Natuna Pty Ltd v Cook - [2007] NSWSC 121

No judgment structure available for this case.

CITATION: Natuna Pty Ltd v Cook [2007] NSWSC 121

HEARING DATE(S): 4-12 December 2006; 20 December 2006; 2 February 2007

JUDGMENT DATE :
23 February 2007

JUDGMENT OF: Biscoe AJ

DECISION: Judgment for plaintiff for $228,361.66. Defendant to pay 75% of plaintiff's costs of its claim. Cross-claim and second cross-claim dismissed with costs.

CATCHWORDS: CONTRACT - joint venturers obtained rezoning and subdivision development consent for adjoining rural lands owned by each - further anticipated venture to jointly subdivide lands prevented by one party selling its land - whether variation of agreement as to proportionate liability for joint costs already incurred - whether agreement to pay interest on loan raised to pay for joint costs - whether agreement to pay compensation for land contributions contemplated by development consent - whether agreement to provide lands to construct access road - whether agreements re future joint costs, compensation and access road predicated on future joint development - whether agreements intended to be contractually binding. ESTOPPEL - promissory estoppel - whether defendant estopped from denying that plaintiff took out loan and incurred interest in reliance upon defendant's representation that he would contribute to interest costs - whether plaintiff estopped from denying that it is obliged to compensate defendant for land which development consent contemplated defendant would contribute for relocation of mangroves from plaintiff's land. MISLEADING AND DECEPTIVE CONDUCT - whether representations to pay compensation misleading and deceptive - whether representations predicated upon continuance of joint development. RESTITUTION - unjust enrichment - whether either party entitled to compensation for land which development consent contemplated that each party would contribute for non-residential lot use. REAL PROPERTY - caveat - compensation - caveat lodged over defendant's land by plaintiff to secure payment of proportion of costs and interest paid by plaintiff for rezoning and development applications - whether caveat lodged without reasonable cause - subjective and objective elements to test of honest belief on reasonable grounds - no evidence of lack of honest belief - reasonable grounds for lodgement.

LEGISLATION CITED: Real Property Act 1900 (NSW), ss 74F, 74J, 74P
Trade Practices Act 1974 (Cth), s 52

CASES CITED: Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309
Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622
Baumgartner v Baumgartner (1987) 164 CLR 137
Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459
Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106
Big River Timbers Pty Ltd v Stewart (1999) 9 BPR 16,605
Ceda Nominees Pty Ltd v Registrar of Title [1982] ANZ ConvR 524
Commonwealth v Verwayen (1990) 170 CLR 394
Composite Buyers Ltd v Soong (1995) 38 NSWLR 286
Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 81 ALJR 352
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Excel Quarries Pty Ltd v Payne [2000] QCA 213
Giumelli v Giumelli (1999) 196 CLR 101
G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631
Lee v Ross (No. 2) (2003) 11 BPR 20,991
Muschinski v Dodds (1985) 160 CLR 583
Northstate Carpet Mills Pty Ltd v B R Industries Pty Ltd [2006] NSWSC 1057
NSW Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288
Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221
Player v Isenberg [2002] NSWCA 186
Riches v Hogben [1985] 2 Qd R 292
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

PARTIES: Natuna Pty Ltd (plaintiff, second cross claimant)
Donald Thomas Cook (defendant, cross claimant))

FILE NUMBER(S): SC 2877/05

COUNSEL: Mr A Ogborne and Mr S Ipp (Plaintiff)
Mr J Robson SC and Mr J Lazarus (Defendant)

SOLICITORS: Bruce Stewart Dimarco (Plaintiff)
Colin Biggers & Paisley (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BISCOE AJ

23 February 2007

2877/05 NATUNA PTY LIMITED v DONALD THOMAS COOK

JUDGMENT

A. INTRODUCTION

1 HIS HONOUR: These proceedings arise out of a dispute between the plaintiff Natuna Pty Limited and the defendant Mr Donald Cook in relation to the proposed joint development of rural land for a housing subdivision. Known as the “Riveroaks Land” or “Riveroaks Estate”, the land was owned as to approximately one-third by Natuna and as to approximately two-thirds by Mr Cook. It is located on the Pacific Highway near Ballina in northern NSW.

2 In February 2001 the parties obtained rezoning of the Riveroaks Land for residential use. The rezoning under the Ballina Local Environmental Plan 1987 was from 1(d) Rural (Urban Investigation) to 2(a) Living Area, except for a conservation area in the far eastern corner of Natuna’s land which was rezoned 7(a) Environmental Protection (Wetlands). On 16 June 2003 they obtained development consent for a large housing subdivision on the Riveroaks Land. General conditions of the development consent and the approved plans and associated documentation, including a draft development control plan, required:

buffer zone

con

ervation area

public playing fields”

mangrove regeneration area”

Fisheries Management Act 1994

mangrove relocation area

3 Having achieved rezoning and a subdivision development consent, the parties could have profited, and I think anticipated profiting, by jointly subdividing and selling the lots of the Riveroaks Land or by jointly selling the Riveroaks Land with the benefit of the development consent. However, they did not take either course and it is common ground that they were under no legal obligation to do so. In October 2003 Mr Cook put it out of their power to do so by contracting to sell his portion of the Riveroaks Land, including the public playing fields, to a third party (except for a narrow strip fronting the Pacific Highway which was dedicated to the Ballina Shire Council as a sound mound and plantation strip). It is common ground that he was legally free to do so.

4 Natuna’s amended statement of claim contains two claims. First, a claim to recover from Mr Cook two-thirds, or alternatively one half, of the joint costs paid by Natuna relating to the rezoning and development applications. It is agreed that they total $386,572.83 and that Mr Cook is entitled to a credit of $2,100 for joint costs that he paid. Natuna’s further pleaded alternative that Mr Cook agreed at a meeting in August 2003 to pay 211/299ths of such costs was not pressed in final submissions. It is common ground that Mr Cook is liable for half the costs of the rezoning pursuant to a deed entered into in 1995 and for half the costs of the development application pursuant to an oral agreement entered into in July 2001. However Natuna contends that these agreements were varied orally at a meeting on 20 March 2003, when it was agreed that Mr Cook would pay two-thirds.

5 Secondly, Natuna claims that Mr Cook is liable for the same proportion of interest and charges on a bank loan which Natuna took out to fund the joint costs paid by Natuna. Mr Cook disputes this liability. The quantum of the interest and charges is agreed at $74,350.49. This claim is mounted on the basis of contract, estoppel, return of contributions to a failed joint endeavour and unjust enrichment.

6 Mr Cook cross-claims against Natuna for:

mangrove relocation land

Trade Practices Act 1974

playing fields land

Real Property Act 1900

7 Natuna disputes all Mr Cook’s cross-claims. It denies that any agreements were reached or that they were contractual. It pleads that if any agreement was reached it was subject to the parties continuing to be engaged in a joint endeavour to jointly develop the Riveroaks Land. This is a critical issue because a joint development is no longer possible since Mr Cook sold his part of the Riveroaks Land. Whilst denying the restitution cross-claim, Natuna pleads that if Mr Cook is entitled to restitution then Natuna is entitled to restitution and set-off of the benefits which Mr Cook has obtained, as pleaded in Natuna’s second cross-claim.

8 By its second cross-claim Natuna claims restitution in the sum of $190,000, or such amount as the Court may determine, arising from the benefit which Mr Cook is said to have obtained from the development consent. That benefit is said to arise from the value of Natuna’s contribution of its “conservation area land” and “buffer zone land”. Natuna pleads that both Mr Cook and Natuna obtained an incontrovertible benefit from the development consent in that the value of their respective lands increased, that it would be unjust to keep that benefit in the circumstances, and that Natuna is entitled to restitution of the net benefit provided to Mr Cook. Natuna’s pleading quantifies that net benefit by propounding the following values of the four relevant parcels of land as at 23 August 2006, but assuming planning as at 22 March 1998:

$ 20,000

9 A remarkable feature of the case is that a joint development by the parties can no longer occur because Mr Cook has sold his portion of the Riveroaks Land, and a development by anyone else in accordance with the 2003 development consent may never occur. Yet the parties claim from each other, or say there should be taken into account, the value of the lands each would have contributed if their joint development had occurred.

10 Natuna’s representatives who dealt with Mr Cook over the years were mainly its directors, Mr Stephen Reid and Mr Robert Hart. Mr David Short, a shareholder, also had some involvement. Mr Cook dealt with Mr Reid and Mr Hart directly until early 2003 when he was represented by an advisor, Mr Trevor Beesley. All these persons gave evidence. My impression was that they gave their evidence honestly and to the best of their recollection, although their recollections differed in some significant respects.

11 Valuation evidence was given by Mr Owen Allsopp for Natuna and Mr Bernard Hunt for Mr Cook. They valued, at different points in time, the mangrove relocation land, the playing fields land, the conservation area land and the buffer zone land. Their valuations were far apart.

B. REZONING FEBRUARY 2001

12 Mr Cook and Natuna were adjoining landowners. Mr Cook’s land was roughly double the size of Natuna’s land. Mrs Margaret Kenyon owned a small residential lot centrally located between their lands. These three parties entered into a deed dated 17 January 1995 which recited that they were desirous of pursuing an application to the Ballina Shire Council for the rezoning of the Riveroaks Land from its then zoning of “Rural (Urban Investigation) 1(d)” under the Ballina Local Environmental Plan 1987 to “Residential 2(a)”. Clause 3 of the deed provided that the costs and expenses associated with the rezoning application were to be shared equally between Natuna and Cook. Clause 5 provided: “For the purposes of record only, it has been contemplated that the value of Cook's land would be approximately double that of Natuna's land...” The deed recited that “the parties shall market the land jointly by treating the land, amongst themselves, as one parcel and to present a united front and purpose to all prospective purchasers”. Clause 6 provided: “The parties hereto will commission, lodge and continue with their joint application for rezoning and they will progress same with all due expedition until at least 31 December 1995. In the event of any party selling the parcel of land which such party owns, then that party will obtain a Deed executed by the purchasers of such land whereby such purchaser agrees to be bound by the terms and conditions hereof as if such purchaser were an original party to this Deed”. Thus, it was contemplated from the outset that the parties would market the land jointly, but each would be free to sell his or its land subject to obtaining the prescribed deed.

