Murcia Holdings Pty Ltd v City of Nedlands

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: MURCIA HOLDINGS PTY LTD & ORS -v- CITY OF NEDLANDS & ORS [1999] WASC 241

CORAM: ANDERSON J

HEARD: 6-29 SEPTEMBER 1999

DELIVERED : 2 DECEMBER 1999

FILE NO/S: CIV 1975 of 1996
CIV 1348 of 1998
CIV 2146 of 1996
Consolidated by Order dated 3 June 1999

BETWEEN: MURCIA HOLDINGS PTY LTD
PETER MAXWELL HOWE
OK JA HWANG
SUK CHUL HWANG
First Plaintiffs
RANGEMEN PTY LTD
Second Plaintiff
AND
CITY OF NEDLANDS
First Defendant
SUSAN PATRICIA WATSON
HEATHER LYLE CULLEN
CHRISTOPHER CHARLES HOLLAND DAVIS
MADELINE MARY GODFREY
ROBERT JAMES HART
NICHOLAS JOHN KEY-WILSON
GLENDA MARGARET STOW
LAURENCE GEORGE TAYLOR
JANE LYNETTE WEDGE
Second Defendants
COLIN EGERTON BARNES
Third Defendant

Catchwords:

Local government - Duty of care - Misfeasance in office - Amending town planning scheme - Duty to landowner - Availability of civil remedy for failure to process amendment - Factors relevant to determination of existence of duty - Whether deliberate refusal to comply with statutory requirements respecting scheme amendments is misfeasance

Negligence - Duty of care - Breach of statutory duty - Local government - Amending town planning scheme - Landowner benefiting from amendment - Whether duty owed to landowner to process amendment

Legislation:

Fair Trading Act, s 10

Local Government Act, s 31, s 156,
Local Government Act 1991 (NSW), s 327
Town Planning and Development Act 1928, s 7

Town Planning Regulations 1967, reg 15, reg 17, reg 18(1), reg 21(1), reg 21(2)

Result:

Actions dismissed

Representation:

Counsel:

First Plaintiffs               :     Mr P A Kyle
Second Plaintiff            :     Mr P A Kyle
First Defendant             :     Mr C B Edmonds & Mr R E Sandover
Second Defendants       :     Mr C B Edmonds & Mr R E Sandover
Third Defendant           :     Mr C B Edmonds & Mr R E Sandover

Solicitors:

First Plaintiffs               :     Kyle & Co
Second Plaintiff            :     Kyle & Co
First Defendant             :     Jackson McDonald
Second Defendants       :     Jackson McDonald
Third Defendant           :     Jackson McDonald

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

Australian Alliance Assurance Co Ltd v Attorney General of Queensland [1916] QSR 135
Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1
Beaudesert Shire Council v Smith (1966) 120 CLR 145
Becker v Home Office [1972] 2 QB 407
Caparo Industries Plc v Dickman [1990] 2 AC 605
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
Downs v Williams (1971) 126 CLR 61
Dunlop v Woollahra Municipal Council (1978) 40 LGRA 218
Dunlop v Woollahra Municipal Council [1982] AC 158
Henley v Mayor and Burgesses of Lyme (1828) 130 ER 995
Jones v Swansea City Council (1990) 3 All ER 737 (HL)
Jones v Swansea City Council [1990] 1 WLR 54
London Passenger Transport Board v Upson [1949] AC 155
Northern Territory v Mengel (1995) 185 CLR 307
O'Connor v S P Bray Ltd (1937) 56 CLR 464
Perpetual Trustees WA Ltd v City of Joondalup [1999] WASCA 196
Perre v Apand Pty Ltd (1999) 164 ALR 606
Pyrenees Shire Council v Day (1998) 192 CLR 330
R v Deputy Governor of Parkhurst Prison, Ex parte Hague [1992] 1 AC 58
Samrein Pty Ltd v Metropolitan Water Sewerage & Drainage Board (1982) 41 ALR 467
Sanders v Snell (1998) 72 ALJR 1508
Shire of Swan Hill v Bradbury (1937) 56 CLR 746
Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397
Stovin v Wise [1996] AC 923
Sutherland Shire Council v Heyman (1985) 157 CLR 424
Tampion v Anderson [1973] VR 715

Case(s) also cited:

Accident Towing and Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529
Ah Toy v Registrar of Companies (NT) (1986) 10 FCR 356
Alec Finlayson Pty Ltd v Armidale City Council (1997) 98 LGERA 119
Armagas Ltd v Mundogas SA [1986] AC 717
Bourgoin SA v Ministry of Agriculture, Fisheries & Food [1986] QB 716
Butera v Director of Public Prosecutions for the State of Victoria (1987) 164 CLR 180
Coshott v Kam Tou Mak, unreported; Fed C of A; 3 March 1998
Emanuele v Hedley, unreported; Fed C of A; 19 June 1998
Esanda Finance Corporation v Peat Marwick Hungerfords (1997) 188 CLR 241
Farrington v Thomson & Bridgland [1959] VR 286
Garrett v Attorney General [1997] 2 NZLR 332
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Holland v Jones (1917) 23 CLR 149
I W v City of Perth (1997) 191 CLR 1
J L Holdings Pty Ltd v State of Queensland, unreported, Fed C of A; 6 March 1998
Krakouer v R, unreported; FCt SCt of WA; Library No 960438; 2 May 1996
Kyogle Shire Council v Francis (1988) 13 NSWLR 396
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) (1981) 150 CLR 225
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590
Lamb v Cotogno (1987) 164 CLR 1
Lawrie v Lees (1881) 7 AC 19
Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193
New South Wales Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288
Palos Verdes Estates v Carbon (1991) 6 WAR 223
Parkes Rural Distribution Pty Ltd v Glasson (1986) 7 NSWLR 332
Perth City v DL (1996) 90 LGERA 178
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 ALJR 841
R v Koppen (1975) 11 SASR 183
Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431
Rookes v Barnard [1964] AC 1129
Rowling v Takaro Properties Ltd [1988] AC 473
San Sebastian Pty Ltd v Minister administering the Environment Planning and Assessment Act 1979 (1986) 162 CLR 340
Sanders v Snell (1997) 72 FCR 569
Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118

ANDERSON J: These are three actions which are ordered to be tried together. The plaintiffs sue the City of Nedlands, a number of councillors and the mayor on various causes of action arising out of the alleged failure of the City to proceed with proper expedition to approve amendments to the City's town planning scheme which would have enabled the plaintiffs to develop their land in a particular way.
At all material times, the City had a town planning scheme with respect to all the land within its district. This was the City of Nedlands Town Planning Scheme No 2. The district covered by the scheme included the suburbs of Nedlands, Claremont and Dalkeith. It incorporated residential density codes. The effect of the scheme and the residential codes was that, as a general rule, lots were of not less than 1,000 square metres, or one‑quarter acre, with one living unit permitted on each lot.

Town planning schemes - some preliminary observations

The power of a municipality to make a town planning scheme is in s 6 of the Town Planning and Development Act which provides:
"(1) A town planning scheme may be made, in accordance with the provisions of this Act, with respect to any land with the general object of improving and developing such land to the best possible advantage, and of securing suitable provision for … disposition of … residence … and of making suitable provision for the use of land for … all or any of the purposes provisions, powers or works contained in the First Schedule."
The First Schedule includes the following matters which may be dealt with in a town planning scheme:
"8. Limiting the number of … dwelling units, or other accommodation units to the hectare generally or in any particular locality, or on any subdivision, allotment, or parcel of land …"
The power to amend a town planning scheme is contained in s 7(4) which provides:
"7(4) A town planning scheme may … be -
(a)-
(b)varied or amplified by an amendment to the scheme prepared by the local government, approved by the Minister and published in the Gazette;"
The power to make and amend town planning schemes is to be exercised for the purposes of the Town Planning and Development Act and use of the power for any purposes other than a purpose of the Act would not be a "real exercise of the power granted by the Act": Samrein Pty Ltd v Metropolitan Water, Sewerage & Drainage Board (1982) 41 ALR 467 at 468.
The Act does not confer any right on landowners to amend the scheme. Nor does the Act confer a power on the Minister to do so. Section 7(4)(b) confers the power of amendment only on the municipality.
The Town Planning Regulations do not prescribe any procedures whereby a landowner may "apply" to have a scheme amended. However, schemes have a restrictive effect on proprietary rights inasmuch as they deny to the owner of land the liberty to use and develop the land according to the owner's wishes. Therefore, a landowner who requests that the scheme be varied is entitled to expect the municipality to give proper consideration to the request. Perpetual Trustees WA Ltd v City of Joondalup [1999] WASCA 196.
However, there is no duty on the local authority to grant requests for scheme amendments and landowners cannot have a legitimate expectation, generally speaking, that their request will actually be granted. The discretion of local authorities to prepare and propose scheme amendments is controlled only by the purpose for which the discretion is conferred: that is, the purpose of municipal government. Should a municipality refuse to consider a request for an amendment and should it appear that the refusal was not bona fide for the purpose of municipal government, the person requesting the amendment could insist that it be reconsidered. But he could not compel the municipality to adopt the amendment. The landowner's legal rights stop at the right to have his proposal properly considered: Shire of Swan Hill v Bradbury (1937) 56 CLR 746, especially per Dixon J at 757 ‑ 758.

The City of Nedlands Seniors' Housing Development Policy

In March 1986, the City adopted a planning policy which it called the "Seniors' Housing Development Policy". Underlying the policy was the assumption that many residents in the City were older people who had lived there most of their lives and did not wish to live anywhere else, but found the large lot sizes no longer manageable. The Seniors' Housing Development Policy recognised that it might be appropriate to amend the town planning scheme so as to allow two residential units to be constructed on the one quarter‑acre lot. The policy laid down the criteria under which this might be done.
Set out below are some parts of the policy:
"1.General
In determining whether to propose an amendment to the District Town Planning Scheme, which would change the coding of residential land in such a manner that would permit seniors housing development, or planning approval to be granted, Council shall have regard to:- …
1.3The type and size of the development is in harmony with the surrounding locality and is environmentally and aesthetically acceptable …
2.Planning Scheme Requirements
2.1Except in exceptional circumstances seniors housing developments shall not exceed the ratio of 1/30 of the area of land zoned for single residential development and including any units approved in accordance with this policy bounded by the four surrounding streets or other natural or municipal boundary and be separated by two single houses on the same street frontage from either another elderly persons homes development or other higher density accommodation such as flats, townhouses and apartments. No more than two seniors housing developments shall be permitted within the same section of a street. A street section includes both sides of the street.
Notwithstanding the above, the ratio of seniors housing developments will be determined by Ward Precinct Land Banks as illustrated in Map 1 and Table 1 of this Policy, such that the total area of seniors housing development will be deducted from the precinct land bank until depleted.
2.2It must be clearly demonstrated that a particular locality has advantage for senior persons, especially in regard to access and proximity to:
2.2.1public transport,
2.2.2community services,
2.2.3shopping,
2.2.4recreational facilities and other matters considered appropriate by Council from time to time …
-
3.Development Requirements
3.1Any development recognised by the City of Nedlands as a seniors housing development shall be restricted to at least one person occupying the unit who is over the age of 55 years …
-
3.2No minimum or maximum size of seniors' housing shall apply. Council recognises the need for a variety of sizes to meet individual requirements. As a guideline Council recognises in strata titled units that two to three bedroom units of at least 120m² will be the norm.
3.3Seniors housing developments shall include support facilities as the Council may from time to time determine are necessary …
3.4Where units are not at ground level lifts are to be provided and they shall be capable of accepting wheelchairs etc …
3.5At least one car space under cover shall be provided for each unit in a small complex and such bay to be at least 3 m x 5.5 m … "
Between January 1994 and March 1995, each of the plaintiffs purchased lots in the City's district with a view to redevelopment under the policy and requested the Council to prepare the necessary scheme amendments.

