Binningup Nominees Pty Ltd v Mirvac (WA) Pty Ltd - [2021] WASCA 130

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   BINNINGUP NOMINEES PTY LTD -v- MIRVAC (WA) PTY LTD [2021] WASCA 130
CORAM:   MURPHY JA
BEECH JA
VAUGHAN JA

HEARD:   11 & 12 FEBRUARY 2021 & FURTHER SUBMISSIONS 20 APRIL 2021, 11 & 13 MAY 2021
DELIVERED          :   27 JULY 2021
FILE NO/S:   CACV 25 of 2020
BETWEEN:   BINNINGUP NOMINEES PTY LTD
Appellant
AND
MIRVAC (WA) PTY LTD
First Respondent
MIRVAC LTD
Second Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   ARCHER J
Citation: MIRVAC (WA) PTY LTD -v- BINNINGUP NOMINEES PTY LTD [2020] WASC 28
File Number            :   CIV 1018 of 2015

Catchwords:

Contract - Interpretation - Services Agreement and Loan Agreement - Dispute between Principal and Contractor - Long‑term Project with no set end date - Where Contractor required to provide a Programme and Budget for each stage of Project for approval or disapproval by Project Control Group - Where Project Control Group comprised of members of both Principal and Contractor - Whether judge erred in finding that Contractor's members of Project Control Group had a right to disapprove a Programme or Budget - Whether judge erred in finding that Completion of Project was not a contractual benefit conferred on Principal - Proper construction of Transaction Documents

Contract - Interpretation - Implied obligations - Whether judge erred in finding that there was no obligation on Contractor 'to endeavour to ensure' that Principal's obligation to repay each Advance under Loan Agreement on time could be met by sale proceeds

Contract - Repudiation - Principles - Whether trial judge erred in finding no repudiation

Appeals - Challenge to factual findings - Whether appellable error by judge in making findings of fact to the effect that Contractor had not made or implemented a decision not to proceed with Project unless it could renegotiate amendments to Services Agreement more commercially favourable to it - Trial judge's findings based to a substantial degree on assessment of credibility and reliability of witnesses - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	D H Solomon
First Respondent	:	B Dharmananda SC & B Lim & M Hales
Second Respondent	:	B Dharmananda SC & B Lim & M Hales

Solicitors:

Appellant	:	Solomon Brothers
First Respondent	:	Minter Ellison
Second Respondent	:	Minter Ellison

Case(s) referred to in decision(s):

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Australian Securities and Investment Commission v Rich [No 5] [2005] NSWSC 417; (2005) 191 FLR 385
Beerens v Bluescope Distribution Pty Ltd [2012] VSCA 209; (2012) 39 VR 1
Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Butt v M'Donald (1896) QLJ 68
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Cardwell Shire Council v King Ranch Australia Pty Ltd [1984] HCA 39; (1984) 53 ALR 362
Child and Adolescent Health Service v Mabior [2019] WASCA 151; (2019) 55 WAR 208
Clarke Boyce v Mouat [1994] 1 AC 428
Commissioner of the Australian Federal Police v Kalimuthu [No 2] [2018] WASCA 192
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169
DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78; (2010) 41 WAR 23
Electricity Generation Corp v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Federal Commissioner of Taxation v Cassaniti [2018] FCAFC 212; (2018) 266 FCR 385
Foran v Wight [1989] HCA 51; (1989) 168 CLR 385
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
GEC Marconi Systems Pty Ltd v BHP‑IT Pty Ltd [2003] FCA 50; (2003) 128 FCR 1
Hancock Prospecting Pty Ltd v BHP Minerals Pty Ltd [2003] WASCA 259
Hochster v De la Tour (1853) 2 E & B 678; 118 ER 922
James E McCabe Ltd v Scottish Courage Ltd [2006] EWHC 538 (Comm)
Joyce v Anderson [2020] WASCA 48
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115
Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623
Lee v Lee [2019] HCA 28; (2019) 266 CLR 129
Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181
Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd [2015] FCAFC 127; (2015) 237 FCR 534
Mirvac (WA) Pty Ltd v Binningup Nominees Pty Ltd [2020] WASC 28
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Nocton v Lord Ashburton [1914] AC 932
Ogle v Comboyuro Investments Pty Ltd [1976] HCA 21; (1976) 136 CLR 444
O'Keefe v Williams [1910] HCA 40; (1910) 11 CLR 171
Park v Brothers [2005] HCA 73; (2005) 80 ALJR 317
Peters (WA) Ltd v Petersville Ltd [2001] HCA 45; (2001) 205 CLR 126
Pilbara Iron Ore Pty Ltd v Ammon [2020] WASCA 92
Reid v Western Australian Planning Commission [2016] WASCA 181
Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596
Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359
Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620
Smart v Power [2019] WASCA 106
Stevenson v Hook (1956) 73 WN (NSW) 307
Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222; (2010) 41 WAR 318
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392
Voulis v Kozary [1975] HCA 44; (1975) 180 CLR 177

Table of Contents

Introduction

The primary proceedings - overview

The land

The Transaction Documents

The planning and environmental work - broad overview

The course of the Project - overview and the breakdown of the relationship between the parties

Mirvac (WA)'s claim against BN

BN's counterclaim against Mirvac (WA)

The alleged Refusal to Proceed decision

BN's counterclaim against Mirvac Ltd

The primary decision - overview

The evidence

The judge's findings on the legal issues

The judge's findings in relation to the alleged Refusal to Proceed decision

Summary of the judge's findings in relation to BN's claims against Mirvac (WA)

Other matters

Scope of this appeal and the outcome

Chronology of Events

2007

2008

2009

2010

Early 2010

May 2010 - Mr Adam Davidson handover to Mr Aleksovski

18 May 2010

July - December 2010

2011

2012

Mr Crockett's email of 24 May 2012

June 2012 - Master Planned Communities document

June 2012 Report to Mirvac Board and Watch Lists

June 2012 Strategy for second access road

July 2012 - HY13 Draft Scenario

August 2012 and meetings with the Shire

30 August 2012 Spreadsheet

31 August 2012 Spreadsheet

September and December 2012 Spreadsheets

25 October 2012 Risk Assessment

December 2012 Strategy - second access road

17 December 2012 Spreadsheet

Meetings December 2012

2013

Mirvac internal emails dated 22 and 23 January 2013

4 February 2013 Board paper

Meeting 6 February 2013

PWC Report of 7 February 2013

February 2013 meeting with Mr Waller

14 - 19 February 2013 email chain

21 March 2013 meeting with Pastoral Co

May 2013 - raising a deemed refusal

20 May 2013 - the Commonwealth's removal of the moth as a protected species

27 May 2013 Strategy - second access road

Early to mid-June 2013

20 June 2013 - Mirvac (WA)'s Deemed Refusal Notice

June 2013 Forecast

July 2013

25 July 2013 Project Control Group meeting minutes

August 2013

September 2013 Options Memo

October 2013 - Project Control Group meetings

Project Control Group meeting prior to 17 October 2013

BN's 17 October 2013 meeting with the Shire and BN's intention to handle acquisition of Pastoral Co land

Mr Waller's evidence as to subsequent steps taken to acquire land from Pastoral Co

November - December 2013

2014

Mr Waller's meeting with Mr Draffen on 3 April 2014

May 2014

13 June 2014 - Project Control Group meeting

September 2014 Report, Programme and Budget

September 2014 - BN's proposal to have meetings recorded

BN's notice alleging repudiation - 2 October 2014

Unchallenged findings - Chronology of Events

Grounds of appeal

Contractual issues

Grounds 1 and 2

Ground 3

Ground 4

Ground 5

Errors of fact - second access road, golf course and Mirvac's internal documents

Second access road

Golf course

Mirvac's internal documents

Mr Lawrance's statement on 13 June 2014 - alleged repudiatory statement

The issue of meetings of the Project Control Group being recorded - alleged repudiatory conduct

Mirvac's non-submission of a Programme Budget in relation to Subdivision and Construction Works

Mirvac Ltd's Performance Undertaking

Tort of interference with contractual relations - Mirvac Ltd

Damages

Services Agreement and the Loan Agreement

The terms of the Services Agreement

Parties

Background

The Land

Objectives

Good faith

The Project and Approvals

Services

Completion

Project Funding

Project Costs and Project Cost Payments

The Principal's fees

Other Project Revenue

Amounts payable by BN to Mirvac (WA) under the Services Agreement

Limited recourse

Stages

Budgets and Programmes

Project Control Group

The Project Account and the Sale of Lots

Payment from the Project Account

Dispute resolution

Monetary Event of Default

Non Monetary Event of Default

Sole right of termination of the Contractor's appointment under the Services Agreement

Non-assignment without consent

Relationship of the parties

The terms of the Loan Agreement

Parties

Background

Facility

Interest

Repayment and payments

Limited recourse

Trigger Event

Default

Assignment

The proper construction of the Services Agreement and grounds 1 - 3

The judge's findings

The findings relevant to appeal grounds 1 and 2

The judge's findings relevant to appeal ground 3

BN's grounds 1 - 3

Grounds 1 and 2

Ground 3

BN's submissions: grounds 1 - 3

Mirvac (WA)'s submissions: grounds 1 - 3

A potential third construction: the parties' submissions

Principles of construction

Analysis: the proper construction of the Services Agreement and grounds 1 and 2

Analysis: ground 3

Conclusion: grounds 1 - 3

The parties' submissions: grounds 6 - 13

BN's submissions

Ground 6 - imposition of second access road condition

Ground 7 - second access road and Pastoral Co

Ground 10 - internal Mirvac documents

Ground 8 - second access road and viability concerns

Ground 9 - September 2014 Report

Conclusions as to errors of fact

Grounds 11 and 13

Ground 12 - recording of Project Control Group meetings

Conclusion as to default(s)

Mirvac (WA)'s submissions

Disposition: grounds 6 - 13

Ground 6

Ground 7

Ground 10

Ground 10.1

Ground 10.2

Ground 10.3

Ground 10.4

Grounds 10.5 and 10.6

Ground 10.7

Ground 10.8

Ground 10.9

Ground 10.10

Ground 10.11

Ground 8

Ground 9

Grounds 11 and 13

BN's claims in relation to Mr Lawrance's statement of 13 June 2014

The judge's findings in relation to Mr Lawrance's statement of 13 June 2014

BN's submissions - ground 11

Repudiation principles

Disposition - ground 11

Disposition - ground 13

Ground 12

The remaining grounds of appeal

Conclusion

JUDGMENT OF THE COURT:

Introduction

This is an appeal by the appellant (BN) against the orders of Archer J in Mirvac (WA) Pty Ltd v Binningup Nominees Pty Ltd[1] (primary decision). Pursuant to the primary decision, the judge made orders allowing the claim of the first respondent (Mirvac (WA)) in debt against BN. The judge dismissed BN's counterclaim against Mirvac (WA) and its holding company, the second respondent (Mirvac Ltd).
[1] Mirvac (WA) Pty Ltd v Binningup Nominees Pty Ltd [2020] WASC 28.
The parties' claims and counterclaims arose out of a number of agreements, referred to as the 'Transaction Documents', to develop certain land owned by BN in Binningup.
In the primary decision, the judge observed that, at trial, the parties and counsel did not distinguish between Mirvac (WA) and Mirvac Ltd, but referred to 'Mirvac'. That occurred when the distinction was immaterial or the matter applied to both entities. These reasons use 'Mirvac' in the same way.[2]

The primary proceedings - overview[3]

The land

[2] Primary decision [5].

[3] This overview is largely drawn from the findings in the primary decision.

