Ford Land Projects Pty Limited v DB Real Estate Australia Limited - [2004] NSWSC 1014

No judgment structure available for this case.

CITATION: Ford Land Projects Pty Limited v DB Real Estate Australia Limited [2004] NSWSC 1014

HEARING DATE(S): 5, 6, 7, 8 and 11 October 2004

JUDGMENT DATE:
2 November 2004

JURISDICTION:
Equity Division
Commercial List

JUDGMENT OF: Windeyer J at 1

DECISION: Plaintiff's claim dismissed with costs.

CATCHWORDS: CONTRACT- breach of contract - contract regarding development of land - where term of contract entitled plaintiff to fee of $3.45m upon obtaining gazettal of an amendment to the zoning of the land - term required land to be re-zoned in accordance with document entitled Amended Zoning Application or so that uses on rezoning substantially the same as allowed by the Application - time limit adhered to - whether wording of instrument ultimately gazetted allowed uses substantially the same as the uses which would have been allowed under the AZA - ESTOPPEL - estoppel in pais - representations by parties - whether alleged consent or acquiescence to draft amendment by defendant induced plaintiff to prosecute the rezoning application - whether defendant precluded from denying compliance with contractual term due to conduct alleged

LEGISLATION CITED: Environmental Planning and Assessment Act 1979
Factories, Shops and Industries Act 1962

CASES CITED: Vacik Pty Limited v Penrith City Council [1992] NSWLEC 8;
North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468
Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641
Coghlan v SH Lock (Aust) Ltd (1985) 4 NSWLR 158
Austral Standard Cables Pty Limited v Walker Nominees Pty Limited (1992) 26 NSWLR 524

PARTIES :
Ford Land Projects Pty Limited (Plaintiff)
DB Real Estate Australia Limited (formerly AXA Property Management Limited) Defendant

FILE NUMBER(S): SC 50097 of 2003

COUNSEL: Mr P McEwen SC with him Mr S Phillips (Plaintiff)
Mr M Craig QC with him Mr R Lancaster (Defendant)

SOLICITORS: Makinson and d'Apice (Plaintiff)
Mallesons Stephen Jaques (Defendant)

- 23 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

WINDEYER J

TUESDAY 2 NOVEMBER 2004

50097/03 FORD LAND PROJECTS PTY LIMITED V DB REAL ESTATE AUSTRALIA LIMITED (FORMERLY AXA AUSTRALIA PROPERTY MANAGEMENT LIMITED)

JUDGMENT

Outline

1 Ford Land Projects Pty Limited (Ford Land) claims to be entitled to $3.45 million from DB Real Estate Australia Limited (DB) because it has fulfilled the requirements of a contract between the parties entitling it to that sum or if it has not then DB is estopped from denying its entitlement.

Facts

2 DB was formerly known as AXA Australia Property Management Limited (AXA). It was and is the responsible entity for the Deutsche Diversified Trust which, so far as the evidence shows, is a managed investment scheme. Nothing really turns on this. Correspondence flowed to different entities, but I will for simplicity always refer to AXA unless there is some required distinction. Mr Weiner is and was at all relevant times, the general manager of Ford Land. Mr McFadyen was the general manager of the Deutsche Diversified Trust from June 2001 until earlier this year, and portfolio manager from August 2000 until June 2001. Mr Forbes was the asset and development manager of that Trust from September 2001 and from that date was responsible for the project the subject of these proceedings. He reported to Mr McFadyen.

3 The agreement called the Project Development Agreement (PDA) between the parties was dated 17 November 2000 and concerned a large parcel of land at Seven Hills, bordered by Powers Road and Seven Hills Road (the land) to be acquired and developed by AXA. The management agreement defined the project as:

“Project” means the development of the land as a first class business park including the construction of high-tech office/factory/warehouse premises with associated car parking and other amenities, retaining walls, earthworks, remediation related to contamination, demolition of existing structures, sewerage, drainage, water reticulation and retention, and the provision of services.

4 Ford Land was appointed manager of the project with substantial obligations and powers and was entitled to very substantial fees for its services.

5 This case concerns only that part of the agreement which relates to the obtaining of an amendment to the zoning of the land. The relevant provision of the agreement is clause 5 as follows:

5. AMENDED ZONING OBLIGATIONS

5.2 Subject to clause 5.3 AXA must pay the Manager a fee of $3,450,000.00 on the date which is 14 days after AXA has received notice in writing from the Manager that notice has been published in the Government Gazette that the Land has been rezoned in accordance with the Amended Zoning Application.

The notice to be served on AXA under this clause must attach a copy of the publication in the Government Gazette and must be served on the Manager by delivery to Hunt & Hunt, Level 15, Gateway, 1 Macquarie Place, Sydney 2000 marked to the reference of Robert Speirs.