The Howe amendment

Mr Peter Maxwell Howe lived in Geraldton at all material times. It was his long‑term plan to retire to the metropolitan area to live, so he decided to invest in residential property as a hedge against price rises. In January 1994, he purchased 17 Stanley Street, Nedlands for $360,000, and the property was transferred to him on 21 March 1994. It was a corner block, on the corner of Stanley Street and Edward Street. In January 1995, he agreed to sell an interest in the property to an elderly couple, Mr and Mrs Nutter, who wished to establish a senior person's dwelling on the lot in the form of a strata title unit. As Mr Howe was the registered landowner, it was he who made the request for an amendment to the scheme to enable this development to be approved. The duties and functions of the Council were being carried out by a commissioner appointed under s 156 of the Local Government Act. On 30 March 1995, the commissioner resolved to prepare an amendment to the scheme to accommodate Mr Howe's application, subject to the submission of an acceptable development application. Mr Howe's application was designated Amendment No 95 and can be referred to as the Howe amendment. On 20 June 1995, Mr Howe put in a development application. On 5 July 1995, the City sent the Howe amendment to the Western Australian Planning Commission for consent to advertise and on 19 July 1995 the Commission granted consent to advertise. It was advertised on 21 and 22 July 1995.
On 28 September 1995, the Council resolved, in effect, not to proceed with the Howe amendment.

The Hwang amendment

Mr and Mrs Hwang lived in Anstey Road, Claremont. They wished to live in a smaller residence on a smaller lot. They purchased 74 Mountjoy Road, Nedlands, for the sum of $390,000. It was a residential lot of about one‑quarter acre with a single house. They wrote to the Council on 20 December 1994 seeking permission to redevelop the site by building "two units suitable for elderly people". Subsequently, through an architect, they submitted plans of the proposed development which was in the form of a battleaxe layout, with a driveway down one side of the lot to service the rear unit. The request was treated as a request to amend the town planning scheme to enable the development to be approved and it was considered by the Council at its meeting on 30 January 1995 and the Council resolved to prepare a scheme amendment. It was designated Amendment No 87 and can be referred to as the Hwang amendment.
The City sent the amendment to the Planning Commission for consent to advertise. The Commission granted consent to advertise. It was advertised in the Government Gazette and in The West Australian in April 1995. On 27 July 1995, the Council resolved, in effect, not to proceed with the Hwang amendment.

The Murcia Holdings amendment

On 3 March 1995, Murcia Holdings Pty Ltd, which is a trustee property developer, agreed to purchase 14 Edna Road, Dalkeith for $420,000. It was a residential lot of about one‑quarter acre, with a single house. On 29 March 1995, Murcia Holdings requested an amendment to the town planning scheme to allow for the additional use of a senior's residence on the lot and later submitted plans for a proposed redevelopment in the form of two strata title units. The plan was for a battleaxe layout with a driveway down one side of the lot to service the rear unit. On 27 April 1995, the commissioner of the City resolved to prepare a scheme amendment and on 9 May 1995, the City sent the scheme amendment to the Planning Commission for consent to advertise. It was designated Amendment No 98 and may be referred to as the Murcia Holdings amendment. On 24 May 1995, the Commission granted consent to advertise. It was advertised in the Government Gazette on 26 May 1995 and in The West Australian on 27 May 1995.
On 27 July 1995, the Council resolved, in effect, not to proceed with the Murcia Holdings amendment.

The Legislation

Before examining the nature of the claims that are made against the City and against the individual councillors and the mayor arising out of the City's handling of these three amendments it is necessary to refer in more detail to the provisions of the Town Planning and Development Act and the regulations. Until 1 March 1995, s 7 was in the following terms:
"7(1)A local authority may … prepare a town planning scheme with reference to any land within its district … or may adopt, with or without modifications, any such scheme proposed by all or any of the owners of any land with respect to which the local authority might itself have prepared a scheme.
(2)A town planning scheme, prepared or adopted, by a local authority, shall not have effect unless it is approved by the Minister, who may refuse to approve any scheme, or may require the local authority to modify the scheme in such a manner as he may specify before approval is given.
(3)A town planning scheme, when approved by the Minister and published in the Gazette, shall have full force and effect as if it were enacted by this Act (3a) -
(4)A town planning scheme may subject to section 7A be -
(a)revoked by a subsequent town planning scheme;
(b)varied or amplified by an amendment to the scheme prepared by the local authority, approved by the Minister and published in the Gazette;
(c)revoked by an instrument of revocation made by the local authority, approved by the Minister and published in the Gazette."
Although s 7(4)(b) empowers a local authority to vary its scheme by an amendment prepared by it, the Act is silent on matters such as public notification, the right of affected ratepayers to object and so on. Such matters are covered by the Town Planning Regulations 1967.
These regulations were substantially amended as from 9 February 1996. The events with which these actions are concerned, and to which the regulations are relevant, straddle that date. The result is that the proceedings are covered by three legislative periods. The first period expired on 1 March 1995 when the Act was amended. The second period expired on 9 February 1996 when the regulations were amended. The third period is from 9 February 1996 onward.
I have set out s 7 as it stood until 1 March 1995. The effect of it and of the regulations as they stood until 9 February 1996 was that the local authority was in effective control of the town planning process. It was, for example, perfectly entitled to stop a scheme amendment at various stages of its progress. By reg 21(2), even after the proposed amendment was approved by the Minister the local authority could resolve not to proceed with it, and it would simply lapse. It is the plaintiffs' case that the amendments that were made to the Act on 1 March 1995 (particularly to s7(2)) changed all that. Subsection (2) was repealed and re‑enacted as follows:
"(2)… a town planning scheme prepared or adopted, or an amendment to a town planning scheme prepared, by a local authority shall [my emphasis]-
(a)… be advertised for public inspection in accordance with the regulations; and
(b)after advertisement under this subsection … be submitted to the Minister for his approval."

A new subsection (2a) was enacted in the following terms:
"(2a)The Minister may, in relation to a town planning scheme or amendment submitted to him under subsection (2)(b) -
(a)approve of that town planning scheme or amendment;
(b)require the local government concerned to modify that town planning scheme or amendment in such manner as he specifies before that town planning scheme or amendment is resubmitted for his approval under this subsection; or
(c)refuse to approve of that town planning scheme or amendment."
When the pleadings in these actions closed, the true interpretation of the new s 7(2) was in issue. The plaintiffs contended that the imperative word "shall" took away the municipality's discretion to discontinue an amendment that had been started and the provisions in the regulations that still purported to expressly confer that discretion ceased to have effect. The plaintiffs' case was that thenceforth a local authority, once it had prepared a town planning scheme, or an amendment to a town planning scheme, was duty‑bound to advertise it and submit the scheme or amendment "to the Minister for his approval" no matter that the local authority no longer wished to proceed with the scheme or amendment. By their defences, the defendants denied that the new subsection had this effect. During the course of the trial, counsel for the defendants made an important concession: that the construction placed on the new s 7(2) by the plaintiffs was correct. By amendment to the defences in each action, the defendants admitted that the Council was required by s 7(2) to submit the amendment to the Minister once it had prepared and advertised the amendment. Because of this concession and the pleading amendment I will not consider the alternative construction of s 7(2), which is that the imperative word "shall" in the subsection only relates to and prescribes the conditions on which an amendment actually proceeded with will obtain the force of law, as to which see Australian Alliance Assurance Co Ltd v Attorney General of Queensland [1916] QSR 135. I approach these cases on the basis that, as from 1 March 1995, scheme amendments which have been advertised must be submitted to the Minister for his approval.
This does not mean to say that the alternative construction to which I have referred is not still tenable. It is tenable. It was the preferred view of the City's legal advisers and provides a rational basis for the refusal of the Council to send the amendments in question to the Minister, notwithstanding his and the Planning Commission's demands that it do so. As will be seen, the Council, acting on what it understood to be the substance of the legal advice it was receiving, did not initially accept that there was a statutory duty on it to submit the amendments to the Minister "for his approval" if the Council decided not to proceed with the scheme amendment. Certainly the regulations, which were not amended when the Act was amended, continued to provide that a local authority could stop a scheme amendment at any time, even after Ministerial approval, if it did not want to go ahead with the amendment.

Background to Council's decision not to proceed with amendments

Because the plaintiffs' claims are based on allegations of negligence against the City and misfeasance in office against the City, the councillors and the mayor, it is necessary to examine in some detail the relevant circumstances and to recount the history.
In March 1995, the office of all the members of Council became vacant as the number of sitting councillors had fallen below the minimum required by s 31 of the Local Government Act. A commissioner was appointed to perform the duties of the Council pending the election of a new Council. The election was set for 24 June 1995. The Council of the City consisted of the mayor and 12 councillors. At the elections, which were held on 24 June 1995, the third defendant, Mr Barns, was elected mayor and the second defendants were nine of the 12 persons elected to the office of councillor. Of these, only two had served before as a councillor. The mayor had served as a councillor for 23 years between 1969 and 1992 and as mayor from 1992 until the vacation of the Council in March 1995. He is the only one of the personal defendants who was a member of Council at the time of the adoption of the seniors' housing policy in 1986.
There is evidence, which I accept, that within the City a substantial level of opposition to the policy had developed amongst ratepayers. I find that the opposition was based mainly on disapproval of so‑called in‑fill development. Opponents of the policy believed that the spacious, wooded, large‑lot single residence amenity of the suburbs had been adversely affected by senior housing developments and feared that this amenity would be gradually destroyed as more and more were allowed. The policy was also seen to be unfair and difficult to police. It was thought to be unfair because it discriminated in favour of persons over the age of 55, allowing them to cash in on the policy, whilst precluding those who had not attained that age from doing so. Secondly, the limitation on the number of senior housing developments in each section of street, or other defined area, (vide cl 2.1 of the policy) meant that an amendment for one property shut out other applicants in that locality - even those more deserving.
There were other perceived anomalies. There was no requirement that an applicant be a long‑term resident of the City. Indeed, there was no residential qualification at all. There was nothing to prevent newcomers, or remote owners (such as Mr Howe, for example), from taking advantage of the policy. There was nothing to prevent property developers (such as Murcia Holdings, for example) from doing so.
I find that there was a body of opinion amongst ratepayers that the policy was not feasible and was harmful to the amenity of the residential suburbs in the municipality.
There is evidence that, at the June 1995 election of councillors, the question of in‑fill development was on the mind of electors. I accept that all of the second and third defendants became aware of this during their canvassing for votes and came to believe, if they did not already believe, that the policy was widely opposed by ratepayers.
The first meeting of the City's Planning Committee following the June elections was held on 18 July 1995. The business to be discussed included the Murcia Holdings and Hwang amendments. These were at the stage where they had been advertised and the period for public objections had expired and, pursuant to reg 17(1) and in accordance with the obligation of the City to consider all objections made with respect to proposed amendments, the Planning Committee had to consider the objections that had been received and make recommendations to Council whether the amendments should be adopted or whether they should "be not proceeded with" (reg 17(2)). There were three objections to the Murcia Holdings amendment. They were that the proposed amendment would allow development which would destroy the single residential amenity of the area and would affect the "green or garden effect so appreciated in the area."
Twenty seven objectors made submissions to the Hwang amendment. The objections were, broadly, against increased residential density, specifically that the proposed development would be out of character, would result in increased noise and traffic and would decrease the security of neighbouring properties. A number of objectors expressed concerns about the policy itself, its fairness and its enforceability.
The Planning Committee had the benefit of a report from the City planners who recommended that, notwithstanding the objections, the Planning Committee should resolve to recommend to the Council that the amendments be proceeded with. The Planning Committee did not accept the City planners' recommendations and resolved instead to recommend to the Council that the amendments not go ahead.
The Planning Committee then moved to consider the Seniors' Housing Development Policy itself and resolved to recommend that the policy be "reviewed" and that, pending review, it be "suspended".
The Planning Committee's recommendation went to a full meeting of Council on 27 July 1995. The meeting was chaired by the mayor, Mr Barns, and all 12 councillors were present, including, of course, the second defendants. Present also was a range of administrative officers and, in the gallery, 42 members of the public. Mr Telfer, the managing director of Murcia Holdings, addressed the meeting. Mrs Nutter also addressed the meeting. They urged the Council to carry on with the amendments. Other members of the public addressed the meeting to the contrary, condemning the policy and urging the Council to scrap it.
A few days before the meeting, Mr Barns, Ms Watson (the deputy mayor) and the City planner had attended on the City's legal adviser, Mr Denis McLeod, of McLeod & Co, to obtain advice on two matters: whether the City could rescind the policy in question and whether it could decline to proceed with the scheme amendments then in train. Mr McLeod advised them that the City could do both. He confirmed that advice in writing by a letter dated 26 July 1995.
At the Council meeting of 27 July the Council resolved not to proceed with the Murcia Holdings and Hwang amendments and resolved to suspend the seniors' housing policy.
The next Planning Committee meeting was on 22 August 1995. By this time, the Howe amendment had been advertised. At the meeting, a representative of Mr Howe, a Mr John Sumner, was given an audience and he urged the Committee to proceed with the amendment. Mr Nutter spoke to the same effect. As the period for public submissions in respect to the Howe amendment had not expired (the period was due to expire on 1 September 1995), no positive recommendation was resolved upon.
By 1 September, the City had received two objections against the Howe amendment. They were in much the same vein as those that had been received in respect to the Murcia Holdings and Hwang amendments. They reflected a wish on the part of the objectors to preserve the amenity of the district and a fear that the kind of development made possible by the amendment would adversely affect that amenity. The City had also received a petition against the Howe amendment, signed by 20 people. The points of objection in the petition were of the same character; that the subdivision would "impinge on the privacy and peace of the surrounding residents", would "increase traffic with the associated problems of noise, pollution and danger to children and elderly residents", would be "out of character with the existing single residential nature of the surrounding streets" and "will lead to the devaluation of associated properties which are single residential."
The theme running through all the objections was that the scheme amendments made under the policy were downgrading the residential amenity of the district, affecting the quality of life and diminishing the value of other properties.
The Planning Committee accepted the objections to the Howe amendment and recommended to Council that the Howe amendment not be approved.
The recommendation of the Planning Committee was considered at the next meeting of Council on 28 September 1995. The presenter of the petition against the Howe amendment, a Mr Seaton, attended the meeting. The minutes record that he informed the meeting that the objectors' petition fairly reflected the views of all of the signatories. Mr Sumner also attended on behalf of Mr Howe and the minutes record that he "urged Council to pass this (the Howe) application because this was a valid, bona fide application and the applicants had lived in the district for some 35 years and were certainly not developers". Strictly speaking, of course, this was not true, as Mr Howe was the "applicant" and he lived in Geraldton. Mr Sumner was referring to Mr and Mrs Nutter.
After considerable debate, it was resolved to accept the Planning Committee's recommendation that the Howe amendment be not proceeded with.
I find that all councillors and the mayor believed that the Council was perfectly entitled to withdraw the amendments in question and that this belief was reasonable.