13 The parties to the 1995 deed entered into a further deed dated 18 April 1997 in which they agreed to extend the operation of the 1995 deed to 31 December 1999. Mrs Kenyon died in August 1997 and Mr Cook is an executor of her estate.

14 The parties to the deeds made a rezoning proposal to the Ballina Shire Council. A useful analysis of the rezoning proposal is found in a report dated 26 March 1998 by the council’s chief town planner. He recommended that the council rezone the land in a manner generally consistent with the principles outlined in a document prepared by David Ardill and Associates Pty Ltd, who were consultants retained by Natuna and Mr Cook to prepare the rezoning application. The report noted that the documentation submitted foreshadowed housing to accommodate 900 people. It attached a plan showing mangroves and saltmarsh on Natuna’s land. The report stated in part:

INTRODUCTION

David Ardill and Associates Pty Limited, Consulting Engineers and Town Planners, have lodged an application with Council seeking the initiation of action to rezone land to enable its development for urban purposes. The majority of the land in question is owned by D Cook and Natuna Pty Limited and is situated adjacent to the Pacific Highway at North Ballina.

If rezoning occurs, the submitted documentation foreshadows that the land will be developed and subdivided into a relatively conventional residential estate, with housing to accommodate approximately 900 people. The conceptual development layout is depicted on the plan accompanying this report.

DESCRIPTION OF THE SITE

The subject land is located on the southern side of the Pacific Highway, immediately west of North Creek Canal. About one third of the property is owned by Natuna Pty Limited whilst Mr D Cook owns the majority of the remainder. The rezoning request also includes a small allotment (.6 of a hectare) fronting the Pacific Highway, in the ownership of the estate of Mrs M E Kenyon, and two small areas of unconstructed public road. The combined area of the rezoning site is 37.16 hectares.

The land is quite flat and predominantly cleared, save for some regrowth vegetation occurring in the north-eastern area and less prominent stands of casuarina in the central and western areas.

Historically, the land has apparently been used for dairying and sugar cane production and consequently significant drainage work has been undertaken over the years. Presently, the property is used for grazing. A dwelling occupies the small centrally located allotment and Mr Cook’s residence and associated farm out-buildings occupy the larger holding. Otherwise, the land is vacant.

The properties are contiguous with the urban area of Ballina, albeit on the western side of North Creek Canal. The Southern Cross Industrial Estate is located on the northern side of the Pacific Highway immediately opposite the site, as is the Ballina Gardens Caravan Park and the Bicentennial Gardens.

A larger proportion of Mr Cook’s property might well have been considered for inclusion in the rezoning proposal, however the farm adjoins the Ballina Sewage Treatment Plant, and accordingly a band of land 400 metres wide has been identified as warranting retention for non-residential purposes to buffer the operation of the plant. The conceptual development plan illustrates that it may be possible and desirable to utilise part of the buffer for open space purposes. The remaining area is likely to be used for continued agricultural production.

DETAILS OF THE PROPOSAL

The land described in the application is presently zoned for the most part 1(d) Rural (Urban Investigation) for the purpose of the Ballina Local Environmental Plan 1987. A very small area of the site adjacent to the Pacific Highway is zoned 1(b) – Rural (Secondary Agriculture) but has been included in this application for practical purposes. One of the objectives of the LEP is to thoroughly investigate land within the 1(d) zone to ascertain its suitability for urban purposes and to determine the likely environmental consequences associated with the land’s development. To this end, a reasonably comprehensive document has been prepared on behalf of the property owners which canvasses environmental and infrastructural issues associated with the proposal and promotes a structure plan for how the land might be developed.

The foreshadowed development entails the creation of approximately 289 residential allotments providing for 347 dwellings and an ultimate population of 900 people. Two allotments have been identified for neighbourhood type commercial facilities, whilst two small parks and a substantial active open space area have been nominated.

INFRASTRUCTURE

Roading and access

Allotments of land within the new estate would not be permitted direct vehicular access to either the new road or the highway, with those routes being buffered to mitigate noise.

15 The report’s conclusions included the following:

The subject land is identified in Council’s current planning instrument as an area which should be thoroughly investigated to determine its suitability for urban development. It is considered the documentation which has been prepared and lodged with Council accurately identifies and addresses the issues of relevance and Council’s technical departments have determined that there are no significant impediments to the rezoning of the land. It is noted however that, should rezoning occur, a number of matters, particularly in relation to infrastructure delivery and ground conditions will need to be more comprehensively addressed prior to the determination of any development application.

16 The rezoning application was successful. In February 2001, the rezoning (by an amendment to the Ballina Local Environment Plan) was gazetted in the NSW Government Gazette. The Riveroaks Land was rezoned from 1(d) Rural (Urban Investigation) to 2(a) Living Area, except for Natuna’s conservation area land which was rezoned 7(a) Environmental Protection (Wetlands).

17 The 1995 deed provided that the costs of rezoning would be facilitated by opening a bank account to which Natuna and Mr Cook would contribute equally. This did not happen because Mr Cook thereafter indicated that he was experiencing financial difficulties. Consequently, in conversations between Mr Reid, a director of Natuna, and Mr Cook, it was agreed that Natuna would pay the costs for the time being – which it did. By the time the rezoning occurred Natuna had spent a total of $119,229.30 on such costs.

C. SUBDIVISION DEVELOPMENT CONSENT JUNE 2003

18 Once the land had been rezoned to allow for residential development, Natuna and Mr Cook proceeded to address the lodgement with council of a development application for subdivision of the Riveroaks Land. The 1995 deed only covered the costs of the rezoning application, not the costs of any application to the council for development consent.

19 It is common ground that at a meeting in July 2001 the parties orally agreed that the costs associated with applying for development consent would be shared equally (as had been the case with the 1995 deed), that Natuna would pay the full amount of the costs up front, and that Mr Cook would reimburse Natuna from the sale of his portion of the land. At that meeting, according to Mr Reid, whose evidence on this point I accept, he informed Mr Cook that Natuna had spent about $120,000 on the project so far and that about $80,000 would be needed for the development application. Mr Cook asked whether Natuna could continue to cover expenses until Mr Cook’s land was sold. Mr Reid agreed and said that Natuna “has just applied for a $100,000 loan from Westpac. This means that financial adjustments will need to be made for the costs of the project and Natuna will need to be reimbursed either out of the proceeds of the sale or if a joint venture for the development is set up”. Mr Cook agreed.

20 On 17 December 2001, development application No. 2002/566 for the proposed subdivision was lodged with the council by Ardill Payne & Partners, the consultants engaged by Mr Cook and Natuna for the purpose of preparing the development application.

21 A draft development control plan for the proposed subdivision was prepared in August 2001 by Ardill Payne & Partners. It showed the number of lots proposed for the subdivision, Natuna’s conservation area and buffer zone area and Mr Cook’s playing fields land and mangrove regeneration area. The documentation provided to the council in support of the development application included this document. The final version was lodged with the council in February 2002.

22 In about August 2002, the council provided its first draft conditions of consent. They were contentious, and in October 2002 were challenged in an appeal commenced by Ardill Payne & Partners (on behalf of Natuna and Mr Cook) in the Land and Environment Court. Among the issues in those proceedings was whether Mr Cook and Natuna would be entitled to compensation for the link or access road which would be dedicated to the council, by reason of the loss of developable land. In or about June 2003 the appeal was discontinued.

23 On 16 June 2003, the council granted its consent to the development application. Some of the relevant provisions of the development consent have been identified above at [2]. Conditions required that the access road land (owned partly by Mr Cook and partly by Natuna) be dedicated with the issue of the first subdivision certificate, which would issue after certain roadworks involving the intersection with the Pacific Highway had been designed and constructed. Deferred commencement conditions required the design, in accordance with certain criteria, of (a) intersections between the subdivision estate and the Pacific Highway and between the eastern and western sectors of the estate, and (b) the internal roadway.

24 It was a general condition of the development consent that the development be carried out generally in accordance with plans and associated documentation lodged by the applicant, Ardill Payne & Partners, including their draft development control plan for the subdivision. Figure 1 in that plan showed the location of Natuna’s conservation area and buffer zone land; the location of Mr Cook’s public playing fields and mangrove regeneration area; and the location of the “link road”. Clause 3.6 of the draft development control plan provided that the playing fields be dedicated to the council on completion of shaping, levelling and grassing works. Clause 3.7(ii) provided that all vegetation in the conservation and buffer areas would be preserved unless its removal was authorised by the council. Clause 3.7(iii) provided that in the mangrove regeneration area, mangroves would be regenerated on a two to one basis as compensation for mangroves on Natuna’s land lost during the development. Clause 4.6(b) provided that the proposed roads were to be dedicated to the council as public roads. Clause 5.2 stated that the draft development control plan “depicts the area to be developed for the regeneration of mangroves and saltmarsh. To compensate for the numbers of these species that will be lost as a result of this development. Regeneration will result in the establishment of twice the amount of mangrove and saltmarsh as will be destroyed. NSW Fisheries have approved a Mangrove and Saltmarsh Regeneration Plan prepared by James Warren & Associates. This document sets out the location and size of the regeneration area and provides guidelines to be adopted in the implementation of the plan”. In conjunction with the development consent, the council adopted Development Control Plan No 1 – Urban Land, Riveroaks Estate.

