MM Constructions (Aust) Pty Ltd v Port Stephens Council

[2012] NSWCA 417

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417

Hearing dates:

20 and 21 September 2012

Decision date:

19 December 2012

Before:

Allsop P at [1];
Basten JA at [203];
Bergin CJ in Eq at [229]

Decision:

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

TORTS - negligence - duty of care - economic loss - local government - processing and assessment of development application - no relevant reliance or assumption of responsibility - no vulnerability - posited duty not conformable with statutory scheme - lack of coherence with administrative law - no duty to avoid foreseeable economic loss

TORTS - misfeasance in public office - local government officer - processing and assessment of development application - credit findings by primary judge - no failure by primary judge adequately to explain credit findings

Legislation Cited:

Civil Liability Act 2002 (NSW), s 43A
Corporations Act 2001 (Cth)
Environmental Planning and Assessment Act 1979 (NSW), s 5, s 79C, s 82, s 96, s 97
Land and Environment Court Act 1979 (NSW)
Real Property Act 1900 (NSW)
Supreme Court Act 1970 (NSW), s 69

Cases Cited:

Caledonian Collieries Ltd v Spiers [1957] HCA 14; 97 CLR 202
Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; 200 CLR 1
Fox v Percy [2003] HCA 22; 214 CLR 118
Giannarelli v Wraith [1988] HCA 52; 165 CLR 543
Goodrich Aerospace Pty Limited v Arsic [2006] NSWCA 187; 66 NSWLR 186
Goose v Wilson Sandford & Co [1998] EWCA (Civ) 245
Kuru v New South Wales [2008] HCA 26; 236 CLR 1
L Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No 1) [1981] HCA 59; 150 CLR 225
Mabo v Queensland [1988] HCA 69; 166 CLR 186
McGlen-McLeod v Galloway [2012] NSWCA 368
McGovern v Ku-Ring-Gai Council [2008] NSWCA 209; 72 NSWLR 504
Mitchell v Cullingral Pty Ltd [2012] NSWCA 389
MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 6) [2011] NSWSC 1613
Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; 205 CLR 254
Monie v Commonwealth of Australia [2005] NSWCA 25; 63 NSWLR 729
NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; 228 CLR 470
New South Wales v Paige [2002] NSWCA 235; 60 NSWLR 371
Northern Territory v Mengel [1995] HCA 65; 185 CLR 307
Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; 74 NSWLR 102
Stuart v Kirkland-Veenstra [2009] HCA 15; 237 CLR 215
Sullivan v Moody [2001] HCA 59; 207 CLR 562
Sutherland Shire Council v Heyman [1985] HCA 41; 157 CLR 424
Tame v New South Wales [2002] HCA 35; 211 CLR 317
Tepko Pty Ltd v Water Board [2001] HCA 19; 206 CLR 1
Twynam Agricultural Group Pty Ltd v Williams [2012] NSWCA 326
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515

Category:

Principal judgment

Parties:

MM Constructions (Aust) Pty Ltd (First Appellant)
Milan Maruncic (Second Appellant)
Port Stephens Council (Respondent)

Representation:

B M J Toomey QC and E G Romaniuk (Appellants)
M J Joseph SC and S Glascott (Respondent)
Creagh and Creagh (Appellants)
DLA Phillips Fox (Respondent)

File Number(s):

2012/19108

 Decision under appeal 

Jurisdiction:

9111

Citation:

[2011] NSWSC 1613

Date of Decision:

2011-12-22 00:00:00

Before:

Johnson J

File Number(s):

2008/289298

Judgment

1. ALLSOP P: The appellants appeal against orders made by the Supreme Court entering verdict and judgment for the defendant, the respondent in this Court (the "Council"), on a statement of claim alleging actionable negligence and misfeasance in public office.

1. The plaintiffs, the appellants in this Court, were a company engaged in land development, MM Constructions (Aust) Pty Ltd ("MM"), and its principal, Mr Milan Maruncic. The negligence and misfeasance were said to have been committed by an officer of the respondent Council (Ms Amanda Gale) in her handling of a development application and subsequent modification applications concerning a development proposed by the appellants at Church Street, Port Stephens.

1. The claim in negligence was founded on an asserted duty upon the Council (referred to as the Defendant in the reasons of the primary judge) in the conduct of its handling of the development application to act with reasonable care so as to avoid the infliction of financial or economic loss to the appellants.

1. The claim for misfeasance in public office was less than clearly articulated. For present purposes it can be summarised as follows: Ms Gale deliberately delayed the progress of the application knowing the financial position of the appellants to be precarious, did not genuinely and honestly try to assess the application and deliberately provided crucial information to the Council for its decision-making which she knew to be false or misleading in an important respect, all in order to cause harm to the appellants. The understanding of the primary judge as to how the misfeasance case was put was set out at [218] of his reasons, which is extracted below.

1. The primary judge dismissed the claim for negligence on the ground that the respondent owed the appellants no duty of care. He was correct to do so for the reasons expressed below.

1. The substantial complaint of the appellants in this Court was the asserted failure of the primary judge to engage with the evidence relevant to the issues for disposition. It was submitted that his Honour did not deal with breach of duty satisfactorily on the hypothesis that he was wrong on the question of the existence of a duty. Given, however, that his Honour was correct on breach of duty, that complaint can be put to one side. I am alive to the comments of the High Court in Kuru v New South Wales [2008] HCA 26; 236 CLR 1 at [12] and like comments in other cases. In my view, the task involved in analysing the question of breach of duty on the hypothesis that I am wrong on the absence of a duty of care does not warrant a significantly longer judgment and the time to undertake that task.

1. The primary focus on appeal was whether the primary judge engaged satisfactorily with the evidence that concerned the misfeasance case, in circumstances where delivery of judgment took place 12 months after the conclusion of addresses and 15 months after the conclusion of the evidence. Monie v Commonwealth of Australia [2005] NSWCA 25; 63 NSWLR 729 was relied upon.

1. For the reasons that follow the appeal should be dismissed.

1. Before commencing with the factual chronology something should be said about Monie and the application to adduce evidence on appeal. In that case at [43], Hunt AJA set out various paragraphs in which he sought to distil from the cases dealing with delay by a trial judge in the delivery of reasons the proper approach of an appeal court. I will not set them out beyond paragraphs (5)-(7) and (9):

"(5) But the trial judge's advantage does weaken with time. Where there is a significant delay between seeing and hearing the witnesses and the delivery of judgment, the trial judge is obliged to give specific reasons for accepting or rejecting the evidence of those witnesses whose evidence plays an important part in the factual finding made. If, for example, the judge is able to explain in the judgment given that contemporaneous notes had been made of the impressions formed of the evidence given by the relevant witnesses, confidence in the decision given would no doubt be maintained despite the delay.

(6) If, after such delay, the trial judge has not given specific and satisfactory reasons in relation to accepting or rejecting evidence which is of importance in the appeal, and where there does not exist any indication in the transcript or the evidence which clearly explains the judge's finding, the appellate court is obliged to give careful scrutiny and consideration to those findings. Where there has been significant delay, there can be no assumptions that statements of a general assertive character made by the judge are based on a sufficient consideration of the evidence, or that evidence relevant to a particular finding not considered in the judgment has not been overlooked by the judge in making that finding where that evidence, if accepted, could have supported a different finding.

(7) The consequences of significant delay in delivering judgment are not limited to the judge's failure to use the advantage given to a trial judge of having seen and heard the witnesses give evidence and of observing their demeanour when they do so. With the emphasis placed for some years now on the need for cases to be resolved expeditiously - not only for the benefit of the parties to that particular case but also for the benefit of the parties in other cases waiting to be heard - the judge who has delayed, for whatever reason, giving judgment in the particular case will inevitably be subjected to considerable pressure to complete and deliver the judgment.

...

(9) And, finally, the long delay may give rise to a reasonable apprehension by the losing party that the judge delayed giving judgment because he or she had been unable to grapple adequately with the issues and, in the end, had become attracted to the decision which was the easiest to make. The possibility that such an apprehension may be held by the losing party requires the judge to deal with that party's arguments in such a way as to demonstrate that those arguments have been understood and that their rejection has been based on a clear and rational process of reasoning."

1. Bryson JA agreed with Hunt AJA. Giles JA did also, subject to matters his Honour set out at [2]-[4]. These matters may be seen to be implicit in what Hunt AJA was saying.

1. Delay is regrettable. The "sorry tale" (to quote Giles JA) of the delay in Monie is set out in detail in the reasons of Hunt AJA at [36]-[42]. The delay was 17 months. The deep deficiencies of the judgment in that case in its grappling with the issues are recounted by Hunt AJA and need not be repeated here. Implicit in Hunt AJA's reasons and explicit in Giles JA's reasons is the importance of the quality of the work produced by the judge in assessing what may be seen to be the operative effect of the delay.

1. At the commencement of the appeal, leave was sought to lead evidence of Mr Pearson, the solicitor for the appellants, about the months prior to the delivery of the judgment. Paragraphs 1-7 of the affidavit were in the following terms:

"1. I am the Solicitor for the Appellants.

2. By this Motion the Appellants seek leave to adduce fresh evidence at the Appeal to be conducted on 20th and 21st September 2012.

3. The first ground of appeal in the Amended Notice of Appeal is that there was an operative delay in delivery of Judgment, which had an adverse effect on His Honour's ability to judge issues of fact and expert evidence important to the decision in the case. The evidence was concluded in September 2010, with Judgment delivered at 2 pm on 22 December 2011.