BN owned a large area of land in Binningup comprising (1) three blocks with common boundaries to the south of the town of Binningup - 'Binningup south' land, and (2) a block to the north of the town of Binningup - 'Binningup north' land. Binningup north was bushland that had never been developed. Binningup south had been the subject of some development by BN prior to the venture with Mirvac (WA). The development had primarily been in an area of Binningup south called Lakewood Shores.[4] Binningup south also incorporated golf course land.

The Transaction Documents

[4] Primary decision [63] - [64].

The Transaction Documents comprised relevantly:
1.A Loan Facility Agreement dated 11 January 2008 between BN and Mirvac (WA), as varied on 1 October 2009 (Loan Agreement).[5]
2.A fixed and floating charge given by BN to Mirvac (WA) dated 11 January 2008 (Charge).[6]
3.A registered mortgage given by BN to Mirvac (WA) dated 11 January 2008 (Mortgage).[7]
4.A Performance Undertaking given by Mirvac Ltd in favour of BN dated 11 January 2008 (Performance Undertaking).[8]
5.A Development Services Agreement (as varied) dated 1 January 2009 (Services Agreement).[9]
[5] GB 86 - 115, 314 - 315.
[6] GB 116 - 165.
[7] GB 166 - 221.
[8] GB 222 - 233.
[9] GB 234 - 313.
In broad terms, under the Transaction Documents (1) Mirvac (WA) agreed to provide to BN 'Services' in relation to the carrying out of the Project, (2) BN agreed to pay Mirvac (WA) 'Project Cost Payments' each month in respect of Project Costs incurred by Mirvac (WA) as specified in sch 1 of the Services Agreement, (3) Mirvac (WA) would, under the Loan Agreement, advance funds to BN to enable BN to make the Project Cost Payments for which it was liable under the Services Agreement, and (4) ultimately, on the sale of a particular lot, the parties would share in the proceeds according to the terms of 'waterfall' provisions. The parties recognised that it would be a long-term project, and no end date was set.[10]
[10] Primary decision [3], [8].
The judge found that under the Services Agreement, a Project Control Group was established to, amongst other things, approve or disapprove Budgets. BN and Mirvac (WA) had equal representation on the Project Control Group. If a dispute over a Budget arose, the dispute would be dealt with under the dispute resolution clause in cl 15 of the Services Agreement. Ultimately, if either party did not accept the determination of an expert under this clause, then (1) the land would be sold, (2) BN would be required to repay to Mirvac (WA) all monies owed, and (3) the Services Agreement would be terminated.[11]
[11] There is an issue in the appeal as to whether (as the judge found) Mirvac (WA) had the right to disapprove a Budget or whether (as BN contends) only BN had the right to disapprove a Budget.
Broadly speaking, the Loan Agreement required Mirvac (WA) to make an Initial Advance of $25 million and to make further advances to BN when requested, in accordance with specified funding provisions, for the purposes of enabling BN to meet its obligations to make the Project Cost Payments to Mirvac (WA). Clause 5.6 provided that, despite any other provision, BN was required to repay any unpaid part of any Advance no later than the 10‑year anniversary date of its making. The Initial Advance was made on 11 January 2008. Its 10‑year anniversary date was 11 January 2018. However, Mirvac (WA) had limited recourse to recover amounts owing by BN. Broadly speaking, this was limited to enforcement against the Project Assets and the Project Securities.
After making payment of the Initial Advance, Mirvac (WA) made periodic advances to BN through to September 2014, pursuant to the Transaction Documents, to enable BN to meet the Project Cost Payments invoiced by Mirvac (WA) in the course of providing the Services under the Services Agreement. The amount outstanding as at October 2014 was $42,776,962 (including the Initial Advance and interest).[12]

The planning and environmental work - broad overview

[12] Primary decision [8].

The planning and regulatory authorities to which development was subject included the Shire of Harvey (Shire), the Western Australian Planning Commission (WAPC), the Environmental Protection Agency (EPA) and certain Commonwealth departments (Commonwealth).[13]
[13] Primary decision [65].
The details of the planning issues and planning work undertaken are set out later in these reasons. Amongst other things:[14]
[14] See primary decision [62] - [90].
1.On 23 October 2007, the Shire initiated Amendment 63 to its Town Planning Scheme to rezone Binningup south to a 'residential development zone' (proposed Scheme Amendment 63). The Shire referred proposed Scheme Amendment 63 to the EPA under s 38 of the Environmental Protection Act 1986 (WA) (EP Act). Ultimately, the EPA decided that proposed Scheme Amendment 63 was required to be advertised, and moreover, that an environmental review was required.
2.On 9 November 2009, the EPA provided a report to the WA Minister for Environment recommending that no development be allowed on the southern part of the Binningup south site, comprising nearly half of that area.
3.On 23 November 2009, the EPA's recommendation was appealed by Mirvac (WA) on behalf of BN.
4.On 1 July 2010, the Minister partially allowed Mirvac (WA)'s appeal.
5.On 22 March 2011, the Commonwealth advised Mirvac (WA) that the development would be a 'controlled action' that would require assessment under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). Amongst other things, the Commonwealth was concerned to protect a particular moth in the area.
6.On 21 July 2011, the Commonwealth Minister approved the Project, subject to conditions. The conditions related to, amongst other things, protecting the moth.
7.On 13 September 2011, the Shire adopted the proposed Scheme Amendment 63, which was subsequently supported by the WAPC.
8.On 14 February 2012, the Shire approved advertising of the (then proposed version of the) Local Structure Plan and required further information to be provided by Mirvac (WA) prior to the final approval of the Local Structure Plan. The further information sought included information in relation to a second access road.
9.On 20 May 2013, the Commonwealth removed the moth from its list of protected species. Mirvac (WA) then requested the removal of the Commonwealth's conditions relating to the moth.
10.On 11 June 2013, the Commonwealth agreed to Mirvac (WA)'s request, and the conditions were varied.
11.On 11 February 2014, the Local Structure Plan was approved and signed by the Shire.

The course of the Project - overview and the breakdown of the relationship between the parties

The judge's findings included the following:
1.By at least late 2011, Mirvac had concerns as to the returns of the Project, particularly having regard to the delays associated with environmental issues and the state of the market.[15]
[15] See [125] - [129] below.
2.Mirvac had raised its concerns with BN and wished to explore the possibility of renegotiating the terms of the Services Agreement with BN.[16]
[16] See [129] - [130] below.
3.In December 2011, Mr Waller of BN told Mirvac that he knew that 'we have to make this work for both parties'.[17]
[17] See [131] - [132] below.
4.In mid‑June 2012, Mirvac was in negotiations with BN by way of amendment to the Services Agreement to attempt to mitigate the impact of the delay and the yield loss arising from the Commonwealth's environmental interventions. Mirvac at this time believed that the Services Agreement would be varied.[18]
[18] See [141] below.
5.Around July 2012, a Mirvac document entitled 'Draft Scenario HY13' proposed a provision in Mirvac's accounts for a loss of $18 million on the assumption that there would be a negotiated agreement for the termination of the Services Agreement.[19]
6.On 4 February 2013, a Mirvac board paper also referred to a proposed provision against loss of $18 million, on the assumption that BN would repay the $25 million Initial Advance and agree to a termination of the Services Agreement. The board paper referred to the alternative course of action as the Land being sold englobo under the 'deadlock' provisions of the Services Agreement. The board paper referred to this latter course as one which BN would likely wish to avoid, and one which would likely lead to an even greater loss (of $27 million) for Mirvac. The board paper referred to Mirvac needing detailed legal advice in order to activate the 'deadlock' provisions to ensure that Mirvac's actions were 'fully supported by the [Services Agreement]'.[20]
7.In the meantime, Mirvac (WA) continued to work through the necessary steps to implement Stage 1 of the Project, and at no time prior to the termination of the Services Agreement in October 2014 did Mirvac make a decision to 'exit' the Services Agreement.[21] Further, other Mirvac projects at this time, with even larger provisions than this one, continued to be developed.[22]
8.In February 2013, Mirvac's auditors, PricewaterhouseCoopers, recommended that Mirvac provide for a greater loss (of $28 million) on the basis that Mirvac would, ultimately, with the benefit of legal advice, activate the 'deadlock' provision of the Services Agreement and the Land would be sold englobo.[23] Mirvac did not act on the recommendation and provided for a loss of $18 million.[24] There was still no intention to delay or stop work on the Project,[25] and, in 2013, Mirvac continued work on the Project.[26]
9.On 11 February 2014, the Local Structure Plan for the Project was finally endorsed by the WAPC.[27]
10.Mr Waller of BN was interested in increasing yield from the Land by converting the golf course into residential lots. He raised this prospect at a meeting with Mirvac in April 2014.[28]
11.At the Project Control Group meeting on 6 May 2014, it was agreed that (1) Mirvac would prepare a feasibility analysis assessing the financial and lot yield impact of developing the golf course land for consideration at the next Project Control Group meeting, and (2) Mirvac would prepare a Budget and Programme for approval at the Project Control Group meeting in the third quarter, around September 2014.[29]
12.By July 2014, the relationship between the parties was poor.[30]
13.In September 2014, the development manager of Mirvac (WA) prepared a report proposing that steps be taken to amend the Local Structure Plan to convert the golf course land into residential lots. Also in September 2014, Mirvac (WA) submitted a Programme and Budget to the Project Control Group to reflect this proposal.[31] (The Project Control Group never considered this proposal prior to BN writing to Mirvac (WA) purporting to terminate the Services Agreement on 2 October 2014 - see [13] below.)
14.On 9 September 2014, Mr Waller of BN wrote to Mirvac (WA) to advise that he intended to record all meetings of the Project Control Group. Mirvac (WA) would not agree to meetings being recorded, but said it would be prepared to have all meetings minuted by an independent minute‑taker. That proposal was rejected by BN.[32]
[19] See [148] below.
[20] See [175] - [178] below.
[21] See [184] - [185] below.
[22] See [143] below.
[23] See [187] - [189] below.
[24] See [191] below.
[25] See [196] below.
[26] See [197] - [256] below.
[27] See [259] below.
[28] See [260] below.
[29] See [264] below.
[30] Primary decision [93].
[31] See [270] - [271] below.
[32] See [274] below.

On 2 October 2014, BN sent a notice stating that it was terminating the Services Agreement. It alleged repudiation and, further or alternatively, breaches of the Services Agreement by Mirvac (WA). On 24 October 2014, Mirvac (WA) sent a notice to BN alleging that BN had repudiated the Service Agreement and purporting to accept BN's repudiation.[33]
[33] Primary decision [97] - [98].
It was common ground that, in one way or another, the Services Agreement was terminated in October 2014. It was also common ground that this was a Trigger Event for the purposes of cl 1.1 of the Loan Agreement.[34] Clause 5.5(b) of the Loan Agreement provided that despite any other provision, if a Trigger Event occurs, BN must repay the Outstanding Loan Amount one year after the date of the Trigger Event.[35]
[34] Primary decision [11] - [12].
[35] Primary decision [13].
The judge outlined, without challenge by the parties in this appeal, the nature of the claims and counterclaims in the primary proceedings. They may be summarised (in broad terms) as follows.

