Lorenzato v Burwood Council

[2020] NSWSC 1659

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Lorenzato v Burwood Council [2020] NSWSC 1659

Hearing dates:

10-21 August 2020

Date of orders:

23 November 2020

Decision date:

23 November 2020

Jurisdiction:

Common Law

Before:

Fagan J

Decision:

(1) Judgment for the plaintiff against the first defendant in the sum of $1,274,000 together with interest up to judgment in accordance with s 100 of the Civil Procedure Act 2005 and Practice Note SC Gen 16 in the amount of $726,171.06 comprising

(a)   interest of $697,324.62 on $1,219,000 from 12 August 2011 and

(b)   interest of $28,846.44 on $55,000 from 1 March 2012.

(2)   The first defendant is to pay the plaintiff’s costs of the proceedings against it.

(3) Judgment for the plaintiff against the second defendant in the sum of $1,219,000 together with interest up to judgment in accordance with s 100 of the Civil Procedure Act 2005 and Practice Note SC Gen 16 in the amount of $697,324.62 from 12 August 2011.

(4)   The second defendant is to pay the plaintiff’s costs of the proceedings against him.

(5)   The cross-claim by the second defendant against John Lukas is dismissed.

(6)   The second defendant is to pay the cross defendant’s costs of the cross-claim.

(7)   The parties have liberty to apply to resolve any issue concerning the calculation of interest and to obtain additional orders quantifying interest if necessary.

Catchwords:

CONVEYANCING – vendor and purchaser – whether council stormwater pipe under property would have given rise to a right of rescission under rule in Flight v Booth – whether the pipe so affected the subject matter that it might reasonably be supposed that the purchaser might not have contracted at all

TORTS – negligent misstatement – breach of duty by local council issuing certificate under s 149 Environmental Planning and Assessment Act – misstatement as to council policy resolution for acquisition of easements over property – purchaser’s reliance on certificate – defences under s 43A of the Civil Liability Act and s 733 of the Local Government Act

TORTS – negligent misstatement – vendor’s breach of duty in answering requisitions about existence of council stormwater pipe under property – reliance by purchaser through conveyancing solicitor – whether plaintiff would have been entitled to rescind if correct answers given

TORTS – professional negligence – whether solicitor exercised reasonable care and skill in obtaining instructions for answers to requisitions – negligence not established

TORTS – private nuisance by public authority – interference with use and enjoyment of land – property flooded by overland flows of stormwater – “good faith” – necessity to prove negligence of council – defence under s 733 Local Government Act 1993 – nuisance established – damages

VALUATION – land – value impaired by local council stormwater pipe – necessity to create an easement and relocate pipe – necessity to alter pipe connections external to the land – difficulty and uncertainty of dealing with council

Legislation Cited:

Civil Claims Act 2002 (NSW)

Conveyancing Act 1919 (NSW)

Conveyancing (Sale of Land) Regulation (2010)

Environmental Planning and Assessment Act 1979 (NSW)

Environmental Planning and Assessment Regulation 2000 (NSW)

Government Information (Public Access) Act 2009 (NSW)

Interpretation Act 1987 (NSW)

Land Acquisition (Just Terms Compensation) Act 1991 (NSW)

Local Government Act 1906 (NSW)(rep)

Local Government Act 1919 (NSW)(rep)

Local Government Act 1993 (NSW)

Municipalities Act 1867 (NSW)(rep)

Municipalities Act 1897 (NSW)(rep)

Roads Act 1993 (NSW)

Cases Cited:

Alison Cobden-Jones v Woollahra Municipal Council [2002] NSWCA 382

Allen v Gulf Oil Refining Ltd (1981) AC 1001

Bankstown City Council v Alamdo Holdings Pty Ltd [2005] HCA 46; (2005) 223 CLR 660

Batey v Gifford (1997) 42 NSWLR 710

Bonaccorso v Strathfield Municipal Council [2003] NSWSC 408

Boland v Yates Property Corp Pty Ltd [1999] HCA 64

Cobden-Jones v Woollahra Municipal Council [2002] NSWLEC 2; (2002) 118 LEGRA 41

Curtis v Harden Shire Council [2014] NSWCA 314

Derry v Peek (1889) 14 App Cas 337

Flight v Booth (1834) 1 Bing (NC) 370; (1834) 131 ER 1160

Hawthorn Corporation v Kannuluik [1906] AC 105

Gales Holdings Pty Limited v Tweed Shire Council [2013] NSWCA 382

Gartner v Kidman [1962] HCA 27; (1962) 108 CLR 12

Kannane v Demian Developments Pty Ltd [2005] NSWSC 1193

Kenny & Good Pty Ltd v MGICA [1999] HCA 25; 199 CLR 413

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

Marcic v Thames Water Utilities Ltd [2002] QB 929

Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31

Mid Density Developments Pty Ltd v Rockdale Municipal Council [1993] FCA 408; (1993) FCR 290

Owners Corporation SP 46510 v Tan [2020] NSWSC 1564

Raphael Shin Enterprises Pty Limited v Waterpoint Shepherds Bay Pty Limited [2014] NSWSC 743

Re Drake and the Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Rickard v Allianz Australia Insurance Ltd [2009] NSWSC 1115

Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373

Spencer v The Commonwealth [1907] HCA 82; (1907) 5 CLR 418

Strike Australia Pty Ltd v Data Base Corporate Pty Ltd [2019] NSWCA 205

Vale v Sutherland [2009] HCA 26

Category:

Principal judgment

Parties:

Elisa Lorenzato (plaintiff)
Burwood Council (first defendant)
Michael Della-Franca (second defendant)
John Lukas (cross-defendant)

Representation:

Counsel:
R Carey (plaintiff)
M L Wright SC with D Robertson (first defendant)
J A Trebeck (second defendant)
J Gooley (cross-defendant)

Solicitors:
Fraser Clancy (plaintiff)
Matthews Folbigg (first defendant)
Scarfone & Co (second defendant)
Mullane Lindsay (cross-defendant)

File Number(s):

2017/83223

Publication restriction:

No

Judgment

1. The plaintiff brings an action against Burwood Council for negligent misstatement in a planning certificate issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW). The certificate was issued on 9 August 2010 in respect of a property at No 13 Appian Way, Burwood. It did not disclose the existence of a 400mm diameter pipe owned by Council that had been laid beneath the property in the early 1900s. A residence had been built over the pipe in about 1911 and a pool was built over it in 1969. Those improvements remained on the land at times relevant to these proceedings. The pipe carried stormwater run-off from a 5.2ha catchment of long established residential development. The certificate did not disclose a resolution that Council had adopted in 2002 for the acquisition of an easement over the pipe and for the later establishment of a drainage easement along the property’s western boundary.

2. In March 2011 the plaintiff purchased No 13 for $3 million under a contract to which Council’s planning certificate was attached. The second defendant was the vendor. The plaintiff brings an action against him for negligent misstatement in the answers he gave to requisitions that were raised prior to completion. Those answers failed to disclose the existence of the pipe or Council’s statutory rights and claims over it or Council’s resolution for the acquisition of easements.

3. After the plaintiff moved into possession of the property it was flooded by overland flows of stormwater from Appian Way on nine occasions between 7 November 2011 and 11 October 2012. The flooding occurred when the pipe through the property became blocked, causing stormwater to back up on Appian Way and then pour down the plaintiff’s driveway. The plaintiff claims damages from Council for the nuisance constituted by the escape across her land of stormwater from the street.

4. The subject property is within the local government area administered by the first defendant (referred to herein as “Council”). The southern boundary of the property fronts onto Appian Way and is 18m wide. The block is rectangular and extends northward to a depth of approximately 86m. The land slopes downward from the street frontage to the rear boundary at the north. The fall from the front to the back of the block is approximately 5m. The stormwater pipe is of vitrified clay. It runs through the entire length of the property roughly down the centre.

5. Stormwater run-off from roofs and paved surfaces in the 5.2ha catchment accumulates in a junction pit at the kerb of Appian Way directly in front of No 13. The pit was constructed in about 2005 and the pre-existing pipe through No 13 was connected to the bottom of it. The catchment comprises all of the residential lots along the southwest side of Appian Way, being about 10 in number, and approximately five lots to the east of Appian Way. It also includes the surface of Appian Way itself; a small reserve midway along the length of the street and approximately 12 residential lots on the north side of Liverpool Road.

6. The plaintiff inspected the property before she contracted to buy it. The existence of the pipe was not ascertainable from a reasonable inspection. The plaintiff was unaware of it until Council engineers told her about it in November 2011, three months after she had completed the purchase, when the pipe blocked and caused flooding as earlier described. Council claims the right to enter the plaintiff’s land for the purpose of maintaining it.

Action against Council for negligent misstatement

7. When Council issued the planning certificate in August 2010 the relevant subsections of s 149 of the Environmental Planning and Assessment Act were in these terms:

149 Planning certificates

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

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

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

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

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

8. Council’s common law duty to exercise reasonable care to provide correct information in a planning certificate is established by L. Shaddock and Associates Pty Ltd v The Council of the City of Parramatta (No. 1) [1981] HCA 59; (1981) 150 CLR 225. In Mid Density Developments Pty Ltd v Rockdale Municipal Council [1993] FCA 408; (1993) FCR 290 the Full Court of the Federal Court described as follows the class of persons to whom a Council owes this duty:

[39]   The relevant class of persons to be considered in the present situation included potential purchasers of the property the subject of the certificate. It is sufficient if the misstatement is made to members of a limited class of persons, including the plaintiff, with the intention that those persons should rely thereon in deciding whether to commit themselves financially; see San Sebastian Pty Ltd v Minister Administering The Environmental Planning and Assessment Act 1979 [1986] HCA 68; (1986) 162 CLR 340 at 357, per Gibbs CJ, Mason, Wilson, Dawson JJ.

