Gugiatti v City of Stirling
[2000] WASC 162
•22 JUNE 2000
GUGIATTI -v- CITY OF STIRLING [2000] WASC 162
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 162 | |
| Case No: | CIV:1405/1997 | 19 & 20 APRIL, 4 MAY 2000 | |
| Coram: | COMMISSIONER PRINGLE QC | 22/06/00 | |
| 22 | Judgment Part: | 1 of 1 | |
| Result: | The plaintiff fails to prove negligence and causation on trial of issues as to liability | ||
| PDF Version |
| Parties: | ALFRED ANTONIO GUGIATTI CITY OF STIRLING |
Catchwords: | Local authority Invalid building and development approvals Whether local authority negligent Approvals enjoyed for many years Additional unlawful activity commenced Prosecution Whether causal connection between grant of invalid approvals and loss Whether claim statute-barred |
Legislation: | City of Stirling District Planning Scheme No 1 (gazetted 17 October 1974) Limitation Act 1935, s 38(1)(c)(vii) Metropolitan Region Scheme Metropolitan Region Scheme Act 1959, s 32 Perth Road Board By-Laws (gazetted 1 April 1932) Perth Road Board By-Laws (gazetted 3 May 1955) Perth Road Board Constitution, By-Laws and Regulations (gazetted 29 June 1960) Road Districts Act 1919, s 197 |
Case References: | Abalos v Australian Postal Commission (1990) 171 CLR 167 Christopoulos v Angelos (1996) 41 NSWLR 700 Dorset Yacht Co v Home Office [1970] AC 1004 GJ Knight Holdings Pty Ltd v Warringah Shire Council [1975] 2 NSWLR 796 Hawkins v Clayton (1988) 164 CLR 539 Hull v Canterbury Municipal Council [1974] 1 NSWLR 300 Karedis Enterprises Pty Ltd & Anor v Antoniou (1995) 59 FCR 35 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 Ministry of Housing & Local Government v Sharp [1970] 2 QB 223 Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700 Re Mallows (1926) 29 WALR 62 Registrar-General v Cleaver (1996) 41 NSWLR 713 Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225 South Australia v Johnson (1982) 42 ALR 161 Sykes v Reserve Bank of Australia (1998) 158 ALR 710 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Warringah Shire Council v Arthur H Gillott [1971] 1 NSWLR 525 West Australian Trustee, Executor & Agency Co Ltd & Anor v Perth Road Board (1929) 31 WALR 91 Wyong Shire Council v Shirt (1980) 146 CLR 40 Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378 Armidale City Council v Alec Finlayson Pty Ltd (1999) 104 LGERA 9 Avenhouse v Hornsby Shire Council (1995) Aust Torts Reports 81-351 Coldman & Anor v Hamilton City Council & Ors (1973) 5 NZTPA 84 Dunlop v Woollahra Municipal Council [1982] AC 158 Enoka v Shire of Northampton (1996) 15 WAR 483 Kiriri Cotton Co Ltd v Dewani [1960] AC 192 Legione v Hateley (1983) 152 CLR 406 Lidcombe Developments Pty Ltd v Warringah Shire Council (1980) 41 LGRA 420 Milson Gardens Pty Ltd v North Sydney Municipal Council (1963) 9 LGRA 308 Murcia Holdings Pty Ltd v City of Nedlands [1999] WASC 241 Northern Territory v Mengel (1995) 185 CLR 307 Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431 Tynan v Meharg (1998) 101 LGERA 255 University of Western Australia v City of Subiaco (1980) 52 LGRA 360 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
CITY OF STIRLING
Defendant
Catchwords:
Local authority - Invalid building and development approvals - Whether local authority negligent - Approvals enjoyed for many years - Additional unlawful activity commenced - Prosecution - Whether causal connection between grant of invalid approvals and loss - Whether claim statute-barred
Legislation:
City of Stirling District Planning Scheme No 1 (gazetted 17 October 1974)
Limitation Act 1935, s 38(1)(c)(vii)
Metropolitan Region Scheme
Metropolitan Region Scheme Act 1959, s 32
Perth Road Board By-Laws (gazetted 1 April 1932)
Perth Road Board By-Laws (gazetted 3 May 1955)
(Page 2)
Perth Road Board Constitution, By-Laws and Regulations (gazetted 29 June 1960)
Road Districts Act 1919, s 197
Result:
The plaintiff fails to prove negligence and causation on trial of issues as to liability
Representation:
Counsel:
Plaintiff : Mr C B Edmonds & Mr R E Sandover
Defendant : Mr J C W Skinner
Solicitors:
Plaintiff : Jackson McDonald
Defendant : Corrs Chambers Westgarth
Case(s) referred to in judgment(s):
Abalos v Australian Postal Commission (1990) 171 CLR 167
Christopoulos v Angelos (1996) 41 NSWLR 700
Dorset Yacht Co v Home Office [1970] AC 1004
GJ Knight Holdings Pty Ltd v Warringah Shire Council [1975] 2 NSWLR 796
Hawkins v Clayton (1988) 164 CLR 539
Hull v Canterbury Municipal Council [1974] 1 NSWLR 300
Karedis Enterprises Pty Ltd & Anor v Antoniou (1995) 59 FCR 35
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Ministry of Housing & Local Government v Sharp [1970] 2 QB 223
Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700
Re Mallows (1926) 29 WALR 62
Registrar-General v Cleaver (1996) 41 NSWLR 713
Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225
South Australia v Johnson (1982) 42 ALR 161
Sykes v Reserve Bank of Australia (1998) 158 ALR 710
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514
Warringah Shire Council v Arthur H Gillott [1971] 1 NSWLR 525
(Page 3)
West Australian Trustee, Executor & Agency Co Ltd & Anor v Perth Road Board (1929) 31 WALR 91
Wyong Shire Council v Shirt (1980) 146 CLR 40
Case(s) also cited:
Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378
Armidale City Council v Alec Finlayson Pty Ltd (1999) 104 LGERA 9
Avenhouse v Hornsby Shire Council (1995) Aust Torts Reports 81-351
Coldman & Anor v Hamilton City Council & Ors (1973) 5 NZTPA 84
Dunlop v Woollahra Municipal Council [1982] AC 158
Enoka v Shire of Northampton (1996) 15 WAR 483
Kiriri Cotton Co Ltd v Dewani [1960] AC 192
