Port Stephens Shire Council v Tellamist Pty Ltd - [2004] NSWCA 353

No judgment structure available for this case.

Reported Decision:
135 LGERA 98

Court of Appeal

CITATION: Port Stephens Shire Council & Anor v Tellamist P/L [2004] NSWCA 353

HEARING DATE(S): 18, 19 February 2004

JUDGMENT DATE:
27 September 2004

JUDGMENT OF: Giles JA at 1; Santow JA at 2; Ipp JA at 332

DECISION: Appeal allowed and cross-appeal dismissed.

CATCHWORDS: TORTS - trespass to land - trespass by defendant Local Council as adjoining landowner - destruction of trees on land owned by plaintiff in consequence of the trespass - liability not in issue - DAMAGES - assessment of compensatory damages - whether compensable loss suffered - adequacy of damages - valuation - whether basis for valuation of loss appropriate - whether diminution in value of plaintiff's undeveloped land - knowledge to be attributed to hypothetical purchaser in valuing land - whether exemplary damages appropriate - whether corporate defendant in conscious and contumelious disregard of the plaintiff's rights - whether exemplary damages inadequate - PRACTICE AND PROCEDURE - whether interest on compensatory damages should be awarded for the whole period from when the cause of action arose until judgment

LEGISLATION CITED: Environmental Planning & Assessment Act 1979 (NSW) s94
Local Government Act 1919 s340D(1)
Local Government Act 1993 s7; s8(1); s220
Supreme Court Act 1970 s94(1)

CASES CITED: Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490
Amalgamated Television Services Pty Ltd v Marsden (No. 2) (2003) 57 NSWLR 338
Beach Petroleum NL v Johnson (1993) 43 FCR 1
Bennett v Jones [1977] 2 NSWLR 355 (CA)
Boland v Yates Property Corp Pty Ltd (1999) 167 ALR 575
Brambles Holdings Ltd v Carey (1976) 15 SASR 279
Carr v Sourlos (1994) 6 BPR 13,626
Cassell & Broome Co Ltd v Broome [1972] AC 1027
Clifford and Anor v Wyong Shire Council (1996) 89 LGERA 240
Closer Settlement Ltd v The Minister (1942) 17 LGR (NSW) 62
C.R. Taylor (Wholesale) Ltd v Hepworths Ltd [1977] 1 WLR 659
Commissioner of Land Tax v Nathan (1913) 16 CLR 654
Commissioner of State Revenue v Pioneer Concrete (Vic) Pty Ltd (2002) 192 ALR 56
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601
Evans v Balog [1976] 1 NSWLR 36
Farmer Giles Ltd v Wessex Water Authority [1990] 1 EGLR 177 (CA)
Falkner v Bourke (1990) 19 NSWLR 574 (CA)
Fire & All Risks Insurance Co Ltd v Rousianos (1989) 19 NSWLR 57
Fox v Percy (2003) 214 CLR 118
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Gazzard v Hutchinson (1995) AustTortsRep 81-337
Gosford Shire Council v Green (1980) 26 The Valuer 425
Gray v Motor Accident Commission (1998) 196 CLR 1
Hollebone v Midhurst and Fernhurst Builders Ltd [1968] 1 Lloyd's Rep. 38
Holt v Cox (1994) 15 ACSR 313
House v The King (1936) 55 CLR 499
Housing Commission of NSW v Falconer [1981] 1 NSWLR 547
Jamal v Moolla Dawood, Sons & Co [1916] AC 175
Jegon v Vivian (1871) LR 6 Ch. 742
Johnson v Perez (1988) 166 CLR 351
Jones v Gooday (1841) 8 M & W 146
Keddell v Regarose Pty Ltd [1995] 1 Qd R. 172
Kenny & Good Pty Limited v MGICA (1992) Ltd (1999) 199 CLR 413
Krakowski v Eurolynx Properties Pty Limited (1995) 183 CLR 563
Lamb v Cotogno (1987) 164 CLR 1
League against Cruel Sports Ltd v Scott [1986] QB 240
Linter Group Ltd v Goldberg (1992) 7 ACSR 580
Livingstone v Rawyards Coal Co (1880) 5 App.Cas. 25
Lonie v Perugini & Perugini [1977] 77 ATC 4,318
Lovell v Lovell (1950) 81 CLR 513
McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Malec v J C Hutton Pty Limited (1990) 169 CLR 638
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Micallef v ICI Australia Operations Ltd [2001] NSWCA 274
Miller v Jennings (1954) 92 CLR 190
Minister for Public Works v Thistlethwayte (1954) AC 475
Ministry for Defence v Ashman (1993) 25 HLR 513
Minter v Eacott (1952) 69 WN(NSW) 93
Murray v Commonwealth (1986) 5 NSWLR 83
Noroton Holdings Pty Limited v Friends of Katoomba Falls Creek Valley Incorporated (NSWCA, 18 October, 1996, unreported)
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 185 ALR 280
Parramatta City Council v Lutz [1988] 12 NSWLR 293
Pastoral Finance Association Ltd v The Minister (1914) AC 1083 (PC)
Perri v Flavell (No 2) (NSWCA Kirby P and Powell JA, 20 September 1995, unreported)
Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd (2001) 50 NSWLR 679
Public Transport Commission of NSW v Perry (1977) 14 ALR 273
Public Trustee v Hermann (1968) 88 WN(Pt.1) NSW 442
Re United Merthyr Collieries Co (1872) LR 15 Eq 46
Rentokil Pty Ltd v Channon (1990) 19 NSWLR 417
Roberts v Rodney District Council [2001] 2 NZLR 402
Rogers v Nationwide News Pty Ltd (2003) 77 ALJR 1739
Ruby v Marsh (1975) 132 CLR 642
Scott v Shepherd (1773) 96 ER 525
Scutt v Lomax [2000] EWJ 350
Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555
Smiths Newspapers Ltd v Becker (1932) 47 CLR 279
Spencer v the Commonwealth (1907) 5 CLR 418
State of South Australia v Johnson (1982) 42 ALR 161
State of New South Wales v Riley (2003) 57 NSWLR 496
Swordheath Properties Ltd v Tabet [1979] 1 WLR 285
TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333
Tesco Supermarkets Ltd v Nattrass [1972] AC 153
The Queen v Brown (1867) LR 2 QB 630
Turner v The Minister for Public Instruction (1956) 95 CLR 245
XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd (1985) 155 CLR 448
Wasson v California Standard Co (1964) 47 DLR (2d) 71
Whitfeld v De Lauret and Company Limited (1920) 29 CLR 71
Willis v the Commonwealth (1946) 73 CLR 105
Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628
Wormald v Cole [1954] 1 QB 614

