Della Franca v Lorenzato; Burwood Council v Lorenzato

[2021] NSWCA 321

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Della Franca v Lorenzato; Burwood Council v Lorenzato [2021] NSWCA 321

Hearing dates:

8 and 9 September 2021

Date of orders:

16 December 2021

Decision date:

16 December 2021

Before:

Basten JA at [1];
Macfarlan JA at [42];
Brereton JA at [128].

Decision:

In Burwood Council’s appeal

(1)   Allow the appeal.

(2)   Set aside the orders made at first instance on 23 November 2020.

(3)   Judgment for Ms Lorenzato against Burwood Council in the sum of $83,846.44 to take effect from 23 November 2020.

(4)   Order Ms Lorenzato to pay Burwood Council’s costs on appeal and 50% of the Council’s costs at first instance.

In Mr Della Franca’s appeal

(1)   Reject the applications of Mr Della Franca to adduce further evidence on appeal.

(2)   Allow the appeal.

(3)   Set aside the orders made at first instance on 23 November 2020.

(4)   Judgment for Mr Della Franca on Ms Lorenzato’s claim against him.

(5)   Order Ms Lorenzato to pay Mr Della Franca’s costs at first instance and on appeal.

Catchwords:

TORTS – negligent misstatement – whether a planning certificate issued by Council under s 149 of the Environmental Planning and Assessment Act contained negligent misstatements – whether resolution adopted by Council constituted a “policy” – whether any such policy was abandoned

TORTS – negligent misstatement – answers to requisitions supplied by vendor of real property did not contain misstatements

TORTS – negligent misstatement – s 43A Civil Liability Act – whether the issue of a planning certificate under s 149 Environmental Planning and Assessment Act constituted the exercise of a “special statutory power”

TORTS – negligent misstatement – s 733 Local Government Act – whether s 733 exemption from liability applied to s 149 planning certificate issued by Council – whether “advice… relating to the likelihood of any land being flooded”

Legislation Cited:

Civil Liability Act 2002 (NSW), ss 3B, 5B, 40, 43A; Pts 1A, 4, 5

Civil Procedure Act 2005 (NSW), s 100

Environmental Planning and Assessment Act 1979 (NSW), s 149

Environmental Planning and Assessment Regulation 2000, cll 7, 7A; Sch 4

Local Government Act 1993 (NSW), ss 59A, 733

Cases Cited:

Bankstown City Council v Zraika (2016) 94 NSWLR 159; [2016] NSWCA 51

Bebonis v Angelos (2003) 56 NSWLR 127; [2003] NSWCA 13

Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105; [1961] HCA 71

Curtis v Harden Shire Council (2014) 88 NSWLR 10; [2014] NSWCA 314

Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560; 1 All ER 865

L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (No 1) (1981) 150 CLR 225; [1981] HCA 59

Lorenzato v Burwood Council (2020) 245 LGERA 328; [2020] NSWSC 1659

Mid Density Developments Pty Ltd v Rockdale Municipal Council (1993) 44 FCR 290; [1993] FCA 590

Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556; [1968] HCA 74

Port Stephens Shire Council v Booth (2005) 148 LGERA 351; [2005] NSWCA 323

Pyrenees Shire Council v Day (1998) 192 CLR 330; [1998] HCA 3

Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd [2021] NSWCA 206

Stovin v Wise (1996) AC 923

Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41

Votraint No 1088 Pty Ltd v Commonwealth [2005] NSWCA 249

Category:

Principal judgment

Parties:

Matter 2020/339522:
Michael Lewis Della Franca (Appellant)
Elisa Lorenzato (Respondent)

Matter 2020/351426:
Burwood Council (Appellant)
Elisa Lorenzato (First Respondent)
Michael Lewis Della Franca (Second Respondent)

Representation:

Matter 2020/339522:
Counsel:
S White SC / J A Trebeck / N J Condylis (Appellant)
J E Sexton SC / R Carey (Respondent)

Solicitors:
Scarfone & Co (Appellant)
Fraser Clancy (Respondent)

Matter 2020/351426:
Counsel:
M L Wright SC / D Robertson (Appellant)
J E Sexton SC / R Carey (First Respondent)
S White SC / J A Trebeck / N J Condylis (Second Respondent)

Solicitors:
Matthews Folbigg (Appellant)
Fraser Clancy Lawyers (First Respondent)
Scarfone & Co (Second Respondent)

File Number(s):

2020/339522;
2020/351426

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law

Citation:

[2020] NSWSC 1659

Date of Decision:

23 November 2020

Before:

Fagan J

File Number(s):

2017/83223

HEADNOTE

[This headnote is not to be read as part of the judgment]

By contract dated 17 March 2011 Ms Lorenzato agreed to purchase a residential property from Mr Della Franca. The contract included a planning certificate (“the Certificate”) issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) by Burwood Council (“the Council”). The purchase was completed on 12 August 2011 after Mr Della Franca’s solicitor supplied answers to requisitions submitted by Ms Lorenzato’s solicitor.

The property was subject to ongoing stormwater issues and in 2002 the Council adopted a resolution concerning inter alia the acquisition of a drainage easement over an underground stormwater pipe located on the property (“the Resolution”). The existence of the Resolution was not disclosed in either the Certificate or in the answers to requisitions.

Ms Lorenzato commenced proceedings in the Supreme Court against the Council and Mr Della Franca claiming damages for, inter alia, negligent misstatement, in the case against the Council, in the Certificate and, in the case against Mr Della Franca, in his answers to Ms Lorenzato’s requisitions. Following a hearing in 2020, the primary judge found in favour of Ms Lorenzato on both of her claims. Judgment was given against each of the defendants for about $1,200,000 together with interest of about $700,000.

The Council then appealed to this Court and, in response, Ms Lorenzato sought by a Notice of Contention to support the judgment against the Council on alternative grounds. The primary issues on this appeal were:

(1)   Whether the Council’s statement in the Certificate that the land was not affected by a policy that restricts the development of the land because of flooding constituted a negligent misstatement;

(2)   Whether the Council’s statement in the Certificate that development on the land was not subject to flood related development controls constituted a negligent misstatement;

(3)   Whether the Council’s failure to disclose in the Certificate the existence of the pipe constituted a negligent misstatement.

Mr Della Franca also appealed and the primary issues on his appeal were:

(1)   Whether Mr Della Franca’s response of “No” to requisition 6(a) (whether there were any unregistered easements) was misleading;

(2)   Whether Mr Della Franca’s response of “No…” to requisition 7 (whether he was notified by Council that the land was to be resumed) was misleading;

(3)   Whether Mr Della Franca’s response of “Not to vendor’s knowledge…” to requisition 8(a) (whether there was any outstanding notification, claim or requirement of the Council) was misleading;

(4)   Whether Mr Della Franca’s response of “Purchaser should make own enquiries” to requisition 19 (whether there were any restrictions on the use or development of the land) was misleading.

The Court unanimously allowed both appeals:

The Council’s Appeal

In relation to Issue 1 (land affected by a policy)

The statutory framework suggests that the reference to a “policy” was not concerned with a site-specific decision (such as the Resolution) but rather with the relationship of particular land to general floodplain levels: [83]. Even if the Resolution did constitute a “policy”, it was not one which itself “restrict[ed] the development of land because of … flooding”. It was only designed to reduce flooding by indirect means: [84], [138], [140]. Further, it was abandoned by the Council by the time of issue of the Certificate: [87], [138].

In relation to Issue 2 (land subject to flood related development controls)

As informed by various documents published by the Department of Infrastructure, Planning and Natural Resource, the expression “flood related development controls” referred to development controls stipulated according to the location of the subject land either above or below an adopted Flood Planning Level: [97], [98], [100]. Provisions in the 1994 Stormwater Code which concerned the creation and preservation of drainage easements did not constitute “flood related development controls”: [98], [100].

In relation to Issue 3 (non-disclosure of the pipe)

The Council’s duty of care did not extend to volunteering information beyond that specified in the Regulation. Its liability would only arise if the information it was required to or chose to provide was incorrect or misleading: [105], [106], [150].

(Further observations per Basten JA and Brereton JA regarding s 43A of the Civil Liability Act and s 733 of the Local Government Act)

The application of s 43A of the CLA does not turn on whether a public authority was performing a duty as opposed to exercising a discretionary power: [19]. The standard of care imported by s 43A(3) is applicable to the Certificate issued under s 149(2) and (5) of the Environmental Planning and Assessment Act. Statements in the Certificate did not breach that standard: [21], [26]-[28], [147], [151].

The failure to refer to the existence of the pipe in the Certificate was not shown to be other than in good faith and there was no reason to find that the defence provided by s 733(1) of the LGA did not apply: [37], [39], [153], [154].

Mr Della Franca’s Appeal

In relation to Issue 1 (unregistered easements)

The answer to requisition 6(a) was not required to disclose the Council’s ownership of the pipe located under the property, or the Council’s concomitant right of repair and the like, pursuant to s 59A of the LGA. This follows from cl 10 of the sale contract which precluded the purchaser from requisitioning in relation to the pipe: [114], [115], [161].

In relation to Issue 2 (notification of resumption)

Even if Mr Della Franca’s knowledge of the Resolution constituted knowledge of an intended resumption, that Resolution had, to Mr Della Franca’s knowledge, been abandoned: [117], [162].

In relation to Issue 3 (outstanding notifications, claims or requirements)

The requirement in the Resolution for an easement and further notices issued by the Council had been abandoned and were not outstanding: [119], [120], [164].

Requisition 8(a) was concerned with outstanding matters with which the vendor should comply before completion and at the relevant time there was nothing of this type for Mr Della Franca to attend to: [122], [164].

In relation to Issue 4 (restrictions on the use or development of the land)

The non-answer to this requisition cannot be regarded as incorrect or misleading: [124].

Judgment

1. BASTEN JA: In August 2011 Elisa Lorenzato became the owner of a property in the Appian Way, Burwood, by transfer from the vendor, Michael Lewis Della Franca, pursuant to a contract for sale and purchase entered into on 17 March 2011.

2. On 17 March 2017 Ms Lorenzato commenced proceedings in the Supreme Court against Mr Della Franca and Burwood Council. Her claims fell into three parts. First, she had a claim against the Council in nuisance on the basis that the Council was liable for flooding resulting from inadequate stormwater drainage affecting properties on the lower side of the Appian Way. She was successful in that claim and was awarded damages in an amount of $55,000; there is no appeal from that order.

3. Her second claim against the Council alleged negligent misstatements in a certificate issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) (“the Planning Act”). In broad terms, the complaint was that the Council had failed to include information relevant to the state of stormwater drainage, as it affected her property.

4. The third claim was also for negligent misstatement, brought against Mr Della Franca, on the basis of inadequate answers to requisitions sought pursuant to the contract of sale of land. Again, the issue related to information with respect to the stormwater drainage affecting the property.