The intervention of the Minister for Planning

In early October, the Town Clerk of the City of Nedlands received a letter from the Minister in the following terms:
"SENIORS' HOUSING DEVELOPMENT POLICY
I have received correspondence from a number of sources with regard to the above policy and associated town planning scheme amendments.
I understand that Council has rescinded the Seniors' Housing Development Policy and has resolved to consider proposals for seniors' housing on their merits.
The correspondence I have received expresses concern about Council's actions on this matter particularly in relation to the status of the amendments. I understand that there are a number of amendments for an additional use (seniors' housing) which have been advertised for public inspection, and which Council may have resolved not to proceed with.
You may be aware that section 7(2)(b), which was included into the Town Planning and Development Act on 1 March 1995, requires Council to forward rezoning documentation to me for my determination following advertising. In accordance with that provision, I hereby request Council to forward such proposals to me together with its resolution on each amendment and any submissions received. Further to this I will consider the amendment in taking Council's and the Western Australian Planning Commission's advice.
Yours sincerely,
RICHARD LEWIS JP MLA
MINISTER FOR PLANNING
4 October 1995"
The claim by the Minister that, in effect, the Council no longer had the right "following advertising" to resolve not to proceed with an amendment was not in accordance with the legal advice which Council had received from McLeod & Co. The City Planner, Mr Kotsoglo, spoke with Mr McLeod and on 17 October 1995, he reported to the Planning Committee that it remained the opinion of McLeod & Co that the Council was at liberty to resolve not to adopt the amendment after the public advertising period and that, in those circumstances, it would be "inappropriate" for the City to submit the documentation to the Minister for his approval, and that it was under no obligation to do so, but there might be conflict with the Minister should it refuse to do so.
The Planning Committee resolved to recommend to Council that a meeting be arranged with the Minister to discuss the matter and "other planning matters".
There was a meeting of the Council on 26 October attended by the mayor and all 12 councillors. At this meeting, it was resolved to accept the Planning Committee's recommendation that a meeting be arranged with the Minister.
A meeting was arranged with the Minister to take place at his offices at 32 St George's Terrace, Perth, on 29 November 1995.
The evidence as to exactly what was said at this meeting is not very clear. The Minister did not give evidence. Mr Kotsoglo and each of the councillors who attended gave evidence. They gave somewhat different accounts. On the whole of the evidence, I find that most of the talking was done by the Minister and he wanted the Council to reconsider all the amendments and approve at least some of them. I find that he mentioned one particular amendment (not one of the plaintiffs') more than once. I find that he said words to the effect "I will take the heat on the rest". The propriety of this kind of approach to planning is not in issue in these proceedings.
The Planning Committee next met on 12 December 1995. The City Planner prepared a report, including a brief summary of the meeting with the Minister. He recommended that the Council review, on their individual merits, all applications which were pending at the time of the suspension of the seniors' housing policy and to advise the Minister that this was what the Council proposed to do. Council met on 21 December and resolved to adopt that recommendation. There were five scheme amendments in view, three of which were those of the plaintiffs.
The special meeting of Council was fixed for 6 February 1996 for the purpose. It is notable that the minutes record this meeting as having commenced at 6.30 pm and as having concluded at 6.32 pm.
The motion which was carried was:
"That after consideration at the January Planning Committee Meeting and Council Meeting of the five amendments under consideration, the Council advise the Minister for Planning that further to the meeting between himself and Council's Planning Committee on 29 November 1995, Council has considered the matters raised and has resolved not to recommend any amendment be reconsidered for final approval and that it considers it has acted within the requirements of the appropriate legislation."
Concerning the brevity of the meeting, it should be recorded that attached to the agenda sent to councillors in advance of the meeting was a substantial dossier of about one hundred pages, including the record relating to each of the proposed amendments and the planning reports with respect to them and the objections that had been received against each proposal. The quantity and nature of the information in the dossier would have enabled councillors to fully reconsider each application on its merits before the meeting. I attach no particular significance to the fact that the meeting is recorded as having lasted only two minutes.

Amendment to Town Planning Regulations

As has been intimated, the Town Planning Regulations were amended effective as from 9 February 1996. The main amendments which are material to these cases are those which were made to reg 17(2), reg 18(1) and reg 21(2). For ease of comparison, I will here set out in tabular form, side by side, the content of the relevant regulations in their unamended and in their amended form.

Town Planning Regulations 1967
(pre 9 February 1996)

Town Planning Regulations 1967
(as amended 9 Feb. 1996)

Regulation 15: Advertisement of Scheme

15(1) Where the Minister had given his consent

for the Scheme to be advertised for public inspection under regulation 14, the local authority specified in the Scheme as such shall become the responsible authority under the Act and notice of the Scheme shall be advertised in the Form No. 3 in Appendix "A" in accordance with sub‑regulation (3) of this regulation and the responsible authority shall take such other steps, if any, as it considers necessary, or as it is directed by the Commission to take, to make public the details of the Scheme.

Regulation 15: Advertisement of Scheme

15(1) Where the Minister had given his consent

for the Scheme to be advertised for public inspection under regulation 14, and, if that consent was conditional, the conditions have been satisfied the local government specified in the Scheme as such shall become the responsible authority under the Act and notice of the Scheme shall be advertised in the Form No. 3 in Appendix "A" in accordance with sub‑regulation (3) of this regulation and the responsible authority shall take such other steps, if any, as it considers necessary, or as it is directed by the Commission to take, to make public the details of the Scheme.

. . .

(5) The Commission shall, in the notice

advertised or given pursuant to this regulation, describe the purpose of the Scheme, state the times and places where the Scheme may be inspected, and specify a date on or before which the submissions in respect of the Scheme may be made; which date shall be not less than 42 days from the date of publication of the advertisement in the Government Gazette unless the Commission decides that another date, being not less than 21 days nor more than 90 days from the date of such publication, is appropriate to the Amendment.

(5) The commission shall, in the notice

advertised or given pursuant to this regulation, describe the purpose of the Scheme, state the times and places where the Scheme may be inspected, and specify a date on or before which the submissions in respect of the Scheme may be made; which date shall be not less than 42 days from the date of publication of advertisement in the Government Gazette unless the Commission decides that another date, being not less than 21 days nor more than 90 days from the date of such publication, is appropriate to the Amendment.

. . .

Regulation 17: Consideration of Submissions

17.(1) The responsible authority shall, within 42

days of the expiry of the period specified by the Commission or the Minister, as the case requires, under regulation 15(5) for making submissions or within such further period as is approved by the Minister, consider all submissions to the Scheme and in respect of each submission shall consider whether the Scheme should be modified accordingly or whether it shall be rejected.

Regulation 17: Consideration of Submissions

17.(1) Subject to sub‑regulation 1(a) the

responsible authority shall, within -

(a) 42 days of the expiry of the period specified by the Commission or the Minister, as the case requires, under regulation 15(5) for making submissions;

(b) 42 days of receiving a statement delivered under section 48F(2)(a) of the EP Act; or

(c) if the responsible authority makes a request under section 48G(1) of the EP Act within the longer of the periods referred to in paragraphs (a) and (b) and a statement is delivered under section 48G(3) of the EP Act, 42 days of receiving that latter statement,

(whichever is the longer period), or such further period as is approved by the Minister, consider all submissions to the Scheme and in respect of each submission shall consider whether the Scheme should be modified accordingly or whether that submission should be rejected.

(2) After considering the submissions made

pursuant to sub-regulation (1) of regulation 16 or if no submissions have been lodged within the period specified under regulation 15(5) for making submissions, the responsible authority shall pass a resolution either -

(a) that the Scheme be adopted with or

without modification; or

(b) that the Scheme be not proceeded

with

(2) After considering the submissions made pursuant

to sub-regulation (1) of regulation 16 or if no submissions have been lodged within the period specified under regulation 15(5) for making submissions, the responsible authority shall pass a resolution either -

(a) that the Scheme be adopted with or

without modification; or

(b) that it does not wish to proceed with

the Scheme.

Regulation 18: Scheme to be Forwarded to the Commission

18.(1) Where a responsible authority passes a

resolution to adopt the Scheme with or without modifications the responsible authority shall within twenty-eight days after such adoption forward to the Commission -

(a) (deleted)

(b) a schedule of submissions made on

the Scheme;

of the submissions made to it;

(d) particulars of the modifications (if

any) to the Scheme recommended by the responsible authority.

Regulation 18: Scheme to be Forwarded to the Commission

18.(1) Within 28 days of passing a resolution under

regulation 17(2) the responsible authority shall forward to the Commission -

(a) a schedule of submissions made on
the Scheme;

(b) its recommendations made in respect

of those submissions;

any) to the Scheme recommended by the responsible authority;

(d) a copy of the resolution passed

under regulation 17(2); and

(e) if that resolution was a resolution

under regulation 17(2)(b), a summary of the reasons why the responsible authority does not wish to proceed with the Scheme.

. . .

Regulation 21: Approval of Scheme by Minister

21(1) Where pursuant to sub‑section (2) of section 7 of the Act the Minister has -

(a) approved of a Scheme;

(b) refused to approve of a Scheme; or

(c) required the responsible authority to modify the Scheme in such manner as he has specified before approval will be given,

the Commission shall notify the responsible authority of the approval, refusal or the requirement that the responsible authority modify the Scheme in such manner as the Minister may specify before approval is given.

Regulation 21: Approval of Scheme by Minister

21(1) Where pursuant to section 7(2a) of the Act

the Minister has -

(a) approved of a Scheme;

(b) refused to approve of a Scheme; or

modify the Scheme in such manner as he has specified before approval will be given,

(2) Upon being notified that the Minister -

(a) has approved the Scheme; or

(b) has required the responsible

authority to modify the Scheme in

such manner as the Minister may specify before approval is given,

the responsible authority shall if it desires to proceed -

required by the Minister;

(d) resolve to adopt the Scheme for final

approval and evidence that adoption by endorsing the Scheme documents to that effect signed by the Mayor or President and by the Town or Shire Clerk of the local authority; and

(e) forward 3 copies of the Scheme to

the Commission for final approval, and in the case of joint planning schemes shall forward such additional copies as the Commission may require.

