Green & Ors v Wilden Pty Ltd & Ors [2009] HCATrans 272 (14 October 2009)

Last Updated: 21 October 2009

[2009] HCATrans 272

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P28 of 2009

B e t w e e n -

GRAEME WILLIAM GREEN

First Applicant

WJ GREEN & CO (1984) PTY LTD (ACN 008 851 867)

Second Applicant

SHARYN LEE GREEN AND GRAEME WILLIAM GREEN AND JULIE ANNE GREEN AND WILLIAM JOSEPH GREEN AND NORMA GLENYCE GREEN

Third Applicants

and

WILDEN PTY LTD

First Respondent

MAGENTA NOMINEES PTY LTD

Second Respondent

TACE PTY LTD

Third Respondent

SYDNEY JAMES CHESSON

Fourth Respondent

BERT LEONARD DENBOER

Fifth Respondent

CALLAO PTY LTD

Sixth Respondent

BENRONE PTY LTD

Seventh Respondent

Application for special leave to appeal

FRENCH CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON WEDNESDAY, 14 OCTOBER 2009, AT 10.36 AM

Copyright in the High Court of Australia

__________________

MR M.L. BENNETT: If it please the Court, I appear on behalf of the applicants. (instructed by Lavan Legal)

MR M.J. McCUSKER, QC: May it please the Court, I appear, together with MR T. GALIC, for the respondents. (instructed by Galic & Co Lawyers)

FRENCH CJ: Thank you. Yes, Mr Bennett.

MR BENNETT: Your Honour notices that the single issue raised in relation to this application is whether the Full Court of the Court of Appeal of the Supreme Court of Western Australia was right to imply into a relatively standard form expert determination clause, an implied term, that the expert so appointed could delegate part of the evaluative function.

HAYNE J: Assume for the purposes of argument, Mr Bennett, that implied terms are not an appropriate mechanism to engage, assume that.

MR BENNETT: Yes, your Honour.

HAYNE J: What is there that suggests there was any delegation in this case?

MR BENNETT: All of the matters that we say were found by the learned trial judge, Justice Hasluck. The reasoning of the Court of Appeal bypassed the very particular fact-findings that the three property valuers had delegated all of the financial evaluative functions to Mr Curtis, the auditor, by saying that that was permitted by an implied term. Your Honours will recall that the learned trial judge had found that there was no independent exercise of a discretionary determination by the three property valuers, Hunt, Sanderson and Richmond, when they adopted uncritically the three special purpose limited audit statements that Mr Curtis had forwarded to them a matter of days or hours before they had completed their valuation.

HAYNE J: Their task was to value the units in the trust?

MR BENNETT: Yes.

HAYNE J: The determinative question is whether what they produced was current repurchase value as determined by an independent qualified valuer nominated, et cetera, is that right?

MR BENNETT: Yes, whether the valuation matched the contract.

HAYNE J: Yes. Why did it not match the contract for a valuer to take as an integer in an assessment of value of units audited accounts that were produced?

MR BENNETT: Because the adoption of the audited accounts with the limited audit statement was correctly found by the learned trial judge to be an uncritical adoption. There was no attempt to discuss with the auditor, in the case of Sanderson, the terms of the audit statement. The terms of the letter that the auditor provided to each of the valuers was limited in its terms. We accept that Appeal Justice McLure did not regard it as such but we would say that the terms were correctly found by the learned trial judge having heard the evidence and the cross-examination of the three valuers.

Your Honours will have seen from our reply submissions that in 1995 at an interlocutory stage when these proceedings, pre-consolidation, went to the Full Court of the Supreme Court of Western Australia, as it was then, the applicants were shut out from running a case that showed the actual errors in the accounts, although your Honours will have seen from the learned trial judge’s assessment of the expert witness that the respondent, a Professor Tunnicliffe, that his Honour had reservations about the accuracy of Tunnicliffe’s attempt to say that the financial statements that were produced by the auditor were accurate or effective.

We say that were the valuers simply to collect information or facts from other parties, how many units there were, for example, then the valuers would be entitled to do that. That is the delegation of the evaluative function. It is surprising that the respondent’s summary of argument contends that the primary judgments of Appeal Justices McLure and Pullin do not find an implied term but they draw attention, for example, in relation to Appeal Justice Pullin’s primary passage in paragraph 182 at page 483 of the application book to subparagraph (c) and not subparagraph (d) where his Honour expressly finds an implication of a term, “was entitled to rely on and adopt the expert opinion” which plainly bespeaks of delegation of evaluative function.

