O'Rourke v P & B Corporation Pty Ltd
[2008] WASC 36
•14 MARCH 2008
O'ROURKE -v- P & B CORPORATION PTY LTD [2008] WASC 36
| (2008) 36 WAR 197 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 36 | |
| 18/03/2008 | |||
| Case No: | CIV:1930/2007 | 29, 30, 31 JANUARY & 1 FEBRUARY 2008 | |
| Coram: | MARTIN CJ | 13/03/08 | |
| 53 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiffs' claim dismissed | ||
| B | |||
| PDF Version |
| Parties: | DEBORAH CAROL O'ROURKE GRANT NATHAN O'ROURKE DAMIEN HARRIS RODNEY NOEL WEGNER ROBIN ANNE WEGNER GERALDINE MARY JEAN STEVENS GOLDPEAK PTY LTD (ACN 095 419 686) HILARY ANN STEVENS ANNA TERESA CARGER MADISON ENTERPRISES PTY LTD (ACN 008 961 055) ELIZABETH BAILEY ALAN RICHARD BAILEY KRYSTEN SARA LEOPARDI ANN STUART FLOWER SEAN PHILLIP LENNON WENDY GAYNOR LENNON P & B CORPORATION PTY LTD (ACN 109 365 291) |
Catchwords: | Contract Sale of land Defendant proposed two alternative land uses for planning approval Only first proposal provided for plaintiffs' proposed residential lots Whether first proposal had reasonable prospects of success without successful rezoning of the land Second proposal did not provide for permanent residential lots Terms of the contract specified that if defendant did not obtain subdivision approval for residential lots within six months, the contract ceased Whether defendant used 'best endeavours' to obtain subdivision approval Plaintiffs seek specific performance Words and phrases 'best endeavours' |
Legislation: | Planning and Development Act 2005 (WA), s 136, s 140 State Administrative Tribunal Act 2004 (WA), s 27(2), s 29(5) |
Case References: | Butts v O'Dwyer (1952) 87 CLR 267 Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 IBM United Kingdom Ltd v Rockware Glass Ltd (1980) FSR 335 Laidlaw Pty Ltd v Cleverley (1972) 25 LGRA 196 Landall Construction & Development Co Pty Ltd v Bogaers (1980) WAR 33 Paltara Pty Ltd v Dempster (1991) 6 WAR 85 Parland Pty Ltd v Mariposa Pty Ltd (1995) 5 Tas R 121 Ross v Carvallio (Unreported, WASCA, Library No 970189A, 2 May 1997) Sheffield District Railway Company v Great Central Railway Company (1911) 27 TLR 451 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- GRANT NATHAN O'ROURKE
First Plaintiffs
DAMIEN HARRIS
Second Plaintiff
RODNEY NOEL WEGNER
ROBIN ANNE WEGNER
Third Plaintiffs
GERALDINE MARY JEAN STEVENS
Fourth Plaintiff
GOLDPEAK PTY LTD (ACN 095 419 686)
Fifth Plaintiff
HILARY ANN STEVENS
Sixth Plaintiff
ANNA TERESA CARGER
Seventh Plaintiff
- MADISON ENTERPRISES PTY LTD (ACN 008 961 055)
Eighth Plaintiff
ELIZABETH BAILEY
ALAN RICHARD BAILEY
Ninth Plaintiffs
KRYSTEN SARA LEOPARDI
ANN STUART FLOWER
Tenth Plaintiffs
SEAN PHILLIP LENNON
WENDY GAYNOR LENNON
Eleventh Plaintiffs
AND
P & B CORPORATION PTY LTD (ACN 109 365 291)
Defendant
Catchwords:
Contract - Sale of land - Defendant proposed two alternative land uses for planning approval - Only first proposal provided for plaintiffs' proposed residential lots - Whether first proposal had reasonable prospects of success without successful rezoning of the land - Second proposal did not provide for permanent residential lots - Terms of the contract specified that if defendant did not obtain subdivision approval for residential lots within six months, the contract ceased - Whether defendant used 'best endeavours' to obtain subdivision approval - Plaintiffs seek specific performance
Words and phrases - 'best endeavours'
Legislation:
Planning and Development Act 2005 (WA), s 136, s 140
State Administrative Tribunal Act 2004 (WA), s 27(2), s 29(5)
(Page 3)
Result:
Plaintiffs' claim dismissed
Category: B
Representation:
Counsel:
First Plaintiffs : Mr J R Ludlow
Second Plaintiff : Mr J R Ludlow
Third Plaintiffs : Mr J R Ludlow
Fourth Plaintiff : Mr J R Ludlow
Fifth Plaintiff : Mr J R Ludlow
Sixth Plaintiff : Mr J R Ludlow
Seventh Plaintiff : Mr J R Ludlow
Eighth Plaintiff : Mr J R Ludlow
Ninth Plaintiffs : Mr J R Ludlow
Tenth Plaintiffs : Mr J R Ludlow
Eleventh Plaintiffs : Mr J R Ludlow
Defendant : Ms W F Buckley
Solicitors:
First Plaintiffs : Karp Steedman Ross-Adjie
Second Plaintiff : Karp Steedman Ross-Adjie
Third Plaintiffs : Karp Steedman Ross-Adjie
Fourth Plaintiff : Karp Steedman Ross-Adjie
Fifth Plaintiff : Karp Steedman Ross-Adjie
Sixth Plaintiff : Karp Steedman Ross-Adjie
Seventh Plaintiff : Karp Steedman Ross-Adjie
Eighth Plaintiff : Karp Steedman Ross-Adjie
Ninth Plaintiffs : Karp Steedman Ross-Adjie
Tenth Plaintiffs : Karp Steedman Ross-Adjie
Eleventh Plaintiffs : Karp Steedman Ross-Adjie
Defendant : Fairweather & Lemonis
(Page 4)
Case(s) referred to in judgment(s):
Butts v O'Dwyer (1952) 87 CLR 267
Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
IBM United Kingdom Ltd v Rockware Glass Ltd (1980) FSR 335
Laidlaw Pty Ltd v Cleverley (1972) 25 LGRA 196
Landall Construction & Development Co Pty Ltd v Bogaers (1980) WAR 33
Paltara Pty Ltd v Dempster (1991) 6 WAR 85
Parland Pty Ltd v Mariposa Pty Ltd (1995) 5 Tas R 121
Ross v Carvallio (Unreported, WASCA, Library No 970189A, 2 May 1997)
Sheffield District Railway Company v Great Central Railway Company (1911) 27 TLR 451
(Page 5)
- MARTIN CJ:
Summary
1 In these proceedings the plaintiffs seek specific performance of separate contracts into which they entered with the defendant for the sale of parcels of land approximately 400 square metres in area situated on the western boundary of a larger parcel of land in Exmouth which is to be developed into a holiday resort by the defendant. If the plaintiffs cannot obtain specific performance of those contracts, they seek damages in the alternative. There are 11 contracts, relating to 11 separate parcels of land. There are 11 plaintiffs or groups of plaintiffs.
2 The lots the subject of the contracts had not been subdivided from the larger parcel of land at the time the contracts were made. Each contract was subject to a condition that the Western Australian Planning Commission (WAPC) grant approval to the subdivision of the lot from the larger parcel within six months of the date the contract was made. It was a term of each contract that the defendant must use its best endeavours to obtain the approval of the WAPC to the subdivision of the lot from the larger parcel.
3 The defendant applied to the WAPC seeking its approval to subdivide the lots, the subject of the contracts. That application was refused. The defendant asserts that because no approval for the subdivision was obtained within six months of each contract being made, each contract is at an end. The plaintiffs assert that the defendant failed to use its best endeavours to obtain the approval of the WAPC to the subdivision. They assert that the defendant cannot rely upon its own breach of contract to bring the contracts to an end. Alternatively, they seek damages for breach of contract. It was, however, agreed that no assessment would be made of the damages to which the plaintiffs might be entitled until the issues relating to liability and the appropriate form of relief, if any, had been resolved.
4 For the reasons which follow, I have concluded that the plaintiffs have failed to establish that the defendant breached its obligation to use best endeavours to obtain subdivision approval. I have therefore concluded that the plaintiffs' claims must be dismissed.
The facts
5 The parties provided me with a statement of facts which were agreed between them. A bundle comprising most of the relevant documents was
(Page 6)
- tendered by consent at the commencement of the trial. Evidence was taken from a number of witnesses. The findings which follow are taken from a combination of those sources.
6 In the end, the factual differences between the parties were confined to limited aspects of what took place at a meeting held at the Royal Perth Yacht Club in Perth on 28 February 2007, prior to entry into any of the contracts. For reasons which follow, it does not appear to me that anything of substance turns upon the resolution of the limited areas of factual controversy, and that the evidence given in respect of the pre-contractual negotiations is irrelevant. However, in case a different view is taken on appeal, I will set out my findings on the disputed topics, together with my reasons for those findings.
7 The defendant, P & B Corporation Pty Ltd (P & B) is the owner of Lot 715 on Deposited Plan 173019, being the land the subject of certificate of title volume 1529 folio 691 (the resort site). The resort site has an area of 3.4398 hectares. It is situated on the corner of Warne Street and Truscott Crescent in Exmouth. It was formerly the site of the Norcape Lodge. Its eastern boundary abuts a reserve which adjoins the Exmouth Gulf.
8 The resort site is situated within the Shire of Exmouth. It is within the area of Town Planning Scheme No 3 (TPS No 3) promulgated by the Shire of Exmouth. Under that scheme, the land is zoned 'tourist'. Within that zone, land may be used for holiday accommodation, or for a motel and restaurant without further approval by the Shire. Eight other uses, including use as a caravan park, hotel, service station and shop may be permitted if expressly approved by the Shire. Use of the land for the purposes of a dwelling, or residential building, is not permitted.
9 Mr Barry Humfrey is a director and shareholder of P & B. He has been primarily responsible for the development of the resort site. In early 2006, he engaged town planning and urban design consultants, Chappell Lambert Everett (CLE) to advise P & B with regard to the prospect of subdividing a portion of the resort site for sale as possible residential sites, in order to generate capital which could be used to fund the cost of head works to be undertaken on the balance of the resort site.