D. MR COOK’S SALE OF HIS PORTION OF RIVEROAKS LAND AND DEVELOPMENT CONSENT IN 2004

25 On 30 October 2003, Mr Cook contracted to sell his portion of the Riveroaks Land to Rayshield Pty Limited for $12,360,000. Special Condition 46 was entitled “Conditions Precedent to Complete” and provided:

46.1 Prior to the Vendor serving a notice in writing on the Purchaser requiring the Purchaser to complete, the Vendor shall have achieved one of the following 3 positions:

A. Natuna, or its successor in title to the Natuna Land, shall have agreed in writing to:

OR B. The Vendor has obtained from a Court all orders necessary to allow the construction and dedication of the road for which the Easement is needed and the signing of the Plan of Subdivision for Stage 1;

46.2 Completion shall be effected within 28 days of the Vendor serving on the Purchaser a written notice specifying that the Vendor has achieved either A, B, or C above and that he will be able to effect a transfer of the Kenyon Property (excluding proposed Lot 64) to the Purchaser at settlement and subject to Condition 45.

46.3 The Vendor must do everything reasonably necessary to achieve the Vendors obligations pursuant to Condition 46.1 within 12 months of the date of this Contract.

46.4 If the Vendor is unable to fulfil any of his obligations pursuant to Condition 46.1 and the Purchaser is not willing to waive such obligations, then either party not being in default may rescind pursuant to the provisions of Clause 19.

46.5 The Vendor warrants that 12 months is sufficient time to finalise all proceedings and actions that may be necessary to achieve the conditions precedent.

26 By contract dated 19 January 2005 he again contracted to sell the same land to the same purchaser for $12,113,000. This contract was completed on 4 October 2005. Clause 48.1 permitted Rayshield to lodge a new development application in relation to the proposed subdivision of the property purchased by it. Clause 48.2 provided that this new development application “shall be based substantially on the [2003] Development Consent to the extent it applies to the Property [which Rayshield purchased] and shall involve substituting, in the place of the Link Road, an alternate Pacific Highway residential access to the Property (thereby reducing or eliminating Natuna’s ability to prevent the Project proceeding). The New DA may increase the number of lots on the Property to a maximum of 30 extra lots…”. Any such development would appear to prevent the Riveroaks development from proceeding in accordance with the 2003 development consent.

27 The land sold included the “playing fields” in relation to which Mr Cook nevertheless claims compensation from Natuna in accordance, he says, with an oral agreement he reached with Natuna at the meeting on 20 March 2003. The land sold excluded a narrow strip fronting the Pacific Highway which was dedicated to the council for use as a plantation strip and sound mound.

28 On 22 December 2003, Mr Cook, through Mr Beesley, lodged development application 2004/627 for the consolidation and boundary adjustment of nine lots into three lots on Mr Cook’s portion of the Riveroaks Land. It appears that this development application arose out of the 30 October 2003 contract of sale by Mr Cook to Rayshield because on 27 January 2004 Mr Beesley wrote a letter to Mr Short of Natuna indicating that one of the conditions of Mr Cook’s contract of sale required approval to, and registration of, a three lot plan of subdivision. Natuna lodged an objection to the development application.

29 A council report of 11 March 2004 stated: “The applicant has advised that the purpose of this application is to facilitate the development of Stage 1 of the Riveroaks Estate”.

30 On 11 March 2004, the council resolved to approve the development application subject to conditions. Condition 1.6 required the creation of an easement (which was subsequently created). The easement burdens Mr Cook's land where the mangrove relocation area is situated (not his portion of the Riveroaks Land) by permitting “the developer (or any agent acting on their behalf) of the Riveroaks estate access for the construction and maintenance of works… associated with”, among other things, “mangrove regeneration works” and “the carrying out of development in accordance with the terms and conditions of” the 2003 development consent. In my view, the easement only permits “access” for those works. It does not entitle the developer or its agent to carry out mangrove regeneration works in the absence of an agreement with Mr Cook to do so.

31 Mr Cook appealed to the Land and Environment Court in relation to condition 1.6 and other conditions of the consent. Natuna was granted leave to be joined to the proceedings as an intervener. The Court delivered judgment on 11 August 2004, allowing the appeal in part but upholding the validity of the conditions subject to some minor amendments which did not affect condition 1.6. The judgment noted that the relationship between Mr Cook and Natuna appeared to have broken down.

Introduction

32 On 20 March 2003, while the parties’ development application and the related Land and Environment Court proceedings were pending, there was a meeting between the parties. The meeting was attended by Mr Cook and his advisor Mr Beesley, and Natuna was represented by Mr Hart and Mr Short.

33 Natuna claims that at this meeting they agreed that Mr Cook would pay two-thirds of the costs incurred by Natuna for the rezoning and the development application. That is, that they in effect agreed to vary the 50/50 cost sharing provided for under the 1995 deed and the July 2001 oral agreement.

34 Mr Cook claims that at the meeting they agreed that:

35 Mr Cook gave evidence that he would not have allowed the parties’ pending subdivision development application to proceed (as a landowner his consent was required), unless there was agreement with Natuna on these matters. One of the proposed conditions of consent involved Mr Cook agreeing to the transplantation of mangroves onto his land. Mr Cook submitted that before agreeing to such a blight on his land, he wanted to be assured that Natuna, which was the beneficiary of the mangrove transplantation, would compensate him for the loss of his land. Mr Cook submitted that, having been satisfied of those matters as a result of the parties' agreement on 20 March 2003, in early June 2003 he decided to allow the development application to proceed.

36 Natuna submitted that any consensus reached as to compensation for land contributions and offset arrangements at the meeting was predicated on the parties proceeding with a joint development in accordance with a consent to the pending development application. Natuna further submitted that no concluded contract was reached, a submission which sits uneasily with Natuna’s case that there was an agreement at this meeting that Mr Cook would be responsible for two-thirds of the joint costs and expenses already incurred.

37 There is tension within each party’s position. Natuna says that the meeting was forward looking, except for costs and expenses. Mr Cook says that the meeting was backwards looking, except for costs and expenses.

38 It is necessary to determine whether or not any consensus as to these matters was predicated on the parties proceeding with a joint development since, in the end, they did not do so. The conduct of the parties antecedent and subsequent to the 20 March 2003 meeting casts light on that issue.

Antecedent conduct

39 In January 2003 Mr Hart was informed by Mr Cook’s advisor Mr Beesley that Mr Cook was planning to develop and subdivide his portion of the Riveroaks Land on his own or do a joint venture with someone, and that Mr Beesley had had discussions with several parties who had expressed interest in a joint venture. Mr Hart broached this subject with Mr Cook and asked what they were going to do about settling up the expenses. Mr Cook told him that when his land was sold, Natuna would be paid out. Mr Cook had discussed with the council aspects of a separate development of his portion.

40 On 5 March 2003 Mr Beesley sent a fax to Mr Smith of Stacks, solicitors for the joint venturers’ interests in the pending Land and Environment Court proceedings. The fax confirmed their telephone conversation that morning that Mr Cook did not wish to proceed with the court case and instructed Mr Smith to withdraw Mr Cook’s “application”. Reference was also made to an offer made by Mr Cook to council officers on 28 February. Mr Smith replied by fax the same day pointing out that: (a) if Mr Beesley was suggesting, as the first paragraph of his letter read literally would suggest, that Mr Cook wished to withdraw his consent to the development application, that application would be void because it would no longer have owners’ consent; (b) it was Ardill Payne & Partners who would have to withdraw from the court case because the application to the Court was in their name; (c) Mr Beesley’s letter, if construed literally (as above), effectively scuttled the development application before the council and before the Court; and (d) Stacks were unable to deal with the application to the Court until there was a resolution by the joint venturers as to whether the development application was to proceed or not.

41 Mr Cook testified, and I accept, that as a result of Mr Beesley explaining to him what Mr Smith had written he understood that he had to make a choice between continuing with a joint development of the Riveroaks Land or commencing a fresh application for development just of his own portion, and that he chose the first course.

42 He had made that choice by the time he instructed Mr Beesley to reply to Mr Hart by fax dated 6 March 2003 which stated, among other things:

Further to this morning’s telephone conversation, I confirm that Don Cook has now instructed that he is agreeable to remaining a party to the proceedings.

43 On 8 March 2003 Mr Beesley wrote to Mr Cook expressing his deep concern about the prospects of success in the upcoming court hearing and stating that a number of other issues gave him cause for alarm. He expressed the opinion that the cost benefit of the exercise if the court case was won was out of proportion to the overall value of the land and the potential profit.

44 By fax dated 11 March 2003 to Ardill Payne & Partners, Mr Smith of Stacks recorded that Mr Cook had telephoned him that morning and that his instructions were to proceed to adjourn the court case as agreed with the council’s solicitors and to negotiate a settlement. He reiterated that the joint venturers should have separate discussions to ensure that when he met with the council there was an agreed position.

45 By 12 March 2003 the parties to the court case had agreed to seek a consent order that the hearing dates of 31 March and 1 and 2 April be vacated, and had agreed to negotiate with a view to a settlement.

46 On 14 March 2003 Mr Cook sent a letter to Mr Smith at Stacks notifying that Mr Beesley was to be his sole spokesperson from that time onwards and withdrawing any consent he may have given for Mr Hart to speak on his behalf. All Mr Cook’s decisions and instructions were to be taken by Mr Smith and everyone else direct from Mr Beesley on his behalf and not from Mr Cook himself.

