The Warehouse Pty Ltd atf Warehouse Invest Trust v Valuer General

Background

1. The salient facts may be shortly stated.
2. Following the valuation of the Land as at 1 July 2017 and 1 July 2018 by the Valuer General, Andrew Bates a valuer with Preston Rowe Paterson Sydney Pty Ltd lodged the Objections on or about 4 March 2019 on behalf of Warehouse.
3. The Valuer General determined the Objections on 5 March 2020 and issued letters dated 5 March 2020 in respect of each of the Objections informing Mr Bates that each had been disallowed. Under the provisions of s 38(1) of the Valuation Act, an appeal to this Court (provided by s 37) must be made not later than 60 days after the notice of the determination is issued (the '60-day period'). However, pursuant to s 38(2) of the Valuation Act, the Court is empowered to allow a person to appeal after the 60-day period. The effect of this was that the 60-day period to commence appeal proceedings against the determinations of each of the Objections ended on 4 May 2020.
4. Following the letters from the Valuer General dated 5 March 2020, Mr Bates and representatives of the Valuer General engaged in intermittent correspondence in relation to the contamination of the Land, and in particular in regard to the expected cost of decontamination of the Land, which Warehouse contends significantly affects the assessed valuations of the Land. While representatives of the Valuer General were waiting for Mr Bates to provide requested costs for disposal of various soils to remediate the contamination on the Land, the 60-day period to appeal the determinations passed.
5. On or about 28 May 2020, Mr Bates, on behalf of Warehouse, lodged an objection to the valuation of the Land as at 1 July 2019 ('2019 objection'), and what, on the evidence before the Court, appears to be an additional objection to the valuation of the Land as at 1 July 2018 ('additional 2018 objection'). The email receipt issued by the Valuer General indicated that Mr Bates noted this was a "late objection" due to COVID-19 restrictions, and requested that the late objection be accepted by the Valuer General.
6. On 15 June 2020, the Valuer General issued a letter to Mr Bates referring to a "late objection" to the land value as at 1 July 2018. On this same date, the Valuer General issued a letter to Mr Bates referring to a "late objection" to the land value as at 1 July 2019. Both letters indicated that the Valuer General would consider the late objections despite being received more than 60 days after the land valuations were issued, and requested further information from Mr Bates to support a review.
7. On 21 July 2020, the intermittent email correspondence between Mr Bates and representatives of the Valuer General in relation to the contamination of the Land featured an email from Mr Bates to the Valuer General indicating that Mr Bates wished to submit an environmental report in relation to the expected cost of decontamination of the Land "under a S35AA application to review [objections as at 1 July 2017 and 1 July 2018]", where in simple terms s 35AA of the Valuation Act provides for the Valuer General to permit a further objection to a valuation that has already been the subject of an objection.
8. On 20 August 2020, the Valuer General issued a letter to Mr Bates which informed him that objections to the land valuations as at 1 July 2017 and 1 July 2018 had been considered under s 35AA of the Valuation Act (due to the previous objection process that had been undertaken and determined), and would not be accepted (the 'August correspondence'). The August correspondence noted that for a "new objection" to be considered, the information provided must be "significantly different or new", and that the information provided by Mr Bates in relation to the removal of the contaminated soil was "not knowledge available" at the time of the land valuations as at 1 July 2017 and 1 July 2018. Copies of the valuation reports dated 22 April 2019 prepared as a result of the "previous objections" were provided to Mr Bates for reference. The August correspondence concluded: "If you are not satisfied with the determination of the original objections, you can appeal them in the NSW Land and Environment Court. Under section 38 of the Valuation of Land Act 1916, you had 60 days from the date of this letter to lodge your appeal. However, the court may accept a late appeal."
9. Warehouse submits that it is not clear from the August correspondence whether the Valuer General considered and then determined to disallow these objections as fresh objections under s 35AA of the Valuation Act or whether they had merely refused permission for Warehouse to make fresh objections under s 35AA. The Valuer General submits that Warehouse's "later objections" were not accepted under s 35AA of the Act (and accepts that the reference to "this letter" was erroneous and should have referred to the correspondence dated 5 March 2020). While not determinative in these motions, from my review of the evidence and the statutory framework of s 35AA of the Valuation Act, I consider that the Valuer General refused permission for Warehouse to make fresh objections under s 35AA.
10. On 12 January 2021, the Valuer General issued a letter to Mr Bates informing him that the 2019 objection had been allowed in part. An appeal in respect of the partial allowance of the 2019 objection was lodged on 9 March 2020, within the 60-day period prescribed by s 38(1) of the Valuation Act. This appeal is not the subject of these motions, as it does not require leave from the Court to be commenced.
11. On 9 March 2021, Warehouse lodged the appeals against the determinations of the Objections, and filed these motions with the Court.