Legione v Hateley (1983) 152 CLR 406
Lidcombe Developments Pty Ltd v Warringah Shire Council (1980) 41 LGRA 420
Milson Gardens Pty Ltd v North Sydney Municipal Council (1963) 9 LGRA 308
Murcia Holdings Pty Ltd v City of Nedlands [1999] WASC 241
Northern Territory v Mengel (1995) 185 CLR 307
Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431
Tynan v Meharg (1998) 101 LGERA 255
University of Western Australia v City of Subiaco (1980) 52 LGRA 360
(Page 4)
1 COMMISSIONER PRINGLE QC: This is the trial of issues as to liability in an action by the plaintiff, the owner of property in Gwelup, against the defendant, a local authority, in whose area the property is located, for damages allegedly suffered by reason of the negligent granting of building and planning approvals in respect of the property and the plaintiff’s reliance on implied representations arising from the granting of the approvals in 1958 and 1976.
2 The evidence in the case consisted of a statement of agreed facts, proofs of evidence tendered as evidence-in-chief (or part thereof) of witnesses, the transcript of their oral evidence and documentary exhibits. There is also a statement of agreed issues, which does not refer to damages. However, the plaintiff's counsel accepted (T156) that as damage is an essential element of the tort of negligence, the plaintiff must prove that he suffered some damage by reason of the alleged negligence.
3 The defendant pleaded inter alia that the claim was statute-barred under the Limitation Act 1935 or, alternatively, that at the date of issue of the writ of summons the plaintiff's cause of action had not accrued. I granted an order consolidating action CIV 1440 of 2000 (in which only the writ claiming the same damages has been filed and served) with this action in order to avoid any risk that the effort and expense of this hearing might be wasted.
4 The plaintiff is 64 years of age. He has been a qualified automotive mechanic since 1956. His father was the owner of the land Lot 29 on Plan 3318 now known as 74 Porter Street, Gwelup ("the land"). The plaintiff's father said that whichever of his two sons (who were mechanics) agreed to build a service station and automotive workshop on the land could have the land but would have to pay half its value to the other. The plaintiff agreed to build those structures on the land and became the registered proprietor of the land on 21 October 1958. He made payment to his brother in 1961.
5 At that time the defendant was the Perth Road Board. On 1 July 1961 the defendant, in common with all other road boards in Western Australia, became a shire council, in its case under the name Shire of Perth. On 30 October 1970 it was duly declared by notice in the Government Gazette to be a city under its present name.
6 After completing his apprenticeship in 1956 the plaintiff worked for various employers until he erected an automotive workshop on the land
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- and commenced business on his own account in about February 1959. He conducted that business on the land until 31 December 1999.
7 From 3 May 1955 the land was subject to the Perth Road Board By-Laws ("the 1955 by-laws"). It was also subject to the Road Districts Act 1919-1954 and the building by-laws in the second schedule thereto and to the Perth Road Board Building By-Laws. That the defendant knew or should have known that statutory regime is an agreed fact.
8 When in 1957 the plaintiff sought approval for the erection of a service station on the land, it was zoned residential, and use of the land as a service station was prohibited. A person using the land for that purpose was liable to be convicted and fined for an offence against the 1955 by-laws. Those by-laws also provided, in effect, that a service station could not be established within half a mile of an existing service station. It was under the latter provision that the plaintiff's application was refused. He was informed that his application was refused because there were two existing service stations within half a mile of the land.
9 In 1958 the land was zoned residential under the 1955 by-laws, use of the land for an automotive workshop was prohibited and anyone who used the land for that purpose was liable to be fined.
10 In 1958 the plaintiff applied to the defendant for a building licence to construct a steel and timber workshop on the land. He submitted a plan which included the words "automotive workshop" in capital letters. The proposed workshop complied with the building by-laws. It was approved by the defendant. The application was accompanied by a specification. The workshop was erected around August and September 1958 in accordance with the plan and specification. It is an agreed fact that the defendant knew or ought to have known that the plaintiff would rely on the approval to construct the workshop.
11 On 29 June 1960 the 1955 by-laws were replaced by other by-laws ("the 1960 by-laws") relevantly to the same effect.
12 The Metropolitan Region Scheme Act 1959 provided in s 32 for the making of the Metropolitan Region Scheme, which was published in the Government Gazette on 9 August 1963.
13 In May 1962 the defendant approved the installation on the land of an industrial fuel pump and tank for private use. By an undated letter sent to the defendant in or about May 1965 the plaintiff said that he had operated a garage-workshop on the land for a number of years and
(Page 6)
- requested permission to install two petrol pumps on the land for the sale of petrol by retail. The application was refused and the plaintiff was notified by letter dated 9 August 1965.