(2) Within 42 days of being notified that the

Minister -

(a) has approved the Scheme; or

(b) has required the responsible

authority to modify the Scheme in such manner as the Minister may specify before approval is given,

the responsible authority shall -

required by the Minister; and

[(d) deleted]

(e) forward 3 copies of the Scheme to

the Commission for final approval,

and in the case of joint planning schemes shall forward such additional copies as the Commission may require.

The significance of these amendments is that they purported to take away the municipality's right not to proceed with an amendment to a town planning scheme after advertising the amendment and considering the submissions of ratepayers. As can be seen, according to the new regulations, once the municipality resolved to prepare and advertise an amendment, it lost control of the process. The discretion whether or not to actually amend the scheme shifted to the Minister, acting on the advice of the Planning Commission.
It is the plaintiffs' case that these amendments to the regulations merely removed confusion by bringing the text of the regulations into conformity with s 7(2) and (2a) of the Act.

Meeting with Parliamentarians

On 18 March 1996, there was a meeting at the Council Chambers in Nedlands between the mayor and 10 of the 12 councillors, the Town Clerk, the City Planner and other senior officers of the City's administration on the one hand and the Premier and a number of State and Federal parliamentarians on the other. Apparently, this is an occasional event, the object of which is to enable discussion to take place between the local authority and members of parliament on matters of mutual interest and concern. There were 14 items on the agenda, one of which was "Planning Legislation - Local Government Autonomy". The minutes record that councillors expressed their concern at the 9 February 1996 amendments to the Town Planning Regulations "whereby the Minister can make a final decision on Scheme Amendments regardless of a Council's decision" and expressed their concern that "the decision‑making process is removed from the Council and rests entirely with the Minister". One of the parliamentarians, the Hon Iain MacLean, MLC responded to the effect that "the option of a Ministerial decision [to override the Council's decision] would only be used in extreme circumstances". There is uncontradicted evidence from councillors present at the meeting, which I accept, that Mr MacLean explained that the amendments that had been made to the regulations were to enable the Minister to deal with aberrant country councils. Mr MacLean offered to obtain confirmation from the Minister that he would only act against the Council's wishes in "extreme" circumstances.

The forwarding of the scheme amendments on 11 April 1996

On 26 March 1996, Council resolved that the plaintiffs' amendments, along with three others, "be forwarded to the Hon Minister for Planning for final consideration". This was done. On 11 April 1996, the Town Clerk forwarded each amendment, a schedule of submissions (objections) in respect to each amendment, and the resolutions of Council that none of the amendments should be approved.
Meanwhile, true to his word, Mr MacLean MLC had written to the Minister expressing the concerns of the Council about the new legislation and to this the Minister had replied on 14 April 1996, inter alia, as follows:
"The Town Planning and Development Act was amended last year to ensure that amendments to town planning schemes, once initiated and advertised, were submitted to the Western Australian Planning Commission and Minister for Planning for consideration. Recent amendments to the Town Planning Regulations have clarified that this includes situations where Councils have resolved not to finalise an amendment, however, it is expected that only in exceptional circumstances would the Commission and Minister proceed to approve an amendment against a Council's recommendation.
The intention of the change was to ensure due process in amending town planning schemes, and overcome the delaying of amendments for extraneous considerations … "
Mr MacLean immediately forwarded a copy of this letter to the Town Clerk under cover of a letter in which he said, inter alia:
"I pointed out at the meeting that the option of a ministerial decision would only be used in extreme circumstances. I have since contacted the Minister for Planning who has confirmed my view of the matter."
All of this, of course, was very reassuring to the Council. Mr MacLean's assurances, confirmed by the Minister, meant that the Council need not grapple too hard with the question whether the Minister could, indeed, lawfully overrule the Council's decision not to go ahead with an advertised amendment. Council could perform its planning responsibilities on the basis that its decisions would be given effect except in "exceptional circumstances".
On 24 May 1996, the City received a letter from the Planning Commission in the following terms:
"TOWN PLANNING SCHEME NO 2
AMENDMENT NOS 78, 87, 91, 95, 98 AND 101
In response to your letter of April 11, 1996 [the letter addressed to the Ministry of Planning at the Planning Commission's address] it is advised that the Hon Minister for Planning noted that Council does not support the above Amendments, dismissed the submissions received and has approved the Amendments without modification and requires Council to endorse the documents.
Would you please arrange for three sets of each of the amending documents to be executed for the Hon Minister's endorsement of final approval.
In accordance with the provisions of Regulations 21(2) and 25 of the Town Planning Regulations, 1967 (as amended) Council is required to return the executed amending documents to the Commission within 42 days of being notified of the Hon Minister's decision.
… "
The receipt of this letter caused consternation amongst councillors. I find that none of the second defendants or the third defendant anticipated that this would be the Minister's response to the sending forward of the scheme amendment documents with advice that none of the scheme amendments should be approved. I find that they were genuinely dismayed to be informed of what appeared to them to be an ill‑considered blanket approval of all six applications, regardless of merit, after they had received assurances that the Minister would only act contrary to the wishes of the Council in "exceptional" or "extreme" circumstances.

The meeting of 6 June 1996

A special meeting of Council was convened for 6 June 1996 and Mr McLeod was summoned to attend the meeting. The depth of feeling generated by the Minister's action is reflected in the notice of meeting and agenda which included the following:
"1. PURPOSE
To consider the decision of the Hon. Minister for Planning to grant final approval to six scheme amendment applications that had been initiated by Council but not proceeded with following the advertising period.
RECOMMENDED
That:-
(a)…
(b)the Minister for Planning be requested to explain the obvious extraneous and exceptional circumstances that resulted in his intervention and approval of the amendments against Council's recommendations;
(c)Council write to the W.A. Municipal Association … expressing, in the strongest possible terms, its very deep concerns relating to the Minister for Planning's actions in regard to his exercise of power under the Town Planning and Development Act and the Town Planning Regulations, with reference to approval of six town planning scheme amendments against Council's recommendations;
(d)Council obtain legal advice in relation to the actions of the Minister and any course of legal action that may be open to Council to have the Minister's decision reviewed or reversed."
The meeting, or part of it, was recorded and the transcript records that Mr McLeod addressed the meeting at length. The substance of the evidence of the defendants is that they had little understanding of the advice which he gave and, by the end of the meeting, remained in a state of uncertainty as to the Council's statutory duty in regard to the scheme amendments in question. I accept that evidence. I have read the transcript of Mr McLeod's address and, with due respect to him, I think it is understandable that this Council of lay men and women, having listened to him, remained uncertain as to the precise legal position.
I accept Mr Kyle's submission that here and there during his address Mr McLeod seemed to express a definite opinion that the legislative scheme in place since 9 February 1996 left the Council without any right or discretion or authority to withdraw a scheme amendment once it had resolved to "prepare" the amendment. There was, however, a theme running through Mr McLeod's address which complicated his advice. From my reading of the transcript of his address, I think he was trying to explain that the regulations did not have a retroactive effect so that those amendments which the Council had resolved not to proceed with before 9 February 1996 might not be caught by the new legislative regime. Each of the plaintiffs' applications were, of course, in that category. I set out below extracts comprising some of the advice he gave on that point:
"Having got that far I would say to you that the situation now seems to be clear, since the 9th of February 1996 - that for an amendment where a local authority has not yet reached the point of resolving not to proceed with the amendment, in the case of an amendment where a local authority has not formed that decision before the 9th of February 1996, then it is open to argument that a local authority doesn't have to refer the amendment to the Minister for his final approval or for his consideration. But where the Council has not made that final resolution, the resolution whether or not to proceed with the scheme before the 9th of February 1996 or putting it the other way, if the Council after the 9th of February 1996 makes a resolution that it will not proceed with an amendment - notwithstanding that resolution they have to submit the amendment document to the Minister for the Minister to consider whether or not he wants to change that decision and approve the amendment in any event.
Now you have six amendments here - one of them comes into that latter category [not one of the plaintiffs' amendments]. In respect of one of them you made your resolution not to proceed with the amendment after the 9th of February 1996, so in regard to that one in my opinion, you didn't have any choice. You had to send it to the Minister. And the Minister was able to do what he has done."
-
"In regard to the others it was open to you, I believe, if you wanted to be bloody minded, it was open to you to say to the Minister we will not send these documents to you. We have resolved that we will not proceed with the scheme and under the terms of the Regulations we do not have to send them, send the documents to you."
This was late at night at the end of a long Council meeting. It was not unreasonable for councillors to understand this advice as meaning that, in regard to all amendment applications which it had resolved not to proceed with prior to 9 February 1996, the Minister had no right to demand that the applications be sent to him for any purpose - certainly not for "approval".
However, this was beside the point. As has been recounted, Council had, in fact, sent all of the applications to the Minister and the Minister had actually purported to approve them all. The question that needed to be answered was whether that approval was proper and legally effective and whether, because of it, Council was obliged to follow through with all formalities necessary to amend the town planning scheme.
The substance of Mr McLeod's advice on that question at this time (although not later) was that, because the City had sent the scheme amendments to the Minister, although not obliged to do so, there was little or no prospect that his decision to approve them could be challenged and little or no prospect that the City could legally avoid promulgating the approved amendments.
The evidence of all the councillors was that they were taken aback by this advice principally because it had never been their intention to offer the scheme amendments to the Minister for approval. I accept that evidence. The resolution of 26 March 1996 to send forward the amendments to the Minister "for final consideration" was passed in the context of the negotiations that had occurred with the Minister and in the light of the assurance given by Mr MacLean MLC, in the presence of senior parliamentarians, including the Premier, that the Minister would not approve an amendment against Council's wishes except in "extreme circumstances".
The meeting of 6 June continued for some time during which the various options were canvassed with Mr McLeod. Finally, it was resolved inter alia that the Minister be requested to explain the "exceptional circumstances" on which he had purported to act and that the whole matter be sent back to the Planning Committee "for further consideration". This amounted to a determination to challenge the Minister's bona fides. I think that some councillors, especially Councillor Stow, had some misgivings about the wisdom of that course.
On 10 June, Councillor Stow requested a special Council meeting for the purpose of rescinding the resolutions passed at the meeting of 6 June save for the resolution that the scheme amendments be referred back to the Planning Committee. It appears from her memorandum to the mayor and councillors and she confirmed in evidence that she was concerned that Council did not have formal advice with respect to its legal position. Her memorandum said, in part:
"We must have legal advice on all options open to the Council before we do anything. McLeod only gave his advice verbally and there may be yet issues which he either had not considered or the full impact was not understood by us. We should have requested his opinion in writing and although I presume he will give the Council a written opinion in a few days I have some questions I would like to submit to him in writing. They may, of course have been answered last Thursday and I missed the significance of them but I really need to see in writing all he said."
A special meeting of Council was held on 19 June at which it was resolved that further legal advice be obtained. Pursuant to that resolution, the Town Clerk wrote to McLeod & Co on 20 June posing seven questions. I set them out because they reveal the extent and genuineness of the Council's uncertainty as to its legal obligations in respect of these scheme amendments.
"1.Do we have to and if so why do we have to comply with the Minister's request to return to him the five scheme amendments rejected by Council before the 9th February 1996 bearing in mind the changes to the regulations on that date? In particular, written advice is required on the retrospective effect of those changes to the regulations.
2.If we do not return them to the Minister for endorsement of final approval does he have the power to force us to do so?
3.Do the applicants have the power to force us to return them to the Minister?
4.If we had not sent the applications to the Minister could he, or the applicants have forced us to do so and if so how?
5.By sending the applications to the Minister in the manner we did, has Council now given the Minister some rights to require the amendments to be approved which he previously did not have?
6.If any position is open to interpretation what is the relative strength of the Council's position?
7.If it is the Council's will, is there any lawful way the Council can avoid acceding to the Minister's request?"
A written advice in response to this request was received on 25 June. It was a long advice of 11 pages. The essence of the advice was that, in the events that had happened, the Council was under a legal obligation to comply with the Minister's request that the executed scheme amendment documents be returned to the Western Australian Planning Commission in accordance with reg 21(2); that is, within 42 days of receipt of notification from the Minister that he had approved the scheme amendments.
There was a meeting of Council on the evening of 25 June 1996. This seems to have been a special meeting convened to discuss the meeting with the Minister that was due to be held the following day. There is a transcript of the meeting of 25 June, or of parts of it, from which it would appear that, although councillors were aware that a letter of advice had been received and that it was of "10 or 11 pages", no councillor had read it. This is not at all surprising because it had only been received at the Council offices at 5.30 pm that day. I find that, during the course of that meeting, the letter was copied and a copy given to each councillor present. There was a suggestion that it be gone through there and then, but the attitude of the meeting is perhaps best summed up by the words of Councillor Key Wilson to the mayor:
"Your Worship, I really would say that the idea of having to digest 11 pages of legalese … ".