PARTIES :
PORT STEPHENS SHIRE COUNCIL (First Appellant)
DARACON ENGINEERING PTY LIMITED (Second Appellant)
TELLAMIST PTY LIMITED (Respondent)

FILE NUMBER(S): CA 40395/03

COUNSEL: G INATEY, SC/ A A HENSKENS (Appellants)
R J ELLICOTT, QC/ J S DRUMMOND (Respondent)

SOLICITORS: Cantle Carmichael (Appellants)
Hartmann & Associates (Respondent)

LOWER COURTJURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): SC 2067/93

LOWER COURT
JUDICIAL OFFICER : Bergin J

CA 40395/03
SC 2067/93

GILES JA
SANTOW JA
IPP JA
30 SEPTEMBER 2004

PORT STEPHENS SHIRE COUNCIL and Anor v TELLAMIST PTY LIMITED

TORTS – trespass to land – trespass by defendant Local Council as adjoining landowner – destruction of trees on land owned by plaintiff in consequence of the trespass – liability not in issue

DAMAGES – assessment of compensatory damages – whether compensable loss suffered – adequacy of damages – valuation – whether basis for valuation of loss appropriate – whether diminution in value of plaintiff’s undeveloped land – knowledge to be attributed to hypothetical purchaser in valuing land – whether exemplary damages appropriate – whether corporate defendant in conscious and contumelious disregard of the plaintiff’s rights – whether exemplary damages inadequate

PRACTICE AND PROCEDURE – whether interest on compensatory damages should be awarded for the whole period from when the cause of action arose until judgment

FACTS

:

The First Appellant, Port Stephens Shire Council (‘the Council’) and the Respondent, Tellamist Pty Ltd (‘Tellamist’) were adjoining landowners of undeveloped parcels of bushland in Salamander Bay, within the Council’s local government area. The Council and Tellamist were seeking to develop their respective parcels of land in accordance with their zoning. The Council’s land was zoned ‘light industrial’, and adjoined on its southern boundary an existing industrial estate. Tellamist’s land was zoned ‘residential’, and it was developing a scheme to create a 35-lot cluster development of villas.