9. The operative pleading is the plaintiff’s third further amended statement of claim (“the statement of claim”). This was amended to its present form, by leave, on the fifth day of the hearing, 14 August 2020. In her action against Council for negligent misstatement the plaintiff alleges that in breach of its duty of care the planning certificate contained incorrect and misleading information concerning matters prescribed for the purposes of sub-ss (2) and (4) of s 149 and that it failed to include advice on relevant matters of which it was aware and that should have been disclosed pursuant to sub-s (5). The certificate was annexed to the contract of sale in accordance with s 52A of the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation (2010).

10. By a resolution of 6 December 1994 Council adopted a Code of Stormwater Management (“the 1994 Stormwater Code”). A resolution concerning acquisition of drainage easements over No 13 was passed 11 June 2002 by the Services and Policy Committee of Council (“the 2002 resolution”). It is common ground that the Committee acted under delegation and that its resolution has the same force, effect and status as a resolution of Council. The plaintiff alleges that she entered into the contract in reliance upon the s 149 certificate and upon the absence from it of any reference to the land being affected by any policy of Council that would restrict development.

11. The plaintiff says that had the certificate been prepared with reasonable care it would have informed her of the 1994 Stormwater Code and the 2002 resolution, both of which she alleges restrict development. She also alleges that the planning certificate was negligently misleading in its failure directly to disclose the existence of the pipe and the susceptibility of the land to intermittent flooding. The plaintiff asserts that had she been made aware of those matters she would not have proceeded with the purchase.

12. It is common ground between the plaintiff and Council that s 59A of the Local Government Act 1993 (NSW) applies to the pipe. That section came into force on 1 August 2002, with the exception of sub-s (3), which was inserted later and took effect from 13 May 2009. Sub-sections (1) and (2) of s 59A have been in the same terms from first enactment.

13. The section is as follows (with emphasis added):

59A Ownership of water supply, sewerage and stormwater drainage works

(1) Subject to this Division, a council is the owner of all works of water supply, sewerage and stormwater drainage installed in or on land by the council (whether or not the land is owned by the council).

(2) A council may operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other things that are necessary or appropriate to any of its works to ensure that, in the opinion of the council, the works are used in an efficient manner for the purposes for which the works were installed.

(3) The provisions of this section have effect despite anything contained in section 42 of the Real Property Act 1900.

14. In Bonaccorso v Strathfield Municipal Council [2003] NSWSC 408 at [44], Young CJ in Eq held that s 59A applies to drainage works whenever they may have been installed by a council, whether before or after commencement of the section. At [36]-[39] his Honour adopted a broad interpretation of the word “installed”. It was held that the pipes in that case had been installed by Strathfield Council within the meaning of the section. The manufacturer had supplied them and provided supervision and lifting gear; the council had supplied the labour for installation – and the cost of the work had been born as to two thirds by the council and one third by the proprietor of the land.

15. Section 191A was inserted in the Local Government Act at the same time as s 59A. Sections 191 and 191A need to be considered together. They are in the following terms, so far as presently relevant:

191 Power of entry

(1)   For the purpose of enabling a council to exercise its functions, a council employee (or other person) authorised by a council may enter any premises.

(2)   Entry may only be made at any reasonable hour in the daytime or at any hour during which business is in progress or is usually carried on at the premises.

191A Power of entry—construction and maintenance of water supply, sewerage and stormwater drainage works

(1)   Without limiting section 191, a council employee (or other person) authorised by a council may enter any premises to carry out water supply work, sewerage work or stormwater drainage work on or under the premises (being work that the council is authorised by this or any other Act to carry out).

16. A further statutory provision that has a bearing upon Council’s rights over the pipe is s 94 of the Roads Act 1993 (NSW), of which the relevant subsections are as follows:

94 Roads authority may carry out drainage work across land adjoining public road etc

(1) A roads authority may, for the purpose of draining or protecting a public road, carry out drainage work in or on any land in the vicinity of the road.

(3) The roads authority must pay compensation to the owner of the land for any loss or damage arising from the exercise of any power under this section.

Council is the roads authority for Appian Way.

17. The plaintiff and Council agree that the pipe was “installed” within the meaning of s 59A(1) by a predecessor of Council and that a continuous chain of succession of local government authority can be traced to the present Council through a series of enactments and repeals. Council is therefore to be regarded as having installed the pipe so that s 59A is engaged. The plaintiff alleges that by reason of Council’s ownership of the pipe and statutory rights over it, the property was worth very much less than the $3 million that she paid for it. The difference in value at the date of completion, 11 August 2011, is the principal component of the damages claimed by the plaintiff in her action for negligent misstatement based on the planning certificate.

18. Council does not dispute that it owed to prospective purchasers of the property, such as the plaintiff, a duty to exercise reasonable care with respect to the terms in which the certificate was issued. It denies that the matters stated in the certificate were inaccurate or misleadingly incomplete. It denies negligent breach of duty. This aspect of Council’s defence turns upon the correct construction of questions that Council was required to answer in the certificate, as prescribed by Sch 4 of the Environmental Planning and Assessment Regulation 2000 (NSW). Council also disputes that the scope of its duty of care extended to a positive obligation to disclose, pursuant to s 149(5), the existence of the pipe or Council’s rights or the risk of overland stormwater flooding of No 13. Council raises statutory defences under s 43A of the Civil Liability Act 2002 (NSW) (exercise of a “special statutory power”) and under s 733 of the Local Government Act (act or omission in good faith).

Action against second defendant for non-disclosure

19. The plaintiff has pleaded at pars 65-94 of the statement of claim alternative bases upon which she says the second defendant is liable to her in damages because the pipe running under the land and Council’s rights over the pipe constitute a defect in title to No 13. This part of the plaintiff’s pleading is difficult to follow. With the benefit of submissions from the plaintiff’s counsel my understanding of the alternative basis of claim is as follows.

Failure to convey good title – cl 16.3

20. In pars 73-77 the plaintiff relies upon cl 16.3 of the contract, which required that the vendor “cause the legal title to the property … to pass to the purchaser free of any … other interest”. She cannot recover damages upon the basis that a deficiency of title discovered after completion constituted a breach of that clause. The doctrine of merger precludes such a claim, as explained in Christopoulos v Angelos (1996) 41 NSWLR 700 at 706C-F (Powell JA) in the following terms:

In the case of a contract for the sale of land, all the provisions in the contract which the parties intend should be performed by the conveyance, or memorandum of transfer, are merged in the conveyance, or memorandum of transfer, and all the rights of the purchaser in relation thereto are thereby satisfied although if there are provisions in the contract which are collateral to the main duties of proving title, conveyance, or transfer and the like, the obligations imposed by [these stipulations are] not discharged by the performance of those main duties.

21. This principle is an insurmountable obstacle to the plaintiff’s formulation of her claim against the second defendant for damages based upon cl 16.3 of the contract and I will not consider it further.

Non-disclosure of a latent defect in title – the pipe

22. In pars 80-94 of the statement of claim it is pleaded that in failing to inform the plaintiff of the pipe and Council’s rights over it the second defendant breached an alleged general obligation owed by him, independently of the terms of the contract and independently of any requisitions being raised, to disclose defects of title. The second defendant disputes that he was obliged to make such disclosure, as matter of law, or that he could be held liable in damages after completion of the contract for any failure to disclose the alleged defect. This part of the plaintiff’s pleading also invokes cl 6 of the contract, concerning errors of misdescription and providing for compensation where such errors are complained of prior to completion. I am unable to find any support in cl 6 for the plaintiff’s innocent non-disclosure case but I will consider it in other respects under Issue 7 ([326]).

Action against second defendant for negligent misstatement

23. At pars 110-141 of the statement of claim the plaintiff alleges that the second defendant, as vendor, owed her a common law duty to exercise reasonable care in answering requisitions raised prior to completion. In the alternative the plaintiff alleges that a term of the contract of sale pursuant to which those answers were required to be given was subject to an implication of law that they would be provided with reasonable care. The answers are alleged to have been incorrect and misleading because, amongst other things, they denied the existence of any unregistered easement or of any “outstanding notification, claim or requirement of a … local authority”. The plaintiff alleges that the second defendant had been aware from late 2002 that Council claimed s 59A rights over the pipe, that those rights were in the nature of an unregistered easement and that Council had given notifications and made claims concerning exercise of its rights that were relevantly “outstanding”. The inaccuracy and incompleteness of the answers to requisitions in August 2011 is said to have been negligent having regard to the second defendant’s knowledge of Council’s claims.

24. The plaintiff alleges that she relied, through her conveyancing solicitor, upon the answers. Following receipt of them she proceeded to settlement. It is alleged that if the answers had been expressed with reasonable care they would have revealed Council’s rights over the pipe and, with that knowledge, the plaintiff would have rescinded the contract. The damages claimed against the second defendant under these alternative causes of action in tort and in contract are the same as those claimed against Council on the cause of action for negligent misstatement.

25. Some particulars of the plaintiff’s case against the second defendant depend upon it being established that Council’s actual legal rights over the pipe – not just its claims – amounted to a defect in the second defendant’s title and that this defect would have justified the plaintiff rescinding the contract if she had been aware of the true position. To succeed on those particulars, the plaintiff must prove that the pipe and Council’s rights with respect to it constituted such a fundamental difference between what the second defendant had promised to convey and what the plaintiff would in fact receive that she could not have been compelled to complete, even upon terms of substantial compensation for misdescription.

26. The second defendant disputes that his answers to requisitions were inaccurate or misleading, taking into account the precise extent of information sought in the requisitions and having regard to what the second defendant alleges was an abandonment of Council’s claims over the pipe as a result of it not having taken any action on those claims during the preceding eight years. The eight years dated from 4 February 2003, when Council gave the second defendant notice of intention to enter No 13 to repair the pipe, a notice that Council never acted upon. The second defendant also disputes that the pipe was installed by any local government authority that was a statutory predecessor of Council. He contends that the plaintiff has not proved that s 59A applies to the pipe.