The meeting with the Minister 26 June 1996

On the morning of 26 June, the mayor and seven councillors, together with the Town Clerk and the City Planner, met with the Minister at the Council offices. The meeting took the form of a Special Council Meeting. The meeting opened with the mayor expressing the Council's disappointment "that we make planning decisions and then we are overridden". The mayor informed the Minister that it seemed to the Council to be "a rather pointless exercise".
The discussion was obviously lively and there was a frank exchange of views. If it is possible to summarise 18 pages of closely‑typed transcript contributed to by a number of speakers, it is perhaps fair to say that a number of councillors expressed anger that, notwithstanding the Council had given each of the applications detailed consideration and had decided that they did not meet the requirements of the policy, the Minister had approved them all when, on no reasonable view of the requirements of the policy, could all of them have been approved on their merits or could any of the Minister's approvals be justified by reference to "exceptional circumstances". The following is an extract from a statement made at the meeting by the deputy mayor to this effect:
"When I look at one of them, [one of the applications] the codes say that aged or dependent persons' dwellings must be designed for that purpose. One of them is a two‑storey family home with a billiards room, which is no more elderly person's housing than this Chamber is. We looked at them and we agonised over them, and it is just a blanket upholding by the Minister without a quarter of the consideration that we have given to them."
The meeting ended in a rather confused state. The mayor asked the Minister whether he was prepared to reconsider his decision that all of the scheme amendments be allowed on the basis that, as he put it, "some are absolutely, we think, outrageous and just should not be … ".
The Minister's response was, to say the least, ambiguous. It is as well to set out in full his concluding words on the subject. He said:
"What I would like to do, Mr Mayor, and it is within your province to decide whatever - it is not for me to tell you - but I would like you as a Council to sit down and maybe come back and say, 'Look, we've reconsidered it, and this is our position'."
The following exchange then took place between the mayor and the Minister:
"THE MAYOR: So you will listen to that, will you?
MR LEWIS: Yes, I will.
THE MAYOR: All right. Now, you have all heard that. We have made some progress."
It is not at all clear to me what progress had been made.
The meeting finally concluded with the mayor asking:
"Will you please give us time? Some of these are glaring. Great objections were made. We might have to speak to you or write to you again on that. Will you hold off until we do that?"
To this, the Minister replied:
"There is a statutory requirement and I can extend that period if you have [inaudible] at short notice. I am happy, but I think for the benefit of everyone, when you have got problems, it is better to bring them to a head and get them off the agenda, because they just fester on."

It should be noted that throughout this period of indecision and debate the Council was receiving strong (in some cases passionate) representations against the scheme amendments. In case it is of any importance, I find that not only did the councillors themselves genuinely believe that the concept of allowing higher density use on some selected lots within single residential zones was bad planning, on the evidence of the submissions that were made to the Council from time to time there was a considerable body of opinion amongst ratepayers to the same effect.
On 15 July 1996, the Planning Commission wrote to the City reminding the City of the time limitations laid down in reg 21(2) and reg 25 "for the return of executed documents". The Minister's grant of final approval had been notified to the City on 24 May 1996 and the regulations provided 42 days from that date for the execution and return of the documents. That period had expired on 5 July.
The letter concluded "Your urgent attention to this matter would be appreciated".
On 19 July 1996, Councillor Stow attended on two of the Minister's staff members in the company of, and at the request of, one of the ratepayers who had been vigorously opposing any further town planning scheme amendments of the kind in question. That ratepayer was Mr Ratneser. According to his letters to the Council and to the Premier (see, for example, folio 810 of exhibit 2) he was firmly of the opinion that the Minister's decision to approve the amendments was "arbitrary and retrospective" and was not based upon sound planning principles. Mr Ratneser described himself as "Co‑ordinator - Residents for a Garden Suburb".
Councillor Stow's uncontradicted evidence was that at this meeting she was advised that part of the difficulty that had arisen between the Minister and the Council might be that the reports presented by the City's officers had not "fully set out the planning grounds on which the Council had refused the applications" and that "if Council intended to maintain its position, it ought to prepare a further submission to the Minister setting out its reasons in detail". See Councillor Stow's written statement at par 147. Councillor Stow made a written report to the mayor and councillors and the Chief Executive Officer of the City to this effect on 25 July 1996. See folio 930 of exhibit 3.
Council met on 30 July 1996 and resolve to endorse and forward to the Minister three of the amendments, including the Howe amendment, but not including the Murcia Holdings or Hwang amendment and request the Minister to reconsider his decision in respect to the other three amendments, including the Murcia Holdings amendment and the Hwang amendment.

The meeting of 6 August 1996

At a special meeting of the Council on 6 August 1996, the Council received further oral advice from Mr McLeod. I find that Mr McLeod advised the Council that it was still open to Council to attempt to persuade the Minister on planning grounds that the amendment applications should not be approved. At this meeting, it was resolved to rescind the resolution that the amendment documents in respect to three of the amendments be endorsed and returned to the Minister and, no doubt inspired by Mr McLeod's advice and by Councillor Stow's report of her meeting with the Minister's staff members, it was resolved instead that:
"(a)A full planning report be prepared on the six scheme amendments and forwarded to the Minister.
(b)The Minister be asked to reconsider his decision on the basis of the above report and in the interest of orderly planning.
(c)The Minister be advised that Council has initiated a town planning scheme review."
On 30 August 1996, the Town Clerk (who had now, in view of changes to the Local Government law, become the "Chief Executive Officer") wrote to the Minister on behalf of the City reiterating Council's opposition to the amendments and Council's inability to support any of the amendments. In the letter, it was pointed out that numerous objections had been received to the concept of subdivision of single residential lots. The letter then addressed each of the applications and enumerated Council's reasons for concluding that each of them should be rejected. The Minister replied to this letter on 26 September 1996 to the effect that he was disappointed with the result of the City's reconsideration of the amendments and had himself reassessed each of the proposals and remained convinced that the amendments ought to proceed. He told the City that each of the amendments "should now be finalised" and demanded that the relevant documents be endorsed and returned "forthwith". He warned that refusal to comply might result in him exercising his power under the Town Planning and Development Act "to assume the powers of a local government where it has failed to comply with its responsibilities … " and added that he would "view this action with such gravity that in addition to my powers, I will also refer the matter to the … Minister for Local Government". The latter was plainly a threat to arrange for the Council's dismissal.
A special Council meeting was immediately convened to be held on 7 October and Mr McLeod was invited to attend. The resolutions carried at the meeting included resolutions that a Queen's Counsel's opinion be obtained and that McLeod & Co be requested to give further advice, specifically relating to the retroactive effect of the amended regulations.
On 29 October 1996, McLeod & Co did provide the Council with further detailed advice which appeared to be supportive of the Council's actions. It included the following advice:
"2.7In our opinion, it is significant that the Council did resolve, prior to 9 February 1996, in respect of each Amendment Nos 78, 87, 95 and 98 in the terms of regulation 17(2)(b) as it then existed, 'that the scheme be not proceeded with'. We assume that the Council's resolution was in those terms in each case.
2.8In the circumstances in our opinion it was inappropriate for the Minister to purport to approve a scheme amendment where the Council in accordance with the regulations as they were at the relevant time, had resolved that the amendment be not proceeded with. In the terms of the Regulations as they existed prior to 9 February 1996, it was clearly contemplated that following such a resolution, the Amendment would not be proceeded with.
2.9In our opinion, there is a reasonable basis for arguing that the Amendment Nos 78, 87, 95 and 98 were not dealt with in accordance with the Regulations, and that the Minister's purported approval was not effective …
-
We are referring this matter to a Queen's Counsel for his opinion. If the Queen's Counsel agrees that there is a reasonable basis for arguing that the amendment process is flawed, and that the Supreme Court might hold that in the circumstances, the Amendments even if gazetted would not be valid, then we will recommend that the Council continue with its defence of the action by Murcia Holdings Pty Ltd and that it continue with the process of seeking to have a determination of the legal issue by the Supreme Court in the Murcia Holdings Pty Ltd action."

Queen's Counsel's opinion

On 9 December 1996, McLeod & Co received an opinion from Mr W Martin QC which was to the effect that from 1 March 1995 the power of the Minister to approve a scheme amendment was not conditioned upon the continued support of the City to the proposed amendment; and following the Minister's approval of an amendment, the City was under an obligation to forward executed documents embodying the amendment to the Planning Commission pursuant to reg 21(2) of the Town Planning Regulations.
McLeod & Co forwarded that opinion to the acting Chief Executive Officer of the City on 12 December 1996. In their covering letter, McLeod & Co expressed disagreement with counsel's opinion in the following terms:
" … we must record the fact that the writer is not happy to accept the Opinion by Mr Martin QC that s 7(2) of the Planning Act, even in the light of the August 1996 amendments to the Planning Act, is to be interpreted as imposing an obligation on a Council to follow through with a scheme amendment process from the time that it could be said that the scheme amendment has been prepared by the Council. That view does not sit easily with the new s 7A(2)(i) of the Planning Act … or the new s 48(c)(i) of the Environmental Protection Act 1986, and nor does it sit easily with the terms of reg 13(1) of the Town Planning Regulations which recognise that a local government, having completed the preparation of a scheme or scheme amendment documents may not desire to adopt the scheme or scheme amendment, and in those circumstances would not make the resolution which would lead to the advertising of the scheme amendment. Nor does Mr Martin QC's mandatory interpretation of s 7(2) accord with the approach adopted quite publicly by the Minister for Planning, that the obligation to proceed with a scheme amendment to the point of submission to the Minister for final approval only arises after advertising of the amendment.
Nevertheless, the Council is now faced with a second legal advice, and this the advice of a Queen's Counsel, confirming the advice in our letter of 25 June, that the Council ought now to execute the three copies of the scheme amendment documents, and to lodge the documents with the WAPC.
Notwithstanding the opinion expressed in our letter of 25 June, and notwithstanding the opinion the Council now has from Mr Martin QC, in our view there was a reasonable argument open to the Council that it was not obliged to forward the scheme amendments to the Minister for final approval … "
On 13 December 1996, the acting Chief Executive Officer wrote to the Minister informing him that Queen's Counsel's advice had been received and that it was his intention to recommend to Council, at its meeting on 17 December 1996, "that the documents be appropriately endorsed and sent to the ministry on Wednesday, 18 December 1996".
At its meeting on 17 December 1996, Council did resolve to endorse and seal the documents relating to the amendments and to forward them to the Planning Commission and the Minister for final approval.
On 19 December 1996, the documents, endorsed and sealed, were sent to the Planning Commission. On the same day, the acting Chief Executive Officer wrote to each plaintiff advising them of that action.
On 23 December 1996, the Planning Commission advised the City that the Minister had granted final approval and that the relevant notice and amending texts would be gazetted on 27 December 1996.
Meanwhile, on 9 September 1996 Murcia Holdings had issued its writ and on 17 October 1996 Mr and Mrs Hwang issued their writ. Mr Howe's writ was not issued until 2 April 1998. As it is now constituted, Mr Howe's action is against the City only.
Dealing first with the action by Murcia Holdings, the claims against the City allege negligence on the part of the City and a breach of the Fair Trading Act s 10 and abuse of office. The claims against the mayor and nine defendant councillors allege abuse of office on their part.

