Mulgrave Shire Council v Red Hills Pty Ltd

[2000] WASC 223

BUNBURY-HARVEY REGIONAL COUNCIL -v- GIACCI BROS PTY LTD [2000] WASC 223

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASC 223
Case No:	CIV:1278/1997	Heard:	29-31 MAY 2000
Coram:	HASLUCK J	Delivered:	15/09/00
No of pages:	54	Judgment Part:	1 of 1
Result:	Plaintiff's claim for $354,990 allowed with interest
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Parties:	BUNBURY-HARVEY REGIONAL COUNCIL GIACCI BROS PTY LTD (ACN 008 708 361)
Catchwords:	Local government Regional council operating dump site Validity of tipping fees Ultra vires rule Arrangements made with earthmoving contractor Whether intention to enter into contract Whether estoppel arising from use of site Whether fees can be recovered by quantum meruit Principles of unjust enrichment
Legislation:	Builders Licensing Act 1971 (NSW) Environmental Protection Act 1986 Interpretation Act 1984 Local Government Act 1960 Local Government Act 1995
Case References:	Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 Attorney-General & Ephram Hutchings v Great Eastern Railway Co [1880] 5 AC 473 Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 Bell Houses Ltd v City Wall Properties Ltd [1966] 1 QB 207 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 City of Camberwell v Cooper [1930] VLR 289 Commonwealth and the Postmaster General v The Progress Advertising and Press Agency Co (1910) 10 CLR 457 Commonwealth v Verwayen (1990) 170 CLR 394 Coshott v Woollahra Municipal Council (1988) 66 LGRA 256 Foran v Wight (1989) 168 CLR 385 Gissing v Gissing [1971] AC 886 Giumelli v Giumelli (1998) 196 CLR 101 Hatton v Beaumont (1978) 20 ALR 314 I W v City of Perth (1997) 191 CLR 1 In Re KL Tractors Ltd (In Liq) (1961) 106 CLR 318 Kathleen Investments (Australia) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 53 ALJR 522 Lismore City Council v Stewart (1989) 18 NSWLR 718 Montreal Street Railway Company v Normandin [1917] AC 170 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Placer Development Ltd v Commonwealth (1969) 121 CLR 353 Seven Cable Television Pty Ltd v Telstra Corp Ltd (2000) 171 ALR 89 Suatu Holdings Pty Ltd v Australian Postal Corporation (1989) 86 ALR 532 Taylor v Johnson (1982) 151 CLR 422 The Administration of The Territory of Papua & New Guinea v Leahy (1960) 105 CLR 6 Vass v Commonwealth (2000) 169 ALR 486 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Ashbury Railway Carriage & Iron Co (Limited) v Hector Riche (1875) LR 7 HL 653 Attorney-General for New South Wales ex rel Franklin's Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955 Breckenridge Speedway Ltd v The Queen in Right of Alberta [1970] SCR 175 Cairncross v Lorimer (1860) 3 Macq 827 Communities Economic Development Fund v Canadian Pickles Corp [1992] 1 WWR 193 Coogee Esplanade Surf Motel Pty Ltd v Commonwealth of Australia (1983) 50 ALR 363 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Eaves v Eaves [1940] Ch 109 Garrard v James [1925] Ch 616 Hazell v Hammersmith & Fulham London Borough Council [1922] 2 AC 1 In Re Coltman (1881) 19 Ch D 64 In re Staines Urban District Council's Agreement [1969] 1 Ch 10 J B Rolland & Ors v La Caisse Deconomie Notre-Dame de Quebec (1895) 24 SCR 405 Kindersley District Credit Union Ltd v Dahl [1992] 3 WWR 209 La Caisse Populaire Notre Dame Ltd v Moyen (1967) 61 DLR (2d) 118 Lark v Outhwaite [1991] 2 Lloyds Report 132 Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610 Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 79 LGERA 30 National Telephone Co Ltd v Constables of St. Peter Port [1900] AC 317 Prospect County Council v Australian Blue Metal Ltd (1965) 11 LGRA 331 Rothmans of Pall Mall (NZ) Ltd v Attorney-General [1991] 2 NZLR 323 Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 Victoria & Ors v Commonwealth (1975) 134 CLR 81

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : BUNBURY-HARVEY REGIONAL COUNCIL -v- GIACCI BROS PTY LTD [2000] WASC 223 CORAM : HASLUCK J HEARD : 29-31 MAY 2000 DELIVERED : 15 SEPTEMBER 2000 FILE NO/S : CIV 1278 of 1997 BETWEEN : BUNBURY-HARVEY REGIONAL COUNCIL

Plaintiff

AND

GIACCI BROS PTY LTD (ACN 008 708 361)
Defendant

Catchwords:

Local government - Regional council operating dump site - Validity of tipping fees - Ultra vires rule - Arrangements made with earthmoving contractor - Whether intention to enter into contract - Whether estoppel arising from use of site - Whether fees can be recovered by quantum meruit - Principles of unjust enrichment

Legislation:

Builders Licensing Act 1971 (NSW)

Environmental Protection Act 1986
Interpretation Act1984
Local Government Act 1960
Local Government Act 1995

Result:

Plaintiff's claim for $354,990 allowed with interest

(Page 2)

Representation:

Counsel:

Plaintiff : Mr N W McKerracher QC & Mr J A Scurria
Defendant : Mr K J Martin QC & Mr J C Curthoys

Solicitors:

Plaintiff : J Scurria & Associates
Defendant : Slee Anderson & Pidgeon

Case(s) referred to in judgment(s):

Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54
Attorney-General & Ephram Hutchings v Great Eastern Railway Co [1880] 5 AC 473
Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424
Bell Houses Ltd v City Wall Properties Ltd [1966] 1 QB 207
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363
City of Camberwell v Cooper [1930] VLR 289
Commonwealth and the Postmaster General v The Progress Advertising and Press Agency Co (1910) 10 CLR 457
Commonwealth v Verwayen (1990) 170 CLR 394
Coshott v Woollahra Municipal Council (1988) 66 LGRA 256
Foran v Wight (1989) 168 CLR 385
Gissing v Gissing [1971] AC 886
Giumelli v Giumelli (1998) 196 CLR 101
Hatton v Beaumont (1978) 20 ALR 314
I W v City of Perth (1997) 191 CLR 1
In Re KL Tractors Ltd (In Liq) (1961) 106 CLR 318
Kathleen Investments (Australia) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117
Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 53 ALJR 522
Lismore City Council v Stewart (1989) 18 NSWLR 718
Montreal Street Railway Company v Normandin [1917] AC 170
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221


(Page 3)

Placer Development Ltd v Commonwealth (1969) 121 CLR 353
Seven Cable Television Pty Ltd v Telstra Corp Ltd (2000) 171 ALR 89
Suatu Holdings Pty Ltd v Australian Postal Corporation (1989) 86 ALR 532
Taylor v Johnson (1982) 151 CLR 422
The Administration of The Territory of Papua & New Guinea v Leahy (1960) 105 CLR 6
Vass v Commonwealth (2000) 169 ALR 486
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

Case(s) also cited:

Ashbury Railway Carriage & Iron Co (Limited) v Hector Riche (1875) LR 7 HL 653
Attorney-General for New South Wales ex rel Franklin's Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955
Breckenridge Speedway Ltd v The Queen in Right of Alberta [1970] SCR 175
Cairncross v Lorimer (1860) 3 Macq 827
Communities Economic Development Fund v Canadian Pickles Corp [1992] 1 WWR 193
Coogee Esplanade Surf Motel Pty Ltd v Commonwealth of Australia (1983) 50 ALR 363
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Eaves v Eaves [1940] Ch 109
Garrard v James [1925] Ch 616
Hazell v Hammersmith & Fulham London Borough Council [1922] 2 AC 1
In Re Coltman (1881) 19 Ch D 64
In re Staines Urban District Council's Agreement [1969] 1 Ch 10
J B Rolland & Ors v La Caisse Deconomie Notre-Dame de Quebec (1895) 24 SCR 405
Kindersley District Credit Union Ltd v Dahl [1992] 3 WWR 209
La Caisse Populaire Notre Dame Ltd v Moyen (1967) 61 DLR (2d) 118
Lark v Outhwaite [1991] 2 Lloyds Report 132
Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610
Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 79 LGERA 30
National Telephone Co Ltd v Constables of St. Peter Port [1900] AC 317
Prospect County Council v Australian Blue Metal Ltd (1965) 11 LGRA 331
Rothmans of Pall Mall (NZ) Ltd v Attorney-General [1991] 2 NZLR 323
Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133
Victoria & Ors v Commonwealth (1975) 134 CLR 81

(Page 4)

1 HASLUCK J: The plaintiff is a regional local government within the State of Western Australia constituted under the Local Government Act1960. It operates a refuse disposal site at Stanley Road, Kemerton within the Shire of Harvey ("the Site"). In September of 1996 the defendant had a need to dump certain refuse material which had been contaminated by asbestos. The removal of this material was part of an earthmoving contract which had been undertaken by the defendant. As a consequence of arrangements made between representatives of the two parties, the defendant proceeded to dump a large quantity of refuse material at the Site between 11 September 1996 and 15 October 1996. The plaintiff seeks to recover from the defendant the sum of $354,990, being the amount invoiced to the defendant as a consequence of the dumping operation. The plaintiff also seeks damages.

2 The plaintiff's claim is based principally upon an alleged contract between the parties, namely, that in consideration of the defendant paying to the plaintiff the sum of $9 per tonne or part thereof of refuse material, the plaintiff would permit the defendant to dump refuse material at the Site. The agreement was said to be partly oral, partly in writing and partly constituted by the conduct of the parties. The plaintiff relies upon a telephone conversation that is said to have taken place on or about 5 September 1996 between the manager of the defendant, Mr Wayne Turner, and Mr Ian Steele who is described in the statement of claim as the secretary, manager and chief executive officer of the plaintiff. The plaintiff also relies upon invoices provided to the defendant during the dumping period. The conduct relied upon consists of the defendant's actions in dumping refuse material at the Site 12 months earlier upon the same terms and the payment of invoices rendered as a consequence without complaint or delay.

3 The statement of claim also includes two alternative claims. The plaintiff sets out certain circumstances which are said to estop the defendant from denying its liability to the plaintiff in the amount claimed. Further, the plaintiff contends that the defendant is, in any event, liable to the plaintiff in the amount claimed on the basis that this represents remuneration based on the reasonable value of the services provided by the plaintiff.

4 The defendant by its amended defence denies liability on various grounds. It says that the parties had no intention to enter into the alleged contract. Alternatively, if they did intend to enter into any contract, the contract was that the defendant would pay the rate which had been validly fixed by the plaintiff pursuant to the plaintiff's statutory powers.

(Page 5)

Particulars are provided of various facts and matters which are relied upon in order to establish that the rate for heavy vehicles - loads in excess of three tonnes of $9 per tonne or part thereof - was not validly set pursuant to the plaintiff's statutory powers. The amended defence goes on to say that the plaintiff is only entitled to charge a reasonable amount for the material dumped at the Site. A reasonable amount on the defendant's case would be much less than the amount claimed.

5 It will be apparent from this short description of the issues raised by the pleadings that I must begin by looking closely at the statutory provisions defining the plaintiff's powers and at various facts and matters preceding the telephone conversation which is said to have taken place on 5 September 1996. It will also be necessary to look at various evidentiary materials, including reports by experts, bearing upon the question of what constitutes a reasonable value for the services provided by the plaintiff. I note in passing that, although the Local Government Act 1960 has been superseded by the Local Government Act 1995, which came into force on 1 July 1996, the nature of the issues between the parties requires me to look closely at certain provisions of the 1960 Act.