Council’s proportionate liability partial defence to the plaintiff’s claim

27. The plaintiff’s actions for negligent misstatement brought against Council and against the second defendant fall within the definition of apportionable claims in s 34(1) of the Civil Claims Act 2002 (NSW), each of them being “a claim for economic loss … in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care”. It would have been open to Council to plead that, if both of these claims, as pleaded and particularised by the plaintiff, should be established, then its liability as a concurrent wrongdoer is:

limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of [Council’s] responsibility for the damage or loss (s 35 of the Civil Claims Act).

28. However, instead of pleading a proportionate liability defence in reliance upon the plaintiff’s formulation of her action against the second defendant, Council has pleaded an entirely distinct case of negligent misstatement upon which it says the second defendant is liable to the plaintiff. Council thus seeks apportionment under s 35 on the basis that the second defendant is concurrently liable on a cause of action that the plaintiff herself does not allege or adopt. It is not clear why Council has not sought apportionment in reliance on the plaintiff’s own formulation of her action against the second defendant.

Second defendant’s cross-claim against his conveyancing solicitor

29. The second defendant has joined the solicitor who acted for him on the sale of the property in 2011 as a cross-defendant. He pleads that the cross-defendant was professionally negligent in that he failed to elicit instructions about the existence of the pipe and Council’s claims over it. It is alleged that any deficiencies in the answers to requisitions resulted from that negligence and that if the second defendant is found liable to the plaintiff for negligent misstatement then the amount of any judgment against him will constitute damages caused by the cross-defendant’s negligent breach of his retainer.

30. The cross-defendant completed the answers to requisitions and delivered them to the plaintiff’s conveyancing solicitor on the afternoon before settlement. He contends that he exercised reasonable care in taking instructions and that the answers he supplied were a faithful reflection of those instructions. The cross-defendant says that he asked the second defendant questions that, having regard to the cross defendant’s knowledge of the pipe and of Council’s claims under s 59A of the Local Government Act, should have elicited instructions about those matters.

Plaintiff’s claim against Council in nuisance for stormwater flooding

31. Council disputes its liability to the plaintiff in nuisance for the repeated flooding of her land by overland flows of stormwater from Appian Way. It asserts that a cause of action can only be sustained against a public authority such as itself if the escape of accumulated stormwater onto privately owned property has occurred through negligence. Council not only disputes negligence but asserts that during the 11 month period in which intermittent flooding occurred the plaintiff refused Council access to her land to rectify the blockage in the pipe that was the cause of water backing up on Appian Way and escaping overland through No 13. Council denies that it was negligent in relation to the flooding. It also pleads in answer to the nuisance action a statutory defence of good faith under s 733 of the Local Government Act.

List of findings and issues

32. The myriad legal issues on which the parties are in dispute can only be resolved by reference to a protracted history of dealings and events, in several discrete periods. The parties disagree about the factual conclusions to be drawn from this mass of detail and about the application of the law. My factual findings will be set out in chronological sequence under the following headings:

• 1904: construction of the drain by Council’s predecessor – [34]ff

• 1989-2011: second defendant’s tenure of No 13 – [61]

• 2011: second defendant’s sale of No 13 to the plaintiff – [132]

• 2011-2014: flooding of No 13; repair of the pipe; raising of the footpath – [139]

• 2015-2017: plaintiff’s Development Application – [204]

• October 2017-July 2020: Council’s settlement negotiations – [216]

33. Whether the plaintiff is entitled to relief and determination of the cross-claim will depend upon resolution of the following issues:

Liability of Council for the s 149 certificate

1. With respect to Council’s 2002 resolution and Question 7 in the planning certificate:

1. what is the statutory context in which Question 7 formed part of the planning certificate and was required to be answered ([233]-[235]);

2. was the 2002 resolution a “policy adopted by the Council” that affected the land by restricting “the development of the land because of the likelihood of … flooding” ([236]-[265]);

3. when the certificate issued on 9 August 2010 was the resolution still operative ([266]-[276]);

4. in the circumstances as found in answer to pars (a)-(c), was the resolution a policy that should have been referred to in answer to Question 7 of the planning certificate? ([277]).

2. Is the 1994 Stormwater Code a “flood related control” to which development on the land was subject, such that it should have been referred to by Council in answer to Question 7A of the planning certificate? ([278]).

3. Was Council required, by s 149(5) in conjunction with the common law, to exercise reasonable care to disclose in the planning certificate the 2002 resolution, the 1994 Stormwater Code, the existence of the pipe and/or the nature of Council’s s 59A rights with respect to the pipe – independently of and in addition to the provision of answers to specific questions in the certificate? ([287]).

4. Insofar as the planning certificate was misleading by reason of the answer to either question 7 or question 7A or any failure to disclose information pursuant to s 149(5), did Council fail to exercise reasonable care in the issue of the certificate? ([291]).

5. Is Council able to rely upon statutory defences in s 43A of the Civil Liability Act (exercise of a “special statutory power”) or s 733 of the Local Government Act (act or omission in good faith) in answer to the plaintiff’s claim for negligent misstatement in the planning certificate? ([308]).

6. Has the plaintiff established reliance upon the planning certificate and consequent damage, to constitute a cause of action for negligent misstatement? ([320]).

Liability of the second defendant for non-disclosure or negligent misstatement

7. Can the plaintiff recover damages from the second defendant for innocent non-disclosure of the pipe prior to completion? ([326]).

8. Did the second defendant breach a common law duty of care owed to the plaintiff, or a contractual obligation of care implied by law, in answering requisitions under the contract of sale? ([330]).

9. Would the plaintiff have been entitled to rescind the contract of sale if the second defendant’s answers to requisitions had disclosed the pipe and Council’s rights with respect to it and/or Council’s 4 February 2003 notification of intent to enter the land to repair the pipe and/or Council’s 2002 resolution? ([348]).

10. Did the plaintiff rely upon the answers to requisitions, in so far as they did not disclose the pipe or Council’s rights over it and notification in respect of it, when she did not purport to assert a right of rescission and instead proceeded to complete the purchase? ([359]).

Damages for negligent misstatement by Council and/or second defendant

11. If Council and the second defendant are liable on the plaintiff’s causes of action for misstatement in the planning certificate and in the answers to requisitions respectively, what loss and damage has the plaintiff sustained? ([361]).

12. Did the plaintiff fail to mitigate her damages caused by misstatement in the planning certificate by not accepting offers made by the Council between October 2017 and June 2020? ([414]).

Apportionment between first and second defendants

13. Has Council established that that second defendant is a concurrent wrongdoer in respect of the plaintiff’s damages upon the cause of action that Council has formulated for the plaintiff against the second defendant, based upon negligent misstatement by annexure of the planning certificate to the contract and by nondisclosure – so that any judgment against Council should be limited to its proportion of responsibility for the apportionable claim? ([415]).

14. If the first defendant is entitled to have liability for the plaintiff’s damages apportioned, what is the appropriate share to be borne by each of Council and the second defendant? ([424]).

Claim against the cross-defendant for professional negligence

15. Did the cross-defendant exercise reasonable care and skill in obtaining instructions from the second defendant for the purpose of answering requisitions and in giving effect to those instructions by drafting and delivering the answers that he did? ([430]).

Liability of Council for nuisance; quantum of damages

16. Is Council liable to the plaintiff in nuisance for any instance or instances of overland flows of stormwater on to No 13 Appian Way in the period 7 November 2011 to 12 October 2012? ([439]).

17. If Council is liable to the plaintiff in nuisance, what is the quantum of the damage suffered? ([464]).

1904: construction of the drain by Council’s predecessor

34. The facts summarised in the following paragraphs are primarily relevant to Issue 8 – whether the second defendant gave incorrect answers to requisitions under his contract of sale to the plaintiff. If a statutory predecessor of Council installed the pipe under No 13, within the meaning of s 59A of the Local Government Act 1993, and if the act of installation is to be imputed to Council so that the section is engaged, then Council had rights over the land, or at least a claim of such rights, that the plaintiff alleges should have been disclosed in answer to the requisitions.

1867 and 1897 Acts: Borough of Burwood proclaimed

35. Pursuant to s 11 of the Municipalities Act 1867 (NSW) (rep) the Governor of what was then the Colony had power by proclamation to declare a new borough (in the case of a city, town, suburb of Sydney or any other populous district), or a new municipal district (in the case of a less populated area of up to 50 square miles with not less than 500 inhabitants). It is agreed between all parties in the present proceedings that the Borough of Burwood was proclaimed under the 1867 Act. Section 25 provided that the electors for the time being of every borough or municipal district proclaimed and all succeeding electors entitled to vote in accordance with the terms of the Act:

shall be a body corporate under such name as the Governor shall in such proclamation direct […].

36. The parties also agree that, so far as relevant to these proceedings, the boundaries of the Borough of Burwood have, from the date of its proclamation under the 1867 Act, encompassed what is now the local government area of Burwood under the Local Government Act 1993, including the location of Appian Way and the lots on that street including No 13.

37. The 1867 Act was repealed by the Municipalities Act 1897 (NSW)(rep). In the 1897 Act the term “municipality” was defined to include “borough” and “municipal district”. Section 4(III) of the 1897 Act provided that the present and future electors of any existing municipality, being those who were entitled to vote according to the terms of the 1897 Act, would:

be and remain a body corporate under such name as the Governor has, in the proclamation constituting such municipality, directed, and shall by such name have perpetual succession and a common seal, and be capable in law of suing and being sued, and of purchasing, holding, and alienating land, and of exercising all such corporate functions, and doing and suffering all such acts and things as by law and in conformity with this Act they may be entitled to exercise, do, and suffer.

38. Section 6 of the Municipalities Act 1897 prescribed the number of aldermen who should comprise the council of every municipality, according to the number of people living within the municipal boundaries. Other sections made provision for election of the aldermen. The authority of the council was established by s 8, as follows:

8   The council of every municipality shall, in and for all such acts, matters, and things as by law and in conformity with this Act may be done or suffered, be the sole representatives of the body corporate of such municipality, and all the acts and proceedings of such council shall be deemed to be the acts and proceedings of such body corporate.