5.3 If notice under clause 5.2 has not been published in the Government Gazette by 27 June 2003, then subject to clauses 5.4 and 5.5 the fee under clause 5.2 is not payable.

5.4 If notice of the Amended Zoning Application is not published in the Government Gazette before 27 June 2003 but the Amended Zoning Application has been approved by the Council and submitted to the Minister for approval, then despite clause 5.3 AXA agrees to pay the fee referred to in clause 5.2 unless it has after 27 June 2003 given 90 days’ notice in writing to the Manager that it will not pay the fee.

5.5 If AXA gives the 90 days’ notice referred to in Clause 5.4, it must thereafter promptly provide such assistance and representations as the Manager reasonably requires (but at the Manager’s cost) to facilitate the gazettal of the Amended Zoning Application.

5.6 If notice of the Amended Zoning Application is published in the Government Gazette before the expiration of the period of notice referred to in clause 5.4, AXA agrees to pay the fee to the Manager.

…

5.11 AXA agrees to sign all documents, and to procure that any purchaser of the Land will sign all documents reasonably required by the Manager consenting to the Amended Zoning Application

6 The definition section in clause 1 of the agreement provides:

“Amended Zoning Application”

7 Annexure 1 contains three documents, namely (1) a draft planning instrument being a draft local environment plan intended as an amendment to the Blacktown Local Environmental Plan 1988; (2) part of a document prepared by Mr Dowling, a planner employed by Scott Carver Pty Limited, Planning Consultants for the site, being that part which set out objectives for the site; (3) that part of the Blacktown Development Control Plan 1992 which related to development in industrial zones. I will later refer to these as documents 1, 2 and 3. So that the case can be understood it is convenient to set out documents (1) and (2).

Draft instrument (1)

Citation

1. This plan may be cited as Blacktown Local Environmental Plan 1988 Amendment No (#).

Aims, Objectives, etc.

This plan aims to facilitate increased employment opportunities by providing an area for modern and advanced technological development and data/administrative processing facilities that will contribute to the economic and social growth of the City of Blacktown.

Land to which this plan applies

2. This plan applies to land shown edged heavy black on the map to which this plan applies.

Relationship to other environmental planning instruments.

Amendment to Blacktown Local Environmental Plan 1988

Development of land on Lots 72 and 73, DP880066, Lot 1, DP 1013658, and Lot 102, DP 1002929, Seven Hills

46. 1. This clause applies to land shown edged heavy black and marked "Clause 46" on the map marked "Blacktown Local Environmental Plan 1988 (Amendment No.#)".

a) Research facilities, data processing / storage / transfer facilities, communication centres, call centres, administrative / processing facilities and like development.

Document 2 - Objectives

The proposed amendment to LEP 1988 is to enable a greater range of uses on the site that will provide increased employment opportunities. The concept is to establish a major business centre in a park-like environment, ensuring high quality landscaping, adequate building setbacks, high quality external finishes and the like.

· to provide an area in the Seven Hills industrial precinct for the special requirements of industry and business, particularly in the areas of advanced technology and communications, and to cater for the varying needs of employment activities;

· to enable development for the purposes of retailing such as shops and mixed businesses, and community facilities such as child care, only where it is associated with, and ancillary to principal activities carried out on the land;

· to provide for new business and office development that will facilitate the provision of increased employment opportunities, in a location highly accessible to employees, in the City of Blacktown;

· to make special provision for business using and developing advanced technology products and processes;

· to create a park-like environment emphasizing the integration of all structures and landscaped areas; and

· to ensure new development enhances the amenity of the area by including high quality landscaping, adequate building setbacks, high quality external finishes and the like.

As Australia's manufacturing sector declines and moves are made towards more high-tech, research and service type industries, the needs of landuse are changing. High-tech industry, such as computers, software, telecommunications, and biotechnology, is a rapidly expanding form of industry. To facilitate growth of this type of industry, an adequate land supply needs to be made available.

High-tech industry has its own particular landuse needs, and because of the high demand of some high-tech firms, a building often needs more structural integrity and sophistication of services than buildings of standard construction. There are high infrastructure requirements, particularly in the mechanical, electrical, and structural areas. Most standard commercial buildings do not provide adequate electrical or mechanical capacity and are therefore obsolete or require extensive and costly renovations.

The proposed development will aim to facilitate the growth of this type of industry whilst permitting a range of other compatible landuses, and provide a range of building types to permit such uses.

8 It seems likely that Blacktown Council would have supported an amendment to its LEP as proposed in the AZA. However, the Department of Urban and Administrative Planning (DUAP) had concerns about the wording. These concerns arose, at least for the most part, through fears that the proposed amended zoning would give rise to office type activities on the site, leading to a substantial increase in the working population on a large site not situated close to public transport.

