or any service or supply thereto.

It is not disputed that the Valuer-General has not, to date, given a notice of valuation of the land to McWilliam's Wines pursuant to s 29(1)(c) of the Valuation Act. Nor is it in contention that McWilliam's Wines is entitled to receive such a notice. The appeal has not been listed for hearing.

By a notice of motion filed on 22 January 2002 McWilliam's Wines moved the Court for the following orders:- 1. That McWilliam's Wines Pty Limited (ACN 000 024 108) be joined as a party to these proceedings.

Alternatively, that McWilliam's Wines Pty Limited (ACN 000 024 108), be given leave to intervene in these proceedings.

The applicant opposes the making of the orders proposed by McWilliam's Wines in the notice of motion. Mr Row, who appears for the Valuer-General, initially indicated that he would be making a submitting submission. However, contrary to the original expectation, Mr Row ultimately made a submission which appears, in some respects, to support the application made by McWilliam's Wines, generally on the grounds of fairness.

Section 29(1)(a) and (c) and s 29(3A) of the Valuation Act provide as follows:- 29 Notice of valuations to owner

(1) On furnishing a valuation list to the council of a local government area, the Valuer-General must cause notice of each valuation contained in the list to be given to: (a) the owner of the freehold estate in the land, and (b) … (c) any lessee of the land under a written lease for a term exceeding 3 years who, under the lease, is liable to pay the whole or any part of any rate or tax to a rating or taxing authority in respect of the land, and (d) … (3A) A person to whom the Valuer-General has given written notice under subsection (1) may lodge with the Valuer-General written objection to any such valuation within such time as is stated in such notice.

Section 34(1)(a) of the Valuation Act is as follows:- 34 Grounds of objection

(1) In relation to land the only grounds upon which objection may be taken under this Act are: (a) that the values assigned are too high or too low, …

Section 35 of the Valuation Act requires that an objection must be lodged not later than 60 days after the date of service of the notice of valuation under s 29. However, the Valuer-General may permit a person to lodge an objection after the 60-day period pursuant to s 35A.

The Valuer-General is required to consider and either allow or disallow any objection under s 35B.

Section 37 of the Valuation Act provides as follows:- 37 Right of appeal

(1) An owner of land may appeal to the Land and Environment Court if the owner is dissatisfied with the Valuer-General's determination of the owner's objection. (2) An appeal may not be made on the ground that the objection is taken to have been disallowed, as referred to in section 35C (4), unless written notice of the objector's intention to appeal on that ground has been given to the Valuer-General at least 14 days before the appeal is made. (3) No person or body has jurisdiction or power to conduct a review or hear an appeal in respect of the determination or an objection except as provided by this Part. 13. The term "Owner" is defined in s 4 of the Valuation Act as follows:-

Owner means the person who, whether jointly or severally, is seised or possessed of or entitled to any estate or interest in land or stratum.

It can be appreciated from the above-mentioned extracted provisions that until a notice is issued to McWilliam's Wines, pursuant to s 29(1)(c) of the Valuation Act, it cannot implement the process which ultimately leads to an appeal to this Court as a person entitled to an estate or interest in the land falling within the definition of "owner" .

McWilliam's Wines seeks to invoke the Court's power pursuant to Pt 8 r 8(1)(b) of the Supreme Court Rules 1970 ("the Supreme Court Rules"), which states as follows:- [8.8] Addition of parties

8 (1) Where a person who is not a party - (a) …

(b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon,

the Court, on application by him or by any party or of its own motion, may order that he be added as a party and make orders for the further conduct of the proceedings.

There is no issue that McWilliam's Wines is to be regarded as an owner of the land, being the holder of an estate or interest as lessee, for the purposes of the Valuation Act. This is particularly relevant to the application of s 37 in the present context. If a notice of valuation had been given to McWilliam's Wines pursuant to s 29(1)(c) then there would have been a right to object pursuant to s 29(3A) and ultimately to appeal pursuant to s 37(1).

The Valuer-General acknowledges that McWilliam's Wines, as lessee, was not, at any time, sent a notice acquainting it with the existence of the valuation made for the base date of 1 July 2000. The Court has evidence of the Valuer-General's response to an objection made by the applicant whereby the objection had been disallowed. It is the disallowance of the objection by the applicant that provides the basis for the present appeal.

Mr Ogborne, who appears for McWilliam's Wines, relies primarily on the judgments of the Master of the Rolls, Lord Denning, and Diplock LJ (with whom Salmon LJ agreed) in Gurtner v Circuit and Another [1968] 2 QB 587.