5. On 23 November 2020, the trial judge, Fagan J, gave judgment on the negligent misstatement claims against both the Council and Mr Della Franca in the sum of $1,274,000, together with interest to the date of judgment. ^[1] The interest was calculated at almost $700,000, running from 12 August 2011.

   1. Lorenzato v Burwood Council [2020] NSWSC 1659. (The judgment published on Caselaw was not identical to that provided in the red appeal book in this Court. The numbering of the paragraphs had changed, and a negative, noted below, was deleted.)

6. Both the Council and Mr Della Franca lodged appeals against the judgment and orders dealing with the negligent misstatements. For the reasons given by Macfarlan JA each appeal should be upheld and the awards of damages for negligent misstatements set aside. Subject to any variation with respect to the costs of the trial in relation to the claim in nuisance, Ms Lorenzato must pay the costs of the Council and Mr Della Franca of the trial and of the appeal to this Court. I agree with the orders proposed, for the reasons given, by Macfarlan JA.

7. The following observations address the statutory protective provisions on which the Council relied. The first is s 43A of the Civil Liability Act 2002 (NSW).

8. Consistently through his reasons, the judge referred to s 43A as a statutory defence. ^[2] That characterisation obscures the true operation of the section. When the section is engaged, it identifies the standard of care, in place of that identified in s 5B of the Civil Liability Act. Accordingly, the application of the section should be addressed before considering whether there has been a breach of duty to which the section applies.

   2. Lorenzato at [18], [33 (5)], and in discussion of issue (5).

9. Section 43A appears in Pt 5 of the Civil Liability Act. Somewhat ineptly, s 40 of the Act provides that Pt 5 applies to “civil liability in tort” and “extends to any such liability even if the damages are sought in an action for breach of contract or any other action”: s 40(1) and (2). (There are exclusions identified in s 3B, but none arose in the present case.)

10. Section 43A reads as follows:

43A   Proceedings against public or other authorities for the exercise of special statutory powers

(1)   This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority’s exercise of, or failure to exercise, a special statutory power conferred on the authority.

(2)   A special statutory power is a power—

(a)   that is conferred by or under a statute, and

(b)   that is of a kind that persons generally are not authorised to exercise without specific statutory authority.

(3)   For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

…

11. The trial judge held that s 43A was not engaged in the present case for a number of reasons, none of which can be upheld.

12. The issue arose in relation to the Council’s provision, in August 2010, of a certificate under s 149 of the Planning Act; as then in force (it is currently s 10.7) the section read as follows

149   Planning certificates

(1)   A person may, on payment of the prescribed fee, apply to a council for a certificate under this section (a planning certificate) with respect to any land within the area of the council.

(2)   On application made to it under subsection (1), the council shall, as soon as practicable, issue a planning certificate specifying such matters relating to the land to which the certificate relates as may be prescribed (whether arising under or connected with this or any other Act or otherwise).

…

(4)   The regulations may provide that information to be furnished in a planning certificate shall be set out in the prescribed form and manner.

(5)   A council may, in a planning certificate, include advice on such other relevant matters affecting the land of which it may be aware.

(6)   A council shall not incur any liability in respect of any advice provided in good faith pursuant to subsection (5). …

(7)   For the purpose of any proceedings for an offence against this Act or the regulations which may be taken against a person who has obtained a planning certificate or who might reasonably be expected to rely on that certificate, that certificate shall, in favour of that person, be conclusively presumed to be true and correct.

13. The judgment contained a number of reasons why the conduct of the Council in issuing the planning certificate did not fall within s 43A. The first was based upon a distinction between the exercise of a power and the performance of a duty. The judgment stated:

“[309] Section 43A does not apply to this case because the planning certificate was not issued in exercise of a statutory power. By providing the certificate Council performed a statutorily imposed obligation. Section 149(2) is expressed in mandatory terms. It requires that upon application by a person under sub-s (1) Council “shall, as soon as possible, issue a planning certificate”. Council cited no authority that would justify interpreting the word “power” in s 43A so broadly as to bring s 149(2) within it. The cases in which s 43A has been applied by the Courts have concerned statutory provisions that confer powers in permissive and enabling terms.”

14. The starting point of an exercise in statutory construction is the text of the statute, not the circumstances which have arisen in other cases. A power does not cease to be a power because there is a duty to exercise it. The trial judge identified two cases in this Court which were said to support the distinction between a power and a duty. The first was Curtis v Harden Shire Council. ^[3] There is some irony in relying upon that decision. In discussing the origins of s 43A, in a passage with which Bathurst CJ at [1] and Beazley P at [221] agreed, I noted the discussion in Stovin v Wise ^[4] as to the manner in which the imposition of a common law duty of care on a statutory power could change a power into a duty. That gave rise to a concern that the courts should be cautious in imposing a duty to take reasonable care. There was no statement in Curtis, nor in the cases discussed in Curtis, nor any basis for inferring, that s 43A only applied to the exercise of a discretionary power.

    3. (2014) 88 NSWLR 10; [2014] NSWCA 314.

    4. (1996) AC 923 at 953 and 956 (Lord Hoffmann).

15. The second case relied upon by the trial judge was Bankstown City Council v Zraika. ^[5] That case involved a failure by a consent authority to impose a condition on a development application. The judge relied upon the statement by Leeming JA that “the power exercised by the Council to grant consent conditionally” was a special statutory power. The judge said that was so because, although the consent authority was obliged to determine the development application, it was the “facultative power to attach conditions of consent” which engaged s 43A.

    5. (2016) 94 NSWLR 159; [2016] NSWCA 51.

16. The issue in Zraika was whether the consent authority was in breach of its duty of care to road users in failing to impose a condition on the manner in which traffic might leave the site. That was why Leeming JA referred to a conditional grant of consent. The reasoning provides no basis for a distinction between powers and duties when considering whether s 43A is engaged.

17. Indeed, Zraika illustrates the artificiality of the distinction. The consent authority was subject to a statutory duty to consider the development applicant. But in considering it, it had a choice as to whether to grant consent, refuse consent or grant consent subject to conditions. That required an evaluative judgment in the exercise of a power. The trial judge thought that the obligation to determine the application fell outside the operation of s 43A. However, the plaintiff’s argument in Zraika was that the authority was under a duty to impose a particular condition when granting consent. Leeming JA noted:

“[96]   It would be quite artificial to regard the exercise of power under s 91(1)(a), on a single occasion recorded in a single instrument, as in fact comprising the separate functions of (i) granting consent to the development application, but at the same time (ii) imposing conditions upon the grant of consent. …

…

[98]   Both as a matter of form and substance, there is a single decision by a council determining a development application.”

18. As noted in Zraika, s 43A assumes the existence of a general law duty of care; it then fixes the relevant standard to be applied. ^[6] The cases concerning the imposition of a common law duty of care on a public authority were concerned with the consequence of imposing such a duty, namely that it turned a discretionary power into an obligation to act in a particular way, an issue that did not arise where the authority was under a duty to act. Thus, in Sutherland Shire Council v Heyman ^[7] Gibbs CJ stated:

“Once it is accepted, as it must be, that the ordinary principles of the law of negligence apply to public authorities, it follows that they are liable for damage caused by a negligent failure to act when they are under a duty to act, or for a negligent failure to consider whether to exercise a power conferred on them with the intention that it should be exercised if and when the public interest requires it.”

6. Zraika at [109] (Leeming JA).

7. (1985) 157 CLR 424 at 445; [1985] HCA 41.

19. Given that, under the general law, a duty of care may operate with respect to a public authority exercising a statutory function, whether discretionary or obligatory, there is no reason to distinguish between the performance of a duty and the exercise of a discretionary power in fixing the standard of care. The application of s 43A does not turn on this factor. ^[8]

    8. See Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd [2021] NSWCA 206 at [125]-[130] (“Seqwater”).

20. Putting to one side cases involving different statutory powers, the question to be addressed was whether the power conferred by s 149 of the Planning Act was “of a kind that persons generally are not authorised to exercise without specific statutory authority”. As recently explained in Seqwater, there is a history of the construction of protective provisions (provisions conferring qualified immunity on public authorities) distinguishing between activities which require statutory authorisation and those which do not. As the High Court explained in Board of Fire Commissioners (NSW) v Ardouin,^[9] while the Fire Commissioners were granted powers to enter property and carry out the functions of fire control, they did not need statutory authority to drive a vehicle to a fire on a public street. A protective provision in the legislation applied to the former, but not the latter activities. That general law approach is reflected in s 43A(2). ^[10]

    9. (1961) 109 CLR 105 at 116; [1961] HCA 71.

    10. See Seqwater at [73] (dealing with the Queensland equivalent of s 43A).

21. The issue of planning certificates under s 149 of the Planning Act is a function conferred only upon a “council”, namely a council under the Local Government Act 1993 (NSW). ^[11] The content of a planning certificate is prescribed by the Environmental Planning and Assessment Regulation 2000 (NSW), cl 279 and Sch 4. The schedule sets out matters to be disclosed in a planning certificate, including certain characteristics of the land and planning instruments which apply to the land. Planning certificates form an important aspect of the transparency of the system for land sale and purchase in New South Wales. There was no serious dispute that people generally are not authorised to issue planning certificates. Accordingly, the issue of a planning certificate was a special statutory power for the purposes of s 43A(2).

    11. See Planning Act, s 4, council.

22. The trial judge further held that the plaintiff’s cause of action for negligent misstatement in the certificate was not “based on” the Council’s exercise of, or failure to exercise a special statutory power: at [315]. The use of the term “based on” derives from s 43A(1). However, the content of the planning certificate as issued in exercise of power under s 149 was the sole basis upon which the plaintiff’s cause of action for negligent misstatement was founded. Although in written submissions Ms Lorenzato sought to support this sentence in the judgment, the point was abandoned on the hearing of the appeal. The abandonment was entirely appropriate: the statement in the judgment at [315] was unsupportable.

23. The judgment then stated that “s 43A is only capable of being applied to a claim against a public authority that is based upon a deliberate act in exercise of a power or a deliberate refraining from action under the relevant power.” That was said to flow from the fact that the standard articulated in subs (3) required that conclusion. The judgment explained that proposition in the following manner:

“[316] If, contrary to my conclusion, s 149(2) should be regarded as conferring a “special statutory power”, s 43A and in particular sub-s (3) could only apply if the plaintiff’s case was based upon Council having exercised the power by issuing a certificate when it should not have done, or upon Council having failed to issue a certificate when it should have done. The plaintiff’s case is not of that kind. Council clearly exercised the power – if s 149(2) confers a power – by issuing a planning certificate. The plaintiff’s case is not based upon the fact that the power was exercised nor upon a contention, which could not succeed, that Council failed to exercise it. The plaintiff’s claim in negligence is that Council erroneously answered “No” to the question in the certificate about the existence of a policy. The test in sub-s (3) could not meaningfully be applied to that negligent misstatement.