HAYNE J: The strength or weakness of the proposition you advance depends, I suspect, upon the content you give to this notion of delegation. In what sense are you advancing the notion of delegation?

MR BENNETT: A delegation of an evaluative function as opposed to a delegation of information gathering function, your Honour, as Appeal Justice Pullin differentiated in the passage to which I referred a moment ago. In subparagraph (c) he says that:

an expert valuer appointed under cl 7.4 was entitled to rely on evidence provided by third parties and that to do so did not involve a delegation of the valuer’s function –

We would accept that as an accurate proposition.

FRENCH CJ: Is delegation not something of a distraction here? Is not the critical point, 1146 in the judgment of Justice Hasluck at page 267 where he says:

The end result cannot be truly described as the decision of the valuer because certain of the figures forming part of his calculation were relied upon in circumstances in which he cannot be said to have had a sufficiently clear assurance or firm basis for assuming that all of the figures in the statement were accurate.

MR BENNETT: That is right. We would accept that.

FRENCH CJ: They were given a balance sheet with a covering letter from Curtis and the finding really reduces to the proposition, does it not, they were not entitled to rely upon it?

MR BENNETT: That is right.

HAYNE J: Why not?

MR BENNETT: Because it is not the contract that my client’s bargained for when they entered and subscribed for units under the trust deed which provided for - - -

HAYNE J: The contract your bargained for was that the value would be what an independent person said the value was. The independent person has said what the value was. That was the bargain.

MR BENNETT: That may, your Honour, be one construction of the clause. The relevant clause is at paragraph 22 of Appeal Justice McLure’s reasons for decision your Honours find at page 433 of the application book. It is not what it says. The second sentence of the relevant clause is:

The Current Repurchase Value shall be as determined by an independent qualified valuer –

If it was merely what he said it was, he could take somebody else’s determination and substitute it and adopt it but where the bargain that we struck required for him to determine the value, for him to have somebody else determine it and blindly adopt it, we say is not the performance of evaluation in terms consistent with the contract between the parties. The danger of the Full Court’s sidestep against the factual findings, if I can call it that, with respect, of implying a term that is said to arise in the proper construction of clause 7.4 that there could be implied, necessarily, that an expert valuer is entitled to rely upon and adopt the expert opinion of a third party, is to produce an uncertain result that the person that the parties agree should in a speedy non-adversarial way determine a value, can set aside that function to another person of their choosing on grounds that are by no means clear.

Her Honour Appeal Justice McLure suggests it is on an area where the valuer so appointed is not competent and so a property valuer delegates financial matters, but it could equally be that the property valuer says, “I’ve got a lot of respect for another valuer and I’ll take his determination”. So it is, with respect, your Honour Justice Hayne, it is not simply a matter of the contract saying we accept and we are bound by the value that is said by a person to be the value. We struck a bargain that a particular person determine the value. Through a long and a complex trial we determined that that valuer – and received judgments in our favour from the learned trial judge – that the valuer had not produced a valuation conforming with the contract. The implication of the term is the basis upon which that was reversed in the Court of Appeal.

We say it is a matter of substantial importance because this would be, as your Honours would appreciate, a common commercial practice to sidestep arbitral or litigation processes in rent reviews, various other commercial determinations by the parties agreeing to be bound by a determination of an expert as opposed to an arbitrator. The necessary implication of the term propounded by the Court of Appeal in the Supreme Court of Western Australia we say would apply across the board and it would be wrong in principle and derogate from the principles enunciated by Justice McHugh in Legal & General Insurance.

FRENCH CJ: What do you say the valuers accepted as matters of fact or opinion from Mr Curtis?

MR BENNETT: The disposal costs, the liabilities, the amount and a proper allowance for other contingencies.

FRENCH CJ: These are things which appeared in the balance sheet?

MR BENNETT: Yes. So, it is not simply the number of units. It is the value that can be placed upon various matters.

FRENCH CJ: They undertook their own valuation in each case of the major asset of the trusts, or each of the trusts, did they not, the shopping centres?