4. The Appellants submit that not only is there objective delay, but there is a concern that His Honour's workload leading up to delivery of Judgment also impacted upon His Honour's ability to judge issues of fact and expert evidence.

5. In November 2011 I telephoned His Honour's Associate to enquire as to whether it was anticipated that Judgment would be delivered before the end of Term. My enquiry was prefaced with the statement that if it was not appropriate that I make this enquiry, His Honour's Associate should advise me of that and my request would proceed no further. His Honour's Associate did however advise me later that day that it was anticipated that Judgment would be delivered before the end of Term.

6. I have caused a search to be made of Judgments delivered by His Honour in the period immediately preceding Judgment. I have identified 16 cases in which His Honour was involved in Judgments delivered in the Court of Criminal Appeal and the Supreme Court, between 11 November 2011 and 20 December 2011. The cases identified have been tabulated in a form of the document annexed hereto and marked 'A'.

7. The Appellants seek leave to adduce evidence of His Honour's workload in the period immediately prior to delivery of Judgment, as summarized in Annexure A, as evidence relevant to the issue of His Honour's capacity, given His Honour's heavy workload, and given the delay, to give proper consideration to the evidence."

It is unnecessary to set out the case names listed in Annexure A.

1. The application to adduce the evidence in the appeal was rejected.

1. None of the paragraphs were probative of any relevant matter. His Honour can be taken to be a member of the Common Law Division, and busy. No fact in those paragraphs made it more likely that his Honour rushed the judgment just to get it out (as was the inference in Monie) or less likely that his Honour had, in the time available to him, been working with all due diligence on the large mass of evidence since the trial. His Honour made no express statement as to when he came to his views of Ms Gale's credit worthiness, but given the character and nature of that assessment (to which I refer below) it is difficult to see why it must not have been readily made at or about the time of the conclusion of the hearing and the consideration of the written submissions.

The factual outline and the reasons of the primary judge

1. The following outline is taken principally from the reasons of the primary judge at [49]-[197] of his reasons. Complaint was made that his Honour merely worked through the documents in a chronological way not engaging with the evidence. That criticism should be rejected. His Honour was required, as this Court is, to consider very serious allegations of malicious behaviour asserted against Ms Gale. A complete factual context must be drawn and appreciated in order to make that assessment. Thus, as his Honour did, I set out below the factual material in a coherent chronological way in order that Ms Gale's conduct be assessed in its context.

1. In 1999 and 2000, Mr Maruncic planned the building of a luxury apartment development in Port Stephens on land he owned in Church Street, to be known as "Milan Towers".

1. In 2000, he submitted a development application to the Council for the construction of the buildings as two five-storey residential towers with 25 apartments. The buildings were 15.7 metres above natural ground level.

1. On 29 May 2000, approval was given by the Council, subject to conditions. The giving of that approval involved obtaining the approval of the Director of the Department of Urban Affairs and Planning as to the height of the building, cl 58(1) of the Hunter River Environmental Plan (the "HREP") requiring the concurrence of the Director for buildings over 14 metres.

1. Demolition and construction began soon thereafter. Work ceased in March 2003 by reason of an injunction obtained by a neighbour. The injunction remained in force until December 2004.

1. Meanwhile, in 2002, the Council gave approval for a nearby development at Donald Street (Nos 65-67), Nelson Bay, for 15 serviced apartments. That development has not proceeded. In February 2005, the Council, over the objection of Mr Maruncic and his companies, gave approval for a seven storey residential development called "Cote D'Azur", also in Donald Street (No 61). This comprised commercial premises, tourist units, residential units and parking. It was completed in February 2007.

1. In August 2005, the Council, again over Mr Maruncic's objection, approved a third development application for another part of Donald Street (No 63) for the development of residential units, shops and parking. Mr Maruncic considered that these developments would compromise the viability of Milan Towers, unless its development was altered.

1. From 2001 to 2005, the Council granted approval to eight development modification applications in respect of Milan Towers. One aspect of those approvals, which are otherwise uncontentious, should be noted. The last modification concerned the height of Milan Towers. Approval was given to a maximum height of approximately 18 metres. Ms Amanda Gale, whose conduct was at the centre of the criticisms by Mr Maruncic, had recently been appointed "Development Co-Ordinator". This modification application was her first involvement with Milan Towers or Mr Maruncic and his companies. This last modification application had been lodged in November 2004 and was approved on 21 April 2005. On 8 February 2005, Mr Maruncic wrote to the Council requesting an increase in height including one further floor and an increase in the number of apartments from 25 to 41. This proposal was the essence of the charge that was ultimately rejected and that became the subject of the proceedings.

1. In May 2005, Mr Maruncic engaged Mr Warnes to assist him in the development. Mr Warnes was a very experienced town planner with experience in the private sector and the Department.

1. On 23 June 2005, Mr Maruncic and Mr Warnes addressed a meeting of the Development Assessment Panel of the Council. Ms Gale was present, as were others from building and engineering departments. The minutes taken record the following (Mr Warnes' evidence being that it was Ms Gale who made these comments):

"Propose to add an additional level raising overall height by approximately 2.5 metres.

...

*Height - The proposal to increase the height by approximately 2.5 metres is considered a considerable increase and is unlikely to be supported. A SEPP1 objection to height was lodged with original Development Application and therefore, a further modification / increase in height is possible via a Section 96 modification to development consent. However, given the extent or increase in height, Council considers this would warrant a new development application.

*Density - The proposal to increase the density of this development (from 25 units to 36 units) is considered a considerable increase and is unlikely to be supported. It does not appear that the original development application included a SEPP 1 for density, therefore, if the current density approved on this site is at its limit, then Council cannot accept lodgement of a Section 96 modification to Development Consent that includes a SEPP 1 objection to density. A new Development Application would be required in this instance.

*Notwithstanding the above individual comments regarding height and density, it is advised that the proposed changes in their entirety (ie. increase in height and unit numbers) would not be considered to be substantially the same development. Therefore, on this basis a new development application would be required.

*The land is within State Environmental Planning Policy No. 71 - Coastal Protection Policy (SEPP 71). Given Council considers the changes require the lodgement of a new application, the Minister would be the consent authority. Any new development application is to be lodged with the Department of Infrastructure Planning & Natural Resources."

The relevant matters to note about this are the view then expressed of the substantial change to the development and the consequent need for a new development application. This was not ultimately how the relevant application went forward. Nevertheless, Mr Maruncic was aware of the issues of height and density to be addressed.

1. Mr Warnes ceased to advise Mr Maruncic in September 2005, though he was later re-engaged. A Mr O'Connor (who had assisted in the Côte D'Azur application) thereafter began advising Mr Maruncic. Mr Warnes' view, of which he advised Mr Maruncic, was that a new development application was required and that what was proposed was not within s 96 of the Environmental Planning and Assessment Act 1979 (NSW) (the "EPA Act"). In fact the application did ultimately proceed as one under s 96. The terms of s 96 and of other relevant statutory provisions, are set out later. (The debate about this issue of the suitability of the application to be approached under s 96 was a significant issue at the hearing.)

1. Mr Maruncic met officers of the Department at the site of Milan Towers in July 2005 at a meeting arranged by Mr Warnes. He was told that in order to progress his proposal he should either write to the Department or obtain a refusal to the modifications from the Council. Between June and December 2005 Mr Maruncic was in contact with the Department about his proposal.

1. In October 2005, Mr O'Connor advised Mr Maruncic against an application under Part 3A of the EPA Act (dealing with major infrastructure and other projects) and that the correct approach was to do a study reviewing floor space ratio, height and density. Mr O'Connor's services were terminated in November 2005.

1. In November 2005, Mr Maruncic was told by the Department by letter that his proposal may be a matter to be dealt with under Part 3A of the EPA Act. The letter also dealt with the question of how he should deal with the height of the development.

1. On 22 November 2005, Mr Maruncic wrote to Ms Gale at the Council explaining the proposed changes he said were brought about by the nearby developments. The letter sought the support of Council and the Department and concluded:

"I would appreciate very much if you would advise me today or as soon as possible if Council will, or, will not, support the changes I propose."

1. Two days later, on 24 November 2005, Mr Maruncic again addressed the Development Assessment Panel, which included Ms Gale. The minutes reflect the view then held by Ms Gale that the proposal fell outside a s 96 modification and that the Department was therefore the consent authority. The purpose of the Council's consideration of the matter, however, was explained to be that the Department wanted the Council's views on the proposal. Those views were negative to the proposal as follows:

"In regards to the basis for lodging a new development application (being proposed changes to height and density), Council considers these changes to be major departures from both the original approved development application, the Tall Building Study, which formed the foundation for the height limit within the area and Council's Local Environmental Plan 2000 (ie. Clause 19 development standards). Therefore, Council would not support such variations and inconsistency with Council's policy .

In regards to Council's Local Environmental Plan 2000, Clause 19 - Urban Housing developments in the Residential 2(c) Zone include: Minimum Site Area per Dwelling of 150m², Floor Space Ratio of 1:8:1 and Maximum Height Limit of 15.0m.

Whilst Council supported variations to both height and density under the original application, a further variation and extent of variation to both height and density is considered unacceptable as stated above."

1. After the meeting, Mr Maruncic wrote to Ms Gale pointing out that there were different methods of height measurement (a matter that became central to the litigation):

"When (Port Stephens) Council calculate their height measurements, they measure from the floor of the basement to the top of the roof.

When the Department of Environment and Planning calculate their heights they are measured from the original land level to the top of the roof.

Therefore, there is a difference of one floor level.

According to Council my last amended plans are two floors above and according to Dept of Land & Environment I am only one floor higher.