[317] If s 149(2) creates a “special statutory power”, it is one power with respect to the issue of a planning certificate, not multiple powers with respect to the provision or withholding of individual particles of information: see Bankstown City Council v Zraika at [96]. The plaintiff’s case on negligent misstatement in the certificate is incapable of engaging s 43A.”

24. The relevant “statement”, said to have been a negligent misstatement, was the issue of the planning certificate. There is no doubt that that was a deliberate act. Whether the judge considered the omission of material from the statement was not shown to have been a deliberate act is unclear. If the element of deliberateness were intended to be contrasted with inadvertence, no such distinction was relevant for the purposes of s 43A because no such distinction is relevant to liability in the tort of negligence.

25. It is true that, as explained in analogous circumstances in Zraika, there was no exercise of multiple powers. The submission, rejected in Zraika, as set out at [17] above, was that the grant of a conditional consent comprised “the separate functions of (i) granting consent to the development application, but at the same time (ii) imposing conditions upon the grant of consent.” That characterisation was described as “quite artificial”. However, that principle, applied to the present circumstances, required that the planning certificate be read as a whole to determine whether the overall effect was to misstate some particular characteristic of land required to be disclosed.

26. There is nothing in the trial judgment which provides any basis for concluding that the issue of the planning certificate did not engage s 43A.

27. Against the possibility that this Court might conclude that s 43A was engaged, Ms Lorenzato contended that the conduct of the Council in fact breached the standard imposed by s 43A(3). That submission should be rejected. As the Council submitted, there was a wealth of evidence available upon which this Court could conclude that the steps taken by Council were in accordance with the general approach, supported by the manual to which reference will be made below, and properly adopted by other councils, namely that the information to be included in a planning certificate did not require reference to individual items of stormwater drainage (or other infrastructure, such as utilities) commonly found on particular parcels of land. Indeed, senior counsel for Ms Lorenzato stated at the outset of his submissions that the flooding in the Appian Way was likely to affect some 27 properties. If that were the case, the fact that there was a defective stormwater drainage system which ran through Ms Lorenzato’s property would presumably need to be disclosed in planning certificates for the other potentially affected properties. The expert evidence did not support that proposition, nor was the case run below on that basis.

28. There was no specific evidence to which this Court’s attention was drawn which supported the proposition that the statements in the planning certificate were in breach of the standard imposed by s 43A(3).

Issue of planning certificate in good faith

29. In requesting the issue of a planning certificate, Mr Della Franca required information in accordance with s 149(2) and s 149(5): see [12] above.

30. In February 2007, cl 7 of Sch 4 of the Regulation was amended to remove reference to any policy adopted by the Council “that restricts the development of land because of the likelihood of … flooding …”. Other risks were to be disclosed, but not risks relating to flooding. At the same time, a new cl 7A was introduced relating to “[f]lood related development controls information”. Curiously, more than three years later, in August 2010, the Council had failed to update the template it used for planning certificates so as to reflect the amendments to cl 7, although it had included the new cl 7A. As a result, the answer it provided in the planning certificate issued in August 2010 included a denial that the land was affected by a policy restricting the development of the land because of the likelihood of flooding, language reflecting the old cl 7.

31. In order to rely upon that as a negligent misstatement, Ms Lorenzato contended in this Court that the answer constituted “advice on such other relevant matter affecting the land of which it may be aware”, within the terms of s 149(5). That appears not to have been how the case was run at trial. Nevertheless, at trial a second negligent misstatement was said to arise from the advice supplied pursuant to s 149(5). Accordingly, even at trial it was necessary to address the protective provision in s 149(6), namely that the advice must have been provided otherwise than “in good faith pursuant to subsection (5).”

32. Although pleaded, the judgment below did not address that issue. Rather, in considering the statutory defences, the reasoning moved directly from the application of s 43A to the reliance upon s 733 of the Local Government Act. Section 733, so far as relevant, provided as follows:

733   Exemption from liability—flood liable land and land in coastal zone

(1)   A council does not incur any liability in respect of:

(a)   any advice furnished in good faith by the council relating to the likelihood of any land being flooded or the nature or extent of any such flooding, or

(b)   anything done or omitted to be done in good faith by the council in so far as it relates to the likelihood of land being flooded or the nature or extent of any such flooding.

…

(3)    Without limiting subsections (1) and (2), those subsections apply to:

(a)   the preparation or making of an environmental planning instrument, including a planning proposal for the proposed environmental planning instrument, or a development control plan, or the granting or refusal of consent to a development application, or the determination of an application for a complying development certificate, under the Environmental Planning and Assessment Act 1979, and

…

(c)   the imposition of any condition in relation to an application referred to in paragraph (a), and

(d) advice furnished in a certificate under section 149 of the Environmental Planning and Assessment Act 1979, and

(e)   the carrying out of flood mitigation works, and

…

(g)   any other thing done or omitted to be done in the exercise of a council’s functions under this or any other Act.

(4)   Without limiting any other circumstances in which a council may have acted in good faith, a council is, unless the contrary is proved, taken to have acted in good faith for the purposes of this section if the advice was furnished, or the thing was done or omitted to be done, substantially in accordance with the principles contained in the relevant manual most recently notified under subsection (5) at that time.

(5)   For the purposes of this section, the Minister for Planning may, from time to time, give notification in the Gazette of the publication of:

(a)   a manual relating to the management of flood liable land, or

(b)   a manual relating to the management of the coastline.

The notification must specify where and when copies of the manual may be inspected.

(6)   A copy of the manual must be available for public inspection, free of charge, at the office of the council during ordinary office hours.

(7)   This section applies to and in respect of:

(a)   the Crown, a statutory body representing the Crown and a public or local authority constituted by or under any Act, and

(b)   a councillor or employee of a council or any such body or authority, and

(c)   a public servant, and

(d)   a person acting under the direction of a council or of the Crown or any such body or authority,

in the same way as it applies to and in respect of a council.

…

33. The judgment rejected Council’s reliance upon that provision on the following basis:

“[319] Council submits that s 733(1)(a) is applicable if there should be a finding that, prima facie, Council is liable for failing to disclose in the planning certificate anything that ‘constitutes advice related to flooding’. That is not an accurate paraphrase of par (a) of s 733(1). The actual words of the paragraph are ‘advice … relating to the likelihood of any land being flooded or the nature or extent of any such flooding’. Those words are not engaged by Council’s incorrect answer to question 7, to the effect that there was no ‘policy adopted by the Council … that restricts the development of the land because of the likelihood of … flooding’. The answer is advice concerning the non-existence of any policy of a particular description. It is not advice ‘relating to the likelihood of [the land] being flooded’.”

34. There are four points to be addressed in relation to this paragraph. First, the explanation as to why s 733 was not engaged could not apply to s 149(6). Accordingly, the judgment failed to address the argument based on s 149(6). The notice of contention filed on behalf of the Ms Lorenzato did not invite this Court to find that the omission of information from the planning certificate involved any lack of good faith on the part of the Council. Nevertheless, the Court was invited to draw that inference. Given that there was no misstatement resulting from the omission of material information, that question does not arise and cannot sensibly be addressed.

35. Secondly, the second sentence in this paragraph in the appeal books (numbered [320]) read, “That is not an inaccurate paraphrase of par (a) of s 733(1).” There was a dispute as to whether that sentence involved a typographical slip. Ms Lorenzato submitted the judge had intended to state that the Council’s submission involved an inaccurate paraphrase of s 733(1)(a), rather than the contrary. The revised version proves that to be correct. However, accepting the undesirability of paraphrasing statutory language, the question remained whether the actual language of the provision was engaged.

36. In construing s 733(1)(a), the reference to “advice” appeared to engage subs (5) of s 149, whereas the phrase relating to the “likelihood of any land being flooded” followed more closely, though not precisely, the language of cl 7 of Sch 4 to the Regulation, prior to its amendment. However, the disclosure required under cl 7 was limited to policies that restrict the development of land “because of the likelihood of … flooding”. The connecting phrase between advice and likelihood of flooding, namely “relating to” is not to be read down so as to deny the application of the exemption to the precise circumstances to which it was intended to apply. The breadth of subs (1) is confirmed by the language of subs (b) which might include any disclosure or failure to disclose information relating to the likelihood of any land being flooded.

37. Thirdly, the judgment made no reference to subs (3), although it was set out in the extract from s 733 contained in the judgment at [318]. The opening words of subs (3), namely “[w]ithout limiting subsections (1)…”, followed by the generality of the phrasing “advice furnished in a certificate under section 149”, confirm the breadth which must properly be attributed to the ordinary meaning of the language of subs (1). There was no reason to find that s 733(1) and (3) were not engaged in the present case.

38. Fourthly, the judgment below made no reference to the operation of s 733(4). The relevant manual, issued pursuant to s 733(5), was the “Floodplain Development Manual – the management of flood liable land”, dated April 2005. It contained express advice as to how susceptibility to flooding should be dealt with in planning certificates. ^[12] The provisions in the manual were the subject of evidence by town planning experts as to why the characteristics of particular parcels of land were not required to be disclosed in planning certificates.

    12. Manual, par 3.1.4 and Appendix I “Floodplain Risk Management Plan Implementation”, par 17, dealing with planning certificates.

39. If that evidence had been accepted (and the town planners were not cross-examined in relation to it) there was a presumption of acting in good faith. No evidence was identified in this Court which was capable of rebutting that presumption.

40. Because of the view taken in [319], the trial judge did not address the question whether the Council did not act in good faith in providing the planning certificate. For the reason noted above with respect to s 149(6), given the absence of a misstatement of the kind pleaded, that question does not arise and cannot sensibly be addressed.

41. For these reasons, in addition to those given by Macfarlan JA, the claims against the Council should have been dismissed.

42. MACFARLAN JA: By contract dated 17 March 2011 Ms Elisa Lorenzato agreed to purchase a residential property at 13 Appian Way, Burwood from Mr Michael Della Franca. The contract included a planning certificate (the “Certificate”) issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) (the “Planning Act”) by Burwood Council. The purchase was completed on 12 August 2011 after Mr Della Franca’s solicitor supplied, late on the previous day, answers to requisitions submitted by Ms Lorenzato’s solicitor.

43. Due to stormwater issues concerning the property that are described below, Ms Lorenzato commenced proceedings in the Supreme Court of New South Wales against the Council and Mr Della Franca claiming damages for, inter alia, negligent misstatement, in the case against the Council, in the Certificate and, in the case against Mr Della Franca, in his answers to Ms Lorenzato’s requisitions. Mr Della Franca cross-claimed against his solicitor but that claim was settled after the judgment at first instance and is not relevant to the present appeal.