47 On 15 March 2003 Mr Beesley wrote to Mr Hart stating among other things:

if development proceeds

I faxed a list of issues to you

… If the development is to proceed with a view to both Don and Natuna each achieving maximum benefits, I think we should meet.

48 The “list of issues” referred to in this communication appears to be Mr Beesley’s document entitled “Suggested Points of Discussion” to which I refer later. The other words that I have emphasised in the above extract suggest that resolution of those issues was for the purpose of establishing a basis on which the parties could proceed with a joint development once development consent had been obtained. Mr Cook gave evidence, which I accept, that the Suggested Points of Discussion were prepared by Mr Beesley after he had discussed with Mr Beesley the matters he wanted to raise with Natuna as arrangements that would bind the parties if they were to move forward with a joint development of the land. He testified, and I accept, that he would most likely have told Mr Beesley that most of them would have to be agreed.

49 On 16 March 2003 Mr Reid wrote to Mr Cook stating that he valued Mr Cook’s friendship and stating, among other things:

It will not [be] the end of the world if you break the agreement as it stands. The land is still there, but all our hopes and expectations will be dashed and all the work we have put in is wasted – so we start again.

50 This communication suggests that Natuna was hoping that a joint development would still occur as had long been hoped and expected.

51 By fax dated 18 March 2003 to Mr Hart, Mr Beesley said that unless they agreed by 4.00 pm that day to meet before Friday, then Mr Cook would not agree to the incurring of any further legal costs or other expenses “until the issues between him and Natuna are resolved”.

52 On 18 March 2003 Mr Reid wrote to Mr Cook recounting a number of events and concluding with the following statement:

The majority of points in Trevor’s list are not in dispute they have to [be] worked out once we know the full implications after approval.

53 This communication suggests an understanding that Mr Beesley’s Suggested Points of Discussion were aimed at creating a consensus which would operate if there was a joint development following approval of the development application.

54 In cross-examination Mr Cook said that his understanding was that the meeting on 20 March 2003 was to discuss the arrangements which would bind the parties if they were to proceed with a joint development. I accept this evidence.

55 Mr Cook agreed in evidence, and I accept, that towards the start of the 20 March 2003 meeting Mr Beesley said something to the effect that the parties needed to be clear on what the arrangements would be if they proceeded to do a joint development; and that Mr Cook understood that the points they went on to discuss were discussed as arrangements that would be binding if the parties proceeded to do a physical joint development of the land.

56 My conclusion from the evidence so far referred to is that the parties understood that agreement on the issues in Mr Beesley’s Suggested Points of Discussion was for the purpose of establishing a basis on which the parties could proceed with a joint development of the Riveroaks Land once development consent had been obtained. The documentary and other evidence of the discussions at the 20 March 2003 meeting, and the parties’ subsequent and other conduct, which are considered below, are consistent with that conclusion. I would accept that Natuna also understood that Mr Cook may not have proceeded with the development application unless those issues were addressed.

Documentary evidence of the meeting

57 The meeting of 20 March 2003 was held at the offices of Ardill Payne & Partners in Ballina. It was attended by Mr Cook, his advisor Mr Beesley, and Natuna’s representatives Mr Hart and Mr Short (a shareholder of Natuna).

58 Mr Hart and Mr Beesley led the discussion. Mr Short had little recollection of the meeting. Mr Cook’s evidence, which I accept, was that he was “out of [his] depth”, and he let Mr Beesley speak on his behalf. He had given Mr Beesley instructions to represent him because he “wasn't up to the standard of that kind of work”.

59 The documentary records of the meeting comprise “Suggested Points of Discussion” which Mr Beesley sent to Mr Hart prior to the meeting; handwritten notes made at the meeting by Mr Beesley and Mr Hart on their respective copies of that document; a typed file note which Mr Beesley made shortly after the meeting from his contemporaneous handwritten notes (which have not survived); and a letter written by Mr Beesley to Mr Hart dated 26 March 2003 confirming matters resolved or verified at the meeting.

60 The Suggested Points of Discussion sent by Mr Beesley to Mr Hart prior to the meeting, was in the following terms:

between Don Cook and Bob Hart

1. Sharing of compensation for link road according to proportionate area of land dedicated

2. Link road dedication

3. Cost of Conservation Area Embellishment to be borne by Natuna

4. Buffer Zone (Joint?)

5. Valuation of Cook rural land for Open Space (playing fields?) (Joint?)

6. Construction of link road (Joint?)

7. Payment for infrastructure, contributions and other costs applicable to Stages 6 & 7 but incurred in Stages 1-5 (including Grand Entrance?)

8. Offsetting above incurred by Cook (where applicable) against payments already made by Natuna

9. New mangroves land to be valued and Cook to be compensated.

10. Costs of transporting, re-establishing, etc. mangroves at Natuna’s cost

11. Cook house and land ?

12. Beth Kenyon’s house & land (Joint?)

61 Item 7 above referred to stages 1 to 7. As at March 2003, Mr Cook understood that stages 1 to 5 of the proposed development application involved the construction of individual lots on his land. The reason for discussing matters to do with the physical development of the land, to his understanding, was that he wanted there to be agreement on what the arrangements would be if the parties were to proceed with a physical development of the Riveroaks Land.

62 At the meeting Mr Beesley struck out item 11, ticked items 1, 2 and 8 and wrote on his copy of the document:

· Next to item 3 “N’s cost”

· Next to item 4 “2/3 x 1/3”

· Next to item 5 “& Mangrove”

· Next to Item 7 “Fair and reasonable”

· Next to Items 9 and 10 “Natuna”

· Next to Item 12 “Don”

63 At the meeting Mr Hart wrote on his copy of the document:

· next to item 9 “Natuna 100%”

· next to Item 12 “Cook 100%”

· “13. Dedication of 2 ha conservation area?”

· “14. Cycleway”

64 Mr Beesley’s file note of the 20 March 2003 meeting was as follows:

Bob opened by stating that there was an agreement to agree on joint development which therefore was not an agreement. I agreed that there was no agreement but wanted clarified what had been agreed between Don and Natuna as I was never informed over the past 11 years what the arrangements were. Bob said there was nothing in writing but there was never any diagreement [sic] and it was to be done on the 1/3rds - 2/3rds basis.

I said that we had to be in agreement on the issues between Natuna and Don before we could proceed on the joint instructions to Tony Smith because Don thought it was integral to the whole matter.

Bob said it was not right to state in my letter that he refused to discuss the issues and I said that's the way I perceived it.

We then proceeded through the list I had previously faxed Bob, item by item [I made notes on my copy but the following points are expanded for future reference]:-

Link road compensation to be shared in proportion to area of land being dedicated.

Link road would be dedicated to Council when required and cost of construction of link road 1/3rd – 2/3rds

Bob agreed that Natuna should be responsible for the cost of the Conservation Area Embellishment.

Buffer zone would also be on a 2/3rds – 1/3rd basis.

Bob agreed that the area being given by Don for the playing fields would be credited also at valuation and the 2/3rds – 1/3rd arrangement would apply.

Payment for infrastructure, contributions and other costs incurred in Stages 1-5 that were for the benefit of Stages 6 & 7 would be reimbursed on a fair and reasonable basis if Don constructed such infrastructure when he did Stages 1-5 without any obligation in Don’s part to do so.

Payments made by Natuna as agreed on joint account in accordance with the written agreement (rezoning and D.A.) would be offset against playing fields, mangrove land, infrastructure.

Bob also agreed that Natuna will be responsible for paying Don for the land he was making available for the transplant of the mangroves at valuation. Further, Natuna would have to pay for the actual transplanting & maintenance of mangroves and Don would assume the responsibility for the Kenyon land and house in exchange for the Kenyon land. Bob agreed.

I asked for a copy of the accounts. Bob pointed to a copy in his file and said he would give me a copy. I asked what the total was and he said $360,000. Don and I were somewhat surprised because the last time Don asked (a few months earlier, it was only $200,000). Bob then volunteered that it included his airfares, car hire, accommodation but not meals.

Bob also said that he knew the valuation for compensation for the link road would be about $450,000 and that therefore he was not fussed so much about the compensation because originally he thought it would be about $1,5000,000 [sic] but now it was so low he didn’t care. I said Don’s position was that he would cede the compensation but Bob said we had to be united on that front. I said Natuna’s position would be enhanced by Don’s stance not the reverse. Bob then asked David Short whether Don could have a separate agreement with Council without affecting Natuna and David said he couldn’t see why not.

65 Mr Beesley’s letter dated 26 March 2003 to Mr Hart canvassed a number of matters. One was a proposal which Mr Hart had put to Mr Beesley following the meeting of 20 March 2003 for Natuna to buy Mr Cook out rather than jointly develop the Riveroaks Land with him. The letter contained a number of questions apparently directed to Natuna’s capacity and experience to carry out a joint development. The letter stated in relation to the 20 March 2003 meeting:

Discussions

66 The following general points may be noted concerning the evidence of the discussions at the meeting. First, in cross-examination Mr Cook agreed with almost all of Mr Hart’s evidence of the discussions. In considering that evidence, I propose to take into account that Mr Cook is 75 years of age and appeared tired at times during his cross-examination. Secondly, Mr Beesley’s file note was inconsistent with his evidence in some respects, and it was demonstrated in his cross-examination that to some extent it attempted to summarise or amalgamate discussions which occurred at different points in the meeting. Thirdly, in cross-examination, Mr Cook substantially agreed with the first paragraph of Mr Beesley’s file note set out above except for the last sentence.

Access road

67 There was a discussion about the access road at the meeting. I deal with it separately later in this judgment when addressing the access road issue.