14 By letter dated 22 September 1965 Mr H E Graham MLA informed the plaintiff that generally new service stations should be associated with shopping centres, but that the plaintiff's workshop was a non-conforming activity which had grown from what was basically a business to repair rural machinery. (The concept of non-conforming use is an important aspect of this case which will be elaborated presently, as will the point that there never was a lawful beginning to any workshop use on the land, such use having been prohibited from at least as long ago as April 1932).
15 On 17 October 1974 the 1960 by-laws were replaced by the City of Stirling District Planning Scheme No 1 ("the scheme"). In the scheme the land was zoned rural and use of land in the rural zone as a "motor repair station" or "fuel depot" was not permitted. The scheme provided for continuance of non-conforming uses. It is an agreed fact that in 1976 the defendant had actual knowledge of those provisions.
16 On 17 March 1976 the plaintiff wrote to the defendant saying that he had been operating a bulk and drum Ampol fuel depot behind the workshop on the land for many years and that in front was the workshop the defendant had approved in 1958. He asked for permission (giving reasons) to establish three 10,000 gallon underground storage tanks.
17 On 3 August 1976 the plaintiff submitted an application for approval to commence development together with a plan to establish tanks for motor spirit and distillate underground on the land. On 14 September 1976 the defendant approved the application, on terms which will be discussed presently, except that I mention at this point that the development had to be completed within a year. It is an agreed fact that the defendant knew or ought to have known that the plaintiff might rely on the approval to carry out the approved development.
18 The underground tanks and fuel pumps were installed within a year of the approval. By letters dated 13 October 1977 and 15 November 1977 the defendant contended that the conditions (in particular as to landscaping) for the development had not been complied with, but it did not purport to revoke the approval.
19 On about 19 April 1991, (it seems actually on 13 March 1991) the defendant commenced a prosecution of the plaintiff in the Court of Petty Sessions, on a charge of using the land for a purpose not permitted under
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- Stirling District Planning Scheme No 2, contrary to s 10(4)(a)(i) of the Town Planning & Development Act 1928. The plaintiff engaged a solicitor and counsel to defend him at his trial in June 1991. They rendered accounts in July 1991 which the plaintiff paid. On 12 July 1991 the plaintiff was convicted. It was found that at all relevant times the land had been zoned either residential or rural and that none of the commercial purposes for which he had used the land had been permitted uses.
20 By letter dated 23 May 1994 the defendant notified the plaintiff that its council had resolved that the plaintiff had to cease using the land as an automotive repair workshop and fuel depot by 31 August 1994, failing which it would commence legal action.
21 By letter dated 18 December 1996 the defendant notified the plaintiff that it had been advised by a Queen's Counsel that no non-conforming use subsisted in relation to the land, and that it required the plaintiff to relocate his business by 1 January 2000. On 31 December 1999 the plaintiff ceased all business activities on the land.
22 The foregoing is largely based on the agreed facts. I shall now address the other evidence and the factual and legal issues in the case.
23 The statement of agreed issues lists 26 issues. I shall approach the case on the basis of broader issues, but bearing that list of issues in mind.
24 The plaintiff's pleaded case is that he relied on the approval of the application for the building licence as an implied representation that it would be lawful for him to use the workshop as such when he had erected it. That is denied by the defendant, which also pleads that it was unreasonable for the plaintiff to rely on approval of a building licence as authorising the use of the land for the conduct of a workshop business and further, that the refusal of his application in 1957 brought or should have brought to his attention the effect of the 1955 by-laws.
25 In his statement, ex "3", the plaintiff explained that he was advised either by a parliamentarian or councillor to apply for permission to build a workshop, as I understand the evidence, on the basis that propinquity of a workshop to a service station would not be an obstacle to success of such an application. He made the application I have mentioned above. After the application had been granted the plaintiff was asked to sign a document containing conditions of the approval.
26 The plaintiff gave evidence to the effect that until around 1948 the land had been used for market gardening and that there had been a shed
(Page 8)
- on the land used in connection with that activity. He said the shed had been there for 70 years. In 1958 it seems that there was a house on the land occupied by the plaintiff's brother, who did repair work on his friends' vehicles for reward. He did not deal with the public.
27 Whatever the reasons for granting the application were (and I will come to that matter), I accept the plaintiff's evidence that he believed that he was entitled to use the workshop for his business and that his belief was based on the fact that he received a building licence from the defendant. He also said that an inspector from the defendant called during construction of the workshop. I consider his belief to have been reasonable.
28 The defendant must have known that the plan and specifications related to a building designed for use as a workshop. Agreed fact number 21 is to the effect that the defendant knew or ought to have known that the plaintiff would rely on the approval to erect the workshop. In my opinion, it was reasonably foreseeable that the issue of the building licence would probably be understood by the plaintiff to imply that there was no legal impediment to his use of the workshop for business purposes.
29 For reasons which will be discussed presently, I think that it is likely that the defendant granted the plaintiff's application on the footing that there existed a lawful non-conforming use of the land for repair of vehicles. That hypothesis is much more persuasive than the alternative that the defendant expected the plaintiff to construct the workshop and then to apply for rezoning of the land, and would not use the workshop unless and until rezoning of the land to allow a workshop business to be conducted on the land had occurred. Moreover, one of the tasks of Mr Knott, the Shire Engineer, was to check whether uses of land pursuant to applications for building licences were permitted. I would add that the plaintiff's counsel (rightly in my view) disavowed any suggestion that the defendant deliberately flouted the 1955 by-laws.