Local Government Legislation

6 Section 696 of the 1960 Act lies within Part XXIX concerning regional councils. It provides that the whole or a portion of the combined area of two or more municipalities may be constituted as a regional district. Where a regional district is constituted, a regional council shall be constituted to perform designated functions. Section 697(2)(e) provides that the constitution agreement shall, in accordance with s 714, designate the function or functions to be performed by the regional council in respect of the regional district.

7 By s 714(2), a designated function has to be of the kind that each of the constituent municipalities is authorised or required to perform. Section 715 provides that a designated function shall not be performed in the regional district by any constituent municipality unless the municipality does so on behalf of the regional council under a contract or with the written approval of the regional council. Section 716(1) provides that a regional council may make by-laws in relation to a designated function in which respect Pt VIII of the 1960 Act relating to the making, confirmation and publication of by-laws shall apply to any such by-law. A by-law made by the regional council will prevail where there is any inconsistency.

(Page 6)

8 Section 190(1) lies within Part VIII of the 1960 Act. It provides that a council may make by-laws "in accordance with the provisions of this Part." Section 191(1) provides that a council may so make by-laws prescribing forms, fees, matters, and things, which by this Act are contemplated, or are required or permitted to be prescribed, or which appear to the council to be necessary or convenient for the purpose of effectually carrying out the provisions of this Act, or for better effecting the operation, objects, and purposes of this Act.

9 Section 717 of the 1960 Act reads as follows:

"717. Subject to this Part, in and for the purposes of performing a designated function a regional council shall -

(a) have the same powers, duties and responsibilities; and

(b) be subject to the same controls, restrictions and procedures,


as a municipal council would have or be subject to under Parts IX to XXIII, both inclusive, or another Act if it were performing a function of that kind and the provisions of those Parts and other Acts shall apply to and in relation to the regional council accordingly."

10 I note in passing that Parts IX to XXIII cover a range of matters such as land and property of municipalities, the power to purchase and take land for works, the management of streets and services, the provision of building approvals and municipal facilities. These various provisions do not presume that in each case the municipality will be obliged to make a by-law before taking any step and the power to make by-laws, as in s 190, is generally expressed in permissive terms. Part X of the 1960 Act concerns the making of contracts. Section 272 provides that a council may enter into contracts for the purposes of the Act.

11 Part XXIX of the 1960 Act concerning regional councils was repealed in its entirety by the 1995 Act. Clause 10 of Sch 9.3 to the 1995 Act provides, inter alia, that a regional council in force under the 1960 Act continues as a regional local government as if it had been constituted as a regional local government under the 1995 Act. A local government under the latter Act is a body corporate and has the legal capacity of a natural person. Section 3.1 of the 1995 Act provides that the general function of a local government is to provide for the good government of

(Page 7)

persons in its district. A liberal approach is to be taken to the construction of the scope of the general function of a local government. By s 3.64, the purpose for which a regional local government is established is to be set out in its establishment agreement. By s 3.67, to the extent that a local law made by a regional local government is inconsistent with a local law made by local government, the local law made by the regional local government prevails.

12 Section 3.5(1) of the 1995 Act provides that a local government may make local laws prescribing all matters that are required or permitted to be prescribed by a local law, or are necessary or convenient to be so prescribed, for it to perform any of its functions under the Act. I note in passing that by s 56(1) the Interpretation Act1984 where the word "may" is used in conferring a power, such word shall be interpreted to imply that the power so conferred may be exercised or not at discretion.

13 Section 3.18 provides that a local government is to administer its local laws and may do all other things that are necessary or convenient to be done for or in connection with performing its functions under the 1995 Act. In performing its executive functions a local government may provide services and facilities. These various statutory provisions clearly allow for the continuance after the coming into force of the 1995 Act of a regional council constituted under the 1960 Act, as if the regional council had been constituted as a regional local government under the 1995 Act.

14 At a first glance, under either Act, the power to make by-laws appears to be discretionary. Prima facie, a municipal body is at liberty to enter into contracts. It quickly became apparent at the hearing before me, however, that it was a live issue between the parties as to whether the plaintiff was at liberty to adopt and collect fees in respect of dumping at the Site otherwise than by the making and publication of a by-law to that effect. It was common ground at the hearing that prior to September 1996 the plaintiff had not made any such by-law under either the 1960 Act or the 1995 Act.

Constitution of the Bunbury-Harvey Regional Council

15 On 13 December 1989 a regional council constitutional agreement was entered into between the Shire of Harvey and the City of Bunbury, thus creating the Bunbury-Harvey Regional Council. Clause 6 of the constitution agreement dealt with designated functions. That clause provided that without limiting the power of each constituent municipality to do all things connected with waste treatment and disposal which have

(Page 8)

not been delegated to the regional council, but in all respects subject to the provisions of s 715 of the 1960 Act, the regional council was to have the designated functions specified in the list forming part of that clause. In accordance with s 714 of the Act, these designated functions were "to be performed by it (the regional council) to the extent that municipalities in Western Australia are authorised or required under any statute from time to time to perform them in respect of their respective municipal district."

16 The list included the orderly and efficient treatment, storage and disposal of waste delivered to a building or place provided for those purposes by the regional council. The list also allowed for the charging of fees for the carrying out of such a function. One finds elsewhere in the agreement that "waste" means house and trade rubbish and refuse and other waste matter, including any wastes composed wholly or in part of liquid. The list of designated functions also included in cl 6(f) the carrying out and doing of all other acts and things which are reasonably necessary for the bringing into effect of all of the functions specified in the list.

17 In 1990 Mr Steele took up his position as chief executive officer of the plaintiff council and the plaintiff assumed control of the Site. The evidence before me included a deed dated 21 April 1992 made between the City of Bunbury and the Shire of Harvey as lessor of the one part and the plaintiff as lessee of the other part which recited that the lessor had purchased the land for the purpose of providing a sanitary landfill site. The subject land was leased to the plaintiff for a term of 10 years commencing 11 February 1992. By cl 13.04, at the expiration of the term, the lessee is required at its own expense to reinstate the site so that it could be used for a purpose other than a sanitary landfill site. The lease included two five-year options of renewal.

18 The tenor of Mr Steele's evidence was that the plaintiff set tipping fees by resolution rather than by by-laws. He referred to a document included in the agreed bundle of documents headed "Refuse Disposal Site". This document was produced by the plaintiff and was issued at the beginning of each financial year to ratepayers in the City of Bunbury and the Australind locality of the Shire of Harvey showing the applicable tipping fees and the allocation of entry vouchers to ratepayers in relation to the Site. It showed the tipping fees which applied at the Site during September to November 1996 and prescribed a fee of $9 per tonne or part thereof for loads in excess of three tonnes.

(Page 9)

19 Mr Steele went on to describe the practices of the plaintiff in regard to the setting of tipping fees. He said that from 1 July 1992, the fees for loads in excess of three tonnes was $9 per tonne or part thereof. This fee had been set by resolution at a meeting of the plaintiff council on 13 April 1992, such fee being effective from 1 July 1992. This was published in a local newspaper - the South Western Times of 25 June 1992 - and has been the rate for commercial loads exceeding three tonnes since that time. Details of the fee were published in the Government Gazette on 19 August 1994 and 8 September 1995.

20 Mr Steele said further that at a meeting of the Bunbury-Harvey Regional Council on 3 August 1995 the existing rates were continued when the draft budget for 1995/96 was considered and adopted. On 4 September 1996 at a meeting of the Bunbury-Harvey Regional Council, it was resolved that the draft budget for the year ending 30 June 1997 be adopted. That draft budget had allowed for tipping fees of $9 per tonne or part thereof. He said that a decision to adopt a budget and schedule of fees was made at each of these meetings by ordinary resolution. On each occasion he made sure that there was a quorum at the meeting before arranging for the meeting to proceed.

21 The plaintiff's power to set tipping fees was said to be referable to cl 6 of the plaintiff's constitution agreement, the relevant head of power being found before 1 July 1996 under the 1960 Act and after 1 July 1996 under the 1995 Act. Mr Steele's evidence was relied upon by the plaintiff to establish that the tipping fees set by the plaintiff at its meeting on 13 April 1992 by way of resolution were validly set in accordance with the plaintiff's powers under the constitution agreement. The same could be said of the subsequent resolutions passed on 3 August 1995 and on 4 September 1996 in that the budgets under consideration included the tipping fees for loads in excess of three tonnes at $9 per tonne or part thereof with the result that adoption of the budget represented an adoption of the tipping fee.

22 I note in passing that the plaintiff conducted its affairs in the manner of a commercial business. The scope of its operations was undoubtedly influenced by the desire of the two constituent councils to make available in the district a waste disposal facility, but day to day decisions and budgeting were largely determined by the plaintiffs capacity to generate sufficient income to sustain its operations. For example, the 1995/96 budget papers contain an estimation that at the close of the 1994/95 financial year, there will be a surplus of $15,090 carried forward. "This has been taken into consideration when formulating the 1995/96 budget."

(Page 10)

The papers go on to say that "the budget as presented was balanced without the need to increase tip fees."

23 The budget papers also contain the following passages which tend to show that the plaintiff saw itself as a financially independent entity:

"MEMBER CONTRIBUTIONS

Contributions from the City of Bunbury and the Shire of Harvey have been assessed as $104,580 and $21,420 respectively.


USAGE FEES

In addition, it is anticipated that the Tip Fee Charges applicable to each Authority will be


City of Bunbury 11,600 tonnes $104,400

Shire of Harvey 2,555 tonnes $ 22,995

RESERVE FUNDS

The establishment of reserve funds ensures the Regional Council maintains a strong financial position for current and future Capital Expenditure. Included in this Budget is the proposal to carry out Trench Excavation at a cost of $110,000. This should provide sufficient Land Fill Area for the next three years.

Funding for this Project will come from the Reserve Account established for this purpose. Thus not requiring further financial commitment from the constituent Councils. This Budget maintains the funding of both reserves. The proposed transfer to reserves are

i) Plant Replacement Reserve $45,000 plus $16,520 interest earned on invested funds.

ii) Site Trenching and Maintenance Reserve $45,000 plus $7,680 interest earned on invested funds."

Events Prior to 5 September 1996

24 Mr Steele said in evidence that the Site has a size of 127.38 hectares. It seems that there was a statutory need to provide buffer zones around the

(Page 11)

waste disposal area and a portion of the Site was too low lying for waste disposal. The combination of these factors meant that a total area of 78,000 square metres was available for waste disposal, being slightly less than one-third of the entire area of the Site.

25 Mr Steele went on to say that during the nine-year period since the Site was opened three cells or pits have been used. The land area of pits 1, 2 and 3 combined amounted to about 15.6 hectares. He anticipated that by the year 2000 dumping will have been completed at pits 1, 2 and 3 and the plaintiff will be in the process of planning to dump in pit 4. A schedule of tipping fees for 1992 signed by Mr Steele stated that the plaintiff was able to contain its charges for admission to the Site for two and a half years after its opening on 1 January 1990 upon the basis that the tip operations were subsidised by the City of Bunbury and the Shire of Harvey to an amount of $265,000. It was against that background that a new scale of tipping fees applicable to light vehicles and heavy vehicles of various descriptions was introduced as from 1 July 1992. This included under the heading "Heavy Vehicles - Weighbridge" a fee of $9 (per tonne or part thereof) for loads in excess of three tonnes.