The action by Murcia Holdings Pty Ltd

Negligent advice by Mrs Holdaway

One manner in which it is alleged that the City was negligent (and the way in which it is alleged that the City breached the Fair Trading Act) is that, by its responsible planning officer Mrs Holdaway, it gave negligent advice to a Mr Day and to Mr Telfer on behalf of Murcia Holdings to the effect that 14 Edna Road, Dalkeith was (i) "ideally suitable for development as a duplex" under the seniors' housing policy; (ii) that the property "complied with all the requirements of the policy"; (iii) that there would be "no difficulty" in obtaining a scheme amendment which "would certainly be granted by the Council", and (iv) that "the Council had not rejected a single application for approval to develop residential properties when the application had complied with the policy". Statement of claim pars 6.1 ‑ 6.4.
I will now deal with the question whether the pleaded representations were, in fact, made by Mrs Holdaway.
Mr Telfer gave evidence to the effect that he had engaged in a number of property developments in the municipality with respect to which he had dealt with Mrs Holdaway. His evidence was that Mr Day, who was a real estate agent, informed him in early 1995 that the property in question, that is, 14 Edna Road, was available for purchase. He gave evidence that, after speaking with Mr Day concerning the investigations which Mr Day had made as to the suitability of the property for development under the seniors' housing policy, Mr Telfer attended on Mrs Holdaway at the Council offices. He said that he had dealt with Mrs Holdaway before in connection with a previous application he had made under the policy for the development of other properties in the City. His evidence was as follows:
"She told me that the property was ideally suited for development under the policy and fitted all the criteria required by the policy 'to the letter', particularly as it was within walking distance of the Waratah Avenue shopping centre … She said there would be no difficulty obtaining the approval of the Council under the policy if the two units complied with all the development conditions in the policy."
Mr Telfer's evidence was that he "took Holdaway's advice at its face value and acted upon it" in purchasing the property in question for $420,000.
Mr Day, whose full name is Alan Hakim Dayawala, gave evidence de bene esse. His evidence was that some time during the week commencing 27 February 1995 he went to the Nedlands City Council office and spoke to a planning officer who he believed was Mrs Holdaway. He gave evidence that he asked her whether the property fitted the criteria under the seniors' housing policy. His evidence was that Mrs Holdaway consulted the tax map for the area, identified the property and "confirmed that no other similar application had been received for the super block in which the property was situated. She said that it met all the requirements set out under the policy and was in an ideal location … She said that the property fitted all the criteria". He said that he then informed Mr Telfer to the effect that he was sure that the property could be developed under the seniors' housing policy.
Mrs Holdaway gave evidence in which she acknowledged speaking with Mr Telfer in respect to the suitability of the property for development under the seniors' housing policy. She did not remember speaking to Mr Day. She said it was part of her job as a planning officer to provide responses to queries from members of the public over the counter at the Council offices and by telephone and in writing in respect of the City's policies and its town planning scheme. She gave evidence that she dealt with public inquiries on a daily basis and often had occasion to respond to inquiries about planning policies. She was familiar with the seniors' housing policy and had explained its provisions to members of the public on a number of occasions. She had also received and assessed some but not all of the proposals for amendments under the policy. Her evidence was that a total of about 22 amendments had been proposed under the policy prior to it being revoked in July 1995.
Her evidence was to the effect that it was her practice, in dealing with inquiries about the policy, to get the policy document out and take the person who was making the inquiry through the policy, explaining its basic requirements. She said it was her practice to inform potential applicants that it was up to the applicants to put their case to the Council. Although she could not recall the specific details of her conversation with Mr Telfer, it was her evidence that she would never have said to any person during the course of a counter inquiry that a particular property was "ideally suitable" for development pursuant to the policy. She said that in order to make an assessment of the suitability of the site, a site inspection was required and a detailed consideration would have to be undertaken of the application itself. Her evidence was that when Mr Telfer made his initial inquiry, no application had been lodged and no site inspection had been undertaken by the planning department.
As to the allegation in the statement of claim that she had advised Mr Telfer that there would be "no difficulty" in obtaining a scheme amendment, her evidence was that she would never have made any such statement during the course of a counter inquiry. She said that, so far as she was concerned, it was Council's decision whether to amend the scheme. She said that because she was in no position to pre‑empt what the Council would do she would never tell anyone, during a counter inquiry, that an amendment would certainly be made by the Council if it complied with the terms of the policy. Her evidence was that it was impossible to say whether an amendment would be "recommended for approval" by the Council even if it complied with the policy because there was still a need to consider the views of adjoining owners and other residents who may make objections and submissions. She said it was her practice to inform people, and she would have told Mr Telfer, if he had asked, that it was in the discretion of Council whether it recommended any application pursuant to the policy.
Having seen and heard Mrs Holdaway give her evidence, I have no hesitation in accepting it. Mrs Holdaway struck me as a competent, forthright and conscientious planning officer who was well aware that no amendment under the seniors' housing policy would be made without a process of assessment under the supervision of the City Planner and without a consideration by Council of the application and of the objections received after advertisement of the proposed amendment.
I find that Mrs Holdaway did not make any of the representations pleaded in the statement of claim.
I will now deal with the issue of reliance. It is apparent from Mr Day's evidence that he was experienced in obtaining amendments to town planning schemes. He knew it was for the Council, not Mrs Holdaway, to make a judgment as to whether an amendment should be finally approved and he also knew that the final decision as to whether a scheme should be amended was not for the Council, but for a superior governmental planning authority. Under those circumstances, it is quite unlikely he would have understood any advice he received from Mrs Holdaway as meaning that the Murcia Holdings application would be approved or that he passed on an assurance in such unqualified terms to Mr Telfer. Mr Telfer is a professional property developer with 15 years' experience in developing properties in the western suburbs. He gave evidence that since 1992 he had developed 15 properties, nine of which were in the City of Nedlands. He had made two previous applications for scheme amendments to accommodate senior housing developments. These applications had been successful and profitable. He had obtained a copy of the seniors' housing policy in 1993 or 1994 and admitted that he knew the main provisions of the policy. He accepted, under cross‑examination, that the policy called for value‑judgments to be made in considering whether an application pursuant to the policy should be allowed. He knew it was for the Council to make the evaluation. He accepted that Mrs Holdaway could not guarantee that any application would be approved and, to the extent that she did give affirmative advice, it could only be understood as amounting to a statement of her belief on the prospects of success of the application. See transcript 446B to 448D. Mr Telfer knew that the procedure with respect to an application for an amendment included advertising and public submissions. He knew of the possibility that there might be objections and he must have known (I think he actually did know) that objections needed to be considered by the Council. See his evidence at 434B to 436A.

In my opinion, no cause of action in negligence arises out of the failure by the Council to submit the scheme amendments to the Minister until 11 April 1996.
As to the claim in negligence for failure to execute amendments approved by the Minister until 19 December 1996 all that has already been said would apply to deny this head of claim, except for one thing. That is that the conduct complained of here is conduct in relation to an amendment that had actually been approved by the Minister. It was an amendment which actually did benefit the plaintiff and the refusal of the Council to process it had the effect of keeping the plaintiff out of that benefit. In this respect, Mr Kyle argued that the case was on all fours with Avenhouse v Hornsby Shire Council (1998) 44 NSWLR 1. In that case, the municipality had approved a subdivision and then failed to take the formal steps necessary to enable the subdivision to be completed in accordance with the approval it had given. The trial Judge held that, in all the circumstances, there was a duty on the shire, sounding in damages, to "process the post approval state of the subdivision" (ibid) at 18B. The Court of Appeal upheld the trial Judge. Sheller JA, in whose judgment Mason P and Priestley JA concurred, held that where a subdivision had been approved under the Local Government Act 1991 (NSW) s 327(2)(b) and Ordinance 32, the Council was under a duty of care to take the formal steps to give effect to that approval and to do so with due diligence and within a reasonable time.
There is a number of features which distinguish that case from this. The legislative framework with respect to subdivisional approvals and implementation of an approved subdivision was quite different from the legislative framework within which the present case falls to be considered. One critical distinction was that, as Sheller JA observed at 22B:
"… in the present case the Council was not concerned with any policy matter … "
As he said also, at p 23C:
"The Council did not suggest that the failure to certify had anything to do with budgetary priorities. Nor did it distort the Council's priorities, or fall within the 'core area' of policy making which, in Sutherland Shire Council v Heyman, Mason J regarded as immune from any liability in negligence (at 469)."
Approving a subdivision under the Local Government Act of New South Wales is a function which seems not to be quasi‑legislative in nature. The local government had no power to subdivide the land of private landowners for the collective good. The power to approve a subdivision, although involving planning considerations, was to be exercised only upon application by that landowner and essentially for the benefit of the landowner concerned. That is its very purpose so far as one can see from the legislative provisions in question. The council of the municipality had itself already approved the landowner's subdivision application, thereby signifying, in a conclusive way, that there was no rational basis for refusing to certify the plan. It is easy to see that in Avenhouse the "proximity of relationship" spoken of in Pyrenees and in Sutherland was much closer than it was in the case with which the court is presently concerned.
I hold that the Council owed to Murcia Holdings no common law duty of care to promptly comply with the requirements of the Act and regulations respecting the amendment in question, even after they had been approved by the Minister.

(3) Misfeasance in office

The plaintiff makes a claim based on the tort of misfeasance in public office. As Smith J said in Tampion v Anderson [1973] VR 715, the precise limits of this tort are still undefined. See also Northern Territory v Mengel (1995) 185 CLR 307 at 345; Sanders v Snell (1998) 72 ALJR 1508. It is, however, an intentional tort. In Mengel at 345, the High Court said:
" … the weight of authority here and in the United Kingdom is clearly to the effect that it is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power."
It appears to be settled that a municipality is the holder of public office for the purposes of the tort. That a municipal body may be guilty of misfeasance in public office has been accepted in cases of high authority: Jones v SwanseaCity Council (1990) 3 All ER 737 (HL). The claim is made against the City and the defendant councillors and the mayor. Although they receive no remuneration, I will assume for the purposes of this case that the councillors and the mayor are also public officers.
I should say, however, that there is much to be said for the view that unpaid elected members of local government councils are not public officers for the purposes of this form of action. It is generally accepted, I think, that in this branch of the common law, the public officer is one "who is appointed to discharge a public duty, and receives compensation in whatever shape, whether from the Crown or otherwise": Henley v Mayor and Burgesses of Lyme (1828) 130 ER 995 at 1001; 5 Bing 91 at 107; Dunlop v Woollahra Municipal Council (1978) 40 LGRA 218 at 235; Todd, "Liability in Tort of Public Bodies" in Mullaney & Linden (eds), Torts Tomorrow - A Tribute to John Fleming (1998) 36 at 37 n4. The action was devised to prevent public servants abusing their powers of office with the object of injuring members of the public. It is questionable whether the law should require of elected volunteers the same "highest standards of a public servant in the exercise of his office": per Nourse LJ in Jones v Swansea City Council [1990] 1 WLR 54 at 85. It is easy to see that there may be sound policy reasons not to include such people within the ambit of the tort. Take this case. Only three of the 10 individual defendants stood for re‑election for another term after these actions were commenced against them.
The claim against the City is that the refusal by the City to forward the amendments to the Minister firstly after advertising and secondly after notification that the Minister had approved the amendments "constituted an abuse of its office". The claim against the individual defendants is that they abused their office by voting at the meeting of 6 August 1996 as they did, whereby they "effectively confirmed that the first defendant should not comply with regulation 21(2) of the Town Planning Regulations". Statement of claim par 21.