By mid 1991, after a land swap to adjust the common boundary, both Tellamist and the Council had cleared their respective land up to the edge of an area designated as a “public reserve”. This public reserve was to have been dedicated to the Council, but since dedication had not as yet occurred, title to the public reserve remained vested in Tellamist. The public reserve ran the length of the common boundary with varying width of between approximately 15 and 30 metres. It contained a large number of mature trees, as well as other foliage and undergrowth.

The Council had granted development consent in respect of its own light industrial subdivision. The Council development was project managed by Mr Atkinson of the surveying firm retained by the Council. The Council also contracted in July 1991 with the Second Appellant, Daracon Engineering Pty Ltd (‘Daracon’) to undertake certain earthworks and drainage construction in respect of the industrial development. That drainage construction was planned to be located in the public reserve a fact of which Tellamist was not aware. Similarly, Mr Atkinson was unaware that title to the buffer zone was still vested in Tellamist. The Council property officer responsible for the industrial development, Mr McMahon, with whom Mr Atkinson liaised, was aware of the state of affairs with regards to title.

On 7 August 1991, the Council consented to Tellamist’s development application for the 35-lot cluster development, on several conditions which related to the public reserve. Relevantly, Condition 10 provided that the public reserve be dedicated prior to the release of the Building Application, and Condition 6 provided that Tellamist develop and landscape within the public reserve a communal barbecue and play area for the benefit of residents and the public. A Tree Preservation Order was in force over land in the Port Stephens local government area, and the development consent was expressed to be subject to it.

Between 8 to 10 August 1991, Daracon pursuant to its contract with the Council entered the buffer zone and cleared all the trees from it, and partially excavated the area in order to construct a large 8 metre dish-shaped drainage swale. Despite being warned off the land by Tellamist on 11 August 1991, Daracon subsequently re-entered the buffer zone. These subsequent incursions occurred in November and December 1991. On the latter occasion, Daracon destroyed a large number of saplings which had been planted by the Respondent in the buffer zone. The Council had agreed to indemnify Daracon on 16 August 1991.

Tellamist commenced proceedings for trespass against the Council and Daracon. It claimed substantial damages on the ground that by reason of the trespasses and consequent destruction of the trees the value of its land had been detrimentally affected, as the cluster development had become financially unviable. On the fifth day of the trial, the Council and Daracon admitted liability withdrew all their defences and abandoned their cross-claims. Thereafter, the trial proceeded as a contested assessment of damages only.

The Trial Judge (Bergin J) awarded Tellamist the sum of $365,000 by way of compensatory damages purportedly assessed on a diminution in value basis and $25,000 by way of exemplary damages, together with interest (but not for the entire period between trespass and judgment) and costs.

The Council appealed, principally contending the Trial Judge erred in that:

(1) The trial judge should have found there was no diminution in value by reason of the requirement that the public reserve be dedicated;

(2) Alternatively, damages were manifestly excessive, as the calculation of diminution in value proceeded upon an incorrect basis;

(3) Exemplary damages should not have been awarded.

Tellamist cross-appealed, principally contending the Trial Judge erred in that:

(1) Compensatory damages were manifestly inadequate, as the calculation of the diminution in value proceeded upon an incorrect basis;

(2) Exemplary damages were manifestly inadequate;

(3) Interest should have been awarded for the whole period up to judgment.

HELD, allowing the appeal and dismissing the cross appeal

Per Ipp JA, Giles JA agreeing:

1. The trial judge erred in awarding compensatory damages. No compensable loss was suffered by Tellamist because the trespasses and removal of the trees in the buffer zone did not cause a diminution in the value of the plaintiff’s land.

Spencer v The Commonwealth

Boland v Yates Property Corp Pty Ltd

Closer Settlement Ltd v The Minister

McCathie v Federal Commissioner of Taxation

Johnson v Perez

Housing Commission of NSW v Falconer

Jamal v Moolla Dawood, Sons & Co

Malec v J C Hutton Pty Ltd

Spencer v The Commonwealth

Marks v GIO Australia Holdings

Boland v Yates Property Corp Pty Ltd

Kenny & Good Pty Ltd v MGICA (1992) Ltd

Selangor United Rubber Estates Ltd v Cradock (No 3)

Linter Group Ltd v Goldberg

(e) Therefore, with such knowledge, the hypothetical purchaser would not have ascribed a value to the land based upon the continued existence of the trees. Accordingly there was no diminution in value. Nominal damages only should be awarded in respect of the trespasses.