My original approval from the basement to the top of the roof was 18.3m, my present height is 23.5m.

So the difference is 5.2m, or, according to the Dept of Land & Environment, 2.7m higher than what I had approved earlier."

This question of the different methods of measurement was to assume some importance.

1. By December 2005, Mr Maruncic had the minutes of the meeting and sent them to the Department requesting a meeting with the Department to discuss his proposal. Mr Maruncic said in evidence that he was told orally by a Departmental officer that his proposal could be dealt with by the Council under s 96, a matter that he said was important and relevant to his decision to lodge such an application. On 23 January 2006, however, an officer of the Department wrote to Mr Maruncic, noting the Council's view that the proposal did not fall within s 96 and that a new approval was required, stating that given the scope of the proposal it might fall within Part 3A of the EPA Act and indicating some of the consequences of that. This view of the Department was founded on a view of the substantiality of the changes proposed. This, in substance, reflected Ms Gale's own views.

1. After this letter, Mr Maruncic lodged, on 15 February 2006, an application under s 96. It is the consideration of this application and its refusal (in its final form) in June 2007 that is the focus of the complaints of Mr Maruncic about Ms Gale's conduct. The primary judge described the amendments to the original approval as follows at [92] of his reasons:

"(a) an increase in the total number of units from 25 to 41;

(b) an increase in the maximum height of the development by approximately five metres (from approximately 18 metres to approximately 23 metres) to accommodate an increase in the ceiling height of 100 millimetres per floor;

(c) conversion of the first-floor apartments into parking spaces; and

(d) the addition of balconies to the southern side."

1. The application was lodged by Mr Maruncic personally at the counter, at which time a conversation took place with Ms Gale as recounted at [93] of the primary judge's reasons:

"GALE: I have major concerns regarding the proposed changes which are a significant departure from the original approval. I expect there will be issues with lodgement of the variations as a Section 96 application as opposed to a new development. What you are proposing is a new development.

MARUNCIC: I am going to lodge the modification application anyway and see how it progresses. I believe in the proposal. I do not want to have to lodge a new development application with the Department of Planning."

The primary judge rejected Mr Maruncic's evidence that Ms Gale said that she would personally object to the application: at [94] of the reasons.

1. Ms Gale was responsible for considering the application. By April 2006, she had formed the view that it should be refused and she proposed to issue a "Notice of Intent to Refuse", but before doing so she decided to seek legal advice from the Council's legal advisors, Sparke Helmore. On 10 April 2006, she wrote to Ms Dianna Grant at that firm setting out her reasons for refusing the proposal as a s 96 application, as follows:

"1) The extent and nature of proposed modifications are not considered to relate to substantially the same development as the development for which consent was originally granted and, therefore, [are] considered outside the scope of a Section 96 modification application pursuant to the Environmental Planning and Assessment Act 1979.

2) The development does not comply with Council's Minimum Area per Dwelling (ie. density) development standard pursuant to Clause 19 of Port Stephens Local Environmental Plan 2000, with the extent of variation to the standard considered unacceptable.

3) The development does not comply with Council's Height development standard pursuant to Clause 19 of Port Stephens Local Environmental Plan 2000, with the extent of variation to the standard considered unacceptable.

4) The development is contrary to the public interests and expectations of an orderly and predictable built environment."

She described the various changes made to the original application as follows:

"The original development consent was issued for 25 Medium Density Units on 29 May 2000. The development was configured in two separate building blocks - Block A & B.

The current s 96 modification relates to:-

- an increase in no. of units (from 25 approved) to proposed 41 units (by large front units being converted into two units, some of level 4,5 & 6 units have been changed from 1 & 2 units into 3 units per floor and increase in height / level will provide for remaining extra units).

- change in height of minimum 4 metres and up to 5 metres.

- changes have affected Block A - 3 floors and Block B - 4 floors

- propose to provide adequate visitor parking by removing pre-approved units on the lower levels and replacing them with parking.

- a series of new balconies for extra open space have been proposed to Block A & Block B.

The building footprint doesn't actually change, however [the] added floors/levels and a change in roofline, along with extra balconies, I assume to provide open space for additional units, contribute to the unacceptable increase in height and density involved in this s 96 modification."

It is to be noted that Ms Gale's concerns included the substantiality of the changes taking the proposal outside s 96 (in line with the view of the Department provided to Mr Maruncic), the height and the density of the proposal.

1. Sparke Helmore advised by letter of 21 April 2006. The advice principally concerned the meaning and operation of s 96, in particular the phrase "substantially the same development" in s 96(2)(a), and the question whether the application fell within s 96 or not. The advice was contrary to the apparent view of the Department, the view of Ms Gale and that which Mr Warnes had communicated to Mr Maruncic, and was expressed as follows:

"In our view, and having regard to existing case law, the current Application does not change in a 'material or essential' way the development approved by the Original Consent (as currently modified). We consider that Council would have difficulty supporting an argument before a Court that an increase in the number/height of the apartments constitutes a material or essential change to the approved development. It remains open for Council to refuse the Current Application on the merit grounds - namely non-compliance with height and density standards."

1. On 28 April 2006, the Council sent a Notice of Intent to Refuse the application identifying three reasons, being the second to fourth paragraphs in the draft letter to Sparke Helmore referred to in [35] above.

1. The application under s 96 was, in any event, deemed refused on 27 March 2006 by the operation of s 96(6) and the regulations. An appeal was thereupon available to MM, as a class 1 appeal under s 17(d) of the Land and Environment Court Act 1979 (NSW). At no time was any appeal lodged. This decision was made by Mr Maruncic in consultation with Mr Warnes.

1. Mr Maruncic wrote to the Council on 23 May 2006 listing further amendments and providing some amended plans. On 1 June 2006, Mr Warnes, by this time once again acting for Mr Maruncic, sent an email to Ms Gale saying that he had left a number of messages at the Council "over the last few weeks" for her to call him. He also stated that he had reviewed Mr Maruncic's submission and he was "concerned that he [Mr Maruncic] has not given [the Council] sufficient information to make the application competent".

1. The plans were publicly exhibited by the Council in May and June 2006 and in early June the application was advertised.

1. Mr Maruncic lodged further plans on 1 July 2006; and Mr Warnes supplied the Council with further plans and explanatory material under cover of letter dated 7 July 2006. Mr Warnes' letter dealt in particular with height in relation to the surrounding developments. Mr Maruncic was by this stage lobbying relevant councillors.

1. On 7 July 2006, Ms Gale prepared a draft letter raising a number of concerns for Mr Maruncic to address regarding his application. It was not sent until 1 August 2006.

1. On 17 July 2006, Mr Warnes wrote to the Council identifying a reduction in the number of units by two and an increase by seven of car parking spaces and stating that plans covering these would be submitted.

1. On 18 July 2006, Ms Gale sent a memorandum to relevant (East Ward) councillors. The primary judge set out the relevant parts at [116] with emphasis:

"The Department of Planning have a concurrence role in respect of developments proposing a maximum height (above 15m) pursuant to a Tall Building Clause within the Hunter Regional Environmental Plan 1989. Therefore, a number of the development applications assessed by Council as identified on plan have required the Department's concurrence. In assessing and providing their concurrence to the proposed maximum heights of these buildings, the Department is measuring height from Natural Ground Level only. In contrast, Council is assessing height in accordance with the height definition pursuant to LEP 2000, whereby height is measured from either Natural Ground or Finished Ground Level (whichever is the lower). This in turn results in different maximum heights being established.

As advised previously, the extent of this proposed modification is considered unacceptable primarily in respect to increases in density and building height pursuant to LEP 2000 and relevant DCPs, which in turn raises concern that the development is contrary to the public interest .

The applicant has indicated that they wish to provide additional information to support their application and has requested Council's advice as to the deficiencies of the application and main areas of concern. This written advice is currently being finalised and essentially aligns with the reasons for refusal as outlined in the Notice of Intent to Refuse issued by Council. It is noted, however, that the applicant has been advised that whilst information submitted with the modification is deficient, the main reasons for refusal relating to proposed increase in density and building height are excessive variations, which are unlikely to be capable of justification through submission of additional information.

Recommendation/Conclusion:

Confirmation is sought as to whether the Section 96 modification is required to be forwarded to full Council for full determination.

Alternatively, if able to be determined under delegated authority within the Sustainable Planning Group, the recommendation is maintained that the modification be refused."

The issue of "concurrence", that is, the role of the Department having to approve any increase in height as well as the Council, because of the original requirement of Departmental height approval (above 15m), was important at the trial, though it fell away during the hearing of the appeal. Further, the statement that Maruncic had been advised as referred to in the third paragraph (the second emphasised portion) above was controversial at the trial and on appeal and heavily relied upon by the appellant in seeking to demonstrate Ms Gale's bad faith.

1. Further plans were lodged with the Council on 20 July 2006.

1. On 27 July 2006, one of the relevant councillors wrote a letter to Mr Maruncic that was sympathetic, but that reflected real concern with height (of 23 metres) "which is too far above our maximum of 15m".

1. On 1 August 2006, Ms Gale sent a letter to Mr Maruncic substantially in the form of the draft prepared on 7 July, adding that discussions had been held with East Ward councillors and that height and density were the problems. The letter identified in some detail "concerns ... which need to be addressed". These are set out at [121] of the primary judge's reasons. They included height and density, as well as floor space ratio, increased traffic and a lack of shadow diagrams. Ms Gale also noted that the proposal had not yet been referred to the Department for height approval (so-called "concurrence"). As the primary judge found at [123], Ms Gale's view was that concurrence of the Department may be required. This was the first time this had been communicated to Mr Maruncic. The reasonableness of the view was a significant issue at trial. On appeal, it was accepted that her views in this regard could not be the subject of criticism.

