North Steyne Investments Pty Ltd v Raffaella Lina Rapone [2010] NSWSC 762 (10 May 2010)

Last Updated: 9 July 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
North Steyne Investments Pty Ltd v Raffaella Lina Rapone [2010] NSWSC 762


JURISDICTION:
Equity Division

FILE NUMBER(S):
07/258135

HEARING DATE(S):
10 May 2010


EX TEMPORE DATE:
10 May 2010

PARTIES:
North Steyne Investments Pty Ltd (plaintiff/cross-defendant)
Nescham Home Units Pty Ltd (second plaintiff)
Raffaella Lina Rapone (defendant/cross-claimant)

JUDGMENT OF:
Brereton J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
M Orlov (plaintiffs/cross-defendant)
B Coles QC w P Russell (defendant/cross-claimant)

SOLICITORS:
Verekers (plaintiffs/cross-defendant)
Andrea Wilson & Associates (defendant/cross-claimant)


CATCHWORDS:
EVIDENCE – Admissibility and relevancy – Opinion evidence – Expert opinion – In general – land valuation – whether leave should be given to allow valuer to give oral evidence in order to prove facts underlying opinions – where objection notified late and no competing valuation

LEGISLATION CITED:


CATEGORY:
Procedural and other rulings

CASES CITED:
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705

TEXTS CITED:


DECISION:
Leave granted to adduce oral evidence



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



BRERETON J

Monday, 10 May 2010

2007/258135 North Steyne Investments Pty Ltd v Raffaella Lina Rapone

JUDGMENT (ex tempore)

1 HIS HONOUR: The plaintiff reads an affidavit of Thomas Stephen Webster affirmed 4 May 2009. Mr Webster is a valuer, and his affidavit annexes a certificate of valuation of the subject hypothetical property, expressing opinions as to what would have been its value had it been built as at 22 August and 21 December 2007.

2 Annexed to Mr Webster's report is an appendix listing sales particulars of five units which he says are appropriate to consider in arriving at the valuation, and examples of a wide selection he considered to be broadly representative of the current market in the relevant price category, and which have led to the formation of his opinion as to a fair and reasonable opinion of value.

3 It is evident from his report that Mr Webster's approach to valuation in this instance has been by reference to comparable sales. The only evidence he furnishes of comparable sales are those in the appendix, although he says:

Whilst we understand the facts below to be reliable we are unable to guarantee their accuracy as we have not sighted the contracts of sale or carried out internal inspections.

4 There is no other evidence likely to be before the court to prove the various characteristics of the five units in question.

5 It is implicit in Mr Webster's report that he has formed the view that the subject property is superior to some and inferior to or closely comparable to others of the comparables. However, the analysis which leads to that result is not apparent on the face of his report.

6 In a notice of objection, apparently given on or about 5 May 2010 that is to say, more than a year after the affidavit in question was affirmed the cross-defendant takes objection to the whole of the report, first on the basis that the process of reasoning, calculations and comparison to alleged comparables is not set out or disclosed in the report and, secondly, on the basis that the sales particulars in the appendix are, at best, hearsay conclusions from unstated facts and unsupported by any primary evidence.

7 The first of those objections has some validity in that, as I have said, the report does not explain the process by which the witness has evaluated the comparables as to which are superior, which are inferior and why he reached the ultimate result he did. Ideally, a valuer's report should do that. However, I think it is within the experience of counsel who have practised to any extent in fields involving valuation, that valuers of real property often do not undertake that exercise in their reports, but simply list the comparable sales and state their conclusion as to a value. While that is less than ideal, the dictates of Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 requiring the exposure of the expert’s reasoning process are not absolute and, as the judgment of Heydon JA in that case recognises, may in some cases go to weight as distinct from admissibility.

8 It is relevant to bear in mind that the cross-defendant has chosen to file no expert valuation evidence, and has indicated that Mr Webster is not required for cross-examination. In those circumstances, the fact that his reasoning is not exposed in as much detail as it might be is of much diminished significance. I do not consider that on that ground the report should be held inadmissible.

9 So far as the sales particulars in the appendix are concerned they, on closer examination, involve statements as to where in the relevant building the unit is located, what was the sales price, and, to some extent, what the accommodation includes – for example numbers of bedrooms, numbers of bathrooms and so on. In at least one case, the assumptions descend to greater detail concerning the nature and quality of the internal fit out. Mr Webster has conceded in his report that he has not carried out internal inspections, and it is in those circumstances difficult to see how the quality of the internal fit out, for example, could otherwise be proved.

10 The fact that not every assumption on which an expert relies can be made good by the evidence does not mean that the expert's report is not admissible or, if admitted, must be rejected. Sometimes, some assumptions on which an expert relies will be invalidated or not proven, while others will be made good. In those cases, the court has to form a judgment, guided by the evidence, as to the effect on the expert’s ultimate opinion of the removal of some of the assumptions on which the expert has relied.

11 In this case, as things stand, few of the sales particulars can be independently proved. I have no more than the witness’s statement of assumptions as to those particulars. It has been indicated that he may be able to give oral evidence, or that some documents may be able to be tendered, making good some of those assumptions. In my view, in circumstances where the affidavit has been on for a year and the objection on this ground notified only a few days ago, the cross-claimant is entitled to an opportunity to endeavour to prove such assumptions as she can. Whether that then triggers a requirement for an adjournment is a bridge that can be crossed if and when we come to it.

12 I grant leave to the cross-claimant to adduce oral evidence from Mr Webster as to the sales particulars set out in the appendix to his report.

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LAST UPDATED:
9 July 2010