FEDERAL COURT OF AUSTRALIA Investa Properties Pty Ltd v Nankervis (No 5) [2014] FCA 632 Citation: Investa Properties Pty Ltd v Nankervis (No 5) [2014] FCA 632 Parties: INVESTA PROPERTIES PTY LTD (ACN 084 407 241) and INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390) v ASHLEY COLIN NANKERVIS, ADAM KIMBERLY BARCLAY and OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230) File number: QUD 231 of 2011 Judge: COLLIER J Date of judgment: 16 June 2014 Catchwords: EVIDENCE – whether documents "business records" – emails – whether expert valuations in documents admissible – whether asserted facts – whether documents produced by persons with specialised knowledge – not expert reports Legislation: Evidence Act 1995 (Cth), ss 69(1), 69(2)(b), 76, 79, 135, 136 Cases cited: Ringrow Pty Ltd v BP Australia (2003) 130 FCR 569 Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 4) [2011] FCA 57 Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) (2012) 207 FCR 448 Date of hearing: 6 and 11 June 2014 Date of last submissions: 11 June 2014 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Counsel for the First and Second Applicants: Mr DH Murr SC and Ms M Painter SC Solicitor for the First and Second Applicants: Lander & Rogers Counsel for the First Respondent: The First Respondent appeared in person Counsel for the Second Respondent: The Second Respondent appeared in person Counsel for the Fourth Respondent: Mr AP Collins Solicitor for the Fourth Respondents: Carter Newell IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 231 of 2011 BETWEEN: INVESTA PROPERTIES PTY LTD (ACN 084 407 241) First Applicant INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390) Second Applicant AND: ASHLEY COLIN NANKERVIS First Respondent ADAM KIMBERLY BARCLAY Second Respondent OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230) Third Respondent JUDGE: COLLIER J DATE OF ORDER: 16 JUNE 2014 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Annexures CH54, CH65, CH66, CH78, CH106 and CH107 be admitted to evidence. 2. Leave be given to the applicants and the fourth respondent to adduce oral evidence-in-chief from their expert witnesses in respect of annexures CH54, CH65, CH66, CH78, CH106 and CH107. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 231 of 2011 BETWEEN: INVESTA PROPERTIES PTY LTD (ACN 084 407 241) First Applicant INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390) Second Applicant AND: ASHLEY COLIN NANKERVIS First Respondent ADAM KIMBERLY BARCLAY Second Respondent OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230) Third Respondent JUDGE: COLLIER J DATE: 16 JUNE 2014 PLACE: BRISBANE REASONS FOR JUDGMENT 1 On 6 June 2014 I provisionally ruled that certain documents attached to the affidavit of Mr Cameron Holt sworn 6 December 2013 were admissible, and that leave be granted to the parties who are calling expert witnesses in these proceedings for their Counsel to examine in chief those expert witnesses in respect of the documents. The applicants and the fourth respondent have now provided written submissions and authorities for further consideration by me in respect of this provisional ruling. 2 Specifically, the fourth respondent objects to the admission as evidence of the following six annexures to the affidavit of Mr Cameron Holt sworn 6 December 2013: Annexure CH54, being an email from Mr Nankervis to Mr Barclay dated 13 June 2008, in turn forwarding an email from Mr Nankervis to Mr Bill Thompson of the same date. The email refers to a PDF file (which I understand to be the RP Data document in respect of the property) but relevantly for current purposes it sets out three different valuation figures being referable to the CRG Business Plan, the Jones Lang LeSalle valuation, and the State UCV valuation. Annexure CH65, being a letter from CB Richard Ellis to Mr Barclay dated 19 August 2008. The subject of the letter is "Request for Provision of Valuation Services of: Lot 170 RP 904872 – Brittains Road, Bellbird Park". The letter refers, inter alia, to the terms of engagement of CB Richard Ellis in respect of the provision of valuation services, and attaches detailed assumptions, disclaimers, limitations and qualifications as well as valuation and advisory services conditions. Annexures CH66 and CH78, which appear to be a copy of a valuation report prepared for ANZ Banking Group Ltd by CB Richard Ellis dated 5 November 2008 in respect of the proposed residential lot subdivision of Lot 170. Annexure CH106, being a letter from CB Richard Ellis to Mr Barclay dated 9 March 2009 and being in similar terms to annexure CH 65. Annexure CH107, being a copy of a report prepared by CB Richard Ellis dated 6 May 2009, which appears to be a copy of a valuation report prepared for "A major Australian financial institution" of "approved 77 lot residential subdivision Lot 170 Brittains Road". 