Preferring a wide interpretation of the corresponding rule in England, the Master of the Rolls explained his view at p 595 as follows:- It seems to me that when two parties are in dispute in an action at law, and the determination of that dispute will directly affect a third person in his legal rights or in his pocket, in that he will be bound to foot the bill, then the court in its discretion may allow him to be added as a party on such terms as it thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in dispute to "be effectually and completely determined and adjudicated upon" between all those directly concerned in the outcome.

Recognising the undesirability of propounding general propositions wider than are strictly necessary for the determination of a particular case, Diplock LJ resorted to the rules of natural justice at p 602 - 3 as follows:- Clearly the rules of natural justice require that a person who is to be bound by a judgment in an action brought against another party and directly liable to the plaintiff upon the judgment should be entitled to be heard in the proceedings in which the judgment is sought to be obtained. A matter in dispute is not, in my view, effectually and completely "adjudicated upon" unless the rules of natural justice are observed and all those who will be liable to satisfy the judgment are given an opportunity to be heard.

Needham J found support from Gurtner in Re Great Eastern Cleaning Services Pty Ltd and the Companies Act [1978] 2 NSWLR 278, when he said at 281 that the court, before exercising its discretion to make or refuse an order that a person be joined as a party, should "take into account what effect such an order could have, not only on the applicant, but on other persons" . Although in Great Eastern Cleaning Services there was technically no "matters in dispute" between the applicant and the respondent, Needham J took a liberal view that the expression covers what could be considered to be the issues in the proceedings.

In Walker v Commonwealth Trading Bank of Australia [1985] 3 NSWLR 496 Needham J had further occasion to again consider the effect of Pt 8 r 8 of the Supreme Court Rules. The matter in dispute in those proceedings was whether certain payments were void as preferences. The plaintiff was the liquidator of a company who asserted that payment to the defendant in discharge of its indebtedness constituted preferences to the defendant. The defendant denied the allegation. His Honour found that there was no suggestion by the defendant that it would fail to put before the court all the matters which should, in its and the mortgagors interest, be so placed. The defendant proposed that the mortgagors be added as parties to the proceedings so that they would be bound by the decision of the court on the question of preference so that in proceedings threatened by the mortgagors the issue could not rise again. Needham J was not able to see how the joinder of the mortgagors was necessary to ensure that all matters in dispute were effectually and completely determined and adjudicated upon. He recognised that the administration of justice requires that litigation should be completed as soon as possible and that issues should not be re-litigated. However, he found no hint of that principle in Pt 8 r 8(1)(b) of the Supreme Court Rules except in the case where the joinder is "necessary" .

Mr Ogborne points to the right of McWilliam's Wines to be involved with the process that commences with the delivery of notice pursuant to s 29(1)(c) of the Valuation Act. Although no proprietary or non-proprietary right or legal right of McWilliam's Wines is affected by the outcome of the appeal, nevertheless the company's commercial interests may be affected by the application of the conditions of the lease, particularly covenant three as set out above (see Gurtner at 595).

Mr Young, who appears for the applicant in the proceedings, who is also the respondent to the notice of motion, relies on the provisions of the Valuation Act to demonstrate that the right of appeal pursuant to s 37 arises solely out of the determination of an objection lodged by one individual. Furthermore, he notes the specific identification of the "appellant's and respondent's cases" in s 39 to support a contention that the Valuation Act does not contemplate the joinder of a third party. In those circumstances, he says, sub-rule 8(1) of the Supreme Court Rules does not apply. He adopts the reasoning applied by Meagher JA in Tweed Shire Council v Minister Administering the Crown Lands Act and Tweed Byron Local Aboriginal Land Council (1996) 92 LGERA 80 at 83 as follows:- There are many reasons, in my opinion, why this sub-rule does not apply in the present case. The primary one is that if, as I think, the statute provides that there are only two parties to an appeal under the Land Rights Act, the statute itself makes the sub-rule inapplicable. Whilst there is a general rule that all interested parties should be joined in proceedings ( Montgomery v Foy, Morgan & Co [1895] 2 QB 321 at 324; John Cooke & Co Pty Ltd v Commonwealth (1922) 31 CLR 394 at 411) that is not a universal rule. Otherwise the role [sic] in Tasker v Small (1837) 3 My and Cr 63, would not exist. In the present case, not only is the sub-rule ousted by an Act of Parliament, but also the appellant has no proprietary right which could be affected, no order is sought against it, its intervention could not be said to be "necessary" in order to obtain a result, and no suggestion has been made that any non-proprietary right of the appellant would be affected, or that it would suffer any disadvantage if it were not joined.

