Land and Environment Court New South Wales Medium Neutral Citation: CSR Limited v Valuer General (No 2) [2013] NSWLEC 1244 Hearing dates: 13 November 2013 Decision date: 24 December 2013 Jurisdiction: Class 3 Before: Moore SC Decision: See text of judgment Catchwords: EVIDENCE: Late notice of material fact; application to vacate hearing dates; effect of agreement between the parties; evidence contrary to agreement; rejection of evidence Legislation Cited: Land and Environment Court Act 1979 Category: Procedural and other rulings Parties: CSR Limited (Applicant) Valuer-General (Respondent) Representation: Mr P Clay SC (Applicant) Ms M Carpenter, barrister (Respondent) Gadens Lawyers (Applicant) Crown Solicitor's Office (Respondent) File Number(s): 31034 of 2012 Publication restriction: No Judgment Introduction 1SENIOR COMMISSIONER: On 13 November, I dealt with two Notices of Motion in these proceedings, one filed by the applicant and the other filed by the respondent. I dealt with each of those Motions, both of them arising on a short notice basis, by giving a decision with respect to each but indicating that I would provide reasons for my rulings as a portion of the judgment in the subsequent substantive proceedings. 2As it transpired, on the third day of the substantive proceedings, the parties handed up consent orders resolving the valuation that was in dispute between them and removing the necessity for adjudication and, hence, removing the necessity for a judgment that could have provided a vehicle for the reasons for the decisions on each of the procedural motions. 3I subsequently caused an enquiry to be made of the parties to ask if they still wished me to provide reasons for my procedural decisions, indicating that if either party required written reasons I would publish them. As such a request has been made; these are the reasons for my determinations concerning the two motions. For convenience, although the two motions were distinctly different, this judgment constitutes a consolidated set of reasons - but reasons concerning each motion given separately. The respondent's Motion 4The motion that was moved by the respondent sought vacation of the hearing dates. This arose because of concerns about the late service of a statement of evidence by Mr Hubbard, the applicant's valuer, which statement had disclosed to the respondent, for what the respondent said was the first time, the existence of a mining lease over the land at Horsley Park that was the subject of the appeal. The respondent was concerned that there would not be sufficient time for the respondent's advisors to investigate and analyse the impact of that mining lease on relevant matters in dispute between the parties in the valuation appeal. This statement of evidence was filed and served on 8 November, the Friday that was a full working week prior to the scheduled commencement of the hearing on Monday 18 November. 5It is, at this point, appropriate to note that the site that was the subject of the valuation dispute was and remains a functioning brickworks and that the site has had conducted on it, for a considerable period of time, an active extractive industry carried out for the purposes of winning raw materials used in the brick making process. For such an activity to be lawful, not only does the broad use for the purpose of brick making in all its facets require some form of foundational development approval (whether of some existing use right nature lost in the mists of time or a statutory development consent is irrelevant for these purposes) and it requires a lawful authority from the state, under the relevant mining legislation, for the carrying out of any related extractive activities on the site. 6Nothing had ever been pleaded by the respondent that, in any fashion, the activities that were being carried out on the site were not being carried out in an entirely lawful fashion. 7There were two reasons why I decided that it was not necessary to vacate the hearing dates based on what was said to be, by the respondent's legal representatives, the late revelation of the existence of the mining lease over the whole of the site. 8The first, and less important, reason was that the existence of the mining lease was a matter of public record able to be searched through the publicly available information of the government authority that had issued it. 9As previously noted, the existence of such lease was a necessary statutory pre-requisite for the carrying out of the extractive industry of obtaining the quarried material from the site for the purposes of making bricks. Although much of the material that to be used for the brick making activities might be imported onto the site, an examination of the airphoto of the site discloses quarrying activities had been undertaken on the site for a considerable period of time including the comparatively recent past (a position entirely self-evident if the representatives of the respondent had undertaken an inspection of the site). Although not currently being undertaken, these past activities should have triggered investigation of the various necessary legal bases for them. 10As a consequence of this, if the experts advising the respondent and the respondent's legal representatives were not aware of the possibility of a mining lease and had not undertaken enquiries to ascertain whether or not there was such a current lease in existence and what might be its terms, this was a defect in the preparation of the respondent's case rather than a matter to be made subject of criticism of the behaviour of the applicant. 