Mirvac (WA)'s claim against BN

Mirvac (WA) contended that, following the termination of the Services Agreement in October 2014, under cl 5.5(b) of the Loan Agreement, the Outstanding Loan Amount (relevantly, the Initial Advance of $25 million) became payable one year after October 2014, being October 2015. (This was described as the 'first pathway'.[36])
[36] Primary decision [11] - [14].
It was common ground that if Mirvac (WA) did not breach the Services Agreement, it was entitled to the Outstanding Loan Amount under the first pathway.[37] On the other hand, if it did breach the Services Agreement, Mirvac (WA)'s entitlement would turn on whether the prevention principle applied (as alleged by BN), and if the principle did not apply, the effect (if any) of the principles of circuity and set‑off.[38]
[37] Primary decision [18].
[38] Primary decision [18].
Mirvac (WA) also alleged that it had a 'second pathway' to the recovery of the Outstanding Loan Amount under the Loan Agreement - pursuant to cl 7 of the Loan Agreement. By cl 7.2, if there were an 'Event of Default' under the Loan Agreement, Mirvac (WA) could cancel the facility and by notice make the Outstanding Loan Amount payable on demand or immediately. By cl 7.1(c), if a Trigger Event occurred, a default under a Transaction Document would constitute an Event of Default under the Loan Agreement. Mirvac (WA) alleged that BN's Termination Notice was a repudiation at common law and a default under the Services Agreement (being a Transaction Document). It accepted BN's repudiation, thereby terminating the Services Agreement. The termination was a Trigger Event, making BN's default under the Services Agreement (via the notice of termination) an Event of Default under the Loan Agreement pursuant to cl 7.1(c). Accordingly, Mirvac (WA) claimed that pursuant to cl 7.2 of the Loan Agreement, the Outstanding Loan Amount became payable by BN to Mirvac (WA) immediately on notice being given.[39]
[39] Primary decision [20] - [21].
Under this 'second pathway', Mirvac (WA)'s claim depended upon whether BN was entitled to terminate the Services Agreement. This, in turn, also depended (amongst other things) on whether Mirvac (WA) had breached the Services Agreement as alleged in BN's counterclaim.[40]

BN's counterclaim against Mirvac (WA)

[40] Primary decision [22].

By its counterclaim, BN alleged that Mirvac (WA) breached the following three obligations under the Services Agreement:[41]
1.The good faith obligation in cl 3.
2.The obligation in cl 6.2 to 'perform the Services and procure Completion of the Project in accordance with all Approvals, and in a proper, timely, professional and workmanlike manner'.
3.An alleged implied term that Mirvac (WA) would refrain from conduct that would hinder or prevent fulfilment of the purposes of the Services Agreement. This obligation (described as a 'No Hindering Obligation') was said to be part of the good faith obligation.
[41] Primary decision [23] - [24].
BN alleged that, by breaching these obligations, Mirvac (WA) repudiated the Services Agreement and, or in the alternative, committed a 'Non Monetary Event of Default' within the meaning of the Services Agreement.[42]

The alleged Refusal to Proceed decision

[42] Primary decision [23]. The term 'Non Monetary Event of Default' was defined in cl 1.1 of the Services Agreement, in respect of a party, to include:

[T]hat party fails to carry out its obligations under this document (except any obligation which if not complied with would constitute a Monetary Event of Default) in a proper, timely, professional and workmanlike manner such that in the opinion, acting reasonably, of the party not in default such failure will have a material and adverse effect on the Project.

BN alleged that Mirvac (WA) breached the Services Agreement by making, and implementing, a decision not to proceed with the Project unless it could renegotiate amendments to the Services Agreement that were more commercially favourable to it (alleged Refusal to Proceed decision).[43]
[43] Primary decision [26].
BN alleged that by no later than December 2012, Mirvac (WA), in order to give effect to the alleged Refusal to Proceed decision, made two further decisions (1) to use deadlock provisions in the Services Agreement to terminate the Services Agreement if BN did not agree to variations favourable to Mirvac (WA), and (2) in the meantime, to delay the progress of the Project until the Initial Advance became repayable under cl 5.6 of the Loan Agreement (on 11 January 2018), thereby putting pressure on BN to terminate or agree to terms more favourable to Mirvac (WA).[44]
[44] Primary decision [27].
BN alleged that Mirvac (WA) implemented the alleged Refusal to Proceed decision by (1) negotiating to vary the Services Agreement, and (2) delaying progress of the Project in relation to a second access road and by the potential development of the golf course land into residential land.[45]
[45] Primary decision [30] - [31].
In relation to the second access road, BN alleged that Mirvac (WA) deliberately caused delay in obtaining the Shire's approval by, in effect, resisting the Shire's demands in respect of a second access road, and thereby creating a 'false issue'.[46]
[46] Primary decision [32].
BN summarised the matters which it alleged 'manifested' the alleged Refusal to Proceed decision as follows:
1.Mirvac (WA) deliberately delayed the progress of the Project, particularly in 2009, by its handling of the second access road issue and its dealings (particularly through Mr Adam Davidson) with the Shire on that issue.[47]
[47] Primary decision [40], [99] - [100].
2.Mirvac (WA) also deliberately delayed the progress of the Project by 'attempting to cause' Coast Pastoral Company (Pastoral Co), a nearby landowner whose land would be needed for a second access road, 'not to sell that land'.[48]
[48] Primary decision [40], [101].
3.As from 2009, Mirvac (WA) had decided to abandon 'Built form' work, which BN asserted Mirvac (WA) was obliged to undertake under the Services Agreement. 'Built form' work means, in effect, constructing and building on a lot before selling it.[49]
4.An 'Approval for Additional Costs' document, prepared by Mr Adam Davidson in early 2009 for approval by Mr Draffen, allegedly concealed from Mr Draffen the extent of the fall in the internal rate of return since the 'Approval to Purchase' of 9 May 2007 was prepared.[50]
5.In order to proceed, Mirvac would have needed an internal 'Approval to Commence Construction' document (ACC) and there was no prospect of such a document being issued because (1) Mirvac (WA) sought to renegotiate the Services Agreement (itself manifesting the alleged Refusal to Proceed decision) and its feasibility studies were based on assumptions that the Services Agreement would be varied, (2) in February 2013, Mirvac provisioned for a $18 million loss on its advance on the basis that BN would likely agree to release Mirvac (WA) from its obligations under the Services Agreement and refund the Initial Advance of $25 million, as it was thought that BN would not wish to have the deadlock provisions operate and lead to a sale of the land, and (3) in September 2013, Mirvac realised it was going to make a loss if the Services Agreement was not varied, even if the golf course was developed.[51]
6.On 3 April 2014, Mirvac (WA) made an alleged repudiatory statement by Mr Draffen. Mr Draffen (allegedly) stated to Mr Waller of BN, at a meeting on 3 April 2014, in effect, that Mirvac's Board was unlikely to decide to carry out the Project, but if Stage 1 was carried out, the Board may possibly decide to proceed.[52] As to what was said at the meeting on 3 April 2014, BN relied on Mr Waller's purported minutes of the meeting.[53]
7.After the meeting on 3 April 2014 between Mr Draffen of Mirvac (WA) and Mr Waller of BN, Mirvac did work to consider a possible Stage 1 to be located at the foreshore, away from established services. This was not a logical place to start, and showed that Mirvac 'never intended' to develop Stage 1.[54]
8.On 13 June 2014, Mr Lawrance of Mirvac Ltd made a statement at a Project Control Group meeting to the effect that, in addition to approval by the Project Control Group, Mirvac would need internal approval prior to commencing Stage 1.[55]
9.In September 2014, Mirvac (WA) deliberately delayed progress of the Project by proposing to the Project Control Group a Programme and Budget for approval to vary the Local Structure Plan so as to remove the golf course and change it to residential land.[56]
10.In September 2014, Mirvac (WA) refused to attend further Project Control Group meetings if those meetings were recorded (as was sought by BN).[57]

BN's counterclaim against Mirvac Ltd

[49] Primary decision [38].

[50] Primary decision [39], [509].

[51] Primary decision [37].

[52] Primary decision [35].

[53] Primary decision [448] - [449]. (The minutes (exhibit 17.644) are not in the GB.)

[54] Primary decision [36].

[55] Primary decision [35].

[56] Primary decision [40], [279].

[57] Primary decision [41].

As against Mirvac Ltd, BN alleged:[58]
1.Mirvac Ltd breached the Performance Undertaking by failing to ensure the due performance of Mirvac (WA)'s obligations under the Services Agreement.
2.By no later than December 2012, Mirvac Ltd determined that it would cause Mirvac (WA) not to proceed with the Project unless the Services Agreement was materially amended to improve the return to the Mirvac parties, and determined that it would direct Mirvac (WA) to trigger the deadlock provisions of the Services Agreement if BN refused to agree to a variation. BN alleged that, as a consequence of that direction, Mirvac (WA) committed the alleged breaches and repudiated the Services Agreement and, by reason of those matters, Mirvac Ltd committed the tort of unlawful interference with the Services Agreement.
[58] Primary decision [42] - [43].

The primary decision - overview

The evidence

The trial occupied 11 days of evidence. The trial bundle exceeded 25 lever arch volumes of documents.[59]
[59] Primary decision [51].
Mirvac (WA) called four witnesses:[60]
1.Mr Adam Davidson, the Senior Development Manager for Mirvac (WA), who had day‑to‑day responsibility for the Project from 2007 until May 2010.
2.Mr Aleksovski, who took over from Mr Adam Davidson as Development Manager on 31 May 2010, and thereafter had day‑to‑day responsibility for the Project.
3.Mr Draffen, the Chief Investment Officer of Mirvac Ltd. In 2008, he became the national developments Chief Executive Officer and was subsequently given responsibility for group strategy.
4.Mr Cooper, who was appointed as one of Mirvac (WA)'s representatives on the Project Control Group in September 2014.
[60] Primary decision [52] - [56].
BN called three witnesses: Mr Waller (a director and secretary of BN), Mr Doyle (a finance broker who had been a consultant to Mr Waller's group of companies, including BN, since late 2012) and Mr Maiorana (a town planning expert).[61]
[61] Primary decision [57] - [60].
The judge was evidently alive to considering the evidence as a whole.[62]
[62] Primary decision [313], [322], [375], [408], [485], [555], [790].
In relation to the judge's assessment of Mirvac (WA)'s witnesses, her Honour's findings were to the following effect:
1.Mr Adam Davidson, who (relevantly) dealt with the Shire in relation to the second access road issue, was an honest and reliable witness and 'most impressive'. Her Honour accepted his evidence entirely.[63]
[63] Primary decision [539] - [543].
2.Mr Aleksovski was an honest witness overall, and for the most part, reliable. The judge accepted his evidence entirely, subject to an exception. The judge said:[64]
[64] Primary decision [547] - [549].
In dealing with the second access road and the golf course issues, I referred extensively to Mr Aleksovski's evidence, and explained why I accepted it, with one exception.
The exception was his explanation as to why he raised tax issues with Mr Payton. While I reject his explanation, it does not cause me to conclude that he was overall an untruthful witness. It was one answer in three days of cross-examination. It is more likely that he was too embarrassed to admit that he was trying to manipulate the Shire.
I also previously dealt with what he wrote in the May 2013 Strategy, being the untrue statement that [Pastoral Co] had discovered a [capital gains tax] issue after conducting further investigation. I explained that, while this was troubling, I was not satisfied it was written as part of a larger plan to delay or impede implementation of the Project or because the [alleged Refusal to Proceed decision] had been made. It does not cause me to conclude he was an untruthful or unreliable witness. (footnote omitted)
3.Mr Cooper was an honest and reliable witness and the judge accepted his evidence.[65]
4.Mr Draffen was an honest and reliable witness and the judge accepted his evidence.[66] His evidence included that:
(a)Mirvac had not, at any time, decided to exit the Project.[67]
(b)Any Mirvac decision to exit the Project would have involved him (Mr Draffen). No such decision was ever tabled for approval or made.[68]
(c)Mr Draffen never reached the view, nor was he ever told, that there was no prospect that BN would vary the Services Agreement.[69]
(d)Mirvac did not believe that it was contractually bound to complete the Project.[70]
(e)Despite making a provision for the loan to BN in 2013, the Project Team continued to work on the Project and did so irrespective of the (deadlock) provision in the Services Agreement.[71]
[65] Primary decision [551] - [552].
[66] Primary decision [553] - [555]. The judge considered criticisms of Mr Draffen's evidence by counsel for BN at primary decision [479] - [485].
[67] Primary decision [372].
[68] Primary decision [406].
[69] Primary decision [348].
[70] Primary decision [374].
[71] Primary decision [403] - [404].
In relation to BN's witnesses, the judge's findings were to the following effect:
1.Mr Waller was at pains to advance BN's case and denigrate Mirvac (WA) throughout his evidence. He was non-responsive on many occasions and his answers were inconsistent with documents. He also admitted that due to various medical issues his memory was 'terrible'. He was not a reliable or credible witness. The judge did not accept his evidence in the absence of some independent corroboration.[72]
2.Mr Doyle, whose evidence was effectively limited to the second access road and golf course issues in 2013 and 2014, was found to be an unreliable witness although there was no reason to doubt his credibility.[73]
3.The evidence of Mr Maiorana, BN's town planning witness, was accepted in terms of his expertise and credibility, but the weight of his evidence was affected by other evidence and the basis for his opinions.[74]

The judge's findings on the legal issues

[72] Primary decision [556] - [568].