9 The Environmental Planning and Assessment Act 1979 (the EPAA) prescribes the procedure for the making of a local environment plan. It is not necessary to go into this in detail. The necessary steps from the time the council determines to prepare a plan until the plan is made by the Minister, if it is made at all, mean that a considerable period of time is required for the process. It was likely that the wording in the original draft put forward to and then by the council would be amended as a result of discussions with the controlling government department and as a result of consideration by Parliamentary Counsel of the form of words for the plan as finally gazetted. The AZA followed this course resulting in the final instrument. Various drafts were put forward culminating in a document referred to as the “third redraft”. The evidence is that it was DUAP concerns which lead to the references to “call centres” and “data processing/storage/transfer facilities” being deleted, but that does not determine the result of this action.

10 The third redraft is in evidence. It is not necessary to set it all out but I set out clauses 2 and 3 as follows:

2. Notwithstanding any other provisions of this plan, a person may, with the consent of the Council, use the land to which this plan applies for a high technology industry meaning an enterprise which has as its primary function the manufacture, development, production, processing or assembly of, or research into, any of the following:

a) electronic and micro-electronic systems, goods and components;

b) information technology, computer software and hardware and the like;

c) instrumentation and instruments;

d) biological, pharmaceutical, medical or paramedical systems, goods or technology;

e) other good, systems and components intended for use in science and technology.

a) the offices are associated with but not necessarily ancillary to any other purpose on the subject land permissible under this plan; and

b) the offices have a direct relationship to a use on the subject land that is permissible under this plan.

11 The solicitors acting for AXA on the proposal were Messrs Hunt and Hunt. Mr Speirs was the partner in charge of this matter at Hunt and Hunt. This changed later when Messrs Mallesons were engaged for all the Deutsche Trust work, but it remained the general position until the end of 2001, although there was some involvement with Mallesons during 2001. BBC Consulting Planners were engaged by Mr Speirs on behalf of AXA to give planning advice. Mr Brindle of BBC provided the relevant advice.

12 Mr Weiner was concerned to obtain the approval of AXA to the proposed wording as it was negotiated over time and in particular the wording of the third redraft. He realised of course that it was different from the wording of the AZA and was concerned, if he could, to obtain the agreement of AXA that the proposed wording would entitle his company to its fee. In his position as project manager he had access to advice given to AXA about the project and in fact he contributed to that advice and arranged for some amendments to be made to draft letters which he saw before they were forwarded to AXA. Nevertheless, Hunt and Hunt and BBC were advisers to AXA and not to Ford Land. Regular project meetings were held attended by Mr Weiner and representatives of AXA including Mr McFadyen and after he was appointed, Mr Forbes. The amended zoning application was always the first item discussed at these project meetings. The approval of AXA (usually referred to as “DDF”) to the proposed wording of the amendment was stated as being required. Mr Weiner made it clear that he would not put the application in final form before Blacktown Council without that approval. He kept on a file a series of documents headed “Amended Zoning Approval Process” with headings “Activities”, “Action”, “Date”, “Complete”; one such activity being “DDF acceptance of proposed language”. All the minutes up to and including 23 April 2002 and the process statements referred to DDF approval of the wording being sought but awaited, with a cascading expected date for approval. The process statement of 24 June 2002, varied the wording. Rather than indicate “DDF approval of proposed language” the item changed to “DDF response” with a date of 26 April 2002. I will return to this but it referred to a letter from the defendant of that date, giving consent to the application being lodged with the council.

13 On 17 December 2001, Mr Speirs wrote to Mr McFadyen discussing the proposed amendment to the AZA as contained in the third redraft. His advice, which was seen by Mr Weiner, and which AXA accepted would be seen, contained the following paragraphs:

The original proposed zoning specifically allowed, among other things, data processing / storage / transfer facilities, communication centres call centres, administrative / processing facilities and the like. These uses would also be permissible under the current proposal if the uses were performed in offices, and if the offices were undertaken in association with another permissible use on the land. In other words, the current proposed zoning could be interpreted to allow, say, a call centre, if there was also a facility on the site for the manufacture, development, production, processing of or assembly of, or research into, say, information technology computer software.

clause 5.10

14 Prior to sending this letter Mr Speirs had sought advice from Mr Brindle of BBC on the recommendations he should make to AXA on the proposed wording. Mr Brindle had responded by fax of 13 December 2001. Comparing the zoning expressions used in the AZA with those in accordance with the third redraft he said:

The agreement zoning specifically allows, among other things, data processing / storage / transfer facilities, communications centres, call centres, administrative/processing facilities and the like. These uses would also be permissible under the proposed zoning if the uses were performed in offices and if the offices were undertaken in association with another permissible use on the land. In other words, the proposed zoning could be interpreted to allow a call centre (say) if there was also a facility on the site for the manufacture development, production, processing of, or assembly of or research into (say) information technology computer software.