26 Mr Jack Stidworthy gave evidence on behalf of the plaintiff. He said that he was a gate person at the Site who had been employed full-time by the plaintiff since approximately 15 February 1995. He described the situation at the Site during the period of his employment. He said that the weighbridge and computer are all linked together. When a vehicle comes to the tip, if it is using a tip pass issued by the City of Bunbury of the Shire of Harvey, he could clip a number off the ticket and record which local authority the pass came from for future billing to the local authority in question. If the vehicle was from a regular customer, it was weighed on the weighbridge and the computer determined the charge automatically because the tare weight of vehicles owned by regular customers was recorded on the computer system. If the vehicle did not belong to a regular customer, the relevant details of vehicle registration number, customer name and type of waste disposed of were manually entered. The computer was able to calculate a net weight of waste disposed of by comparing the weights of the vehicle loaded and unloaded as determined by the weighbridge. The total charge for dumping waste for the vehicle could then be determined.

27 Mr Steele said that two people are employed by the plaintiff to work in shifts at the gatehouse/weighbridge. Prior to November 1996, the plaintiff used its own staff and equipment for landfill operations in which a traxcavator purchased for $138,000 in 1991 was used. Weighbridge

(Page 12)

dockets evidencing the cost of each load were signed immediately by the relevant driver with a copy being handed to the driver for delivery to his principal.

28 It was common ground at the hearing that 12 months prior to the events principally in dispute in these proceedings, the defendant dumped 325 tonnes of refuse material at the Site. This took place between 21 September 1995 to October 1995. The defendant was invoiced at the rate of $9 per tonne upon the basis of the details set out on the relevant weighbridge dockets and the sum of $2,826 was eventually paid by the defendant to the plaintiff on 10 November 1995. The balance due of $324 was paid approximately two months later. These payments were apparently made without any complaint by the defendant or significant delay.

29 The weighbridge dockets issued in respect of the 1995 dumping operation were the same as the weighbridge dockets issued 12 months later in respect of the disputed transaction. I therefore pause briefly to look at a sample weighbridge docket dated 24 September 1996 issued by the plaintiff. It shows that truck 77 spent seven minutes on the Site with asterisks denoting that the tare attributed to the vehicle was determined by manual weighing. Comparison with the gross weight produced a net weight for the load of $16.62 which at $9 per tonne or part thereof led to a calculated value of $153. The weighbridge docket includes these further details in respect of truck 77: "Contractor: Giacci Bros, Customer: Giacci, Cust. Addr: Picton South West Highway, Product: general domestic refuse." The plaintiff also put in evidence the account summary for the 1995 dumping operation documenting the total amount payable of $2,925.

30 Under cross-examination, Mr Steele conceded that he did not have any personal involvement in the 1995 transaction. His understanding was that the defendant had an account established prior to 1995 and as a consequence their deliveries were accepted and payment subsequently made by them without any specific discussion. The practice was that once an account had been established by a client, it would run on unless there was a request by the client that it be shut down or a decision to that effect was made by the plaintiff.

31 The Site controlled by the plaintiff was not the only dumping site in the vicinity. There were dumping sites controlled by neighbouring municipalities. The defendant called as a witness Michael Cross, who is a partner is J W Cross & Sons, demolition contractors. He said that his

(Page 13)

partnership operates Australind Sand Supplies and has a 200-acre property at Stanley Road, Australind, about 100 metres from the plaintiff's Site. Sand is extracted and sold from the Cross site and since 1992 the partnership has had approval from the Shire of Harvey to accept inert waste from the general public as well as rubbish from the partnership's demolition work.

32 Mr Cross said that fees for use of the Cross site were ascertained by vehicle size, such fees being subject to negotiation. The tipping fees he was charging to the public in 1996 were $80 for a tipping semitrailer and this would be the applicable rate for the type of trucks used by the defendant. Mr Cross had not attempted at any stage to take contaminated material such as asbestos or old batteries and he recognised that he was probably not licensed for such a purpose.

33 Mr Cross recalled that in 1996 tenders were called for the preparation of the site of the proposed new hospital at Bunbury at the corner of Robertson Drive and Bussell Highway. His firm did not tender for the job because he knew the site included the old rubbish dump site of the City of Bunbury and was likely to include asbestos and heavy metal contamination of the sand from old batteries.

34 It was common ground before me that in mid-1996 the defendant was awarded a contract by the Building Management Authority to do earthworks at the new site for the Bunbury Regional Hospital - described in the relevant documents as the South West Health Campus Site - and that, as part of this contract, the defendant was required to dispose of large quantities of asbestos and contaminated waste. The consulting engineers to the proprietor of the site were Gutteridge Haskins & Davey Pty Ltd, commonly known as GHD.

35 At that time, Mr Wayne Turner was employed by the defendant as construction manager. His normal duties included supervising earthmoving and cartage contract works for Giacci Bros Pty Ltd and the preparation of tenders for this type of work. He was called as a witness by the defendant. In his written statement of evidence and under cross-examination, Mr Turner described the circumstances in which the defendant came to be interested in the Health Campus contract and the way in which the contract was obtained.

36 Mr Turner said in evidence that during the preparation of the tender for the Health Campus contract, he inspected the relevant site. The north-east corner was an old rubbish dump site that had not been used for

(Page 14)

many years. Areas of heavy metal contamination had been identified in a site assessment report prepared by GHD engineers and had to be disposed of elsewhere. The balance of the area consisted of piles of debris and rubbish, including scrap metal, broken glass, disintegrating asbestos, cement pieces and rubble. The Health Campus contract envisaged that there was a provisional quantity amount of 21,700 cubic metres for the excavation and removal of this area to clean sand. It was obvious to him that the actual rubbish in the area was only a small portion of the 21,700 cubic metres and that there was a considerable allowance being made for the removal of soil from the area in this figure. There was no organic rubbish in the area. The defendant's obligation was to excavate to clean sand at the direction of GHD engineers. The defendant would be paid for the quantity removed at the rate tendered and inserted in the price schedule of rates.

37 Mr Turner knew that at the time the tender was being prepared, Giacci proposed to excavate and transport the material from the site to its sandpit at Gelorup, a short distance away. There, it would be screened. Giacci would use the soil as fill at this sandpit and deposit the hard rubble at the privately owned tip operated by the Cross partnership. His understanding was that the amount payable at the Cross site would be $3 per tonne.

38 Mr Cross gave some evidence bearing upon these matters. He recalled visiting Michael Giacci at the defendant's Picton depot. He asked Michael what he was going to do about the rubbish from the Health Campus site and whether he wanted to use the Cross tip. Michael said he was not sure where this was going and that he had several options. Mr Cross could not recall being asked to quote a rate and the conversation ended at that.

39 Mr Cross recalled that a month to six weeks after the conversation just mentioned, Michael Giacci rang and asked to see him. Mr Cross went to the Picton office again and was told by Michael Giacci that he had "problems" and asked if Mr Cross could take the material from the hospital site. He told Michael that he would need to speak to either the Department of Environmental Protection or the regional tip to see what special permission was needed to take this material. Whilst it was inert waste, Mr Cross knew because of the issue of its contamination, special permission would probably be needed. He asked Michael Giacci about the prospect of selling Giacci's clean sandfill which their trucks could back-load. Michael said that this was a separate issue that "we would have to work out."

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40 Mr Cross could not recall quoting a figure to Michael Giacci, but had in mind that his standard figure of $80 for a tipping semitrailer could be reduced to at least $70 per truck because of the amount of volume to be delivered. Mr Cross then spoke to Mr Steele about the matter and was told that he, Cross, was not licensed to take the material in question. He did not push the issue further. He rang Michael Giacci and told him that he had been so advised and could not take the material.

41 Documentary evidence, consisting principally of various exchanges of correspondence between GHD engineers and the defendant, defined the problem confronting the defendant in late August and early September 1996 more exactly.

42 Clause 2.22 of the tender documents required the contractor to remove the waste and dispose of the same "at a suitable landfill site." The clause continues: "The pistol range target backstop mound containing lead contamination should be removed from the site and disposed of. The Stanley Road landfill site may be used subject to agreement with the landfill operator." Clause 2.23 headed "Regulations" provides that all work shall be completed in accordance with the relevant codes of practice, statutory regulations for health, safety, handling/disposal/transportation of waste and hazardous material. Where asbestos is encountered during rubbish removal or other associated works, it was to be removed in accordance with certain specified statutory provisions.

43 Letters written by Mr Turner on behalf of the defendant establish that at the time of tendering the defendant believed that all materials could be deposited at the landfill site in Stanley Road owned by the Cross partnership. Four weeks after being awarded the contract the defendant was informed that all of the debris and rubbish would "have to be taken to the regional tip in Stanley Road which is operated by the Shire of Harvey." This was bound to add to the cost of the project with the result that the defendant requested a review and adjustment of the contractual provision. GHD engineers were not prepared to accommodate this request to vary the rate of payment and related provisions. The stance adopted by the engineers was that all tenders were submitted competitively. It was a normal risk to the contractor to provide rates that reflected the work under the contract adequately. The defendant's tender rate should therefore have allowed for any appropriate fees or licences or approvals to properly dispose of the material being excavated.

44 The documents evidencing the relevant exchanges commence with a fax dated 29 August 1996 from Mr Edgeloe of GHD to Wayne Turner

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requiring the defendant to dispose of all rubbish at a suitable landfill site. In a responsive letter written on the same day, Turner referred to his belief that "our existing sand pit in Gelorup is suitable." By a letter dated 2 September 1996 and signed by Michael Giacci, the defendant wrote to Capel Shire Council requesting "permission" to remove material from the South West Health Campus site to "our Gelorup sand pit."

45 The documents suggest that it was on or about 4 September that it finally became apparent that the Gelorup sand pit could not be used. This is borne out by a handwritten fax dated 4 September from Mr Paull of GHD addressed personally to Michael Giacci. It referred to "a site meeting today at which you stated that you had based your tender on rubbish disposal at J W Cross' tip at Stanley Road." Having reiterated the GHD requirement that the rubbish could only be disposed of "at any available and suitable landfill designated sites at the earliest opportunity", Mr Paull concluded by saying:

"Given the 2 weeks notice required by the Stanley Road Regional tip site, as mentioned by you, it would appear this timing will frustrate your efforts to meet the Date of Practical Completion. Please urgently advise which approved landfill site (eg. Harvey Shire tip, Stanley Rd or Capel Shire tip etc.) you are intending to dispose the rubbish to and when you will commence carting."

46 In a typed letter, also dated 4 September 1996, Mr Paull on behalf of GHD engineers wrote to the defendant in these terms (omitting the inessential parts):

"In reply to your letter dated 2 September 1996, you are advised that the buried rubbish may be disposed at any disposal site available to Giacci Bros providing that Clause 2.23 regulations is adhered to in accordance with the contract.

The material is referred to in the documentation as rubbish which clearly implies it is not clean fill material and should be disposed of accordingly.

Paragraph 4 of clause 2.22 even states rubbish shall be removed to clean sand further reinforcing this.

Areas of chemically contaminated material are clearly defined in the documents and their specific disposal locations given.

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The balance of the rubbish had no elevated levels of contamination but is still deemed as rubbish and is continually referred to as such, and thus must still be disposed of in accordance with the requirements of clause 2.23.