MR BENNETT: Yes. At the time each of the trust’s major asset was a small suburban shopping centre.

FRENCH CJ: Was there any find by Justice Hasluck that the valuations were wrong?

MR BENNETT: No. His Honour regarded himself as bound, we would say, by the Full Court decision that it was not the case to prove that it was wrong. The passage that deals with the attempt on the part of the respondent to say that the valuations were right is dealt with at page 244 in paragraph 1050 and following in the learned trial judge’s reasons where he deals with the evidence of Tunnicliffe. Your Honours have seen, subsequently, in the lengthy reasons his Honour commented that he had reservations about the accuracy of Tunnicliffe.

Your Honour the Chief Justice gave me the reference to the Sanderson valuation and the finding essentially that it did not comply with the terms of the contract. A similar finding in relation to Richmond, who gave evidence in relation to Tace Pty Ltd, the Summerfield Shopping Centre, is at page 286 in paragraph 1238. In relation to Mr Hunt, who gave evidence in relation to Magenta in respect of the Kelmscott Village, your Honour finds that commencing at page 292. Your Honour sees the same general conclusion at paragraph 1292 on page 295.

It is put against us, I note, in my friend’s submission that the two fundamental propositions put against us is that there is no point of special principle and no new question of law. We know of no authority, nor does the Court of Appeal judgment cite an authority, where in respect of an expert valuation clause an implication of term is - - -

HAYNE J: As I say, assume, that to be so, does not the question then become whether you have a reasonable prospect of obtaining orders different from this Court? So that you can confront that, does that not then lead on to the further question of whether the argument described as an argument of delegation has legs?

MR BENNETT: We would say for the reasons that are carefully and in detail given by the learned trial judge, it plainly has legs. We persuaded him at the end of a 51-day trial where he heard the evidence of the three valuers, heard the evidence of the independent account, Tunnicliffe, heard the cross-examination, was able to see it. Curtis was not called by the respondent to give evidence but the directors were called. The directors gave evidence, for example. The directors had never adopted the balance sheets that were the subject of the Curtis letter – they were prepared by staff and not adopted by any board meetings – of the relevant three respondent companies, so there is a factual basis.

FRENCH CJ: The word “delegation” is equated to uncritical acceptance, is that right?

MR BENNETT: Yes, your Honour, that is so.

FRENCH CJ: That is all it means in this context.

MR BENNETT: I would accept that. We do not go, because of the way in which the conduct of the case proceeded after the finding in 1995 by the Full Court of the Supreme Court of Western Australia in the interlocutory battle, we do not go to identifying the errors other than by the cross-examination of Tunnicliffe. There was an issue before the learned trial judge, dealt with in his reasons, whether or not the respondent should have been entitled to call expert evidence on the accuracy of the accounts and the like in the Full Court decision.

We accept that Appeal Justice Pullin looks in more detail in the Court of Appeal as to whether or not there was in fact a delegation or an uncritical adoption. Your Honour sees a conclusion at paragraph 205 at page 491 where his Honour deals with it. The difficulty with his Honour’s reasoning, with respect, if one follows the analyses in paragraphs 201 and 202 where his Honour says that:

his Honour erred in concluding that Mr Sanderson did no more than accept ‘uncritically’, the figures –

The next sentence answers that –

Mr Sanderson, in my opinion, was not obliged to vouch for the underlying realities. The material provided to him by Mr Chesson –

who was a director of the relevant companies –

and the auditor was relevant material and he was entitled to consider it and employ it in valuing the units. Mr Sanderson was not required to independently ‘vouch’ –

That, with respect, sets the standard far too high. We do not suggest that the property valuer is required to carry out his own independent audit function, but what his Honour does not address there is the concept of uncritical adoption. His Honour seems to be at odds with the learned trial judge and the basis for his Honour’s reasoning is not explicated in that paragraph. His Honour then deals with it in 203 to say that:

Mr Sanderson did not speak to Mr Curtis –

and the fact that he did not speak –

provided no foundation for a conclusion that the Sanderson valuation was invalid.

That was the wrong question. The question, with respect, that his Honour should have posed was whether the fact that Mr Sanderson did not speak to Mr Curtis provided a foundation for a correct finding by the learned trial judge that it was an uncritical adoption of the Curtis material.