3 The fourth respondent submits that if the Court intends to permit these documents to be admitted as business records (a course it opposes) the documents should not be able to be relied upon for the truth of their contents, particularly in respect of valuation details. In summary, the fourth respondents submit: 1. The documents are not said to be business records of the applicants or of any other party in this dispute. 2. In any event, they are not "business records" for the purposes of s 69 of the Evidence Act 1995 (Cth) ("the Evidence Act"). Section 69(1) states that the section applies to a document which either (a) forms part of the records of a business or (b) contains a previous representation made or recorded in the document in the course of or for the purposes of the business. Section 69(2) provides that the hearsay rule does not apply to a document (being a business record) if the relevant representation was made by a person who had or might reasonably be supposed to have had personal knowledge of "the asserted fact". 3. The only asserted facts relied on for the purposes of s 69(2)(b) of the Evidence Act are opinions as to the value of the property contained in the documents. 4. Insofar as any document constitutes opinion of value, it is caught by s 76 of the Evidence Act, which excludes opinion evidence unless it falls within the exceptions contemplated by that section (for example, expert opinion evidence). In this case the documents in the annexures do not come within any of the exceptions of s 76. The authors are not sought to be called as experts or their expertise verified. 5. In any event the reasoning of Hely J in Ringrow Pty Ltd v BP Australia (2003) 130 FCR 569 is directly apposite in this case. Even if the documents are admissible under s 69, they should be excluded pursuant to the Court's general discretion contained in s 135, or alternatively because they unfairly prejudice the fourth respondent within the meaning of s 136. 4 The applicants submit that these documents are admissible, in summary for the following reasons: 1. Annexures CH65 and CH106 are letters which do not contain opinion evidence at all. They are business records. 2. Annexures CH54, CH66, CH78 and CH107 do contain opinion, however: (a) the CB Richard Ellis reports were self-evidently prepared by a person who has specialised knowledge and were wholly or substantially based on that knowledge, so are admissible under the exception in s 79; (b) they do not purport to be expert reports; (c) Ringrow is authority for the proposition that documents containing valuation evidence are admissible as evidence of value. 3. The real issue is whether the documents ought be excluded pursuant to s 135 or s 136 of the Evidence Act. In this case the documents are clearly relevant and have probative value. The fourth respondent has not identified any actual prejudice the admission of any specific documents would cause. Consideration 5 I consider that the documents are admissible as business records, and further that the valuation opinions in those documents are admissible both as asserted facts in business records and as opinions based on specialised knowledge as contemplated by s 79 Evidence Act. Annexure CB54 6 Annexure CB54 is an email from the first respondent to the second respondent, referring to a State Government valuation for the relevant site and annexing a one page RP Data statement. On its face the email (which includes other communications in an email "trail") appears to have been sent on 13 June 2008. The first respondent's email address is given as being at Investa, during the time he was employed by Investa. In my view it is open to the Court to find that this email is a business record as defined by s 69 of the Evidence Act, because it is a document which "is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business": Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 4) [2011] FCA 578; Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) (2012) 207 FCR 448. I am satisfied that the relevant "person, body or organisation" for the purposes of s 69 includes potentially Mr Nankervis, Mr Barclay or the applicants. To the extent that this document includes opinions, in respect of figures stated in the body of the email and the one page annexure, I am satisfied that that material forms part of the business communication and ought be admitted. Annexures CH65 and CH106 7 Annexures CH65 and CH106 are term of engagement letters, prepared by CB Richard Ellis and sent to Mr Barclay care of "Brittains Road Developments P/L" in anticipation of the provision of valuation services to be provided by CB Richard Ellis in respect of Lot 170. No opinions are expressed in these letters, other than in the very limited sense of an estimate as to the time required for the work to be completed. In my view these documents squarely fall within the business records exception found in s 69 of the Evidence Act. Annexures CH66, CH78 and CH107 8 Different considerations apply however in respect of annexures CH66, CH78 and CH107. These documents are substantial and detailed valuation reports prepared by CB Richard Ellis, variously prepared for a specific financial institution (namely ANZ Bank) or financial institutions at large. Issues addressed in the reports include site details, the proposed development, market commentary, and the valuation rationale adopted by the valuer. 