44. Following a hearing in August 2020 before Fagan J in the Common Law Division, his Honour delivered judgment on 23 November 2020 finding in favour of Ms Lorenzato on both of her claims ([2020] NSWSC 1659). Judgment was given against each of the defendants for about $1,200,000 together with interest under s 100 of the Civil Procedure Act 2005 (NSW) of about $700,000.

34. The Council then appealed to this Court, contending that the primary judge erred:

1. in finding that the Council was liable to Ms Lorenzato for negligent misstatements made in its s 149 Certificate;

2. in finding that s 43A of the Civil Liability Act 2002 (NSW) did not protect the Council against Ms Lorenzato’s claim;

3. in finding that s 733(1)(a) of the Local Government Act 1993 (NSW) (the “LG Act”) did not protect the Council against Ms Lorenzato’s claim;

4. in assessing Ms Lorenzato’s damages;

5. in rejecting the Council’s proportionate liability defence under Part 4 of the Civil Liability Act 2002 (NSW).

46. In response, Ms Lorenzato sought by a Notice of Contention to support the judgment against the Council on alternative grounds.

47. Mr Della Franca also appealed, contending that the primary judge erred:

1. in finding that answers to requisitions 6(a), 7, 8(a) and 19 were incorrect and constituted negligent misstatements;

2. in finding that Ms Lorenzato relied on the answers to requisitions;

3. in assessing damages;

4. in assessing the amount of interest to be awarded to Ms Lorenzato.

48. For the reasons appearing below, both appeals should be upheld.

RELEVANT FACTUAL CIRCUMSTANCES

49. The relevant factual circumstances are described in detail in the primary judgment at pages 19 to 90 ([35]-[232]). It is sufficient for present purposes to provide the following summary, based largely on that contained in the Council’s written submissions on appeal.

50. In about 1904 a predecessor council installed a 400mm diameter pipe under the surface of the subject property for the purpose of draining stormwater from the Appian Way and surrounding catchment. By reason of s 59A of the Local Government Act 1993 (NSW) (enacted in 2002), the Council is the owner of that pipe (Judgment at [60] and [332]).

51. In about 1911 the house which is on the property was built over part of the pipe and in the 1960s a swimming pool was installed over another part. Mr Della Franca became the owner of the property in 1989. In about 2005, he added a patio to the rear of the house, over the pipe.

52. During his ownership of the property, Mr Della Franca and neighbouring residents complained to the Council about their properties being inundated by stormwater runoff from the Appian Way and surrounding catchment during heavy rain.

53. In 2001 the Council’s engineers concluded that the drainage issues were caused by the poor condition of the pipe referred to above, that it should be decommissioned and that a new stormwater pipe with greater capacity should be installed under the surface of the property, with a drainage easement to be created adjacent to the northern and western boundaries and therefore not under the house. Thereafter the Council negotiated with Mr Della Franca for it to acquire such a drainage easement to enable the proposed works to be carried out but the negotiations were unsuccessful.

54. In June 2002 Mr John Wyatt, the Council’s Group Manager of Engineering Services, prepared a report for the Council’s Services and Policy Committee on the issue. This led to that Committee passing the following resolution on 11 June 2002 (the “2002 Resolution”):

“A. That Council proceed to negotiate the creation of an easement over the existing pipeline and then proceed to reline the existing pipe in its current location beneath the house.

B. That, should Council be unable to gain consent from the owner, it proceed with compulsory acquisition of an easement over the existing pipeline. (Future development of the property should include the establishment of an easement adjacent to the side boundary for drainage purposes).

C. That the Acting General Manager and Council’s Solicitor meet with the owner and his Solicitor and advise them of Council’s adopted course of action.

D. That Council agree to remove the tree on the side boundary of 14 Wyatt Avenue.”

55. Mr Della Franca was notified of the 2002 Resolution by letter of 14 June 2002. He and the Council then had further unsuccessful negotiations between July 2002 and February 2003.

56. On 4 February 2003 the Council issued two notices to Mr Della Franca which stated inter alia that the Council had resolved to carry out maintenance of the existing drainage pipe and intended to enter the property to undertake an inspection of the pipe and to carry out the works.

57. On 14 February 2003 the Mayor of the Council sent a letter to Mr Della Franca in which he referred to the 2002 Resolution and stated inter alia that “Council has chosen not to pursue the second option” and “I therefore confirm the Council will act pursuant to the Notices issued to you on 4 February 2003”.

58. On 21 February 2003 Mr Della Franca’s solicitors sent a letter to the Council stating inter alia that Mr Della Franca would seek an injunction to restrain the Council from undertaking the proposed “unauthorised works” on the drainage pipe if the Council did not confirm that it would not carry them out.

59. On 5 March 2003 the Council’s General Manager, Mr Romano, sent a letter to Mr Della Franca which relevantly stated:

“1. There is no agreement on the matter of Council’s rights in relation to the existing pipeline. Council’s position remains that no further rights or easements are required to undertake maintenance of the existing pipeline and that no net compensation is payable in respect of any new pipeline on the side of your property. Your position is that Council needs an easement to do works on either the existing pipeline or a new pipeline, and that net compensation is payable to you in respect of a new pipeline on the side of your property. As a result, there is no agreement whether additional rights are required for Council to undertake maintenance; on whether any compensation is payable for work or a new pipeline; and on the value of the land which is currently occupied by the pipeline or that which would be required should the pipeline be relocated.

2. Given this impasse, Council has agreed to defer the proposed drainage works through your property until this matter could be resolved. This includes the proposal to replace the missing section of pipeline under the front section of your property.

3. Council will investigate the feasibility of relocating the pipeline to a position on your eastern boundary, including the possibility of it being half located on the adjacent property. Should this be possible you indicated you would not seek compensation for this easement.

4. Council will also investigate the feasibility of using alternative construction techniques to minimise the disruption and cost of constructing a new pipeline along your western boundary. This will require staff or consultants to enter your property to collect the information necessary to complete this work. It is noted that you reaffirmed your agreement to allow access for this purpose. Council will exercise the normal protocol of advising you before anybody enters your property.

5. It is not possible to schedule any works until the above matters are resolved, therefore the funding for the proposed works will be relocated to other projects this year. Future funding for the project will be considered in conjunction with other program needs as part of our normal budgeting process.

6. Council has agreed not to enter your property in accordance with the notice issued, and will formally notify you should it wish to proceed in this manner at some time in the future. No other formal response is required from you in relation to the current notice.”

60. On 21 March 2003 Mr Wyatt provided an update on the issue to the Mayor, Councillors and the General Manager, in which he stated:

“[T]he General Manager and Director of Technical Services and Operations met with the owner in an attempt to resolve the issue. As a result of the meeting it was agreed that Council would not proceed with the maintenance work as advised and that it would investigate the possibility of relocating the pipeline in [an] adjacent property. The owner was advised that the funds which had been allocated for the project would be reallocation to other projects and that future funding of this project would need to be considered in conjunction with other projects in future capital works programs.”

61. The Council did not thereafter take any steps to implement any aspect of the 2002 Resolution.

62. On 18 June 2004 the Council granted consent to a development application brought by Mr Della Franca to construct a new patio and skillion roof at the rear of his property, in an area said by the Council in these proceedings to be directly above the drainage pipe. The conditions of consent did not require Mr Della Franca to grant a drainage easement to the Council along the western and northern boundaries of the property, or elsewhere.

The s 149 Planning Certificate

63. Since the events relevant to these proceedings, amendments have been made to the applicable legislation. The regulatory framework set out below refers to the legislation as it was at the relevant time.

64. Section 149 of the Planning Act was in the following terms:

149 Planning certificates

(1)    A person may, on payment of the prescribed fee, apply to a council for a certificate under this section (a planning certificate) with respect to any land within the area of the council.

(2)    On application made to it under subsection (1), the council shall, as soon as practicable, issue a planning certificate specifying such matters relating to the land to which the certificate relates as may be prescribed (whether arising under or connected with this or any other Act or otherwise).

(3)    (Repealed)

(4)    The regulations may provide that information to be furnished in a planning certificate shall be set out in the prescribed form and manner.

(5)    A council may, in a planning certificate, include advice on such other relevant matters affecting the land of which it may be aware.

(6)    A council shall not incur any liability in respect of any advice provided in good faith pursuant to subsection (5). However, this subsection does not apply to advice provided in relation to contaminated land (including the likelihood of land being contaminated land) or to the nature or extent of contamination of land within the meaning of Part 7A.

(7)    For the purpose of any proceedings for an offence against this Act or the regulations which may be taken against a person who has obtained a planning certificate or who might reasonably be expected to rely on that certificate, that certificate shall, in favour of that person, be conclusively presumed to be true and correct.

(See now s 10.7 of the Planning Act.)

65. Clause 279 of the Environmental Planning and Assessment Regulation 2000 was in the following terms:

279 What matters must be specified in a planning certificate? (cf clause 112 of EP&A Regulation 1994)

(1) The prescribed matters to be specified in a certificate under section 149 (2) of the Act are the matters set out in Schedule 4.

(2) A certificate under section 149 (2) of the Act may be issued containing only the information set out in clause 3 of Schedule 4.

66. Clauses 7 and 7A of Sch 4 to that Regulation were in the following terms:

7 Council and other public authority policies on hazard risk restrictions

Whether or not the land is affected by a policy:

(a)    adopted by the council, or

(b)    adopted by any other public authority and notified to the council for the express purpose of its adoption by that authority being referred to in planning certificates issued by the council,

that restricts the development of the land because of the likelihood of land slip, bushfire, tidal inundation, subsidence, acid sulphate soils or any other risk (other than flooding).

7A Flood related development controls information

1)    Whether or not development on that land or part of the land for the purposes of dwelling houses, dual occupancies, multi dwelling housing or residential flat buildings (not including development for the purposes of group homes or seniors housing) is subject to flood related development controls.

(2)    Whether or not development on that land or part of the land for any other purpose is subject to flood related development controls.

…

67. Prior to the introduction of cl 7A in 2007, cl 7 included the word “flooding” in its list of the possible reasons for restricted development of the land, and did not include the words “other than flooding” at its conclusion.

68. On 6 August 2010 Mr Della Franca applied in writing to the Council for the issue of a s 149 certificate. The form that he completed gave him the option of paying $40 for a “Section 149(2) Certificate” or $100 for a “Section 149(2) Certificate + 149(5) Certificate”. He selected the latter and paid $100 for the certificate.

69. The s 149 Certificate that the Council supplied and that was attached to the contract for sale to Ms Lorenzato was expressed to be issued under s 149(2) and (5). It provided first “Section 149(2) details”, said to be “in respect of the prescribed matters to be included in a planning certificate”.