Installation of the storm water pipe in about 1904

39. By 1903 Burwood Road had been constructed, running approximately north-south and intersecting with Liverpool Road running approximately east-west. George John Hoskins was the registered proprietor of more than 19 acres of land lying between these two roads in a triangle east of Burwood Road and north of Liverpool Road. He submitted to the Council of the Borough of Burwood a plan of subdivision. The plan provided for Appian Way to be constructed, commencing at Burwood Road in the north-west and following a serpentine route to join Liverpool Road in the south-east. The street was designed to diverge and then to rejoin around a small park approximately halfway along its length. That is how it was eventually constructed and that is the configuration of the road to the present day. No 13 is located opposite the small park, on the north side of the street. There are lawn tennis courts in the park.

40. Mr Hoskins’ plan of subdivision provided for numerous residential lots to be created along each side of Appian Way. By 25 August 1903 the Council of the Borough had approved the plan and on that day it entered into an agreement with Mr Hoskins containing the following provisions:

1. Clause 4 provided that Mr Hoskins “shall dedicate the said Road to be called the Appian Way to public use as a public road and thoroughfare within the said Borough … and the said Borough shall accept such dedication and shall take and have the care construction charge maintenance and management of the said Road … as a public road street or thoroughfare within the said Borough”.

2. By cl 2 it was agreed that as soon as practicable Mr Hoskins would supply to the Council of the Borough “suitable levels and sections of the said Road to be called the Appian Way whereupon the said Borough shall forthwith commence and diligently proceed with the construction of such Road”. Clause 2 further provided that Appian Way “shall be completely constructed and finished by the said Council prior to the month of December in the year [1904]”.

3. Clause 2 also specified that the Council would “with all reasonable dispatch carry out and completely finish” certain additional works, the description of which included “the drainage of the said Road with all proper provisions for the carrying off and away therefrom and from the lands before referred to of all surface waters and surface drainage including the construction of all proper culverts gullies gully shafts gratings pipes and other works necessary and efficient for the purpose”.

4. Pursuant to cl 3 it was agreed with respect to all works carried out by the Council of the Borough under the terms of the agreement that “all work shall be under the supervision and to the satisfaction and approval of the Overseer of works of the said Borough and upon completion of such works or any of them the said Borough shall thereafter have the care maintenance and management thereof respectively and shall at all times keep the same in good order and repair”.

1. Clause 5 required the Borough “with all reasonable dispatch after the execution of this Agreement [to] make construct and carry out a main drain from the lands and Works hereinbefore mentioned for the purpose of carrying all surface waters and surface drainage therefrom and from all buildings and improvements to be hereafter erected and made thereon … and the said Borough shall at all times have the care control and management of such main drain and shall at all times maintain and keep such main drain in good order condition and repair as a work of the said Borough”.

2. By cl 6 Mr Hoskins agreed to contribute to the Borough the funds necessary for carrying out the works, up to a maximum of £1,100.

41. The Borough, being a body corporate constituted by its electors in accordance with s 4(III) of the 1897 Act, had the power to undertake construction and management of Appian Way and of the “main drain” and other surface drainage works. It had the power thereafter to maintain those works. This appears from the following extracts from ss 175 and 177 of the 1897 Act:

175   The council shall, within the boundaries of the municipality, have the care, construction, and management of public roads other than the main roads of the Colony … and shall adopt such means as may seem to them desirable for the establishment and management of … sewerage or other drainage …. For the purposes of this Act all roads, streets, lanes, or other thoroughfares … dedicated to public use … shall be deemed and taken to be public roads, streets … and thoroughfares … .

177   Any council or person authorised by any council may, for any purpose of this Act at all reasonable times in the day-time enter upon and layout … or make-up on or under any private land within the municipality, any sewers or other drains, water-courses … or any other necessary works […].

42. In accordance with the plan of subdivision, separate titles to lots along Appian Way were created. A report of Burwood Council’s Group Manager Engineering Services, Mr Wyatt, dated 11 June 2002 states that “the records available show that … the road [was] completed by 1905 (including planting and road drainage) and the house [on No 13 was] built in 1911”. The parties agree that construction of the house took place in 1911. It is a clear inference that by that year the pipe that runs through the centre of No 13 must already have been installed. I infer that this is the “main drain” referred to in cl 5 of the agreement of 25 August 1903.

43. It is established by reports of hydrological engineers tendered in the proceedings that Nos 13-17 Appian Way are located in a slight depression forming part of a drainage path dictated by the natural topography. A contour plan of the area lying immediately to the north of Appian Way is annexed to a report to Council from Brown Smart Consulting dated May 2012. It shows that the natural drainage path is oriented from south-west to north-east, across the south-east corner of No 17, diagonally across the middle of No 15 and then across the northern one third of No 13. One would expect the “main drain” to have been constructed across one or more of these three parcels of land. There is no evidence of any pipe or drain in the vicinity that could answer the description of the “main drain”, other than the pipe through No 13 that is the subject of these proceedings.

44. The report of Mr Wyatt referred to above states that in Council’s 2000 budget, presumably for the financial year ended 30 June 2001, funds were provided for an investigation of stormwater drainage from Appian Way, with a view to relieving periodic flooding of Nos 13-17. A letter from Council to a resident of 16 Appian Way dated 3 January 2001 stated that “a detailed drainage study” was being undertaken at that time. Mr Wyatt’s June 2002 report summarises some of the results of the study. It records that “sidelines were found to run through the front yards of [No 13] and a number of adjacent properties”. A plan illustrating the location of the pipe and the sidelines was submitted by Council to Mr Dundas of Egan National Valuers in July 2001. I infer that this plan was prepared from the results of the investigations carried out with funds from the 2000 budget and that what it illustrates is what was referred to in Mr Wyatt’s report.

45. The plan shows six stormwater collection grated pits located in the gutters of Appian Way within a radius of approximately 80m of the front boundary of No 13. It depicts connecting subsurface drainage lines from these pits to the pipe that runs the length of No 13. Three of the connecting lines are shown as joining the pipe, apparently below the ground surface, in the front garden of No 13 between the house and the front boundary. I infer on the balance of probabilities that all of these pits and connecting lines are part of the original construction of the stormwater drainage works for Appian Way, executed by about December 1904 pursuant to the agreement made on 25 August 1903 between the Borough of Burwood and Mr Hoskins. This inference is supported by the consideration that the pits and sidelines are clearly adapted to and necessary for drainage of the road surface. They are integral to the road, which was required to be constructed under the terms of the agreement and which self-evidently was constructed.

46. I also infer on the balance of probabilities that it was the Borough that installed the drainage works. Completion of those works by the Borough was part of its consideration for Mr Hoskins’ dedication of Appian Way as a public road. He plainly performed his side of the bargain. The Deposited Plan of subdivision is in evidence and there is no doubt that Appian Way has been a dedicated public road since 1904. It is a natural inference that the Borough discharged its corresponding obligation. The drains had to be constructed and there is no basis for finding, or entertaining the possibility, that the Borough repudiated this contractual obligation.

47. Further, the minutes of a meeting of the Borough Council held on 20 July 1903 record that it considered tenders that had been received from contractors, for execution of the work, and that it resolved, inter alia:

That the drainage as estimated for by the overseer of works be carried out by the Council.

The fact that the Council required Mr Hoskins to pay for the work and that this requirement was formalised in cl 6 of the agreement does not alter the position that the Borough was the entity that carried out the installation. Funding is a separate matter from execution. There is no evidence that the resolution of 20 July 1903, that the Council carry out the works, was ever countermanded. I find that the subsequent construction of the drain, which undoubtedly occurred, was the implementation of that resolution.

1906 Act: from a corporation of electors to a corporation of aldermen

48. With effect from 1 January 1907 the Municipalities Act 1897 was repealed by the Local Government Act 1906 (NSW)(rep). Boroughs and municipal districts constituted under the repealed Act, including the Borough of Burwood, were referred to in the 1906 Act as “existing municipalities”.

49. Section 29 of the 1906 Act provided that every municipality shall be governed by a council consisting of elected aldermen. Section 12 effected a significant change in the identity of the municipal corporate body, relative to the operation of the 1867 and 1897 Acts. It provided as follows:

12   Every existing municipality … is constituted a municipality under this Act. Thereupon the body corporate of such existing municipality shall be dissolved, and shall be replaced by the council of the municipality which under that name is created a body corporate. All powers, rights, and liabilities of such old body corporate shall be the powers, rights, and liabilities of the council of the municipality.

50. Whereas under the 1867 and 1897 Acts all of the electors constituted the body corporate, now it was an incorporation of only the elected members of the council. The corporate entity named Borough of Burwood, comprising all of the electors, was dissolved and in its place was a corporate entity named Council of the Municipality of Burwood, comprising the elected aldermen.

51. This change is confirmed by the terms of s 44 of the 1906 Act. The word “area” in this section is defined to include “municipality”. Section 44 of the 1906 Act was in these terms:

44   The duly constituted council of an area shall be a body corporate, having perpetual succession and a common seal.

52. By combination of s 73(xi) and s 74 of the 1906 Act, there was conferred upon the Council of the Municipality of Burwood the “care, control and maintenance of any stormwater channel, culvert, drain” – amongst many other powers and responsibilities. Section 76 conferred power to enter upon private lands lying near to public roads to make and keep open, inter alia, “tunnels, drains, and watercourses”. Section 208 provided for enforcement of the Council’s right to enter on private land for such purposes.

53. Subject to any inconsistent provision of the 1906 Act, of which I can find none that is presently relevant, s 4(6) provided as follows:

4(6)   … [T]his Act shall apply to all matters and things made, done, or commenced under the Acts hereby repealed, and at the commencement of this Act of any force or effect … by virtue of the Acts hereby repealed, as if this Act had been in force at the time they were made done or commenced, and they were made, done or commenced hereunder.