30 The plaintiff gave evidence to the effect that he had been informed by the defendant in 1958 that the zoning of the land was such that it was unlawful for it to be used for conducting a workshop business on it. He would have established a workshop at some other location where the operation of such a business would have been lawful. I accept that evidence. Indeed, the evidence implies that had the plaintiff been told that the land could not be used for that purpose, his application for a building
(Page 9)
- licence would have been rejected and that he would perforce have had to go elsewhere.
31 Mr Hewison and Mr McCallum were called to give evidence on behalf of the defendant. Both were in the employ of the defendant in 1958. Their evidence revealed that a Mr Knott was the Shire Engineer in 1958, that it was Mr Knott's duty to determine, in relation to applications for building licences, whether or not the use of a proposed building was a permitted use and that Mr Knott passed away in about 1997.
32 Mr Hewison said that in 1958 the defendant's engineering department consisted of Mr Knott, Mr Jenkins, the assistant engineer, Mr McCallum, a qualified engineer who dealt with applications for building licences, and himself, and that until 1966 the engineering department dealt with both engineering and planning matters. Mr Hewison's job was in the area of zoning and planning matters. He did not assess applications for building licences but was familiar with the procedures. Mr Hewison also stated that a separate procedure for dealing with applications for development approvals did not exist. All applications involving construction of buildings were dealt with by way of applications for building licences, which applications were submitted over the counter at the defendant's offices, sometimes after a discussion between the applicant and staff at the counter. Mr Hewison also said that it was the defendant's practice around 1958 to refuse applications (for building licences) for buildings to be erected for prohibited uses. He said he could not recall whether Mr Knott or the council made the final decision on applications for building licences.
33 With respect to the third condition of approval of the plaintiff's application for a building licence, Mr Hewison said that the Chief Inspector of Shops and Factories was a state government official and that the condition implied that the workshop was intended to be used for commercial purposes. I draw the same inference. Moreover, the workshop was very large.
34 Mr McCallum confirmed that his task around 1958 was to assess whether drawings and specifications complied in a structural sense with building by-laws. He made recommendations to the Shire Engineer and said that it was not part of his role to assess whether the use of a proposed building would be prohibited or not. Mr Hewison and Mr McCallum were satisfactory witnesses whose evidence I accept.
(Page 10)
35 While here the action is not against a deceased estate (cf Re Mallows (1926) 29 WALR 62, 63) it seems to me that the fact that Mr Knott cannot now be called as a witness to deal with the allegations of negligence, which only he could have responded to fully, and the delay in commencing the action are matters which should be borne in mind in deciding whether or not Mr Knott was negligent.
36 There is some support for the defendant's submissions that it could not have refused the application for a building licence as the proposed workshop conformed to the building by-laws; (West Australian Trustee, Executor & Agency Co Ltd & Anor v Perth Road Board (1929) 31 WALR 91) and that it was possible for a building approval to be granted but for approval for use of the workshop to be refused later (cf Warringah Shire Council v Arthur H Gillott [1971] 1 NSWLR 525, 541-3). It was also submitted, in relation to the Perth Road Board case (supra):
"The decision indicates (at p 92) that, at best, the Defendant had power to refuse the Building Licence Application if it knew or ought to have known that the proposed building was to be used for the business of an automotive workshop – not that it had no power to approve the Building Licence Application".
37 I think that the answer to these submissions lies in the facts, firstly, that the application for a building licence was very probably treated (in accordance with procedures in 1958 discussed above) as a combined application for building and development approvals; secondly, was granted on the basis that it related to a lawful non-conforming use and thirdly, that had Mr Knott been alive to the non-existence of such a use the defendant would have refused the application.
38 It has been held that where a council has given a development approval which it knew or ought to have known would cause financial loss to the applicant, in the event of it being invalid, if it is invalid the council will be liable in damages to the applicant for negligence: see Hull v Canterbury Municipal Council [1974] 1 NSWLR 300, 308-310; GJ Knight Holdings Pty Ltd v Warringah Shire Council [1975] 2 NSWLR 796, 804-5. I accept that proposition subject to the qualification that where, as here, the planning decision depends on factual matters outside the application, the plaintiff must prove that the defendant knew or ought to have known or found out those matters (here, the absence of a lawful non-conforming use).
(Page 11)
39 I would add that the proposition is consistent with the decision of the High Court in Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225: see, for example, approval at 235 and 251 of Ministry of Housing & Local Government v Sharp [1970] 2 QB 223 and compare the remarks of Nagle J on the same case in Hull (supra) at 308-310.
40 In the absence of any evidence from the late Mr Knott, I must do my best to infer what his explanation would have been. He must have known about the by-laws published in 1932. The land had been in private ownership for many years. There was an old shed on the property. Had he visited the property, that is what he would have seen. On the other hand, he made no enquiry of the plaintiff as to for how long the business of repairing vehicles on the land had been carried on. He did not deliberately flout the by-laws. It is a reasonable inference that he was prepared to accept on behalf of the defendant without close enquiry that there was a lawful non-conforming user of the land as a workshop. It may also be inferred that he believed that if the defendant accepted that such a use existed and issued a building licence accordingly, the defendant would not go back on its decision. The last is an important point, since if the defendant intended to adhere to its decision and did so, the plaintiff would not have been likely to suffer loss and what happened from 1958 to 1999 cannot be disentangled from the circumstances under which Mr Knott approved the application for the building licence.