10 During June 2006, Mr MacLennan of CLE corresponded with Ms Vicki Suckling of Tourism WA in relation to that agency's policy on subdivisions of that kind. In an email of 3 October 2006, Ms Suckling advised Mr MacLennan that:
(Page 7)
- Very basically, if you want to subdivide and sell off lots for residential use, we would want to see a commitment from the developer that the resort site will be developed too. In our experience with these issues, many times a developer will flog off the residential component and walk away, leaving the tourist site vacant and then a future developer comes to us and asks for an additional component of residential to be approved to make the tourist development all stack up. The idea of getting residential on a tourist zoned site is to finance the tourist development. The other design issue according to the report is to ensure that all units in the development are designed primarily for tourist occupation, and that the tourist component remains dominant. In this regard, we would prefer to see the development strata titled so that these issues can be controlled in a management statement. Again, we can look at other options as long as the objectives are met (see Recommendation 10).
11 The report to which Ms Suckling was referring was the report of the Ministerial Taskforce to the Minister for Planning and Infrastructure, published January 2006, entitled Tourism Planning Taskforce Report. The taskforce had been appointed by the Minister for Planning and Infrastructure to examine issues surrounding the trend of introducing permanent residential components to tourism developments on land zoned for tourist developments and the strata titling of tourism developments.
12 By email of 4 October 2006, Mr MacLennan advised Ms Suckling of the general nature of P & B's proposal in the following terms;
We are proposing to rezone the western most portion of the site (4821 m2) to Residential-R30 to accommodate the 12 lots, as the current scheme provisions do not allow for residential uses within the Tourist zone. The creation of 12 residential lots will enable the funding of the resort site, while still maintaining the integrity of the Tourist zone. We have reviewed the recommendations of the Taskforce report, and believe that the proposal is in keeping with it, in that we are using less than 25% of the site (14% to be precise) for residential, and are proposing the residential component on the 'least' desirable part of the site from a tourism perspective. A market demand study was prepared for the site in 2004 by Ray Bird and Associates, which again supports a component of the site being used for residential, given the large number of lands currently available within close proximity to the subject site for tourism pursuits, as well as the current market demands for serviced apartments within Exmouth (a copy of which can be supplied in due course).
We propose lodgement of a rezoning request with Council in the near future, which in turn will be referred to DPI and TWA as part of their processing, however we are seeking you [sic] preliminary thoughts/comments on our proposal prior to commencing the formal processing of this development.
(Page 8)
- Can you please review the attached plan and provide preliminary comments at your earliest convenience. Let me know if you'd like to discuss this further.
13 By email of 9 October 2006, Ms Suckling responded to Mr Everett of CLE. She advised that in principle, Tourism WA did not object to the proposal to provide a component (14%) of residential on the subject site. She also advised that Tourism WA would prefer that the entire site remained zoned 'tourist' or similar, instead of rezoning a portion of the site to residential zoning. She also advised that the preferred form of subdivision of a tourist-zoned site would be through a survey strata, rather than a green titled subdivision. The reason for that was 'to ensure that the predominant use of the site remains as tourism', and to 'allow for appropriate conditions to be imposed to ensure that the entire development operates as an integrated tourist facility'. In that context, Ms Suckling advised that the intent of allowing for a component of residential use was to 'help finance the development of the tourist facility'. To that end, conditions could also be 'imposed to provide assurances that the residential component could not be sold off', leaving the tourist component vacant.
14 During October 2006, Ms Phillida Rooksby took over responsibility for furthering the subdivision proposal within CLE. On 9 November 2006, she wrote to Ms Suckling providing a detailed proposal for the subdivision, together with submissions in support of that proposal. It is clear from the terms in which she wrote that the rationale for the proposal was to permit owners of the subdivided lots to have the flexibility to use buildings constructed on those lots either for permanent or semi-permanent accommodation, or to let them out for short-term use to holiday makers, as they chose. The evidence does not establish whether any substantive response was received to that letter.
15 On 22 November 2006, Ms Rooksby wrote to the Shire of Exmouth, requesting the initiation of an amendment to TPS No 3, so as to apply, as an additional use, the use of 'dwelling' to the portion of the resort site which was proposed for subdivision. TPS No 3 incorporates by reference the definitions of terms defined in the Residential Planning Codes. In those codes, the term 'dwelling' is defined to mean:
A building or portion of a building being used, adapted or designed or intended to be used for the purpose of human habitation on a permanent basis by a single person, a single family, or no more than six persons who do not comprise a single family.
(Page 9)
16 Ms Rooksby's letter enclosed a document entitled 'Scheme Amendment Report' prepared by CLE. In the portion of that document entitled 'Introduction' it is stated that:
A major redevelopment of the site is proposed, comprising a new tourist resort. Use of a small component of the site (around 14%) for potential use for permanent residential accommodation is also proposed to provide for permanent and medium term stay, and to assist in funding infrastructure required for the resort. The purpose of this rezoning proposal is to enable the subdivision and development of the proposed residential component of the site.
17 In the portion of the document headed 'Overview of Proposal', it is stated:
The Shire's Town Planning Scheme No. 3 does not permit 'Dwelling' uses within the 'Tourist' zone, and as such, rezoning of the 4821 m2 portion of Lot 715 along Truscott Crescent to apply 'Dwelling' as an 'Additional Use' in Schedule 2 of the Scheme is sought (refer Proposed Zoning plan at rear), to enable its subdivision and potential use for permanent inhabitation. The application of an 'Additional Use' will allow the flexibility for these sites to be used for short, medium or long term tenure and is considered more appropriate than complete rezoning to residential for this reason, and also because it allows the application of conditions against the use. A density coding of R25 is proposed. This requires a minimum lot size of 320m2 and an average of at least 350m2, with lots of between 400 and 440m2 proposed (refer Figure 4 - Proposed Subdivision).
18 In the section of the report headed 'Key Issues', it is stated:
The dwellings, which may be leased for short and medium stay, as well as permanently inhabited, will be offered the opportunity to lease through the resort and to utilise its facilities (for an appropriate annual fee). Notations of this will be provided to purchasers, who will also be specifically advised of the resort and its potential impact on amenity, to ensure common understanding of this. Notwithstanding this, the proposed centralised and professional management of the resort (details of which are emerging as the proposal is advanced) should minimise any potential land use conflicts.
19 Under the heading 'Conclusion', the report states:
There is a strong demand for both resort-style holiday and permanent residential accommodation within the Exmouth locality. This proposal seeks to apply R25 single house (permanent residential) additional use to a small portion (14%) of the site which will both assist in meeting this demand, contribute towards funding necessary head works and thus facilitate to the early development of another much needed, high quality resort. The proposal responds well to state and local planning objectives,
(Page 10)
- and has been formulated in consultation with stakeholders from both levels of government.
20 Indicative drawings of the proposed resort, and a subdivision plan, were attached to the Scheme Amendment Report.
21 The council of the Shire of Exmouth considered the proposal to initiate the amendment at its meeting on 14 December 2006. By letter dated 19 December 2006, the town planner of the Shire of Exmouth advised Ms Rooksby that the council had resolved to amend TPS No 3 to add an additional use of 'dwelling' to the portion of Lot 715 proposed for subdivision on conditions which included:
1.3 Dwelling designs for each lot to be prepared by the resort developer and be harmonious with the resort design.
1.4 Each lot to be under a management arrangement with the resort to address;
a) Absent landowner dwellings should be made available for occupancy by visitors.
b) All lot landowners having year round access to resort facilities
c) Maintenance of dwellings and gardens by the resort
d) All lot owners to build as per plans prepared by the resort.
23 In early February 2007, P & B engaged J Napier Holdings Pty Ltd, trading as Ray White Real Estate Exmouth, as selling agents for the lots which were proposed for subdivision. Mr Jeff Napier was the agent responsible for the sale of the lots. Mr Napier had previously acted as agent for the sale of property in the Exmouth area to Mr Gary Stevens. In early 2007, Mr Stevens asked Mr Napier if there were any blocks available for sale in the Exmouth area. Mr Napier had heard of the proposed subdivision of the 12 lots at the resort site through Mr Ken Downes, a sales consultant engaged by Ray White Real Estate Exmouth,
(Page 11)
- and who had a long-standing relationship with Mr Humfrey. After making inquiries, Mr Napier advised Mr Stevens that there would be 12 lots coming up at the site, but they were still subject to subdivisional approval. A few days later, after making further inquiries through Mr Downes, Mr Napier advised Mr Stevens that the developer was willing to sell 11 out of the 12 lots at a price of $280,000 each. After some discussion, Mr Stevens proposed a price of $260,000 for each lot. Mr Napier again communicated with Mr Humfrey through Mr Downes and was told that a price of $260,000 would be acceptable. Mr Napier advised Mr Stevens that the developer would accept a purchase price of $260,000 per lot, with a 5% deposit, but only if all sale contracts were signed up at once.
24 Mr Stevens contacted a friend of his, Mr Sean Lennon. Mr Lennon and his wife, Wendy, are the eleventh plaintiffs. Mr Stevens advised Mr Lennon of the opportunity to purchase a lot. Mr Lennon contacted Mr Napier on about 16 February 2007, and had a general discussion with him in relation to the project and the lots.
25 Mr Lennon discussed the possible purchase of a lot with his wife. They decided to proceed. They attended Mr Napier's office in Exmouth on 27 February 2007. Mr Napier had prepared a contract for them to sign. There was more discussion in relation to the purchase. Mr Lennon accepted that in the course of that discussion Mr Napier told him that a house which they constructed on the lot could be used either for long-term use or for short-term use through the resort. Mrs Lennon was not sure whether that was said. However, she stated that she had left all the talking up to her husband - she was 'just happy about getting the block' so she 'didn't really listen to too much' (ts 247). I find that Mr Napier advised Mr and Mrs Lennon that they could use the lot either for permanent occupation or for short-term holiday rental if they chose.
26 Mr and Mrs Lennon signed the offer which had been prepared by Mr Napier at his office on 27 February 2007. They offered to purchase the lot numbered 12 on the subdivisional plan which was annexure B to the offer, being the northernmost lot in the proposed subdivision. They offered to pay $260,000, of which $13,000 would be paid by way of deposit within seven days of acceptance of the offer. Settlement was to occur 21 days after the issue of the certificate of title.