54. Relevantly for the purposes of this case, s 4(6) had the effect that the 1906 Act was applicable to the execution of the works by the Borough under the 1897 Act as if the 1906 Act had been in force when those works were performed. Thus, the drainage works of Appian Way including the main drain through No 13 were governed by the 1906 Act as if those works had been installed by the newly incorporated Council of the Municipality of Burwood in exercise of its powers conferred by s 76 of that Act.

1919 Act: continuity of the incorporated council

55. The Local Government Act 1919 (NSW)(rep) commenced on 1 January 1920. It repealed the 1906 Act but made the following provision for continuity:

7   The repeal of any Act by this Act shall not operate to break the continuity of existence of a shire or municipality or of its council existing at the commencement of this Act.

8   (1) The repeal by this Act of any enactment shall not, as far as relates to any previous or pending transaction or matter, affect property vested, acts and things validated or authorised, rights powers and protection acquired, liabilities incurred, or indemnities given by or under the repealed enactment.

56. The 1919 Act did nothing to disturb the status of the Council of the Municipality of Burwood as a corporate entity. The following provisions confirmed that status:

22   (1) For the local government under this Act of each city municipality and shire there shall be a council.

(2) The council shall he a body corporate, with perpetual succession and a common seal, and may sue and be sued in its corporate name; and shall, for the purposes and subject to the provisions of this Act, be capable of purchasing holding granting demising disposing of and alienating real and personal property, and of doing and suffering all such other acts and things as bodies corporate may by law do and suffer.

23   (1) Each city and municipal council shall consist of aldermen elected by the electors (except where otherwise provided).

1993 Act: from corporation of aldermen to body politic

57. From the commencement of the Local Government Act 1993 on 1 July 1993, s 219 has established a council for each local government area. Local government areas are as proclaimed by the Governor pursuant to s 204(1). By cl 21 of the transitional provisions in Sch 7 of the Act, an area constituted as a municipality at 1 July 1993, such as the area within the boundaries of what was Burwood Municipality under the 1919 Act, is taken to be constituted under s 204(1) of the 1993 Act.

58. The legal status of each council is provided for in the following section of the 1993 Act:

220 Legal status of a council

(1)   A council is a body politic of the State with perpetual succession and the legal capacity and powers of an individual, both in and outside the State.

(2)   A council is not a body corporate (including a corporation).

(3)   A council does not have the status, privileges and immunities of the Crown (including the State and the Government of the State).

(4)   A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation).

59. Clause 22 of Sch 7 makes the following transitional provision:

22 Continuation of existing councils

A council constituted immediately before the commencement of Division 1 of Part 2 of Chapter 9 [in which ss 219 and 220 are located] continues as that council and is taken to be constituted under this Act.

60. The effect of enactment of the Local Government Act 1993 is that the body of aldermen of Burwood Municipality that was an incorporated entity under the 1906 Act and that continued in existence without interruption under ss 7 and 22 of the 1919 Act has maintained its continuity under the new Act. The entity has changed its status from that of incorporated body of aldermen to body politic but there has been no change of identity and no dissolution of the previous entity or replacement of it by a new one. The present Council, the first defendant in these proceedings, is the same entity as the council of aldermen that was incorporated under the 1906 Act and that was, in substance and effect, deemed by that Act to have carried out the drainage works that were executed by its predecessor, the Borough of Burwood, in about 1904.

1989-2011: second defendant’s tenure of No 13

61. The facts summarised under this heading are important to Issues 8-10 – whether the second defendant’s answers to requisitions in connection with his 2011 sale to the plaintiff were erroneous or misleading and whether they were given negligently. The facts show that from late 2000 the second defendant knew that the pipe existed. By 4 February 2003 he knew that Council claimed ownership of the pipe; that it was 100 years old and in a dilapidated condition; that Council had issued a notification asserting its right and intention to enter the land to repair and maintain the pipe; that Council had resolved to acquire an easement over the pipe and that it had resolved to acquire at some time in the future an easement on the western boundary of the property.

62. The facts related in the following paragraphs, particularly those concerning events in the years 1996 to 2004, are also important to one aspect of Issue 11; namely, the question of what a hypothetical purchaser would have been willing to pay for No 13 in 2011 if he or she was fully informed about the pipe and Council’s rights over it. Council’s dealings with the second defendant during these years show that it was determined not to pay compensation for a drainage easement near the western boundary of No 13, to which the pipe could be relocated from under the house. The dealings also show that Council was markedly indecisive about rectifying the inefficiency of stormwater drainage from Appian Way through No 13 and resisted expending funds on improving this infrastructure, even in the face of firm, consistent hydraulic engineering advice and repeated pleas from affected landholders over many years. Council failed to take action despite knowing that the drain through No 13 had only 11.5% of the capacity that would be required for 1 in 20 year rain events – being Council’s own standard for piped stormwater capacity, prescribed in the 1994 Stormwater Code for construction on private land. Awareness of Council’s chronically unsatisfactory record with respect to the deficient pipe would be significant to the price that a fully informed hypothetical purchaser would have paid for the property in 2011.

Complaints of flooding to Council pre- and post- the second defendant’s purchase

63. Given the continuity of the Council as a single legal entity under the successive Acts considered above, I will refer to it as “Council” in relation to all relevant events irrespective of the date on which they occurred. In December 1969 Council approved construction of a swimming pool at the rear of No 13, pursuant to an application by the second defendant’s predecessor in title. No condition was imposed with respect to the pipe, such as any limitation on depth of excavation or on siting of the pool relative to the line of the pipe. The pool was in place when the second defendant bought the land in 1989.

64. In September 1986 Council received a letter from the proprietor of No 15 Appian Way reporting that on four occasions during the preceding 15 years the drainage of the street had proved “incapable of carrying storm water after heavy rain”, resulting in overland flows down the driveway of the property. Other complaints from residents in 1984 and 1988 attributed these flooding events to blockage of drains by leaves and refuse.

65. When the second defendant purchased No 13 in 1989 a planning certificate dated 5 June 1989 was attached to the contract. It made no mention of the existence of the pipe, or of any rights asserted by Council with respect to it, or any restrictions upon use or development of the land by reason of the pipe, or the incidence of overland stormwater flows through the property as a result of inadequacy of the pipe. On inspection of the property prior to purchase the second defendant did not become aware of the pipe.

66. Wyatt Avenue runs more or less parallel to Appian Way, to the north of it. Six townhouses are constructed on a single parcel that is designated 10-12 Wyatt Avenue. That property and No 13 Appian Way are back to back. The pipe through No 13 terminates at a pit in the back garden of the property, just inside its rear boundary, which is the common boundary with 10-12 Wyatt Avenue. Stormwater is carried further to the north from the boundary pit, through 10-12 Wyatt Avenue. From time to time during the 1990s overland stormwater flowed through No 13 Appian Way as a result of inadequate capacity of the pipe, causing flooding and damage at 10-12 Wyatt Avenue. On 3 January 1996 the six townhouses suffered heavy flooding as a result of such overflows during a severe rainstorm.

67. This prompted the strata manager to write to Council’s General Manager on 6 March 1996 requesting that “the Appian Way street drain [be] enlarged to enable it to collect all water in a heavy rainstorm”. The General Manager’s reply of 17 April 1996 included the following:

It is understood that flooding was caused by overland flows in excess of the capacity of the drainage system in Appian Way. … It is acknowledged that the drainage system in Appian Way requires upgrading to Council’s current standards for stormwater drainage. A proposal for reconstruction has been submitted to Council for consideration and inclusion in the drainage component of Council’s Management plan.

68. Two years went by without Council taking any action to rectify the acknowledged deficiency. Other evidence in this case has shown that Council’s statements to residents who have been affected by Appian Way stormwater overflows cannot be relied upon. The Court has no acceptable evidence that in 1996 there actually was a proposal before Council for reconstruction of Appian Way drainage or, if there was, that Council considered it. In April 1998 the proprietor of No 17 Appian Way reported to Council that the basement level of his house had been flooded by stormwater flowing down his driveway when the drainage system for the street proved inadequate. He reminded Council that this had last occurred in January 1996, during the same rainstorm that had resulted in stormwater damage at 10-12 Wyatt Avenue. The proprietor of No 17 pointed out that on that earlier occasion he had been told by Council that the rain storm of January 1996 was a “1 in 100 year event”, an explanation for the failure of the street drainage system that he no longer accepted in view of a recurrence after two years. Council’s response was to have an officer attend No 17 and propose ways in which the overland flows down the driveway could be diverted around the house. Still nothing was done about the acknowledged inadequacy of the drain under No 13.

68. Neglect of the problem continued throughout 1998, 1999 and 2000. Although the inadequacy of this system had been demonstrable from residents’ reports of flooding since 1972 and had been acknowledged by Council in early 1996, over the ensuing period of nearly five years Council did not identify which drain was causing the problem. During that time Council’s engineering personnel did not ascertain that there was a critical main drain under No 13 and that it was in a dilapidated condition.

69. The Chairman of the unit holders at 10-12 Wyatt Avenue wrote to Council’s engineering department on 6 June 2000, in the following terms:

It is agreed generally that the overland flooding to our property really begins from an inadequate drain in the area of 13 and 15 Appian Way, which has not been able to handle large quantities of water during deluges. Consequently, this water overflows through the driveway and garage at 13 Appian Way, builds up in his backyard then overflows onto our properties.

We understand and hope it is true that a substantial sum of money is budgeted to increase the Appian Way drain system and ask that this be given highest priority to be completed as soon as possible.

71. Whatever hope may have been held out to the Chairman in mid-2000 that Council would do anything in the reasonably near future to enhance the stormwater drainage of Appian Way proved to be false.