[73] Primary decision [569] - [571].

[74] Primary decision [572].

A central legal issue was whether Mirvac (WA), as a member of the Project Control Group had the contractual right, under cl 5.2 of the Services Agreement, to disapprove a Budget proposed for approval or disapproval by the Project Control Group. BN submitted that only it had the right to disapprove a Budget, and thereby trigger the deadlock provisions which might result in a termination of the Project and the sale of the land. The judge said that this was a critical issue, as it formed part of the context against which to consider the contractual benefits to BN under the Services Agreement and the nature and scope of Mirvac (WA)'s obligations under the Services Agreement.[75]
[75] Primary decision [583] - [584].
The judge found that on the proper construction of the Services Agreement, Mirvac (WA), as a member of the Project Control Group, had the contractual right to disapprove a proposed Budget.[76] Her Honour found that the proper 'performance [by Mirvac (WA)] under the Services Agreement did not inevitably mean that the Project would be completed'.[77]

The judge's findings in relation to the alleged Refusal to Proceed decision

[76] Primary decision [585] - [618].

[77] Primary decision [535].

The judge found that Mirvac (WA) believed that it was not contractually required to complete the Project.[78]
[78] Primary decision [374].
In relation to the particular matters alleged by BN concerning the alleged Refusal to Proceed decision (referred to in points 1 ‑ 10 of [26] above) in summary, the judge:
1.Did not accept BN's first contention that Mirvac (WA) sought to avoid the imposition of a condition of planning approval requiring the immediate construction of a second access road in order to avoid expenditure by Mirvac (WA) unless and until the carrying out of the Project had been internally approved by Mirvac Ltd. Further, the judge did not accept that Mirvac (WA)'s dealings with the Shire on this issue were undertaken for the purpose of causing delay. On the contrary, the judge found that Mirvac (WA) sought to avoid the imposition of such a condition in an effort to avoid delay in the EPA approval process and to avoid premature, and possibly unnecessary, expenditure.[79]
[79] Primary decision [103], [178].
2.Found that Mirvac (WA), through Mr Aleksovski, did not attempt to cause Pastoral Co not to sell the land required for the second access road. Whilst Mr Aleksovski had misstated to the Shire that Pastoral Co faced significant tax implications on a sale of the land, this was not made as part of a larger plan to delay the Project or because the alleged Refusal to Proceed decision had been made. Rather, the statement was made in an attempt to manoeuvre the Shire to acquire the land itself in an effort to save costs.[80]
[80] Primary decision [263] - [270].
3.Found that, on the proper construction of the Services Agreement, Mirvac (WA) had no obligation to develop the 'Built form' lots.[81]
[81] Primary decision [707] - [722].
4.Found that BN had not explained how Mr Adam Davidson's alleged concealment, in the 2009 Approval for Additional Costs document, of the fall in the internal rate of return, manifested the alleged Refusal to Proceed decision.[82] Further, her Honour found that:[83]
[82] Primary decision [510].
[83] Primary decision [511] - [515].
(a)Mr Adam Davidson's evidence, and the Approval for Additional Costs document, clearly indicated that the internal rate of return of 21% came from the 'Latest Approval (Q3 Forecast)' and not the 'Approval to Purchase' document;
(b)Mr Draffen's evidence did not contradict Mr Adam Davidson's evidence;
(c)quarterly updates (although not formally approved) became the baseline for future status updates;
(d)the deterioration was not serious in the sense that it was outside of any tolerable level; and
(e)counsel for BN was 'unable to provide a convincing reason as to why the Perth team would want to deceive the national team in the manner alleged'.
5.Found, in effect, that by seeking to renegotiate the Services Agreement and providing for a loss of $18 million in the event that negotiations were not successful, Mirvac (WA) did not manifest the alleged Refusal to Proceed decision. Also, whilst Mr Aleksovski produced a report in September 2013 indicating that if the Project were completed without a variation then Mirvac would suffer a loss, his memo set out three options. The first two effectively involved the Project proceeding and suggested that further feasibility studies be undertaken (to commence development near the foreshore and to incorporate the golf course land). Option 3 involved negotiations with BN 'outside of the … Services Agreement'.[84] The judge said:[85]
[84] Primary decision [438] - [445].
[85] Primary decision [446].
[BN] submitted that the [September 2013] Options Memo shows there was no possibility that an [Approval to Commence Construction document] would ever have been given in the future. I do not accept this. The express terms of the [September 2013] Options Memo, in setting out options and advising that consideration be given to pursuing the third, is entirely inconsistent with a decision having been taken to pursue only option 3 and, if it failed, to stop work on the Project. On the contrary, the implication from the [September 2013] Options Memo is that, if option 3 failed, one of the other two options would be followed. (footnote omitted)
6.Did not accept Mr Waller's evidence as to the meeting on 3 April 2014, or the accuracy of Mr Waller's purported notes of that meeting. Her Honour summarised the evidence and said:[86]
[86] Primary decision [472] - [473].
I accept Mr Draffen's account of the meeting. As at 3 April 2014, Mirvac's position, with which Mr Waller agreed, was that Mirvac would do some more work around the potential for a Stage 1 that would present the Project in its best light. The prospect of renegotiating the Services Agreement was left open.
I do not accept that anything Mr Draffen said in the meeting manifested the intention alleged by [BN]. Indeed, even Mr Waller's purported minutes do not assert that Mr Draffen said that Mirvac had decided not to proceed. (footnotes omitted)
7.Found that Mirvac (WA)'s work after the meeting on 3 April 2014, in considering locating Stage 1 at the foreshore, did not show that Mirvac never intended to develop Stage 1. Rather, the judge accepted Mr Draffen's explanation as to why the foreshore was chosen. The foreshore was the location that had been agreed by the parties for Stage 1 in the site visit in June 2013. It was also the location identified in the minutes of the Project Control Group meeting of 25 July 2013, and in Mr Crockett's email of 25 July 2013 containing his notes of that meeting. It was the location identified in options 1 and 2 of Mr Aleksovski's September 2013 Options Memo.[87]
8.Found that, at the Project Control Group meeting on 13 June 2014, Mr Lawrance said words to the effect that 'Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval'.[88] Her Honour said, in effect, that Mirvac (WA) had the legal right under the Services Agreement to disapprove a Budget, and that it would be expected that Mirvac (WA) would go through an internal approval process before approving or disapproving a Budget at a Project Control Group meeting.[89]
9.In relation to the proposal to delete the golf course and turn it into residential land, found that Mirvac (WA), by proposing in September 2014 to amend the Local Structure Plan to convert the golf course land to residential land, did not do so to deliberately delay progress of the Project.[90]
10.In relation to BN's insistence that meetings of the Project Control Group be recorded, found that Mirvac (WA)'s refusal to attend meetings on that basis was not in breach of its obligations (including the good faith obligation). Nor was her Honour satisfied that Mirvac (WA)'s refusal was done in order to delay or stop the Project. The documentary evidence showed that, by September 2014, the relationship between the parties was combative. Mirvac (WA) had said that it was willing to attend a meeting if it was not recorded, and was willing to pay for an independent minute‑taker. That was not an unreasonable stance in all of the circumstances. Further, each party could have utilised the dispute resolution process in the Services Agreement to resolve the issue of whether the meetings should be recorded. Instead, BN sent its notice of termination on 2 October 2014.[91]

Summary of the judge's findings in relation to BN's claims against Mirvac (WA)

[87] Primary decision [474].

[88] Primary decision [477] - [478].

[89] Primary decision [478].

[90] Primary decision [306].

[91] Primary decision [527] - [528].

The judge found that:[92]
1.Mirvac (WA) did not make or implement the alleged Refusal to Proceed decision.
2.Mirvac (WA), through Mr Adam Davidson and Mr Aleksovski, did not seek to delay the progress of the Project.
3.Rather, Mirvac (WA) continued to progress the Project, independently of its feasibility concerns and its consideration of using the deadlock provisions in the future (subject to obtaining legal advice).
4.Accordingly, Mirvac (WA) did not repudiate the Services Agreement.
5.BN's alternative allegation of breach, being that there was a Non Monetary Event of Default, was based on the same allegations as the alleged repudiation. This alternative claim failed for similar reasons.
6.Accordingly, BN was not entitled to terminate the Services Agreement. BN's notice purporting to do so was a default under the Services Agreement and a repudiation of the Services Agreement, which Mirvac (WA) was entitled to accept and did so. This made the Outstanding Loan Amount immediately repayable on notice.

Other matters

[92] Primary decision [746] - [751], [754] - [756].

Consequently, the judge found that Mirvac Ltd had not committed the tort of unlawful interference with the Services Agreement.[93]
[93] Primary decision [778], [790].
Her Honour also found that BN had not, in any event, proved its damages claim.[94] Further, her Honour found that even if BN were entitled to damages, Mirvac (WA) was entitled to equitable set‑off.[95]
[94] Primary decision [886].
[95] Primary decision [908].