HAYNE J: What is the content of this notion of uncritical adoption that you are employing? It conveys, does it, a notion that there should have been some step taken before adoption? What is the step that should have been taken?

MR BENNETT: If I can deal with that by going particularly at page 265 in the learned trial judge’s reasons for decision, paragraph 1137 at line 35, your Honour:

Mr Sanderson acknowledged that he did not ask to see the annual accounts for Wilden of 30 June 1990 or 30 June 1991 and was not aware that the balance sheet for those years adopted by Wilden did not include as a non-current asset either a loan to unit holders or interest on loans –

contrary to the other. So he did not look at a context of financial accounts to see how this balance sheet struck at a particular date. The date of the repurchase request related to accounts on either side. In 1138:

Mr Sanderson acknowledged also that he took no other steps and made no other enquiries in relation to the information . . . He relied on his own knowledge . . .

No evidence was given by the defendants as to what Mr Curtis was instructed to do, how long he had to perform his task and whether he was given a copy of the Trust Deed . . .

the valuer arrived at his conclusion simply upon the basis of the information provided to him. The evidence given by Mr Sanderson in his affidavit, and other evidence at trial, establishes to my satisfaction that the information provided to him was limited to the materials supplied to him by fax –

and a statement given by Hunt in another valuation “bearing upon the formula”. Then at 1141 –

he formulated his opinion as to the value of the units upon the basis of limited materials and at comparatively short notice. He did not speak to Mr Curtis or undertake any enquiries or seek assistance from other experts. He was in error in stating in his report (and thus assuming) that Curtis had prepared the statement of assets and liabilities.

All he did was write a covering letter saying to a limited extent he accepted it as accurate. These are the matters that we say advanced successfully at

trial could identify that there was an uncritical adoption, no inquiry, no attempt to see the basis for the balance sheet, mistaken as to who prepared it, no attempt to inquire as to the financial context, how long had Mr Curtis been an auditor of this company, where were the other accounts of the company, some process of inquiry perhaps addressed by discussion with the auditor or by some other person or some other expert.

FRENCH CJ: Once you set aside the implied term finding and say instead all that was really being said there was that the valuers were entitled to adopt this information as part of their process, it becomes much more like a question of just the range of things that a valuer could do within the exercise of his fact-finding discretion, does it not?

MR BENNETT: If it were merely fact-finding?

FRENCH CJ: Once you have the implied term out of the way, is there really an issue of principle involved in the way the valuers went about it?

MR BENNETT: Yes. The issue of principle is it was not fact-finding. It was opinion adopting and to do that means that it is back to the test enunciated by Justice McHugh in Legal & General. What we end up with is a result different from the bargain that we struck in the contract. Valuation does not conform with the underlying contract provision where we bargained for their determination, not their adoption of someone else’s determination. To that extent, the error of the implied term infects the Court of Appeal decision. It ought to be set aside and the trial judge’s determination should be restored.

HAYNE J: But the slide in the propositions you have just advanced is the subject of the determinations, the determination of integers as distinct from the determination of values and you have slid between the two.

MR BENNETT: Your Honour is correct in that observation. You cannot have a determination of the whole where you adopt, uncritically, the determination of others of the integers. May it please your Honours.

FRENCH CJ: Thank you, Mr Bennett. Yes, Mr McCusker.

MR McCUSKER: May it please your Honours. My learned friend has said a number of things that were wrong in the way that the valuers approached their task. As Justice Pullin said, referring to a number of those matters – it appears at pages 490 and 491 – at paragraphs 202 through to 204 he refers to some of the criticisms made in this case of Mr Sanderson and his approach to valuation and says at 204:

In my opinion, all of the complaints made by the Green parties about the Sanderson report amount to no more than allegations that Mr Sanderson was negligent in the performance of the task or the process of performing the valuation of the assets and determining the liabilities.

The question of implying a term tends to distract, in my submission, from the real issue here and that is, as I think your Honours have mentioned to my learned friend, a question of what is a valuer entitled to do in performing his task and how far does he go before it may be said, well, he has gone beyond the scope of the contract? Clause 7.4 of the deed is a very broad provision that simply says, “as determined by an independent qualified valuer” appointed by the president at the time, being an Institute of Valuers. Putting to one side entirely the question of implication because, with respect, I agree with your Honour the Chief Justice that really it may be said that Justice McLure, when she referred to an implied term, was doing no more than saying this is what the parties must have intended.