1. Mr Warnes gave Mr Maruncic advice on the 1 August 2006 letter (see [125] of the primary judge's reasons) and on 22 August sent a detailed submission to Ms Gale. In particular he addressed issues of height and density, the primary judge extracting the following at [126] (emphasis made by his Honour);

"Following upon discussions with both Council Staff and East Ward Councillors the s 96 modification has now been reduced to seek approval to 40 units, a maximum height above natural ground level of 23.15 metres (Building A) and 23.1 metres (Building B) excluding the lift over run . The design of the upper floors has also incorporated a stepping in of the building at its upper levels to reduce its scale and bulk.

The interpretation of the building from adjoining public places will not allow for a reading of the height of the buildings as 23 metre structures as they are set into the site below the street level such that Building A, the building set highest on the land, would read as a building of some 21.9 metres. It must be remembered that the measurement of height for the purpose of development is taken from natural ground level and not street level however impact is read from street level and the variation between absolute heights of 1 to 2 metres would be imperceptible to the human eye."

1. Further plans were submitted a few days later. Mr Warnes maintained email contact with Ms Gale. Replacement plans were submitted. Mr Warnes stressed the relative height of the buildings, stating in an email of 4 September set out by the primary judge at [129] of his reasons:

"Michael has had new plans and elevations prepared showing the relative heights of the development as fixed by a Surveyor that show the development does not exceed 21 metres at any location and that at most other points it is lower to somewhere at the lowest it being no greater than 15 metres above natural ground."

1. A letter of 5 September 2006, set out at length by the primary judge at [130] of his reasons also dealt with the height issue and methods of measurement and the reduction of the height of the development from 25m above natural ground level to 19.8m, including a one metre reduction for top soil removal.

1. After further plans were lodged, on 29 September 2006, Ms Gale forwarded the latest revised plans to the Department for concurrence. The primary judge set out at [133] the text of the covering letter revealing Ms Gale's state of mind. In that she said:

"The current Section 96 Modification is the 10th modification to be lodged and the documentation submitted outlines the amendments as proposed, with the main changes relating primarily to an increase in density (ie. approved 25 units, now proposed 41 units) and increase in height (ie. approved 17.95m and proposed at maximum 21.8 metres).

The application has been tentatively called before full Council for determination. Discussions with relevant Councillors continue, in order to determine whether the modification does require referral to Council for determination with internal assessment of the modification currently being undertaken."

It can be accepted that this was Ms Gale's state of mind because of the primary judge's finding (to which I will come) about her genuine and honest involvement in the processing of the application.

1. One of Ms Gale's colleagues, Mr Greenhalgh, sought concurrence on 16 October 2006. The primary judge noted at [135] the participation of other officers of the Council in the process, since the claim for misfeasance in public office was based on Ms Gale's actions alone. Mr Greenhalgh sought further information from Mr Maruncic in late October.

1. On 30 October 2006, Mr Murphy of the Department, in a response to the Council's request for concurrence, stated that the Department was unable to give concurrence because it was a significant departure from the original approval and advised the Council to consider carefully whether it was appropriate to progress the application as a s 96 application. On 14 November 2006, Mr Murphy wrote again confirming that the Department was unable to provide concurrence.

1. On 30 November 2006, Ms Gale once again sought the advice of Sparke Helmore. The principal reason for seeking the advice was to obtain a review of a draft set of reasons for refusal of the application. She also drew the solicitors' attention to the view of the Department contained in its letter of 30 October 2006 (referred to above) and sought confirmation of the earlier advice.

1. Sparke Helmore responded promptly on the same day, 30 November 2006. They expressed disagreement with the Department's views and maintained the view that they had already expressed. The advice as to the draft reasons was short and to the point:

"We note that, in any case, the Department's failure to provide concurrence means that Council has no power to approve the application. Therefore this point should remain in the reasons for refusal. In addition, the other 'merit grounds' listed in your draft reasons are very arguable, and ought to be included."

1. As the primary judge pointed out at [145] of his reasons, these communications have significance because, as he said, they indicated that Ms Gale took (and apparently followed) legal advice. The primary judge also pointed out at [146] that other officers of the Council, Messrs Anson, Broyd and Greenhalgh, were "closely involved" in the process. For instance, Mr Broyd signed the Notice to Intent to Refuse the application issued on 30 November 2006. The reasons were recorded by the primary judge at [148], as follows:

"1. The Department of Planning has not granted concurrence in relation to the height variation pursuant to Division 4, Clause 58 of the Hunter Regional Environmental Plan 1989.

2. The development does not comply with Council's Minimum Area per Dwelling (ie. density) development standard pursuant to Clause 19 of Port Stephens Local Environmental Plan 2000, with the extent of variation to the standard considered unacceptable.

3. The development does not comply with Council's Height development standard pursuant to Clause 19 of Port Stephens Local Environmental Plan 2000, with the extent of variation to the standard considered unacceptable.

4. The development is contrary to the public interests and expectations of an orderly and predictable built environment."

1. Issue was taken on appeal with the extent of the involvement of other Council officers. It can be accepted that Ms Gale was principally responsible for the day to day handling of the application and the drafting of relevant memoranda. The evidence did not, however, permit any conclusion that the other officers did not pay proper attention to their responsibilities in the handling of the application, or that Ms Gale could assume from their passivity that her asserted intention to harm Mr Maruncic would go unnoticed.

1. Mr Maruncic sought legal advice and on 4 December 2006 his solicitor wrote to the Council. He challenged the need for Department concurrence; he also challenged the other reasons as unsatisfactory. The matter was said to be urgent. The urgency was explained in a letter three days later. The property was to be sold by auction on 13 December 2006 in a mortgagee sale. The property had been mortgaged in May 2004. In July 2005, notices under s 57(2)(b) of the Real Property Act 1900 (NSW) and statutory demands under the Corporations Act 2001 (Cth) had been served. The mortgagee took possession of the property on 13 November 2006. Mr Maruncic's solicitor said in his letter:

"... The only way our client can stop the sale is to re-finance the mortgage, and the only way this can be done is if council provide him with the development consent that he has sought. The situation is therefore urgent.

As indicated in previous correspondence, our client will look to council for any damages which he suffers as a result of the council failing to properly consider his application."

1. The auction took place on 13 December 2006 and the property was passed in.

1. Ms Gale sought advice from Sparke Helmore about the threat of legal action. She also prepared a draft response to Mr Maruncic's lawyer that was not sent. The primary judge used it as evidence of Ms Gale's state of mind: [154] of the reasons. Once again, the legitimacy of this was based on his acceptance of her evidence about her bona fides and honesty. On this basis, the draft revealed her view that the concurrence requirement was based on the height issue and that the variation as to density was unacceptable.

1. Correspondence then followed as discussed in [155]-[158] of the reasons. On 30 January 2007, shortly prior to a meeting of the Council scheduled for 5 February 2007, Mr Warnes wrote to members of the Council urging them to attend and to hear Mr Maruncic. He said this about Mr Maruncic and the development:

"Mr Maruncic is unlike most developers in that this project is his sole development and is the culmination of his ... work which is to see a building of significant Architectural merit and high private amenity constructed at Nelson Bay where he will live out his retirement years. Unfortunately due to the significant delays that have been encountered in this matter Mr Maruncic now faces the prospect of having his financiers sell him up if he cannot get this matter resolved as quickly as is possible."

1. On 5 February 2007, Ms Gale sought further clarification from the Department about its view that concurrence would not be issued, based on the Department's view that the application was not properly to be dealt with under s 96. She stated that the advice she had was that the matter could be dealt with under s 96. A response was received on 12 February 2007 from the Department that reiterated its view that this application was a substantial departure from the original approval; but that if the application was to be dealt with under s 96 the Council did not require concurrence from the Department. The primary judge discussed the significance of this correspondence with the Department at [164] as follows:

"Thus, the Department of Planning indicated (contrary to views in earlier correspondence) that concurrence was not required for the Plaintiffs' s 96 application. That said, the Department of Planning response did not suggest that there was a clear-cut and obviously favourable outcome which should result for the Plaintiffs' s 96 application. To the contrary, the Department of Planning used guarded language and expressed concern about the scale of the application. It might be thought that this would have the effect of maintaining a degree of caution on the part of officers of the Defendant, including Ms Gale. Given the Plaintiffs' causes of action, this is a pertinent consideration."

1. By mid-February 2007, the application had been called to the Council for decision; and on 13 February 2007, Ms Gale sent a long email to all councillors to advise them of the current status of the application. In it she asked that the application be refused under delegated authority, rather than by the full Council.

1. In anticipation of the matter going to Council, on 14 February 2007, Ms Gale once again sought confirmatory advice from Sparke Helmore about two matters:

"- the validity of lodgement of the s 96 application as opposed to a requirement to lodge new DA;

- clarification of the concurrence role requirements for s 96 applications."

1. Within five days, Sparke Helmore responded, once again stating their view that the application fell to be considered under s 96. Their view was supported by reference to a number of court decisions. The subject of concurrence was also dealt with. The solicitors advised that no separate concurring approval from the Department was required under cl 58 of the HREP by reason of the height of the buildings. Thus, the application was for the Council only to approve or not pursuant to the power in s 96 of the EPA Act.