On the other hand, a wide range of activities can take place in an office and the proposed zoning is quite flexible in this regard since offices are permissible where they are associated with and not necessarily ancillary to any other purpose on the land that is permissible under the plan.

Thus the addition of the 'office' subclause significantly broadens the range of uses permissible on the site.

15 There was of course a build up to this position with Mr Weiner and the planners having input into discussions with DUAP. Mr McFadyen did not have any contact with BBC but he knew that Mr Brindle was giving planning advice to Mr Speirs. BBC and Mr Speirs commented on the various drafts for the LEP put forward, discussing whether or not these were more restrictive than the AZA. Mr McFayden remained involved to some extent even after Mr Forbes was employed in September 2001, but in March 2002 he told Mr Weiner that he must direct any concerns he had to Mr Forbes.

16 In February 2002, Mr McFadyen sought advice from Messrs Mallesons in Victoria. He got this by letter of 26 February 2002. The advice was that the uses allowed under the third redraft were “substantially narrower” not “substantially the same” as the AZA. Mr McFadyen told Mr Weiner of this advice but not the detail of it. They met on 13 March. Mr McFadyen had the letter with him. He said he took it to show that he had a basis for concerns rather than a desire not to pay the contract fee. Mr Weiner thought that Mallesons lacked knowledge of the background and said that he would send some documents to Mr McFadyen relevant to this. He did so. Mr Forbes knew that Mr McFadyen was obtaining advice from Mallesons and he knew of the advice. While he said that he was not really concerned with the rezoning wording he did tell Mr Weiner that he did not consider the uses under the amendment the same as under the AZA. He told him this in February 2002 and again on 5 April 2002. He did not think the material put forward to Mr McFadyen changed the position.

17 Mr Wiener in his first affidavit said that in a conversation with Mr Forbes on 10 April Mr Forbes had said that there was not much doubt that the proposed third redraft wording would allow development substantially in the same way as would have been allowed under the AZA, but he would “have to run this past his solicitors” and would respond in due course. Mr Forbes denied this. As it is accepted he had over a period, expressed the contrary view to that claimed in the conversation, I think it more likely than not that he did not use the words claimed. As I will explain, however, it does not really matter.

18 Mr Forbes had been getting his own advice from Miss Sureda from the firm City Planners. He said he did this to educate himself and to understand the process of rezoning better. A lot of time in cross-examination was spent showing that a letter from City Planners of 2 April 2002 was less positive than a later letter of 19 April 2002 and that Mr Forbes had sought this more positive letter from City Planners. I had, and still have, some difficulty seeing the relevance of this and in the long run it seemed only to be relevant to credit. It seemed to be claimed that the desire of the defendant, through Forbes, was to progress the rezoning but avoid payment of the fee, because the rezoning in accordance with the third redraft would add value to the land. The first letter of City Planners would not have supported this view. The second may have, but otherwise it has no bearing on the issues here.

19 Mr Forbes had also been seeking advice from Mr Beatty of Messrs Mallesons in Sydney. No written advice is in evidence, but Mr Forbes said that Mr Beatty supported the Mallesons Melbourne view. Mr Forbes arranged for Mr Beatty to draft a letter to be provided to the plaintiff company. That letter is dated 26 April and was received on 29 April. It was in the following terms:

We refer to your request for our consent to the wording of the proposed amendment to the zoning of the Land, as defined in clause 1.1 of the Agreement.

· does not constitute a consent to, or approval of, the actual terms of any rezoning in any way different from the form of words in Annexure 1 to the Agreement (comprising the Amended Zoning Application, as defined in clause 1.1); and

· does not limit or otherwise affect our rights under the Agreement or at law generally.

20 Mr Weiner said that when he received this letter he rang Mr Forbes as he was concerned about it. He said that Mr Forbes had said:

Mallesons could not give us a letter of consent as this would constitute an acceptance that the fee would be payable whereas the words of the amended zoning may change before gazettal.

“I have received your letter. What does it mean?”

“We do not think that the wording of the draft LEP is in line with that in the PDA and so we cannot approve it. However, I don’t want to engage in a drawn out debate which may cause the sunset date not to be met nor do we want to approve alternative wording that may lower the bar for performance once the actual words are gazetted. It is up to you to seek the rezoning and see if you can get it approved. We have received advice from Mallesons that it is not up to us to approve it. We will review the wording that is gazetted and assess it on its merits against that included in the PDA.”

“I am satisfied that the wording of the draft LEP is satisfactory. We will proceed with lodgement of the draft LEP as is.”