It remains the contractors responsibility to gain any required approvals for disposal."

47 The evidence of Mr Stidworthy, the gatekeeper at the plaintiff's Site, may also have a bearing upon the nature of the steps taken by the defendant to address the problem confronting it. Mr Stidworthy said in evidence that a few days prior to 5 September 1996 someone phoned the gatehouse and said to him that they were from Giacci and asked for the rate per tonne to dispose of contaminated material at the plaintiff's Site. The caller did not refer specifically to asbestos contamination, but definitely said that the material to be disposed of was contaminated. Mr Stidworthy said that the applicable rate was $9 per tonne or part thereof, but that Ian Steele had to verify the rate and to instruct Mr Stidworthy to set up an account on the computer. The person indicated that he would call Ian Steele about the matter. Mr Stidworthy said that the caller may have been Wayne Turner from Giacci, but he was not absolutely sure.

The Dumping Arrangements

48 Mr Steele said in his written statement of evidence that Mr Wayne Turner, on behalf of the defendant, telephoned him at the plaintiff's offices in Australind on or about 5 September 1996 and informed him that the defendant wished to dump refuse material at the tip. Mr Turner asked if the defendant could do this and what the rate charged by the plaintiff would be. As far as Mr Steele could recall, there was no reference to the previous rates or any previous occasion. There were some conversational exchanges about the fact of asbestos contamination, although he did not clearly recall the details of such discussion.

49 Mr Steele said that the defendant could dump at the plaintiff's Site, subject to Mr Steele inspecting the refuse material. The rate charged by the plaintiff would be $9 per tonne or part thereof invoiced immediately by weighbridge docket after each truckload was dumped. The $9 fee did not take into account the fact of asbestos contamination. Mr Turner then stated that the defendant accepted those terms. Later that same day, Mr Steele inspected the refuse material at its place of origin at the Health Campus site.

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50 Mr Steele said in a supplementary statement that following his discussion with Mr Turner he held the belief and he assumed that the defendant would pay tipping fees at the rate of $9 per tonne or part thereof. This was because, firstly, Mr Turner had indicated to Mr Steele that he accepted the rate of $9 per tonne or part thereof and, secondly, the defendant had dumped waste at the plaintiff's Site 12 months earlier. The defendant was invoiced at the rate of $9 per tonne or part thereof and had actually paid the invoiced amount in November 1995 and the balance sum two months later.

51 Mr Steele was cross-examined about these matters. He agreed he had made no note of the conversation. He said that he was able to fix the telephone conversation as having taken place on 5 September 1996 because there had been a meeting of the regional council on the previous day, at which the earthmoving contract for the Health Campus site was discussed over refreshments. The consensus of those present was that the material would go to a tip operated by the Shire of Capel and when it became apparent to Mr Steele from his conversation with Mr Turner that the material was likely to go to the plaintiff's site that factor, combined with the previous night's discussion, caused the date to stick in Mr Steele's mind. Mr Steele agreed that when he attended the Health Campus site on the same day as the conversation, he saw no difficulty with receipt of the waste material in question. The material at all times looked rather like peat interspersed with fragments of asbestos and glass, but there was virtually no metal and everything else had broken down.

52 Mr Turner accepted in his written statement of evidence that he spoke by telephone to Mr Steele. His evidence was in these terms:

"Giacci's obligation under the contract was to excavate to clean sand at the direction of the Superintendent, GHD Engineers. How deep the area would have to be excavated was not precisely known. Accordingly the quantity of the material that had to excavated under Item 1.1(21,700 cubic metres) of 59 is a provisional quantity and subject to payment for the actual quantity excavated and removed at the rate tendered and inserted in the Priced Schedule of Rates.

I have read a copy of the statement of Ian Alistair Verity Steele paragraphs 19 to 23. I agree that I spoke by telephone to Ian Steele.

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I said to him words to the effect, after identifying myself, 'We have 17½ thousand cubic metres of asbestos contaminated soil together with rubbish we need to get rid of from the new hospital site at Bunbury.' He said words to the effect 'What truck numbers are we talking about?' and I said 'there would be about 8 trucks a day.' We discussed the opening time of the Tip. He said words to the effect that 'it will take about two weeks to clean and form an area away from the general public.' I said 'we want to start within a couple of days as the contract is running'. I asked 'what will the charge be?'. He said '$9 per tonne'. I said 'Can we have a reduced rate because of the volume?. He said 'no, that is the rate.' This was the only discussion we had in respect of the rate though I thought it was high especially considering the amount of material dumped.

At the time of my conversation with Steele I knew that when the Giacci tender for this contract was being prepared a private tip operator at Stanley Road had quoted a price of $3.00 or $3.20 per tonne, I cannot recall which, to take the hard rubble from us. I knew that at the time the tender was being prepared, Giacci proposed to excavate and transport the material from the site to its sand pit at Gelorup a short distance away, there screen it and use the soil as fill at this sand pit and deposit the hard rubble at this privately owned tip, operated by Cross Bros, demolition contractors. It was my knowledge of the $3.00 per tonne payable at Cross's tip only a few kilometres from the Tip that caused me to consider the rate of $9.00 per tonne as being too much.

I did not push Steele on this point since his advice to me was that that was the rate. Although he did not say the rate was non negotiable, that was how I understood his words.

When he said that was the rate I assumed he was quoting a set rate the Tip charged and which I further assumed was set under some Local Government arrangement and so was not subject to negotiation. I assumed the rate he stated was imposed automatically once the Tip was used. Because of this I did not think it was open to push for a reduced rate.

When I had been conducting my own business I had carted material to the Tip and had been charged a rate advised by the gatemen. This I believe was the rate that the Tip charged. I

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used the Tip over a period of about 18 months when I had my own business. On several occasions when I had dumped loads over 3 tonne and been so charged by the gateman. I passed this on to my customer. At the time of this conversation I could not recall the amount of the rate though I knew that fixed rates had been set.

I live within the Shire of Harvey at Australind and recall that prior to my conversation with Steele I had had, delivered at my residential address, an official pamphlet stating the tip fees, together with free tip passes that came with my Rates notice. I believe the pamphlet is identical to the one I now produce. [2]

When I had the conversation with Steele I knew of the existence of this sort of pamphlet and that it was issued by the Tip. I knew it contained information about the rates charge by the Tip. I could not, at the time of my conversation with Steele, recall the precise rates as I did not have the pamphlet in front of me."

53 Mr Turner was cross-examined about these matters. When asked whether 4 September was the date of the conversation he said: "I recall it was on or about that date, yes." He agreed that by that stage he knew that the defendant had to take the material to a location which was approved by a variety of authorities. He also knew that he had to ring Mr Steele to get his approval in order to do that. He made the telephone call in order to make the arrangements. He also needed to tell him that the material was going to be contaminated with asbestos and that there was going to be about 17,500 cubic metres of material to be disposed of. He agreed that he said words to the effect that time was running under the contract and that "time is very tight for us." He agreed with the cross-examiner that when deliveries commenced the defendant met with co-operation at the Site in ensuring that trucks could get in and out as quickly as possible.

54 The following exchange with the cross-examiner then occurred:

"You don't imagine for a moment that any of that would have been possible if you had just turned up to the site with hundreds of trucks and wanted to go straight in without having reached some arrangement in advance with Mr Steele, do you?---No, that's correct.

As part and parcel of your discussion with Mr Steele, talking about what you needed, you asked him what price or what rate would be charged for the deliveries?----That's correct.

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That was after you had explained to him, was it, the nature of the deliveries and the quantity of them?---Yes.

He told you it would be $9 a tonne or part thereof, did he?---That's correct.

You said, 'In view of the volume is it possible to reduce that price'?---That is correct, yes.

And he said, 'No, I'm not prepared to reduce the price'?---Words to that effect, yes.

Although he didn't cooperate with you in that regard you were nevertheless able to get in and use the tip shortly after and indeed he inspected the site and inspected the material and gave approval for the dumping the very next afternoon?---Yes, that's correct.

When he said to you the rate was going to be $9 per tonne or part thereof you certainly didn't have any intention at that stage of not paying that rate once he stipulated what payment he required, did you?---Personally, no.

When you say 'personally,' no-one else was involved in these arrangements over the telephone obviously, were they?---No."

55 As the cross-examination proceeded, Mr Turner agreed that there was never any suggestion that the defendant would not pay the rate of $9 per tonne. Mr Turner was not aware that deliveries had taken place at the Site by the defendant 12 months previously and that these deliveries had been paid for. He agreed that the material could have been dumped at another approved location, such as at Capel, but his understanding was that Capel had declined to take the material. He agreed that the material could also have been delivered to the Rockingham tip. He said that the defendant had a fleet of approximately 100 trucks at that time, being mainly dual axle trucks. The value of contracts performed by the defendant in that year was probably around $2,000,000.

56 In the course of the cross-examination, Mr Turner also confirmed that he had spoken to Mr Steele during the course of the tendering process. He believed he was told that the rate for dumping bulk material at the plaintiff's Site was $9 per tonne. This rate was not incorporated into the tender price because the defendant believed it could do the job in a cheaper way. As it turned out, GHD Consulting Engineers was not

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prepared to allow the job to be done in the cheaper way the tendering party had in mind.

57 I pause to note that there was no contemporaneous document on either side purporting to evidence the contents of the telephone conversation between Mr Steele and Mr Turner. Before leaving this aspect of the matter, I will make a finding that the telephone conversation, and the inspection of the Health Campus site soon afterwards, did occur on 5 September 1996. Mr Steele positively identified that date and provided a convincing explanation as to how the date was fixed in his memory. Mr Turner did not seem to seriously dispute his evidence in that regard and it was apparent from Mr Turner's evidence and from the manner in which cross-examination was conducted that Mr Turner did not have a specific recollection of the precise date and could only say that the telephone conversation occurred on or about 4 September 1996. In these circumstances, I prefer the evidence of Mr Steele on this point.

58 When the various exchanges of correspondence, before and after the events of 5 September 1996 are viewed objectively, it is apparent that the defendant was obliged to find an alternative to the Gelorup sand pit as a matter of urgency. The nature of the material and the size of the dumping operation made it likely that the implications of the proposal would have to be worked out at short notice in order to meet the defendant's requirements. The accounts given by Mr Steele and by Mr Turner of the crucial telephone conversation, and of the subsequent meeting on the South West Health Campus site, are consistent with a recognition on both sides that a state of urgency was the underlying reality and special arrangements had to be made. Not much was said, but at all material times the parties acted as if arrangements were being made at the request of the defendant in order to accommodate the defendant's urgent need.

Events After 5 September 1996

59 On 9 September 1996, Mr Turner sought approval from the Environmental Health Authority for a transport plan whereby rubbish removed from the South West Health Campus Site would be:

"Transported to the Bunbury/Harvey regional rubbish tip site under Health Act 1911/Asbestos Regulation 1992.

We are unable to get in contact with Mr. K. Steel from the Harvey Shire Council with regards to the above, however we have spoken to Mr. I. Steele who is the manager of the regional

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tip, who has also inspected the material on site and is [sic] prepared an area away from the general public to dump the above rubbish."

60 On 10 September 1996, Keith Steel, the Environmental Health Officer, at the Shire of Harvey wrote to the defendant, giving approval for the defendant to dump asbestos-contaminated waste from the South West Health Campus at the plaintiff's tip. On the same day, the Department of Environmental Protection confirmed that the defendant's transport plan for the asbestos-contaminated waste was acceptable.