1. The primary judge remarked on the course of events to this point and the roles of Sparke Helmore and the Department in their provision of advice to Ms Gale at [169] of the reasons, as follows:

"I note that it was not until this point that the Defendant was provided with legal advice from Sparke Helmore that Department of Planning concurrence was not required. Whatever may be said concerning the views of the Department of Planning which had been expressed, and the legal advice which had been provided by Sparke Helmore to the Defendant up to this time, it is difficult to see that the course of events up to this point materially assists the Plaintiffs in their causes of action against the Defendant based upon the suggested acts and omissions of Ms Gale. Ms Gale, who was not a lawyer, had taken independent legal advice and communicated with the Department of Planning. It is difficult to see how the fact that the legal advice changed, and the Department of Planning altered its view on the need for concurrence, may be (in some way) sheeted home to Ms Gale."

1. At [170]-[172] of the reasons, the primary judge described some of the communications among Ms Gale and the other Council officers about preparing a report for a March meeting that was described as a "deadline". The correspondence reveals a degree of business-like attendance to the processing of the application for a decision in March.

1. Meanwhile, Mr Warnes enquired about progress.

1. On 26 February 2007, solicitors acting for the mortgagee in possession purported to withdraw the s 96 application. Sparke Helmore advised the Council that its consideration should continue whilst seeking evidence to assess the legitimacy of the actions by the mortgagee's solicitor. This development brought a defensive response from Mr Maruncic, which was dealt with by the primary judge at [177]-[179] of the reasons.

1. On the evening of 13 March 2007, the application was considered by the Combined Strategic/Operations Committee of Council. On that very day, Mr Warnes sent an email to all Councillors which included a letter of three pages that he described as "a last desperate plea". This letter refers to a report to be considered by the Committee. That report was dated 9 March 2007 and was sent to "All Councillors & Executive Group" under Mr Anson's name, although Ms Gale was involved in its preparation. Also on 13 March, Mr Warnes sent additional information to Mr Anson and Ms Gale. This material in March can be seen to have been made available to Mr Warnes to comment upon. Consideration of the application was deferred because of the receipt of this further information to allow for its assessment.

1. On 20 March 2007, further plans were lodged by Mr Maruncic for a 38 unit proposal and a height reduction. These plans were then publicly exhibited from 29 March to 11 April 2007.

1. Meanwhile, on 30 March 2007, contracts were exchanged for the sale of the property by the assignee of the mortgagee in possession. It was accepted on appeal that from this date there was no causal relevance of any impugned conduct of Ms Gale. It assumed only an evidential significance, throwing light upon her earlier alleged conduct of delay and deliberate refusal to examine the application honestly.

1. On 5 April 2007, Mr Warnes wrote to the Council concerning information that Mr Maruncic was delivering that day to the Council which concerned the height of the buildings. It was information from the surveyors Fagan Mather Duggan. The primary judge referred to Mr Warnes' letter at [187] of the reasons. The letter included the following:

"The information relates to survey and height deduction undertaken by local Survey firm Fagan, Mather Duggan Pty Ltd in relation to the amended plans and the height of the proposed development in respect of natural ground and that of the adjoining approved development.

In summary the information provided by the Survey firm confirms that the heights of the development now proposed by Michael Maruncic are 22.17 metres for block A (closest to Church Street) and 22.93 metres for Block B.

These reductions in heights are achieved from the earlier proposals by the reduction in floor to ceiling heights and the removal of the lift overrun by including the lift motor within the lift itself using the latest design of lift available that does not require lift tower placement above the last habitable floor.

These heights when compared to the development already approved and which adjoins the subject land to the east show that Building A is lower than the already approved adjoining building and that Building B whilst nominally higher than the adjoining building at 22.93 metres is likely to be lower than that adjoining building as the only plans available to the Survey Firm of that adjoining building indicate the Lift Tower as a half height overrun whilst the completed development has a lift that now exits on the roof level deck area and is therefore likely to be some 2 metres higher than both of Mr Maruncic's proposed buildings.

I understand that the number of units has been also been reduced to 38 and that the provision of car parking now exceeds Council's requirements."

1. The primary judge referred at [188] of the reasons to the letter of the surveyors of 4 April 2007 and the controversy as to whether the Council and Ms Gale had it in their possession, as follows:

"In this letter, Mr Warnes referred to information provided by Fagan Mather Duggan Pty Limited. The evidence demonstrates that Mr Maruncic and Mr Warnes had been provided with a letter dated 4 April 2007 from Mr Mather (Exhibit E, Tab 45). There is controversy as to whether Mr Mather's letter was provided to Ms Gale and the Defendant or whether Mr Warnes' letter of 5 April 2007 was the only source for this information. I accept the evidence of Ms Gale that it was not received by the Defendant. The letter is not contained in the Defendant's records and Mr Warnes' letters do not assert that he supplied Mr Mather's letter to the Defendant. The real issue, however, concerns the relevance and the utility of the information conveyed by Mr Warnes (based upon Mr Mather's document) to the process of determination by the Defendant with respect to the Plaintiffs' application."

There was no appeal from the finding that Ms Gale and the Council did not have Mr Mather's letter of 4 April in their possession.

1. The questions of the height of the building, and the comparative height of the building compared with Côte D'Azur and the effect of these matters on the decision of the Council, including by reference to the letters of early April 2007, were the subject of focus both at trial and on appeal. In this context, the findings at [189]-[190] should be noted:

"[189] What is clear is that Mr Mather's letter did not purport to be a survey of either 'Milan Towers' or 'Cote D'Azur'. Mr Mather agreed that there was no survey involved, with his involvement being 'just a review of plans' (T571.49). Mr Mather explained the process which he undertook in his evidence. I accept the submissions for the Defendant that, in light of his evidence, Mr Mather did not purport to undertake an accurate height measurement of the size of 'Cote D'Azur'. Mr Mather's letter dealt with the size of 'Cote D'Azur' from basement to the top of the lift overrun, without regard to relevant LEP definitions of 'height' in accordance with the decision of the Court of Appeal in Port Stephens Council v Chan Industrial Pty Limited [2005] NSWCA 232; 141 LGERA 226. The size of 'Cote D'Azur' was estimated by Mr Mather to be 22.7 metres high. He achieved this figure by a process of assumption and additions so as to give rise to an estimate.

[190] Although a considerable amount of time was taken up at the hearing, and in submissions, addressing the role of Mr Mather's letter in this case, I do not, in the end, consider that it plays any significant part. In particular, I do not think that the letter demanded the approach submitted for the Plaintiffs. It was not essential that the information contained in Mr Warnes' letter (by reference to Mr Mather's letter) be included in papers that were provided ultimately to Councillors as part of the decision-making process. I am certainly not persuaded that the omission of reference to Mr Warnes' letter supports a conclusion that Ms Gale was, in some way, seeking to suppress this information from Councillors."

1. On 10 April 2007, further plans were received by Council, otherwise unexplained by any correspondence. On 11 April 2007, a letter from the Council to Mr Warnes (drafted by Ms Gale) stated that the Council was in the process of finalising consideration of the matter. The letter sought confirmation of the relevant information, stating:

"During the preparation of this supplementary information, a further revised set of plans has been submitted (received 22nd March 2006) which is the revised plan that is being reviewed for the purposes of Council's request and is the revised plan which is currently being re-exhibited. This set of plans generally incorporated changes to density (now 38 units), height, removal of the lift overrun and carparking, and included revised documentation (received 5th April 2007) confirming by survey the maximum heights for this development.

Council is in the process of finalisation [of] the supplementary information required to be completed by the end of this week and forwarded to Councillors for their consideration of this item at the Ordinary Meeting of 24th April 2007.

However, on the 10th April 2007 a further set of revised plans has been received without a covering letter explaining the changes (noted in red) on plan. There would appear to be only several small changes (noted in red) which are difficult to read.

As outlined above, Council is concerned with the numerous revised sets of plans received over time for this proposal and the difficulty in assessment and preparation of information for Council. Given the timeframes associated with finalising this information and re-exhibition of the proposed plans, Council requests your confirmation of the relevant plans for this proposal. Further, it should be noted that submission of further revised plans may result in deferral of this matter beyond the Ordinary Council Meeting in April."

1. Mr Warnes responded that the plans that had been advertised were those that were relevant.

1. Objections were received in April and May 2007: [191] and [194] of the reasons. Mr Maruncic wrote directly to Council members about these objections and about supporting his application: [195] of the reasons.

1. The application came before the Combined Strategic/Operations Committee on 12 June 2007. A report of Mr Anson was before the Committee. It can be taken to have been prepared by Ms Gale. It recommended that Council not support the application and that it be delegated to the general manager for decision. On 12 July 2007, Mr Maruncic was advised that the application was refused, the reasons being stated to be its height, density, public interest and parking and traffic aspects.

The negligence case

1. The pleading of the case in negligence was in the following terms in an unnumbered paragraph in the pleading:

"Alternatively the Defendant was well aware of the Second Plaintiff's reliance on its conduct and advices as to the alleged bona fide consideration of the application and the expense and hardship involved by the Second Plaintiff and as such owed a duty of care to refrain from conducting itself in a manner so as to allow the Second Plaintiff to believe that a bona fide decision on the merits of the application ('No 3 plans') would be made.

The Plaintiffs allege the Defendant owed a duty of care to avoid foreseeable harm that would be caused by their actions in knowingly exceeding the limits of their authority and knowing the Second Plaintiff to be relying on their conduct as indicative of its authority to approve the aforesaid plans."