9 In considering the admissibility of this material, the decision of Hely J in Ringrow is directly on point. In that case, too, the applicant sought to tender valuation reports pertaining to a major issue in contention, however did not intend to call the valuers themselves to give evidence. After carefully considering the material before the Court his Honour concluded, in summary: A reasonable inference could be drawn that the original valuation reports formed part of the records kept by, inter alia, the valuer, and that the representations in the reports were made in the course of and for the purposes of the business of the valuer. Section 69 of the Evidence Act is to be construed broadly. The inference may be drawn that the valuers who prepared the reports before his Honour had personal knowledge of the contents of those reports. Assertions of "fact" to which s 69 refers includes assertions of opinion: Ringrow at p 572[13]. The asserted facts in the valuation reports in question were the expressions of opinion by the valuers contained in the valuation reports. It followed that the valuation reports before his Honour were admissible. The probative value of the reports before him was slight because, inter alia, the reports did not squarely address the issue on which they were tendered. His Honour concluded that the reports should be excluded under s 135 of the Evidence Act. 10 In this case I am satisfied that the valuation reports in annexures CH66, CH78 and CH107 are business records within the meaning of s 69. At the very least it is reasonable to infer that they are business records of CB Richard Ellis. Further, there is no suggestion that they were not prepared by CB Richard Ellis, and more particularly by a person who has specialised knowledge within the meaning of s 79 of the Evidence Act such as to be admissible under that provision. To that extent I consider that annexures CH66, CH78 and CH107 are admissible pursuant to both s 69 and s 79 of the Evidence Act. 11 While I note the concerns of the fourth respondent that the applicants do not intend to either call the expert valuers who prepared these reports, or attempt to satisfy the requirements of Practice Note CM 7 Expert witnesses in proceedings in the Federal Court of Australia, this does not mean that annexures CH66, CH78 and CH107 are otherwise inadmissible for the reasons I have explained. 12 Rather, as the applicants submit, the real question before me is whether I should exclude or limit the use of annexures CH66, CH78 and CH107 pursuant to s 135 or s 136 of the Evidence Act. Section 135 confers a discretion on the Court to refuse to admit evidence if its probative value is substantially outweighed by the danger that it might be unfairly prejudicial to a party, or be misleading or confusing, or cause or result in undue waste of time. The Court may limit the use to be made of evidence pursuant to s 136 if there is a danger that a particular use of the evidence might be unfairly prejudicial to a party, or be misleading or confusing. 13 In this case I am satisfied that the circumstances do not warrant me exercising my discretion under either s 135 or s 136 to exclude these documents. The applicants submit that the documents show contemporaneous opinions as to value, and to that extent they are generally relevant to matters in issue in these proceedings including the conduct of the first and second respondents, what each of them knew, and what they did not tell the applicants. I agree. Further, as I explained to the parties during oral submissions, I am satisfied that any possible prejudice to the fourth respondent can be addressed by: evidence which can be elicited from and given by expert valuation witnesses who are appearing in these proceedings; and submissions which the parties may make after the evidence is complete. 14 As I have already observed, the weight the Court can attribute to the material in annexures CH66, CH78 and CH107 can ultimately be viewed in a meaningful way through the prism of expert evidence which can be tested by cross-examination in Court. Conclusion 15 It follows that I confirm my provisional ruling. Annexures CH54, CH65, CH66, CH78, CH106 and CH107 are admissible. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 17 June 2014