70. Items 7 and 7A in this section of the Certificate were in the following terms:

“7. COUNCIL AND OTHER PUBLIC AUTHORITY POLICIES ON HAZARD RISK RESTRICTIONS

Is the land affected by a policy adopted by the Council or adopted by any other public authority and notified to the Council for the express purpose of its adoption by that authority being referred to in planning certificates issued by the Council, that restricts the development of the land because of the likelihood of land slip, bushfire, flooding, tidal inundation, subsidence, acid sulphate soils or any other risk?

No

7A. FLOOD RELATED DEVELOPMENT CONTROLS INFORMATION

Whether development on the land or part of the land for the purposes of dwelling houses, dual occupancies, multi dwelling housing or residential flat buildings (not including development for the purposes of group homes or seniors housing) is subject to flood related development controls:

No

Whether development on the land or part of the land for any other purpose is subject to flood related development controls:

No

…

71. In a separate section of the Certificate, headed “SECTION 149(5)”, the Council stated that:

“The following advice on other matters affecting the subject land of which Council is aware is supplied in pursuance to sub-section 5 of Section 149”.

The following was then stated:

“1. The land is not affected by a Residential District Proclamation.

2. The land is affected by a Tree Preservation Order.

3. Register of consents may be examined at Council’s Offices for particulars relating to a development consent which may have been issued for use or development of the land.

4. Council has resolved not to proceed with draft Local Environmental Plan (LEP) 2000 and wrote to the Department of Infrastructure, Planning and Natural Resources (now the Department of Planning) on 22 August 2005 formally advising of this. This draft LEP bears no further relevance.

5. Council has adopted a Burwood Town Centre Master Plan and Vision Document for the whole of the Burwood Council area.

6. Council has adopted a Streetscape Upgrade Policy relating to the provision of public works required to be carried out in the Burwood Council area as a result of new development.

7. Council on 26 May 2009 resolved to prepare a Comprehensive Local Environmental Plan for the whole of the Burwood Local Government Area, to replace the existing Burwood Planning Scheme Ordinance 1979.”

The answers to requisitions

72. Clause 5 of the contract for sale dated 17 March 2011 limited the time for the purchaser to make requisitions. Special condition 10 to the contract stated that the “only form of general requisitions on title that the Purchaser shall be entitled to raise pursuant to Clause 5 shall be in the form of [the] Requisitions on Title annexed and are deemed to be served at the date of this Contract”.

73. Clause 10 of the contract provided relevantly as follows:

“10   Restrictions on rights of purchaser

10.1   The purchaser cannot make a claim or requisition or rescind or terminate in respect of –

…

10.1.2   a service for the property being a joint service or passing through another property, or any other service for another property passing through the property (‘service’ includes air, communication, drainage, electricity, garbage, oil, radio, sewerage, telephone, television or water service);

…

10.1.8   any easement or restriction on use the substance of either of which is disclosed in this contract or any non-compliance with the easement or restriction on use…”.

74. The form of requisitions on title incorporated in the contract and referred to in cl 5 included the following:

“6. Is the Vendor aware of:

(a) any unregistered easements such as a right of way which affect the property? If so, please give full details.

(b) the breach of any covenant noted on the title? If so, such breach must be remedied before completion.

7. Has the Vendor received any notification from the Roads and Traffic Authority or local Council that the land or part of it is to be realigned, widened, altered or resumed? If so, please give full details.

8. Is there any outstanding notification, claim or requirement of:

(a) a statutory or local authority, or

(b) an adjoining owner which affects the property or any part of it?

Any such notice, claim or requirement issued before contracts were exchanged must be complied with by the Vendor before completion.

…

19. Is the Vendor aware of any restrictions on the use or development of the land?”

75. On 9 June 2011 Ms Lorenzato’s solicitors provided to Mr Della Franca’s solicitors a form of transfer to be signed and handed over on settlement “subject and without prejudice to satisfactory replies to requisitions on title herein”. On 14 July 2011 Ms Lorenzato’s solicitors expressly stated to Mr Della Franca’s solicitors that they raised requisitions on title in accordance with special condition 10. In a letter of 4 August 2011 they referred to the date of 12 August 2011 scheduled for settlement and requested “a direction to pay as soon as possible together with replies to requisitions”. A further reminder was given by Ms Yvonne Marra, a paralegal employed by Ms Lorenzato’s solicitors, by email of 9.19am on 11 August 2011. The vendor’s answers to the requisitions, given by way of handwritten notations on a copy of the form of requisitions on title annexed to the contract, were provided later that day. Settlement took place the following day.

76. Relevantly, the answers were as follows:

6(a)   “No”.

6(b)   “The purchasers should make their own enquiries”.

7   “No, but purchaser should make own enquiries”.

8(a)   “Not to vendor’s knowledge but purchaser should make own enquiries”.

8(b)   “Not to vendor’s knowledge”.

19   “Purchaser should make own enquiries”.

DISPOSITION OF THE APPEALS

BURWOOD COUNCIL APPEAL

Whether misstatement in item 7 of the s 149 Certificate

Whether there was a relevant policy

77. The primary judge found that the 2002 Resolution was, within the meaning of item 7 in the s 149 Planning Certificate, a “policy adopted by the Council… that restricts the development of the land because of the likelihood of… flooding”. His Honour also found that the 2002 Resolution, and therefore the relevant “policy”, was not revoked or abandoned prior to issue of the Certificate. Accordingly his Honour found that the statement in the Certificate that no such policy existed was erroneous.

78. His Honour stated that the object of paragraphs A and B of the 2002 Resolution (see [54] above) “was to achieve adequate drainage of stormwater from Appian Way and to avert the risk of flooding the road and/or” that of nearby properties and that those paragraphs described the steps that would be required to achieve that result. His Honour also noted the statement in the 2002 Resolution that “[f]uture development of the property should include the establishment of an easement adjacent to the side boundary for drainage purposes” and acknowledged that this did not state “in terms” that any future development consent would be made conditional upon the grant of a western boundary easement. He stated however that “that was what it meant”.

77. His Honour continued:

“Such a long term plan of action, with a defined objective and multiple intermediate and contingent steps, was a ‘policy’ according to the ordinary meaning and usage of that word in the English language. The policy was adopted ‘because of the likelihood of … flooding’ of road infrastructure and vulnerable properties. The fact that the means chosen would require drainage access through only one parcel of private property and would therefore restrict the development of only that property does not make it any the less a ‘policy’. Council submitted that its 2002 resolution only had to be disclosed in answer to question 7 if it applied generally throughout the local government area or at least to multiple properties. But question 7 in the certificate is not so limited.”

80. The proper construction of the Certificate was to be determined in light of the statutory framework pursuant to which it was issued. As noted above, s 149(2) of the Planning Act provided for the inclusion in certificates of such matters “as may be prescribed”. That prescription appeared in the Environmental Planning and Assessment Regulation 2000, which is a statutory instrument which commenced in 2001. In general terms, the subject Certificate followed, and used the language of, cl 7 of Sch 4 to the Regulation (see [66] above). The exception was that the form of the Certificate reflected cl 7 of the Regulation as it stood prior to its amendment in 2007 (that is, including the word “flooding” in the list of possible reasons for restricted development) (see [67] above). Nevertheless, the terms of the Regulation, both in its pre- and post-2007 form, provide the background against which the Certificate is to be construed.

81. As well, another part of the statutory framework that needed to be taken into account was the Floodplain Development Manual of April 2005 issued pursuant to s 733 of the Local Government Act 1993 (NSW). That section was in the following terms:

733 Exemption from liability—flood liable land and land in coastal zone

(1)    A council does not incur any liability in respect of:

(a)    any advice furnished in good faith by the council relating to the likelihood of any land being flooded or the nature or extent of any such flooding, or

(b)    anything done or omitted to be done in good faith by the council in so far as it relates to the likelihood of land being flooded or the nature or extent of any such flooding.

…

(3)     Without limiting subsections (1) and (2), those subsections apply to:

…

(d) advice furnished in a certificate under section 149 of the Environmental Planning and Assessment Act 1979, and

…

…

(5)    For the purposes of this section, the Minister for Planning may, from time to time, give notification in the Gazette of the publication of:

(a)    a manual relating to the management of flood liable land, or

(b)    a manual relating to the management of the coastline.

The notification must specify where and when copies of the manual may be inspected.

(6)    A copy of the manual must be available for public inspection, free of charge, at the office of the council during ordinary office hours.

…

82. Relevantly, that section, which was concerned, as indicated by its heading, with a council’s “exemption from liability” in respect of “flood liable land and land in coastal zone”, provided in sub-s (5) for the Minister for Planning from time to time to notify in the Gazette the publication of a manual relating, inter alia, to the management of flood liable land. By sub-s (6) the manual had to be available for public inspection.

83. The 2005 manual, still current in 2010, addressed at some length the matters that should, and should not, be contained in s 149 certificates so far as flooding was concerned. Statements in the manual such as the following tended to suggest the reference to “a policy” in cl 7 of Sch 4 to the Regulation (see [66] above) was not concerned with a site-specific decision, or even decisions related to a number of sites, made by council but rather with the relationship of particular land to general floodplain levels:

“…in relation to item (12) in Schedule 4 of the EPAR [Regulation], councils should only provide information under section 149(2) in relation to land subject to flood related development controls (land at or below an FPL [flood planning level] for development control) where such controls are imposed by policies adopted by council in accordance with statutory requirements under the Local Government Act 1993…”

See also the primary judgment at [284] quoted at [97] below.

84. Even if the 2002 Resolution did however constitute a “policy” it was not in any event one of the character described in item 7 of the Certificate, that is, one which “restrict[ed] the development of the land because of … flooding”. At most, it indicated that the Council would be likely in the future to take the indicated steps concerning acquisition of an easement and would impose a condition on any future development consent that a relevant easement be granted in favour of the Council. On Ms Lorenzato’s case, and seemingly on the primary judge’s reasoning, this would, or at least might, have the effect of advancing the Council’s objective to reduce flooding in the area. It might thus be regarded as a policy designed to achieve that result by indirect means but in my view could not fairly be described as a policy, as required by item 7, that of itself restricted development because of the likelihood of flooding. Ironically, this reasoning is analogous to that adopted by the primary judge when considering whether, for the purposes of item 7A in the Certificate, “development” on the subject land was “subject to flood related development controls”. His Honour said in that context:

“…A partial restriction upon full development of land, dictated by the presence of a drain on it and/or an easement over it, has only an indirect connection with flooding and is outside the concepts with which question 7A is concerned.”

85. In considering item 7 the primary judge in my view erroneously had regard to the possible, or even likely, effect of what the Council proposed, rather than, as he did in relation to item 7A, considering what the “policy” provided for in a direct sense.