The claim of misfeasance against the City

The nature of the tort of misfeasance in public office was considered in detail by Yeldham J in Dunlop v Woollahra Municipal Council (supra) in terms which ultimately received the approval of the Privy Council in Dunlop v Woollahra Municipal Council [1982] AC 158 at 172 (PC). What emerges very clearly from the judgment of Yeldham J is that this form of misfeasance (which may be constituted either by acts of omission or commission) is a tort, so that the plaintiff must not only show damage from the misfeasance, but some misconduct by the public officer or body in the discharge of a duty which it owes to persons, including the person allegedly aggrieved. See also, to the same effect, Tampion v Anderson (supra). The requirement that there be a duty to the plaintiff seems to have been accepted by the majority of the High Court in Mengel at 346 ‑ 347. On grounds that I have tried to explain, I have found that the City owed no statutory duty and no common law duty of care to the plaintiffs to comply with the direct requirements of the Act and regulations with respect to the processing of amendments to the City's town planning scheme. On those exact grounds, I would hold that the City owed no duty to the plaintiffs, breach of which would constitute the tort of abuse of office. The circumstances of this particular case do not enable a conclusion to be reached that, although the City was not negligent or in breach of statutory duty, it was guilty of misfeasance in office actionable at the suit of the plaintiffs.
Concerning the ingredients of the tort itself, there is some uncertainty as to the mental element which is required to accompany the act or omission which caused the harm. As was pointed out in Mengel (at 347), the cases do not establish that misfeasance in public office is constituted simply by an act of a public body which it knows is beyond power and which results in damage. More is required; but what that "more" is remains a little unclear.
In Mengel, government stock inspectors, acting in good faith, placed severe restrictions on the movement of the plaintiffs' cattle which caused financial loss to the plaintiffs. The inspectors had no power to impose the restrictions, although they believed they had the power. They appreciated that the restrictions were likely to cause loss to the plaintiffs. The plaintiffs succeeded below against both the Northern Territory and the stock inspectors, essentially on the principle of Beaudesert Shire Council v Smith (1966) 120 CLR 145 that "a person who suffers loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other". On appeal to the High Court, the Beaudesert principle was held to be unsound and the case was effectively overruled. The appeal was allowed and the plaintiffs' claims were dismissed. In the course of their judgments, all of the justices considered what was required to establish the tort of misfeasance in public office. On my understanding of the judgments, which I acknowledge is not wholly in conformity with the headnote of the case, all of the justices were of the view that there must be, at least, actual knowledge on the part of the public officer that the act done by him or her is beyond power: Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ at 347; Brennan J at 357; Deane J at 370. Such knowledge was not established. It was therefore not necessary for the court to decide whether more than actual knowledge of want of power was required. In the majority judgments, the matter was dealt with in the following way (at 347):
"The cases do not establish that misfeasance in public office is constituted simply by an act of a public officer which he or she knows is beyond power and which results in damage. Nor is that required by policy or by principle. Policy and principle both suggest that liability should be more closely confined. So far as policy is concerned, it is to be borne in mind that, although the tort is the tort of a public officer, he or she is liable personally and, unless there is de facto authority, there will ordinarily only be personal liability. And principle suggests that misfeasance in public office is a counterpart to, and should be confined in the same way as, those torts which impose liability on private individuals for the intentional infliction of harm. For present purposes, we include in that concept acts which are calculated in the ordinary course to cause harm, as in Wilkinson v Downton [1897] 2 QB 57, or which are done with reckless indifference to the harm that is likely to ensue, as is the case where a person, having recklessly ignored the means of ascertaining the existence of a contract, acts in a way that procures its breach.
It may be that analogy with the torts which impose liability on private individuals for the intentional infliction of harm would dictate the conclusion that, provided there is damage, liability for misfeasance in public office should rest on intentional infliction of harm, in the sense that that is the actuating motive, or on an act which the public officer knows is beyond power and which is calculated in the ordinary course to cause harm. However, it is sufficient for present purposes to proceed on the basis accepted as sufficient in Bourgoin [SA v Ministry of Agriculture, Fisheries & Food [1986] QB 716], namely, that liability requires an act which the public officer knows is beyond power and which involves a foreseeable risk of harm."
It may be important to appreciate that the last sentence is not intended as a definitive statement of the law. As to the requisite mental element, what was being said was that, even if all that is required is an act which the public officer knows is beyond power and which involves a foreseeable risk of harm, the case was not made out.
Brennan J put it this way (at 357):
" … the mental element is satisfied either by malice (in the sense stated) or by knowledge. That is to say, the mental element is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury. These are states of mind which are inconsistent with an honest attempt by a public officer to perform the functions of the office. Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference as to the availability of power to support the impugned conduct and as to the injury which the impugned conduct is calculated to produce … Malice, knowledge and reckless indifference are states of mind that stamp on a purported but invalid exercise of power the character of abuse of or misfeasance in public office."
Deane J dealt with the subject as follows (at 370 ‑ 371):
"As Lord Diplock observed, in delivering the judgment of the Privy Council in Dunlop v Woollahra Municipal Council, the tort of misfeasance in public office is "well established". Its elements are: (i) an invalid or unauthorised act; (ii) done maliciously; (iii) by a public officer; (iv) in the purported discharge of his or her public duties; (v) which causes loss or harm to the plaintiff. That summary statement of the elements of the tort inevitably fails to disclose some latent ambiguities and qualifications of which account must be taken in determining whether a particular element is present in the circumstances of a particular case. The critical element for present purposes is malice.
In the context of misfeasance in public office, the focus of the requisite element of malice is injury to the plaintiff or injury to some other person through an act which injuriously affects the plaintiff. Such malice will exist if the act was done with an actual intention to cause such injury. The requirement of malice will also be satisfied if the act was done with knowledge of invalidity or lack of power and with knowledge that it would cause or be likely to cause such injury. Finally, malice will exist if the act is done with reckless indifference or deliberate blindness to that invalidity or lack of power and that likely injury. Absent such an intention, such knowledge and such reckless indifference or deliberate blindness, the requirement of malice will not be satisfied."
In my opinion, the tort of misfeasance in public office will not be made out unless (a) the public body or officer does an act maliciously or which he actually knows is beyond power and (b) the act is calculated in the ordinary course to cause harm or (c) the public officer is recklessly indifferent to the harm that is likely to ensue.
As will be apparent from what I am about to say with respect to the claim of misfeasance against the individual councillors, I am not satisfied that there was actual knowledge on the part of the City that there was no power to conduct itself as it did. Neither am I persuaded that the failure to strictly comply with the requirements of the Act and regulations as regards the processing of these scheme amendments was conduct calculated to injure the plaintiffs. Nor do I think the City was recklessly indifferent to the consequences to the plaintiffs of its conduct.

The claim of misfeasance against the mayor and councillors

The act or omission constituting the abuse of office on the part of these defendants is pleaded to be as follows:
"19.Pursuant to Regulation 21(2) Town Planning Regulations 1967 the Council was required to forward the Amendment to the Western Australian Planning Commission for final approval within 42 days after the date on which the Minister for Planning had approved the Amendment.
20.At a special meeting of the Council on 6 August 1996:
20.1It was moved that a submission be prepared outlining Council's reasons for rejecting the Amendment ('the Motion').
20.2Each of the Second Defendants and the Third Defendant voted in favour of the Motion and it was carried.
20.3An amendment to the Motion was moved to the effect that the Amendment be returned to the Minister for Planning for final approval ('the amending motion').
20.4Each of the Second Defendants and the Third Defendant voted against the amending motion and it was lost.
21.By voting for the Motion and against the amending motion the Second and Third Defendants effectively confirmed that the First Defendant should not comply with Regulation 21(2) Town Planning Regulations.
22.At the time of voting in favour of the Motion and against the amending motion each of the Second Defendants and the Third Defendant knew or were recklessly indifferent to the fact that by that date the Council should have complied with Regulation 21(2) of the Town Planning Regulations and that the Motion and the amending motion had the effect of the Council refusing to act lawfully …
23…
24.In the premises
(a)the Second Defendants and the Third Defendant did not act in good faith in voting for the Motion and against the amending Motion and their votes in favour of the motion and against the amending motion constituted an abuse of their positions as public officers."
In the light of the statements of principle that have already been discussed, as to the elements of the action on the case for misfeasance in public office, it seems to me inappropriate to treat this exercise of voting power as tortious. Once again, it implies that there was a duty to the plaintiffs to exercise the voting power in a different manner and no duty of that kind has been made out. Also, there is the conceptual difficulty that the casting of the vote was not, in itself, an act which was beyond the power of the councillor concerned. There is, I think, a recognition of this in the pleading by the introduction into par 24(a) of the allegation that, in so voting, the mayor and councillors "did not act in good faith". As I understood Mr Kyle's submissions on this point, they really came down to the proposition that, in voting as they did, the councillors and the mayor acted maliciously and, therefore, beyond power. I think that to establish abuse of office in the casting of a vote, it would have to be shown, at the very least, that the person casting the vote did so maliciously in the sense of an intention to injure (Mengel per Brennan J at 356) or with actual knowledge that there was no power to do that which was voted for and reckless indifference to the consequences. Assuming that liability will attach to the act of voting if the person who cast the vote knows that, in so doing, he or she will cause the corporate body to do an act which is beyond power, I am not satisfied that any of the councillors or the mayor had that actual knowledge. I am not persuaded that any of the individual defendants - none of whom were lawyers - actually knew that the City was acting beyond its powers in not complying with the requirements of reg 21(2). I do not believe they thought of the matter in that way. For most of the time, including on 6 August 1996, they were thoroughly confused as to what were the powers and duties of the City with respect to these particular scheme amendments. I have attempted to detail the evolution of the realisation on the part of the Council that the Council was powerless to stop the amendments. As late as October 1996, the Council's legal adviser, Mr McLeod, was advising the Council that there was a reasonable basis for arguing that the amendments in question had not been dealt with by the Minister in accordance with the law and that his approval of the amendments was "not effective". Mr McLeod is a specialist in the field of local government law. It was Mr McLeod who suggested that his opinion be tested by obtaining the opinion of Mr Martin QC. The Council accepted this advice. That was not the behaviour of people who knew the score, but were indifferent to the duties of their office. And when the opinion of Mr Martin QC was received, they fairly promptly followed the advice contained in it. It is a case to which the words of Brennan J in Mengel are apt. He said at 358:
"A public officer is appointed to his or her office in order to perform functions in the public interest. If liability were imposed upon public officers who, though honestly assuming the availability of powers to perform their functions, were found to fall short of curial standards of reasonable care in ascertaining the existence of those powers, there would be a chilling effect on the performance of their functions by public officers. The avoidance of damage to persons who might be affected by the exercise of the authority or powers of the office rather than the advancing of the public interest would be the focus of concern."

In my opinion, the claim by Murcia Holdings based upon the allegation of misfeasance in public office fails both against the city and against the individual defendants.
It follows that the action by Murcia Holdings ought to be dismissed.

The action by the Hwangs

The claims by the Hwangs against the City allege negligence on the part of the City and a breach of the Fair Trading Act s 10. There are also claims of misfeasance in office on the part of the City and on the part of the mayor and the same nine councillors who are defendants in the Murcia Holdings action.