2. The trial judge erred in awarding exemplary damages. There was no sufficient evidentiary basis to found a finding of conscious and contumelious disregard for the rights of Tellamist.

Gray v Motor Accident Commission

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd

Lamb v Cotogno

State of New South Wales v Riley

Tesco Supermarkets Ltd v Nattrass

Beach Petroleum NL v Johnson

Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd

Crimmins v Stevedoring Industry Finance Committee

Woolcock Street Investments Pty Ltd v CDG Pty Ltd

Tesco Supermarkets Ltd v Nattrass

Krakowski v Eurolynx Properties Ltd

:

1. The trial judge did not err in her substantially credibility-based findings of fact, particularly with regard to representations made to Tellamist by Council and the lack of prior warning given by Council regarding construction of the drain.

Fox v Percy

2. The trial judge did not err in awarding compensatory damages, but erred in the assessment of the quantum of those damages, such as to justify a reassessment by the Court of Appeal.

Spencer v The Commonwealth

Commissioner of Land Tax v Nathan

Commissioner of State Revenue v Pioneer Concrete (Vic) Pty Ltd

Kenny & Good Pty Ltd v MGICA (1992) Ltd

Fire & All Risks Insurance Co Ltd v Rousianos

Pastoral Finance Association Ltd v The Minister

Minister for Public Works v Thistlethwayte

Turner v The Minister for Public Instruction

The Queen v Brown

Boland v Yates Property Corp Pty Ltd

Closer Settlement Ltd v The Minister

Spencer v The Commonwealth

Gosford Shire Council v Green

Housing Commission of NSW v Falconer

Marks v GIO Australia Holdings Ltd

Kenny & Good Pty Ltd v MGICA

(i) At the relevant time, the Council had no legal entitlement to remove the trees. Further, the hypothetical prudent purchaser knowing of Conditions 6 and 10 would not know of the Council’s present intentions to remove the trees and construct a drain. It is unreal to assume that the Council would have disclosed to the hypothetical purchaser its intentions. Nor would there be anything to cause the hypothetical prudent purchaser to conclude that Council would in the future after dedication remove the trees and construct such a drain, including the engineering drawing on Council’s development file, there being no evidence that it would have been made available to the hypothetical purchaser.

(ii) In considering the knowledge and expectations of the hypothetical purchaser, it is to be assumed that the Council will act legally in its dealings with the Public Reserve. This expectation includes that (i) the Council would not trespass in order to remove the trees, (ii) the Council would comply with proper planning principles in exercising its powers to consent to removal of the trees, which were subject to a Tree Preservation Order and (iii) the Council would act properly in its conflicting capacities as both applicant and consent authority.

Holt v Cox

Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council

Clifford v Wyong Shire Council

(e) If, contrary to principle, the hypothetical purchaser can have imputed to it retrospective knowledge of the Council’s intentions, its knowledge must also be taken to extend to the serious legal doubts as to the Council’s entitlement to so act after dedication. The result would be a modest discount for the risks of legal challenge, but not a complete negation of value.

3. The trial judge erred in her exercise of the discretion under s94 Supreme Court Act 1970 by not awarding interest on compensatory damages for the whole period from the date when the cause of action arose to the date of judgment.

House v The King

Lovell v Lovell

Micallef v ICI Australia Operations Ltd

Ruby v Marsh

Bennett v Jones

Falkner v Bourke

Perri v Flavell (No 2)

4. The trial judge did not err either in awarding exemplary damages, or in the quantum of such damages.

Gray v Motor Accident Commission

Krakowski v Eurolynx Properties Ltd

Brambles Holdings Ltd v Carey

(d) An award of exemplary damages should not be made until compensatory damages have been assessed, and then only if the sum awarded for compensation is inadequate also to punish and deter the conduct of the defendant.

Amalgamated Television Services Pty Ltd v Marsden (No 2)

Cassell & Broome Co Ltd v Broome

X L Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd

House v The King

Smiths Newspapers Ltd v Becker

Amalgamated Television Services Pty Ltd v Marsden

Discussion

(by Santow JA) of the principles governing awards of damages for trespass to land.