41 In 1962 the plaintiff was using a truck to cart limestone and needed a fuel pump and tank to fill the truck with fuel on a regular basis. Neptune Oil Company made a successful application on the plaintiff's behalf for the installation of the fuel pump and an underground tank, which the plaintiff installed.
42 In 1964 the plaintiff took over a small business - the supplying of drums of fuel to market gardens. He obtained approval from the Explosives and Mines Department but not from the defendant, as he understood that owners of similar businesses in the vicinity had not obtained permission from the defendant for the conduct of such businesses. The plaintiff's business expanded to the point where he had a number of overhead fuel tanks as well as demountable fuel tanks on his trucks. Around 1975 the plaintiff was told by an official from the Fire Brigade that it was preferable to have his fuel tanks located underground. The plaintiff approached Ampol. He was told that Ampol was willing to bear the cost of installing the tanks underground and some fuel pumps.
(Page 12)
43 At that stage (if not before) Mr Anderson came into the picture. He was the representative of Ampol who dealt with the plaintiff. It seems that having discussed the question of underground tanks with the plaintiff, Mr Anderson spoke to the defendant's officers who complained to him about the danger of overhead fuel tanks and their unsightly appearance.
44 The plaintiff, in effect, appointed Mr Anderson to apply to the defendant for permission to locate fuel tanks underground. Mr Anderson had the carriage of the application. He wrote and the plaintiff signed correspondence. Mr Anderson was also involved in preparation of the plans and drawings.
45 Mr Anderson said he believed in 1976 that the plaintiff had a non-conforming use right in relation to the land and "believed he had obtained this view from the City of Stirling officers" during discussions preceding the making of the application. The opening salvo, as it were, was the plaintiff's letter to the defendant dated 17 March 1976 (referred to above) which contained two material passages:
"I have been operating a bulk and drum Ampol fuel depot at the rear of this site for many years and on the front of the lot is a workshop which your council approved in 1958 …….. I realise that I operate in a non-conforming site on rural land and therefore I would be prepared to enter into a legal agreement to remove these tanks in 10 years time if such a condition was required by your Council".
46 In a report dated 8 April 1976, the defendant's Chief Planning Officer referred to a precedent for approving a use in the rural area for 10 years only, and recommended approval of the plaintiff’s application subject to conditions which included the following:
"The applicant entering into a legal agreement with the City to totally clear the lot of all buildings and tanks within 10 years".
47 The defendant's council approved the defendant's application subject to conditions which included that quoted above.
48 By letter dated 6 July 1976 prepared by Mr Anderson the plaintiff requested that the condition quoted above to be amended to read:
"That the non-conforming location be reviewed in 10 years from the date hereof with a thought towards rezoning of the lot
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- or a relocation of all activities for which the site is being used at that time".
49 The defendant's council adopted a recommendation that the amended condition - condition (e) - be accepted, and the plaintiff was notified that the condition had been amended by it as asked.
50 On 9 August 1976 the Town Clerk wrote to the plaintiff "advising of the Council's initial conditions of approval" and saying that clause (e), which was omitted, was subsequently amended to read that the non-conforming location be reviewed in 10 years.
51 Form 2 (the formal approval to commence development) signed by the Town Clerk on 14 September 1976 stated that the application was granted subject to conditions approved by Council on 21 April 1976. Again the amended condition was omitted.
52 It was argued for the plaintiff that the appropriate inference is that the defendant intended to abandon the amended condition.
53 It was common cause that the approval granted in 1976 was void (T141). So the question whether it would have been effectively limited (absent rezoning and a favourable review) for 10 years only, had the approval been lawful and having regard to cl 30 and cl 31 of the Metropolitan Region Scheme, is rather beside the point. So is the question whether there was a binding "legal agreement" (cf the letter dated 17 March 1976) for the removal of all buildings and tanks if rezoning or a favourable review had not occurred within 10 years. (cf T183-184). The plaintiff's evidence was that he consented to the condition and then had it amended - or rather Ampol did. He hoped to obtain rezoning to a service station so as to avoid relocation. The point against the plaintiff is that he consented to relocating his businesses if he could not obtain rezoning and the defendant required him to move.
54 The plaintiff said (T146-148) he did apply for rezoning on several occasions without success. (At least some of the applications seem to have been for approval to commence development, as appears from the defendant's letter dated 22 December 1983). Mr Glover, Mr Johnson and Mr Gardner were neither asked nor said anything about the defendant intending to abandon the amended condition and I am not disposed to find on the evidence that it did. The defendant's letter dated 9 August 1976 seems to keep condition (e) alive. The omission from Form 2 may have been in error or explicable on the basis that there would be a review as a matter of contract.
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55 A contentious aspect was whether the plaintiff complied with a condition of the approval of 1976 as to landscaping. The defendant's argument was that the approval lapsed in 1977 when the plaintiff failed to perform the condition. Clause 30(2) of the Metropolitan Region Scheme authorised the revocation of an approval if conditions of the grant were not complied with. The defendant did not purport to revoke the approval. On the contrary, it continued to treat it as a valid approval. It did not lapse. (The authorities cited by counsel in relation to this part of the case will be found among the "cases also cited").
56 A sub-issue was whether a councillor, Mr Burkett, said to the plaintiff and Mr Anderson (as they said in evidence he did) in relation to the landscaping question that there was nothing to worry about and that he would take care of it. I do not find it necessary to say more about that peripheral issue than that my impression is that it is doubtful that Mr Burkett would have been so positive.