Terms of the commercial contract, of course, is trite law. It should be interpreted so as to make commercial sense. Having regard to also the facts and circumstances, the factual matrix it has sometimes been called, objectively known to the parties here, each trust, each of the three trusts was formed to acquire and then to operate a shopping centre and each shopping centre was its primary asset by far. Clause 7.4, providing for a valuer to be “nominated by the President of the Australian Institute of Valuers” clearly envisaged that there would be a land valuer, as there was, appointed to carry out that task.

If at the time the deed was signed, if I can approach it this way, a question was asked by some independent bystander or officious bystander, how is the valuer to determine after valuing the shopping centre, which is within his expertise, what are the other assets and liabilities of the trust to determine the value of the units? I would respectfully submit there could be no doubt that the answer would be, well, do so in accordance with the established practice of valuers who are members of the Institute of Valuers in such cases and that is, as the evidence overwhelming, in fact, there is no contradiction, the evidence given before the court by both the three valuers and by the president at the time of these two valuers, that what they did was precisely in accordance with the established practice of valuers and that is they could have got the figures simply by going to the trust in each case, the trust accountant, and extracting the figures that they wished and even if they did not critically examine those figures and they turned out to be wrong, that would not be a departure from the terms of their contract.

What they did in this case was close to that. They asked the trust auditor to provide them with a balance sheet and then they adopted that balance sheet. There is no question about that. The figures on the balance sheet, which were a combination of, for the most part, factual matters such as the cash at bank, what were the liabilities, these are simply facts not opinions and there were a couple of matters which might be called opinions, and that is what proper provision had been made for bad or doubtful debts, things of that nature.

HAYNE J: Did the valuers strike their own value of the real estate?

MR McCUSKER: They did, your Honour, yes, and there was never any challenge to it.

HAYNE J: What is the proportion of relationship between the value of the real estate, the value of the items that are the subject of allegedly uncritical adoption?

MR McCUSKER: I cannot give the exact figure but it was - - -

HAYNE J: No, but what order of magnitude are we talking?

MR McCUSKER: Overwhelmingly, the real estate was the single biggest, in fact, it was the dominant asset. There was some cash at bank, there were some creditors and there was a question of whether those creditors may or may not be able to pay. There were liabilities and there were some – so the creditor’s doubt was a question of provision for doubtful debts. In terms of order of magnitude, your Honour, by far the most overwhelming asset and the largest task by far was to value the real estate, that is, the shopping centre.

FRENCH CJ: I think it is common ground there was no challenge to that valuation?

MR McCUSKER: No, never any challenge to that valuation, your Honour. It was somewhat belated. My learned friend has referred to an attempt by the present applicants to challenge the valuation figures but there was never any challenge to the valuation of the real estate. Never. It was accepted that that was properly carried out, so that the challenge which was belated came after an attempt had been made by challenging the trusts themselves, taking action against the trusts, to establish that there was some error otherwise in the valuations that were carried out.

HAYNE J: Do I misunderstand the litigation as being not only concerned with the value but also there was what was, in effect, a full administration action tried?

MR McCUSKER: Yes, there was and a number of other ancillary bits and pieces that were run in the course of the trial.

HAYNE J: Which led to this very long trial.

MR McCUSKER: Yes, it did, your Honour, indeed. Justice McLure observed that – I will not read it out – at paragraph 76, page 447 that the valuers acted in this case – this was back in 1992 in accordance with established practice relying on the auditor’s opinion. Now, there is no question about it. We accept that what they did in this case was to carry out a proper valuation of the real estate and ask the auditors to provide them with the other figures in relation to the accounts of the trusts which were outside their expertise.

Could I by way of analogy – it may not be very helpful, but suppose a valuer is appointed to value a farming operation enterprise and by far the major asset is the real estate and a land valuer is therefore appointed to do that. The valuer values the land and asks the stock agent to assist in determining the sheep numbers and their value. Is it seriously suggested that the valuer in that case could not rely upon the numbers provided by the stock agent – in other words, must he go and count the sheep himself – and could not rely upon the agent’s opinions to value a matter on which he has no expertise?