Scope of this appeal and the outcome

In its grounds of appeal, BN does not contend that the judge erred in relation to her findings referred to in points 3, 4, 6 and 7 at [37] above.
The grounds of appeal are nevertheless extensive. There are three grounds of appeal alleging errors in relation to the construction of the Services Agreement.[96] There are over 20 grounds (including subgrounds) alleging other errors of law.[97] There are also some 25 grounds (including subgrounds) alleging errors of fact.[98] Many of the alleged errors of fact relate to the alleged Refusal to Proceed decision.[99]
[96] Grounds 1 - 3.
[97] Grounds 3 - 5, 12, 14 - 23.
[98] Grounds 6 - 11, 13.
[99] Especially ground 10.
Given the numerous challenges to findings of fact, including in relation to the alleged Refusal to Proceed decision, it is necessary to outline in detail the course of events over the (approximately) six years in which the Services Agreement operated, prior to its termination in October 2014. The overall chronology of events, taken from the primary decision and the agreed chronology in this appeal, is set out in the next section of these reasons (Chronology of Events). Many of the matters in the Chronology of Events are not the subject of challenge in the grounds of appeal.
The judge made key factual findings as to Mirvac's state of mind and the purposes for which it acted from a consideration of the evidence as a whole, including, to a substantial degree, based on her Honour's assessment of the credibility and reliability of the witnesses. The observations of Bell, Gageler, Nettle and Edelman JJ in Lee v Lee[100] are applicable in the appeal to this court:[101]
A court of appeal is bound to conduct a 'real review' of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge's findings unless they are 'glaringly improbable' or 'contrary to compelling inferences' is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, 'in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge'.
[100] Lee v Lee [2019] HCA 28; (2019) 266 CLR 129.
[101] Lee [55]. See also Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [25]; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 [43]; Smart v Power [2019] WASCA 106 [100] ‑ [106]; Child and Adolescent Health Service v Mabior [2019] WASCA 151; (2019) 55 WAR 208 [93]; Joyce v Anderson [2020] WASCA 48 [105] ‑ [106], [204] ‑ [213].
In Fox v Percy, Gleeson CJ, Gummow and Kirby JJ observed that the limitations of the appellate court, in proceeding on the record, include:[102]
the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. (footnotes omitted)
[102] Fox [23].
A finding of fact as to the state of mind of a witness is a paradigm example of a finding of the kind referred to in [44] above. Consistently with the above principles, generally speaking, an appellate court would be slow to differ from a finding of fact at trial as to the state of mind of a witness.[103]
[103] Nocton v Lord Ashburton [1914] AC 932, 957; Clarke Boyce v Mouat [1994] 1 AC 428, 436 - 437.
Unequivocal admissions made in certain circumstances may nevertheless have 'overwhelming persuasiveness' unless they can be explained in some convincing way, and may thereby point to error by a trial judge despite the advantages enjoyed by the trial judge.[104]
[104] Voulis v Kozary [1975] HCA 44; (1975) 180 CLR 177, 193; Commissioner of the Australian Federal Police v Kalimuthu [No 2] [2018] WASCA 192 [490] ‑ [491].
For the reasons which follow, the appeal should be dismissed. In broad terms:
1.The judge did not err in law in finding that the Completion of the Project was not a contractual benefit conferred on BN.
2.The judge did not err in finding that Mirvac (WA)'s members on the Project Control Group had a right to disapprove a Programme or Budget.
3.Whilst the judge erred in finding, in effect, that Mirvac (WA)'s right to disapprove a Budget under cl 5 of the Services Agreement encompassed a decision not to proceed with the Project because Mirvac (WA) considered it no longer in its economic interests to do so, the error is immaterial to the disposition of the appeal. Prior to BN's Termination Notice, the occasion was never reached where the members of Mirvac (WA) on the Project Control Group disapproved or were required to consider the disapproval of a Budget. Also, BN accepted that in order to succeed in the appeal, BN had to establish not only the grounds relevant to construction, but the grounds challenging the judge's findings of fact relevant to repudiation and breach.[105] BN has not successfully challenged the findings of fact.
4.Having regard to the evidence as a whole, and in light of the principles of appellate restraint referred to above, BN has not established error in the judge's findings to the effect that Mirvac had not made or implemented the alleged Refusal to Proceed decision or had otherwise deliberately delayed the progress of the Project as alleged by BN.
5.The judge did not err in finding (as alleged in ground 11) that Mr Lawrance's statement at the Project Control Group meeting on 13 June 2014 was not repudiatory.
6.The judge did not err in finding that the refusal of Mirvac (WA)'s representatives to attend meetings of the Project Control Group in circumstances in which BN was insisting on the meetings being recorded was not a Non Monetary Event of Default under the Services Agreement or a repudiation of the Services Agreement.
7.It is unnecessary to deal with the remaining grounds insofar as they are predicated on the success of the grounds alleging that the judge should have found the alleged breaches or repudiation of the Services Agreement by Mirvac (WA).
[105] BN's written submissions filed 13 May 2021, par 4.2.

Chronology of Events

Although the judge did not structure her findings in this manner, we will commence with a comprehensive chronological conspectus of the facts, as we consider that assists in the evaluation of challenges to the judge’s findings of fact.

2007

In 2007, prior to the Transaction Documents being executed, Mirvac (WA) commissioned a report from civil engineers Cossill & Webley in relation to anticipated development costs. The authors of the report advised Mirvac (WA), among other things, that it may be necessary to provide secondary access into the southern part of the site.[106]
[106] Primary decision [116].
On 23 October 2007, the Shire initiated proposed Scheme Amendment 63 to its Town Planning Scheme to rezone Binningup south to a 'residential development zone'.[107]
[107] Primary decision [66]; Agreed chronology WB 123.
On 19 November 2007, the Shire referred the proposed Scheme Amendment 63 to the EPA under s 38 of the EP Act.[108]

2008

[108] Primary decision [66]; Agreed chronology WB 123.

On 11 January 2008, Mirvac (WA) made the Initial Advance of $25 million to BN under the Loan Agreement.[109]
[109] Primary decision [67].
In 2008, Mirvac (WA) held an 'engagement forum' attended by representatives from Mirvac (WA), BN, the local authorities and development consultants. The urban planning consultants appointed by Mirvac (WA), Roberts Day, ran the forum with a view to coordinating the consultant teams, authorities, the Shire, the golf course and other representative groups.[110]
[110] Primary decision [69].
In 2008, Mirvac (WA) worked with its consultants and with the Shire in relation to drafting provisions of a Local Structure Plan. Mirvac (WA) also worked with the EPA, including arranging a visit to the site.[111]
[111] Primary decision [70].
There were Project Control Group meetings on 14 February 2008 and 25 August 2008.[112]
[112] Agreed chronology WB 123.
On 10 September 2008, Mirvac (WA) received a report from traffic engineers Riley Consultants (2008 Riley Report) who advised that, from a traffic perspective, the existing road could accommodate the development of up to 90 per cent of the existing lots in the town site, plus 1,200 lots within the subject land. It recommended that a traffic analysis be done with respect to a second access road after there were 750 dwellings in the subject land.[113]
[113] Primary decision [116]; GB 316 - 353, particularly GB 331 - 332.
In 2008, Mirvac (WA) received a report from TME titled TME Fire Management Guidelines (2008 TME Fire Report). The report said that there was a need for a second external access to the southern portion of the site that could accommodate particular types of fire trucks. The judge accepted Mr Adam Davidson's evidence that, after receiving that report, it seemed highly likely that a second access road would have to be built, and it was likely that it would be required in order to get planning approval. However, the judge also accepted, in effect, Mr Adam Davidson's evidence that Mirvac (WA) was hopeful that alternative strategies may still be available, and that Mirvac (WA) had been looking at a range of alternate potential emergency access means in discussions with Mr Lush from TME.[114]
[114] Primary decision [117].
In October 2008, Mirvac (WA) wrote to the EPA, stating that a second access road did not form part of the current proposal. The judge effectively accepted Mr Adam Davidson's evidence that this was accurate, given the discussions which had taken place between Mr Adam Davidson and Mr Lush from TME around this time. Those discussions focussed around the need to keep the fire access issue and the second access road issue quite separate.[115]
[115] Primary decision [119].
The judge accepted Mr Adam Davidson's evidence that there were two reasons why he did not want a secondary access road to form part of the proposal at this time:[116]
1.Mirvac (WA) did not absolutely know that a second access road was required, since there were both traffic-related and fire‑related reasons why it may or may not be required. In particular, Mirvac (WA) was unsure whether a second access road would be required as (1) it would depend on the number of dwellings built, and (2) Mirvac (WA) had the 2008 Riley Report which suggested that the development alone would not trigger the need for a second access road.
2.Mirvac (WA) wanted to avoid having to readvertise the proposal which would have resulted in substantial delay. In circumstances where Mirvac (WA) was close to a potential outcome, such a delay on the basis of something that may or may not have been required at that point in time was not seen to be worthwhile.
[116] Primary decision [121] - [122]. See also primary decision [128].
On 28 October 2008 there was a Project Control Group meeting.[117]

2009

[117] Agreed chronology WB 123.

On 1 January 2009, Mirvac (WA) and BN varied the Services Agreement.[118]
[118] Primary decision [71]; Agreed chronology WB 123.
In 2009, Mirvac continued to work with the Shire. One of the issues under discussion was secondary access to the site.[119]
[119] Primary decision [73].
On 20 January 2009, TME issued to Mirvac (WA) a revised fire management plan (2009 TME Revised Fire Plan).[120] In the Revised Fire Plan, TME amended its previous position that there was a need for a second external access to the southern portion of the site. TME wrote that there was a need for '[e]valuation of the need for a formal secondary (emergency) access to the southern portion of the site as the development reaches its full potential. … The need for this access will be reviewed during later stages of the development once approximately 750 dwellings have been completed'.[121]
[120] Primary decision [118], [123].
[121] Primary decision [123]; GB 354 - 397, particularly GB 377, 394.
On 2 February 2009, the EPA determined that proposed Scheme Amendment 63 should be assessed under pt 4 div 3 of the EP Act.[122]
[122] Agreed chronology WB 123.
On 3 February 2009, there was a Project Control Group meeting.[123]
[123] Agreed chronology WB 123.
On 5 February 2009, Mirvac submitted Revision A of the Local Structure Plan to the Shire (Revision A).[124] Revision A described the golf course, in effect, as part of the design response to the 'Open Space' aspect of the proposed Local Structure Plan.[125] Revision A also dealt separately with 'emergency access' and 'proposals for second access road'. In relation to the latter, it stated (amongst other things):[126]
An outcome of the Design Enquiry Forum was support for the provision of a second access road to the Binningup town site. This has the capacity to reduce traffic on the existing Binningup Road and provide a permanent secondary emergency access and quicker and more direct access to the proposed Village Centre from the south. The 'Local Structure Plan Traffic Report' (Riley Consulting, Dec 2008) provided as a technical supplement to this report identifies that from a traffic perspective a second access would not be required until more than 1500 new dwellings are constructed and occupied within the development. It is proposed to review this analysis when 750 dwellings have been constructed and occupied.
[124] Primary decision [72].
[125] GB 429 - 432; Agreed chronology WB 123.
[126] GB 435.
On 30 March 2009, Mr Pearce of Roberts Day (Mirvac (WA)'s urban planning consultants), emailed Mr Jake Davidson,[127] Manager of Planning Services at the Shire, attaching a proposed policy statement for inclusion in the Local Structure Plan.[128] The proposed policy required the developer to prepare an updated traffic impact assessment upon the issue of titles to facilitate 750 dwellings. It stated that, if the assessment showed that an 'acceptable level of service' was unlikely to be achieved at the intersection of Binningup Road and Old Coast Road (based on an assessment of household trip generation at that time and the projected final trip generation), the assessment would need to address options, which might include upgrades to the intersection and/or the provision of secondary access.[129]
[127] Mr Jake Davidson and the witness Mr Adam Davidson are not related. To avoid confusion, the judge referred to each man by his full name: primary decision [124].
[128] Primary decision [124] - [125].
[129] Primary decision [126].
The judge accepted Mr Adam Davidson's evidence that this proposed policy statement referred to an 'acceptable level of service', and omitted reference to secondary access for emergency purposes, on the bases that:[130]
1.the Shire was primarily focused on maintaining access to the site, so the proposed policy was intended to address the traffic issue and whether that was a trigger for a second access road;
2.the Shire's engineers wanted to do a separate piece of work to confirm at which level the triggers for a second access road should be set;
3.Mirvac (WA) was aware, as a result of discussions between Mr Adam Davidson and Mr Lush of TME, that there were alternative options available for dealing with emergency access. Mirvac (WA) did not want emergency access to be factored into the present assessment when a second access road might not be required in any event; and
4.Mirvac (WA) was keen to avoid the environmental review being re-advertised, which Mr Adam Davidson 'felt could have led to a bunch of other complications and reassessment and inevitable further delays …'.
[130] Primary decision [127] - [128].
Thus, the judge effectively accepted that the proposed policy statement sent on behalf of Mirvac (WA) in the email dated 30 March 2009 did not address secondary access for emergency purposes because Mirvac (WA) wanted to address that issue separately, as at that point in time, there appeared to be a range of other options available to Mirvac (WA) which were more likely to be the outcome than the construction of a second road.[131]
[131] Primary decision [129].
On 1 May 2009, there was a Project Control Group meeting.[132]
[132] Agreed chronology WB 123.
In May 2009, following discussions between Mr Jake Davidson of the Shire and Mr Adam Davidson regarding the appointment of an independent consultant to facilitate the resolution of the second access issue, Mirvac (WA) and the Shire commissioned independent traffic consultants, Shawmac Pty Ltd.[133]
[133] Primary decision [130].
On 17 June 2009, Mr Adam Davidson emailed the Shire advising that Mirvac (WA) understood that the Shire required the triggers for commencement of approvals and construction for the second access road to the site be amended prior to the adoption of the Local Structure Plan (instead of amending the Local Structure Plan prior to advertising).[134] The judge found that the effect of this communication was not that Mr Adam Davidson knew that a second access road itself would need to be provided for in the Local Structure Plan, but rather that he knew that the triggers for assessment and construction of the second access road would need to be included.[135]
[134] Primary decision [131].
[135] Primary decision [132] - [133].