57 The persons who were the defendant's planning officers in 1976 were called as witnesses. Mr Glover was called on behalf of the plaintiff. He had commenced employment with the defendant in 1965. In 1966 the planning and building functions in the engineering department were split and he was promoted to the position of planning officer in the planning department. In 1976 he was the Chief Planning Officer and later that year became Director of City Planning. In his statement ex "4" he explained the procedures followed at that time and then identified the memorandum from the Chief Planning Officer to the Town Clerk dated 8 April 1976, saying it had been prepared by Mr Bruce Gardner. Mr Glover said he could not recall considering or signing the memorandum and that he would have relied on Mr Gardner as to the correctness of the statement: "The lot has a non-conforming use right as a fuel depot and workshop". He also said he saw the correspondence and other documentation up to 14 September 1976 and that the plaintiff had had to provide a second set of plans before his application was approved finally.
58 Mr Glover also gave evidence about the records kept by the defendant. Files were kept for each ward, chronologically, with the oldest documents at the bottom. However, in relation to applications for building licences, each site had its own envelope containing all the documentation. Conditions imposed were noted on the envelopes. From 1963, when the Metropolitan Region Scheme came into force, each application for approval to commence development had its own file, separate from envelopes relating to applications for building licences. Determination of planning applications was delegated to the Chief
(Page 15)
- Planning Officer but it seems that his decisions were ratified monthly. Any decisions not clear-cut were referred to and decided by Council. That included matters involving non-conforming uses. There was no register of non-conforming uses. However, if there was a discrepancy between the use applied for and the current zoning, it was up to the developer to assert and prove if necessary a non-conforming use right.
59 At T225 Mr Glover explained how the attitude to non-conforming uses hardened as approved schemes superseded by-laws during the 1960s and 1970s, and that there had not been much development in the 110 square kilometres before that when:
"If somebody claimed a non-conforming use right, you know, for something not of massive significance it was usually felt that he knew more about it than we did".
60 Mr Johnson and Mr Gardner were called as witnesses by the defendant. Mr Gardner reported to Mr Johnson, who in turn reported to Mr Glover.
61 Mr Gardner read the letter dated 17 March 1976, which he said reflected the statement in the report he prepared, dated 8 April 1976, that the land had a non-conforming use right as a fuel depot and workshop. He also said that he would have discussed the defendant's application with other officers. Mr Gardner said Mr Glover and Mr Johnson probably told him that the defendant had those non-conforming use rights (T298). I do not think that a positive finding should be made that one of Mr Glover, Mr Johnson or Mr Gardner told Mr Anderson before 17 March 1976 that such rights subsisted. That proposition is inconsistent with Mr Glover's evidence (he said he relied on Mr Gardner's report, which followed the letter dated 17 March 1976), one would have expected Mr Anderson to have framed differently the letter dated 17 March 1976 if that was what he had been told and Mr Anderson expressed only a belief. Mr Johnson said both that he relied on Mr Gardner's report and that he, Mr Glover and Mr Gardner believed that the plaintiff had non-conforming use rights for reasons other than what was said in the letter dated 17 March 1976.
62 Not a great deal turns on the point since all concerned readily accepted without investigation that the plaintiff had those non-conforming use rights. In particular, Mr Gardner and Mr Johnson did not investigate the matter at all. I accept the plaintiff's submissions that had they done so they would have discovered that the approval in 1958 was invalid.
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63 Mr Johnson joined the defendant in 1967. By 1976 he had become the Senior Planning Officer. He referred the defendant's letter dated 17 March 1976 to Mr Gardner. Mr Johnson explained in evidence that the application related to an existing use. He may have discussed the question of non-conforming use with Mr Gardner. He also confirmed what Mr Glover had said about the keeping of the defendant's records, that when the files and the officers' knowledge could not establish whether a use which had been pursued for a considerable time was lawful, an assumption in favour of the applicant tended to be made. He expressed the opinion (without objection) that that was probably what happened in this case.
64 Mr Johnson also pointed out that in 1976 there was still employed by the defendant Mr McCallum who had been there in 1958, and that if there had been doubts about the defendant's rights in 1958 he would have expected them to have been challenged then.
65 On 6 December 1988 Mr Johnson wrote to the plaintiff and his wife complaining that the land was being used as an overnight trucking depot, and saying that all use of the land other than as a fuel depot and service workshop should cease. At T148 the plaintiff said that his prosecution in 1991 was triggered by trucks being parked on the land overnight, not the use of the land as a fuel depot or workshop. The charge related to the period between 1 October 1990 and the date of the charge, 13 March 1991.
66 It was not until 1991 that the defendant challenged the plaintiff's alleged non-conforming use rights. That happened as a result of an investigation by the defendant and its solicitors which revealed the existence in the Government Gazette for 1932 of by-laws which zoned the ward in which the land was situate residential and prohibited use of it as a workshop or fuel depot. That prohibition was current until those by-laws were superseded by the 1955 by-laws.
67 The plaintiff sought to overcome his problem by making further applications to the defendant. On the State Ombudsman’s recommendation in 1994, the defendant commenced rezoning procedures, to allow the uses of a workshop and fuel depot on the land. Mr Johnson said that after advertising the proposed rezoning, the defendant received 259 objections, and in March 1996 it decided not to proceed with the rezoning. I have referred above to the notice given to the plaintiff in December 1996 and to discontinuance of the use of the land for business purposes in December 1999.