Consideration

1. The principles regarding the Court's consideration of an application to allow an appeal after a fixed period are relatively clear. The frequently cited authorities (such as Fowler v Valuer General [2015] NSWLEC 133 ('Fowler'); Jassls Pty Ltd v Valuer General [2006] NSWLEC 59 ('Jassls'); Jackamarra v Krakouer (1998) 195 CLR 516; [1998] HCA 27 ('Jackamarra v Krakouer'); and Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 ('Gallo v Dawson')) indicate that there are four matters for the Court to consider in deciding whether to exercise the discretion to allow an appeal pursuant to s 38(2) of the Valuation Act, being, first, the length of the delay (beyond the 60-day period); second, the reasons for the delay; third, any prejudice occasioned by the delay; and fourth, if Warehouse has an arguable case on the appeals it seeks to be allowed to commence.
2. I also note the broader principle of ensuring that justice is done in the circumstances identified by the High Court as guiding the exercise of discretionary power to extend time. In this respect, in Gallo v Dawson at 480 McHugh J noted that "[t]he grant of an extension of time under this rule [being Order 60, rule 6 of the then High Court Rules which provided for extensions of time] is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties" (citations omitted). Similarly, in Jackamarra v Krakouer, Kirby J at 539-540 noted: "But where… the discretion is conferred in unlimited terms, the question for the decision-maker is whether it would be just in all the circumstances to grant or refuse the application. Necessarily, the indulgence is not granted as of course. It is for the party seeking to persuade the decision-maker to show that it should be granted. …Inherent in the grant of a discretionary power is the assumption that it will sometimes be refused." (Citations omitted.)
3. Having considered the evidence before the Court, the submissions of the parties, and the approach in the authorities, I now address each of the four matters.

Length of delay

1. Warehouse submits that the length of the delay, while not insignificant, is not excessive. Warehouse notes that the appeals were lodged approximately 10 months after the 60-day period measured from the date of the determination of the Objections in March 2020 (or approximately 7 months after the 60-day period measured from the August correspondence to the extent that it was a determination to disallow objections). The Valuer General submits that a proper analysis of the August correspondence would not suggest that it amounts to a determination to disallow objections, and submits that the length of delay requiring explanation by Warehouse is 10 months.
2. I accept that the length of the delay is 10 months after the 60-day period, as it should be measured from the determination of the Objections in March 2020. I consider this to be a significant delay which, without cogent explanation, and subject to the matters considered below, would clearly militate against exercising the discretion under s 38(2) of the Valuation Act.
3. Warehouse also contends that if the Court allows the appeals to be commenced out of time, the hearings can be heard efficiently and concurrently with the appeal in relation to the 2019 objection. I am mindful of the need for the Court to prioritise the just, quick and cheap resolution of the real issues. I note the fact that the Court would likely hear appeals which would raise similar issues (albeit for different base dates) is of some moment. Although not determinative, I take into account that the Court would already be hearing the 2019 objection, if the appeals are allowed to be commenced.

Reasons for delay

1. Warehouse submits that following the initial determination of the Objections in March 2020, Warehouse did not simply "sit on its hands" and "allow the appeal period to expire". Rather, it engaged in "on-going dialogue" with the Valuer General in relation to the Objections which "culminated" in the August correspondence.
2. Having considered the evidence in the March Affidavit and the April Affidavit, I note that what Warehouse characterises as "on-going dialogue" during the period leading up to the August correspondence could also be characterised as Warehouse engaging in a number of different statutory processes under the Valuation Act in relation to the Objections, the 2019 objection, and the additional 2018 objection. However, I accept the evidence of Mr Hanscomb that Warehouse has at all times treated the objections as a single "package". Taking this view, the exchanges between the Valuer General and Warehouse's representatives in relation to the valuation of the Land may be characterised as "on-going dialogue".
3. I also accept, but not without some concern, the evidence of Mr Hanscomb that the "continuing engagement" between Warehouse's representative and the Valuer General, and the issuing of multiple letters "purporting to commence the 60 day period for appeal", resulted in Warehouse misunderstanding the relevant deadlines. My concern relates to the fact that Warehouse appears to have retained experienced advisors throughout its intercourse with the Valuer General.
4. The continuation of engagement after the determination of objections was characterised as "important" by Craig J in Fowler at [5], and was considered by Preston CJ of LEC in Jassls, when their Honours allowed appeals out of time. I similarly consider that ambiguity about the relevant deadlines for the commencement of the appeals created as a result of continuing engagement with, and unclear correspondence from, the Valuer General, supports the exercise of the discretion to allow the appeals pursuant to s 38(2) of the Valuation Act.
5. Warehouse further submits that, until legal advice was sought in early December 2020, the director of Warehouse, Mr Nitzan Ronen, was unaware that the relevant deadlines under the Valuation Act for commencing appeals in relation to the Objections had passed. On becoming aware of the deadlines, the appeals were commenced promptly thereafter.
6. In this respect, on or about 12 December 2020, Warehouse's solicitors received some of the material relating to the Objections from Mr Bates. In the period between December 2020 and March 2021, Warehouse's solicitors obtained copies of documents relating to the Objections and the 2019 objection from Mr Bates. The appeals and these motions were filed in early March 2021.
7. The Valuer General notes the period of time between Mr Ronen becoming aware of the relevant deadlines under the Valuation Act in December 2020 and January 2021, and Warehouse filing the appeals on 9 March 2021. The Valuer General also notes that Warehouse has not provided evidence about why Mr Bates did not inform Mr Ronen that the relevant deadlines had passed.
8. I am mindful of the comments of Kirby J in Jackamarra v Krakouer at 543 in relation to his Honour's consideration of "whether the delay is that of the litigant or of its lawyers, with which the litigant should not be saddled" (noting Warehouse's ability to safeguard its own interests may be relevant to this consideration). While these circumstances do not involve a delay by Warehouse's solicitors, I note Mr Hanscomb's evidence in relation to the personal steps undertaken by Mr Ronen in seeking resolution of the Objections, including his monthly enquiries of Warehouse's representative throughout 2020. On the evidence before the Court, Warehouse, and Mr Ronen, do not appear to be responsible for the delay in lodging the appeals in relation to the Objections.
9. Given these reasons, I consider that Warehouse has provided a reasonable explanation for the delay in lodging the appeals until 9 March 2021, and that this supports the exercise of my discretion to extend the time for the appeals.