27 The foot of the first page of the offer records that 'annexure A and B form part of and are included in this contract'. Annexure A was in the following terms:
(Page 12)
- The purchaser is aware that the lot the subject of this contract as identified on Annexure 'B' is subject to survey and that the sub division development is conditional upon approval by the Shire of Exmouth and all other relevant authorities.
The purchaser is further aware that the lot is to be purchased as vacant strata and will form part of the overall Norcape Lodge Resort development, and will be subject to development guidelines.
28 That annexure was signed by Mr and Mrs Lennon, and in due course, by Mr Humfrey on behalf of P & B.
29 As I have mentioned, annexure B to the Offer is a subdivisional plan. Also attached to the Offer was a document entitled 'Disclosure Statement' which contained information relating to the sale of a strata titled lot.
30 Clause 3 of the Offer provided that:
The 2002 General Conditions are incorporated into this Contract so far as they are not varied by or inconsistent with the Conditions or special Conditions of this Contract.
31 This clause refers to the document entitled Joint form of general conditions for the sale of land (2002 revision) published by The Law Society of Western Australia and the Real Estate Institute of Western Australia (the General Conditions).
32 Clause 13 of the General Conditions relevantly provides:
Subdivision
13.1 When Clause applies
This clause applies only if the Land is not a Lot at the Contract Date.
13.2 Contract conditional
The Contract is conditional on the following.
(a) An application for the subdivision of the Lot from the Original Land being lodged with the Planning Commission within 3 months after the Contract Date.
(b) The Planning Commission granting approval for the subdivision of the Lot from the Original Land within 6 months after the Contract Date, or any longer period as specified in:
- (1) the Contract; or
(2) a subsequent agreement in writing between the Parties.
- 13.3 Further condition for subdivision
(a) The Contract is also conditional on the following.
(1) The Planning Commission endorsing approval on a Subdivision Plan within 6 months after approval for subdivision by the Planning Commission.
(2) The Subdivision Plan being In Order for Dealing within 3 months after the date of endorsement of approval by the Planning Commission in accordance with subclause (1).
(b) Each period specified in subclause (a) will, if applicable, be extended as specified in:
(1) the Contract; or
(2) a subsequent agreement in writing between the Parties.
(a) The Seller must, if the Seller has not already done so, lodge an application with the Planning Commission for the subdivision of the Subdivision Lot, from the Original Land, within 15 Business Days after the Contract Date.
(b) Following the lodgment of the application in accordance with subclause (a), the Seller must use best endeavours to:
(1) obtain the approval of the Planning Commission, to the subdivision of the Subdivision Lot from the Original Land; and
(2) subject to the approval of the Planning Commission to the subdivision, arrange for preparation of a Subdivision Plan including the Subdivision Lot, and for the Subdivision Plan to be:
(A) lodged at DOLA; and
(B) endorsed as in Order for Dealing,
as soon as practicable.
- If the Planning Commission grants approval for the subdivision of the Lot from the Original Land subject to a condition with which either the Seller or the Buyer, acting reasonably:
- (a) is unwilling to comply with; or
(b) considers it to be prejudicial,
the Party who:
(c) would be bound to comply with the condition; or
(d) is prejudiced by the condition,
- may within 10 Business Days of being notified of the condition elect by Notice to the other Party to withdraw from and terminate the Contract.
- 13.6 …
13.7 Termination of Contract
(a) If:
(1) any condition specified in this clause is not satisfied within the time specified for satisfaction of that condition; or
(2) a Party withdraws from, and terminates the Contract, following the imposition of a condition by the Planning Commission
subclause (b) will apply.
- (b) Where subclause (a) applies, the following apply.
(1) The Deposit and any other money paid by the Buyer under the Contract, must be promptly repaid to the Buyer.
(2) If the Deposit has been invested by the Deposit Holder in accordance with clause 1.9, the Buyer will be entitled to the interest on the Deposit.
(3) If any other money has been paid to the Deposit Holder by the Buyer, and invested by the Deposit Holder with a Deposit Financial Institution, the Buyer will be entitled to the interest on that other money.
- (4) Subject to subclause (1) to (3), no Party will have any claim or right of action against the other arising from the termination, except in respect to any matter which arose before the termination.
- 13.8 …
33 Under cl 26 of the General Conditions, the expression 'Planning Commission' is defined to mean the WAPC.
34 P & B accepted the offer to purchase made by Mr and Mrs Lennon, and Mr Humfrey signed the offer to that effect on 6 March 2007.
35 In the meantime, as a result of a conversation with Mr Stevens, on 28 February 2007, Mr Napier travelled to Perth for a meeting with prospective purchasers of the lots, who had been introduced to the prospect by Mr Stevens. The meeting was held at the Royal Perth Yacht Club at 6.00 pm on 28 February 2007. It lasted between 1 and 1-½ hours. Apart from Mr Napier, the persons present were:
(a) Ms Deborah O'Rourke - she and her husband, Mr Grant O'Rourke, are the first plaintiffs;
(b) Ms Julie Harris - who is the wife of the second plaintiff, Damien Harris;
(c) Ms Robin Wegner and her husband Mr Rodney Wegner, who are the third plaintiffs;
(d) Mr Gary Stevens, who is the husband of the fourth plaintiff, Ms Geraldine Stevens, a director of the fifth plaintiff, Goldpeak Pty Ltd, and the brother-in-law of the sixth plaintiff, Ms Hilary Stevens;
(e) Mr Jeff Carger, who is the husband of the seventh plaintiff, Ms Anna Carger;
(f) Mr Ronald Sharpe, who is a director of the eighth plaintiff, Madison Enterprises Pty Ltd;
(g) Ms Elizabeth Bailey, who with her husband, Mr Alan Bailey, are the ninth plaintiffs;
(h) Mr Johnson Kitto, who is the de facto husband of Ms Krysten Leopardi, and the brother-in-law of Ms Ann Flower, who together are the tenth plaintiffs;
(Page 16)
- (i) Mr Andrew McIntyre, whom Mr Stevens requested attend the meeting in order that he might give financial advice to prospective purchasers.
36 Those attending the meeting sat around a lengthy table on a balcony overlooking the Swan River. For some who attended, who knew each other, it was a partially social occasion. Drinks and snacks were purchased from time to time by people who left the table to get them from the bar. Not all those present were at all times engaged in the one conversation, in the sense that there were side conversations from time to time. It is clear from the evidence that not all persons present heard everything that was said at the meeting.
37 Evidence was given by everybody who attended the meeting. There were differences in their recollection of what was said. That is not surprising, given the nature of the meeting, and the passage of time between the meeting and the trial. I am satisfied that all those who gave evidence did their genuine and honest best to recollect what was said at the meeting. There was nothing in the demeanour of any of the witnesses that would cause me to doubt that they were doing their best to recall what was said. The differences between them are, I think, due to the imperfections of human memory rather than any deliberate attempt on anybody's part to contrive their evidence.
38 There was substantial agreement amongst almost all those present as to a number of topics which were discussed, and a number of things that were said by Mr Napier. The preponderance of evidence establishes, and I find, that Mr Napier told those present that the price for each lot would be $260,000, and that each block would have an area of approximately 400 square metres. He also told those present that a non-refundable deposit of 5% would be required within seven days of entry into the contract, and that it would be held in the trust account of Ray White Exmouth. He also advised all those present that all eleven lots had to be purchased together, as the developer was not interested in selling piecemeal.
39 Mr Napier also advised those present that building on their lot would be subject to compliance with design guidelines which were in the course of preparation, as part of the overall development of the resort. He also advised those present that bookings for holiday makers had to be arranged through the resort managers, on behalf of the owners. He also advised those present that those using the buildings to be constructed on the lots which were to be sold would have full use of all resort facilities.
(Page 17)
40 Mr Napier also advised all those present at the meeting that the lots had not yet been created, and were subject to survey, although he did not expect that to pose a problem. He estimated that the subdivisional process would take between six and nine months, after which titles would issue and settlement would take place.
41 There were three issues upon which the evidence diverged. Those issues were:
(a) whether there was any discussion of the zoning of the land;
(b) whether a document prepared by Mr Napier and headed 'Norcape Lodge strata residential blocks' was provided to those present at the meeting;
(c) whether Mr Napier advised those present at the meeting that the lots could be used either for permanent residential use, or rented out to holiday makers.
Zoning
42 Mr Napier's evidence, given by the adoption of a written witness statement, was that he said words to the effect that the lots were subject to a 'rezoning of the land from tourist to residential'. However, later in his written statement, he stated that he did not recall specifically discussing the current zoning of the land being tourist. He was not cross-examined on either statement, notwithstanding that, by the time he was called, virtually every person who was present at the meeting, with the exception of Mr Johnson Kitto, had denied that there was any discussion about the zoning of the land. Mr Kitto's evidence was that although he did not recall a discussion about zoning, he conceded that it might have been discussed.
43 The failure to cross-examine Mr Napier on this issue was a significant oversight. In other circumstances, such a failure might preclude a submission that his evidence on the subject should be rejected. However, in the circumstances of this case, given the somewhat equivocal nature of Mr Napier's evidence on the subject, and the preponderance of the evidence of those present at the meeting, and my view that this is a peripheral factual issue in any event, I do not consider that the failure to cross-examine on the point should preclude my acceptance of the overwhelming preponderance of evidence to the effect that there was no discussion on the point. Accordingly, I find that there was no discussion in respect of the zoning of the land at the meeting on 28 February 2007.
(Page 18)
Was Mr Napier's document distributed at the meeting?
44 Mr Napier's evidence-in-chief was to the effect that prior to the meeting, he had put together a package of documents which included a document entitled 'Norcape Lodge Strata Residential Blocks' which he had prepared after discussion with Mr Downes, and that he had distributed a package to each of the persons present at the meeting. However, all of the persons present at the meeting denied receiving the document entitled 'Norcape Lodge Strata Residential Blocks'. The only witness who was slightly equivocal in this regard was Ms Harris, who stated that there was an A4 piece of paper present at the meeting, on which she made some notes. However, she could not, and did not, say that the A4 piece of paper to which she referred was the document which had been prepared by Mr Napier entitled 'Norcape Lodge Strata Residential Blocks'. None of the plaintiffs discovered the document. All denied ever having the document in their possession.