On 7 July 2009, the Shire's Development Services Committee held a meeting regarding the need for a second access, in relation to which it had sought independent specialist advice. The minutes of that meeting recorded that (1) a second access was required based on expected traffic generation and the provision of an emergency access, (2) the timing of the second access was under discussion (at this time, a staged approach tied to development milestones was expected), and (3) this matter would be resolved prior to final consideration.[136]
[136] Primary decision [134].
The judge found that, at its meeting on 14 July 2009, the Council appeared to resolve that provisions addressing the proposed secondary road access to the development were to be incorporated into the Local Structure Plan to the satisfaction of the Council.[137]
[137] Primary decision [135].
On 3 August 2009, in accordance with the EP Act, an Environmental Review was issued for public comment from 4 August 2009 to 15 September 2009.[138]
[138] Agreed chronology WB 124.
At around this time in 2009, the EPA was assessing the proposed Scheme Amendment 63, and Mirvac (WA) and the Shire were working together to address the EPA's concerns.[139]
[139] Primary decision [137].
On 20 August 2009, the EPA wrote to the Shire, advising that it had become aware of the minutes of the Shire's Committee meeting on 7 July 2009. The EPA sought clarification on whether the amendment and the development envisaged by the amendment could proceed without the provision of a secondary access road.[140]
[140] Primary decision [136].
On 24 August 2009, Mr Adam Davidson prepared a draft proposed response to the EPA for the Shire, and emailed it to Mirvac (WA)'s consultants for their input (24 August 2009 email). The draft stated that a second access road did not form part of the current proposal as whether it would ultimately be required was a matter dependent on a range of traffic-related factors. Further, in the final sentence of the email, in a statement directed toward the Mirvac (WA) consultants, Mr Adam Davidson said:[141]
We need to be very careful not to end up encouraging approval for the northern half only, but at the same time inclusion of the second access road within the current approvals process could cause delays of the type significant enough for Mirvac to walk away from this project. (So focus hard as the above is very serious for all of us).
[141] Primary decision [138] - [140].
In respect of this communication,[142] the judge accepted Mr Adam Davidson's evidence to the effect that:
1.the secondary emergency access issue was not referred to because it was separate and distinct from the issue regarding the construction of a secondary access road due to traffic triggers, not because Mirvac (WA) wished to avoid the EPA requiring construction of the second access road as a condition of giving environmental approval for the Scheme Amendment;[143]
2.as the EPA was concerned with the proposal put in front of it, rather than any issues regarding a secondary access road being constructed for emergency access reasons, it was Mirvac (WA)'s decision whether or not to include it in the proposal;[144]
3.the final sentence was not referring to delays which would result from Mirvac not giving internal approval to commence construction of infrastructure on the land, but rather, to the delays associated with the approvals process, as including the second access road at that time would have required readvertising the amendment as well as a 'snowball of issues' relating to the design details;[145]
4.he was probably being a little over-dramatic to 'put the wind up' the consultants to try and get them to respond quickly and do a bit more work;[146] and
5.he knew, however, that Mirvac (WA) would not have had the right under the Services Agreement to walk away merely because construction of a second access road was required by regulatory authorities as a condition of granting planning or environmental approval to the Scheme Amendment.[147]
[142] GB 454 - 457.
[143] Primary decision [141].
[144] Primary decision [142].
[145] Primary decision [143].
[146] Primary decision [144].
[147] Primary decision [144].
On 25 August 2009, Mr Adam Davidson emailed Mr Jake Davidson of the Shire in relation to the response to the EPA that he had drafted for the Shire. He attached the draft proposed response as a document (Mirvac's draft EPA letter). The judge accepted that Mirvac (WA)'s primary goal at this time was to avoid further delays, to avoid conflation of emergency access and traffic access, and to try and keep future options open based on various yield outcomes.[148]
[148] Primary decision [145] - [147].
On 9 September 2009, Mr Jake Davidson of the Shire replied to Mr Adam Davidson. He attached Mirvac's draft EPA letter, to which he had made some amendments. Mr Adam Davidson made some further minor amendments and emailed the document back. He asked Mr Jake Davidson to send him a copy of the letter the Shire sent to the EPA. Mr Jake Davidson did so the same day.[149]
[149] Primary decision [148].
The letter sent by the Shire to the EPA on 9 September 2009 (Shire's EPA letter) stated:[150]
Second Access Road
Amendment 63 to Shire of Harvey District Planning Scheme No 1 is not contingent on the provision of a second access road to the town site and as such the second access road does not form a part of the proposal.
Council has granted consent to advertise the proposed Binningup Beach Local Structure Plan whilst noting that several modifications are required prior to final consideration. One of these modifications relates to the inclusion of provisions addressing secondary road access to Binningup.
The Shire of Harvey and Mirvac jointly commissioned a further study into the provision of secondary access to Binningup to clarify the likely need for such an access. The results of that study indicate that, although development of the area addressed by Amendment 63 alone (to the maximum yield likely to be possible under the proposed Local Structure Plan) would be unlikely to trigger a requirement of a second access road, a second access road may be required when the potential for new homes on vacant land in the existing town site and other development sites in Binningup are taken into account.
The Shire has therefore indicated that provisions addressing the need for a secondary access road be included in the proposed Binningup Beach Local Structure Plan. The provisions are to provide for planning, approvals and ultimately construction of secondary access to Binningup in a timely and coordinated fashion based on the point at which a particular number of lots are constructed (if at all). Should the trigger points (in terms of number of lots) be reached and the necessary approvals not be obtained, then further development would be precluded. (emphasis added)
[150] Primary decision [148].
Mr Jake Davidson of the Shire also included in his email to Mr Adam Davidson on 9 September 2009 a copy of draft Local Structure Plan provisions which were under review, to which he had added a third bullet point. Mr Adam Davidson said he was happy with that amendment. The amended version of the provisions (2009 Trigger Provisions) outlined the development milestones which would trigger the undertaking of investigations, approvals and timing in relation to the provision of a second public access road to the site. They provided:[151]
The investigations, approvals and timing for the provision of a second public access road to the site will be undertaken in accordance with the following development milestones:
•Upon the issue of titles to facilitate the development of 750 dwellings, the developer will prepare a 'Route and Funding Study' to determine the alignment and funding arrangements for the provision of a second public access road to the site;
•Upon the issue of titles to facilitate the development of 850 dwellings (aggregate) the developer will commence the process of securing the necessary approvals and other commitments to facilitate construction of the second public access road; and
•Upon the issue of [titles] to facilitate the development of 1,000 dwellings (aggregate), the construction of the secondary road is to be undertaken in accordance with the approved 'Route and Funding Study'.
No further subdivision will be permitted beyond each of the stipulated milestones until such time as the relevant actions have been undertaken to the satisfaction of the Shire of Harvey.
[151] Primary decision [149].
The judge found that the Shire's EPA letter and the 2009 Trigger Provisions document recorded an agreed position between Mirvac (WA) and Shire Officers.[152]
[152] Primary decision [150], [158], [161].
The documentary evidence showed that the Shire Officers and Mirvac (WA) had reached an agreement about trigger points as to the time at which the route would need to be identified (on the issue of titles to facilitate the development of 750 dwellings) and the time at which the road would be constructed (on the issue of titles for 1000 dwellings).[153]
[153] Primary decision [172].
At some point prior to 15 September 2009, Mirvac submitted a referral to the Commonwealth under the EPBC Act.[154]
[154] Primary decision [74].
On 15 September 2009, the Commonwealth acknowledged Mirvac (WA)'s referral under the EPBC Act, requested further information about certain species including the 'Graceful Sun Moth' (moth), and 'stopped the clock' on the timing for its decision on the referral (with the 'clock' to be restarted once the Commonwealth had received satisfactory information).[155]
[155] Agreed chronology WB 124.
On 9 November 2009, the EPA provided a report to the WA Minister for Environment recommending that no development be allowed on the southern part of the Binningup south site, comprising nearly half of that area.[156]
[156] Primary decision [75].
On 23 November 2009, the EPA recommendation was appealed by Mirvac (WA) on behalf of BN.[157]
[157] Primary decision [75].
On 17 December 2009, Mirvac (WA) met with the Appeals Convenor at the Binningup site.[158]

2010

Early 2010

[158] Primary decision [75]; agreed chronology WB 124.

Mirvac (WA)'s internal documents show that, as early as 2010, the financial viability of the Project had deteriorated.[159]
[159] Primary decision [327].
On 4 February 2010, there was a Project Control Group meeting.[160]
[160] Agreed chronology WB 124.
On 3 March 2010, the EPA recommended to the Minister and Appeals Convenor that Mirvac (WA)'s appeal be dismissed.[161]
[161] Agreed chronology WB 124.
On 10 March 2010, a report confirmed that there was a 'significant' moth population on the site at Valentines Hill.[162]
[162] Agreed chronology WB 124.
Mirvac (WA) met with the Appeals Convenor several times up to March 2010.[163]
[163] Primary decision [75].
On 7 April 2010, Mirvac (WA) submitted a revised concept plan to the Appeals Convenor as part of its appeal against the EPA report.[164]
[164] Primary decision [75]; agreed chronology WB 124.
On 20 April 2010, there was a Project Control Group meeting.[165]
[165] Agreed chronology WB 124.
In April 2010, the Appeals Convenor recommended that it was open to the Minister to allow Mirvac (WA)'s appeal against the EPA report.[166]

May 2010 - Mr Adam Davidson handover to Mr Aleksovski

[166] Agreed chronology WB 124.