Mr Cook’s proportion of costs and expenses

68 It is common ground that Mr Cook is liable for at least half the costs of $386,572.83 paid by Natuna associated with the rezoning and the development application, as provided by the 1995 deed and the July 2001 agreement referred to earlier, less a sum of $2,100 which Mr Cook paid. However, Natuna contends that at the meeting on 20 March 2003 Mr Cook agreed to pay two-thirds of those costs retrospectively, thereby varying the 1995 deed and the July 2001 oral agreement.

69 The fact that the parties had recorded in the 1995 deed their contemplation that the value of Mr Cook’s land was approximately double that of Natuna’s land exposes the reasoning which lay behind any two-thirds/one-third agreement at the 20 March 2003 meeting.

70 Mr Beesley’s “Suggested Points of Discussion” circulated prior to the 20 March 2003 meeting stated: “Where costs/expenses etc are agreed as joint, then Cook to be responsible for 2/3rds and Natuna for 1/3rd”. Mr Beesley’s file note of the meeting commenced with these words: “Bob opened by stating that there was an agreement to agree on joint development which therefore was not an agreement. I agreed that there was no agreement but wanted clarified what had been agreed between Don and Natuna as I was never informed over the past 11 years what the arrangements were. Bob said there was nothing in writing but there was never any diagreement [sic] and it was to be done on the 1/3rds – 2/3rds basis”. Mr Beesley’s letter of 26 March 2003 confirmed that one of the matters “resolved/verified” at the meeting was “(a) Where costs, expenses etc are agreed as joint, then Natuna is responsible for 1/3rd and Don for 2/3rds”.

71 Mr Hart gave evidence that, not long after the meeting had started, the issue of the joint development of the Riveroaks Land was raised and there was a conversation to the following effect:

Hart: Don and Natuna had an agreement to agree on doing a joint development which, of course, is not an agreement at all.

Beesley: That’s right, but it would still be good for me to know what had been agreed between Don and Natuna, as I have never been told over the past eleven years what the arrangements were.

Hart: There was never anything in writing, but there was never any disagreement between us that the joint development was to be done on a one-third to two-thirds basis – Natuna would be liable for one-third of the costs and receive one-third of the profit and Don would be liable for two-thirds of the costs and receive two-thirds of the profit.

72 Mr Cook agreed in cross-examination with this evidence of Mr Hart except that he could not recall the second lot of words attributed to Mr Hart.

73 Mr Beesley’s affidavit gave the following account of the discussion at the commencement of the meeting:

Hart: An agreement between the parties to agree is not agreement at all on joint development and therefore there is no agreement yet between Don and us.

74 Mr Beesley testified that he then introduced the topic of infrastructure costs for the Riveroaks Estate and said:

Beesley: In relation to infrastructure costs, we are happy to share the costs, where the infrastructure is to be of benefit to both parties, on a one-thirds, two-thirds basis if that suits you.

75 Mr Beesley’s affidavit evidence changed the order of parts of the conversation recorded in his file note and put forward Mr Hart’s comments on the two-thirds/one-third basis as relating to infrastructure costs. Mr Beesley accepted that this was inconsistent with his file note. His Suggested Points of Discussion did not limit the two-thirds/one-third arrangement to infrastructure costs but referred to “where costs/expenses, etc. are agreed as joint”. The Suggested Points of Discussion did not list an item involving infrastructure costs until item 7 and the file note did not record any mention of infrastructure costs until item 7 was discussed. Mr Beesley’s file note and his notation to item 7 on his copy of the Suggested Points of Discussion used the words “fair and reasonable” in relation to this item, not one-third/two-thirds.

76 I accept Mr Hart’s evidence, which I think is consistent with Mr Beesley’s file note. It indicates that the two-thirds/one-third consensus reached at the meeting was referable to “joint development” costs and profit. In context, in my view, the words “joint development” refer to future joint physical development of the subdivision in accordance with the anticipated development consent. Tellingly, there was no reference to the two-thirds/one-third proportions applying retrospectively to past joint costs of the rezoning and development applications.

77 There is no doubt that prior to the 20 March 2003 meeting the parties had understood for years that they shared the costs of the rezoning and development applications on a 50/50 basis. It would have been surprising, to say the least, if they had agreed in March 2003 to reverse their longstanding agreements and replace them with a new arrangement for the splitting of costs dating back to 1995. I am satisfied that they did not do so.

78 I conclude that, Mr Cook is liable to pay Natuna 50 percent of $386,572.83 less $2,100, which equals $191,186.41.

Mr Cook’s mangrove relocation land

79 Mr Cook cross-claims that at the 20 March 2003 meeting it was agreed that he would be paid compensation for the use of his mangrove relocation land.

80 Situated on Natuna's land is a large patch of mangroves and saltmarsh. Their presence was raised as a development issue by the NSW Department of Fisheries. In July 1998 the Department advised that its site inspection had confirmed the presence of a well developed mangrove and saltmarsh community which had significant environmental value, and requested that the relevant land be rezoned for environmental protection to allow for its conservation. It was a requirement of the Department of Fisheries that for every hectare of mangrove and saltmarsh removed from Natuna's land two hectares of vacant land be found on which to replant them. A Natuna file note dated 28 September 1998 indicated that a mangrove compensatory area would need to be purchased and that the “land must be dedicated to Council (perhaps on Don's land)”. In evidence, Mr Hart agreed that at about that time, he was aware that an area for mangrove regeneration had to be found and that Natuna needed to purchase land for that purpose “at value”.

81 Throughout 1999, different sites for the mangrove relocation area were considered. By about March 2000 a consensus emerged whereby the mangroves and saltmarsh would be relocated in an area of 2 to 2.5 hectares on other land owned by Mr Cook. This was just to the south of the Riveroaks Land, and adjacent to the proposed link road, in a 400 metre “buffer zone” surrounding a sewage treatment plant. A report of 13 June 2002 prepared by Gunninah Environmental Consultants as part of the subdivision development application indicated the area.

82 Mr Cook gave evidence that in a conversation in about March 2000 Mr Reid agreed orally with Mr Cook’s statement that “You’ll have to purchase your share of the playing field land and the full value of the proposed mangrove area”. I accept this evidence, notwithstanding that Mr Reid did not recall the conversation. There was no discussion of how the lands would be valued. Mr Reid testified, and I accept, that he would never have agreed to allow Natuna to pay Mr Cook the land value of the mangrove relocation land as Mr Cook would remain the owner.

83 Mr Hart accepted in evidence that the relocation of the mangroves away from Natuna's land was “essential for the redevelopment”. Mr Reid accepted in evidence that the mangrove relocation was a “requirement” of council and that but for the relocation Natuna would not have been able to have the reconfiguration of its land that provided it with the ability to put a number of extra lots on its land. In response to a draft condition of development consent that “the proponents rehabilitate an additional 2.5 hectares of native vegetation, that consists of mangrove, saltmarsh and terrestrial plantings”, Mr Hart wrote to the council on 9 September 2002 (on behalf of both Natuna and Mr Cook) stating: “We are required by NSW Fisheries to provide 2.76 ha of compensatory habitat (Mangroves, Saltmarsh) adjacent to the S.T.P. That requirement has been met and has been incorporated into our design. This condition should reflect that agreement or be deleted”.

84 Mr Hart gave the following evidence which I accept:

we will have to compensate you for allowing us to use your land for the mangroves

85 Mr Hart testified that this view as to Mr Cook’s entitlement to compensation for the mangrove relocation land was held at a time when he believed that there was a joint undertaking on foot, and was on the assumption that the parties would jointly proceed with a development or jointly sell the Riveroaks Land. He did not understand that Mr Cook would be entitled to any compensation if he sold his portion of the Riveroaks Land. I accept Mr Hart’s evidence. I think that his assumption and understanding were reasonable.

86 Mr Reid gave similar evidence that it was also his intention that Mr Cook would be paid proper compensation for the mangrove land. This was reflected in a letter he wrote to Mr Cook on 18 March 2003. He testified that it was never said that Mr Cook was the only one that would be compensated.

87 This subject of compensation for the mangrove land was discussed at the 20 March 2003 meeting. Mr Beesley’s Suggested Points of Discussion item 9 states: “New mangroves land to be valued and Cook to be compensated”. Mr Beesley wrote “Natuna” next to item 9 on his copy of this document. Mr Hart wrote “Natuna 100%” next to item 9 on his copy of this document. Mr Beesley’s file note of the meeting recorded: “Bob also agreed that Natuna will be responsible for paying Don for the land he was making available for the transplant of the mangroves at valuation”. Mr Beesley’s letter of 26 March 2003 was also confirmatory on this point, although not well expressed.

88 According to Mr Hart, the conversation on this topic at the meeting was to the following effect:

Beesley: Okay, now Natuna would have to pay for the new mangrove land that Don is making available and be responsible for the cost of transplanting and maintaining the mangroves.

89 In cross-examination Mr Cook agreed with Mr Hart’s evidence.

90 Mr Beesley's version of the conversation was as follows:

Beesley: Natuna is responsible for paying Don for the land he is making available for the transplant of the mangroves, at a fair and reasonable valuation...

91 In cross-examination Mr Hart agreed that words to that effect were said.

92 Mr Cook's affidavit evidence was:

Beesley: Don will have to be paid a fair and reasonable price for the mangrove land...

93 The recollections of Mr Hart and Mr Beesley are substantially similar to that recorded in Mr Beesley’s file note, although each embellished what was recorded in the file note.