21 By this time Mr Weiner had reinstated the application with the council to proceed in accordance with the proposed third redraft. He did this on 17 April. He said in cross-examination that it was his decision to do so. He said in his affidavit that he proceeded and did not withdraw the application because he was happy that the wording would entitle him to the fee; that he believed Mr Speirs and Mr Brindle had so advised, and that he knew that there was a time limit to obtain gazettal. His additional reason given in his affidavit for not withdrawing the application was the conversation that he said he had with Mr Forbes. However, it was his decision to proceed and accepting for the moment that the conversation he had with Mr Forbes was as he stated, but with the inclusion of other matters agreed to in cross-examination, namely that it was not for AXA to approve the wording and the final wording would be considered on gazettal, this by no means establishes that he would have withdrawn the application had the conversation been otherwise. I do not think that he would.

22 The draft LEP proceeded to gazettal but with some amendments from the third redraft. Gazettal took place on 7 March 2003 within the time allowed. The defendant, now under its new name, refused to pay the fee. That gave rise to these proceedings. The instrument as gazetted is as follows:

Blacktown Local Environmental Plan 1988 (Amendment No 178)
under the
Environmental Planning and Assessment Act 1979.

1. Name of plan
This plan is Blacktown Local Environmental Plan 1988 (Amendment No 178) .

2. Aims of plan

(a) to rezone Lot 2, DP 776475 from Zone No 5(a) Special Uses-Telecommunications to Zone No 4(a) General Industrial under Blacktown Local Environmental Plan 1988 , and

3. Land to which plan applies

This plan applies to land shown edged heavy black on the map marked "Blacktown Local Environmental Plan 1988 (Amendment No 178)" deposited in the office of the Council of the City of Blacktown.

4. Amendment of Blacktown Local Environmental Plan 1988

Blacktown Local Environmental Plan 1988

Schedule 1 Amendments

(Clause 4)

1] Clause 6 Interpretation

the map

Blacktown Local Environmental Plan 1988 (Amendment No 178)

[2] Clause 49
Insert after clause 48:

49. Development on Lots 72 and 73, DP 880066 Lot 1, DP 1013658, Lot 102, DP 1002929 and Lot 2, DP 776475, Powers and Station Roads, Seven Hills

(1) This clause applies to land shown edged heavy black and marked "clause 49" on the map marked "Blacktown Local Environmental Plan 1988 (Amendment No 178)".

(5) The council must not grant consent to carry out development for a purpose or purposes specified in subclause (2) or (3) unless the council has had regard to the Transport Management and Accessibility Plan.

(6) The requirements outlined in subclause (4) and (5) may be waived for applications concerning development that the council considers is of a minor nature.

Blacktown Local Environmental Plan 1988 (Amendment No 178)

As compared with the third redraft clause 49 sub-section (2) was close enough to being the same. However, sub-clause (3) was different as it required association with a purpose for which the land was being used and not association with a permissible purpose.

Pleadings

23 The plaintiff claims that in breach of contract the defendant has refused to pay the fee of $3.45 million and claims that fee. That is not necessarily how it is expressed in the contentions in the amended summons, which are, I think, inadequate as pleadings, but that is the plaintiff’s main claim. In the alternative the plaintiff claims that the defendant, by its words and actions “consented and/or acquiesced to gazettal of the amending LEP in the form in which it was ultimately gazetted and to the payment of the fee of $3,450,000 plus GST to the plaintiff”. Particulars are given of the consent and/or acquiescence said to arise out of a course of conduct between the parties, including but not limited to the correspondence between the parties leading up to the third redraft, the advices from Messrs. Hunt and Hunt and BBC and the letter of 26 April 2002. It is claimed that, to the knowledge of AXA, but for the consent and acquiescence particularised the plaintiff would not have prosecuted the rezoning application in the manner and for the purposes as ultimately gazetted and that AXA is estopped from denying that this said rezoning was otherwise than would entitle the plaintiff to its fee, it knowing that in providing its consent as claimed the defendant knew that the plaintiff relied upon it.

24 There are obvious problems with this as on any basis it could not be claimed that AXA consented to gazettal of the LEP in the form in which it was ultimately gazetted as this varied, in a number of respects, from the third redraft.

The contract claim

What is the amended zoning application?

25 The plaintiff’s argument is that for the purposes of clause 5 the AZA includes all three documents in annexure 1. For this it relies on the definition in clause 1 which I have set out. Counsel for the plaintiff said that if the defendant argues otherwise it must be on the basis that there is an ambiguity. I do not agree with that analysis. I must construe the document and arrive at its meaning in an objective manner, having regard to the words used. If the plaintiff is correct then document 3, which relates to the development control plan, would have to be considered. Its purpose is, as it says, to provide guidance for the preparation and assessment of development applications for sites zoned as industrial. It could not be gazetted. Some reliance was placed on its drainage guidelines and vehicular access and circulation provisions, but really only to indicate that these were matters which would have had to be considered in any event, irrespective of clauses 49(4), (5), and (7) of LEP 178. Once it is realised that document 3 cannot be part of the AZA the argument for inclusion of document 2 is difficult to maintain, unless the word “development” in clause 5.10 differs in some ways from “use”. The general wording of the Blacktown LEP 1988 refers to development not to use. That is because under the EPAA the definition of development means, among other things, “the use of land”. The wording as to the zones shown in Exhibit D at pages 98-117 makes this clear. The only document in Appendix 1 which could have been gazetted “exactly in accordance with” its terms was document 1. The only document to which consent could be required under clause 5.11 is and was document 1. I consider it the only relevant document for the purposes of clause 5. I should add that if I were wrong in this it would not assist the case of the plaintiff. The objectives in document 2 are not all included in document 1, nor in LEP 178.