45 In the course of cross-examination, Mr Napier's attention was drawn to the fact that all present denied receipt of the document. He accepted that it could be the case that he had not provided it to those at the meeting, but he was certain that he had it with him because he had used it as his note of what to say.
46 Mr Downes gave evidence that a couple of days after the meeting at the yacht club, Mr Napier returned to Exmouth and they discussed the events of the meeting. During the discussion, Mr Downes picked up one of the sale contracts which Mr Napier 'had signed up', from among a bundle of papers which Mr Napier had. Mr Downes said that in the course of undertaking that exercise, he noticed the document which Mr Napier had prepared setting out the salient features of the transaction, following an earlier discussion with Mr Downes. Mr Downes' recollection of seeing the document in this way was not challenged in cross-examination.
47 I accept the evidence of those present to the effect that they were not given the document at the meeting. It is highly improbable that they would all be mistaken in this respect, and equally improbable that none of them would have retained or discovered the document. I also accept the evidence of Mr Napier to the effect that he had the document with him and used it as a note to remind him of the points to be discussed. There is a strong co-incidence of topics between the items on the document, and the topics which, on the evidence, were undoubtedly discussed. However, I also accept that Mr Napier did not stick strictly to the script provided by
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- the notes and, for example, may have omitted reference to some items - such as the reference to zoning which is found on the note. The evidence of Mr Downes is not inconsistent with this conclusion, as it is quite possible that the document he saw in Exmouth after the meeting is the document Mr Napier had used to remind himself of the topics to be addressed.
Permanent use
48 Mr Napier's evidence, in the form of the written statement he adopted, was to the effect that he advised those present at the meeting that the lots which they purchased could be used for long-term use by them or rented out long term by them, or could be used as holiday homes and rented out when not used by the owners. Despite the fact that a number of persons present at the meeting had by then given evidence which was inconsistent with this evidence, Mr Napier was not cross-examined upon these assertions. That omission makes it significantly more difficult to accept the plaintiffs' submission that I should reject the evidence of Mr Napier on this topic.
49 Mr Kitto, Mr Wegner and Mr Carger gave evidence to the effect that Mr Napier did not say anything about the lots being used for a permanent or long-term residence, although Mr Carger conceded that he has hearing difficulties.
50 Ms Bailey, Mr McIntyre and Mr Sharpe could not recall Mr Napier talking about use of the land for long term or permanent residential purposes, but would not deny that it may have been discussed.
51 Mr Stevens affirmed the truth of a written statement in which he asserted that there was no discussion about use of the land for permanent or long-term residential purposes. However, in cross-examination, he was taken to a portion of the affidavit which he swore in support of an application for interim injunction on 30 November 2007 in which he deposed, in relation to this meeting:
I didn't want to purchase the lot to build any permanent residence on it, and was told at the meeting by Deborah O'Rourke, Mrs Julie Harris, Rod and Robin Wegner, neither did they. To the best of my knowledge, my wife and sister in law have never wanted to build any permanent residence other than their existing homes in Serpentine. Mr Kitto, Ms Leopardi and Mrs Bailey told me before the 28 February meeting at RPYC that they wouldn't want to construct a residence in Exmouth. All of the plaintiffs (except the 11th plaintiff - who wasn't at the meeting in any event) live in
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- Perth and have told me that they would not want to build or live in any dwelling in Exmouth.
52 In the course of cross-examination, Mr Stevens confirmed the truth of that portion of his affidavit. As a consequence, he accepted that he could not be sure that Mr Napier did not say something at the meeting about purchasers being able to use the land for either long-term or short-term accommodation.
53 It is also of some significance that the affidavit sworn by Mr Stevens was prepared by Mr Johnson Kitto who is a solicitor who was then acting for the plaintiffs. The fact that Mr Kitto prepared an affidavit in which Mr Stevens deposes to discussion at the meeting in respect of use of the land for permanent residential purposes causes me to doubt the accuracy of his present recollection to the effect that it was not discussed.
54 Ms Deborah O'Rourke confirmed that she told Mr Stevens at the meeting that she and her husband did not want to build a permanent house on the land. She accepted in cross-examination that Mr Napier could well have said words to the effect that the purchasers could either live in the dwellings on the land permanently, rent them out long-term or use them as holiday homes and rent them out when they were not using them. When it was put to her that Mr Napier would give evidence to the effect that the discussions all took place on the basis that long-term staying in the property was an option, she agreed with that proposition.
55 In the course of cross-examination, Ms Robin Wegner was asked, in relation to statements made by Mr Napier at the meeting (ts 162):
Counsel: But he also did talk about how the houses could be used for long-term use by the individual or rented out long-term, didn't he?
Ms Wegner: Yes, apparently that was an option.
56 Ms Julie Harris could not remember any discussion about use of the land for permanent residential purposes, but acknowledged that she could not remember the detail of the conversation because she was just thinking of the land as a vacant block. She accepted that there could have been discussion on that subject.
57 Having regard to the evidence as a whole, including in particular the affidavit sworn by Mr Stevens and the apparently clear recollection of Ms O'Rourke and Ms Wegner to the effect that there was discussion at the meeting about use of the land for a permanent residence or long-term use, I accept Mr Napier's evidence to the effect that he made such statements
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- during the meeting. It seems to me to be most likely that the persons who cannot now recall those statements being made during the meeting were not particularly interested in that subject at the time the statements were made, because they had no intention of using the land for such purposes.
The contracts
58 I have already referred to the contract between the Lennons and P & B, which was entered into on 6 March 2007. Contracts between all the other plaintiffs and P & B were entered into on identical terms, save for the specification of the particular lot sold, between 6 March and 29 March 2007. It follows that the time for satisfaction of the condition requiring the grant of approval by the WAPC for the subdivision of the lots varied between 6 September and 29 September, as between the various plaintiffs. In respect of eight of the plaintiffs (first, second, third, fourth, fifth, seventh, eighth and eleventh) the relevant date was 6 September 2007, for the sixth plaintiff, 8 September 2007, for the tenth plaintiffs, 16 September, and for the ninth plaintiffs, 29 September 2007.
The application for subdivision approval
59 On 16 April 2007, Ms Rooksby forwarded to the WAPC an application for the subdivision of 12 lots being the 11 lots the subject of the contracts with the plaintiffs, and a twelfth to be retained by P & B. It seems the application was received at the WAPC on 17 April 2007. The application was therefore lodged within the time specified by cl 13.2(a) of the General Conditions (which was a condition to which each contract was subject), but outside the time specified by cl 13.4(a) of the General Conditions (except in the case of the ninth plaintiffs, in respect of whom the contract date was 29 March 2007). However, the plaintiffs do not allege any breach by P & B in this respect in their statement of claim. That may be because, for reasons which will appear, any relatively minor delay in the lodgement of the subdivision application does not appear to have had any significant effect upon subsequent events.
60 The subdivision application comprised a standard form printed by the WAPC and completed by Ms Rooksby, a letter dated 10 April 2007 from Ms Rooksby to the Department of Planning and Infrastructure (which provides administrative support to the WAPC), eight copies of the plan of the proposed subdivision, a copy of the certificate of title, a draft concept plan for the resort site, and a copy of the Scheme Amendment Report which have been submitted to the Shire of Exmouth.
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61 The printed form prepared by the WAPC requests applicants to provide details and particulars of the application. In many instances, the information is provided in the form of a tick within a box. In other instances, very limited space is provided to respond to the questions posed in the printed form.
62 One such question is posed in the following terms on the printed form:
8. Proposed land use/development (please state the purpose of the subdivision and specify the proposed use of each of the proposed lots).
63 Adjacent to those words on the printed form, Ms Rooksby wrote:
Resort and 12 survey strata residential (permanent and/or short stay) dwellings.
64 In the course of cross-examination, Ms Rooksby was asked to respond to a number of criticisms that were directed at the terminology she had used in answering the question posed by the form. Before dealing with those specific criticisms, it is appropriate to record that at the time Ms Rooksby gave her evidence, I gained the strong impression that she was providing thoughtful, carefully considered, direct and unequivocal answers to the questions she was asked. Having now had the opportunity to review the transcript of her evidence in detail, I have formed the view that her evidence was entirely logical, plausible and consistent with all the objective evidence, including the contemporaneous documents. I accept her evidence in its entirety.
65 The first criticism directed to Ms Rooksby in relation to her brief description of the proposed land use was that she had failed to consult the plaintiffs, as prospective purchasers of the lots. However, as she explained in evidence, it was quite possible that the owners of the subdivided lots might change both before and after the erection of residential buildings on those lots. Accordingly, in her view it would have been unwise to rely upon the idiosyncratic views of the present prospective purchasers. Rather, in her view, it was more appropriate to identify the range of likely uses to which any and all prospective purchasers of the subdivided lots would put the land.
66 Ms Rooksby also made the point that while there was no doubt that the WAPC would be interested in the use to which the subdivided land was to be put, the process of subdivision does not control land use. Rather, as Ms Rooksby pointed out, land use is controlled by zoning
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- under the relevant local town planning scheme, in this case TPS No 3 of the Shire of Exmouth.
67 In my view, the explanation given by Ms Rooksby for not consulting the plaintiffs as prospective purchasers of the lots in relation to the uses to which they proposed to put the lots is entirely reasonable. It is one of the reasons why the pre-contractual discussions between Mr Napier and the plaintiffs or their representatives are irrelevant.
68 Next, Ms Rooksby was criticised for having linked the two possible uses to which residential buildings on the lots might be put by both the conjunctive and disjunctive - that is 'permanent and/or short stay'. It was suggested to her that this terminology was ambiguous and confusing.
69 Ms Rooksby pointed out that her terminology was intended to accommodate the simple fact that the residential buildings to be constructed on the lots were unlikely to vary in size or configuration depending upon whether the occupants of those buildings were permanent or short-stay holiday makers. As she pointed out, the residential building, which might be called a 'house' for the avoidance of controversy, could be used for either permanent or short-term occupancy. As she also pointed out, the use to which the building was put might vary from time to time, and from owner to owner. Accordingly, in her view, the terminology which she had used was apt to convey that fairly obvious fact. I agree with that view.