94 I conclude that at the meeting there was agreement that Natuna would be responsible for paying Mr Cook for the land he was making available for the transplantation of mangroves at a valuation to be obtained. The words “making available” meant, in my view, making available in a joint development of the Riveroaks Land. The antecedent conduct of the parties supports the conclusion that the agreement was predicated on that occurring. When Mr Cook subsequently sold his portion of the Riveroaks Land he put it out of his power to proceed with a joint development. By reason of that event, the agreement between the parties in relation to the mangrove relocation land ceased. As regards the valuation referred to in the agreement, given that Mr Cook would retain ownership, it was implicit, I think, that Natuna would not pay Mr Cook the full value of that land as if the title in fee simple were to be transferred to Natuna, but that the valuation would be by reference to the value of that land without the mangroves less its value with the mangroves.

95 Mr Cook submitted that the essential point is, irrespective of whether the Riveroaks Land was developed by Natuna and Mr Cook jointly, that Mr Cook has “set aside” the mangrove relocation land which was required in order for the development consent to be issued. He submitted that Natuna has benefited substantially from his “agreement to set aside” that land for Natuna's mangroves because (a) the value of Natuna’s land has increased as a result of the granting of development consent; and (b) Natuna is able to develop a significantly larger proportion of its land than might otherwise have been the case, were it not able to relocate the mangroves.

96 The submission that Mr Cook had set aside or agreed to set aside his mangrove relocation land was based on three underlying facts. First, it was a condition of the June 2003 subdivision development consent that the mangroves be relocated to that land. Secondly, Mr Cook’s land is burdened by an easement for development access, registered on 16 February 2005, which permits the developer of the Riveroaks Land access to his land for the construction and maintenance of works required to be undertaken in connection with the development consent and which are associated with, among other things, mangrove regeneration works. Thirdly, Mr Cook is ready, willing and able to provide the mangrove relocation land so that the condition of the 2003 subdivision development consent requiring mangrove relocation is complied with.

97 Those three facts may be accepted, although the second should be put in context. The easement for development access was required to be created by a condition of consent to Mr Cook’s development application 2004/627 granted by the council on 11 March 2004. Mr Beesley’s letter of 27 January 2004 to Mr Cook indicated that that development application was made because Mr Cook’s contract of sale to Rayshield required approval to, and registration of, a three lot plan of subdivision. Thus, it was Mr Cook’s late 2003 sale contract with Rayshield which was essentially causative of the easement. Further, the easement only permits access. It does not entitle Natuna to carry out mangrove regeneration work. Any such entitlement depends upon agreement between Mr Cook and the developer under which Mr Cook would presumably require compensation.

98 In my opinion, none of the abovementioned facts mean that Mr Cook has set aside or agreed to set aside the mangrove land in any way that is legally binding between him and Natuna. Just as he was free to sell his portion of the Riveroaks Land, he is free to sell or do what he will with his mangrove relocation land.

99 Mr Cook submitted that there is no evidence to suggest that the 2003 development consent will not be activated and that there is every likelihood that Mr Cook's mangrove relocation land will be used for its intended purpose, in which case Mr Cook is entitled to be compensated. It is possible that those events will occur. However, they have not occurred, Natuna will not necessarily be involved if they do occur, and, in my view, Mr Cook is not obliged to permit the use of the mangrove relocation land in the absence of a new agreement with the developers which would presumably provide for compensation to Mr Cook. The evidence of Mr Hart, which I accept, is that currently Natuna is not interested in developing its portion of the Riveroaks Land and wishes to sell it for as much as possible. No evidence was called from Rayshield. Clause 48.1 of the 2005 Rayshield sale contract makes provision for Rayshield to seek an alternative development consent which would not include the Natuna land. The development consent will lapse five years after its issuance unless work is physically commenced in accordance with the consent before that time.

Mr Cook’s playing fields land

100 Mr Cook cross-claims claims that it was agreed at the 20 March 2003 meeting that his playing fields land was to be valued and that he would be credited with one-third of the valuation.

101 Mr Beesley’s Suggested Points of Discussion item 5 stated: “Valuation of Cook rural land for open space (playing fields?)(Joint?)”. Mr Beesley’s file note of the meeting recorded “Bob agreed that the area being given by Don for the playing fields would be credited also at valuation and the 2/3rds-1/3rd arrangement would apply”. Mr Beesley’s letter of 26 March 2003 stated: “The land which Don is providing for Playing Fields is to be valued and the value is to be deemed to be part of Don’s contribution to joint costs/expenses”.

102 Mr Beesley testified that the following was said at the 20 March 2003 meeting:

Mr Beesley: Don’s land for the playing fields and mangrove would be valued and the valuations would be offset against expenses owed to Natuna by Don. You pay for all the mangrove land and Don will contribute two-thirds and you contribute one-third for the playing fields.

103 In cross-examination Mr Hart agreed with this evidence. He also said “It has always been my understanding that the playing fields would be valued and that Natuna would be responsible for approximately one-third of the value of those playing fields”.

104 Mr Hart’s affidavit evidence was that at the 20 March 2003 meeting the following was said:

Mr Beesley: Don’s Playing Fields.

Mr Hart: Well, just like with the buffer zone, the land to be given by Don for the playing fields will also need to be valued and would be a joint cost to be shared two-third by Don and one-third by Natuna.

Mr Beesley: Yep. You happy with that Don?

105 In cross-examination Mr Cook agreed with this evidence. Mr Cook’s recollection in an affidavit was as follows:

Mr Beesley: Don will have to be paid a fair and reasonable price for the mangrove land and your share of the playing fields land.

106 I conclude that there was agreement at the 20 March 2003 meeting that Mr Cook’s playing fields land would be valued and would be deemed to be a joint cost to be shared one-third by Natuna and two-thirds by Mr Cook. Thus, Mr Cook would be credited with one-third of the value of that land. However, in my view, as stated earlier, this consensus was predicated on the parties proceeding with a joint development once the pending development application was approved.

107 The playing fields land was part of Mr Cook’s portion of the Riveroaks Land which he later sold to Rayshield Pty Ltd. Mr Cook has therefore received the value of the playing fields land, with any enhanced value that it had as a result of the development consent. It is unlikely to my mind that at the 20 March 2003 meeting the parties intended by their agreement that Natuna had to credit Mr Cook with one-third of the value of the playing fields land even if Mr Cook sold it. Clause 44.4 of the Rayshield sale contract purported to preserve Mr Cook’s right to seek contribution from Natuna in respect of one-third of that land:

The Vendor acknowledges that, on exchange, it will have no right to seek contribution from the Purchaser or any other party for any matter required for the completion of the Project in accordance with the Development Consent and/or the new Development Consent PROVIDED THAT nothing in this condition shall prevent the Vendor from seeking contribution from Natuna in respect of:

(a) the land content of the Mangrove Rehabilitation Area proposed to be located on the Remaining Cook Land as shown on the Draft Plan; and

108 Mr Cook submitted that the 2003 development consent has benefited Natuna in that it has resulted in a substantial increase in the value of Natuna’s land. Accordingly, he submitted, he remains entitled to compensation notwithstanding the sale of the playing fields land. The submission did not identify what this increased value might be. The submission seems to be in the nature of a restitutionary claim, which was not pleaded by Mr Cook, rather than the pleaded claim of an agreement entered into at the 20 March 2003 meeting for Natuna to pay Mr Cook one-third of the value of the playing fields land. I therefore do not think that it should be entertained. In any event, the expert valuation evidence did not address an issue of the increased value of Natuna’s land resulting from the development consent or from the playing fields component of the development consent. In the absence of expert valuation evidence, it is impossible to determine what any such increased value might be: Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 81 ALJR 352 at 386 [161].

Mr Cook’s offset

109 Mr Cook’s cross-claim pleads that it was agreed at the 20 March 2003 meeting that his liability for costs and expenses would be offset against the value of his mangrove relocation land contribution. In submissions, he extended this claim to Natuna’s portion of the value of his playing fields land.

110 Item 8 on Mr Beesley’s Suggested Points of Discussion for the 20 March 2003 meeting was “Offsetting above incurred by Cook (where applicable) against payments already made by Natuna”. Mr Beesley’s file note of the meeting recorded “Payments made by Natuna on joint account in accordance with the written agreement (rezoning and DA) would be offset against playing fields, mangrove land, infrastructure”.

It will have to be one for one Stephen. You let me out to the Highway and I’ll let you into your property over my land.

Yes, of course.

174 Mr Reid testified that he could not recall having had this conversation. The only comment which he could recall making to Mr Cook in relation to access was in a telephone conversation on 29 September 2003: “If we sort out the development consent, and Stage 1 is ready to proceed, access will automatically be granted over the Link Road.” This comment is supported by a file note.

175 I accept Mr Cook’s evidence. I also accept Mr Reid’s evidence as to his September 2003 comment.

176 Mr Cook submitted that the alleged 2001 oral access agreement was confirmed at the meeting held on 20 March 2003. Given that the access claim was only pleaded as based on an oral agreement in early 2001, this submission should not be elevated to a claim based on an agreement at the 20 March 2003 meeting.

177 Item 2 in Mr Beesley’s Suggested Points of Discussion sent to Natuna prior to the meeting stated: “Link road dedication”. Mr Beesley's file note of the meeting recorded “Link road compensation to be shared in proportion to area of land being dedicated. Link road would be dedicated to Council when required and cost of construction of link road 1/3rd – 2/3rds”. Mr Cook's evidence was that at this meeting Mr Cook or his advisor Mr Beesley raised the issue of access to his part of the Riveroaks Land, to which Mr Hart or Mr Short of Natuna responded: “We will not deny you access to your property Don”. Mr Beesley gave evidence of a conversation to the following effect at the meeting:

Beesley: In relation to the link road, I trust there will not be any problems in Natuna dedicating its part of the link road when required? It is essential for Don to be able to commence the development.

178 This is not supported by Mr Beesley’s file note or his subsequent letter.

179 Mr Hart gave evidence of a conversation to the following effect at the meeting:

Beesley: The link road should be dedicated when required by Council and the cost of constructing the link road would be a joint cost – one third by Natuna and two thirds by Don.