61 In the meantime, in the manner foreshadowed by Mr Turner's letter of 9 September 1996, the plaintiff was taking steps to upgrade the approach roads so that the defendant's trucks could deliver the waste to a separate area of the plaintiff's tip. DPM Contractors and B & J Catalano Pty Ltd were engaged by the plaintiff for that purpose. A DPM invoice 3545 submitted to the plaintiff refers to 161½ hours of work at the Site from 10 to 30 September 1996 valued at $10,497.50. The amount in question relates to "Hire of front end loader. Push out for Giacci trucks and other jobs as requested (tip)."

62 The defendant commenced dumping refuse material at the plaintiff's tip on 11 September 1996. The various deliveries were recorded via the weighbridge docket system that I have already described. Dumping of the refuse concluded on 15 October 1996, by which time the defendant had allegedly dumped approximately 39,444 whole or part tonnes of asbestos-contaminated waste at the tip. I note in passing that the defendant pleaded in par 6 of its defence that it "dumped approximately 30,045 cubic metres at the site between 11 September 1996 and 15 October 1996." I will return to this difference of opinion later.

63 It is apparent from a summary of account put in evidence that on the plaintiff's case the balance of the defendant's account with the plaintiff at the conclusion of the dumping operation was $354,990. By letter dated 7 February 1997, the plaintiff advised that its account for $354,990, being invoice number 45 dated 7 November 1996, was now overdue and payment was required.

64 The plaintiff pressed the defendant for payment by letter dated 7 March 1997. Its letter reads in part:

"It is inappropriate for you to dispute liability for our account. Directions as to the dumping of material were provided to you by the EPA and the Shire of Harvey. We were not involved in

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the giving of those directions. Those matters are entirely between you, the Shire of Harvey and the EPA. The fact that you dumped materials at our site gives rise to liability on your part to pay our usual fees and charges. Any complaints you have about directions given to you by the entities can have no bearing on this."

65 Proceedings were commenced and the plaintiff was eventually successful in obtaining summary judgment for the sum of $371,873.91. When the summary judgment was overturned on appeal, the plaintiff repaid to the defendant the sum of $300,000 on 20 February 1998. I note in passing that on 1 December 1998, the plaintiff's fee for disposal of loads in excess of three tonnes was increased from $9 to $16 per tonne or part thereof.

66 The plaintiff later had to obtain various licences pursuant to provisions of the Environmental Protection Act 1986, a development bringing with it further costs and budgetary implications. Indeed, in a letter dated 30 August 1996 written to the plaintiff at the beginning of the new licensing regime, the Acting Director of the newly created Waste Management Division of the Department of Environmental Protection recognised that "some local authorities may have difficulty in providing funds for capital costs for the implementation of these conditions because of budgeting restraints".

67 The documentary evidence adduced by consent included details of the tipping fees charged by other local government bodies. This evidence was relevant to the quantum meruit issue which I will come to in due course.

The Ultra Vires Issue

68 The plaintiff's case proceeded from the premise that it was empowered by its constitution to perform various designated functions including the charging of fees. The 1960 Act allowed for the making of by laws in regard to fees but the relevant provisions were permissive. There was no requirement in the 1960 Act or in the plaintiff's constitution that the charging of fees must be done by way of a by-law.

69 The plaintiff's designated functions as a regional council included, pursuant to cl 6(f) of its constitution, "the carrying out and doing of all other acts and things which are reasonably necessary for the bringing into effect all of the aforementioned functions." A clause of this kind, the

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plaintiff argued, conferred a power to set tipping fees by resolution (rather than by by-laws) and to enter into contracts in connection with the payment of tipping fees. The plaintiff had acted accordingly under the 1960 Act by approving budget papers containing the $9 fee. This practice continued under the 1995 Act, for the by-law making power under the latter Act was permissive also. Moreover, the transitional provisions preserved the designated functions set out in the plaintiff's constitution. In due course the plaintiff entered into a contract with the defendant being the contract the subject of these proceedings.

70 The defendant denies that any contract was entered into between the parties. It says further, in par 4(i) of its defence, that the fee forming part of the alleged contract "was not validly set pursuant to the plaintiff's statutory powers".

71 It will be convenient to begin with the ultra vires dispute. In essence, the defendant argued that the so-called incidental power in cl 6(f) of the plaintiff's constitution should be given a restricted meaning. The true position was that the plaintiff could only be involved in the "charging of fees". Such a phrase denoted not only a fee imposed by by-law in the manner contemplated by the statutory regime but also that the plaintiff was not at liberty to recover fees by contract.

72 There are three issues to be dealt with under this heading; first, the question of whether a dumping fee sought to be recovered by the plaintiff has to be fixed by the making of a by-law; second, if the plaintiff was at liberty to set fees by a resolution adopting a budget, whether the relevant formalities were complied with in the circumstances of the present case; third, if the formalities were observed, with the result that a valid fee was in existence as at 5 September, whether the plaintiff had power to enter into a contract of the kind contended for by the plaintiff.

73 The general rule is that the powers of a statutory body are circumscribed by the statute governing its activities. Its powers are limited to what is expressly stated in the relevant legislation, or is necessarily and properly required for carrying into effect the purposes for which the body was established, or which may be fairly regarded as incidental to, or consequential upon, those things which the legislature has authorised. What the statute does not expressly or impliedly authorise is taken to be prohibited. If the subject matter of a contract is beyond the scope of the constitution of a statutory body, it is ultra vires: Attorney-General & Ephram Hutchings v Great Eastern Railway Co [1880] 5 AC 473.

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74 Various decided cases suggest that what is regarded as necessary or as incidental to a designated function will be viewed liberally. In Commonwealth and the Postmaster General v The Progress Advertising and Press Agency Co (1910) 10 CLR 457 Higgins J, at 469 said "the word 'necessary' may be construed liberally, not as meaning absolutely or essentially necessary, but as meaning appropriate." Also see Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 53 ALJR 522.

75 In Kathleen Investments (Australia) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117 the Atomic Energy Commission wished to acquire shares in a company which was proposing to mine uranium but was not necessarily obliged to do so. One function of the Commission was to undertake or arrange for or encourage other authorities or persons to undertake exploration for and mining and treatment of uranium. Section 18(1) of the relevant act provided that the Commission had power to do all the things that were necessary or convenient to be done for or in connection with the performance of its functions. Section 18(2) provided that without limiting the generality of s 18(1) the Commission was empowered to acquire property and to do anything incidental to any of its functions or powers.

76 The High Court held (with Barwick CJ dissenting) that in appropriate circumstances acquisition of shares in a company could be something necessary or convenient to be done in order to encourage the company concerned to undertake exploration for and the mining and treatment of uranium.

77 Stephen J said at 143 that the Commission did not have an unfettered power to take up shares in any company no matter what the circumstances. The Commission could use the capacity it had to acquire property only for the purpose of carrying out the functions which the Act cast upon it. Similarly the powers conferred by s 18 were to be exercised only so far as was necessary for or in connection with the performance of its functions. If the Commission acquired shares in a company for a purpose which had no connection with the functions, its action would be unauthorised. A contract which would otherwise have resulted from offer and acceptance would be a nullity because there would be no valid offer capable of acceptance.

78 Counsel for the defendant submitted that the reasoning of Stephen J, consistently with Bell Houses Ltd v City Wall Properties Ltd [1966] 1 QB 207, established that a contract made without authority is void. Further, that a plea of ultra vires is available not only to a corporation

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guilty of an impugned transaction but also to a defendant who is sued upon an ultra vires contract, and without there being any ground in principle for distinguishing between executory and executed contracts.

79 Let me now turn to the present case. I have previously described the main features of the statutory regime relevant to the manner in which the plaintiff, as a duly constituted regional council, was entitled to conduct its affairs. I have referred to the fact that cl 6 of the constitution agreement entered into between the Shire of Harvey and the City of Bunbury sets out the designated functions of the plaintiff. The list of functions included the disposal of waste delivered to a place provided for that purpose and allowed for the charging of fees and the doing of all other acts and things which are reasonably necessary.

80 Counsel for the defendant contended that the capacity to perform a designated function is subject to various restrictions. Section 717 provides that in performing a designated function a regional council shall have the same powers, duties and responsibilities and be subject to the same controls, restrictions and procedures as a municipal council. Section 716(1) provides that a regional council may make by-law under Part XIII in relation to a designated function. Section 191(1) provides that a council may so make by-laws prescribing forms, fees, matters and things, which by this Act are contemplated, or are required or permitted to be prescribed to be necessary or convenient for the purpose of effectually carrying out the provisions of the 1960 Act.

81 It follows, counsel for the defendant argued, that if a regional council was to exercise a designated function and charge fees, it could only do so by means of a by-law. In the present case, no by-law prescribing the $9 fee had been brought into existence (as I have already noted) with the result that the fee sought to be imposed on the defendant was invalid and ultra vires.

82 The plaintiff said in answer to this plea that the constitution agreement expressly allowed for the regional council to charge fees, but there was no requirement that the charging of fees had to be done by way of a by-law. The position under the 1960 Act was that the power to make by-laws was permissive or discretionary and this remained the position under the 1995 Act. The power of the plaintiff in cl 6(f) of its constitution to do all other acts and things that are reasonably necessary to carry out its designated functions allowed the plaintiff to set tipping fees by resolution rather than by by-laws and to enter into contracts in connection with the payment of the tipping fees. I note that by 6.16 of the 1995 Act a fee or

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charge imposed for the use of a local government facility or for a service is to be imposed when adopting the annual budget.

83 According to the plaintiff, the council resolution of 4 September 1996 to adopt the draft budget for the coming year fixed the tipping fee that was in force when the telephone conversation of 5 September 1996 took place between Mr Steele and Mr Turner. Further, and in the alternative, if for some reason the adoption of the draft budget on 4 September 1996 was found to be irregular or invalid, on the grounds that it ought to have been adopted prior to 31 August 1996, the tipping fee of $9 fixed in the previous year under the 1960 Act would continue in force, with the result that a validly set $9 tipping fee was in force at the time of the telephone conversation.

84 I am conscious that the list of designated functions to be performed by the plaintiff council is comparatively limited, while as the by-law making powers of municipalities in respect of various discrete subject-matters are usually employed to govern the activities of residents in the district generally, with penalties being attached to the by-law as a means of exercising control. It is also apparent from the detailed procedures to be followed in the making of a by-law as prescribed by s 190 of the 1960 Act that considerable time and care will be involved in the making of a by-law. This may serve to explain why the power to make by-laws is generally expressed in permissive terms.

85 Against this background, I conclude that the plaintiff was not obliged to make a by-law under the 1960 Act or (after 1 July 1996) to make a local law under the 1995 Act in order to establish a valid tipping fee. The incidental power in cl 6(f), should be liberally construed, and was therefore sufficient to outweigh any suggestion based upon a narrow reading of the constitution and related statutory powers that the "charging of fees" was limited to fees imposed by a by-law. In my view, the plaintiff council was entitled to adopt a tipping fee by a valid resolution as a designated function allowed to it by the constitution agreement.

86 Accordingly, I find that a valid tipping fee had been brought into existence by the plaintiff prior to 1 July 1996 as a consequence of its adoption of a budget containing reference to the $9 fee in the preceding year. I find, further, that its adoption of a draft budget containing such a fee on 4 September 1996 can be characterised as validly setting a fee for the coming year, with the result that there was a valid $9 fee for heavy vehicles in existence as at 5 September 1996.