70 Next, Ms Rooksby was criticised for having used the word 'dwellings' in the text to which I have referred. It was suggested to her that in technical town planning parlance, that word usually connotes permanent occupation. That suggestion is soundly based - see, for example, the definition of 'dwelling' in the Residential Planning Codes, which I set out at [15] above. It was suggested to her that the use of the word 'dwelling' in conjunction with the expression 'short stay' gave rise to confusion and ambiguity.
71 Ms Rooksby responded by pointing out that while the word 'dwellings' often did have a connotation of permanent residence when used by town planners, it did not invariably bear that connotation, and could be used in a broader sense corresponding to its common usage - to refer simply to a building designed to be lived in. In her view, when the word was used in conjunction with the expression 'permanent and/or short stay', it would have been obvious to any reasonable reader that the word
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- 'dwellings' was being used in the broader sense. I accept that evidence and agree with her conclusion.
72 Next it was put to Ms Rooksby that her use of the expression 'short stay' was infelicitous because it was not a defined term within TPS No 3, and that it would have been more appropriate for her to use a defined term, such as 'holiday accommodation'.
73 Ms Rooksby accepted that she could have used a term defined in TPS No 3. However, in her view, the expression 'short stay' had a plain and obvious meaning which should and would have been apparent to any reasonable reader of the application, especially when the application form was read in conjunction with her accompanying letter. I accept that evidence and agree with her conclusion.
74 Ms Rooksby's letter of 10 April 2007 to the Department for Planning and Infrastructure comprises four pages. It explains the context of the proposed subdivision, the purpose of the subdivision and advances arguments in support of the approval of the proposed subdivision.
75 Under the heading 'Outline of Proposal', Ms Rooksby wrote:
The application proposes to create 12 single residential lots ranging in size from 400 m2 to 441 m2, and a balance lot of 2.9577 ha on which a resort development is proposed.
76 In cross-examination, it was put to Ms Rooksby that the use of the expression 'residential lots' implied that the lots would be used only for occupation by permanent residents. Ms Rooksby accepted that such an implication could be drawn if the sentence was read in isolation, but pointed out that the uses to which the lots might be put was fully developed in the remainder of the letter. In her view, when the letter is read as a whole, an implication to the effect that the lots were only proposed for permanent use would not be drawn. For reasons which I will develop, I agree with that assertion.
77 After a description of the site, the letter of 10 April 2007 refers to the development of a draft concept plan, following discussions with the Shire of Exmouth, the Department for Planning and Infrastructure, and Tourism WA.
78 After a description of the resort, Ms Rooksby wrote:
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- The twelve residential sites proposed are intended to utilise surplus land for either short stay or residential use and provide a funding stream for the upgrading of infrastructure necessary to the development of the resort.
79 This is one of the passages in the letter which would prevent any reasonable reader from forming the view that the lots were proposed to be used only for permanent residential purposes.
80 Ms Rooksby was also criticised in cross-examination for failing to address aspects of the proposal that were positive to the advancement of tourism. She denied those criticisms. This is one of the passages in the letter which sustain that denial.
81 The next passage in the letter more fully justifies that denial, because it addresses in detail the policy issues identified in the tourism planning taskforce report to which I have already referred, and relates the particular aspects of the proposed subdivision to each of those policy issues. In this portion of the letter, Ms Rooksby addressed such things as the location of the subdivided lots in the area of least tourism value, the provision of lots with separate road frontage, the fact that the area of the subdivided lots was 14% of the site, well under the 25% provided for in the taskforce report, the proposal to develop a management agreement restricting short-stay use to lessees introduced by the manager of the resort and allowing for the shared use of facilities, and the development of design guidelines to ensure that the buildings on the subdivided lots complement, and appear to complement the appearance of the resort.
82 The letter from Ms Rooksby also refers to the initiation of the amendment to TPS No 3 by the Shire of Exmouth to add the additional use of 'dwelling' to the land proposed to be subdivided within the tourist zone. It was suggested to Ms Rooksby in cross-examination that it would have been preferable not to mention the rezoning, because of the impression of permanent occupation which it conveyed. Ms Rooksby rejected that suggestion. She pointed out that it was both appropriate and desirable for an applicant for subdivision to provide full and frank information to the WAPC. She also pointed out that the proposal to add an additional use by amendment to TPS No 3 was a public proposal which might well be known to the Department or the WAPC. Accordingly, in her view, failure to disclose that proposal might raise suspicions on the part of either the Department or the WAPC as to the adequacy of the information provided by the applicant for subdivision.
83 Ms Rooksby's explanation for the course she followed in this regard is entirely reasonable, and I have no hesitation in accepting it.
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84 Under the heading 'Subdivision Application Details', after referring to the proposed amendment to TPS No 3, Ms Rooksby wrote:
Irrespective of the outcome of this, however, the proposed lots could function equally well for short stay. As such, the subdivision is not dependent on the Amendment and so may be considered independently. Alternatively, if this aspect is of major concern, the subdivision approval could be made conditional upon finalisation of the rezoning (though this is not preferred). Concurrent processing of the subdivision with the Amendment is sought because of the need for the sale of the lots being created to fund infrastructure required for the resort and therefore facilitate the primary component.
85 In another portion of the same section of the letter, Ms Rooksby wrote:
Additionally, given the location of the proposed new lots with separate frontage to Truscott Crescent, their independent development (for tourist purposes, under the current zoning, or either short stay or permanent residential under the proposed zoning) represents far less of a 'threat' to tourist development of the area than might normally be expected and therefore should not be of such great concern from TWA's perspective as other examples might generate.
86 It is clear from these passages that Ms Rooksby was proposing that the WAPC might consider and approve the subdivision only by reference to the prospective use of the lots for short-stay accommodation, entirely in conjunction with the management and operation of the proposed resort. In these passages, Ms Rooksby was proposing that it was unnecessary to defer consideration of the application until the amendment to the local town planning scheme had been effected, because subdivision was justified under the current zoning. She was clearly making the point that the subdivided lots could only be used for permanent residential purposes if and when the amendment to the scheme was promulgated.
87 These passages also provide further support for the proposition that no reasonable reader could have been confused as to the uses to which the lots might be put in the future. They also emphasised the significance of the proposed subdivision to the development of tourism. The latter proposition was reinforced by other passages within the same portion of the letter.
88 Under the heading 'Summary and Conclusion', the letter concludes in the following terms:
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- The proposal forms part of a composite plan to realise a high quality resort development on the parent lot, with the subdivision providing for the development of surplus land along a separate street frontage in an independent but integrated fashion. There is a strong demand for residential lots and resort-style accommodation within the Exmouth locality, which this proposal seeks to respond to. The site is considered suitable to accommodate these uses given its proximity to the beach, other tourist facilities, and the Exmouth Town Centre, and the access its street frontages provide, with the subdivision created evenly shaped, serviced lots along the 'lower' amenity of Truscott Crescent. Their development will be pursued in a complimentary [sic] form to the resort (as required under the conditions of the rezoning), and is not considered to in any way undermine the viability or potential of the parent site the intended resort purpose which is being concurrently pursued. Your positive consideration of this proposal is therefore sought.
89 This conclusion reinforces the observations I have made in respect of the lack of ambiguity as to the uses to which the subdivided lots might be put, and the emphasis upon the positive relationship between the subdivision and the development of a tourist resort.
90 Those conclusions would have been reinforced by a reading of the Scheme Amendment Report, to which I have already referred, and which was enclosed with the subdivision application. No reasonable person reading the application form, the letter of 10 April 2007, and the Scheme Amendment Report could have been left in any doubt as to precisely what was proposed, and of the arguments being advanced in support of that proposal.
91 It is the practice of the WAPC to show the status of all applications for subdivision on its website, including the officer responsible for the application, the agencies which are to be consulted by the WAPC in relation to the proposal, and the status of their responses. Following lodgment of the application, Ms Rooksby accessed the website from time to time, and noticed that a number of agencies were to be consulted by the WAPC, including the Shire of Exmouth and the WA Tourism Commission.
92 The website did not, however, identify the officer who had been assigned to the consideration of this application. Nevertheless, on approximately three occasions, Ms Rooksby telephoned the WAPC and attempted to speak to the officer responsible for processing the application. Each time she left a telephone message for that officer to telephone her. She did not receive any telephone call in response. She
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- was not surprised by that, as that had been her common experience in dealing with officers of the WAPC.
93 By letter dated 18 June 2007, Tourism WA responded to the WAPC's request for comment on the proposed subdivision. Tourism WA responded in the following terms:
While it is acknowledged that until the scheme amendment has been approved and gazetted, the land use of the entire site must remain for short stay, the issuing of titles for the future residential component prior to the construction of the tourism component is contrary to Tourism WA's policy and the Tourism Planning Taskforce Report. The case put forward by the applicant that the development is reliant on funding generated by the subdivision is not relevant as funding can be generated through pre-sales of both the tourism and residential components. Tourism WA's experience is that in certain cases the developer may subdivide and sell the residential component off, leaving the tourism component undeveloped, and there is no mechanism in place to enforce the development of the tourism component. Therefore it is recommended that titles be withheld until the tourism component has been substantially commenced. This may mean that this application will need to be deferred until construction has commenced on the tourist component.
Additionally a management statement will need to be prepared to ensure prospective purchasers of the residential component are aware that they are buying into a tourism development.
Notwithstanding the above, should the WAPC resolve to approve the proposal, I have attached a schedule of conditions which should be included on the approval for the strata application.
The proponent is well known to Tourism WA. The agency has been kept abreast of the project proposal and we have every confidence the stated tourism outcomes will be achieved. However, while the capacity of the proponent is acknowledged, there is a need to ensure appropriate safeguards are established to ensure the project does not falter after the residential component is completed (as has happened with several strata-titled tourism developments in Western Australia and Australia).
94 Ms Rooksby was not aware of the nature of the position adopted by Tourism WA until some time after she received the letter from the WAPC advising that the subdivision application had been refused. When she saw a copy of the letter from Tourism WA, she was disappointed that the support which she had expected would be provided by that agency to the subdivision application had not been forthcoming.
95 During June 2007, the WAPC issued Planning Bulletin 83 - Planning for Tourism. Included within that policy statement, is the assertion that in
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- considering any application for the strata subdivision of tourism developments, the WAPC would require a construction and staging programme which demonstrates that common facilities and viable management arrangements are provided for each stage, and the 'inclusion of a management statement for the strata scheme to provide for integrated common management of the units for a minimum period of 25 years as a tourism facility'.