January 2001: Council found that the pipe had deteriorated

72. In about late 2000 and in January 2001 Council workmen attended a blocked drainage pit on the south-western side of the small park around which Appian Way diverges. They observed that a storm water pipe ran north under the park towards No 13. A camera inserted through the pipe was used to produce a video recording. This showed that the pipe passed directly under the house and swimming pool on No 13. That information was passed on to the second defendant, as the then occupier of the property, at some time in late 2000. It was the first he knew of the pipe.

73. The results of Council’s investigation at this time are in evidence only through Mr Wyatt’s report to Council of 11 June 2002. The report included the following:

The detailed investigation revealed that the existing pipeline, which was thought to have been located along the side boundary was in fact located beneath the existing house and swimming pool at number 13 Appian Way. Sidelines were found to run through the front yards of this and a number of adjacent properties. A small section of pipeline appeared to be missing at the junction of the sideline with the mainline in the front yard of No 13 Appian Way.

The investigation of the interior of the pipe using closed circuit TV camera showed that the pipe under the house has extensive longitudinal cracking, tree root infestation and a lost section under the front lawn of the property. Unfortunately, the investigation was not able to check the pipe joints so no information is available regarding the amount of leakage through the joints. Should there be a lot of leakage it could lead to structural damage of the house.

74. The “missing” or “lost” section of the pipe was not associated with collapse of the internal diameter or blockage. Water still passed through. This must have depended upon the surrounding soil being sufficiently compacted to maintain the opening.

75. When this information emerged in January 2001 it became manifest to Council that the pipe was not only of proven inadequate diameter and capacity, even for rainfall events of a 2 year Average Return Incidence (“ARI”), but that it was also unserviceable. Council’s senior engineering officers considered the solution to lie in acquiring a drainage easement, 2m wide, inside and adjacent to the western and northern boundaries of No 13 and extending for the full length of those boundaries. The total area affected would be 211m². On the western boundary this easement would be located in the area of an existing driveway, carport and garage that lay to the west of the house. The officers intended that a new storm water pipe of greater capacity would be installed on this proposed easement and that the existing pipe would be decommissioned. The second defendant was first informed of this proposed solution by a Council engineer who was investigating the street drainage, at about the time when the second defendant was told of the existence of the pipe.

May 2001: commencement of negotiation for an easement

76. It would reasonably have been expected that Council would respond to the 2001 investigation results with a sense of urgency. However, five months went by before Council officers formally approached the second defendant for acquisition of the proposed easement, at a meeting on 25 May 2001. The second defendant said he was agreeable to granting an easement if no viable alternative was available. Mr Wyatt said that there was “no viable alternative”. The second defendant said he would expect compensation for the easement. He pointed out that he had been unaware of any stormwater pipe when he purchased the property and that there had been no reference to any such pipe in the planning certificate that had been issued by Council at that time. The General Manager was present at the meeting and said that he would have two valuations prepared to determine the effect of the proposed easement on the value of the property and hence the appropriate level of compensation.

77. On 8 June 2001 the General Manager advised the second defendant that a valuer had been appointed. Council received a valuation from Mr Dundas of Egan National Valuers on 10 August 2001. Mr Dundas was of the view that the easement would create a “blot on the title” and would give rise to 4-6 weeks of interference with enjoyment of the land while the new stormwater pipe was laid. He also took into account that conditions of the easement would likely preclude future construction of improvements over the area affected. These detriments were valued at $95,000.

78. However, Mr Dundas thought there would be considerable betterment to the property through decommissioning of the old pipe. This involved an assumption that it would be a condition of the grant or resumption of the easement that the rights associated with it would be exercised by Council and that a new pipe would be laid and the old one would cease to be used. Mr Dundas wrote:

[It] is considered the location of the existing pipe below the residence would be of serious concern to any potential purchaser of this property. It is my opinion it would devalue the property by between $125,000 and $150,000.

That range of figures constituted the measure of betterment that would result from decommissioning of the pipe. It exceeded the $95,000 assessment of detriments arising from the easement, leading Mr Dundas to assess compensation at nil.

79. Mr Dundas’ report was not initially sent to the second defendant but a plan of the proposed easement was forwarded to him under cover of a letter of 13 September 2001 from Council’s General Manager, with no offer of compensation. The letter included the following:

The need to establish the proposed easement results from drainage infrastructure works being carried out by Council in the vicinity of [your] property.

The infrastructure works, amongst other things, are intended to improve the drainage system for all properties in the vicinity of this property. Clearly, the carrying out of such works is desirable because they will benefit the community generally.

[…] Council considers that the construction of a new drainage system within the site of the proposed easement and the decommissioning of the existing line of pipes, which currently run directly under the swimming pool and residence, will be beneficial to [your] property.

Naturally, Council will pay all costs and expenses associated with the construction of the drainage system to be located within the site of the proposed easement and the decommissioning of the existing line of pipes. You will not be required to contribute to those costs and expenses.

Council is prepared to pay all your reasonable legal costs and expenses associated with the creation of the proposed easement.

Please consider the Council’s proposal and let us know whether it is commercially acceptable to you.

80. On 21 September 2001 the second defendant replied, stating that he did not find Council’s proposal commercially acceptable. He complained of the lack of detail of the works proposed and requested a further meeting. The second defendant’s letter included the following:

When I purchased this property I had no idea that there was a storm water pipe under my house. It was only last year that Burwood Council were working on the street stormwater that one of your engineers approached me to discuss the possibility. Searches were then carried out to confirm this. It seems that even your engineers were not certain of the whereabouts of those pipes. That engineer then raised with me for the first time the possibility of me giving an easement. Of course I am concerned about the pipe and the possibility that it might burst or leak.

[At the meeting on 25 May 2001] I further explained that I expected compensation to be paid by Burwood Council to me for the granting of [a new drainage easement]. After all the presence of such a large storm water pipe on my property will affect my property in a very significant way.

81. Shortly after this letter was written the second defendant retained Mr Brady, a certified practising valuer. In a report issued in early November 2001 Mr Brady assessed that Council’s proposed drainage easement would diminish the value of the property by $100,000. No offset was allowed for betterment from de-commissioning the old pipe. The second defendant did not provide a copy of this valuation to Council until a year later.

82. By February 2002 the lack of progress towards a negotiated agreement for Council to acquire a drainage easement over No 13 was causing deferral of other works. Resurfacing of Appian Way was two years overdue. If an easement were to be acquired and a new storm water pipe installed on it, the pits at various locations in the gutters would have to be relocated and new connecting lines would have to be laid. According to a memorandum from Mr Wyatt to one of the Councillors dated 7 February 2002, resurfacing could not proceed until the reconfiguration of pits and drainage lines under Appian Way had been completed.

March 2002: differences concerning Council’s rights and “betterment”

83. On 21 March 2002 Council’s General Manager together with Mr Wyatt and Mr Cormican, the Engineering Manager, met with the second defendant and his solicitor, Mr Hones. Mr Hones said that he had a barrister’s advice on the status of the pipe under No 13, on the basis of which he considered Council’s claimed rights over the pipe were “in some jeopardy”. He therefore disputed that compensation for the proposed easement should assume betterment to the second defendant from decommissioning the old pipe. Council’s officers proposed that they would investigate the history of the pipe and obtain their own legal advice. They suggested that the parties’ valuers should meet.

84. Mr Wyatt said that a new pipe would be laid within the proposed easement by thrust boring so that the existing driveway, carport and garage would remain undisturbed. Mr Hones said that the new pipe should be laid at sufficient depth to permit lowering of the driveway and construction of a basement under the existing residence, in case such development of the site should in future be desired.

April 2002: Robinson GRC hydraulic study

85. In April 2002 Council received a report from Robinson GRC Consulting Pty Ltd (Robinson GRC) on a hydraulic study that Council had commissioned. The report presented the results of drainage system modelling on almost all of the stormwater drainage operated by Council and by Sydney Water within the municipality. A computer program was used to calculate stormwater flows in pipes and channels and to forecast the magnitude of overflows during major storms. Probable maximum precipitation data from the Bureau of Meteorology was utilised, as well as records of storm patterns that enabled calculations to be made of maximum run-off from the extensive impermeable surfaces across the local government area.

86. Several discrete catchments were identified, one of them being “Dobroyd North”. From part of the Dobroyd of North area, stormwater drains through No 13 Appian Way. The report identified likely trouble spots where high overflow rates and levels of ponded water were likely to occur. Such locations were identified by means of hydraulic calculations. The likely flows in excess of system capacity were quantified. In addition the consultants examined Council’s files concerning drainage works and complaints. The file for Appian Way yielded the most complaints for the whole municipality, recorded in the consultants’ report as follows:

October 1972   17 Appian Way – Flooding

November 1974   17 Appian Way – Flooding of garage

July 1988   16 Appian Way – Flooding

January 1996   10-12 Wyatt Avenue – Flooding; 17 Appian Way – Garage and basement flooding

April 1998   17 Appian Way – Flooding

November 1998   13 and 15 Appian Way – Blocked pit

January 1999   15 Appian Way – Overflowing drain

87. Until February 2015, when Council raised and levelled the footpath, the lowest point along the combined frontages of Nos 13-17 Appian Way was at the driveway of No 17. When the capacity of the pipe through No 13 was exceeded overland flows would initially proceed down that route. If the excess over pipe capacity was great enough there would be overland flows through Nos 13 and 15 as well.

88. Robinson GRC rated the severity of potential for flooding at the Appian Way trouble spot as “significant”. The consultants understood that the diameter of the pipe was 450mm. Their report included the following:

In heavy storms the capacity of [the pipe under No 13] is inadequate and the resulting surface flows can pass through Nos 13, 15 and 17 Appian Way and properties in Wyatt Avenue to the north. […]

[Works] are proposed by Burwood Council to reduce the drainage problems at Appian Way. These include the provision of additional pits and pipe work to more effectively collect stormwater from the low point adjacent to No 13 Appian Way. These [works] are limited because of the difficulty of enlarging the 450mm pipeline that runs through No 15 [sic] Appian Way. […]

The current works will improve the flooding situation, but flooding is likely to occur in future. Effective options would be: the construction of a new pipeline to Wyatt Avenue through private property; demolition or alteration of some buildings and fences between … Appian Way and Wyatt Avenue to provide a clear flow path for overflows.