Whether the Council’s alleged “policy” abandoned prior to 2010

86. The essence of the primary judge’s reasoning to his conclusion that the 2002 Resolution was not revoked or abandoned by August 2010 was as follows:

“[267] No resolution amending or repealing that of 11 June 2002 was passed by Council up to August 2010. Council submits that its express notification to the second defendant on 5 March 2003 that it was deferring repair of the existing drain constituted abandonment of any intention to implement the resolution. I do not accept that submission. Deferment of remediation of the drain was not abandonment. In any event, what was deferred was the entry under statutory powers. Entry on that basis had not been dealt with in the resolution and deferment of it said nothing about whether Council would proceed in the future with acquisition of either an easement over the drain or a western boundary easement.

…

[271] From [the earlier described] frequent and consistent reiterations of engineering advice, Council was aware that establishment of a western boundary easement was a core, indispensable element of the 2002 resolution. Notwithstanding that the resolution itself postponed acquisition of such an easement until ‘future development of the property’, Council knew that this acquisition was not just an option but that it would have to be done. Implicit abandonment of the plan in the resolution cannot be attributed to Council in these circumstances.”

87. The following circumstances however in my view indicate that even if the 2002 Resolution did constitute a relevant “policy”, it was abandoned by the Council by the time of issue of the Certificate in 2010.

88. The Mayor’s letter to Mr Della Franca of 14 February 2003 (which was not referred to by the primary judge in his summary of the circumstances that were relevant in this context – compare at Judgment [109]) stated that the Council had “chosen not to pursue the second option” referred to in the 2002 Resolution. This was what was stated in item B of that Resolution (compulsory acquisition of an easement at the site of the existing pipeline or imposition of a condition on a future development consent that a boundary easement be provided). This left only item A, which involved the creation of an easement over the existing pipeline by agreement with the owner, and then consequent relining of the existing pipe. Even assuming that item A subsisted as an operative “policy” until at least 2010, it clearly did not involve a policy of the type described in item 7 of the Certificate. A “policy” to attempt to reach an agreement with the landowner about a matter could not on any view be described as a policy that restricted development of the subject land due to flooding.

89. Moreover, as the primary judge pointed out in [267] (see [86] above), the course of action of which the Council informed Mr Della Franca by its notices of 4 February 2003 (see [56] above) was not a course of action envisaged by any part of the 2002 Resolution. The course of action was not therefore a relevant policy for the purposes of Ms Lorenzato’s case because the policy she relied upon was said to be embodied in the 2002 Resolution.

90. By stating at its conclusion that the Council would “therefore… act pursuant to the Notices”, the 14 February letter from the Mayor confirmed that such policy, if that is how it can be described, of the Council as evidenced by item B of the 2002 Resolution was superseded and replaced by the notices.

91. After Mr Della Franca, through his solicitors’ letter of 21 February 2003, threatened to seek an injunction to restrain the Council from acting on the notices, the Council’s general manager, Mr Romano, responded by his letter of 5 March 2003 (see [59] above). In paragraph [1] of it, he stated that there “is no agreement on the matter of Council’s rights in relation to the existing pipeline” and gave details of what was not agreed. He then stated in paragraph [2] that “Council has agreed to defer the proposed drainage works through your property until this matter could be resolved”. He then identified various investigations that the Council would undertake. He concluded by stating in paragraph [6] that “Council has agreed not to enter your property in accordance with the notice [sic] issued, and will formally notify you should it wish to proceed in this manner at some time in the future”.

92. In these circumstances, it could not be said that the Council had a current “policy” (if it was a policy at all) to act on the notices. Nor, as I have said, was there any other arguably relevant “policy” on foot (see [88] above).

93. I respectfully disagree with the primary judge’s reasoning in [267] (see [86] above) on this point. First, his Honour said in relation to the 5 March 2003 letter that “[d]eferment of remediation of the drain was not abandonment”. The relevant issue was however whether there was a policy “that restricts the development of the land because of the likelihood of … flooding”. The position evinced by this letter and earlier communications was that the Council did not by then have a “policy” to do anything except investigate options to address excess stormwater in the area, not all of which necessarily involved any action being taken in relation to the subject land. For example, one identified possibility was that the pipeline might be relocated under an adjacent property – see Mr Wyatt’s letter of 21 March 2003 advising of the outcome of a meeting with Mr Della Franca (see [60] above).

94. Moreover, the judge was in error in saying that “what was deferred was the entry under statutory powers”. “Deferment” was not a strong enough word for what occurred as the Council agreed not to exercise those powers without further notice, effectively putting Mr Della Franca in the same position as if no notices had yet been issued. More significant however was that it was not only “entry under statutory powers” that was resiled from but, for the reasons I have given above, such “policy”, if any, as was embodied in the 2002 Resolution.

95. For these reasons there was no misstatement in item 7 of the Certificate.

Whether misstatement in item 7A of the s 149 Certificate

96. As the primary judge held that there was no misstatement in item 7A of the Certificate, this issue arises by way of Ms Lorenzato’s Notice of Contention which seeks to support his Honour’s judgment on a ground additional to that upon which he relied.

97. In relation to the meaning of the expression “flood related development controls” in item 7A of the Certificate, the primary judge referred to the 2005 Floodplain Development Manual (see [81]-[83] above) and to a circular, a Guideline and a Direction, all published in 2007. His Honour continued:

“[283] The Guideline used the expression ‘flood related development controls’ repeatedly and consistently in the sense of restrictions imposed by local environmental plans upon residential development by reference to the location of the subject land either above or below an adopted Flood Planning Level. The Departmental circular under cover of which the Guideline and Direction No 15 were distributed also used the expression ‘flood related development controls’ repeatedly and consistently in the above sense. The circular stated that cl 7A of Sch 4 of the Regulation, the Guideline and Direction No 15 constituted, together:

a package of changes concerning flood related development controls on residential development on land above the 1-in-100 year flood and up to the Probable Maximum Flood.

[284] The circular said that the changes followed ‘community concern over notations about low flooding risk being included on section 149 certificates and the appropriate development controls that should apply to residential development in low flood risk areas’. From the usage of the expression ‘flood related development controls’ throughout these documents, issued by the Department at the time of cl 7A being inserted in the Regulation, I interpret the quoted expression where it appears in the clause as having the meaning discussed at [283] above. It has the same meaning in question 7A in the planning certificate.”

98. Ms Lorenzato relied before the primary judge on a Code of Stormwater Management which was adopted by the Council in 1994. The Code sought to prevent stormwater drainage issues through the adoption of policies to be applied in the process of assessing development applications. Ms Lorenzato relied in particular on two of those policies, cll 8.8 and 8.16 of the Code, which relevantly provided as follows:

8.8 Easements

For sites that have existing Council pipelines through them that are not covered by an easement, or where an existing pipeline is not within the easement, Council will require the creation of an easement in favour of itself over the pipeline. The easement width is to be the pipe, box or channel section width plus 1.5m, with an overall minimum width of 2.5m.

…

8.16 Structures Over or Near Drainage Lines and Easements

New buildings, structures and tennis courts will not [be] permitted over drainage lines or within easements. Paving over any drainage line or easement is acceptable, but will require appropriate jointing at the easement boundary, and to be in a material approved by Council’s Engineer.

Clearances to easement boundaries are required to prevent structural loads on drainage structures or encroachment within the angle of repose of the soil. Piering is an acceptable technique to achieve this.

If there is an existing structure over the drainage line or easement within the site that is part of the application, then an access pit is required to be provided upstream and downstream of the structure…

In relation to Ms Lorenzato’s submission that these provisions constituted “flood related development controls”, his Honour concluded:

“[286] It is no doubt true that preservation of the integrity of an existing drain and creation of an easement over it, as provided for in these clauses [cll 8.8 and 8.16 of the Code], are provisions related to ensuring that storm water is piped and contained and does not become an overland flood. But that does not constitute those clauses, or any other part of the Code, a ‘flood related development control’ within the meaning that I have concluded at [283]-[284] must be attributed to that expression in question 7A. The quoted expression encompasses development controls that are stipulated according to the location of a property relative to a Flood Planning Level. A partial restriction upon full development of land, dictated by the presence of a drain on it and/or an easement over it, has only an indirect connection with flooding and is outside the concepts with which question 7A is concerned.”

99. In support of her Notice of Contention, Ms Lorenzato submitted that “flood related development control” in item 7A of the Certificate meant any principle or policy:

“(i)    that was adopted or was to be applied by the appellant in the course of ‘control’ as defined in s. 4(1) of the EP&A Act in relation to development, including in assessing applications for development consent under s. 79C; and

(ii)    that addressed the risk of flooding”.

100. I agree with the primary judge that the correct construction of “flood related development control” where used in item 7A of the Certificate and in the corresponding clause of Sch 4 to the Regulation could, and should, be informed by the various published documents to which his Honour referred (see Judgment [278]-[284]). I further agree with his Honour’s reasoning in Judgment [283], [284] and [286], which I have quoted above, in particular that “… in the sense of restrictions imposed by local environmental plans upon residential development by reference to the location of the subject land either above or below an adopted Flood Planning Level”. Ms Lorenzato did not provide any good reason for a different view to be taken, with the result that Grounds 1 to 5 of her Notice of Contention should be rejected.

Whether negligent misstatement

101. As I have concluded that there was no misstatement in the Certificate, either in item 7 or item 7A, the question of whether the Council was negligent in making a misstatement in it does not arise. It is sufficient in these circumstances to note the observations of Basten JA at [27] above concerning breach of the standard of care imposed by s 43A(3) of the Civil Liability Act. Those observations, with which I agree, point strongly against any breach, not only of the standard referred to in that sub-section, but also of the ordinary standard, that is, the reasonable care and skill to which Part 1A of the Civil Liability Act refers.

Whether negligence in non-disclosure

102. By Grounds 6 and 7 of her Notice of Contention, Ms Lorenzato asserts that the primary judge ought to have found that, even if the statements in items 7 and 7A of the Certificate were correct, the Council nevertheless breached a duty owed to her by failing to disclose in the Certificate that “the pipe ran through the middle of the property, that it was owned by the Council and subject to Council’s statutory rights and that No 13 was affected by overland flooding as a result of inadequate stormwater drainage of Appian Way” (see Judgment [287]).

103. She relied in this respect particularly on the fact that item 7 in the Certificate referred to a restriction on development because of “flooding”, whereas the corresponding item in the list of prescribed matters in Sch 4 to the Regulation did not refer to flooding. This came about because the template for the Council’s s 149 certificates was not appropriately amended after the changes to the Regulation in 2007 which deleted the word “flooding” from the list of possible reasons for restricted development in cl 7 in Sch 4 and its place included a new provision, cl 7A, dealing with flood related development controls (see [67] above).