In May 2010, Mr Aleksovski replaced Mr Adam Davidson as the person responsible at Mirvac (WA) for the Project.[167] Mr Adam Davidson prepared handover notes for Mr Aleksovski.[168] Under the heading 'Authorities', the handover notes stated, as a key issue going forward, 'resolving path forward on the second access road to Binningup (refer provisions on the proposed local structure plan for current agreement)' and included a link to a document which indicated that it was 'Shire Approved' on 9 September 2009.[169] Under the heading 'Second Access Road', the handover notes stated:[170]
•Will be a contentious issue. Deliberately deferred from the approvals process as it is not required at this time. The Shire wants it built, but is particularly concerned about emergency access (as is FESA). Best way forward is I think to separate those two issues by tackling the issue of a separate emergency access up front. Jon Riley did the original traffic study - see:
•The agreed outcome with the shire is located at: l:\Binningup Beach\4. Project Management\4.5 Miscellaneous - it is the file called: 'Bin Secondary access (ammend [sic] 63) 09.09.09.Shire Approved.doc' and is as follows:
[167] Primary decision [76].
[168] Primary decision [151].
[169] Primary decision [152].
[170] Primary decision [153].
The handover document of May 2010 then reproduced the 2009 Trigger Provisions which Mr Jake Davidson had emailed to Mr Adam Davidson on 9 September 2009.[171]
[171] Primary decision [154].
Regarding the reference to an 'agreed outcome with the Shire' in this portion of the handover notes, the judge accepted Mr Adam Davidson's evidence. The judge said:[172]
Shortly afterwards, Mr Adam Davidson was asked if he knew, when he wrote the Project synopsis, that there was no agreed outcome between Mirvac and the Shire. He replied:
'I think it was my belief, at the time, that we either had or it was very unlikely that the outcome would change. I thought that we, at least, had a - outcome with the officers and that it was very likely that that outcome would be upheld by council at the time.'
Earlier in the cross-examination, Mr Adam Davidson had said, in the context of the Shire's EPA Letter:
'I guess in dealing with council officers, and particularly senior ones, you assume that they understand the limits of their own authority and operate within those.'
[172] Primary decision [156] - [157].
Moreover, the judge rejected a very serious allegation which was put to Mr Adam Davidson, by counsel for BN, in relation to the handover notes. Counsel for BN put to Mr Adam Davidson that he (Mr Adam Davidson) had told Mr Aleksovski at the handover that although there was no agreed outcome with the Shire, he would refer to an agreed outcome in handover notes and create an internal Mirvac (WA) document which Mr Aleksovski could then use to suggest to the Shire that there had been an agreed outcome prior to Mr Aleksovski's time.[173]
[173] Primary decision [160].
The judge accepted Mr Adam Davidson's evidence entirely and found that:[174]
1.there was no foundation in the evidence for the allegation;
2.to the contrary, the documentary evidence supported Mr Adam Davidson's view that there had been an agreement with the Shire Officers on the terms set out in the handover notes (which reproduced the 2009 Trigger Provisions as amended by Mr Jake Davidson);
3.the Shire's EPA letter, drafted by Mr Adam Davidson and settled and sent by Mr Jake Davidson, setting out the Shire's position, showed an agreed position more generally;
4.it was not asserted by BN that something had occurred between the date on which those documents were settled and the date on which Mr Adam Davidson emailed his handover notes that changed that position;
5.the proposition was inherently improbable, as it would have required Mr Adam Davidson, a planning manager, to have the foresight to determine that there would be some value in creating a document in 2010 falsely asserting an agreement, and would have also required him to be dishonest (and willing to be dishonest) despite the fact that he was leaving Mirvac (WA) for a job elsewhere; and
6.if Mr Adam Davidson had wanted to create a document alleging an agreement that went beyond documents common to the Shire and Mirvac (WA), one might expect he would refer to fictitious oral conversations, but he did not; instead he reproduced the 2009 Trigger Provisions in the handover notes.

18 May 2010

[174] Primary decision [161] - [163].

On 18 May 2010, the Shire recommended that the Council support the revised Local Structure Plan subject to the submission of final documents.[175]

July - December 2010

[175] Agreed chronology WB 124.

On 1 July 2010, the Minister partially allowed Mirvac (WA)'s appeal. The outcome was seen to be an 'excellent one' by Mirvac (WA) and BN.[176]
[176] Primary decision [75].
Mirvac (WA) sent a copy of the Minister's decision to the Commonwealth on 19 July 2010, asking to revive previous discussions around the two issues that remained of concern to the Commonwealth. These were the presence of the moth on the land, and the changes to the Scheme brought about by the appeal outcome. In the following month, Mirvac (WA) provided further information, and continued to do so as required.[177]
[177] Primary decision [77].
On 16 September 2010, a Ministerial Statement was issued indicating that the proposed Scheme Amendment 63 could be implemented. This was the final step in the EPA appeal.[178]
[178] Primary decision [78].
On 29 October 2010, there was a Project Control Group meeting.[179]
[179] Agreed chronology WB 125.
Mirvac (WA) commissioned market research to commence in November 2010 and to finish in mid-December 2010.[180]

2011

[180] Primary decision [79].

In February 2011, Mirvac (WA) held a design workshop for the Project. From that time onwards, many meetings and discussions occurred in relation to the design and other issues relating to the Project.[181]
[181] Primary decision [80].
On 22 March 2011, the Commonwealth advised Mirvac (WA) that the development would be a 'controlled action' that would require assessment under the EPBC Act.[182]
[182] Primary decision [81].
On 31 May 2011, there was Project Control Group meeting.[183]
[183] Agreed chronology WB 125.
On 17 June 2011, Mirvac (WA) lodged Revision B of the Local Structure Plan with the Shire (Revision B). The Shire then lodged that revised Local Structure Plan with the WAPC.[184] Revision B referred to the golf course as part of a network of Public and Private Open Space.[185] Revision B also stated that a detailed 'Local Structure Plan Traffic Report' had been prepared by Riley Consultants in May 2011, which included assessment in relation to access to the site and involved proposals for a potential second access road 'should it be required in the longer-term'.[186]
[184] Primary decision [82].
[185] GB 536.
[186] GB 534.
Revision B also stated:[187]
An outcome of the Design Enquiry Forum was support for the provision of a second access road to the Binningup town site. This has the capacity to reduce traffic on the existing Binningup Road and provide a permanent secondary emergency access and quicker and more direct access to the proposed Village Centre from the south. The 'Local Structure Plan Traffic Report' (Riley Consulting, May 2011) provided as a technical supplement to this report identifies from a traffic perspective a second access road would not be required until more than 1500 new dwellings are constructed and occupied within the development. …
The pre-requisite triggers and timing for the provision of a second road have been agreed with the Shire of Harvey[.]
Revision B then set out the 2009 Trigger Provisions.
[187] GB 534 - 535.
On 21 June 2011, Mirvac (WA) emailed the Commonwealth reminding it that the statutory timeframe for deciding on the development expired the following day. On 22 June 2011, the Commonwealth informed Mirvac (WA) that it intended to approve the development subject to stated conditions. The letter gave Mirvac (WA) 10 business days in which to comment on the conditions. It also said that the time for making the final decision had been extended to 13 July 2011. Mirvac (WA) then worked to have the conditions varied.[188]
[188] Primary decision [81].
On 21 July 2011, the Commonwealth Minister approved the Project, subject to conditions. The conditions related to, amongst other things, protecting the moth.[189]
[189] Primary decision [81].

In other words, BN alleged that (1) Mirvac (WA) put up the September 2014 Budget and Programme not for the purpose of performing the Services Agreement, but for the purpose and with the intention of delaying the carrying out of Subdivision and Construction Works until 11 January 2018, when the Initial Advance would be repayable, and (2) the fact that Mirvac (WA) had this improper purpose or intention may be inferred from (amongst other things) Mr Lawrance's statement of 13 June 2014.

BN's pleaded case

By its amended further re‑amended defence and counterclaim filed 26 September 2017,[569] BN pleaded, in effect, that:
1.Mirvac (WA), contrary to its obligations under the Services Agreement, did not submit a Budget and Programme to carry out a stage of the Project involving Subdivision Works or Construction Works because the directors of Mirvac Ltd had not approved the Project being implemented by the carrying out of Subdivision or Construction Works and creating Sale Lots (par 29).
2.This was alleged to constitute, alone or in combination with other pleaded matters, a repudiation of the Services Agreement or a Non Monetary Event of Default entitling BN to terminate under cl 17.1 of the Services Agreement (pars 32 ‑ 33).
[569] See BB 260 - 264.
The particulars to par 29 alleged that Mr Lawrance had made a statement at the Project Control Group meeting on 13 June 2014 to the effect alleged in [609.1] above.
In other words, Mr Lawrance's statement on 13 June 2014 was alleged to constitute an admission that Mirvac (WA) did not, contrary to the terms of the Services Agreement, submit a Budget and Programme to carry out a stage of the Project involving Subdivision or Construction Works in or prior to the end of September 2014 because the directors of Mirvac Ltd had not approved the Project being implemented by way of Subdivision or Construction Works.

BN's case at trial

The judge described BN's claims in relation to Mr Lawrance's statement at the meeting on 13 June 2014, as follows:[570]
[570] Primary decision [34] - [35], [447], [475].
In [BN's] written submissions, it summarised the matters which it said manifested the [alleged Refusal to Proceed decision].
… Mr Lawrance was the Development Director of Mirvac Ltd at the time. In its closing submissions, [BN] modified (or clarified) what it had pleaded:
…
(2)[BN] asserted that the effect of Mr Lawrance's statements was that, in addition to [Project Control Group] approval, Mirvac would need internal Mirvac approval prior to commencing Stage 1.
…
[BN] asserted that statements made by … Mr Lawrance in 2014 showed that the [alleged Refusal to Proceed decision] had been made. …
…
[BN] alleged that, at the [Project Control Group] meeting on 13 June 2014, Mr Lawrance made a statement 'to the effect, in addition to the [Project Control Group] approval, that Mirvac would need internal Mirvac approval prior to commencing Stage 1 works on the Project'. (emphasis added) (footnotes omitted)

The judge's findings in relation to Mr Lawrance's statement of 13 June 2014

The judge found that the statement made by Mr Lawrance on 13 June 2014 was in these terms:[571]
Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval.
[571] Primary decision [477]. The finding as to what was said is not challenged by ground 11 and was, moreover, accepted by BN in this appeal: appeal ts 53 - 54.
The judge then said:[572]
I accept that evidence. However, I do not consider Mr Lawrance's statement was repudiatory or one which manifested the intention alleged by [BN]. As will be seen, Mirvac WA had the right to disapprove a budget as a member of the [Project Control Group]. Before a [Project Control Group] meeting at which a budget was to be approved or disapproved by the [Project Control Group], it is to be expected that Mirvac would go through an internal approval process to enable their representatives on the [Project Control Group] to be in a position to vote appropriately, as explained by Mr Draffen in a passage extracted above. There is nothing repudiatory or sinister about this. Indeed, Mr Waller said he would think that would be logical. (emphasis added) (footnotes omitted)
[572] Primary decision [478].
The reference in the second sentence of this passage to 'manifested the intention alleged by [BN]' is, evidently in context, a reference to the allegation that Mr Lawrance's statement manifested the alleged Refusal to Proceed decision.
The reference in the fourth sentence to 'as explained by Mr Draffen' is a reference to Mr Draffen's evidence in relation to a meeting with Mr Waller of BN on 3 April 2014, and the reference in the last sentence of the passage to Mr Waller's statement is a reference to the same meeting. The relevant findings with respect to that meeting are at primary decision [454] ‑ [455]:
In his oral evidence, Mr Draffen said, consistently with what he wrote at the time, that the purported minutes were not an accurate record of their meeting. He said:
'[T]here's references in there to comments that I made around the Mirvac [B]oard approval process which I don't agree are correct. Certainly, from a Mirvac perspective, we would have gone through an internal approval process to be in a position at the formal [Project Control Group] to approve - or our - or, you know, basically in - in a position for our attendees at the [Project Control Group] to vote appropriately. That is a process that would have been an internal process that may or may not have required Mirvac [B]oard approval, depending on the size of - the scope of the approval sought. … Certainly we would have gone through a process prior to any formal consideration, for example, of a budget or programme at the [Project Control Group] to get the necessary approvals that we would need.'
In cross examination, Mr Waller was asked if Mr Draffen said words to the effect that Mirvac will need to go through its internal approval processes before it could agree at [Project Control Group] level to a construction of Stage 1. He replied 'That's - well, I would think that would be logical'. (footnotes omitted)
In this context, the judge's finding to the effect that Mirvac did not believe that it was contractually bound to complete the Project (at primary decision [374]) is also relevant.