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87 Any irregularity in regard to the adoption of the budget, in my view, did not give rise to an invalidity. The relevant provisions were not mandatory but directory, and were substantially complied with; Montreal Street Railway Company v Normandin [1917] AC 170 at 175; Hatton v Beaumont (1978) 20 ALR 314. Even if I be wrong in that regard, and there was an invalidity, it follows from earlier discussion that the tipping fee of $9 adopted in the previous year would continue to apply, thus producing the same result.

88 The defendant argued that if the plaintiff was not authorised to charge $9 per tonne for waste delivered to the Site under by-laws or under local laws, it could not enter into a commercial contract that had such an effect. It follows from the finding I have just made, however, that if cl 6 is to be liberally construed, with the result that fixing of the tipping fee by resolution was valid, then the plaintiff's power to enter into dumping contracts should be viewed in the same light. The making of such a contract can be fairly regarded as incidental to the plaintiff's principal functions as a body providing dumping facilities. In other words, the tipping fee of $9 having been validly set, it was open to the plaintiff to contract upon that basis.

89 Before turning to the next issue of whether the parties in fact entered into a contract, I note in passing that even if I be wrong in the conclusion I have just come to concerning the validity of the fee, there is a further issue to be considered as to whether, if a contract is found to exist, the defendant can be liable to the plaintiff under such a contract, notwithstanding the invalidity of the fee. This was the issue addressed in Bell Houses Ltd v City Wall (supra). Also see In Re KL Tractors Ltd (In Liq) (1961) 106 CLR 318. I will return to this aspect of the matter later.

The Contract Issue

90 It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty. An intention to contract is essential. In Taylor v Johnson (1982) 151 CLR 422 at 428 a majority of the High Court indicated, consistently with what has been described as the "objective theory" of contractual assent, that the law is concerned, not with the real intentions of the parties, but with the outward manifestations of those intentions.

91 Cheshire and Fifoot: Law of Contract (7th Aust ed) indicates at par 5.1 that an objective test must be applied in determining whether the parties have manifested an intention to create legal relations. There are

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decided cases to similar effect. For example, in Australian Broadcasting Corp v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 549, Gleeson CJ, delivering a judgment in which Hope and Mahoney JJA agreed, cited with approval the statement of Lord Diplock in Gissing v Gissing [1971] AC 886 at 906:

"As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party."

92 Gleeson CJ also explained (at 550) that, in the search for an objective determination of the intention of the parties, it may be "both appropriate and necessary to have regard to the commercial circumstances surrounding an exchange of communications and, in particular to the subject matter of those communications".

93 This approach was approved by Burchett J in Vass v Commonwealth (2000) 169 ALR 486. In that case, governmental officers instructed a law firm to act on behalf of a federal minister at a forthcoming Royal Commission although no provision had been made by the government for payment of costs. The Commonwealth denied reaching any agreement to pay the law firm's costs. His Honour held that the parties did intend to enter into a contract. The communications made to the law firm were reasonably understood as contractual in nature. The communications occurred in the context of the firm's practice as solicitors pursuant to which, in the ordinary course, they would act in reliance upon a contract providing for their services.

94 The same approach was applied subsequently by Tamberlin J in Seven Cable Television Pty Ltd v Telstra Corp Ltd (2000) 171 ALR 89. His Honour said at par 100 that the decisive issue is always the intention of the parties objectively ascertained from the terms of the contractual document read in light of the surrounding circumstances.

95 In regard to contracts involving governments and governmental agencies, it will be useful to refer to Cheshire & Fifoot: Law of Contract (supra) par 5.28:

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"It is necessary to discover whether the Crown attracts any special rule relating to contractual intention. The answer is that it does not if it is engaging in ordinary commercial dealings. When, however, governments or government instrumentalities enter into relations with citizens, companies or other governments as part of a process of implementing policy or programmes, the treatment of the relationship as contractual may be inappropriate. There is a considerable body of case law which upholds the proposition that in certain types of activities governments cannot be tied down by contract. An example is a local council carrying out its responsibilities in relation to planning control, even though a fee is paid for the obtaining of certificates and so forth. The courts, in such cases, say that there is no intention to create contractual relations, despite the fact that in all other respects the arrangements have the hallmarks of a contract."

96 The authors of the text go on to refer to Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424. In that case, a wool subsidy scheme was characterised as an arrangement that did not have the hallmarks of a contract. The High Court said that a test which has been applied in such cases in order to determine whether a contract has been made or not is to ask whether there has been a request by the alleged promisor that the promisee shall do the act on which the latter relies. The presence or absence of an implied request to do the act may often provide a useful test for determining whether there has been a true offer and a true acceptance such as to bring a contract into existence. In that case, the High Court was unable to find in the subsidy announcement anything in the nature of a request or invitation to purchase wool, or anything suggesting that the payment of subsidy was put forward in order to induce any manufacturer to purchase wool, or which suggested that the payment of subsidy and the purchase of wool were regarded as related in such a way that the one was a consideration for the other.

97 Another decision of the High Court which illustrates the approach just described, and which was relied upon by the defendant in the present case, is The Administration of The Territory of Papua & New Guinea v Leahy (1960) 105 CLR 6. In that case, the lessee of a pastoral property entered into correspondence with the Department of Agriculture which led to the department taking over the spraying of the property with a view to eradicating cattle tick. The High Court held that the arrangement made was not contractual in character, and accordingly the respondent had no cause of action against the administration. Upon the evidence, the

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department was doing no more than giving effect to a general policy of dispensing aid to individual cattle owners to combat a recognised menace in the Territory, whilst the lessee's attitude throughout was that of a private person appealing for governmental aid.

98 McTiernan J said this at 11:

"The arrangement consisted of agreed promises but that is not enough to make a contract, unless it was the common intention of the parties to enter into legal obligations, mutually communicated, expressly or impliedly. It was not an express or implied term of the arrangement that the respondent should make any payment for the treatment of the cattle. I cannot agree that the Administration through its officers intended to enter into legal relations when, at the request of the respondent, it undertook the organization of the tick eradication campaign with respect to his cattle. The conduct of the parties constituted an administrative arrangement by which the Administration in pursuance of its agricultural policy, gave assistance to an owner of stock to prevent that stock contracting a disease which was prevalent in the Territory. The work done by the Administration was analagous [sic] to a social service which generally does not have as its basis a legal relationship of a contractual nature and from which no right of action would arise favour of the citizen who is receiving the services if the Government acts inefficiently in performing them.

In Goldv. Essex C.C.(1) Lord GreeneM.R. said: 'Apart from any express term governing the relationship of the parties, the extent of the obligation which one person assumes towards another is to be inferred from the circumstances of the case. This is true whether the relationship be contractual (as in the case of a nursing home conducted for profit) or non-contractual (as in the case of a hospital which gives free treatment). In the former case there is, of course, a remedy in contract, while in the latter the only remedy is in tort, but in each case the first task is to discover the extent of the obligation assumed by the person whom it is sought to make liable.' (2). As I have said, no remedy in contract exists for the benefit of the respondent in this case and the only remedy to which he might have recourse is one in tort."

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99 It is apparent from the decided cases that the question of whether action is being undertaken pursuant to a distinct policy or specific governmental function or whether it is being undertaken pursuant to a contractual relationship, will have to be answered by reference to the circumstances of the particular case. Cheshire & Fifoot (supra) goes on to say at par 5.28:

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borrower is bound to repay an ultra vires loan, he is, in a sense, a fortiori bound to repay an ultra vires loan. I should think it is clear that, if a corporation made an ultra vires loan in terms repayable at the end of three years, it need not wait for the expiration of the three years but could sue for repayment at any time.

The above considerations make it clear, I think, that to accede to the argument of the creditors in this case would be to act not in confirmative with, but rather in violation of, the true intent and purpose of the rule that a corporation is not bound by a promise which it had no power to make. The claim of the Commonwealth is for goods sold and delivered. The company has accepted the goods and had the benefit of them, and there is no reason why it should not pay for them."

124 One finds in In Re KL Tractors Ltd (supra) a reference to the case of City of Camberwell v Cooper [1930] VLR 289. In that case, a municipal council constructed a crossing over the footpath of a public street at the written request of the owner of the property. The municipality then gave to the owner a certificate under s385(2) of the Local Government Act which did not state any amount as being due or payable in respect of the work. The council sought to recover the cost.

125 Justice Mann made these observations (at 291):

"The whole transaction seems to me to have been entirely outside the act. They (City of Camberwell) were not carrying out any statutory requirements but were taking upon themselves an independent enterprise by a method for the convenience of all parties.

Mr Fullagar contended that if there was a contract there was no power in the corporation to enter into it. I do not, however, feel called upon to enquire very closely as to whether the corporation had power to enter into such a contract or not, because in my opinion the owner, having made this contract with them and having had the work done which he asked should be done and which he undertook to pay for, is liable to pay for it, and it does not lie in his mouth to challenge the statutory power of the corporation to do what was done in this case."

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126 These cases strongly suggest that in the circumstances of the present case the plaintiff is entitled to recover upon this basis also. The defendant has undoubtedly had the benefit of being allowed to dump at the plaintiff's Site and it recognises that it is obliged to make some payment for the facility made available to it. The doctrine of ultra vires was not designed to enable persons to avoid their contractual obligations. The objective of the doctrine was that moneys or other property of a corporation should not be transferred into other hands by an unauthorised act of the corporation. It follows that in circumstances where the plaintiff has sued to recover moneys owing to it the defendant cannot rely upon the doctrine in order to avoid liability. To suggest otherwise, would amount to an inversion of the doctrine of ultra vires.

127 In my view, nothing turns on the fact that in In Re KL Tractors (supra) and City of Camberwell v Cooper (supra) neither the Commonwealth nor the local authority were obliged to follow a statutory procedure in setting a contract price. It is not uncommon that governmental trading enterprises are obliged to comply with formal procedures. Further, I consider that I am obliged to give preference to the decision of the High Court in the KL Tractors case as against the reasoning of Mocatta J in Bell Houses Ltd v City Wall (supra), being the decision strongly relied upon by counsel for the defendant. The views of Stephen J in Kathleen Investments must be treated with caution for present purposes, being obiter dicta in a case in which it was eventually held that the statutory body in question had not acted ultra vires.

128 I note in passing, as was submitted by counsel for the plaintiff, that the Supreme Court of Canada and other Canadian courts have adopted the approach taken by the High Court of Australia in In Re KL Tractors (supra) and rejected attempts by parties who have contracted with companies to use the doctrine of ultra vires as a defence to claims instituted by the companies to recover moneys owed by such parties pursuant to the terms of contracts fully performed. This suggests that in the circumstances of the present case I should act upon the precept enunciated in KL Tractors (supra) that where a company such as the defendant has accepted the services in question and had the benefit of them, there is no reason why it should not pay for them. I find that, in the alternative, the plaintiff is entitled to recover the amount claimed on this ground also.

129 As to the second issue, this raises the question of whether the plaintiff is entitled to recover in any event, even in the absence of a

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binding contract between the parties, upon the basis that it can recover a lawfully imposed fee.

130 I digress briefly to note that the defendant contended that recovery upon this basis was not an issue reflected in the statement of claim. In other words, the defendant argued that the plaintiff relied upon the existence of a contract and if a contract was not found to exist, it should follow that the plaintiff was unable to recover.