The additional hurdle argument

26 It is convenient to consider this argument next because if it succeeds the plaintiff’s claim fails. In short, the defendants says that clauses 4, 5 and 7 of LEP 178 set up additional hurdles to obtaining development consent, thereby bringing about the situation that the land cannot be developed in substantially the same way as it could have been had the AZA been gazetted. Consideration of a Transport Management and Accessibility Plan is now mandatory: under the AZA it is not disputed that council could have required such a plan and considered such a plan, and it could have considered the water and drainage issues now mandatory under LEP 178(7) but these were matters of discretion not compulsion.

27 The whole purpose of clause 5 of the PDA was to expand the uses allowed under the land as zoned in Zone 4(a) (General Industrial Zone). The additional hurdles do not restrict the uses; they may give rise to conditions of development consent; they may cause a development application to be rejected but in themselves they do not restrict the uses. I have had some doubt about clause 49(4)(d) as the words “target modal split” mean nothing to me and would mean nothing to any ordinary reader, but as council is required only to consider the Transport Plan and is not compelled to give effect to its recommendations, this does not limit the uses. I consider the additional hurdle argument fails. It seems to me that what are described as hurdles are really within the conditions referred to in clause 5.1(d) which it was thought might be negotiated with council by Ford Land as manager.

Main breach of contract argument

28 First I should make it clear that the position of the defendant as consistently stated but never really established by evidence as being the responsible entity or a trustee for various unit holders is quite irrelevant. It was suggested in cross examination and in other evidence and in argument that the fact that the defendant was trustee or responsible entity for unit holders in some trust or managed investment scheme and that it had some special responsibility to take care of unit holders’ funds was of some significance. This has no bearing on the matter at all. Perhaps it was to justify conduct that might seem unfair: - doing the wrong (unfair) thing for the right reason. I mention it only to discard it from consideration.

29 I will deal first with the argument directed to clause 49.3 related to offices. This clause is more restrictive than in the third redraft as it requires association with a purpose for which the land is being used rather than with a purpose which is permitted under the zoning. As I understood it the defendant argued that if it were suggested that the defendant had consented to the wording in the third redraft it did not consent to the wording as finally gazetted. This all seems to me to be beside the point and in any event goes to estoppel. The AZA did not refer to offices. Something has been gained. It is difficult to see how there could be any objection to that.

30 I now deal with the uses under the AZA and those allowed under LEP 178. When I refer to letters I am referring to the lettered sub-paragraphs in clause 49(2). It is accepted that uses under “General Industrial” zoning require an element of manufacture. It is not necessary to go into the detail of this and it was not clearly explained during the hearing. It flows from clause 9(3) of Blacktown LEP 1988 which restrains council from granting consent to development not generally consistent with one or more of the objectives of the zone where the development proposed is to take place. Those objectives so far as Zone 4(a) is concerned generally relate to industrial development and uses ancillary to industry. The LEP adopts the EPA Model Provisions 1980 definition of industry which is:

“industry” means:

(a) any manufacturing process within the meaning of the Factories Shops and Industries Act 1962; or

(b) the breaking up or dismantling of any goods or any article for trade or sale or gain or as ancillary to any business; …

Factories, Shops and Industries Act 1962

Any handicraft or process in or incidental to the making, assembling, altering, repairing, renovating, preparing, ornamenting, finishing, cleaning, washing, breaking up or adaption of any goods or any articles or part of an article for trade or sale or gain or as ancillary to any business.

31 This explains why the rezoning was sought as none of the new uses envisaged had the required manufacturing element. The additional uses authorized by LEP 178 are for high technology industry as defined. Insofar as LEP 178 allows for manufacture, development, production, processing or assembly of the items listed in the sub-paragraphs to clause 49.2 of LEP 178 other than information technology in (b), and systems in (d) it does not appear to be any advance on the pre-LEP 178 allowed uses. Research into the listed matters is the extension. Research as authorized would not include historical research (which is a rather far-fetched example in my view of any intended outcome), but more relevantly for example would not include research into components or strength of building materials.