CA 40395/03
SC 2067/93

GILES JA
SANTOW JA
IPP JA
30 SEPTEMBER 2004

PORT STEPHENS SHIRE COUNCIL and Anor v TELLAMIST PTY LIMITED

Judgment

1 GILES JA: I agree with Ipp JA.

2 SANTOW JA:

INDEX

OVERVIEW 7
BACKGROUND –contested factual issues 14
The extent of the original screen and replanting 16
Conclusion 23
Nature of ‘Buffer Zone’ or ‘Public Reserve’ and representations 23
Conclusion 31
What was the agreement between the parties? 31
The adjustment of the boundaries 36
Dedication of the Public Reserve 41
Construction of the Drain and removal of trees 43
Subsequent events leading to the trespasses 45
The August 1991 trespasses 46
Conclusion 52
Tree Preservation Order 54
Conclusion 55
The intense development of the 35-lot cluster development would have acted as a screen to the houses at the back of the development 56
Conclusion 56
Appreciation in value of the respondent’s land 56
Tellamist’s Claim 58
Appeal 60
Issues 60
DISPOSITION OF THE APPEAL and CROSS-APPEAL 62
Recapitulation 62
Was any damage suffered? 64
Conclusion 77
A. Damages as Compensation 78
B. The Nature of Damages for Trespass 79
(i) Trespass giving benefit to the defendant without actual loss to the plaintiff 81
(ii) Trespass involving benefit to the defendant and correlative actual loss to the plaintiff 82
(iii) Trespass involving loss to the plaintiff and no correlative gain to the defendant 83
C. Principles of Valuation 91
(i) General principles of valuation 91
(ii) Methods and techniques of valuation 95
(iii) The Hypothetical Development Model 97
(iv) ‘Before-and-after method’ 100
D. What is the appropriate method of valuing the Plaintiff’s loss? 101
(i) Reinstatement cost? 101
(ii) Loss of profits? 103
(iii) Diminution in value? 105
E. The valuation evidence 106
(i) Diminution in value based on a 35 lot cluster development before and after trespass 106
(ii) Valuation based on a 35 lot cluster development pre-trespass, and a 12 lot subdivision post-trespass 113
F. The Trial Judge's approach 116
G. Reassessment of Compensatory Damages 121
(i) Approach to damages 121
(ii) Assessment of diminution in value 122
(iii) Conclusion on approach to assessing diminution in value 126
H. Consequential Losses 128
Conclusion on compensatory damages 131
I. Interest on Compensatory Damages 131
J. Reassessment of Exemplary Damages 135
(i) Should exemplary damages have been awarded? 135
(ii) Amount of exemplary damages 140
GENERAL CONCLUSIONS 144
SCHEDULE A 147
SCHEDULE B 148
SCHEDULE C 149

OVERVIEWOVERVIEW

(a) Council’s Tree Preservation Order,

(b) dedication of a treed area to Council as a Public Reserve, and

(c) enhancement of part of that Public Reserve with a landscaped barbecue and play area.

3 There were two principal trespasses (August and December 1991) as well as two lesser ones in April and November 1991, whereby the original trees and then replanted trees were removed as a screen from the buffer zone. These were carried out by the Council so it could install with no prior warning a large dish drain on the buffer zone for the benefit of its own adjoining light industrial development. First, the original trees were removed in the August 1991 trespasses, and then replanted trees in the later trespasses. This left Tellamist’s land with no screening for its cluster housing development from Council’s adjoining industrial estate and ultimately was said to have rendered it unviable.

4 Council employed a construction engineer Daracon Engineering Pty Ltd (“Daracon”), the second appellant. Daracon was engaged by Council to carry out construction work and tree removal for its purposes. Acting on behalf of Council, Daracon removed the trees from Tellamist’s adjoining land in order to construct a drain. It did so around 8 - 10 August 1991, following a smaller incursion in April 1991. Later on Daracon again entered Tellamist’s land to remove replanted trees between 23 December 1991 and 10 January 1992, following a smaller incursion in November 1991. There is no dispute that each incursion constituted a trespass.

5 Tellamist had originally on 23 May 1989 applied to the Council to develop its adjoining land into 27 individual lots, consented to on 3 July 1998. That proposed development was later (14 March 1991) replaced by DA 5163/91 to develop the 35 cluster homes, approved on 7 August 1991 with the conditions earlier mentioned.

6 That buffer zone, described as “Public Reserve”, was so shown in the plan of subdivision submitted with the respondent’s 1989 development application, as also the 1991 development application. Contemplated from the earlier time was a land swap adjusting the common boundary between Council and Tellamist’s land, and re-zoning part of the respective lands of Council and Tellamist. When the preceding development consent was eventually given to the 27 individual lots on 3 July 1989 there was however no condition requiring dedication of the buffer zone to Council, but conditions did include a Tree Preservation Order. That condition was however one of the conditions of the later cluster home development approved on 7 August 1991, just before the August trespasses.