138. Nor did the resolution restrict the development of land in the way that a policy of the kind referred to in question 7 would. The resolution did not of itself restrict development at all. It did not state that development was prohibited or constrained. It did not proscribe any form or extent of development. It was no more than a proposal to proceed in the future in a certain way in certain events. That did not impose any present actual restriction on development. The existence of the resolution did not prevent the owner from carrying out development – including along the western boundary, where it was contemplated that an easement might be required. Any effect that it had was indirect and uncertain.

139. Further, to the extent that the resolution did restrict development, it did not do so because of the likelihood of flooding. Any connection with flooding was, again, incidental. If development was restricted, it was because of the proposed acquisition of an easement, not because of the likelihood of flooding.

140. For all those reasons, the 2002 resolution was not a policy of the kind which question 7 contemplated. But even if it were a policy, it was abandoned by 2011, when the certificate was issued. In a letter to Mr Della Franca of 14 February 2003, the Council stated:

“Thank you for your e-mail to me dated 7 February 2003 and bringing your concerns to my attention in respect of the above matter.

I note your preference for Council not to pursue the resolution of relining and repairing the existing drainage pipeline located beneath your house, but rather to acquire an easement along the western boundary of your property.

Council’s resolution was made following advice from Council’s legal advisers and Council’s engineers as to the condition of the existing pipeline. This is considered the best option for Council to pursue in terms of providing an improvement to the condition of the pipeline within its current financial capacity.

Council has chosen not to pursue the second option partly because it is less economical and also because the parties have been unable to reach agreement on the amount of compensation payable for the acquisition of the easement. I have been advised that negotiations between the parties’ valuers and legal representatives in respect of a compensation amount took place over 12 months but that agreement was not able to be reached.

I note your comments that both valuers have valued the acquisition of the easement at $100,000.00 but that their opinions were divided on the issue of betterment. Relying on the advice from our valuer and legal advisers, it is Council’s position that installation of the pipeline will result in a betterment of the property and that the overall compensation ought to be Nil.

I therefore confirm that Council will act pursuant to the Notices issued to you on 4 February 2003.”

143. The “second option” referred to was that in part B of the 2002 resolution, to “proceed with compulsory acquisition of an easement over the existing pipeline”. In rejecting the argument that the Council had abandoned the policy, his Honour did not refer to this letter, ^[16] and although it had been noticed earlier in the judgment,^[17] only the concluding sentence was noted. Counsel for Ms Lorenzato referred to other correspondence, of 5 and 21 March 2003. However, that correspondence does not detract from the proposition that the 2002 resolution, apparently abandoned by the 14 February 2003 letter, was no longer being pursued; to the contrary, they are consistent with it, in that, in the absence of agreement as to the Council’s rights in relation to the existing pipeline, it was deferring proposed drainage works until that question could be resolved, and would investigate the possibility of relocating the pipe to the eastern boundary, and also of using alternative construction techniques to construct a new pipeline along the western boundary – neither of which are consistent with the acquisition of an easement over the existing pipeline.

     16. Primary judgment at 394-395 [266]-[276].

     17. Primary judgment at 357 [109].

144. It follows that in my opinion his Honour erred in concluding that the 2002 resolution was a policy of the kind referred to in question 7 of the planning certificate and that the Council had answered the question incorrectly.

Standard of care – CLA, s 43A

145. Moreover, his Honour took the view that the duty to exercise reasonable care in issuing the certificate could only have been discharged by giving an answer to question 7 that reasonably accurately conveyed the existence of the 2002 resolution. ^[18] His Honour said:^[19]

“In a case where the information supplied concerns Council’s own acts and/or decisions, it is not relevant to enquire whether Council took reasonable steps to maintain accurate records of policies that it had adopted or whether it followed a reasonable procedure for interrogating those records prior to issuing a certificate. The duty of care could not be discharged by the adoption of any system of keeping or searching records if, notwithstanding such system, Council failed to answer question 7 in a s 149 certificate with reasonable accuracy as to the existence of its own policy resolution that lay within its own repository of corporate knowledge.”

18. Primary judgment at 400 [291].

19. Primary judgment at 400 [291].

146. This was said to follow from the following passages in the judgment of the High Court in L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (No 1):^[20]

“A public body, by following the practice of supplying information upon which the recipients are likely to rely for serious purposes, lets it be known that it is willing to exercise reasonable skill and diligence in ensuring that the information supplied is accurate. In the circumstances, diligence might be more important than skill, although competence in searching for and transmitting the information must play a part. However, even if diligence only and not skill were required, a public body might be specially competent to supply material which it had in its possession for the purposes of its public functions.

…

Where, as in the present case, the supplier is the exclusive possessor of essential information concerning a matter of importance, such as the buying and selling of property, and, being a local government body, sets itself up as a centre from which, in a quite formalized fashion, this information is distributed to those who require it, it requires no holding out of special skill or competence in order to lead to the inference that care will be taken in furnishing that information.

…

In the discharge of their public functions local authorities have in a practical sense an obligation to provide information of the kind now in question in response to a request. It is information of vital importance to an owner or intending purchaser. It materially affects the use to which the land may be put in the future and its value. Because it relates to intended acts of the authority, it is information which it alone possesses. […] The specialized nature of the information, the importance which it has to an owner or intending purchaser and the fact that it concerns what the authority proposes to do in the exercise of its public functions and powers, form a solid base for saying that when information (or advice) is sought on a serious matter, in such circumstances that the authority realizes, or ought to realize, that the inquirer intends to act upon it, a duty of care arises in relation to the provision of the information and advice.”

20. (1981) 150 CLR 225 at 235 (Gibbs CJ), 243 (Stephen J), 252-253 (Mason J); [1981] HCA 59.

147. In my respectful view, those passages do not state, nor support the proposition, that the duty of care is discharged only if the question is answered accurately. That is all the more so given the standard of care imported by CLA, s 43A(3), which, for the reasons given by Basten JA, I agree is applicable to the issue of a certificate under EPAA, s 149(2): the Council does not incur liability unless its act or omission was in the circumstances so unreasonable that no council could properly have considered it to be a reasonable exercise of the power in question. Even if the answer to question 7 in the certificate were incorrect, a reasonable council, having in mind the content of question 7 and the types of matters which are ordinarily disclosed under it, would not have thought to refer in the answer to an operational, property-specific resolution such as the 2002 resolution, and by failing to do so the Council did not act unreasonably in the sense referred to in CLA, s 43A(3).

Notice of Contention – EPAA, s 149(5)

148. By her Notice of Contention, Ms Lorenzato contended that regardless of the scope of EPAA, s 149(2), the Council was obliged to disclose the existence of the pipe under s 149(5) as a matter affecting the land of which it was aware – particularly because it knew that the pipe was inadequate, in disrepair, and causative of flooding of the property. It was submitted that the primary judge’s rejection of this proposition – on the basis that that there was no principle upon which the content of the Council’s duty could be so enlarged; that, by responding to an application lodged pursuant to s 149(1), the Council could only be taken to providing such information as s 149(2) obliged it to provide; and that, at least absent an explicit request for information about Council infrastructure installed on the property or statutory rights in respect of it, there was no obligation on the Council to address such matters, and no person who received the certificate could reasonably rely upon it as containing full disclosure on those topics – was erroneous. ^[21]

     21. Primary judgment at 399-400 [288]–[290].

149. In this respect, it is to be observed that the application for a planning certificate requested advice under s 149(5) as well as under s 149(2), and the applicant paid the extra fee ($60) for such advice, over and above the standard fee of $40 for advice under s 149(2). The information concerning the pipe was obviously of considerable relevance and importance to a purchaser of the property. It was, to use the terms of s 149(5), a relevant matter affecting the land of which the Council was aware. It is true that s 149(5) is permissive and not mandatory, but in circumstances where the Council agreed to provide information pursuant to s 149(5), demanded and was paid an additional fee for doing so, and had in its possession material of such obvious relevance affecting the particular land and knew that its certificate would be relied on by a prospective purchaser, the certificate would reasonably be regarded by a prospective purchaser reading it as misleading due to its failure to disclose a material matter within the Council’s knowledge.

150. However, the mere fact that the certificate may have been misleading by non-disclosure is insufficient to found liability. Liability depends upon breach of a duty of care. It was submitted that once the Council engaged in giving advice under s 149(5), reasonable care required it to do more than it did. Reference was made to the following passage in the judgment of Gummow J in Pyrenees Shire Council v Day (citations omitted):^[22]

“[177]  The general rule is that ‘when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered’. A public authority which enters upon the exercise of statutory powers with respect to a particular subject matter may place itself in a relationship to others which imports a common law duty to take care which is to be discharged by the continuation or additional exercise of those powers. An absence of further exercise of the interconnected statutory powers may be difficult to separate from the exercise which has already occurred and that exercise may then be said to have been performed negligently. These present cases are of that kind. They illustrate the broader proposition that, whatever its further scope, Lord Atkin's formulation in Donoghue v Stevenson includes ‘an omission in the course of positive conduct  … which results in the overall course of conduct being the cause of injury or damage’.

[178]  In the period shortly after the first fire, the Shire became aware of a serious risk to the entire row of shops in Neill Street by reason of the great possibility of fire at No 70. A competent inspection was conducted by an officer of the Shire and an oral warning was given to and an undertaking provided by Mr Tzavaras. Mr Tzavaras was told that he would be hearing from the Shire and there followed the letter of 12 August 1988. This emphasised the conclusion reached by the Shire that it was imperative that the fireplaces be not used under any circumstances unless certain work was performed. These steps were measures under Pt XXVI of the Local Government Act apt to assist in the prevention of further fire but, without more, by no means likely to do so. Adjoining owners and occupiers were not put on notice nor was anything done to put the Shire in the position to alert future owners or occupiers of No 70. The taking of such additional measures under s 694(1) would have engaged the exercise of the interrelated and specific powers conferred by such provisions as ss 695(1A), 883 and 890 of the Local Government Act. The Shire occupied such a situation and had placed itself in such circumstances that in stopping where it did it did not exercise its powers under s 694(1) with the care and diligence required by the circumstances.”

22. (1998) 192 CLR 330 at 391-392 [177]-[178] (Gummow J); [1998] HCA 3.

151. Once again, the relevant standard of care is that referred to in CLA, s 43A(3). Accordingly, the Council will incur liability only if its omission to refer to the pipe was, in the circumstances, so unreasonable that no council could properly consider it to be a reasonable exercise of or failure to exercise its power. The matters that were disclosed under EPAA, s 149(5), were of generic policies affecting the property, rather than of property-specific information. There was a substantial body of evidence that as a matter of practice, property-specific information concerning drainage pipes was not included by councils in s 149 certificates. Save that his Honour noted Mr Olsen’s evidence that, in his experience, he had never seen a disclosure on a planning certificate of aboveground or inground services within a property,^[23] his Honour did not refer to this evidence. Ms Lorenzato failed to prove that no council could properly consider the failure to refer to the existence of the pipe to be reasonable in the circumstances.