32 Data in its usual meaning is information or statistics or assumptions. Data processing means the collection, co-ordination, organisation, and probably transmission of data. Mr McEwen, by use of the definition of “automatic data processing” in the Macquarie Dictionary sought to bring data processing within (b) or (e). That definition is “the use of computers and other information handling machines to store, organise and perform calculations of large quantities of numerical data with the minimum of human intervention”. The same dictionary defines information technology as “the use of computers to produce, store and retrieve information”.

33 I have come to the conclusion that processing information would be a use substantially the same as data processing/storage/transfer facilities, but processing information technology – on counsel’s definition processing the use of computers to prepare, store and retrieve information – would not. In any event one should not stretch dictionary meanings too far. The words need to be read in a sensible way. Such a reading is against the plaintiff.

34 The position with call centres is clearer. A call centre is a centralised response point where persons engaged there respond to inquiries or requests of customers usually of a particular business. A call centre is not an enterprise processing information technology. There was some attempt to say that a call centre could be located in an office associated with some other authorised and existing use. That could not be a permissible use. The call centre office would have no connection with a permissible use. On the construction issue this is really the end of the matter. Assuming all other AZA uses were allowed four out of five does not amount to uses substantially the same.

35 Communications centres likewise do not fall within the permissible uses. Such a centre could be a telephone exchange, a centre to receive or send radio or wireless messages, or a centre receiving and sending messages and signals via satellite. Such enterprises are not for the processing of electronic systems or the processing of information technology. They are for the processing of messages sent or received by whatever means. In the same way the allowable uses do not encompass a use substantially the same as administrative/processing facilities on their own. Such a facility might be an offsite centre handling paperwork as part of a larger enterprise. It might be an office processing mortgages for a major Australian bank. It has no connection with a permissible use.

36 In considering whether the uses which are allowed are substantially the same as the uses which would have been allowed under the AZA there needs to be a permissible use substantially similar to a sought use. That means the same in substance, or perhaps following the line of cases considering the same word in connection with EPAA s96 means “essentially or materially the same or having the same essence”: Vacik Pty Limited v Penrith City Council [1992] NSWLEC 8; North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 per Mason P at 475 and Stein JA at 481. It means more than “much the same”. The fact is that under the permitted uses one cannot set up an ordinary data processing operation, nor an ordinary call centre operation nor a communications centre nor administrative/processing facilities. What can be done under LEP 178 is far more restrictive. The conditions of the contract entitling the plaintiff to the fees on rezoning have not been met. The contract claim fails.

Estoppel

37 The estoppel claim as contained in paragraph C6.1 in the amended summons could not be made out. Whatever the defendant did, it did not consent to or acquiesce in the gazettal of LEP 178 in the form gazetted. None of the matters claimed as the course of conduct showing such consent or acquiescence could do so separately or together. The matters most relied upon were the letter from Messrs Hunt and Hunt of 18 December 2001 and the advice of BBC Consulting Partners of 19 November 2001. Neither supported the plaintiff’s claim. The activity statements are clearly against the claim. The letter of 26 April 2002, although relied upon by the plaintiff, puts the matter beyond doubt. In fact it made everything that went before it irrelevant.

38 The next claim is that but for the consent claimed to have arisen under the particularized matters - which I have just held do not amount to consent or acquiescence - the plaintiff would not have prosecuted the rezoning application. The fact is that it did prosecute the rezoning in the face of the documents claimed to give rise to consent which could not do so. There is no knowing what would have been the position had the application for a rezoning been withdrawn and again recast. What is quite clear is that the AZA would not have been gazetted in the face of DUAP and subsequently Planning NSW opposition.

39 The real but unpleaded claim of the plaintiff is that AXA had the advice of Mallesons which it did not disclose and that in allowing Mr Weiner to proceed in ignorance of that advice, and in reliance on his claimed conversation with Mr Forbes, it should be estopped from denying that the uses allowed fulfilled the requirements entitling the plaintiff to the fee. The claim was argued on the basis of an estoppel in pais namely that the defendant is precluded from denying compliance with clause 5.10 because by the conduct claimed it induced the plaintiff to believe it accepted compliance and to act on that belief to its detriment. But that is really because it is said AXA was happy for the matter to go forward because gazettal in accordance with the third redraft would add value to the land.