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68 The defendant admits in its defence that it owed a duty of care to the plaintiff when considering the plaintiff's applications in 1958 for a building licence and in 1976 for approval to commence development, to act according to law. It denies that it was negligent or that as a result of the alleged negligence the plaintiff suffered the alleged or any loss and damage. In the alternative the defendant pleads (as I have said above) that no loss was suffered up to 31 December 1999, or further alternatively, that the plaintiff suffered loss or damage in or about 1958 and 1976, so that his claim is statute-barred.
69 The plaintiff's particulars of loss and damage are pleaded as follows in par 23 of the statement of claim:
"(a) Construction costs of the existing structures erected pursuant to the building licence approval and fuel tank approval;
(b) relocation costs for plaintiff's existing business;
(c) demolition costs for buildings and fuel structures on the land;
(d) loss of profit as a result of relocation;
(e) construction cost of replacement buildings and fuel tank structures on new premises;
(f) cost of land for replacement premises;
(g) damage to reputation and anxiety caused by prosecution in Court of Petty Sessions;
(h) legal costs in defending prosecution in Court of Petty Sessions;
(i) alternatively (excepting (b)-(f) herein) loss of the value of the plaintiff's business;
(j) damage for loss of income to the plaintiff".
70 At the commencement of the second day of the trial I raised with the plaintiff's counsel (T153-4) the points that damage is an essential element of a claim in negligence and that there is High Court authority for the proposition that a claim for loss of profits, in a case of negligent misrepresentation, must relate not to the contract into which the plaintiff
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- was induced to enter but to some other contract which the plaintiff would have entered into but for the misrepresentation, and whether by analogy what Mr Gugiatti had to prove was what his position would have been had he followed some other course rather than to erect the workshop and to construct the underground tanks on the land. (See South Australia v Johnson (1982) 42 ALR 161, 170 and compare Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, 510-513).
71 The plaintiff then gave evidence to the effect that had he been informed in 1958 that he could not carry on a workshop business on the land, he would have established such a business on other land where such a use was permitted. He also deposed to having been in a financial position to take that course. The plaintiff also said that he envisaged that when he retired he would pass the business on to a son. That evidence raises the question whether by reason of negligence on the part of the defendant the plaintiff has lost the commercial opportunity of establishing and operating businesses on land with appropriate zoning (which it may safely be assumed would have been available in the metropolitan area). Whether the value of such an opportunity would have exceeded the value of use of the land for commercial purposes actually carried on the land from 1959 to 1999 (adjusted to take into account respective costs of establishment and respective residual land values) is a matter of quantification which I am not required to address.
72 The pleaded particulars of damages are also potentially relevant to the extent that they conform to the measure of damages in tort (as opposed to damages for breach of contract).
73 I will now consider how the case should be decided.
74 Conspicuous features of this case are that until 1991 the defendant acknowledged the rights asserted by the plaintiff to conduct the businesses of operating the workshop and fuel depot on the land, and that it was only when the plaintiff used the land for parking of trucks (and perhaps stubbornly persisted in such use despite the complaints of others and demands by the defendant that such user should cease) and after prosecution of the plaintiff had started that the defendant investigated closely the background to the construction of the workshop and tanks on the land, when the invalidity of the approvals of 1958 and 1976 was revealed.
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75 In another case in which there was an order for the trial of the question of liability, Dorset Yacht Co v Home Office [1970] AC 1004, Lord Pearson said at 1052:
"The form of the order assumes the familiar analysis of the tort of negligence into its three component elements, viz, the duty of care, the breach of that duty and the resulting damage. The analysis is logically correct and often convenient for purposes of exposition, but it is only an analysis and should not eliminate consideration of the tort of negligence as a whole. It may be artificial and unhelpful to consider the question as to the existence of a duty of care in isolation from the elements of breach of duty and damage. The actual damage alleged to have been suffered by the plaintiffs may be an example of a kind or range of potential damage which was foreseeable, and if the act or omission by which the damage was caused is identifiable it may put one on the trail of a possible duty of care of which the act or omission would be a breach. In short, it may be illuminating to start with the damage and work back through the cause of it to the possible duty which may have been broken".
76 Another important principle is that in relation to the question whether there has been a breach of a duty of care, not only must the risk of harm be reasonably foreseeable (even unlikely events being reasonably foreseeable) but there must also be considered what a reasonable person would have done in the circumstances, in the light of the magnitude of the risk, the degree of probability of its occurrence and other relevant factors: see Wyong Shire Council v Shirt (1980) 146 CLR 40, 47-8 (per Mason J) and Abalos v Australian Postal Commission (1990) 171 CLR 167, 180.
77 The reasons of Mason J and Lord Pearson reflect established principles. In my opinion, they imply that, so far as breach of duty and damage are concerned, what actually happened is what must be considered. It may well have been the case that had the point of invalidity of the approvals been taken much earlier by the defendant, it would have been liable on the principle in Hull (supra) but that scenario is academic and irrelevant.
78 I find that while Mr Knott's investigation of the basis on which the plaintiff's application in 1958 might be supported was inadequate, even careless, he was not negligent. I base the finding of absence of negligence on the inferences that when Mr Knott (and the defendant) considered the plaintiff's application in 1958, they accepted that a non-conforming use
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- which they could not controvert might well have existed and decided his application on that basis, intending, moreover, to honour their decision once it had been acted on by the plaintiff. Indeed, a policy to deal with doubtful cases on that sympathetic basis seems to have existed. A reasonable person in Mr Knott's position would have considered the risk that the defendant would be guilty of a volte face to be small as in the event it turned out to be. Further, I do not think a reasonable person in Mr Knott's position would have taken precautions against the risk that what happened (as described above) in the 1990s might occur at that stage.