96 By letter dated 5 July 2007, the Shire of Exmouth responded to the WAPC's request for advice in relation to the subdivision application. The letter advised that the Council had resolved, at its ordinary meeting held on 21 June 2007, that it supported the subdivision, subject to conditions, which included a condition to the effect that a memorial be placed on the titles of the subdivided lots to ensure that owners were aware that in the event that TPS No 3 was not amended as then proposed, the lots could only be used for short-stay accommodation.
97 On the same day, 5 July 2007, a report on the application was prepared for consideration by the WAPC. That report, which was obtained under the Freedom of Information Act, was tendered in evidence. However, no witness from either the WAPC or the Department for Planning and Infrastructure spoke to the report or the decision to refuse the application which was made, presumably following consideration of the report. And, of course, the terms of the report were not known to Ms Rooksby, or to any of the parties to these proceedings, at any material time prior to their commencement.
98 In these circumstances, it seems to me that the report has very little, if any, evidentiary value. It does not appear to me to provide any guidance as to the content of P & B's obligation to use best endeavours to obtain subdivisional approval, unless there was some evidence that the position actually adopted by the WAPC could or should have been foreseen by the applicant for subdivision approval (see Parland Pty Ltd v Mariposa Pty Ltd (1995) 5 Tas R 121, 134). There was no evidence to this effect. In the absence of such evidence, at its highest, the report could only shed some limited light on the question of whether, if there was a failure to use best endeavours, that failure was the cause of the refusal of the application for subdivision. And because no evidence was led as to the identity of the person or persons who made the decision to refuse the application, and given that neither party chose to pursue that topic in evidence, the document alone is an unreliable source of any conclusions on the limited issues to which it might be relevant.
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99 By letter dated 9 July 2007, apparently received by CLE on 12 July 2007, the WAPC advised that the application for subdivision had been refused. The reasons for refusal were stated to be:
1. The application does not comply with the Shire of Exmouth Local Planning Scheme No 3. The proposed use of the subdivision is residential, however the site is zoned 'Tourist' in the Scheme and a dwelling is not a permitted use.
2. The proposal does not comply with WAPC Planning Bulletin No 83 Planning for Tourism by reason that neither a construction and staging program nor a management statement for the strata scheme had been provided as required by Recommendation 12 of the Taskforce Report.
3. Approval to the subdivision would set an undesirable precedent for the further subdivision of surrounding lots.
100 The letter also advised that an aggrieved applicant could either apply for a reconsideration of the application by the WAPC, or for a review of the WAPC's decision by the State Administrative Tribunal within 28 days of the date of the decision. The letter advised that if reconsideration was sought, one of the matters to which the WAPC would have regard is whether:
… there is compelling evidence by way of additional information or justification from the applicant/owner to warrant a reconsideration of the decision.
101 Ms Rooksby gave evidence to the effect that when she received the letter advising her of the refusal of the application, she was surprised that she had not previously been contacted by the officer within the department who was responsible for processing the application. In her experience, it was usual for such contact to be made in cases where professional town planning consultants had been engaged, prior to a decision refusing an application, in order that the consultant might be given the opportunity to address any concerns which might be held within the WAPC or the department in relation to the application.
102 Ms Rooksby's view, which she expressed to Mr Humfrey, was that the first reason given by the WAPC for refusal was erroneous, because the subdivision itself was not inconsistent with TPS No 3, as the lots could only be used for permanent occupation if the amendment to TPS No 3 occurred, and her letter had explicitly made that point. In relation to the second reason for refusal, the view formed by Ms Rooksby, and which she conveyed to Mr Humfrey, was that if this had been the only reason for
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- refusal, it is unlikely that it would have resulted in a refusal, but rather would have resulted in the imposition of a condition on approval.
103 Ms Rooksby formed the view that although the third reason given for the refusal of the application was very generally and perhaps cryptically expressed, it was likely to encompass the general considerations that had been raised at the time of consideration of the policy relating to the subdivision of land associated with tourism resorts, and in particular, the risk of fragmented or stalled development. Ms Rooksby conveyed this view to Mr Humfrey.
104 Ms Rooksby attempted to telephone the responsible officer at the WAPC in order to discuss the decision on a number of occasions. She again left a number of telephone messages. Again her calls were not returned.
105 Ms Rooksby gave consideration to the possible courses of action open to P & B and advised Mr Humfrey in relation to them. One option was to request the WAPC to reconsider its decision. However, in her experience, requests for reconsideration were seldom successful unless new or additional information was provided. Ms Rooksby's experience is corroborated by the emphasis given to that subject in the letter of refusal from the WAPC dated 9 July 2007. Ms Rooksby advised Mr Humfrey that she could not readily identify any additional information or material which would satisfy this requirement, so as to give cause for optimism that the WAPC would reconsider its decision. The only additional material she could have provided would have been a construction and staging programme and management statement, but as she did not consider that the second reason given by the WAPC for refusing the application was, of itself, critical, it was her view that the provision of that material was unlikely to result in a favourable reconsideration by the WAPC.
106 The second alternative open to P & B was to seek review of the decision of the WAPC in the State Administrative Tribunal. She discussed that option with Mr Humfrey. She advised Mr Humfrey that because of the significant policy question relating to the splintering of ownership of a tourism site ahead of its development for tourism purposes, and the apparent resistance to such a course by Tourism WA, she was not optimistic that such a review would be successful. It was also her experience, which she communicated to Mr Humfrey, that review by the State Administrative Tribunal would take at least six months, by which time the date for satisfaction of the conditions relating to
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- subdivision would, of course, have passed, and the contracts with the plaintiffs come to an end.
107 In addition to discussing these issues with Ms Rooksby, Mr Humfrey had discussions with Mr David Etherton, of Tourism WA, at about this time. He was advised by Mr Etherton that Tourism WA was concerned that any one of the various purchasers of the subdivided lots could develop something on those lots which was not in line with the rest of the resort development.
108 At around the same time, Mr Humfrey also had discussions with officers of the Shire of Exmouth. In the course of those discussions, he was advised that the Shire would support further attempts to obtain approval to the subdivision provided that design guidelines which incorporated actual house plans of the buildings to be constructed on the lot were prepared. Because of the time and cost involved in the preparation of those plans, and because of his doubts as to the acceptability of that course to the eleven purchasers of the lots, Mr Humfrey did not consider that course appropriate.
109 After taking full account of the advice he had been given by Ms Rooksby, and his discussions with representatives of Tourism WA and the Shire, Mr Humfrey decided not to take any further action in relation to the subdivision application, either by way of application for reconsideration by the WAPC, or by way of application for review by the State Administrative Tribunal. He advised Ms Rooksby of his decision.
110 However, before communicating that decision to the plaintiffs, Mr Humfrey decided to give the matter further consideration. He did so during the course of a business trip to Vietnam. Upon his return from Vietnam, some time between 22 and 24 July 2007, Mr Humfrey telephoned Mr Downes, of Ray White Exmouth, and instructed him to advise the purchasers that the subdivision application had been refused, and that it would be necessary to terminate the contracts. Mr Downes advised Mr Napier, who in turn contacted Mr Stevens and advised him of the position, on or about 30 July 2007. Mr Stevens then notified the other purchasers of the position.
111 On 10 August 2007, Mr Kitto wrote to Mr Napier, advising that the various purchasers did not necessarily accept that the purchase contracts were terminated. In this letter, Mr Kitto also requested information on the extent to which the vendor had exhausted all possible means of obtaining development [subdivisional] approval, including appeal. Mr Kitto also
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- requested the provision of a full copy of the application for subdivisional approval and copies of all responses from the WAPC.
112 By facsimile sent on 13 August 2007, Mr Napier provided Mr Kitto with a copy of the advice of refusal of the subdivisional application which had been received from the WAPC. He did not respond to the request for a copy of the application, although he did not have then have a copy of the application.
113 By letter dated 15 August 2007 to Mr Napier, Mr Kitto repeated his request for a copy of the application for subdivision. In that letter, Mr Kitto also foreshadowed the commencement of legal proceedings.
114 By letter dated 21 August 2007, solicitors acting on behalf of P & B responded to Mr Kitto's letter of 15 August 2007. The letter enclosed a copy of the application for subdivision.
115 These proceedings were commenced in September 2007.
116 In early October, Mr Napier sent to each purchaser a cheque for the amount of their deposit and accumulated interest. Those cheques were returned under cover of a letter from Mr Kitto dated 15 October 2007.
The issues
117 The plaintiffs allege that, in breach of each of the contracts, P & B 'failed to use its best endeavours to obtain the approval of the WAPC to the subdivision, or alternatively failed to submit a competent application at all'. Seven particulars of breach are relied upon in the statement of claim:
1. The purported application … [for subdivision was] 'for the creation of 12 single "residential" lots despite the Resort Site being zoned "Tourist", and despite the plaintiffs not requesting or acquiescing to any such zoning change as part of the subdivision'.
2. The purported application described the proposed use of each of the proposed subdivided lots in terms which were either inconsistent with the 'tourist' zoning of the Resort Site or alternatively were ambiguous as to the proposed use of each of the subdivided lots.
3. Following the submission of the purported application, the defendant failed to make any enquiry of the allocated officer of the Department for Planning and Infrastructure to determine whether there was any matter arising from it that was likely to lead to a recommendation to refuse approval of the application.
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- 4. The defendant failed to make any enquiry of the plaintiffs … to determine whether any of the plaintiffs objected to subdivision approval for a purpose based on the zoning of the land as 'tourist'.
5. The purported application failed to comply with WAPC planning bulletin number 83 in that neither a construction and staging program nor a management statement for the strata scheme were provided.
6. The defendant failed to communicate to the plaintiffs the decision of the WAPC to refuse approval for the subdivision and failed to consult with the plaintiffs about whether to:
(i) abandon the purported application and replace it with a more appropriately drafted one;
(ii) seek a reconsideration of the decision to refuse the purported application; or
(iii) appeal the decision to refuse the purported application.