1. On appeal it was argued that the Council owed the appellants a duty to exercise reasonable care to avoid foreseeable economic loss. Reliance was placed in particular upon Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515. The sufficiently close relationship necessary for the imposition of such a duty was said to be found here because of the following factors:

(a) the need for the consent from the legislative framework;

(b) the vulnerability of the appellants by virtue of the critical importance of the views expressed by Council officers, especially Ms Gale, to the outcome;

(c) reliance by the appellants upon the good faith and non-negligent performance of duty by Council staff; and

(d) the control vested in the Council over the property and the interests of the appellant by the power given by the statute.

1. The statutory powers being exercised arose under the EPA Act, s 96, as part of Division 7 dealing with post development consent matters. Division 7 finds its place in Part 4 entitled "Development Assessment". Decisions about consent and variation to consent will, of course, be importantly influenced and to a degree controlled by the HREP and the relevant Port Stephens Development Control Plan. Section 5 of the EPA Act identifies the range of general considerations that a decision-maker will need to bring to bear upon any particular decision and its particular controlling legislation:

"The objects of this Act are:

(a) to encourage:

(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,

(ii) the promotion and co-ordination of the orderly and economic use and development of land,

(iii) the protection, provision and co-ordination of communication and utility services,

(iv) the provision of land for public purposes,

(v) the provision and co-ordination of community services and facilities, and

(vi) the protection of the environment, including the protection and conservation of native animals and plants, including threatened species, populations and ecological communities, and their habitats, and

(vii) ecologically sustainable development, and

(viii) the provision and maintenance of affordable housing, and

(b) to promote the sharing of the responsibility for environmental planning between the different levels of government in the State, and

(c) to provide increased opportunity for public involvement and participation in environmental planning and assessment."

1. Section s 79C deals with the evaluation of a development application and was in the following terms:

"(1) Matters for consideration-general

In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a) the provisions of:

(i) any environmental planning instrument, and

(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Director-General has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and

(iii) any development control plan, and

(iiia) any planning agreement that has been entered into under section 93F, or any draft planning agreement that a developer has offered to enter into under section 93F, and

(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph), and

(v) any coastal zone management plan (within the meaning of the Coastal Protection Act 1979),

that apply to the land to which the development application relates,

(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(c) the suitability of the site for the development,

(d) any submissions made in accordance with this Act or the regulations,

(e) the public interest."

1. Section 96 deals with modification of consent and was in the following terms:

"Modification of consents-generally

(1) Modifications involving minor error, misdescription or miscalculation

A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify a development consent granted by it to correct a minor error, misdescription or miscalculation. Subsections (1A), (2), (3), (5) and (6), section 96AB and Division 8 do not apply to such a modification.

(1A) Modifications involving minimal environmental impact

A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if:

(a) it is satisfied that the proposed modification is of minimal environmental impact, and

(b) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and

(c) it has notified the application in accordance with:

(i) the regulations, if the regulations so require, or

(ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and

(d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be.

Subsections (1), (2) and (5) do not apply to such a modification.

(2) Other modifications

A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if:

(a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which consent was originally granted and before that consent as originally granted was modified (if at all), and

(b) it has consulted with the relevant Minister, public authority or approval body (within the meaning of Division 5) in respect of a condition imposed as a requirement of a concurrence to the consent or in accordance with the general terms of an approval proposed to be granted by the approval body and that Minister, authority or body has not, within 21 days after being consulted, objected to the modification of that consent, and

(c) it has notified the application in accordance with:

(i) the regulations, if the regulations so require, or

(ii) a development control plan, if the consent authority is a council that has made a development control plan that requires the notification or advertising of applications for modification of a development consent, and

(d) it has considered any submissions made concerning the proposed modification within the period prescribed by the regulations or provided by the development control plan, as the case may be.

Subsections (1) and (1A) do not apply to such a modification.

(3) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 79C (1) as are of relevance to the development the subject of the application.

(4) The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified.

(5) Threatened species

Development consent of the kind referred to in section 79B(3), or in respect of which a biobanking statement has been issued under Part 7A of the Threatened Species Conservation Act 1995, is not to be modified unless:

(a) in the case of development referred to in section 79B(3)-the requirements of section 79B(3)-(7) have been complied with in relation to the proposed modification as if the application for the proposed modification were an application for development consent, or

(b) in the case of development in respect of which a biobanking statement has been issued under Part 7A of the Threatened Species Conservation Act 1995-the applicant has made an application for modification of the biobanking statement in relation to the proposal and a new biobanking statement has been issued or the consent authority is satisfied that the modification will have no impact on biodiversity values (within the meaning of that Act).

This subsection does not apply to State significant development.

(6) Deemed refusals

The regulations may make provision for or with respect to the following:

(a) the period after which a consent authority, that has not determined an application under this section, is taken to have determined the application by refusing consent,

(b) the effect of any such deemed determination on the power of a consent authority to determine any such application,

(c) the effect of a subsequent determination on the power of a consent authority on any appeal sought under this Act.

(6A), (7) (Repealed)

(8) Modifications by the Court

The provisions of this section extend, subject to the regulations, to enable the Court to modify a consent granted by it but, in the extension of those provisions, the functions imposed on a consent authority under subsection (1A)(c) or subsection (2)(b) and (c) are to be exercised by the relevant consent authority and not the Court."

1. The primary judge referred to other aspects of the statutory context at [27]-[42] of the reasons.

1. The power exercised by the relevant Council in a decision under a provision such as s 96 is not unconstrained. As public power, it is subject both to appeal and to judicial review. Section 96 does not provide for the exercise of power that cannot be brought to account.

1. The power to be exercised involves the honest and bona fide attendance to questions, many of which involve the evaluation of interests and values either irrelevant to, or even inimical to, the financial and economic interests of an applicant. The power is a species of governmental power.

1. In Caledonian Collieries Ltd v Spiers [1957] HCA 14; 97 CLR 202 at 220 Dixon CJ, McTiernan, Kitto and Taylor JJ stated that:

"... the well-settled principle applies that when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered".

1. In Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; 200 CLR 1 at 29 [62], McHugh J referred to this as a well-known or settled category of duty of care. As McHugh J pointed out in the same paragraph, the above passage in Caledonian Collieries was cited by Mason J in Sutherland Shire Council v Heyman [1985] HCA 41; 157 CLR 424 at 458-9 as part of the following important passage concerning the relationship between a common law duty and a statutory power:

"It is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty. The principle that when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered (Caledonian Collieries Ltd. v. Speirs; Benning v. Wong) has been applied mainly to private Acts. However, it has been frequently applied in Australia to public authorities, notably public utilities, exercising powers under public statutes... While some early statements of the principle suggest that the power given by statute is conditioned upon it being exercised without negligence so that negligent exercise amounts to an excess of authority ..., the better view has always been that the cause of action in negligence arises under the principle by virtue of a breach of a duty of care existing at common law.... And, at least since the decision in Fisher v. Ruislip-Northwood Urban District Council and Middlesex County Council, it has been generally accepted that, unless the statute manifests a contrary intention, a public authority which enters upon an exercise of statutory power may place itself in a relationship to members of the public which imports a common law duty to take care." (most citations omitted)

1. Neither Caledonian Collieries nor Heyman requires a linear or mechanical application of non-evaluative rules. The use of the word "may" by Mason J in the first line of the above extract from Heyman makes that clear. Neither case is the foundation for the broad proposition that any foreseeable loss of any kind from the exercise of any power, whatever its character, if exercised without reasonable care, is recoverable. A duty of some character must be gleaned as a matter of statutory construction or from the common law, in the context of the statute. No case of statutory duty was propounded by the appellants.

1. A number of considerations need to be borne in mind about the imposition of a duty here: first, the damage sought to be recovered is for pure economic loss, being the interests of Mr Maruncic and MM in relation to the land and its valuable or productive use; secondly, consideration is required as to the conformance of the statutory responsibilities of the Council with the content of the putatively imposed duty of care and the prospective interests of the plaintiff to be protected as well as to the realm of public administrative law.

1. As to the duty of care and economic loss, I said the following in Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; 74 NSWLR 102 at 126 [105] (with which Beazley and McColl JJA agreed):

"The duty is to prevent or avoid economic loss, beyond that which it is reasonably necessary to cause in the proper administration of the Protection of the Environment Operations Act. The circumstances in which the common law will impose a duty of care to avoid causing pure economic loss have been the subject of considerable debate and uncertainty in Australia since Caltex Oil (Australia) Pty Limited v The Dredge 'Willemstad'. Since then, in a series of cases in the High Court culminating in Woolcock Street Investments v CDG (Bryan v Maloney; Hill v Van Erp; Esanda Finance Corporation Limited v Peat Marwick Hungerfords; Pyrenees Shire Council v Day; and Perre v Apand) the High Court has identified an approach based on the presence, in the particular circumstances, of 'salient features' that, when combined, constitute or reflect a sufficiently close relationship to give rise to a duty of care. Such salient features include the inherent likelihood of the production of economic loss (Caltex at 576) and assumption of responsibility and known reliance (Bryan v Maloney and the negligent misrepresentation cases). The most important of these features, however, is vulnerability, in the sense discussed in the joint reasons of Gleeson CJ, Gummow, Hayne and Heydon JJ in Woolcock Street Investments v CDG at 530 [23]:

'"Vulnerability"', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, "vulnerability" is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant.'"

(Citations omitted)

The first sentence of the above paragraph is to be read, of course, as the duty to take reasonable care to prevent or avoid economic loss.

1. Here, as in Precision Products, it can be accepted that the negligent exercise of the power would or may cause economic detriment to the appellants. Delay in, or rejection of, a development approval can readily be seen to have economic consequences for a developer. There was, however, no relevant reliance, no assumption of responsibility and no vulnerability. Further, the posited duty does not conform to the statutory framework.