11Second, and more importantly, I was satisfied that the disclosure of the existence of the lease, setting aside the question of whether it ought to have been discovered (in the non-legal sense of this word) as part of the respondent's preparation for the proceedings, had not come so late that there was not sufficient time for respondent's lawyers and expert advisers to make such enquiries as they might consider were necessary to deal with whatever relevant matters might arise from the lease for the purposes of the proceedings. 12For those two reasons, principally the second of them, I declined to vacate the hearing dates. I note that, as matters transpired, additional time became available because of the necessity to have further joint expert conferencing. That additional time enabled the respondent's representatives and advisers to consider this issue. 13This additional time, however, became an unanticipated bonus as I had already determined that sufficient time was available from the time of the service of Mr Hubbard's statement of evidence to the originally scheduled time for the commencement of the hearing for the respondent's representatives and advisers to make all necessary enquiries to permit them to respond to any matters that might arise out of the existence and terms of the mining lease. The applicant's motion 14The second motion was moved by the applicant. This motion concerned a statement of evidence by Mr. Watt, the consulting valuer commissioned by the respondent. The order sought by the motion was that the respondent not be permitted to rely on this statement of evidence. 15This order was sought on the basis that the statement of the evidence was contrary to (and effectively sought by implication to repudiate) an agreement that had been reached between the applicant and the respondent in a conciliation conference held pursuant to s 34 of the Land and Environment Court Act 1979 and conducted in March and May 2013 by Acting Commissioner Miller. 16The Acting Commissioner had not been able to assist the parties to reach an agreement that resulted in orders finalising the appeal but had, during the course of the conciliation conference, assisted the parties to reach an agreement with respect to one significant aspect of the matters in dispute, that being the appropriate whole site valuation basis derived from a single comparable sale. The parties agreed that this valuation rate per m2 should be used for the purposes of the proceedings subject to the resolution of offsetting costs arising from the hypothetical rehabilitation of the site necessary because of the quarrying and brick making activities. 17The Acting Commissioner, with the agreement of the parties, recorded this outcome of the conciliation conference in his report to the Court. He provided that report because there was no agreement pursuant to s 34(4)(b) that he proceed to determine the matter. 18The terms of his report to the Court were transmitted electronically to the parties by eCourt. The terms of that communication are reproduced below: CSR Limited v. Valuer General. Section 34 Report. This report is prepared in accordance with the requirements of Conciliation Conferences under s34 of The Land and Environment Court Act, 1979. The conference was held in Court on 14 May 2013. The applicant and the respondent were represented by Counsel. Property. 327/335 Burney Road, Horsley Park. Subject: Objection to the Land Value assigned by the Valuer General under the Valuation of Land Act, 1916, as at 1 July 2011. Was an agreement reached that was acceptable to the parties (s34 (3))? Yes, in respect of part of the dispute in the following terms: "Based on the "Wonderland" sale (Lot 1 Wonderland Drive, Eastern Creek [Lot 1 DP650179, Lot Z DP 419949, Lots 9, 11 and 13 DP 241859]) if works were not required to the subject property the parties agree that the value of the subject property at 1 July 2011 would be $31,460,000 calculated on the basis of 57 ha of developable land at $55 per square metre plus $110,000 for the zoned E 2 land (11.026 ha). The parties also agree that no value is assigned to an area of 4.254 ha. Accordingly, the land value at 1 July 2011 has not been agreed." Did the parties consent to be Commissioner disposing of the proceedings (s34 (4) (i) or (ii)). No. The remaining issues in dispute (s 34 (a) (4) (ii)). 1.The nature, scope and cost of works. 2.The land value of the subject property. Termination. As agreement was not reached the conference was terminated. The matter is to be included in the Class 3 Directions List on 24 May. Yours faithfully Julianne Reeves Commissioners Support Officer for E. Craig Miller, Acting Commissioner of the Court. 19In his statement of evidence, tendered as an exhibit on the motion, Mr Watt expressed an opinion on the appropriate basis for calculation of the valuation for the whole site on the basis that it was to be used for industrial purposes post the hypothetical rehabilitation, which valuation was some 20% higher than the valuation that had been agreed to by the parties (and recorded as having been agreed to) as the outcome of the conciliation conference. 