131 I have some difficulty with a defence based upon this line of reasoning. It is true that the plaintiff relied principally upon a contractual relationship between the parties and an agreed fee of $9 per tonne. It pleaded in the alternative, however, at par 14 to par 17 of the claim, that it had provided services, the defendant had accepted the benefit of the same, with the result that the defendant was liable to pay remuneration based on the reasonable value of the services provided. It seems to me that a quantum meruit plea of this kind allows the plaintiff to press a claim for what I have held to be a validly prescribed fee of $9 per tonne. I will look at the principles relevant to quantum meruit in a moment. In summary, however, the decided cases suggest that recovery on this ground is pursuant to a right to restitution based upon unjust enrichment. If, as I have previously held, the fee of $9 per tonne was validly prescribed, then, in the absence of a contract between the parties, the defendant would be unjustly enriched if it refused to pay the prescribed fee.

132 It follows that, there is no substance in this line of defence. If the fee was validly imposed, then it can be recovered. The claim in this respect was based upon the validity of the fee, and even if it be said that there was some lack of clarity on the pleadings as to this issue, the defendant was afforded an ample opportunity at the trial to challenge the validity of the fee, as emerges from earlier discussion. Clearly, the defendant came to the hearing prepared to deal with this issue. The validity issue is referred to specifically in par 5 of the reply.

The Estoppel Issue

133 The plaintiff contended, in the further alternative, that even if it were not able to recover against the defendant pursuant to a contract entered into between the parties or upon the basis that the fee was not validly imposed, the defendant is estopped from denying liability.

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134 Before turning to the facts and matters relevant to the estoppel issue, it will be useful to look briefly at a number of decided cases bearing upon this aspect of the matter.

135 In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Mason CJ and Wilson J noted that for many years there was a reluctance to allow promissory estoppel to become a vehicle for the positive enforcement of a representation by a party that he would do something in the future. It was thought to be a defensive equity. Generally speaking, they said, a plaintiff cannot enforce a voluntary promise, because the promisee may be expected to appreciate that, to render it binding, it must form part of a binding contract. They went on to accept, however, that in some circumstances promissory estoppel may extend to the enforcement of a right not previously in existence when the defendant has encouraged in the plaintiff a belief that it will be granted and has acquiesced in action taken by the plaintiff in that belief. What gave rise to the need for the court to intervene was the defendant's unconscionable attempt to go back on the assumptions which were the foundation of their dealing.

136 Mason CJ and Wilson J summarised their reasoning in this way at 404:

"One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has 'played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it': per Dixon J in Grundt v Great Boulder Goldmines Pty Ltd (1937) 59 CLR 641. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption."

137 It is apparent from this passage and the reasoning of other members of the High Court in Walton's case (supra) that the purpose of the doctrine of estoppel is to preclude parties relying on strict rights where to do so would be unconscionable. It is also apparent from later decisions of the High Court in Commonwealth v Verwayen (1990) 170 CLR 394 and Foran v Wight (1989) 168 CLR 385 that the assumption being referred to in this line of reasoning may be one as to a legal as well as to a factual state of affairs. In other words, a representation as to the effect of a legal agreement or the adequacy of arrangements made between the parties can give rise to an estoppel. Brennan J noted in Walton's case (supra) at 423

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that the equity raised in such circumstances has as its object not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon.

138 The defendant submitted, having regard to Verwayen's case and Giumelli v Giumelli (1998) 196 CLR 101, that if it be thought that the plaintiff suffered a detriment as a result of any assumption created by the defendant, then relief under this heading should be proportionate to the detriment in question, and this should not necessarily be regarded as the full amount of the claim.

139 In the circumstances of the present case, there can be little doubt that as a consequence of the telephone conversation that took place on 5 September 1996, Mr Steele was entitled to assume that the fee under discussion of $9 would be paid. There was no discussion as to whether it was a validly imposed fee and Mr Turner raised no objection to the amount proposed. The passage of cross-examination I quoted earlier reveals that Mr Turner's intention was to pay the fee and he made no suggestion to the contrary. This fee was the same as the fee imposed 12 months earlier.

140 The defendant argued that the defendant could not be said to have played any part in creating an assumption on the plaintiff's part that the plaintiff's fee would be paid because the plaintiff harboured such an assumption in any event, believing at all times that its fees were valid and reasonable. I am reminded, however, that in the crucial passage of cross-examination some discussion took place as to whether the normal fees should be reduced on account of the large volume of material to be dumped. In my view, in circumstances where a doubt had been raised as to whether the normal fees should apply, Mr Turner's decision to proceed, notwithstanding his inability to obtain a reduction, created a discrete assumption that the fee of $9 would be paid that went beyond any assumption that the plaintiff, via Mr Steele, had harboured beforehand. This special assumption was underpinned when the parties inspected the waste a short time later and concluded that the degree of contamination involved was manageable.

141 The approach roads were built and the deliveries of waste by the defendant commenced. The gatekeeper and his colleagues at the Site proceeded to issue invoices at the rate of the $9 fee in the manner I have described earlier in this judgment. While the deliveries were continuing,

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no objection was raised as to the issue of invoices in this manner and there was no suggestion that the invoices would not be paid. In my view, against this background, the plaintiff is entitled to enforce its right of recovery upon the basis of an estoppel of the kind pleaded in the statement of claim.

142 In essence, the defendant knew that the plaintiff anticipated receiving payment at the prescribed rate as a consequence of the crucial telephone conversation and the issue of weighbridge charges on an ongoing basis during the period of the dumping. The plaintiff acted to its detriment by building the approach roads. The defendant used the plaintiff's services and can be said to have unconscionably raised an argument after the dumping operation was over that the fee was not legitimately imposed. It sought to do so only after also unsuccessfully pressing the superintendent of the hospital contract for variations to cover the charges. The purpose of the doctrine of estoppel is to preclude parties relying on strict legal rights where to do so would be unconscionable. In my view, the plaintiff is entitled to relief on this ground also.

143 When I turn to the form and extent of the relief, I am obliged to give consideration to the defendant's submission that the plaintiff should only obtain recompense proportionate to the detriment allegedly suffered.

144 I accept that in certain special circumstances, as in Giumelli's case, it may be necessary to limit the measure of equitable relief lest the requirement for consideration to support a contractual promise be outflanked. Nonetheless, the High Court seemed to acknowledge that the prima facie entitlement of a successful claimant is to have the promise the subject of the estoppel proceedings enforced. In my view, this is the appropriate outcome in the circumstances of the present case, bearing in mind that the fees claimed by the plaintiff reflect its reasonable costs, as appears in more detail below.

The Quantum Meruit Issue

145 I must now return to the plaintiff's quantum meruit plea (as a further alternative) at par 14 to par 17 of the statement of claim. If it be held, contrary to my earlier findings, that there was no contract between the parties and that the fee of $9 per tonne was not validly prescribed, the plaintiff seeks to recover reasonable remuneration for the services provided to the defendant. The plaintiff contends that, in any event, validly prescribed or not, $9 per tonne represents reasonable remuneration. The defendant contends for a much lower figure.

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146 Where a party has supplied materials to, done work for, or otherwise benefited another in anticipation or performance of a contract, the retention of the benefits conferred without compensation is prima facie an unjust enrichment. In circumstances of this kind, the right to claim restitution is an avenue of relief.

147 According to Cheshire & Fifoot's Law of Contract (supra) at par 25.6, such cases were formerly assigned to the quasi-contract category of quantum meruit claims, but these are now classified as categories of restitution.

148 The leading case is the decision of the High Court in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221. In that case, the company was a licensed builder and carried out the renovation of a cottage for Paul. The work was done under an oral contract that Paul would pay a reasonable remuneration for it, calculated by reference to prevailing rates in the building industry. The work was completed and Paul took occupation of the cottage, but refused to pay a balance claimed to be due by the company.

149 The company sued. Paul relied on the Builders Licensing Act 1971 (NSW)which provided that contracts for building work were not enforceable by a licensed builder unless in writing. The High Court held that Paul could not rely on the Act. The Act precluded an action for breach of contract. But the company had a distinct right to restitution based on unjust enrichment which was not affected by the Act. According to Deane J at 255, the obligation does not arise from agreement at all. It is an obligation or debt imposed by law which arises from the defendant having taken the benefit of the work done, goods supplied or services rendered.

150 Deane J went on to indicate at 263 that the computation is based on the principle that restitution in such cases involves payment of an amount which constitutes reasonable compensation for the benefit or "enrichment" accepted. The plaintiff relied on this passage to assert that it was entitled to recover the amount claimed as "remuneration at the prevailing rate for work or the market value of materials."

151 I pause to note that the defendant in its closing submissions accepted that under principles of restitution it was obliged to pay reasonable remuneration to the plaintiff for the waste disposal service rendered to it constituting the "benefit" which it received in September/October 1996. It agreed with the plaintiff that the reasonable remuneration is to be assessed

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at the date of provision of such services. The crucial question is: how is reasonable remuneration to be assessed in all the circumstances?

152 The defendant asserted that reasonable remuneration is not in principle to be assessed by a simplistic analysis of the plaintiff's internal fee structure. Such a structure may bear no relationship to particular circumstances of the case. One has to assess the fair value to the defendant of the service from which it benefited. Further, as the plaintiff allegedly made use of a large proportion of the dumped material in a "Bund" wall at the Site, this benefit had to be brought to account. The defendant said that it had paid to the plaintiff $71,873.91 on 26 September 1997, such sum being more than sufficient to constitute reasonable remuneration in all the circumstances.

153 The reasoning of Deane J in Pavey & Mathews Pty Ltd v Paul (supra) seems to allow for the particular circumstances of a case to be brought to account. His Honour summarised the position in this way at 263:

"What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or 'enrichment' actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (e.g. remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied). In some categories of case, however, it would be to affront rather than satisfy the requirements of good conscience and justice which inspire the concept or principle of restitution or unjust enrichment to determine what constitutes fair and just compensation for a benefit accepted by reference only to what would represent a fair remuneration for the work involved or a fair market value of materials supplied. One such category of case is that in which unsolicited but subsequently accepted work is done in improving property in circumstances where remuneration for the unsolicited work calculated at what was a reasonable rate would far exceed the enhanced value of the property."

154 It follows that in the circumstances of the present case, there was a significant degree of controversy between the parties as to how the benefit or enrichment should be measured. Accordingly, before seeking to resolve this issue, I must review the relevant evidence.
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The Expert Evidence

155 The plaintiff relied upon the evidence of Mr Steele and two expert witnesses, Mr Harold McKenzie, a consultant with a background in engineering, and Mr Harvey Pickup, a partner in a firm of chartered accountants known as Sheffields. The evidence of these witnesses was relied upon in order to support the contention that the plaintiff's fee of $9 per tonne represented remuneration based on the reasonable value of the services provided in that, consistently with the reasoning of Deane J, it represented remuneration at the prevailing rate for work or the market value of the services provided by the plaintiff.