Going back to the provision in clause 7.4, it must be read in the context of what the parties must be taken to have understood in the commercial context and what they understood in this commercial context was that the major asset overwhelmingly was the real estate, that a valuer appointed by the institute would be a valuer with expertise in land values but nothing else and, as indeed the applicants have conceded in their submissions, a valuer who is not of course an arbitrator is entitled to inform himself as he sees fit. That is just what this valuer did in each case. In may be said in an action – if there has ever been an action the valuers in this case – well, you were negligent or careless in uncritically accepting and adopting the auditor’s statements. That may or may not be so. Justice Pullin referred to it and so I am not saying that they were negligent, but that would be appropriate to an action in negligence but certainly not appropriate in an action to set aside the valuation of an expert.

The decisions I have referred your Honours to – two very old decisions – Hopcraft v Hickman is one and Anderson and Purcell and Stockley are another – very old decisions – all point in the same direction, that is, the valuer in determining value may have regard to a number of matters, including the opinion of others, provided he adopts it as his own. That is not delegation. That is performing the valuer’s task. Delegation – which is the word which is constantly put forward by the applicants – would be if the valuer says to some third party, “You go and carry out a valuation of the entire units. I am not going to do it.” That would be delegation, and even if he put his name to it, it may be arguable – we say no more than that – that that would not be carrying out his task as a valuer, but that is not this case.

How is the valuer to inform himself, for example, in this case of the cash at bank? He could go to the bank, I suppose, and ask for a statement or, as he did, he could rely upon the auditor and the figures that the auditor provided.

FRENCH CJ: Can I just understand. I am not absolutely clear on the extent to which the valuation was challenged. There seems to have been some interlocutory process that affected it.

MR McCUSKER: Yes.

FRENCH CJ: At the end of the trial was there any evidence before the primary judge which involved a challenge to the correctness of any of the elements of the information that had been provided by Mr Curtis to the valuers?

MR McCUSKER: We called one expert, your Honour, that is the present respondents, who was an expert in accounting generally, to say that the way in which the work had been done by the auditors was in accordance with accepted practice, but that is as far as it went. There was no finding and no challenge as to particular items. You will see, your Honour, in the reasons of the learned trial judge there is no finding that there was any evidence of any error. Indeed, the utility of this appeal is highly questionable because what would happen if leave were granted and an appeal allowed and the matter were then referred back, in accordance with the judgment of Justice Hasluck, to get a fresh valuation?

It is highly questionable whether any valuer could be found, appointed by the Institute of Valuers’ president, who could carry out the expert task of valuing the real estate, which was the primary task, and in addition to that, carrying out some form of personal audit. Why should he do that? The authorities do not support my learned friend’s proposition that to refer to others for their views and advice, in the case of an expert, is going beyond the expert’s requirements under the contract. One of the cases I referred your Honours to in the authorities, Anderson, which is an old decision, 1835, is particularly salient on a number of points. Reference was made at the foot of page 1352 to an earlier decision in Emery v Wase on a similar question:

One objection made is, that the arbitrator did not exercise his own judgment about the timber. That alone is not sufficient to prove the award bad; for a man may make use of the judgment of another upon whom he can depend, and the valuation of that person is his if he chooses to adopt it.

The word “arbitrator” was used in that case as, indeed, it was used in Hopcraft v Hickman, but, in fact, in both cases what was being carried out was a valuation and in each case a challenge was made to the valuation on the ground that the valuer referred to and adopted the opinion of others on several matters. In Hopcraft v Hickman it was the opinion of a builder as to the value of an estate which formed part of the total valuation and it was held that there was no valid challenge to the valuation simply to say, well, you referred to and adopted the opinion of a builder who had the requisite expertise. We are not talking here of arbitration, that is important, nor are we talking of an action against the valuers themselves based upon alleged negligence because of uncritical adoption and so forth.

Your Honours, two other matters. In our submission, this is simply a case of the application of principles of construction – and I do not refer to implied terms they are well known too, of course – but principles of construction which are well established to a particular contract, in this case clause 7.4. There is no special issue that arises out of that. The circumstances of this case will differ, as they will from case to case, depending upon what the factual matrix is here, but the factual matrix in this case, given that the real estate was the primary asset and given that the Institute of Valuers, a president, was to appoint a valuer, an expert in that field, these are important factual matrix questions.