20Although there was no consent pursuant to s 34(12) for me to enquire as to what had transpired at the conciliation conference, I was informed that Mr Watt had been present at the conciliation conference. However, whether or not Mr Watt had been present at the conference was not a matter for my consideration concerning the appropriateness or not of whether this evidence should be admitted. It would only have been relevant had the question of whether or not he had had notice of the agreement was required to be considered (a matter with which I did not need to deal). This is because the agreement that was reached and recorded as an outcome of the conciliation conference was an agreement between the parties (as recorded by the Acting Commissioner) and was not merely an evidentiary agreement between the advisors to the parties (as would be the case if the agreement had been recorded in a joint expert report, for example). 21The date of the Acting Commissioner's report to the Court was 14 May and the report was communicated to the parties, through the electronic communication reproduced above, on that date. Mr Watt's statement of evidence was dated 4 November and was filed and served on 8 November. 22There was no suggestion that there had been any communication by the respondent to the applicant during the intervening time that there was any intention to seek to repudiate or modify the agreement that had been reached at the conciliation conference and recorded by the Acting Commissioner in the terms set out earlier. 23For the purposes of the discussion that follows, it is appropriate to note that Mr. Watt, in his reaching a different comparative valuation for the site in a "fit for industrial use" state, sought to rely not only on the single agreed comparable site that gave rise to the parties' agreed basis for the whole site value (known as the Wonderland sale) but also sought to rely on an analysis of two further sales of further development sites in what might broadly be regarded as the large industrial development precinct within the south-western quadrant of the intersection of the M7 and M4 motorways - the precinct within which the site that is the subject of the appeal is also located. 24It is also appropriate to note that there was no suggestion that Mr Watt had had a copy of Mr. Hubbard's statement of evidence (the statement that had triggered the respondent's motion) prior to the preparation of Mr Watt's statement of evidence or that there had been any joint conferencing between these two experts. 25The applicant put five alternative bases as to why the order sought should be made. These were: a)The Respondent's conduct amounts to an abuse of process; b)The Respondent is estopped from changing its position; c)The Respondent has made an election from which it is not entitled to resile; d)The Respondent is bound by its conduct at an earlier stage of the proceedings; e)To the extent that the agreement amounts to an admission and leave is required to withdraw the admission and leave should not be granted. 26Mr Clay SC, counsel for the applicant, developed these alternative characterisations of a basis for rejection of the statement of evidence by way of both written and oral submissions. Ms Carpenter, counsel for the respondent made submissions in response. 27Ultimately, I have concluded that it is not necessary to characterise the basis for rejection as properly founded on one or more (or all) of Mr Clay's bases. 28In blunt terms, not rejecting Mr Watt's statement of evidence would have been to attack the very foundational basis of the s 34 conciliation processes. That is not to say that the respondent might not have been able to seek to resile from the agreement reached and reported to the Court had it sought to do so on a proper basis, with reasonable notice and with the applicant being accorded the proper procedural opportunity to resist such an endeavour. 29That was not the case here. There was no attempt by the respondent to resile from the agreement or give any (let alone reasonable) notice that it sought to do so. Mr Watt simply sought, through his evidence, to reject the agreement - an agreement that was inter partes. To the extent that his evidence sought effectively to do so, that required not merely service of the document but the combination by the respondent of a proper procedural basis, notice and opportunity to applicant to resist. 30It was always the proper role of the respondent to take such steps if it wished to do so. It was not the role of a witness to seek to do so through a statement of expert opinion. The respondent adopting the position, in a passive fashion, perhaps, by the filing and serving of this statement of evidence could not be permitted to undermine the process for agreements between the parties at a conciliation conference. 31Permitting such a position should be entirely self-evidently repugnant and I rejected the statement of evidence. To adopt a phrase used by (then) Senator Obama during the 2008 campaign, "you can put lipstick on a pig, but it's still a pig" - but that, in effect was what Mr Watt's statement of evidence dated 4 November sought to do. 32I note, merely for completeness of the record, that Mr Watt was permitted to prepare a further statement of evidence and he did so. I specifically permitted him to traverse issues unconstrained by the whole site agreement when he dealt with an alternative hypothetical partial site rehabilitation model of valuation outcome and he also did this. Tim Moore Senior Commissioner 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. Decision last updated: 08 January 2014