40 The undisputed fact is that Mr Weiner was aware that Mallesons had advised that the third redraft had not fulfilled the zoning requirements, albeit that he was not shown the letter that gave that advice. It is also undisputed that he was aware that Mr Forbes did not think that the third redraft was sufficient and he knew that the defendant had not approved the form of words. He thought that they were sufficient and he took the risk. In fact he said so and he had reactivated the application for rezoning before he received the letter dated 26 April. Silence after 29 April did not justify his proceeding on the basis consent was given. No statement of Mr Forbes, even in the terms alleged by him could justify his assuming that to be the position in light of the clear wording of the letter dated 26 April. The fact that the claimed vital conversation was not particularised in the amended summons nor in other particulars given suggest that I should not accept the evidence of Mr Weiner as to the precise words of the conversation and that I should accept Mr Forbes. Mr Weiner was in the habit of making detailed notes of important matters. Acceptance of the wording was vital to him. He made no notes of this. The June process statement is against him with its wording and response date. While Mr Forbes was not an altogether convincing witness I accept him on this matter. But, even if Mr Weiner’s version were correct the words are not so clear a representation as to found an estoppel. I am satisfied that Mr Weiner did not assume the position to be that consent was given. It is far more likely that he realised that he had received all he could get from DUAP and relied upon its being sufficient. While the argument of Senior Counsel for the plaintiff seemed directed to estoppel by representation of fact, that is estoppel in pais, I should state that, if there were an argument based on conventional estoppel, it must fail. Mr Weiner was satisfied the wording would bring in his fee. AXA was not so satisfied. It did not conduct itself on the basis of the plaintiff’s understanding; neither could Mr Weiner have reasonably thought the defendant was conducting itself on the basis that if the wording was gazetted it would pay the fee. In other words first there was no adopting of an assumption, and second if there were AXA had no part in its adoption. Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641 at 676; Coghlan v SH Lock (Aust) Ltd (1985) 4 NSWLR 158 at 167. The wording of the letter of 26 April was so clear that a nebulous statement of Mr Forbes could not found some other assumed basis of conduct.

41 I should record that I have given careful attention to the decision in Austral Standard Cables Pty Limited v Walker Nominees Pty Limited (1992) 26 NSWLR 524 because Mr McEwen SC placed much reliance on it. That was a case of estoppel by representation. The purchaser, under notice to complete a contract by a certain date made of the essence, told the vendor it would not be ready to complete on that date. The vendor chose to keep the contract on foot, but relying on the representation, did not do everything necessary to enable it to give vacant possession on the date fixed by the notice for completion. It was held that the purchaser was estopped from relying on the vendor’s inability to complete on the date fixed, the purchaser having represented it would not settle on that date and the vendor having relied on the representation. No conduct of that sort took place here. AXA always made it clear it would be bound by the contract which would determine the right to payment. As I have said, even if the conversation with Mr Forbes took place in terms claimed by Mr Weiner that was not an acknowledgement that AXA accepted payment would be due if the third redraft were gazetted (which it was not). The estoppel claim fails.

42 It follows that the plaintiff’s claim must be dismissed with costs.

**********

I certify that this and the preceding 25 pages are a true copy of the reasons for Judgment herein of The Honourable Mr Justice Windeyer.

…………………………………
Associate

Date………………………..

Last Modified: 11/10/2004

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Citations

Ford Land Projects Pty Limited v DB Real Estate Australia Limited [2004] NSWSC 1014

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CITATION:	Ford Land Projects Pty Limited v DB Real Estate Australia Limited [2004] NSWSC 1014
HEARING DATE(S):	5, 6, 7, 8 and 11 October 2004
JUDGMENT DATE:	2 November 2004
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Windeyer J at 1
DECISION:	Plaintiff's claim dismissed with costs.
CATCHWORDS:	CONTRACT- breach of contract - contract regarding development of land - where term of contract entitled plaintiff to fee of $3.45m upon obtaining gazettal of an amendment to the zoning of the land - term required land to be re-zoned in accordance with document entitled Amended Zoning Application or so that uses on rezoning substantially the same as allowed by the Application - time limit adhered to - whether wording of instrument ultimately gazetted allowed uses substantially the same as the uses which would have been allowed under the AZA - ESTOPPEL - estoppel in pais - representations by parties - whether alleged consent or acquiescence to draft amendment by defendant induced plaintiff to prosecute the rezoning application - whether defendant precluded from denying compliance with contractual term due to conduct alleged
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 Factories, Shops and Industries Act 1962
CASES CITED:	Vacik Pty Limited v Penrith City Council [1992] NSWLEC 8; North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468 Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641 Coghlan v SH Lock (Aust) Ltd (1985) 4 NSWLR 158 Austral Standard Cables Pty Limited v Walker Nominees Pty Limited (1992) 26 NSWLR 524
PARTIES :	Ford Land Projects Pty Limited (Plaintiff) DB Real Estate Australia Limited (formerly AXA Property Management Limited) Defendant
FILE NUMBER(S):	SC 50097 of 2003
COUNSEL:	Mr P McEwen SC with him Mr S Phillips (Plaintiff) Mr M Craig QC with him Mr R Lancaster (Defendant)
SOLICITORS:	Makinson and d'Apice (Plaintiff) Mallesons Stephen Jaques (Defendant)