There is one other matter I should mention and that is that your Honours might be surprised to know that under the trust deed there was no binding effect in the absolute sense of these valuations. Repurchase notices could be given by unit holders, valuations then carried out and if the giver of the notice so chose, the repurchase notice could be withdrawn, back to square one. Now, that was clearly open. At trial the question was raised by Justice Hasluck and counsel for the present applicants said they did not wish to withdraw. They had no intention of withdrawing the repurchase notice. So, for all those reasons, in our submission, there is no special issue that is raised by this proposed appeal and, in any event, it has no merit.

FRENCH CJ: Thank you, Mr McCusker. Yes, Mr Bennett.

MR BENNETT: I have a few limited points, if it please the Court. The first is the proposition that the trust is to be construed as a property trust. The fullest expression of the terms of the trust is in application book page 200 in paragraphs 870 to 879 in respect of the trustee generally. This was no special purpose property trust. It was a general trust and the investments could go elsewhere. The full terms of clause 7.4 are to be found at page 203 in paragraph 887. In respect to the last matter raised by my friend, paragraph 889 gives a better and fuller, with respect, statement of the provisions of clause 7.11 of the uniform trust deeds:

a unit holder may withdraw a repurchase request at any time by notice to the trustee -

My friend omitted to tell your Honours –

provided that such unit holder shall pay the costs incurred by the trustee in connection with the repurchase request -

which at trial would have been the costs of 10 years litigation, it is contended by the trustee.

HAYNE J: I am not sure that the is self-evident, but perhaps it may be.

MR BENNETT: Well, it is a contention.

HAYNE J: I understand it may have been the contention.

MR BENNETT: In respect of my friend’s example, which he conceded may have been unhelpful about the value of the farm - - -

HAYNE J: The notion that there should be 10 years litigation about the unit trust is startling in itself, Mr Bennett. I do not know that we can profitably examine it further.

MR BENNETT: No, not on the papers before you. There was an intervening trial where the matter – what was sought at least by the present applicants to be a concluded settlement was litigated unsuccessfully. That slightly delayed the progress of the interlocutory matters by a year or two. Your Honour, the unhelpful example my friend gave of the value of a rural property, asking a stock agent for the count of sheep, we would accept he can inform himself as to factual matters. When he consulted with the stock agent for the price of sheep, that is where he adopts the opinion. He is entitled to adopt and we do not say that a valuer is not entitled to adopt. What he is not entitled to do is abandon his own evaluative function by uncritically adopting the opinion of others. That is a distinction not borne out by the example.

The final point to raise is my friend questions the utility of the proceedings rather in a manner that the unsuccessful respondent before your Honours in Tabcorp queried the utility of reconstituting the lobby in

the relevant building in Canberra. Our contractual bargain was for a determination. The litigation was run in a particular way. We were unable to say to the court and deal with the court in detail the errors that were apparent in the financial aspects. They are matters that can be dealt with when we seek and obtain a determination according to our contractual right. We are entitled, in our respectful submission, to say there is utility in insisting that the determination be in accordance with a contract. May it please your Honours.

FRENCH CJ: Thank you, Mr Bennett.

This application for special leave concerns the scope of the function conferred on valuers appointed to value units in unit trusts for the purpose of their repurchase from unit holders by the trustees of the trusts. At the heart of the application is the question whether valuers appointed under the trust deeds were entitled to rely upon information provided by the auditor of the trusts, including the balance sheet.

There was no evidence below that the determinations made by the valuers were incorrect. There was no challenge to their valuation of the shopping centres which are the major assets of the trusts. In our opinion the holding of the Court of Appeal, although involving unnecessary resort to an implied term of the relevant deeds, was a holding that the valuers were entitled to rely upon information provided by the trust auditors. That holding does not involve error warranting the grant of special leave.

There are insufficient prospects of the applicants obtaining orders in this Court that would disturb the actual orders of the Court of Appeal to warrant the grant of special leave. Special leave will be refused.

MR McCUSKER: I ask for costs, may it please your Honours.

FRENCH CJ: Can you resist that?

MR BENNETT: No, your Honour.

FRENCH CJ: Special leave will be refused with costs.

AT 11.15 AM THE MATTER WAS CONCLUDED