1. The appellants did not rely on the Council for protection or assistance. They made an application to the Council for variation of a consent. They had available to them professional advice, including experienced town planning and legal advice. It was Council's task in its local government function to consider and process the approval. The evidence that Mr Warnes and Mr Maruncic "relied" on the Council officers doing their jobs competently and diligently was no more than a reasonable expectation of members of the public. No representation was made by them which might be seen to found any assumption of responsibility by the Council. No case was pleaded or run based on the Council assuming some responsibility upon which the appellants relied.

1. The Council was not responsible for Mr Maruncic's financial predicament. Nor was it responsible for his decision, made with the advice of his professional adviser, Mr Warnes, not to exercise rights of appeal.

1. For the same reasons, the appellants were not vulnerable. The paragraph from Woolcock Street Investments quoted above is apposite here. Clarity of foreseeable damage and of causal link does not necessarily lead to a conclusion of vulnerability. Vulnerability arises from the inability to protect oneself. Here the circumstances of a professional developer with appropriate professional advice and a legal regime under which challenge could be made to the decision in question does not bespeak vulnerability, to the contrary.

1. Important to the appellants' complaints and argument was their asserted vulnerability to delay and the financial consequences thereof. The statute, however, in s 96(6) provides its own mechanism for protection from delay: deemed refusal in a time fixed by the regulations, and appellate rights from that time.

1. Approval of a variation to a consent may be to the financial benefit of the applicant; a refusal would not be. Approval, however, may be to the financial detriment of a nearby landholder, and refusal to its benefit. In making a judgment about whether to approve or not, the Council must consider the broad range of interests public and private of the kind set out in the EPA Act, ss 5 and 79C. The power is exercised in that milieu of interests, including the environment, the public interest and the interests of other landholders. Thus, though the place of the applicant is not as starkly antithetical to the exercise of the power as was the party in Precision Products discussed at 127 [12] of that judgment, it can nevertheless be said that the breadth of the interests and considerations attending the decision to approve an application, or not, conflict or may conflict with the duty to take into account the interests of the applicant. The legislation lays down the balance of interests to be assessed by the Council. They are to be weighed in the exercise of public power. The balance is adjusted in that way. Giving a private right of action through an imposed duty of care based on an applicant's economic interest may tend to skew that balance. Further, if the applicant's economic interests were to be protected, why not anyone whose economic interests may be affected? The statutory balance, intended to be reached by the bona fide decisions of Council, may be affected by the consideration of private litigation by those who wish to threaten it. These considerations affect the assessment of a lack of vulnerability. They also point to a degree of lack of conformance, indeed potential conflict, between the public duty of the Council in making the relevant decision, and considering the application therefor, and a private duty to act with reasonable care to avoid causing economic loss to the applicant: cf Sullivan v Moody [2001] HCA 59; 207 CLR 562 at 581-582 [55]-[60]; Tame v New South Wales [2002] HCA 35; 211 CLR 317 at 335 [24]-[26], 342 [57], 425 [323]; and Stuart v Kirkland-Veenstra [2009] HCA 15; 237 CLR 215 at 254-256 [111]-[118].

1. Further, there is the risk of lack of coherence with public or administrative law. This is not the issue of a certificate to enable a house to be built. It is an evaluative process that leads to a decision made as part of local government. Of course, the intentional tort of misfeasance in public office is available; but to make available the law of negligence, through the asserted duty of care, would risk incoherence with administrative law for reasons of the kind discussed in Precision Products at 128 [116]-[119] and New South Wales v Paige [2002] NSWCA 235; 60 NSWLR 371 at 400 et seq.

Ground 25: In failing to provide any basis for his findings that he preferred the evidence of Mr Cesta to that of Mr Dupont, such that his finding was against the weight of evidence (J [354]).

1. The ground is directed at [354] of the reasons which are as follows:

"I note that this conclusion does not depend upon which valuation expert was to be accepted. The problem for the Plaintiffs is more fundamental than that. However, if the point had been reached, I would have accepted and applied the approach adopted by Mr Cesta, the Defendant's valuation witness."

1. The matter was entirely obiter. The primary judge had rejected the claim. If the issue had been relevantly material there would be force in the appellants' complaint.

Ground 26: In finding the Appellants' claim for damages was limited to the loss of the chance to make a profit, thereby failing to take account of the value of the land itself (J [284]).

1. The same can be said about [284] of his Honour's reasons which were as follows:

"As will be seen, the Plaintiffs' case on damages is based upon the loss of a chance to build 'Milan Towers' and to make a profit from sale of the apartments. There is considerable force in the Defendant's submission that there was no realistic chance of this happening at any time that matters for the purpose of these proceedings."

1. Whether or not it is appropriate to take the value of the land separately from profit is open to doubt. The appellants' claim was that the alleged wrongs prevented the development of the land according to Mr Maruncic's plans. It is difficult to see why those claims are not to be approached by way of the need to show a profit on sale.

1. In any event, the primary judge was not drawing final conclusions but stating the nature of the appellants' case, as he understood it, as part of what his Honour referred to at [286]:

"What I have said is sufficient to note the difficulties for the Plaintiffs in the case, should this point be reached."

1. I have read the reasons of Basten JA. I agree with them.

1. For the above reasons, the order of the Court that I propose is: appeal dismissed with costs.

1. BASTEN JA: The Port Stephens Council was the consent authority for most land development applications within its boundaries. Prior to 2005, the appellants had obtained consent for a major residential development at Nelson Bay. In early 2005 the appellants sought a variation of the consent, increasing the size of the project. It was ultimately refused in July 2007. At no stage did the appellants challenge in the Land and Environment Court any deemed or actual refusal of the application. The validity of the process has not been reviewed. The appellants brought proceedings in tort, seeking to recoup their losses by a claim for damages. They sued the Council in negligence and for the intentional tort of misfeasance in public office.

1. Both claims were rejected by Johnson J in the Common Law Division: MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 6) [2011] NSWSC 1613. The appellants challenge that decision. I agree with Allsop P that the appeal should be dismissed with costs. I agree with the reasons given by the President, which I would supplement in the following respects.

Nature of causes of action

1. Where an authority with power to approve a development acts invalidly, but on reconsideration grants the approval, the developer may have suffered significant financial expense as a result of the delay caused by the first invalid decision. Under the general law, no damages are recoverable merely because the decision causing the loss was invalid. Invalidity is generally neither a sufficient, nor even a necessary, precondition to recovery of damages. No case suggests that the statutory conferral of judicial review functions on the Land and Environment Court, nor the replacement of prerogative writs by s 69 of the Supreme Court Act 1970 (NSW), has created a right to recover damages for invalid decision-making.

1. Public authorities may act in various ways which engage responsibilities and obligations under the general law. The Council will be liable for the negligent driving of garbage trucks. It may also be liable for the negligent carrying out of a building inspection and the negligent provision of information it is under a legal duty to supply. However, the consideration of a development application with respect to land falls into a different class of conduct. It involves a determination as to whether a legal impediment to development of land in private ownership should be relaxed: Environmental Planning and Assessment Act 1979 (NSW) ("EP&A Act"), s 76A(1). It is an exercise of public power subject to statutory regulation (see, eg, EP&A Act, s 79C) and subject to the controls imposed by various statutory instruments (eg, local environmental plans and development control plans). One matter the Council is required to take into account is simply described as "the public interest": s 79C(1)(e). The Council is an elected body, although it may delegate its powers to officers: see McGovern v Ku-Ring-Gai Council [2008] NSWCA 209; 72 NSWLR 504 at [157] and [161] (dealing with a claim of bias in determining a development application) and at [163]-[168] and [176]-[183] (dealing with alleged bias on the part of a council officer, not dissimilar to the allegation in this case).

1. Private landholders seeking approval are entitled to have their applications considered within a reasonable time. Once the prescribed period (40 days) has expired, the applicant is entitled to treat the failure to make a determination as a deemed refusal, from which it may appeal to the Land and Environment Court: EP&A Act, ss 82 and 97. Alternatively, an applicant aggrieved by unreasonable delay could obtain an order in the nature of mandamus directing the Council to determine the application. The fact that the Council is, in this sense, under an obligation to act within a reasonable time, does not mean that it is liable in negligence for damages for failing to proceed with reasonable expedition.

1. Needless to say, if the applicant proceeded to lodge an appeal with the Land and Environment Court, no claim in tort would lie against the Court for failing to take reasonable care in determining an application although, again, this Court could make orders requiring the Land and Environment Court to carry out its functions according to law.

1. In these circumstances, the concept of a duty in the Council to act expeditiously may be conceded; it is a statutory duty subject to both appellate and judicial review. There is no basis for implying a right to damages for breach of that statutory duty, nor was one suggested.

1. The primary cause of action relied upon by the appellants was misfeasance in public office. The availability of such a cause of action, as a matter of principle, was not in dispute. However, the existence of a cause of action for intentionally exceeding or abusing a public office does not sit comfortably alongside a cause of action for careless carrying out of the functions of public office.

1. In Northern Territory of Australia v Mengel [1995] HCA 65; 185 CLR 307 at 348 the joint reasons considered the possibility that misfeasance in public office should extend to the case where the officer ought to know that he or she lacks power to take a step which has a foreseeable risk of harm. In respect of foreseeable harm, the reasons stated:

"So far as unintended harm is concerned, the proposed reformulation ... serves no useful purpose if there is a duty of care to avoid the risk in question and is anomalous if there is not."

1. Principles of coherence amongst potential causes of action is an important factor in determining whether a duty of care is to be imposed.