Both of these are difficult because of the existing buildings on the lots.

89. Table 6.2 in the Robinson GRC report set out the magnitude of overflows at Nos 13-17 Appian Way that would result from the insufficient capacity of the pipe through No 13 to handle likely recurrent intensities of precipitation. The table showed the overflow values for various Average Recurrence Intervals, as follows:

1 year ARI            0.32 m³/sec

10 year ARI            1.7 m³/sec

100 year ARI            2.8 m³/sec

Potential Maximum Precipitation   12 m³/sec

April - June 2002: inconclusive negotiations for acquisition of an easement

90. In response to matters raised by Mr Hones at the meeting with Council officers on 21 March 2002, Mr Wyatt wrote to the second defendant on 24 April 2002. He advised that on information available to Council it appeared likely the drain under No 13 had been constructed in connection with the roadworks of Appian Way in “or around” 1905. Mr Wyatt said that Council had obtained its own legal advice. He quoted statutory provisions that he said gave Council sufficient power to undertake work on the existing drain and/or to improve the drainage of Appian Way. He asserted that, regardless of the outcome of the parties’ dispute about whether Council had rights over the existing pipe, the installation of a replacement on the proposed new easement would be desirable for the relief it would give from flooding of No 13. He said:

This benefit is enough in itself to extinguish the bulk of the owner’s claim for compensation payable in respect of the proposed easement.

91. Mr Wyatt expressed Council’s preference for resolving the question of compensation by negotiation “rather than seeking a legal solution” and he proposed that the parties’ valuers should meet. A meeting took place between Messrs Dundas and Brady on 23 May 2002. This achieved nothing because the second defendant had not given Mr Brady authority to negotiate on valuation methodology or to release a copy of his own valuation report. Through Mr Brady the second defendant maintained his stance, in reliance upon legal advice, that there was no benefit to him from decommissioning the old pipe because Council had no rights over it.

92. In a letter dated 29 May 2002 Mr Hones offered on behalf of the second defendant to accept compensation of $200,000 for the easement. Needless to say Mr Brady’s valuation at $100,000 had still not been provided to Council at this time. In oral evidence the second defendant denied that he had authorised this offer but I do not accept that evidence. Mr Hones’ letter contains detailed additional proposed terms of an easement and these must have been the subject of instruction. I find it improbable in the extreme that the solicitor would have made this offer without authority. Having observed the second defendant in the witness box when he gave evidence that the offer of $200,000 was unauthorised, I am satisfied that this was said not on the basis of any genuine recollection but in order to deflect embarrassment caused by the cross-examination, in which it was suggested that his seeking $200,000 while withholding a valuation for half of that sum was disingenuous.

93. On 31 May 2002 Mr Wyatt wrote to Mr Hones to point out that, without a copy of Mr Brady’s valuation, Council had no basis for assessing the offer to accept $200,000. He said:

If your client is not prepared to provide information necessary to resolve this situation quickly, Council will consider commencing proceedings for the compulsory acquisition of the easement. If forced to go down this path, Council will look for the most cost-effective solution – including the acquisition of an easement over the existing pipeline or abandoning the whole project. Given the demands on Council’s financial resources, it is unclear when or if the project will again receive funding should Council resolve to reallocate the funds for the project.

94. The second defendant was difficult. The advice he said he was receiving was, in my respectful opinion, wrong. But Mr Wyatt’s letter disregarded Council’s responsibilities to the owners of other affected properties. It should not have been considered open to Council to pressure the second defendant by threatening to leave him – and, necessarily, the other owners – to suffer ongoing stormwater damage from the inadequate drainage system.

June 2002: Council’s resolution

95. Mr Wyatt prepared a detailed report for consideration at a meeting of Council’s Services and Policy Committee scheduled for 11 June 2002. His report summarised the history of construction of the pipe under No 13, the frequency of complaints from residents of Nos 13-17 since 1984 and the results of the investigation in January 2001 that had revealed deterioration of the pipe. He referred to the Robinson GRC study of the hydraulic capacity of the pipe in “a variety of storm conditions”. Mr Wyatt identified two options. The first was to acquire an easement at the western boundary of No 13 and install a larger diameter pipe. The second “significantly cheaper solution” was to remediate the existing pipe and install a lining in it. He said that neither solution would completely eliminate overland flows during heavy rainfall events but that such flows would be higher under the second, cheaper option.

458. In the present case there is nothing vague about the plaintiff’s allegation of conduct by Council that gave rise to the flooding nuisance. The plaintiff’s complaints are wider than as summarised above at [448]-[451] but the particulars concerning reconfiguration of the street drains in 2005 are very specific and sufficient to found the cause of action. Council adduced no evidence capable of demonstrating good faith in its absurd decision to construct the junction pit in front of No 13 and to feed all stormwater run-off into it, when it knew that the outlet pipe was inadequate in both capacity and condition. The necessity to address the drainage problem at Appian Way could not support a conclusion of good faith because Council had been told that even the implementation of the whole of Concept 1 would leave the system well below adequate capacity and not even sufficient for 1 year ARI rain events. Good faith cannot be shown in relation to the partial undertaking of a scheme that would achieve no useful object.

459. It cannot be said that good faith in the reconfiguration of the street drains and construction of the pit was frustrated only by the second defendant’s refusal of access to complete the second half of Concept 1. As mentioned at [130], there is no evidence that the second defendant was ever told the purpose of the pit and other works on Appian Way. He was not warned of the danger those works posed to his property in the absence of refurbishment of the pipe. There was no renewed request to him for access, nor did Council endeavour to invoke its clear statutory powers for the purpose of repairing the pipe. I find no trace of good faith in Council’s implementation of the first half of this unsatisfactory Concept, that created such significant and obvious risk to the property in front of which the large junction pit was placed.

460. Council submitted that it had shown good faith by commissioning hydraulic studies, engineering studies and investigations of the condition of the pipe. I have referred to all of those in the chronological narrative of events earlier in this judgment. The commissioning of studies and investigations can hardly support a case of good faith when Council has acted contrary to the professional and technical advice contained therein. The flooding of No 13 from the junction pit installed near its front boundary was so predictable, from the 2001 internal inspection of the pipe’s condition and from Webb McKeown’s warnings about Concept 1, that there appear to be only two possible explanations for Council having reconfigured the street drainage in 2005. The first is that the relevant decision makers in Council failed to understand the professional advice and did not have sufficient common sense to see what was likely to occur if all stormwater from the catchment was concentrated in the junction pit, dependent as it was upon a failing pipe.

461. The other possible inference is that Council determined to pressure the second defendant to grant access to his land for repair of the pipe, by exposing his property to the primary risk of flooding if it should fail. If the inundation that the plaintiff experienced had occurred while the second defendant was in occupation he might have been more compliant with Council. I would not be willing to draw this inference in the absence of evidence from any of the decision-makers. It was Council’s choice not to call them and if the issue had been more clearly in focus at interlocutory stages of the proceedings and in the trial then failure of the decision-makers to give evidence might have permitted the inference of such an improper and malicious purpose to be more easily drawn. The morass of issues litigated in the case did not identify the question whether Council may have deliberately misused its powers in this respect with sufficient clarity to justify drawing such a grave conclusion without hearing evidence from those who would be implicated. The other possible inference from the circumstances, to which I have adverted in the preceding paragraph, is sufficient to deny Council the defence of good faith under s 733.

462. Council argued that “whenever specific drainage issues or instances of flooding were reported to Council, those issues were promptly addressed”. This contention appears to be addressed to the period after the flooding of No 13 commenced. I have found, contrary to the submission, that Council was extremely dilatory in alleviating the problem. Its first stage of alleviation, by pumping, only provided effective protection to the plaintiff’s property after a delay of 11 months from 7 November 2011; that is, after 12 October 2012. More enduring alleviation was only achieved after a delay of another nine months up to July 2013 when relining of the pipe was carried out and then a further seven months until the footpath was raised and levelled in February 2015. At [199] above I have already dismissed Council’s submission that its continuance of the nuisance was caused only by the plaintiff refusing access to her property. There was no such refusal.

463. Council has not discharged its onus of proving the defence provided for in s 733 and it is liable to the plaintiff for the flooding damage to her property.

Issue 17: plaintiff’s damages for nuisance

464. The extent of damage to the plaintiff’s chattels and the interference with her enjoyment of the land caused by Council’s continuing nuisance over the 11 months from 7 November 2011 has been summarised at [140]-[142], [144], [147]-[148], [154], [161], [173] and [186] above. Council made the surprising submission that, so far as damage was done to the plaintiff’s back garden by the pumping of water through it up to 11 December 2011, she consented to this and can claim no compensation. The alternative would have been for the plaintiff to allow the water to flood down her driveway, through her carport and garage and/or into her front garden or through the house. I will assess against Council all damage that was sustained to the plaintiff’s back garden by reason of the pumping on the basis that it is likely to have been less than the damage that otherwise would have been done. The plaintiff’s acceptance of pumping through her property for the first month after the pipe became blocked was reasonable mitigation.

465. I accept the plaintiff’s evidence about damage to chattels and incidental cleaning and repair costs. $4,568 is assessed in respect of those items. I make no allowance for the cost of an internal inspection of the pipe carried out by the plaintiff’s contractor in October 2012, being $6,204. That expense cannot be said to have been caused by the nuisance. It would reasonably be taken into account as part of the plaintiff’s damages for misrepresentation, in that it is an expense that would not have been incurred if the plaintiff had received accurate information in the s 149 certificate and had never entered into the contract. However I will not make separate allowance for it as part of the damages in that cause of action because the estimate that must be made of the shortfall in value of the property is necessarily so imprecise that I regard it as encompassing all incidental costs.