Again, in Samad and the Barbara Street Clinic v The Council of the City of Fairfield, the D-G of the NSW Health Department and the District Court of New South Wales [1999] NSWCA 349, unreported, Meagher JA upheld an appeal against the decision of a district court judge granting leave for the council to be joined as a party to an appeal against the cancellation of a licence by the Director-General of the New South Wales Health Department. Meagher JA, with whom Priestley and Fitzgerald JJA agreed, explained his reasons at par 12, par 13 and par 14 as follows:- The appeal of the appellants under the regulations is an appeal against the person who revoked the licence, viz, the Director General. It cannot be anything else. Dr and Mrs Samad have no complaint against anyone except the Director General. Dr and Mrs Samad seek no relief against the Council, the Director General seeks no relief against the Council. The Council has no proprietary right in the licence. The Council has no legal or equitable estate in the property involved. There is no lis between Samads and the Council. The order sought by the Samads, viz. that the cancellation of the licence be revoked, could have been decided in litigation restricted to the Samads and the Director General.

Certain further matters ought to be noted. They include the following: (1) Dr and Mrs Samad did not consent to the Council's application, but opposed it. (2) The addition of an extra opponent must obviously impose a heavy burden on an appellant in terms of time and money, and should be acceded to only with great reluctance. (3) The order made was to join the Council as a full party, not as amicus curiae. (4) If no joinder were made, there was nothing to stop the Council assisting the Director General in any way it wished to. (5) If Parliament had intended that the Council should have had power to close down premises such as the appellants', no doubt it would have said so; if it did not, it must be assumed Parliament had intended Councils have no such power.

It is a matter of regret that all these, apparently elementary factors, avoided his Honour's attention.

Even if McWilliam's Wines is joined as a party Mr Young contends it could not argue for a reduction in the valuation.

In Tenstat Chullora No 2 Trust v Valuer-General and Another (2000) 110 LGERA 227, which involved the present three litigants, Bignold J addressed the issue of costs claimed by McWilliam's Wines against the present applicant following determination by Commissioner Nott of an appeal by the applicant against the Valuer-General's decision to disallow its objection to an earlier statutory valuation made in respect of the subject land. McWilliam's Wines had become a party to the proceedings having been joined on its own motion, which was not opposed by the original parties to the proceedings. As in the present case, McWilliam's Wines appears not to have received notice of the statutory valuation. It was common ground that McWilliam's Wines had not objected to the valuation.

The following obiter remarks made by Bignold J at p 232 assist the Court with an understanding of Mr Young's submission:- … it was simply incorrect to regard the second respondent as an objector under the Valuation of Land Act, it being common ground that it had not objected to the statutory valuation. (It appears that it may have not received notice of the statutory valuation, apparently as a result of an oversight, but nonetheless, contrary to the requirements of the Valuation of Land Act, s 29(2)(b) that certain classes of lessee be notified of the statutory valuation.) It appears that the parties before the Commissioner presented their respective cases based upon the same fundamental misapprehension.

In these circumstances, whatever role and status the second respondent enjoyed in the proceedings, it was not in the capacity of a statutory objector under the Valuation of Land Act. Although this conclusion casts no doubt on the case it conducted at the hearing of contending that the statutory valuation was too high, inevitably there must be doubt as to the competence of the Commissioner's decision to alter the statutory valuation by reducing it from $5.25 million to $5 million. This doubt arises from the express language of the Valuation of Land Act, s 39 which states: "Without limiting the powers of the Court under the Land and Environment Court Act 1979, the Court shall, if it upholds an objection and is satisfied that the valuation is erroneous, order the valuation to be altered."

It is not necessary to resolve the doubt raised by Bignold J now although it may ultimately become necessary to do so if McWilliam's Wines is joined as a party.

Mr Row from the Crown Solicitor's office initially made an oral submission which had no foundation from the evidence. Mr Ogborne objected to the submission being made in those circumstances and Mr Row, quite properly in my view, withdrew it.

Notwithstanding his withdrawal, the Court subsequently received a submission from the Crown Solicitor more or less in the same terms and supported by an affidavit. No formal application for leave to make the further submissions or to rely on the affidavit evidence has been made. Neither of the other parties to the notice of motion have been given an opportunity to meet or test the evidence or to reply to the further submissions made by the Crown Solicitor. It is indeed extraordinary that a solicitor in the position of the Crown Solicitor should seek to proceed in such an unusual and indeed inappropriate way.