1. The Civil Liability Act 2002 (NSW) assumes that a duty of care may arise in respect of a "special statutory power" by stating that "any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power": s 43A(3). For this purpose the phrase "special statutory power" means a power conferred by or under a statute, being a power of a kind that persons generally are not authorised to exercise without specific statutory authority: s 43A(2). This provision appears to incorporate one ground of invalidity as a precondition to establishing liability. More importantly, it is based on an implicit assumption that there may be a duty of care in considering the exercise of at least some "special statutory powers".

1. As first enacted the Civil Liability Act expressly stated that it created no cause of action: s 11 (since repealed). The point may have been deemed to be self-evident. In any event an assumption by the legislature as to the operation of the general law does not make it so, absent an intention to change the law in that respect: cf Mabo v Queensland [1988] HCA 69; 166 CLR 186 at 211 (Brennan, Toohey and Gaudron JJ); Giannarelli v Wraith [1988] HCA 52; 165 CLR 543 at 569 (Wilson J). There is no suggestion that the Act sought to create any new cause of action.

1. The pleading, set out at [80] above, was obscure: there is no duty, generally, to avoid "foreseeable economic loss", as suggested on the appeal. Rather, it appears that the pleading relied on a form of representation, though no specific representation was actually pleaded. The appellants claimed that the Council's "conduct" allowed Mr Maruncic to believe that:

(a) "a bona fide decision on the merits of the application would be made", and

(b) the Council had authority to make such a decision, although it was knowingly exceeding the limits of its authority.

1. In respect of (a), no doubt the Council had a public law duty to determine the appellants' application in good faith; had its officers suggested otherwise they would have been wrong in law. In respect of (b), the pleading is redolent of an allegation of misfeasance in public office. The point of distinction is not readily apparent.

1. There are a number of cases where councils have been held liable for negligent misrepresentations. However, none is comparable with the allegations in the present case. In L Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No 1) [1981] HCA 59; 150 CLR 225, a council was held negligent for failing to include a notification of a road widening proposal on a statutory certificate. The answer given, in the negative, was wrong. The present case was not one in which there was any allegation that an officer had negligently misrepresented an existing state of affairs involving the exercise of a council power.

1. In Tepko Pty Ltd v Water Board [2001] HCA 19; 206 CLR 1, the owners of rural land sought to have it rezoned for the purposes of subdivision. For that purpose, it was necessary to obtain a water supply, at the owners' cost, from the Water Board. The Water Board gave an estimate of the likely cost which was found to be substantially in excess of the actual cost. When the developer revealed the estimate to its financier, the financier moved to realise the security for the loan. The prospective developer sued the Water Board for its negligent estimate of cost. The joint reasons of Gleeson CJ, Gummow and Hayne JJ noted that the case was one in which it was not useful "to begin by examining the extent of a defendant's duty of care separately from the facts which give rise to a claim": at [8], quoting Hayne J in Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; 205 CLR 254 at 289-290. The Court held that the Board had been under no duty to provide the estimate which, under some pressure, it gave.

1. That case too differed from the present in the sense that the Water Board had no knowledge of the relationship between the developer and its financiers, nor that its cost estimate would be used in a particular way by the developer. In the present case, the key factors were as follows:

(1) with respect to power, there was a real question as to whether the application for variation could be determined under s 96 of the EP&A Act or whether a fresh development application was required;

(2) it was no part of the appellants' case that such a power was not available - indeed it had relied upon and insisted upon the existence of such a power at all relevant times;

(3) the doubts of the relevant officer as to the propriety of using s 96 had been made clear to the appellants, they having their own expert advice which they followed in disregard of the opinions expressed by the Council's officer, and

(4) the Council dealt with the matter as an exercise of power under s 96.

1. The function being exercised by the Council in granting or refusing approval to the variation of a consent required the weighing of a number of factors relevant to the amenity of an area which was to be experienced by both users of the proposed development and others living or having business in the vicinity. The height of the proposed development exceeded those permitted by the relevant statutory instruments. Approval had already been given to an increase in height above those limits. It was largely an evaluative judgment for the representatives of the local area to determine whether a further indulgence should be allowed. To refuse an increase in the size of the building may well have affected its financial viability to the developer. Whether or not that was a relevant consideration in respect of the proposed variation, the existence of public interests potentially in conflict with the private interests of the developer militate against a finding of a duty to the developer of the kind pleaded.

1. The only remaining feature of the claim in negligence was the allegation that the matter had not been dealt with "bona fide". At least, that appears to have been an implicit element of the claim to the extent that it relied upon a misrepresentation that the application would be dealt with in good faith. However, an allegation that the relevant officer misrepresented that the application would be dealt with in good faith, when it was not her intention so to do, does not imply a lack of reasonable care, but an intentional tort such as misfeasance in public office.

1. It follows that no duty of care of the kind pleaded by the appellants arose in the present case.

Grounds for complaint about reasons

1. As noted by Allsop P, the appellants sought to rely upon the remarks in the reasons of Hunt AJA in Monie v Commonwealth of Australia [2005] NSWCA 25; 63 NSWLR 729 as identifying the "approach" to be taken to the present appeal. In particular, reliance was placed upon the following statement of Hunt AJA at [43]:

"(5) But the trial judge's advantage does weaken with time. Where there is a significant delay between seeing and hearing the witnesses and the delivery of judgment, the trial judge is obliged to give specific reasons for accepting or rejecting the evidence of those witnesses whose evidence plays an important part in the factual finding made. If, for example, the judge is able to explain in the judgment given that contemporaneous notes had been made of the impressions formed of the evidence given by the relevant witnesses, confidence in the decision given would no doubt be maintained despite the delay."

1. The suggested consequence of a failure to give "specific reasons" of the kind suggested, is that the appellate court "is obliged to give careful scrutiny and consideration to those findings": at [43](6). The appellants sought to rely upon the approval for that approach given by Callinan and Heydon JJ in NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; 228 CLR 470 at [166]-[167]. The statement approved and set out in full at [166] was taken from a judgment of the English Court of Appeal in Goose v Wilson Sandford & Co [1998] EWCA (Civ) 245, which was in similar terms to Monie. The element of delay was treated as relevant to the question whether "the process before the [Refugee Review] Tribunal was fairly conducted": at [167].

1. It seems doubtful that Hunt AJA intended to prescribe an obligation inherent in judicial decision-making. Rather, the passage set out above at [9] is redolent of an appellate court unsatisfied with the reasoning of the primary judge, seeking explanations as to why the process may have miscarried. For example, the suggestion that the very fact of delay led to pressure to complete and deliver a judgment which may therefore be defective can hardly rise above the level of speculation: Monie at [43](7) and (8). The same may be said of the suggestion that delay may demonstrate that the judge was "unable to grapple adequately with the issues" and has therefore made the decision "which was the easiest to make": [43](9). It is, in truth, also a matter of speculation as to whether demeanour-based findings were made and noted at the time of the trial or only shortly before the judgment was delivered. It is only some apparent flaw in the reasons given which could allow the appellate court to indulge in speculation as to the process of decision-making at trial.

1. Gleeson CJ in NAIS provided the following analysis at [5]:

"Undue delay in decision-making, whether by courts or administrative bodies, is always to be deplored. However, that comfortable generalisation does little to advance the task of legal analysis when it becomes necessary to examine the consequences of delay. The circumstances in which delay, of itself, will vitiate proceedings, or a decision, are rare. ... There is, however, nothing in the Act that prescribes a time limit for decisions of the Tribunal, and this Court has no power to determine some such limit. A court may have power to relieve against oppressive conduct of a complainant, or a prosecutor, and delay may be a factor in the oppression. In such circumstances, the ground for relief is the oppression, not the delay. A court of appeal, reviewing a decision of a primary judge, may conclude that delay in giving judgment has contributed to error, or made a decision unsafe. Again, the ground of appellate intervention is the error, or the infirmity of the decision, not the delay itself. [See Monie v The Commonwealth ... and the authorities there collected.] Where delay gives rise to a ground of supervisory or appellate intervention, the remedy must be tailored to the circumstances and justice of the case. In adversarial litigation, for example, neither party may be at fault, and it may be unnecessary and unjust to visit the successful party with all the consequences that flow from having to start again."

1. To invite the Court, as the appellants did, to approach the reasons given by the primary judge as presumptively infected by error, because of the delay in delivering them, was to reverse the proper approach. Rather, to the extent that the appellants were able to point to aspects of the reasons which were unsatisfactory or suggestive of error, it may have been relevant to take account of the delay in determining whether there had in fact been a miscarriage of justice.

1. Were the approach suggested by the appellants correct, it would tend to be destructive, rather than protective, of the proper administration of justice. Many cases, especially in the superior courts, of which this is clearly one, are not readily disposed of by way of ex tempore reasons delivered at the completion of the hearing. As a practical matter, some delay is inevitable. Indeed, a degree of delay sufficient to allow a careful reconsideration of the documentary and oral evidence in the light of final submissions may be desirable, if not essential. Thereafter, it is necessary for a judge to balance the pressures of additional cases, some of which may have been granted expedition and others of which may involve criminal proceedings and issues of liberty of the individual. If delay were to lead to retrial in a significant number of cases, the effect would be self-perpetuating. Those to suffer most would be the litigants involved, not merely in the cases requiring retrial, but in all cases. Comfortable platitudes must give way to practical reality. The basis of discernible error in a particular case is rarely capable of transmogrification into a legal principle.

1. BERGIN CJ in Eq: I agree with Allsop P. I also agree with Basten JA.

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Decision last updated: 21 December 2012