Hart: It’s really too early to be discussing construction costs for the Link Road at the moment – we haven’t even got the consent yet. But what I think I can say is that, if there is to be a joint development, then this will naturally be a joint expense to be shared one-third by Natuna and two-thirds by Don.

180 In cross-examination, Mr Cook recalled a conversation to that effect.

181 I accept Mr Hart’s evidence. I do not think that there was confirmation of the alleged 2001 agreement at this meeting. I accept that there was a consensus at this meeting that if there was a joint development the construction costs would be shared one-third by Natuna and two-thirds by Mr Cook.

182 As invited in Mr Cook’s submissions, I have taken into account the parties’ conduct subsequent to the 20 March 2003 meeting. After the 20 March 2003 meeting there was correspondence between the parties, before and after the development consent of 16 June 2003, in which Mr Beesley, on behalf of Mr Cook, unsuccessfully sought confirmation that Mr Cook was entitled to access over that part of Natuna’s land constituting part of the proposed access road; that Mr Cook might construct the road over Natuna’s land; and that Natuna would dedicate that part when the road was completed.

183 Mr Hart wrote a letter to Mr Beesley on 6 June 2003 which included the following: “Whilst you raise the spectre of Natuna not granting access to Don, it is not an issue which has ever been canvassed within our partnership. We are committed to honouring the terms of consent as foreshadowed in the draft conditions.” Those draft conditions required the access road land to be dedicated with the issue of the first subdivision certificate, which would be after certain roadworks involving the intersection with the Pacific Highway had been planned and constructed. Those draft conditions did not change significantly in the equivalent final conditions of development consent. The time when the parties would be required to dedicate their lands for the access road did not arise because Mr Cook sold his land.

184 There was a meeting in September or October 2003 between Mr Cook, Mr Beesley, a Mr Elford (of Ardill Payne & Partners) and Messrs Short and Edwards of Natuna. According to Mr Beesley, Messrs Short and Edwards agreed at the meeting that Mr Cook was entitled to access. Mr Short denied that he agreed. He recalled Mr Edwards complaining about Mr Cook abandoning the joint development when Natuna had paid for all the expenses and Mr Cook had paid nothing. Messrs Elford and Edwards did not give evidence. I am not satisfied that there was the agreement alleged by Mr Beesley. Mr Beesley gave evidence that on 18 October 2003 Mr Edwards (a shareholder of Natuna) told him that Mr Reid acknowledged that Mr Cook was entitled to access. He wrote a letter to Mr Edwards on 19 October asserting this and also asserting that Mr Edwards and Mr Short had also acknowledged the same thing. Mr Reid denied having done so. Although Mr Edwards did not give evidence, I accept his denial.

185 There are, in my view, several obstacles to the access road agreement claim. First, I do not think that the discussion in early 2001 constituted a binding contract. Here it is helpful to distinguish between three questions. Did the parties arrive at a consensus? If they did, was it such a consensus as is capable of forming a binding contract? If it was, did the parties intend that the consensus at which they arrived should constitute a binding contract? See Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 at 627 per McLelland J (affirmed on appeal 40 NSWLR 631) quoting the dictum of Mahoney JA in Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 326. Depending upon the size, importance and complexity of the subject matter, the less formal the initial agreement, the less likely it will be that it was intended to be legally binding and enforceable: Player v Isenberg [2002] NSWCA 186 at [49] – [52]. There was a loose oral consensus in early 2001, before the pending rezoning application was approved, that each party would provide part of its or his land for an access road. I do not think that such a casual conversation, referring in an ill-defined way to parties giving each other road access over their respective lands, was capable of forming a binding contract or, if it was, that the parties intended that their consensus should constitute a binding contract. The consensus did not deal with essential matters such as the location and dimensions of the road, the parties’ respective liability for construction costs, and dedication of the road to (and compensation therefor by) the council. Elevation of the consensus to a binding contract lay in the future. There was an attempt at the 20 March 2003 meeting to move towards a contract.

186 Secondly, even if the consensus was contractual, its essence was that it imposed reciprocal access obligations on the parties. By selling his land to Rayshield, it became impossible for Mr Cook to perform his reciprocal obligation of providing Natuna with access over that land. There are no such reciprocal obligations between Rayshield and Natuna. Rayshield was not a party to the access agreement and Rayshield and Natuna are not contractually bound to provide the other with access over the land owned by each.

187 Thirdly, even if Mr Cook had not sold his land, the parties were not obliged to undertake the development because of the alleged access agreement or the development consent or for any other reason. It is common ground that Mr Cook was free to sell his land, as he elected to do, rather than undertake the development. Natuna has a corresponding freedom. Natuna is not currently interested in carrying out the development. The parties implemented their joint venture to the point of obtaining a development consent but came under no obligation to proceed further. The access agreement should be viewed as being predicated upon the parties proceeding with a joint development. This corresponds with Mr Cook’s understanding of the access agreement. As he conceded, he understood that either party could decide not to proceed with the development at any time prior to the time when the link road was to be dedicated under the development consent conditions and that nothing in the early 2001 discussions meant that either party had to continue with the joint development. In the circumstances, I do not consider that it was a breach of the access agreement for Natuna to refuse to permit Mr Cook or Rayshield access over Natuna’s land.

188 Finally, Rayshield is not a party to these proceedings. If specific performance of the access agreement as sought were available (contrary to my opinion), it would have to be moulded so as to ensure that Natuna had reciprocal access rights over Rayshield’s portion of the road. It is impossible to do that in a way which would bind Rayshield when it is not a party to the proceedings.

189 For these reasons, I do not accept Mr Cook’s access agreement claim. As I have not accepted Mr Cook’s access agreement claim, it is unnecessary to deal with his damages case for breach of the access agreement.

Estoppel

190 Had the alternative pleaded estoppel cause of action been pressed, I think that it would have been infected by similar difficulties to those that infect the access agreement cause of action. In addition, in my view, Mr Cook suffered no detriment from the pleaded assumptions made in reliance on any access representation and the circumstances do not support a finding of unconscionable conduct.

M. MR COOK’S CROSS-CLAIM FOR LODGEMENT OF CAVEAT WITHOUT REASONABLE CAUSE

191 Mr Cook claims compensation under s 74P of the Real Property Act 1900 (NSW) for lodgement of a caveat without reasonable cause.

192 Although the caveat is not in evidence, the following matters are admitted on the pleadings. On or about 16 March 2005 Natuna caused to be lodged caveat AB 353525 over the portion of the Riveroaks Land owned by Mr Cook. The nature of the interest in Mr Cook’s land claimed by Natuna was an “equitable interest in the land herein described arising pursuant to the joint venture to re-develop the said land by the Caveator and the Registered Proprietor pursuant to a Deed and arising pursuant to the improvements carried out to the land by the Caveator at the request of the Registered proprietor”. On or about 21 April 2005, Natuna's solicitors were served with a lapsing notice pursuant to section 74J. Natuna had 21 days after service to obtain an order extending the operation of the caveat. Natuna commenced these proceedings seeking that order. On 13 May 2005, by consent, the caveat was extended until further order. On or about 26 August 2005, Natuna issued a notice withdrawing the caveat upon Mr Cook lodging a security deposit with the Court in the amount of $400,000. Completion of the Rayshield sale agreement occurred on 4 October 2005.

193 Mr Cook submits that the lodging of the caveat delayed settlement of the Rayshield sale contract by about five months from the date the caveat was lodged to the date that the notice of withdrawal was issued. He claims that he has sustained pecuniary loss, being the loss of opportunity to invest the balance of the sale proceeds ($9,113,000) for that period. Natuna denies that it lodged the caveat without reasonable cause. Alternatively it submits that the caveat was not causative of the alleged pecuniary loss and that Mr Cook failed to take all reasonable steps to mitigate his loss.

194 Section 74P is in the following terms:

74P Compensation payable in certain cases

(2) Compensation referred to in subsection (1) is recoverable in proceedings taken in a court of competent jurisdiction by the person who claims to have sustained the pecuniary loss.

195 “Reasonable cause” for the lodgement of a caveat exists where the caveator has an honest belief, based upon reasonable grounds, that the caveator has a caveatable interest. In order to establish liability under s 74P, the onus is on Mr Cook to prove, first, that Natuna had no caveatable interest and, secondly, that Natuna did not have an honest belief based on reasonable grounds that a caveatable interest existed. As to the second issue, the test is partly subjective and partly objective. It is subjective in that it requires an examination of the caveator’s actual belief and whether it was honestly held. It is objective in that it requires that the belief be held on reasonable grounds: see Lee v Ross(No. 2) (2003) 11 BPR 20,991; [2003] NSWSC 507 at [21] - [23]; Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 at 469 – 470 (CA); Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106; Northstate Carpet Mills Pty Ltd v B R Industries Pty Ltd [2006] NSWSC 1057 at [61]. A caveator may have reasonable grounds on which to believe that it has a caveatable interest even though it is mistaken and it is ultimately held that it did not: Ceda Nominees Pty Ltd v Registrar of Title [1982] ANZ ConvR 524.

196 The first issue is whether Natuna had, as at 16 March 2005, a caveatable interest in Mr Cook's portion of the Riveroaks Land. To be a caveatable interest, the interest must be “a legal or equitable estate or interest in land”: s 74F(1). The caveat alleged an equitable interest arising on two bases. The first was a “joint venture” between the parties to “redevelop” the land pursuant to “a Deed”. The “Deed” was the 1995 deed. That deed only obliged the parties to share the costs of a rezoning application. In my view, it did not confer on any of the landowners a proprietary interest in the land of any of the other landowners. It did not give Natuna any equitable interest in Mr Cook's land.