(1) Negligent advice by Mr Algeri

It is the plaintiffs' case that, in about November 1994, Mrs Hwang attended on one of the assistant planners of the City, Mr Algeri, with her son Steve Hwang. By par 5 of the statement of claim, it is pleaded that:
" … the First Defendant by its Town Planning officer, one Joe Algeri, orally advised and represented to the Plaintiff Ok Ja Hwang, on behalf of the Plaintiffs, and in the presence of one Steve Hwang, that there would be no difficulty with an application by the Plaintiffs for the Council's approval of an amendment to the First Defendant's town planning scheme to permit the development of the property for seniors' housing pursuant to the Council's Seniors' Housing Development Policy ('the Policy') in accordance with plans produced by the Plaintiff Ok Ja Hwang to Algeri and the application would certainly be granted by the Council."
It is further pleaded that a necessary implication of that advice was that the Hwangs' application "would be expeditiously recommended by the first defendant for approval" and "the first defendant would not delay in dealing with an application pursuant to the law" and "the first defendant would thereafter promptly comply with all necessary obligations and formalities … " and "the approval would be effectuated within a reasonable time … " - statement of claim par 5 and par 6.
Both Steve Hwang and Mrs Hwang gave evidence in support of the allegation made in the statement of claim as to the representations made by Mr Algeri. Steve Hwang said that he told Mr Algeri that his parents were looking at the possibility of buying 74 Mountjoy Road and wanted to know whether it could be developed into two units under the seniors' policy. His evidence was that Mr Algeri got out some plans, saying that he had to see whether there were any other properties developed under the seniors' policy near to the property in question. After consulting the plans, Mr Algeri told them that there were no other seniors' housing developments in Mountjoy Road and that the property was in a good position for development under the policy. His evidence was that Mr Algeri gave them a copy of the policy and went through it with them. He said that he showed Mr Algeri a rough sketch of the property and explained that the intention was to build a unit at the back of the existing house. His evidence was that Mr Algeri "said that that was satisfactory" and that he then "said that if we made an application for approval under the policy, it would be approved as long as the buildings complied with the policy". Steve Hwang's evidence was that Mr Algeri said that the procedure was quite simple and that all they had to do was to write to the Council and ask for approval and put in some detailed plans.
Under cross‑examination, however, Steve Hwang admitted (t/s 481) that he understood from what Mr Algeri said that "he was depending on the council whether it would be approved".
Mrs Hwang's evidence was that, although she was not fluent in English, she could understand what was said and could follow the conversation between Mr Algeri and her son. Her evidence‑in‑chief was that "Mr Algeri looked at our sketch plan and said that it would be suitable for development for seniors' housing. He said there would be no difficulty in getting council's approval of the development if we applied under the policy in accordance with the sketch plans. He said the application would be granted by the council if the detailed plans complied with the requirements of the policy. I knew nothing of the policy and accepted his advice completely."
Under cross‑examination, Mrs Hwang gave evidence to the effect that Mr Algeri explained that only one seniors' housing development was permitted in each street and that, because there was no such development in Mountjoy Road "that's why it's possible develop that property". Her evidence was as follows:
"He show me a map of the council boundary and then this street - possible develop this street and not possible develop - but anyway he explain to us … He say to us just it is possible and then you put in application."
Her evidence (at t/s 499) was to the effect that her son then explained that they did not wish to purchase the property unless it could be developed under the seniors' housing policy. As I understand her evidence, it was to the effect that Mr Algeri responded to this by saying "just put in application form".
In my opinion, this evidence falls well short of establishing the allegations in the pleading. I think it is most likely that the understanding which Mr and Mrs Hwang obtained, in light of the conversation between Mr Algeri and Mrs Hwang and her son Steve is truly reflected in the application which they subsequently made by letter dated 20 December 1994 and the letter written by Mr Hwang to the Town Clerk in August 1995 seeking a review of the Council's decision not to proceed with the amendment. The letter of application is addressed "To Town Council of Nedlands" and clearly recognises the need to persuade the Council to make a favourable decision. After setting out the merits of their case for a scheme amendment under the seniors' housing policy, the letter concludes:
"I hope that you will consider our proposal for the redevelopment of 74 Mountjoy Street home. I eagerly await for a favourable reply, at your earliest convenience."
The letter reflects an awareness on the part of Mr Hwang that the decision as to whether the scheme should be amended in respect to this property was in the discretion of the Council and is inconsistent with a belief that an amendment to the scheme in relation to this property was a mere formality.
Mr Hwang's letter to the Town Clerk of 1 August 1995, the object of which was to persuade the Council to, as he put it, "re‑evaluate their decision" contains no suggestion that Mr Algeri had given an assurance that an application for the development of the property in question would be granted. On that subject, the letter is in the following terms:
"Early in January 1994, my wife and son approached Nedlands City Council with inquiries regarding a senior persons' development in the Nedlands area. They met with a Mr Joe Algeri who was very helpful and gave them all the necessary details. After this discussion we proceeded to purchase the property at 74 Mountjoy Road Nedlands … when the sale was completed we wrote to the Council stating our intentions to develop the property for two senior dwellings … "
If it was the fact that they purchased the property on the basis of assurances by Mr Algeri, one would expect to see some reference to it in this letter, the purpose of which was to persuade the Council to reconsider its decision.
Mr Algeri gave evidence de bene esse. His evidence was to the effect that he attended to inquiries from members of the public at the counter of the City's offices and attended to numerous inquiries in respect to the seniors' housing policy. He could not specifically remember speaking to Mrs Hwang and her son Steve, but accepted that he did so. He adamantly denied giving any assurances concerning the outcome of any application they might make under the seniors' housing policy. He said it would not be possible for him to give any such assurance because it was entirely for the Council to evaluate for itself whether the policy criteria were met in any given case. He said that applications were not "invariably approved". It was put to him under cross‑examination that it was his practice, when dealing with people inquiring about the seniors' housing policy at the counter, to assess for himself whether the criteria was satisfied in their case and, if that was the position, he would so advise the person making the inquiry and give them to understand that if the matter went forward to Council, it would be "passed". That is not quite how the question was formulated. See the transcript of the de bene esse evidence at p 31. That, however, seems to be the substance of the question and it seems to be how Mr Algeri understood the question. His answer was:
"No. I would say that they were eligible, but I would - and this is one thing I can be very sure about. On all occasions as a final note to prospective applicants, I would say, 'Ultimately the decision will be council's,' and, in the case of a town planning amendment, 'the Minister.' I would give them information regarding their eligibility wherever possible, but I wouldn't say invariably 'Should you satisfy this criteria' it would be approved."
He was cross‑examined at considerable length but his evidence remained firmly and consistently to the effect that he would not and could not give an assurance that an application would be approved.
On the whole of the evidence, I am not persuaded that Mr Algeri made the representations pleaded. The heads of claim which are based upon that allegation are not made out.

(2) Other heads of claim

The other heads of claim in this action are identical to those in the Murcia Holdings action and I would reject them for the same reasons as I have rejected them in the Murcia Holdings action. The City owed no statutory duty or common law duty of care to the Hwangs in relation to the processing of the scheme amendments affecting 74 Mountjoy Road and did not commit the tort of misfeasance in office in the way in which that amendment was handled. None of the individual defendants committed the tort of misfeasance in office by their conduct as councillors and mayor.

The action by Mr Howe and Rangemen Pty Ltd

These plaintiffs sue in their capacities as trustees of the Howe Family Trust, which was, at all material times, the owner of 17 Stanley Street, Nedlands, in respect to which the Howe amendment was sought. They sue only the City and the causes of action are in negligence, for breach of s 10 of the Fair Trading Act and for abuse of office.

(1) Negligence arising out of statements allegedly made by Mrs Holdaway

The plaintiffs plead that, at some time in 1994, Mrs Holdaway "orally advised and represented to the First Plaintiff's agent, one John Sumner, that there would be no difficulty with an application by the First Plaintiff for the approval by the Council of the First Defendant … of an amendment to the First Defendant's town planning scheme to permit the development of the property for seniors' housing pursuant to the Council's Seniors' Housing Development Policy and the property definitely fitted all the requirements of the Policy and there would be no basis for any objection to the proposal".
It is pleaded that, in reliance upon that representation or those representations, the plaintiffs acted in a manner which has caused them loss. It is pleaded that the representations made by Mrs Holdaway were false and misleading.
In his evidence‑in‑chief, Mr Sumner said that he had been instructed by Mr Howe to sell the Stanley Street property and, when it was placed on the market, Mr and Mrs Nutter approached him and told him they thought the property would be suitable for development under the seniors' housing policy and, if the property was redeveloped under that policy, they would like an opportunity to purchase the rear unit. At this time, Mr Sumner did not know much about the seniors' policy, but acting on instructions from Mr Howe, he made inquiries at the municipal offices, where he spoke to Mrs Holdaway. His evidence was that Mrs Holdaway informed him she had already spoken to Mr and Mrs Nutter and knew what they wanted to do. He said that Mrs Holdaway explained the requirements of the seniors' policy and informed him that the property "fitted all the requirements of the policy" and "there would be no difficulty getting the approval of the Council to an amendment of its town planning scheme" and that she would recommend the amendment to the Council for approval. His evidence was that she explained the amendment procedures, including that people could object. He gave evidence that Mrs Holdaway said "she could see no basis for an objection in this case". His evidence was that he relayed all of this to Mr Howe, following which Mr Howe instructed him to proceed to sell an interest in the property to Mr and Mrs Nutter and to obtain Council's approval to a suitable amendment. Mr Sumner said that, acting on those instructions he did arrange for a contract to be entered into between the trustees of the Howe Family Trust and Mr and Mrs Nutter and engaged town planning consultants to prepare "amendment documents".
Mr Howe gave evidence as to what Mr Sumner told him. His evidence‑in‑chief was as follows:
"He told me he had spoken to the Nedlands council and as a result of what they had said, he believed that the property could certainly be developed as a duplex under the policy. He said it required council's approval but it appeared to him that that would be easy to obtain. I cannot remember exactly what he said but it was something to the effect that the council would be very positive."
As a result of that advice, he instructed Sumner to proceed to negotiate an agreement with Mr and Mrs Nutter and seek to obtain "an approval of the proposed development".
Under cross‑examination, Mr Sumner admitted that he had operated as a real estate agent in the Nedlands area for approximately 25 years and had "some experience" in applications for planning approval. He understood that the rezoning process involved an application being made, advertising, consideration by the Council after advertising, determination by the Council as to whether it would or would not approve the necessary scheme amendment and that the proposal would then be submitted to the Minister for his final approval. He admitted that he knew this before speaking with Mrs Holdaway. He admitted that he made no notes of his conversation with Mrs Holdaway and the substance of his evidence was that not until he came to prepare his statement for these proceedings, that is, four years after the conversation, did he have occasion to record the conversation in writing. He admitted in cross‑examination that Mrs Holdaway told him that "ultimately on any of these applications it would be in the discretion of the council". When it was put to him that he understood that Mrs Holdaway "couldn't give any guarantee that it would be approved" he accepted that this was so. His evidence was:
"No. She just indicated that it complied with the policy and she didn't see any problem with it."
It is evident from the terms of the application which Mr Sumner made on behalf of Mr Howe (exhibit 1 folio 105) that he understood the necessity to persuade Council of the merit of an amendment to the scheme in respect of this property. The letter is cast in the language of persuasion. He admitted that the form of the letter was suggested to him by Mrs Holdaway. There is evidence, already referred to, that Mr Sumner attended a Council meeting on 28 September 1995 and that at that meeting he was allowed to address the Council concerning the Howe amendment. There is evidence, and Mr Sumner admitted, that he spoke to the amendment application in the sense that he made submissions to the Council to the effect that it ought to be approved on its merits.
I am satisfied on Mr Sumner's own evidence that he was not given to understand by Mrs Holdaway that "there would be no difficulty" in respect of the Howe amendment or that "there would be no basis for any objection to the proposal".
Mrs Holdaway gave evidence to the effect that, whilst she remembered speaking to Mr Sumner in connection with the Howe amendment, she could not remember the content of her conversation or conversations with him. However, her evidence was to the effect that she had never advised a person inquiring about redevelopment under the seniors' housing policy that "there would be no difficulty" in obtaining approval of an amendment to the scheme to accommodate the proposed redevelopment and had never told any person that there was "no basis for any objection to the proposal". She said these were judgments she was not in a position to make and they were not judgments which she would have made or expressed. I have already stated my opinion of Mrs Holdaway as a witness. She was an impressive witness whose evidence I accept.
On the whole of the evidence, I am not persuaded that the representations alleged to have been made by Mrs Holdaway were made by her. I think his conversation with Mrs Holdaway probably left Mr Sumner with the impression that the prospects of obtaining the Howe amendment were good, but that was no more than the truth at that time. So far as appears from the evidence, the Howe amendment did comply with the criteria set by the policy and the main, if not the only, reason it ran into trouble was because Council decided to rescind the policy. That was a decision which was taken by the new Council in mid‑1995, many months after Mr Sumner's inquiry.
The head of claim in this action, which is based upon representations allegedly made by Mrs Holdaway to Mr Sumner, fails.

(2) Other heads of claim

Each of the other heads of claim must also fail, for the reasons already given. As to the claim of negligence against the City for failing to process the Howe amendment in accordance with the regulatory provisions of the Act and Town Planning Regulations, the City owed no duty to these plaintiffs to do so. Neither was the City guilty of the tort of misfeasance in office arising out of its failure to do so.
This action must also be dismissed.
These cases were directed to be tried on the issue of liability only. I did hear evidence in respect to the issue of damages for the purpose, so I was informed, of enabling me to determine whether the various heads of damages claimed were within the category of losses which were reasonably foreseeable and also to determine questions of causation and exemplary damages. Because of the conclusion I have reached as to liability, there is no need for me to deal with these matters and I mention them only to show that they have not been overlooked.

[1999] WASC 241

2 DECEMBER 1999

Key Legal Topics

Areas of Law

Local Government Law

Administrative Law

Legal Concepts

Duty of Care

Breach of Statutory Duty

Misfeasance in Office

Negligence