466. The principal component of the plaintiff’s damages for nuisance is the loss of enjoyment of her property. Over the 11 months of intermittent inundation there were extended periods when the rear garden and lawn were unusable due to waterlogging. For substantially the whole of the 2011-2012 summer the pool could not be used because it was polluted and it was not worth emptying and refilling it, or otherwise thoroughly cleaning it, until the plaintiff could be sure that Council’s system of pumping storm water from Appian Way to Burwood Road could be relied upon.

467. I take into account that each instance of flooding was of brief duration and that after March 2012 the events were of lessening severity. Material loss of enjoyment of the property was contributed to by the repetition and frequency of stormwater ingress and the continuous apprehension to which this gave rise. The nuisance to the plaintiff’s property warrants damages of $55,000, inclusive of the damage to chattels and incidental outgoings referred to above.

Interest up to judgment

468. Council submits that the plaintiff should be denied interest up to judgment upon such damages as may be awarded for the causes of action on which she has been successful. It is submitted that the plaintiff’s claim for negligent misstatement accrued “at least by 7 December 2011, when she became aware of the pipe running through the property”. The cause of action in nuisance accrued on 7 November 2011. Council made this submission:

Rather than commencing proceedings in respect of the pipe running through her property, the plaintiff instead commenced proceedings to obtain development consent for substantial alterations and additions to the property, even though the plaintiff says that she would not have purchased the property had she known about the existence of the pipe.

469. The plaintiff only commenced proceedings in the Land and Environment Court because she was driven to do so after Council had failed to determine her development application within the statutory time limit and in circumstances where Council required her to grant an easement free of charge, to commission and pay for another hydraulic survey of the catchment and to build, entirely at her own expense, a piece of infrastructure that was Council’s long overdue responsibility. It was this stance by Council that Commissioner Brown found so unreasonable that no reasonable Council could possibly have adopted it. That was an understatement. Council’s attempt to impose upon the plaintiff unreasonable economic burdens, forcing her to expensive litigation in the Land and Environment Court for relief, may properly be described as oppressive and an abuse of power. For Council then to assert that the plaintiff should be denied interest on her damages, upon the ground that she postponed the present litigation until she could vindicate some of her rights in another court, is very bold. I do not accept the argument.

470. Council also contended that the property had appreciated in value between December 2011 and the date when the proceedings were commenced. It is said that the plaintiff would “receive a windfall” if she should be compensated by interest for the loss of her money. I regard any appreciation in value of the subject property as irrelevant to whether interest should be awarded. If the plaintiff had been given correct information in the planning certificate and had not bought this residence, the money would have been available to be invested in some other appreciating asset.

471. I will award interest up to judgment on the damages for negligent misstatement from the date upon which the plaintiff completed her purchase of the property. Interest on the damages for nuisance will be awarded from 1 March 2012. That date is somewhat earlier than the midpoint of the period over which stormwater flooding incidents occurred. The worst of the flooding was in the early period and I attribute more than half of the damage to the first four months, November to February inclusive.

Orders

472. Orders to the following effect will be entered:

1. Judgment for the plaintiff against the first defendant in the sum of $1,274,000 together with interest up to judgment in accordance with s 100 of the Civil Procedure Act 2005 and Practice Note SC Gen 16 in the amount of $726,171.06 comprising

1. interest of $697,324.62 on $1,219,000 from 12 August 2011 and

2. interest of $28,846.44 on $55,000 from 1 March 2012.

2. The first defendant is to pay the plaintiff’s costs of the proceedings against it.

3. Judgment for the plaintiff against the second defendant in the sum of $1,219,000 together with interest up to judgment in accordance with s 100 of the Civil Procedure Act 2005 and Practice Note SC Gen 16 in the amount of $697,324.62 from 12 August 2011.

4. The second defendant is to pay the plaintiff’s costs of the proceedings against him.

5. The cross-claim by the second defendant against John Lukas is dismissed.

6. The second defendant is to pay the cross defendant’s costs of the cross-claim.

7. The parties have liberty to apply to resolve any issue concerning the calculation of interest and to obtain additional orders quantifying interest if necessary.

Council’s mismanagement of Appian Way drainage

473. The negligent misstatements of Council and of the second defendant have resulted a substantial award of damages to the plaintiff. Those aspects of the litigation arose from brief instances of tortious conduct in August 2010 and August 2011. Although the flooding of the plaintiff’s property has given rise to a much smaller award for nuisance, the decades of Council’s neglect that culminated in that flooding and Council’s poor treatment of the plaintiff in connection with it cannot go unremarked.

474. Between 2001 and September 2016 s 7 of the Local Government Act provided that the general purposes of the Act included the following:

(d)   to give councils:

the ability to provide goods, services and facilities, and to carry out activities, appropriate to the current and future needs of local communities and of the wider public.

In the same period s 8 provided that the charter of councils included these elements:

to provide directly […] adequate, equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively

to bear in mind that it is the custodian and trustee of public assets and to effectively plan for, account for and manage the assets for which it is responsible.

475. In relation to Appian Way stormwater drainage Burwood Council has over a long period repudiated the purposes of the Act and the statutory charter. For 50 years Council has known, from the complaints of residents, that the stormwater system in this location has insufficient capacity. To this day that deficiency has not been addressed. The frequency of flooding events in the 1980s and 1990s demonstrated to Council that it is not just exceptional rain events with which the system cannot cope. From the beginning of 2001 Council knew that the main drain lying under the residence at No 13 was not only too small for its task but that it had deteriorated and was failing.

476. Upon the pipe becoming completely blocked in November 2011, the plaintiff called upon Council to resolve the inadequacy of the system and to prevent stormwater from inundating her land. She asked Council to perform its duty. Stormwater management is, after all, a basic service of local government. As a ratepayer the plaintiff could reasonably have expected that there would be prompt rectification of a serious problem that Council had turned into an emergency through years of conscious neglect. Instead, from the outset, the General Manager gave no acknowledgement of Council’s responsibility and demonstrated complete ignorance of the facts. There followed egregious delay in clearing the pipe and in carrying out interim repairs. False assertions were made by Council that the plaintiff was refusing access for its workmen. Council unconscionably used the development application process to try to make the plaintiff pay for new infrastructure. Council made unreasonable settlement proposals after its failure in the Land and Environment Court and then doggedly and without merit resisted the plaintiff’s action for nuisance in the present litigation.

477. Over decades Council’s neglect has resulted in significant property damage and worry for owners and occupiers in this neighbourhood. In more recent years it has caused great stress for the plaintiff. Her home has been threatened by stormwater that Council has channelled to her front boundary. Hostility has been stirred up against the plaintiff by Mayor Faker’s letter to her neighbours on 18 December 2012 falsely alleging that she had delayed resolution of the problem by refusing access to her property. Contrary to that claim, Council’s inactivity during the 13 months from when the pipe became blocked in November 2011 was caused by a particularly bad bout of decision making paralysis in Council’s long and lamentable record of non-feasance.

478. Mr Della Franca’s assertive approach to negotiations in 2002 provided no excuse for Council’s failure to act at that time. His stance should have led to Council compulsorily acquiring a western boundary easement in the interests of the wider community, with compensation for Mr Della Franca to be assessed judicially if need be. In the face of Mr Della Franca’s resistance Council abdicated its responsibility to surrounding residents, leaving them and the unsuspecting successor in title of No 13 to suffer the effects of a drainage system known to be grossly inadequate.

479. The plaintiff, particularly, has been let down by Council but so have the ratepayers of Burwood generally. Upon the pipe under No 13 failing in November 2011, urgent re-lining would have been useful as a temporary protective measure. It made no sense for Council to delay action for 20 months and then to re-line the pipe in July 2013. When the re-lined pipe could not cope, as Council had been told by its engineering consultants would be the case, it again made no sense to raise and level the footpath in February 2015. That merely created a dam by which the roadway would be flooded when stormwater could not escape quickly enough through the undersized pipe. The footpath became a spillway, poised above a row of valuable homes, over which excess stormwater was spread out to cause equal annoyance at Nos 13, 15 and 17.

480. Council appears to have squandered ratepayers’ funds on these belated and half-baked postponements of the inevitable, instead of applying the money to compensation for acquisition of an easement over No 13 and the cost of a proper drain. Of course, Council had known from 2001 that a larger drain on a new easement was, in Mr Wyatt’s words, “the only viable option”. So Council moved quickly enough when it thought the plaintiff’s application to develop her land presented an opportunity to make her bear the entire cost of these necessary public works.

481. Amendments to the Local Government Act that took effect from 23 September 2016, prior to the hearing of the plaintiff’s planning appeal, included the following guiding principles for the exercise of councils’ functions (in s 8A):

(g)   Councils should work with others to secure appropriate services for local community needs.

(h)   Councils should act fairly, ethically and without bias in the interests of the local community.

482. Burwood Council’s attempt to extract from the plaintiff a free easement and the installation of a new public drain at her personal expense was irreconcilable with those principles. Words such as these in an Act of Parliament are not to be disregarded by a council as mere rhetoric. When Council’s abuse of its power to impose development conditions was rejected by the Land and Environment Court, one would have thought that compulsory acquisition of an easement with fair compensation and installation of a larger pipe at public expense should have followed. Instead, after Commissioner Brown had given his decision Council frittered away three years on stop-start negotiations with the plaintiff, while her home improvement works proceeded to the stage where an adequate drain on the western boundary could now only be laid at considerably increased cost.

483. The ratepayers of Burwood have been burdened with substantial legal and other costs by a Council that has preferred disputation through solicitors’ correspondence, litigation in the Land and Environment Court and now a trial in this Court, rather than decision-making and the construction of drainage works. Many aspects of Council’s conduct towards the plaintiff have displayed a lack of understanding that it is an elected public body, constituted to serve its community, of which the plaintiff and her neighbours in the Appian Way flood path are members.

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Amendments

08 February 2021 - Cross referencing corrected

Decision last updated: 08 February 2021