Prejudice

1. No prejudice occasioned by the delay is asserted by the Valuer General.

Arguable case

1. The principal basis for the appeals by Warehouse will be Warehouse's contention that the issued land values as at 1 July 2017 and 1 July 2018 are too high because the Valuer General has made inadequate allowances for the costs of remediation of the contamination present on the Land. Warehouse highlights that no specific allowance for these costs appears to have been made in the determination of the Objections, in contrast to the Valuer General's approach of partially allowing the 2019 objection and reducing the land value as at 1 July 2019, in part, due to a specific allowance of $10,900,000 being made for the cost of remediation of the contamination.
2. Warehouse will contend that this allowance in relation to the land value as at 1 July 2019 was inadequate in the appeal related to the 2019 objection, and that a greater amount should be allowed for both the 2019 objection and the Objections (noting it is the Objections which are the subject of these motions). Waterhouse notes that it provided a technical consultant's report in support of the 2019 objection, opining that the additional cost of developing the Land due to the presence of contamination was approximately $44,000,000.
3. The Valuer General submits that, as outlined in the August correspondence, the evidence in relation to contamination "was not knowledge available at the time of [the land valuations as at 1 July 2017 and 1 July 2018]".
4. The approach to assessing whether a case is arguable was considered in Jackamarra v Krakouer by Brennan CJ and McHugh J at 519-522, and Kirby J at 540. Their Honours noted that the assessment normally involved considering "the outline of the case" (citing Lord Denning in R v Secretary of State for the Home Department; Ex parte Mehta [1975] 1 WLR 1087 at 1091; [1975] 2 All ER 1084 at 1088). Kirby J identified that if a case is "hopeless, unarguable or bound to fail" the request for an extension of time will be refused: at 540. This high-level approach balances the need to identify whether granting leave to appeal is futile (and thus Court resources should not be expended on hearing it) with the imperative not to unnecessarily expend Court resources during this identification process by requiring overly detailed submissions when making the decision whether to grant leave.
5. I consider that Warehouse has provided an appropriate outline of the case that it seeks to make out in the appeals, noting that "parties do not expect to argue the merits issue as elaborately as if they were arguing the appeal itself": Jackamarra v Krakouer at 522 (Brennan CJ and McHugh J). In this respect, I note that the contention between Warehouse and the Valuer General in relation to whether knowledge of the contamination was available at a particular time is likely to be a matter of some complexity that will require the examination of detailed evidence. Of course, I express no view in relation to prospects of its success.
6. Given this, I consider that on the outline of the case provided by Warehouse there is an arguable case for Warehouse in the appeals and I factor this into the exercise of my discretion to allow Warehouse to commence appeal proceedings.

Conclusion

1. While not without some reservations, for the reasons above, I consider that it is appropriate to allow Warehouse to appeal the determinations of the Objections after the 60-day period otherwise prescribed by s 38(1) of the Valuation Act.

In proceedings 2021/00067972:

1. The Court makes the following orders: 1. Pursuant to s 38(2) of the Valuation of Land Act 1916 (NSW), The Warehouse Pty Ltd atf Warehouse Invest Trust is allowed to appeal after the 60-day period for making the appeal prescribed by s 38(1) of the Valuation of Land Act 1916 (NSW). 2. The time for filing the appeal is extended to 9 March 2021 being the date on which The Warehouse Pty Ltd atf Warehouse Invest Trust filed an application in Class 3 of the Court, being the application which shall be treated as having duly instituted the appeal. 3. Each party is to bear their own costs in relation to the notice of motion filed 9 March 2021.

In proceedings 2021/00068066:

1. The Court makes the following orders: 1. Pursuant to s 38(2) of the Valuation of Land Act 1916 (NSW), The Warehouse Pty Ltd atf Warehouse Invest Trust is allowed to appeal after the 60-day period for making the appeal prescribed by s 38(1) of the Valuation of Land Act 1916 (NSW). 2. The time for filing the appeal is extended to 9 March 2021 being the date on which The Warehouse Pty Ltd atf Warehouse Invest Trust filed an application in Class 3 of the Court, being the application which shall be treated as having duly instituted the appeal. 3. Each party is to bear their own costs in relation to the notice of motion filed 9 March 2021.

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