It is true that some observations were made during the course of the hearing which raised questions about whether the Valuer-General had properly complied with the statutory obligations in relation to the subject valuation. However, the procedure adopted by the Crown Solicitor is not the appropriate way to meet any such implied criticism.

The subsequent submissions made by the Valuer-General are rejected.

Although McWilliam's Wines will not be required to satisfy any judgment made in the proceedings as contemplated by Diplock LJ in Gurtner, nevertheless it will be indirectly out of pocket if the applicant is successful in having the Court raise the valuation.

The circumstances are quite distinct from those the Court of Appeal considered in Tweed and Samad in that McWilliam's Wines could suffer a disadvantage if the applicant is successful.

Although Mr Ogborne does not rely on the provisions of s 38 of the Land and Environment Court Act 1979, that section nonetheless applies to these class 3 proceedings. In the Court's opinion the position of the Land and Environment Court should not be confined by the strictly legal approach taken in other jurisdictions when it considers an application made pursuant to Pt 8 r 8(1) of the Supreme Court Rules in classes 1, 2 and 3 of the Courts jurisdiction. In order for the Court to be properly informed in respect of all the issues that are likely to arise in the proceedings it is appropriate that McWilliam's Wines be joined as a second respondent.

The Court does not have complete confidence that all matters in dispute may be "effectually and completely determined and adjudicated upon" if the sole support for the valuation comes from the Valuer-General. Moreover, the Valuer-General has not satisfactorily explained how it is that a right of objection and hence an appeal accrued to the applicant, yet no such right is available to McWilliam's Wines. That issue needs to be dealt with at the hearing.

It is difficult to comprehend from the present state of the evidence how it is that McWilliam's Wines has not been afforded, at least, the same right as the applicant to object and appeal. In the event of two appeals it is likely they could be heard together. In that case, McWilliam's Wines would be a party in its own right.

Mr Young contends that if the Court does join McWilliam's Wines as a respondent then it should be limited to arguing only that the valuation made by the Valuer-General should be maintained. Notwithstanding the obiter views expressed by Bignold J in the earlier Tenstat case the Court is not persuaded that any conditions should be imposed at the time of joinder. If the doubt foreshadowed by Bignold J is ultimately accepted and McWilliam's Wines adduces evidence to the effect that the true valuation of the land should be lower it could be open for the Court to rely on that evidence in order to maintain the Valuer-General's valuation notwithstanding the contention from the applicant that it should be higher.

It is not necessary to make Order 2 in the notice of motion dated 22 January 2002 as the Court believes it is to the same effect as Order 1 in the same motion.

The Court makes the following orders:- (1) Order 1 in the notice of motion dated 22 January 2002. (2) Costs reserved. (3) The matter will be listed for call over before the Registrar at a date convenient to the parties within the next seven days. (4) The exhibits may be returned.

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.

CITATION : Tenstat Pty Limited v New South Wales Valuer-General [2002] NSWLEC 14 APPLICANT: Tenstat Pty Limited PARTIES : RESPONDENT: New South Wales Valuer-General FILE NUMBER(S) : 30099 of 2001 CORAM: Talbot J KEY ISSUES: Practice and Procedure :- joinder of parties pursuant to Pt 8 r 8 of the Supreme Court Rules in class 3 jurisdiction. Land and Environment Court Act 1979 s 38 LEGISLATION CITED: Valuation of Land Act 1916 s 4, s 29, s, 29(1)(a), s 29(1)(c), s 29(3A), s 34(1)(a), s 35, s 35A, s 35B, s 37, s 37(1), s 39 Supreme Court Rules 1970 Pt 8 r 8(1)(b) Gurtner v Circuit and Another [1968] 2 QB 587; Re Great Eastern Cleaning Services Pty Ltd and the Companies Act [1978] 2 NSWLR 278; CASES CITED: Samad and the Barbara Street Clinic v The Council of the City of Fairfield, the D-G of the NSW Health Department and the District Court of New South Wales [1999] NSWCA 349, unreported; Tenstat Chullora No 2 Trust v Valuer-General and Another (2000) 110 LGERA 227; Tweed Shire Council v Minister Administering the Crown Lands Act and Tweed Byron Local Aboriginal Land Council (1996) 92 LGERA 80; Walker v Commonwealth Trading Bank of Australia [1985] 3 NSWLR 496 DATES OF HEARING: 12/02/2002 DATE OF JUDGMENT: 02/20/2002

(2000) 110 LGERA 227

At a glance

Court

Decision date

Before

Source

Judgment (51 paragraphs)

Parties

Cases Cited (5)

Cited By (2)