7. The defendant failed to seek advice from a town planner other than Chappell Lambert Everett, or legal advice, about whether to:
(i) abandon the purported application and replace it with a more appropriately drafted one;
(ii) seek a reconsideration of the decision to refuse the purported application; or
(iii) appeal the decision to refuse the purported application.
119 In addition, by the amended reply, the plaintiffs assert that the failure of the defendant to seek either reconsideration or review of the WAPC's refusal of the application, or to abandon it and replace it with a more appropriately drafted application, was a breach of the obligation to use best endeavours to obtain subdivisional approval.
120 P & B denies that it breached its contracts with the plaintiffs in any of the respects alleged. It asserts that the plaintiffs were all aware, prior to entering into their contracts, that there was a proposal to rezone the land for residential use. P & B admit that it did not consult the plaintiffs in relation to the application for subdivision, nor did it seek independent town planning or legal advice with respect to the course to be followed following refusal of the subdivision application, but asserts that it was
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- under no obligation to do so, and therefore was not in breach of its contractual obligations by failing to do so. P & B counterclaims for a declaration that the contracts with each of the plaintiffs are at an end by reason of the failure of the condition to which they were subject.
121 Each of the plaintiffs has also pleaded that they are ready, willing and able to perform their obligations under the contract. P & B has denied that allegation. No evidence was led on the topic.
The expert evidence
122 Expert evidence was led from three town planners - Mr David Maiorana, Mr Peter Webb, and Ms Rooksby. All are experienced and qualified town planners. As no challenge was made to the expertise of any, it is unnecessary to set out their qualifications and experience. Their evidence took two forms - written statements and reports which were tendered in evidence, and their oral evidence. Their oral evidence was taken concurrently.
The written evidence
Mr Maiorana
123 Mr Maiorana was engaged to provide expert evidence by Mr Kitto, at a time when Mr Kitto was acting as solicitor for the plaintiffs. Mr Kitto briefed Mr Maiorana orally as to what was required. This was unwise. Mr Kitto was a prospective witness in the case. His wife and sister-in-law are plaintiffs. While impartiality is not a condition of the admissibility of expert evidence (yet), the weight to be attached to opinion evidence will of course be affected by the impartiality and detachment with which it is given. An oral briefing session between a party, or, in this case, a person whose interests are closely allied to those of a party, and an expert witness necessarily affects adversely the court's assessment of the independence and impartiality of the witness.
124 Mr Maiorana was asked to address the question of whether the application for subdivision constituted the use of best endeavours. In his written report, he took as his starting point the reasons for refusal of the application given by the WAPC. Using those reasons, he made assumptions, and drew inferences with respect to the reasoning process within the WAPC that led to refusal of the application. He then related those assumptions and inferences to the terms of the subdivision application.
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125 In my opinion this process of reasoning is fundamentally flawed. The question of whether or not the subdivision application constituted the use of best endeavours is to be assessed by reference to the circumstances which existed at the time the application was made, at least up until the time it was determined. The actual decision on the application, and the reasoning process employed by the WAPC cannot inform the question of whether best endeavours were used prior to the decision being made. In the absence of evidence that the reasons for refusal were foreseeable, the reasons given go only to the question of whether there is a causal link between any established failure to use best endeavours at the time the application was submitted and the refusal of the application. The question of whether there has been a failure to use best endeavours must be assessed objectively, and in respect of the terms of the application, must be assessed by reference to the circumstances which existed prior to the decision on the application. Of course different considerations apply to the allegations of failure to use best endeavours following receipt of the decision on the application.
126 In his written report Mr Maiorana initially restricts his consideration to the terms of the printed application form itself. On that basis, he expresses the view that the application relied on an amendment to TPS No 3 which was far in the future and was itself contingent on other processes. However, the printed form should not be read in isolation. When the form is read with the letter and other documents which were submitted with the application, it is clear that the application was not dependent upon an amendment to TPS No 3. Any person reading the application with any experience in planning would have known that unless TPS No 3 was amended, the land proposed for subdivision could not be lawfully used for permanent residential use. The subdivision application was advanced on the alternative basis of use of the lots for tourism purposes only, for that reason.
157 There is a passage in the decision of Hope J in Laidlaw Pty Ltd v Cleverley (1972) 25 LGRA 196 which could be construed as being inconsistent with the authorities to which I have referred. In that case, Hope J observed at 205:
That the council's refusal was on a proper ground cannot be gainsaid, but the plaintiff claims that the defendant should have renewed the application or appealed when, after the refusal, it learned that the council was prepared to reconsider the matter along the lines suggested in the State Planning Authority's circular. I think there are two answers to this claim. In the first place, if the defendant had fulfilled his obligations in respect of the seeking of approval but nonetheless the council refused that approval, he was released from further obligations under the contract, and was not affected by the circumstance that he discovered that had the other party been more active in the matter, consent may have been obtained.
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- To the extent that this passage might be construed as connoting that once a refusal had been obtained, there was no obligation upon the applicant to consider and, if reasonable, pursue an appeal, it is inconsistent with the other authorities to which I have referred and should not, in my respectful opinion, be followed.
The alleged breaches
158 I will now assess the specific allegations of breach of contract made by the plaintiffs, and which I have set out above, in the light of my findings of fact and the principles of law which I have set out.
159 The first alleges breach by submitting a subdivision application for the creation of 12 single 'residential' lots, despite the site being zoned 'tourist' and despite the plaintiffs not requesting or acquiescing in any such zoning change. For reasons which I have set out above, the subdivision application did not request the creation of 'residential' lots. Rather, it requested the subdivision of land. The application was put on the basis of two alternatives as to land use. The first alternative was a possible mix of land uses, including both permanent residential and holiday accommodation, subject of course to the necessary amendment to TPS No 3. The second alternative was to seek the subdivision solely on the basis of the land being used for holiday accommodation. In the circumstances which prevailed at the time the application was lodged, that course was objectively reasonable and prudent. A failure to make any reference at all to the proposed amendment to TPS No 3 to permit the land to be used for permanent residential purposes would have been less than frank and would probably have come to the attention of the WAPC. I find that it is more likely than not that a failure to refer to the prospective use of the land for permanent residential purposes would have been prejudicial to the application's prospects of success. For the reasons I have already developed, the application that was submitted made it abundantly clear that the proposal for subdivision was not dependent upon the amendment of TPS No 3 in order to permit the land to be used for permanent residential use.
160 The alleged breach relies upon a lack of communication between P & B and the plaintiffs.
161 While I have found that the plaintiffs were not aware of a proposal to rezone the land, I have also found that each of them, either directly or through their representative, were advised that the land could be used for either permanent residential purposes or holiday accommodation. I do not consider that a prudent and reasonable person acting in his own interests
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- was under any obligation to consult the plaintiffs with respect to the terms of the application for subdivision. Rather, the obligation of P & B was to take all the steps that a prudent and reasonable person, determined to achieve the success of the subdivision application, would take. The content of that obligation does not depend upon communications between P & B and the plaintiffs. That is another reason why, in my opinion, the pre-contractual negotiations between the parties are irrelevant.
162 The second allegation of breach alleges that the subdivision application described the proposed use of each of the lots in terms which were inconsistent with the 'tourist' zoning of the site or were ambiguous. However, the subdivision application, read as a whole, made it quite clear that under the then current terms of TPS No 3, the land could only be used for holiday accommodation, and argued for the approval of the subdivision on that basis alone. The application also quite properly referred to the proposal to amend TPS No 3 to permit an additional use. For the reasons I have given in my assessment of the evidence, there was no inconsistency between the application and the zoning, nor any ambiguity as to the proposed use of the lots.
163 The third breach alleged is an allegation of failure to make inquiry of the allocated officer of the Department for Planning and Infrastructure between lodgement of the subdivision application and its determination. However, there was no responsible officer allocated to the application on the website of the Department. Ms Rooksby made a number of attempts to contact the relevant officer without success. She expected that she would be contacted before any adverse decision was made. Mr Maiorana confirmed that her expectations in that regard were reasonable. Further, there was a very short period between the completion of the process of consultation with agencies, which was a prerequisite to a determination by the WAPC, and the making of the determination. The opportunities for meaningful communication were therefore extremely limited. In my opinion the steps taken by Ms Rooksby to communicate with officers of the Department were consistent with the steps that might reasonably be expected of a prudent and reasonable person acting in their own interests and determined to obtain the approval, and did not put P & B in breach of its contractual obligations.
164 The fourth alleged breach focuses upon the failure of P & B to consult the plaintiffs 'to determine whether any of the plaintiffs objected to subdivision approval for a purpose based on the zoning of the land as 'tourist''. As pleaded, the allegation is difficult to comprehend. The case seems to have proceeded on the basis that it is to be construed as an
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- allegation of breach by reason of a failure to consult the plaintiffs with respect to the terms upon which the subdivision application was made, and in particular, the reference to the possible use of the land for permanent residential purposes. For the reasons I have given in relation to the first allegation of breach, I do not accept that there was any obligation on P & B to consult the plaintiffs with respect to the terms of the subdivision application.
165 The fifth allegation of breach concerns the failure to provide a construction and staging program and management statement, as required by WAPC Planning Bulletin 83. However, as I have found, that Bulletin was not published until some time after the subdivision application was lodged. Accordingly, counsel for the plaintiffs suggested that this allegation should be construed as a breach by failing to lodge the required documents after the Bulletin had been published.
166 The evidence of all of the experts, which I accept, was to the effect that if the failure to lodge these documents had been the only reason for refusal of the application for subdivision, it would be reasonable to expect that contact would have been made by the WAPC with the applicant through its consultant representative prior to refusal of the application, and the documents requested. Alternatively, the matter could have been dealt with by the imposition of a condition upon subdivision approval or by way of a request for reconsideration supported by the requisite documents. In those circumstances, in my opinion it would impose an unduly onerous obligation upon P & B to conclude that, in the relatively short period between the publication of Planning Bulletin 83, and the determination of its application, it was obliged to submit the documents required by that Bulletin. But in any event, the expert evidence satisfies me that any breach in this regard would not have been an operative cause of the failure to obtain approval to the subdivision, because, if it had been the only reason for refusal, it could have been, and would have been easily remedied. All the experts were of this view.