     23. Primary judgment at 402-403 [301].

152. Moreover, s 149(6) provides that a council shall not incur any liability in respect of any advice provided in good faith pursuant to sub-s (5). In Mid Density Developments, it was said that good faith calls for more than honest ineptitude, and that there must be “a real attempt by the authority to answer the request for information at least by recourse to the materials available to the authority”. ^[24] In Port Stephens Shire Council v Booth it was said:^[25]

“Other cases on analogues of s 149(6) include Lamont v Wyong Shire Council (unreported, Supreme Court, NSW, Palmer AJ, 13 December 1991); Forbes Shire Council v Pace (2002) 124 LGERA 37; and Melaleuca Estate Pty Ltd v Port Stephens Shire Council [2004] NSWSC 415; the last is currently under appeal. Their facts differ. They include reference, sometimes by illustration, to no effort at all to take care to avoid causing foreseeable damage, to delegation of design to persons known not to be qualified, to lack of honest endeavour to undertake the relevant task, to ‘fobbing off’ rather than genuinely attempting to remedy a situation, and to declining to remedy a nuisance because the work would cost too much. Each case must turn on its own facts; as the High Court said in Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 142 LGERA 1 at [50], speaking of s 733(1) of the Local Government Act 1993, the range of advice, acts and omissions to which it may apply may vary from one case to the next and it is “unwise, if not impossible, to place a definitive gloss upon the words of the statute”.”

24. Mid Density Developments at 300 (Gummow, Hill and Drummond JJ).

25. (2005) 148 LGERA 351 at 380 [122] (Giles JA; Beazley JA and Hunt AJA agreeing); [2005] NSWCA 323.

153. As Basten JA explains, Ms Lorenzato’s Notice of Contention did not explicitly contend that it should be found that the Council acted other than in good faith, though her counsel’s submissions invited the Court to do so. It is important, when considering the state of mind of a council, to bear in mind questions of attribution. No doubt the Council’s engineering department had, or at some stage had had, knowledge of the existence of the pipe, which it had investigated. However, the property department responsible for answering the request for the s 149 certificate, or at least the relevant persons in it, did not. The evidence established that they conducted the types of inquiries and investigations that are ordinarily conducted in such circumstances. It did not reveal, in respect of the preparation of the s 149 certificate, “no effort at all to take care”, “delegation … to persons known not to be qualified”, “lack of honest endeavour”, or anything like that. In my view, the failure to refer to the existence of the pipe was not shown to be other than in good faith.

154. Finally, there is the question of LGA, s 733(1)(a). The Council’s reliance on s 733(1)(a) as a defence was rejected by the trial judge, on the basis that the reference to “advice furnished in good faith by the council relating to the likelihood of any land being flooded or the nature or extent of any such flooding” was not engaged by question 7 in the s 149 certificate, which referred to the existence of a “policy adopted by the Council … that restricts the development of the land because of the likelihood of … flooding”. As his Honour said, that answer is advice concerning the non-existence of any policy of a particular description. It is not advice “relating to the likelihood of … land being flooded”. I agree that s 733(1)(a) would not avail the Council if its answer to question 7 were incorrect. However, it would be engaged in respect of the complaint, raised by the Notice of Contention, that the Council failed to disclose under s 149(5) the likelihood nature and extent of flooding. And in that respect, for the reasons given in respect of s 149(6), the defence would succeed, as the Council did not act otherwise than in good faith.

Conclusion

155. The Council was not required to disclose the 2002 resolution in response to question 7 in the s 149 certificate, and his Honour erred in holding otherwise. Insofar as s 149(5) permitted disclosure of the existence of the pipe, the applicable standard is provided by CLA, s 43A, and it cannot be said that the omission to do so in the circumstances was so unreasonable that no council could have considered it reasonable. Further, it was not omitted other than in good faith. Liability of the Council in negligence was not established. This does not affect its liability in nuisance.

The Liability of Mr Della Franca – the Answers to Requisitions

156. The primary judge concluded that:

1. Mr Della Franca’s answers to the following requisitions were misleading:

1. requisition 6(a), as the Council’s rights in respect of the pipe were tantamount to an easement;

2. requisition 7, as Mr Della Franca had been informed by letter of 14 June 2002 of the resolution passed three days earlier which contained notification that an easement over the existing drain would be resumed, and “by clear implication” that a western boundary easement would be resumed in the future;

1. requisition 8(a), as the notification of 4 February 2003 (that the Council intended to enter on the property for the purpose of carrying out maintenance and relining the drainage pipe), as well as that of 14 June 2002 (of the intention to acquire an easement) were outstanding; and

2. requisition 19, because the correct answer would have been that Mr Della Franca was aware of restrictions, both on the use of the land arising from the existing pipe, and on development of the land arising from the 2002 resolution; and

2. The misleading and erroneous answers constituted negligent breaches of Mr Della Franca’s common law duty and implied contractual obligation as vendor to exercise reasonable care that his answers should be accurate.

157. It was not in issue at first instance, nor before us, that a vendor owes a common law duty to a purchaser to exercise reasonable care to answer requisitions on title accurately. ^[26]

     26. Votraint No 1088 Pty Ltd v Commonwealth [2005] NSWCA 249 at [13]-[19] (Mason P; Giles JA and Campbell AJA agreeing); Bebonis v Angelos (2003) 56 NSWLR 127 at 140 [80]-[81] (Handley JA; Beazley JA and Heydon JA agreeing); [2003] NSWCA 13, citing Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556; [1968] HCA 74 and Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560; 1 All ER 865.

Requisition 6(a)

158. As has been mentioned, the negative answer to requisition 6(a) was found to be misleading on the basis that, although there was no easement granted and no instrument that was capable of being registered but presently unregistered, the Council’s ownership of the pipe that ran through the centre of the property, coupled with its rights under LGA, s 59A(2), to operate, repair, replace and maintain it, were “tantamount” to an easement. ^[27] Thus, the simple answer “no” was said to be misleading. ^[28]

     27. Primary judgment at 412 [338].

     28. Primary judgment at 412 [338].

159. The fact remains that, although there are similarities between the Council’s rights to the pipes and an easement, it was not an easement. The answer was literally correct. Moreover, the requisitions were in a form authorised by and annexed to the contract: Special Condition 10 provided as follows:

“10. The Purchaser acknowledges that the only form of general requisitions on title that the Purchaser shall be entitled to raise pursuant to Clause 5 shall be in the form of Requisitions on Title annexed and are deemed to be served at the date of this Contract.”

160. The requisitions must be construed in the context of the contract as a whole, and in particular clause 10.1.2, which provides as follows:

“10.1    The purchaser cannot make a claim or requisition or rescind or terminate in respect of –

…

10.1.2    a service for the property being a joint service or passing through another property, or any service for another property passing through the property (‘service’ includes air, communication, drainage, electricity, garbage, gas, oil, radio, sewerage, telephone, television or water service);”

161. The effect of clause 10.1.2 was that the purchaser could not make a requisition in respect of a drainage service passing through the property. Requisition 6(a), construed in the context of clause 10.1.2, should not be read as referring to or encompassing a service in respect of which a requisition was precluded. The pipe was such a service. It was not encompassed by the requisition in question, and it follows that the answer was not misleading by failing to refer to it.

Requisition 7

162. The negative answer to requisition 7 was held to be false because Mr Della Franca had been informed by letter of 14 June 2002 of the Council’s 2002 resolution. The trial judge considered that even if Mr Della Franca thought that the resolution had been abandoned or lapsed, the correct answer would still have been in the affirmative. ^[29] However, for reasons already given, the 2002 resolution did not remain operative. The Council had abandoned its intention to resume an easement. The requisition did not require disclosure of a notification that was no longer operative or in effect.

     29. Primary judgment at 412-413 [341].

Requisition 8(a)

163. The negative answer to requisition 8(a) was held to be false in several respects: the notifications of 4 February 2003 were said to be outstanding; the notification on 14 June 2002 of the Council’s 2002 resolution requiring an easement was said to be outstanding; and the Council had a “claim” that it owned the pipe and was entitled to enter upon the property to perform work on it.

164. However, for the reasons already advanced, the June 2002 notification and resolution were not outstanding; the resolution had been abandoned. The 4 February 2003 notice was, contrary to his Honour’s finding,^[30] no longer outstanding: the General Manager’s letter of 5 March 2003 informed Mr Della Franca that the Council would “not … enter your property in accordance with the notice issued, and will formally notify you should it wish to proceed in this manner at some time in the future.” Thirdly, the requisition was concerned with a “notice, claim or requirement issued before contracts were exchanged” which must be complied with by the vendor, and requires that they be complied with before completion. A claim to have a right of entry onto property to perform works is not a claim of the kind comprehended by that requisition.

     30. Primary judgment at 411-412 [336].

Requisition 19

165. The answer to requisition 19 was found to be misleading because the correct answer would have been that Mr Della Franca was aware of restrictions on the use of the land arising from the existing drain, and on development of the land arising from the 2002 resolution. However, for reasons explained above, the 2002 resolution did not restrict development of the land. The existence of a pipe is not a restriction on user. In any event, the answer “purchaser should make own enquiries” was effectively a warning to the purchaser: “caveat emptor”.

Conclusion

166. For those reasons, I do not accept that a case of negligent misstatement can be sustained against Mr Della Franca on his answers to the requisitions on title.

Other matters

167. In the light of those conclusions, it is unnecessary to address:

1. Mr Della Franca’s complaint that his Honour erred in finding reliance on the answers to requisitions;

2. Both appellants’ complaints concerning the assessment of damages;

3. The question of proportionate liability; and

4. Mr Della Franca’s complaint that the trial judge erred in respect of the discretion to award interest.

168. Since judgment was reserved, Mr Della Franca has filed a motion seeking to adduce fresh evidence. Prima facie, the evidence which he seeks to adduce would have been highly relevant on the question of damages, and has become available only recently. However, as Mr Della Franca succeeds on liability, it is unnecessary to consider the question of damages any further, and the motion should be dismissed, with its costs being costs in the appeal.

Conclusion

169. The Council’s appeal should be allowed, although Ms Lorenzato should retain her judgment for damages for nuisance in the sum of $55,000 and interest. Mr Della Franca’s appeal should be allowed, and instead there should be judgment in his favour. I agree with the orders proposed by Macfarlan JA.

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Endnotes

Amendments

16 December 2021 - Formatting on Caselaw coversheet corrected.

Decision last updated: 16 December 2021