156 The evidence of Mr McKenzie consisted principally of a review of operational issues at the Site dated November 1998. Objection was taken to the McKenzie report on the ground that it did not seem to be directly relevant to the matters in issue between the parties. It was a report directed principally to landfilling procedures, management of green waste area, ground water monitoring and site surveys. A later report prepared by Mr McKenzie dated 9 January 2000 contained some elaboration of such matters and also addressed various cost issues. In my view, the McKenzie reports were sufficiently relevant to be admitted in evidence because they contained facts and data brought together by an experienced engineer concerning the size and topography of the Site which enabled Mr Pickup to proceed with his analysis. Nonetheless, the plaintiff's case as to this aspect of the dispute rested principally upon the analysis undertaken by Mr Pickup and the documentary evidence I mentioned earlier concerning the tipping charges of other local government bodies.

157 Mr Pickup presented two reports, being first a report dated 26 November 1998 and second a supplementary reported dated 26 April 2000. The first report had incorrectly assumed that the Site was acquired by the plaintiff in 1989 for $410,000 when the true position was that the Site was acquired at that figure by the City of Bunbury and the Shire of Harvey and then leased to the plaintiff in the manner previously described. This incorrect assumption obliged Mr Pickup to amend certain of his calculations, especially in regard to the rehabilitation costs, but did not cause him to alter the reasoning in his first report or his conclusion that "the rate of $9 per tonne charged by the regional council for loads in excess of three tonnes appears reasonable." For ease of reference, I will draw principally upon Mr Pickup's first report in seeking to convey the essence of his opinion.

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158 In preparing his reports, Mr Pickup relied upon discussions with Mr Steele and Mr McKenzie as to the history of operations conducted at the Site. He also relied upon statistics of tonnages of waste dumped at the Site from 1997 to 1998, and upon the audited financial statements of the plaintiff for the years ended 30 June 1997 and 1998. He took account of the projected life of the Site and the plaintiff's obligation to rehabilitate. His approach was to calculate the cost incurred by the plaintiff per tonne of waste received by reference to past financial statements, information regarding Site rehabilitation and statistics of tonnages dumped. The calculation was restricted to the years 1997 and 1998 because prior full years' statistics for tonnages dumped were not readily available. He noted that fees are levied in an attempt to recover costs of operating the refuse disposal Site. Although the fees charged represent a substantial portion of the revenue generated by the regional council, it is not self-funding. Operating subsidies have been received from both the City of Bunbury and the Shire of Harvey.

159 After bringing to account the various factors mentioned in his first report, he calculated the disposal cost per tonne of waste over the two years, the subject of his calculation at $9.27. He noted that the cost per tonne over the two years was not the same as the average annual cost per tonne. The former calculation was the more conservative statistic, in his view, as it spreads the additional tonnage effect of the Giacci contract more evenly than would an annual average. He mentioned that for the purposes of comparison, the average annual cost per tonne over the two years was $10.22. He included in his report a "sensitivity analysis" where a calculation was made of the cost per tonne if the Giacci contract had not occurred. In that latter case, in his view, the costs would reduce only marginally but the tonnage over which the costs could be recovered reduces significantly. On that scenario, the cost per tonne would increase to $13.84.

160 Mr Pickup's first report also included, in appendix 4, the range of fees charged by other disposal sites. Mr Pickup noted a disparity between sites. The charges at the major Perth metropolitan waste disposal sites were generally much higher than $9 per tonne (usually above $20 per tonne), whereas the charges at smaller, outer suburban sites or country sites were around $7 per tonne. The metropolitan sites tended to employ more sophisticated machinery and to be more conscientious in meeting environmental requirements and codes of practice. The country sites were often run on low budgets and had difficulties meeting proper environmental standards, with the result that actual costs and charges did not reflect those which would be incurred if the sites were properly

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managed. On the matter of asbestos-contaminated waste, all sites charged considerably higher than $9 per tonne, usually in the range of $30 to $50 per tonne.

161 The amended costs per tonne in Mr Pickup's supplementary report ranged from $8.89 per tonne to $8.58 per tonne, depending upon variations in the assumed lease period. Mr Pickup noted that the slight reduction in the cost per tonne compared to his first report was to be expected, given the reduction in the annual amortisation of rehabilitation costs consequent upon the reassessment of those costs under the various lease terms in the second McKenzie report. Nonetheless, he noted that the calculated rates per tonne, although slightly below $9, are not materially so. Accordingly, as I have already noted, he maintained his opinion that the rate of $9 per tonne charged by the plaintiff for loads in excess of three tonnes at the relevant time appeared to be reasonable.

162 The defendant relied principally on the evidence of Mr Sean McGarry, a chartered quantity surveyor. It soon became apparent that he was proceeding from an entirely different premise, this being consistent with the defendant's contention that the principles of restitution espoused by Deane J in Pavey & Mathews Pty Ltd v Paul (supra) allowed for, and indeed required, that benefits obtained by the plaintiff must be brought to account, in the circumstances of the present case, before any determination could be made as to what constituted reasonable remuneration in respect of the service provided.

163 Mr McGarry took account of evidence presented by Mr Geoffrey Callow, an engineering surveyor, that approximately 30,000 cubic metres of material was removed from the South West Health Campus site. He also took account of the fact that soon after the dumping operation commenced the plaintiff called in tenders for an earthmoving contract at the Site which required the contractor to construct a sand bund wall to stabilise the southern side of the pit. The tenders for this earthmoving contract closed on 16 October 1996, with the contract being let to the Carbone firm at a price which Mr McGarry understood to be $131,000. Mr McGarry's discussion with Mr Steele led him to assume that 30,000 cubic metres of material removed by the defendant from the South West Health Campus site was eventually spread out in a strip 410 metres long at the plaintiff's Site, being the entire length of the proposed bund wall, in the configuration 30 metres wide and 2.5 metres high. This material was subsequently covered with clean sand. I pause to note that these assumptions, on the defendant's case, were confirmed by the

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evidence of personal observations made by Mr Turner at the time the Giacci material was being pushed into position.

164 Put shortly, Mr McGarry's report suggested that the sum of $56,969 represented the cost to the plaintiff to receive and cover the Giacci material, this figure including all the actual incurred costs involved in relation to building limestone roads, pushing out the incoming Giacci material and then covering it with a metre of topsoil. Mr McGarry said that a saving of $18,000 was available to the plaintiff in respect of its earthmoving contract in that an opportunity existed and was in fact taken advantage of to utilise the Giacci material in the formation of a bund wall at the plaintiff's Site. It was immaterial that such a saving may not actually have been obtained by negotiation with the contractor who undertook the work. The value of this opportunity should be brought to account.

165 In its closing submissions, the defendant also directed attention to the plaintiff's financial statements. The analysis relied upon by the defendant suggested that the figure of $53,088 represented reasonable remuneration for the service made available to the defendant, having regard to the figures contained in the plaintiff's 1996/1997 financial accounts. $53,088 represented the actual difference between budgeted expenditure and actual expenditure by the plaintiff in 1996/1997 plus an allowance of 10 per cent for profit. I pause to say that I have some difficulty in comprehending how this figure can be characterised as the fair market value of the services provided by the plaintiff. It seems to be made simply upon costs incurred in a single year and makes no provision for reserves or forward commitments under the lease.

166 As a further alternative, by reference to Mr Cross' adjoining operation, the defendant argued that a figure of $65,660 represented reasonable remuneration. Evidence was available that the relevant deliveries were effected by 938 trucks. Mr Cross had given evidence that he would have charged at the rate of $70 per truckload. On that basis, one arrived at the figure of $65,660 contended for by the defendant as an alternative basis for computing reasonable remuneration. I have to say, however, that, in my view, I cannot give any weight to a calculation based on dumping at the Cross site when it is apparent from the evidence that Mr Cross was not in a position to receive the contaminated waste.

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Findings as to the Quantum Meruit Issue

167 It emerges from a consideration of the evidence relied upon by the parties in regard to the question of what constitutes reasonable remuneration that there was a profound conceptual difference between them as to how the service offered by the plaintiff should be valued in the circumstances of the present case. The plaintiff focused upon its costs, bringing to account long-term commitments, the defendant sought to define the value of the benefit received by the defendant by characterising the plaintiff's tip as a subsidised public service and by seeking, in effect, to confine the financial analysis to the pros and cons associated with handling the defendant's material, viewed as a discrete transaction.

168 In seeking to resolve this issue, I am conscious that the burden of proof lies on the plaintiff to establish its case upon the balance of probabilities. In applying that precept to the circumstances of the present case, I take account of the reasoning of Deane J in Pavey v Mathews which suggests that, prima facie, reasonable remuneration comprises the prevailing rate for work or the market value of materials or services. I also take account of the evidence showing that the plaintiff was operating at one remove from the local authorities responsible for its constitution. The plaintiff had to attend to its obligations under the lease and carry into effect policies and budgets reflecting commercial realities, including provision for the future.

169 It is true that the reasoning of Deane J allows for adjustments to the market value to be made in special circumstances. In the present case, however, it seems that the tipping fees being charged by the plaintiff were consistent with or less than the fees being charged for similar services and had been fixed having regard to the realities of the plaintiff's business operations. In these circumstances I consider that the plaintiff is entitled to recover the amount claimed. My conclusion is supported by Mr Pickup's evidence and by my earlier findings. The defendant was not obliged to use the plaintiff's site but decided to do so at short notice in order to meet an urgent need. The plaintiff built approach roads in order to accommodate the request, and without increasing its fee. These factors suggest that the defendant would be unjustly enriched if it failed to pay at the nominated rate of $9 per tonne for what was, in effect, the only dumping facility available to it in the urgent circumstances of the case.

170 One notices also that the fee of $9 per tonne had been fixed by the plaintiff in 1992, that is to say, some years before the dispute in question arose, and the financial statements of the plaintiff do not suggest that it

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was obtaining an excessive return for its services. The financial statements show that it had various expenses to meet in terms of its day-to-day operations, and it was obviously reasonable to make provision for longer-term requirements. These matters of broad impression are underpinned by the expert evidence of Mr Pickup. His evidence establishes that, upon analysis, the figure of $9 per tonne represents reasonable remuneration. The value to the defendant was precisely what was charged if it failed to pay and it was unjustly enriched to that extent. This conclusion is not affected by the fact that some of the material contributed to the creation of a bund wall at the Site because, in my view, sooner or later material would be dumped which would enable the bund wall to be built. Accordingly, I find for the plaintiff in regard to the quantum meruit issue.

171 It follows from this finding that if, contrary to my earlier findings, it be thought that the only basis upon which the plaintiff is entitled to recover against the defendant is upon the basis pleaded in par 14 to par 17 of the statement of claim, then, in my view, the plaintiff is entitled to payment of the sum of $354,990 upon the basis that it represents remuneration based on the reasonable value of the services provided by the plaintiff between 11 September 1996 and 15 October 1996 in respect of the waste material dumped at the plaintiff's Site by the defendant. Again, the plaintiff is entitled to interest on the amount in question in accordance with the schedule adduced in evidence.

Conclusion

172 For the sake of completeness, I have dealt with all the issues brought before me. It follows from earlier discussion, however, that, in my view, the plaintiff is essentially entitled to recover against the defendant upon the basis that the defendant is indebted to the plaintiff in the sum of $354,990 as a result of a contract entered into between the parties on 5 September 1996 which led to 39,444 tonnes of refuse material being dumped at the Site between 11 September 1996 and 15 October 1996. The statement of claim also includes a claim for interest. In that regard, reliance was placed upon a schedule of interest calculations which took account of changing rates of interest and various interludes in the history of this matter. The schedule reveals the total amount due to be the sum of $61,185.36. Accordingly, this amount will be allowed to the plaintiff in addition to the principal claim. I will hear from the parties as to the precise form of the orders to be made.