197 The second basis stated in the caveat for the claimed equitable interest in Mr Cook's land was the “improvements” carried out to the land by Natuna at Mr Cook's request. This appears to be a reference to the costs and expenses incurred by Natuna to progress the rezoning and development applications in respect of the Riveroaks Land.

198 In Excel Quarries Pty Ltd v Payne [2000] QCA 213, the Queensland Court of Appeal held that no caveatable interest arose in circumstances where the caveator, a prospective mining lessee under an agreement with the registered proprietor, expended significant sums of money on a rezoning application which ultimately failed. The Court held that there was a claim for unjust enrichment but that did not give rise to a caveatable interest, by way of constructive trust or otherwise. Mr Cook submitted that this case supports the proposition that the incurring of expenditure on an application to a council in respect of development of land does not give rise to any caveatable interest. In my view, the case is distinguishable because, unlike the present case, and as the Court of Appeal pointed out, the relationship of the parties in that case was not in the nature of a joint relationship or endeavour and was not analogous to those concepts. Thomas JA (Ambrose and Helman JJ agreeing) held at [15] – [16]:

[15] I do not consider that the case which is advanced raises or requires the formulation by the court of a constructive trust. I accept the submission of [counsel] for the respondent that the relationship of these parties was not in the nature of a joint relationship or endeavour and was not truly analogous to such concepts. This was an arm's length agreement in relation to property in which a developer and an owner made a particular agreement which was capable of resulting in the developer obtaining the right to exploit the property on certain conditions. They would never have become joint venturers even if the agreement were fully carried out. They remained in a defined contractual relationship until its termination. Thereafter there has been no further relationship.

199 It is unnecessary to express a concluded view on whether Natuna had a caveatable interest because, in my view, Mr Cook has not discharged his onus of proving that Natuna did not honestly believe on reasonable grounds that it had a caveatable interest in Mr Cook's land. There appears to be no evidence to support a finding that Natuna did not have an honest belief that a caveatable interest existed. No questions were directed in cross-examination to either of the directors of Natuna, Mr Hart and Mr Reid, which suggested that they did not have an honest belief that a caveatable interest existed. Absence of cross-examination on the issue of honest belief was regarded as significant by Palmer J in Lee v Ross (No 2) (above) at [27]. In this state of the evidence, I decline to find that Natuna did not have an honest belief that a caveatable interest existed.

200 As to whether there were reasonable grounds for such a belief, Mr Cook pointed out that Natuna’s caveat was lodged over a year after Natuna became aware, in February 2004, of the sale to Rayshield. Mr Cook submitted that given the experience of the major shareholders of Natuna, Natuna must have known that its claim to a proprietary interest was unprecedented and therefore there were no reasonable grounds for believing that it had such an interest. I do not accept the submission. I accept, substantially as submitted by Natuna, that on the evidence Mr Hart and Mr Reid were aware when Natuna lodged the caveat that:

(a) Natuna had been engaged in a joint endeavour with Mr Cook to rezone and obtain development consent for a subdivision of the Riveroaks Land with a view to obtaining a profit either by selling the land with development consent or developing the land in accordance with the development consent and selling lots in the subdivision;

201 Natuna submitted that based on these matters there were reasonable grounds for it to believe that it had the following caveatable interests in Mr Cook’s land. First, a constructive trust or equitable charge for the payment to Natuna of Mr Cook’s share of the joint costs paid by Natuna in improving the land which were paid, to the knowledge of Mr Cook, on the faith of a promise by Mr Cook that Natuna would have an interest in the land. Reference was made to NSW Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288 at 308 and Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404 in aid of the proposition that there were grounds for believing that principles of proprietary estoppel applied so as to give Natuna an interest in the land. Secondly, a constructive trust or equitable charge protecting Natuna’s equitable right to the return of its contributions to the failed joint venture. Reference was made to Muschinski v Dodds (1985) 160 CLR 583 at 620 where the High Court imposed a constructive trust over land in circumstances of failure of a joint venture. Thirdly, an equitable charge for the payment to Natuna of Mr Cook’s share of the joint costs paid by Natuna in circumstances where the agreement to charge the land was supported by sufficient acts of part performance. An equitable charge is sufficient to support a caveat: Composite Buyers Ltd v Soong (1995) 38 NSWLR 286; Big River Timbers Pty Ltd v Stewart (1999) 9 BPR 16,605. It was said that there were sufficient acts of part performance by Natuna of the oral agreement creating the charge – in procuring the grant of development consent – so that the statute of frauds did not apply.

202 Mr Cook in reply submitted that Excel (above) was a complete reply to Natuna’s submission as to reasonable grounds. In my view, it is not and is distinguishable for reasons discussed earlier. It has not been established, in my opinion, that there were no reasonable grounds for Natuna to believe that it had a caveatable interest. The costs paid by Natuna were related to the rezoning and subdivision development consent. It is at least arguable that the rezoning and the development consent increased the value of the Riveroaks Land, including Mr Cook’s portion: Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 81 ALJR 352 at 372 [100], 386 [161]. Mr Cook was liable to repay Natuna half those costs and had promised to do so out of the proceeds of sale. Those circumstances combined with the subsequent collapse of their commercial joint venture led to a situation in which, I think, there were reasonable grounds for a belief that a constructive trust or equitable charge attached to Mr Cook’s land, or would be imposed by the court, to secure his liability for those costs. Caveats are commonly lodged to protect a claim under a constructive trust: see Lindsay, Caveats against Dealings, Federation Press, 1995, p90, footnote 6 and the cases there collected.

203 For these reasons, I do not accept Mr Cook’s claim for compensation under s 74P.

N. SUMMARY AND ORDERS

204 In summary:

205 There will be judgment and orders as follows:

Citations

Natuna Pty Ltd v Cook [2007] NSWSC 121

Most Recent Citation

Cases Citing This Decision

278

Boensch v Pascoe [2019] HCA 49

Cases Cited

18

Statutory Material Cited

2

Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55

Thomas v SMP (International) Pty Ltd [2010] NSWSC 822

Player v Isenberg [2002] NSWCA 186

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CITATION:	Natuna Pty Ltd v Cook [2007] NSWSC 121
HEARING DATE(S):	4-12 December 2006; 20 December 2006; 2 February 2007
JUDGMENT DATE :	23 February 2007
JUDGMENT OF:	Biscoe AJ
DECISION:	Judgment for plaintiff for $228,361.66. Defendant to pay 75% of plaintiff's costs of its claim. Cross-claim and second cross-claim dismissed with costs.
CATCHWORDS:	CONTRACT - joint venturers obtained rezoning and subdivision development consent for adjoining rural lands owned by each - further anticipated venture to jointly subdivide lands prevented by one party selling its land - whether variation of agreement as to proportionate liability for joint costs already incurred - whether agreement to pay interest on loan raised to pay for joint costs - whether agreement to pay compensation for land contributions contemplated by development consent - whether agreement to provide lands to construct access road - whether agreements re future joint costs, compensation and access road predicated on future joint development - whether agreements intended to be contractually binding. ESTOPPEL - promissory estoppel - whether defendant estopped from denying that plaintiff took out loan and incurred interest in reliance upon defendant's representation that he would contribute to interest costs - whether plaintiff estopped from denying that it is obliged to compensate defendant for land which development consent contemplated defendant would contribute for relocation of mangroves from plaintiff's land. MISLEADING AND DECEPTIVE CONDUCT - whether representations to pay compensation misleading and deceptive - whether representations predicated upon continuance of joint development. RESTITUTION - unjust enrichment - whether either party entitled to compensation for land which development consent contemplated that each party would contribute for non-residential lot use. REAL PROPERTY - caveat - compensation - caveat lodged over defendant's land by plaintiff to secure payment of proportion of costs and interest paid by plaintiff for rezoning and development applications - whether caveat lodged without reasonable cause - subjective and objective elements to test of honest belief on reasonable grounds - no evidence of lack of honest belief - reasonable grounds for lodgement.
LEGISLATION CITED:	Real Property Act 1900 (NSW), ss 74F, 74J, 74P Trade Practices Act 1974 (Cth), s 52
CASES CITED:	Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR 622 Baumgartner v Baumgartner (1987) 164 CLR 137 Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) 21 NSWLR 459 Bedford Properties Pty Ltd v Surgo Pty Ltd [1981] 1 NSWLR 106 Big River Timbers Pty Ltd v Stewart (1999) 9 BPR 16,605 Ceda Nominees Pty Ltd v Registrar of Title [1982] ANZ ConvR 524 Commonwealth v Verwayen (1990) 170 CLR 394 Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 81 ALJR 352 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Excel Quarries Pty Ltd v Payne [2000] QCA 213 Giumelli v Giumelli (1999) 196 CLR 101 G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 Lee v Ross (No. 2) (2003) 11 BPR 20,991 Muschinski v Dodds (1985) 160 CLR 583 Northstate Carpet Mills Pty Ltd v B R Industries Pty Ltd [2006] NSWSC 1057 NSW Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288 Pavey and Matthews Pty Ltd v Paul (1987) 162 CLR 221 Player v Isenberg [2002] NSWCA 186 Riches v Hogben [1985] 2 Qd R 292 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
PARTIES:	Natuna Pty Ltd (plaintiff, second cross claimant) Donald Thomas Cook (defendant, cross claimant))
FILE NUMBER(S):	SC 2877/05
COUNSEL:	Mr A Ogborne and Mr S Ipp (Plaintiff) Mr J Robson SC and Mr J Lazarus (Defendant)
SOLICITORS:	Bruce Stewart Dimarco (Plaintiff) Colin Biggers & Paisley (Defendant)