167 The next two allegations of breach concern events following the refusal of the application for subdivision by the WAPC. Included in the first such allegation, is the assertion that P & B failed to communicate to the plaintiffs the refusal decision. That allegation must fail. Although it took a little time for P & B to notify the plaintiffs of the refusal of the application for subdivision, the reasons for the course taken were, in my view, reasonable, and the delay in notification had no material impact whatever on the ultimate outcome.
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168 The second aspect of the sixth allegation of breach alleges a failure to consult with the plaintiffs about the course to be taken. However, I fail to see how any consultation with the plaintiffs or any of them would or could have made any material difference to the course of events. None of the plaintiffs were expert town planners, nor were they informed as to the various issues which were likely to have been taken into account by the WAPC when considering the subdivision application. In those circumstances, I do not accept that the obligation to use best endeavours to obtain subdivisional approval included an obligation to consult with the plaintiffs in relation to the steps, if any, to be taken following the refusal of that application.
169 The seventh breach alleged relates to a failure to seek advice from a town planner other than CLE, or legal advice, with respect to the steps that might be taken following refusal of the subdivision application. However, this allegation appears to me to proceed upon the erroneous assumption that the subjective view of P & B is somehow relevant to the content of the obligation to use best endeavours. It seems to me that that is the only way in which the provision of advice to P & B by either town planners or lawyers could be relevant.
170 However, it is clear from the authorities to which I have referred that the content of the obligation to use best endeavours is to be determined objectively, albeit having regard to the circumstances at each relevant time. So, the question is not whether P & B should have taken advice with respect to the steps that might be taken following refusal but, rather, whether a reasonable, determined and prudent person, acting in his own interests, would have taken further steps to attempt to obtain subdivisional approval following the refusal of the subdivision application by the WAPC. Although such a person might well be assumed to have taken advice, that assumption is only one step along a path that would lead to a conclusion that such a person would have taken some further step to obtain subdivisional approval. In my opinion, the breach alleged is in itself immaterial.
171 However, if I am wrong in that view, and there is some basis upon which the question of whether or not P & B should have taken further advice is of itself relevant to the question of breach, in my opinion, in all the circumstances, there was no obligation on P & B to take that further advice. P & B had engaged reputable town planning advisors in whom confidence was properly and reasonably reposed. The advice given to Mr Humfrey by Ms Rooksby following the refusal of the subdivision application was reasonable and plausible. Mr Humfrey also received
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- advice from other quarters, including Tourism WA and the Shire of Exmouth. On the evidence before me, and the findings I have made, there was no reasonable basis for him to conclude that he needed further advice to make an informed decision about the course to be followed. And as there was no evidence as to what legal advice might have been given had P & B sought such advice, that aspect of the plaintiffs' case must necessarily fail.
172 The eighth breach alleged (in the reply) is an assertion that P & B failed to use its best endeavours by either:
(a) lodging a further application for approval in different terms; or
(b) seeking reconsideration of the refusal by the WAPC; or
(c) applying to the State Administrative Tribunal for review of the refusal decision.
173 Dealing firstly with the allegation that P & B should have submitted a further application for subdivision approval, in different terms, that course could only be justified if there was some error or failing in the terms of the application which was lodged. For the reasons I have given, I have concluded that the application which was lodged was entirely appropriate, and in accordance with P & B's obligation to use its best endeavours to obtain subdivisional approval. There is therefore no basis upon which I could conclude that an application in different terms should have been lodged following the refusal.
174 Turning then to the prospect of an application for reconsideration by the WAPC, the evidence satisfies me that such an application would only have reasonable prospects of success if it were accompanied by fresh information or material omitted from the original application, and which was likely to persuade the WAPC to change its position. In my view there was no such material or information, and accordingly, no basis upon which any reasonable person could have concluded that an application for reconsideration by the WAPC would have had any reasonable prospect of success.
175 Turning lastly to the prospect of an application for review by the State Administrative Tribunal, it seems to me that the reasoning process applied by Ms Rooksby to that prospect was entirely consistent with that which would have been adopted by a prudent and reasonable person determined to obtain approval in the advancement of their own interests. Ms Rooksby reasoned, correctly, that the issue before the State Administrative Tribunal would not be whether there was an error on the
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- part of the WAPC, but rather, whether, on all the evidence before the Tribunal, the 'correct and preferable decision' was that the subdivision application should be approved (State Administrative Tribunal Act 2004 (WA), s 27(2)). So, she correctly reasoned that the identification of error within the reasons given by the WAPC would not necessarily mean that the application to the Tribunal would be successful. She reasoned, as would any person under an obligation to use best endeavours, that although the first reason given by the WAPC was erroneous, and the second reason given could be overcome, that did not mean that an application for review would necessarily succeed. Ms Rooksby reasoned that the third reason given by the WAPC was likely to be an oblique reference to the policy issue which had been ventilated by Tourism WA with respect to the undesirability of fragmenting the ownership of land to be used for the development of tourism resorts. Mr Maiorana did not disagree with that process of reasoning. As it happens, in fact Tourism WA had opposed the grant of approval to the subdivision. Ms Rooksby was able to discover that fact very soon after the refusal of the application by obtaining a copy of the letter of 18 June 2007 from Tourism WA to the WAPC. It is reasonable to conclude that, in the discharge of an obligation to use best endeavours, any person contemplating an application for review to the State Administrative Tribunal would have taken the same step, and having obtained the letter, such a person would, in my view, have reasonably concluded that an appeal to the State Administrative Tribunal would not have enjoyed reasonable prospects of success in the face of opposition from both the WAPC and Tourism WA. Accordingly, I find that a reasonable and prudent person, determined to obtain subdivisional approval in his or her own interests, would have concluded that an appeal to the State Administrative Tribunal would not have enjoyed sufficient prospects of success to justify its commencement.
176 There is another reason why such a person would have arrived at that conclusion. That is because, on the evidence, resolution by mediation in the State Administrative Tribunal would have taken approximately four months, and resolution by determination of the Tribunal between six and 12 months. By that time, the time for fulfilment of the condition with respect to the approval of subdivision would have expired. Accordingly, by the time subdivisional approval had been obtained through this means, there would have been no contracts between the parties. It was faintly suggested in the course of Mr Maiorana's evidence that steps could have been taken to secure an expedited mediation. However, the evidence established that, before attending any such mediation, WAPC would have
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- required the input of the various agencies which were consulted, including the Shire of Exmouth, and most particularly, Tourism WA. I think it more likely than not that the requirement for consultation with those agencies would have delayed the conduct of any mediation to a time beyond the time for fulfilment of the condition relating to subdivisional approval under the contracts between the parties. And, in any event, given that Tourism WA was opposed to the subdivision, there was no reasonable basis for concluding that the matter was likely to be resolved, and approval to the subdivision obtained, at a mediation.
177 In response to the issue concerning the time of a determination by the Tribunal, the plaintiffs refer to s 29(5) of the State Administrative Tribunal Act 2004. That section provides that a decision made by the Tribunal substitutes for that of the decision maker and, unless otherwise ordered or provided by the enabling Act, is to be regarded as having effect, or as having had effect, from the time when the decision reviewed would have had effect. However, the plaintiffs have cited no authority which supports the proposition, implicit in their argument, that a favourable decision by the Tribunal sometime after the contracts had come to an end by reason of the failure of the condition to which they were subject, would somehow retrospectively revive the contracts which would by then have terminated. The case of Butts v O'Dwyer (1952) 87 CLR 267, relied upon by the plaintiffs, is not in point because the relevant statutory provisions in that case did not require ministerial approval within a specified time, nor had the agreement between the parties lapsed by reason of a failure to obtain approval by a time specified in the agreement.
178 The plaintiffs' argument in this respect was raised in supplementary written submissions following the completion of oral argument, and was outside the scope of the topics upon which written submissions were invited. P & B have not responded substantively to the proposition, and the matter has not been argued before me at all. In those circumstances I am reluctant to rule definitively upon it, other than to observe that the proposition appears to me to be inherently dubious. It is a purely legal issue which could, if necessary, be ventilated and resolved on appeal notwithstanding my failure to rule upon it.
Section 140 of the Planning and Development Act 2005 (WA)
179 A similar observation applies to an issue that was raised belatedly in relation to the effect of s 140 of the Planning and Development Act 2005. Section 136 of that Act prohibits an agreement to sell land other than as a
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- lot, subject to, amongst other things, s 140 of that Act. There is an initial question as to whether these contracts were for the sale of land other than as lots - as to which see Landall Construction & Development Co Pty Ltd v Bogaers (1980) WAR 33. If the contracts did fall within s 136 of the Act there would be a subsidiary question as to whether, if I had concluded that P & B was in breach of the obligation to use best endeavours to obtain subdivisional approval, specific performance could or should be ordered, given that approval was not in fact obtained within the period of six months referred to in s 140.
180 These legal issues were only barely debated. They only arise if, contrary to my conclusion, P & B is found to have been in breach of contract. If that point is reached, there is no reason why they could not be addressed and resolved by an appellate court. Accordingly, I do not propose to rule upon them at this point.
Ready, willing and able
181 As I have observed, issue was joined on the pleadings as to whether the plaintiffs were ready, willing and able to complete their contracts. Proof of that capacity is, of course, a pre-requisite to the grant of specific performance. Notwithstanding the fact that representatives of all plaintiffs gave evidence, none of them gave any evidence on this subject. Given the pleaded issue, this is a remarkable omission.
182 The plaintiffs ask me to infer that they were ready, willing and able to perform from the mere fact of their pursuit of these proceedings. That submission takes the process of inference a long way beyond appropriate bounds.
183 However, although no submissions were made to this effect, it seems to me to be more likely than not that the failure to adduce evidence on this subject was due to oversight by the plaintiffs' legal advisors. Oversights of that kind should not be the source of injustice if they can be cured without injustice to other parties. If this omission had been the only impediment to the grant of specific performance, I would have invited the plaintiffs to apply to re-open their case to lead further evidence on that subject. However, as I have concluded that the plaintiffs' case must fail for other reasons, it is not appropriate to take that course.
Conclusion
184 For these reasons the plaintiffs have failed to establish that P & B breached the contracts between it and the plaintiffs. The plaintiffs' claims
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- should be dismissed. P & B has succeeded in establishing that the contracts came to an end by reason of the failure of the condition to obtain subdivisional approval, and a declaration to that effect should be granted.
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