BN's submissions - ground 11

As noted earlier, in its written submissions relating to ground 11, BN submitted:[573]
The judge accepted, at [478] of the [primary decision], that the statement that 'Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval' was made by [Mr Lawrance] at the 3 June 2014 [Project Control Group meeting] [(Mr Lawrance's Statement)]. The judge found that [Mr Lawrance's Statement] was not repudiatory or one that manifested the intention alleged by [BN]. If [BN's] construction of the Transaction Documents is accepted, [Mr Lawrance's Statement] was clearly repudiatory and one that manifested the intention alleged and was a further [d]efault by Mirvac (WA). (emphasis added)
[573] Appellant's submissions, par 18; WB 36.
In oral submissions, counsel for BN originally appeared to contend that Mr Lawrance's statement was repudiatory in that it stated, in effect, that Mirvac (WA) would not proceed even after approval of a Budget at a Project Control Group meeting.[574] However, later in his oral submissions, counsel for BN appeared to put the different proposition that Mr Lawrance's statement ought be construed as repudiatory because it conveyed that Mirvac (WA) would not approve a Budget presented at a Project Control Group meeting, and that Mirvac (WA) had (as alleged in grounds 1 and 2) no contractual entitlement to disapprove a Budget at a Project Control Group meeting.[575]

Repudiation principles

[574] Appeal ts 56, 61 - 65.

[575] Appeal ts 104 - 105.

The term 'repudiation' is used in different senses. First, it may refer to conduct of the repudiating party which evinces an unwillingness or inability to render substantial performance of a contract. That may be referred to as 'renunciation'. Secondly, the term 'repudiation' may refer to any breach of contract which justifies termination by the other party.[576] It is the former sense which is relevant to ground 11.
[576] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 [44].
In the former sense, the test is whether the conduct of that party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.[577]
[577] Koompahtoo [44]; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623, 659.
Repudiation is a serious matter and is not to be 'lightly found or inferred'.[578] The repudiation of a contract must appear clearly and without ambiguity.[579]
[578] Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620, 633.
[579] Stevenson v Hook (1956) 73 WN (NSW) 307, 313.
At least generally speaking, an issue of repudiation depends upon objective acts and omissions, and not upon uncommunicated intentions.[580] The bona fides of the allegedly repudiating party may however be of significance in cases in which it is alleged that repudiation is evinced by the party having taken a mistaken view of the interpretation of the contract.[581]
[580] Laurinda (647), (658).
[581] As to which, see [625] below.
An inference of an intention to repudiate or renounce a contract may be established by the promisor's express language to that effect.[582] Renunciation may also be established by drawing an inference from the promisor's express language and conduct which conveys to the other party that the defaulting party intends to fulfil the contract only in a manner substantially inconsistent with that party's obligations, and not in any other way.[583]
[582] Hochster v De la Tour (1853) 2 E & B 678; 118 ER 922.
[583] Shevill (625 - 626); Laurinda (634), (647).
Whilst it is possible that a party may repudiate a contract by insisting on an incorrect interpretation of the contract, that is not always the case. There are other cases in which a party, though asserting a wrong view of a contract because it believes it to be correct, is nevertheless willing to perform the contract according to its tenor. In the latter case, the party 'may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him'.[584]
[584] DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423, 432.
Repudiation by the promisor does not itself bring about a termination of the contract. If the innocent party does not accept the repudiation, the contract remains on foot.[585]

Disposition - ground 11

[585] Foran v Wight [1989] HCA 51; (1989) 168 CLR 385; Ogle v Comboyuro Investments Pty Ltd [1976] HCA 21; (1976) 136 CLR 444, 450 ‑ 451.

The following observations may be made with respect to ground 11. First, insofar as BN contended that Mr Lawrance's statement conveyed that, even after approval of the Budget at a Project Control Group meeting, Mirvac (WA) would still not proceed unless and until it obtained its own further internal approval, the contention has no merit. The statement as found by the judge does not expressly or impliedly convey that meaning. The judge was correct, at primary decision [478], to find, in effect, that Mr Lawrance's statement indicated that before Mirvac (WA)'s members on the Project Control Group would vote to approve or disapprove a Budget, there would be internal processes within Mirvac to be followed.
Secondly, and allied to that point, Mr Waller's evidence, although given in relation to Mr Draffen's statement at the 3 April 2014 meeting,[586] was equally apposite to a consideration of Mr Lawrance's statement on 13 June 2014. It is some evidence, although not conclusive, of what a reasonable person in the position of BN would have understood by the statement by Mr Lawrance and, in particular, whether it conveyed a renunciation by Mirvac (WA) of the Services Agreement or of a fundamental obligation under it.
[586] As noted earlier, it was alleged at trial, but not in this appeal, that Mr Draffen's statement on 3 April 2014 was repudiatory.
Thirdly, the repudiation alleged in ground 11 is expressly dependent upon the success of BN's contentions as to the proper construction of the Services Agreement in grounds 1 and 2. That is confirmed by its written submissions (see [618] above) and its oral submissions.[587] For the reasons indicated earlier, that construction cannot be accepted. Also, the third construction of the Services Agreement, which we have adopted, provides no platform for success on ground 11. On that construction, a statement that, in effect, Mirvac would need to go through its internal processes before its representatives voted on a Budget or Programme for commencement of Stage 1 falls well short of amounting to a statement that Mirvac intended to fulfil the Services Agreement only in a manner substantially inconsistent with its obligations and in no other way.
[587] Appeal ts 52, 56, 105.
For these reasons, ground 11 fails.

Disposition - ground 13

In relation to ground 13, the judge's findings were as follows:[588]
I am not satisfied that the reason why Mirvac WA did not submit a programme and budget in relation to subdivision works or construction works was because Mirvac Ltd's directors had not approved the Project being implemented by carrying out subdivision works or construction works and creating Sale Lots. Indeed, I find that was not the reason.
A budget for Stage 1 could not be prepared until after the [Local Structure Plan] had been approved, which occurred in February 2014. In April 2014, Mr Draffen and Mr Waller agreed that Mirvac WA would do some more work around the potential for Stage 1 that would present the Project in its best light. This is what Mirvac WA sought to do in the September 2014 Report.
The September [2014] Budget included the cost of detailed design and documentation of the second access road, the bulk entry works and the subdivision application for Stage 1. Until these expenses were approved, and the work done, it was not possible to create a realistic budget for subdivision works or construction works.
[588] Primary decision [536] - [538].
The effect of ground 13 is set out in [605] above. Ground 13 fails for three reasons. First, for the reasons given in relation to grounds 6 ‑ 10, the judge has not been shown to be in error in finding that BN had not established that Mirvac had made or implemented the alleged Refusal to Proceed decision. Secondly, as indicated earlier, there is no error in the judge's finding that Mr Lawrance's statement conveyed that Mirvac would go through its internal approval process before its members on the Project Control Group voted to approve or disapprove a Budget. That statement did not expressly or impliedly convey the notion that Mirvac had made or had implemented, or would make or implement, the alleged Refusal to Proceed decision. Thirdly, the unchallenged findings are that (1) the Local Structure Plan had not been approved until February 2014, (2) in April 2014, Mr Draffen and Mr Waller agreed that Mirvac would do some more work around the potential for Stage 1 that would present the Project in its best light, and (3) the September 2014 Budget included the cost of the detailed design and documentation of the second access road, the detailed design and documentation of the bulk entry works, and the subdivision application for Stage 1. In light of those unchallenged findings, and the acceptance of Mr Aleksovski as a truthful and reliable witness (other than in respect of that aspect of his evidence as to why he raised the tax issues), it was plainly open to the judge to find that the reason that a Budget for Subdivision Works had not been prepared prior to September 2014 was that Mirvac (WA) was not in a position to create a realistic Budget for Subdivision Works or Construction Works.
Ground 13 should be dismissed.

Ground 12

Ground 12 concerns BN's insistence on recording the Project Control Group meetings, and alleges that the judge should have found that Mirvac (WA) repudiated the Services Agreement by not agreeing to recordings.
The judge's reasoning at primary decision [527] is correct:[589]
Mirvac WA's refusal to agree to meetings being recorded was not a breach of its obligations, good faith or otherwise. I am also not satisfied it refused in order to delay or stop the Project. The documentary evidence showed that, by September 2014, the relationship between the parties was combative. Mirvac WA had said it was willing to attend a meeting if it was not recorded, and was willing to pay for an independent minute taker. This was not an unreasonable stance, in all of the circumstances. Mirvac WA's Good Faith Obligation did not require it to agree to the meeting being recorded.
[589] Primary decision [527].
Further, BN's submissions proceed on a false premise.[590] The judge did not find at primary decision [522] that BN had a legal right to record meetings of the Project Control Group. Rather, her Honour found that it would not be 'unlawful', for the purposes of the Surveillance Devices Act 1998 (WA), to have the meetings recorded. The fact that it was not unlawful to record meetings does not mean that BN had a positive legal entitlement, statutory or otherwise, to record meetings.
[590] See [477] above.
In substance, an impasse arose as to the procedures for recordkeeping in relation to Project Control Group meetings. The detailed provisions concerning Project Control Group meetings, including the procedural matters in cl 5.10 of the Services Agreement, are silent on the point. There was no contractual right vested in BN to insist on having the meetings recorded, as BN accepted at trial.[591] Absent a statutory or contractual entitlement to record meetings, Mirvac (WA)'s decision not to participate in meetings on the terms stipulated by BN in that regard, was not repudiatory in nature or a Non Monetary Event of Default.
[591] Primary decision [522].
Further, whilst there was no contractual or statutory entitlement on the part of BN to record the meetings, it may be accepted that the impasse fell within the dispute resolution clause in cl 15.1 of the Services Agreement. On the proper construction of the Services Agreement, on the primary facts as found by the judge, BN could and should have utilised the provisions of cl 15 of the Services Agreement.
Ground 12 should be dismissed.

The remaining grounds of appeal

All of the remaining grounds of appeal - grounds 4, 5 and 14 ‑ 23 - assume the success of the grounds impugning the judge's finding that Mirvac (WA) did not breach or repudiate the Services Agreement in the manner alleged by BN. Our conclusions on grounds 1 ‑ 3 and 6 ‑ 13 mean that it is not necessary to determine the remaining grounds. Bearing in mind the length of, and the scope of issues canvassed in, these reasons and the scope of the issues canvassed in the remaining grounds, it is not appropriate to determine the remaining grounds.

Conclusion

The appeal should be dismissed.
The parties should be heard on the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
NF
Research Associate to the Honourable Justice Murphy and the Honourable Justice Mazza
27 JULY 2021