79 As to the application in 1976, I shall assume that one of the defendant's officers told Mr Anderson before 17 March 1976 that the plaintiff had non-conforming use rights in the land.
80 Again, what actually happened is important. The change in the manner of conducting the fuel depot business was addressed by the defendant in the belief that the existing business was lawful, which Mr Anderson's letter of 17 March 1976 would have reinforced. The decision to grant the application was initially conditional on removal of all structures within 10 years and then on a review within 10 years. Again, the risk that the defendant would take steps to prevent the operation of either business on the land within 10 years was small. Ampol bore the cost of construction of the tanks and pumps. (It would have been easy for Ampol to ascertain that sale of fuel commenced after the 1955 by-laws came into effect). In the event the plaintiff used the tanks for about 23 years and the workshop for about 41 years. Mr Johnson and Mr Gardner did not know about the by-laws published in 1932 and failed to make factual enquiries because they believed that the plaintiff had non-conforming use rights. They intended to honour those rights for at least 10 years and taking the other matters mentioned in this paragraph into account, I find that the defendant was not negligent in 1976.
81 On the facts of the case, I consider that there is an alternative impediment to a decision in favour of the plaintiff, namely, that he fails on the issue of causation. By April 1976 the plaintiff was aware that in some sense his use of the land was "non-conforming" and in that month he was put on terms as to the use of the land for business purposes. He then also became aware that rezoning would solve his problem, if it could be achieved. That implied a present deficiency or flaw in his rights relating to use of the land. True it is that he secured better terms but he failed to obtain competent legal or planning advice. He agreed to run the risk that after 10 years he might, without compensation, be required to cease all
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- business activities on the land. When that period had elapsed he started a new and apparently objectionable activity on the land, that of providing overnight parking for large trucks. He did that without obtaining advice and apparently persisted (perhaps stubbornly) in the use, despite complaints and at least one demand that he should cease providing parking for trucks. It was the use of the land for that purpose which, as he said, "triggered" the prosecution in 1991.
82 The defendant's letter dated 6 December 1991 and the State Ombudsman's letter to the defendant dated 4 August 1994 (see par 4) were included in volume 4 of the trial bundle and they were among documents to which the plaintiff did not object. The Magistrate's reasons were included in the bundle by consent. The plaintiff's evidence as to the parking of trucks having triggered the prosecution is at T148. During argument, the plaintiff's counsel accepted that the complaint was issued in relation to the parking question and debated with me (T378-9) the question of causation of the plaintiff's loss. Counsel accepted that it was at a later stage that the defendant discovered the invalidity of the approvals granted in 1958 and 1976, and submitted:
"I don’t think there’s a defence to a claim of negligence that you brought it on your own head or something like that".
83 However, Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700, 712 and Sykes v Reserve Bank of Australia (1998) 158 ALR 710, 715 demonstrate that a plaintiff's conduct can break a chain of causation and in this case in my opinion it did.
84 In relation to the question of limitation, it is plain that in a case where it is uncertain whether a loss will be suffered by the plaintiff (ie where the loss or the liability to indemnify is contingent) for limitation purposes, loss is first suffered only when loss becomes actual, or the contingent liability has been crystallised. That was decided by the High Court in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, 527-534; also see 536-7, 540, 555-7 and see Karedis Enterprises Pty Ltd & Anor v Antoniou (1995) 59 FCR 35, Christopoulos v Angelos (1996) 41 NSWLR 700 and Registrar-General v Cleaver (1996) 41 NSWLR 713, to all of which cases I was referred and which I have considered. Even where economic loss caused by misrepresentation has been suffered, time may not start running until that fact is known to or reasonably ascertainable by the plaintiff: Wardley at 527, 537, 540; Hawkins v Clayton (1988) 164 CLR 539, 561-2, 587-8, 599-602. Also see Karedis (supra), Christopoulos (supra) and Cleaver
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- (supra). As I understand these authorities, sometimes time may start running before the loss was reasonably ascertainable by the plaintiff, but it starts running no later than that, in cases where actual loss has been suffered.
85 It seems to me that the invalidity of the approvals in 1958 and 1976 was reasonably ascertainable during 1976 and 1977, that is to say, when the approval for underground tanks was sought the question of landscaping was in dispute and the need for rezoning was known to the plaintiff. There was no need for the plaintiff or his agent, Ampol, to find the by-laws of 1932. The by-laws of 1955 prohibited both uses. The business of running a fuel depot came into existence on the land in 1964. Ascertainment of the illegality of that proposed use would have been reason to investigate the legality or otherwise of the workshop business. The by-laws of 1932 were expressly referred to in and repealed by clause 31(a) of the 1955 by-laws insofar as they might have been relevant. The test is objective.
86 However, had the plaintiff's case on breach of duty and causation succeeded, I would have found against the defendant on the limitation question on another point, (which is logically anterior to that discussed in the previous paragraph). The defendant's adoption in 1994 of the State Ombudsman's recommendation that an attempt should be made to obtain the rezoning of the land to permit its use for workshop purposes and a fuel depot was accepted by the defendant, and only abandoned in 1996. Moreover, one would expect a local authority which has issued invalid planning approvals which have been acted on to rectify the position, so far as that can be done consistently with proper planning principles. Those considerations lead me to the conclusion that the situation was not plainly irretrievable on 17 April 1991, six years before the date of issue of the writ of summons.
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