7 As to the latter development, Tellamist was ultimately unable to proceed with it contending that this development had become “financially unviable” as a consequence of the loss of its protective screen of trees in the buffer zone. Despite an application for extension, Tellamist’s development application DA5763/91 eventually lapsed on 7 August 1996 unextended.

8 In the year 2000 Council granted consent for the subdivision of Tellamist’s land into 12 residential lots, in place of the 35 cluster homes. That consent was not expressed as subject to any condition requiring the dedication of land for “public reserve” or “buffer zone”.

9 Tellamist brought proceedings before the trial judge Bergin J. It claimed damages as a consequence of the destruction of the buffer zone as follows:

Less 12 Residential Lots 121,347

1,820,754

(ii) Consequential losses and ongoing costs 77,454

$1,898,208

10 The trial commenced on 17 February 2003 and concluded after eight days on 28 February 2003. On the fifth day (21 February 2003) the appellants withdrew all defences and cross-claims. The hearing then proceeded as an assessment of damages only.

11 On 3 April 2003 the trial judge gave judgment in favour of Tellamist as follows:

(ii) Exemplary Damages (Red, 78L-N) 25,000

Total $390,000

12 On 16 April 2003 the trial judge gave judgment on interest and costs as follows:

2002-16 April 2003 (Red, 86D-L) $462,057

13 The appellants had argued at trial that, though the land was technically owned by the respondent at the time of the alleged trespass, there was an understanding between the parties, though one which ultimately did not find its way into a formal document. It was to the effect that the land the subject of the trespass was to be transferred and dedicated to the Council as public reserve land, so negating any damages. That argument did not succeed.

14 The appellants contended again on appeal that, given those circumstances, any trespass involved no or minor damage and in any event could not have been in conscious and contumelious disregard of the respondent’s rights. Therefore, it is said, the exemplary damages ($25,000) should not have been awarded (Ground 11). The appellants also disputed as manifestly excessive the award of ordinary damages ($365,000) on various valuation and other grounds.

15 In particular the appellants contended that

(b) the trial judge in assessing value on the basis of diminution of value of the respondent’s land, did so on a basis different from that which was adopted by Mr Howes, the Council’s expert valuer though the trial judge appeared to rely at least in part on Mr Howes’ valuation (Grounds 4-7),

(c) the trial judge had failed to take into account that the August 1991 development approval for the 35 cluster homes had lapsed upon which the valuations were based, due to the respondent’s failure to substantially commence that cluster development or otherwise realise any loss prior to its lapsing (Ground 8),

(d) the trial judge was in error in adding back interest deducted by Mr Howes (Ground 16), and

(e) the respondent had failed to mitigate its loss by replanting for modest cost (Grounds 10 and 15).

16 Conversely the respondent cross-appeals, disputing the trial judge’s basis for assessing damages. It asserts instead what appears to be a loss of profits basis derived from the report of its valuer Mr Fagan. This is said to yield a much higher figure than the diminution in value basis adopted by the trial judge and Mr Howes. Tellamist further contends that the amount for exemplary damages was wholly inadequate. It claims also a larger sum for ordinary damages namely $1,898,208. Finally, it claims additional interest from 1 July 1987 to 8 February 2002.

17 Since dictating this judgment, I have had the advantage of reading in draft the judgment of Ipp JA who reaches a different conclusion on damages. Where convenient to do so, I make reference to that judgment.

18 In summary, we agree that for purposes of assessing damages for trespass, what is required to be valued, under whatever methodology is the pre-trespass value of Tellamist’s land with its approved cluster development, at the time of the August 1991 trespasses. We agree also that the test is what a willing but not anxious purchaser would then have paid for that land, who was conversant with the subject at the relevant time but, as Isaacs J emphasised in Spencer v the Commonwealth (1907) 5 CLR 418 at 440, not including circumstances subsequently arising – in short knowledge by hindsight. We agree such a purchaser would know of the development conditions including the required dedication of the public reserve. Where principally it appears we differ, is that I do not consider that such a hypothetical purchaser making proper enquiry would, without impermissible hindsight, know either of Council’s impending trespass or of Council’s hitherto well-concealed intentions from Tellamist to construct a dish drain, so setting at nought the conditions it had imposed just a week before on Tellamist’s development. I refer in particular to the conditions of a dedicated and enhanced public reserve, reinforced by a Tree Preservation Order, serving as a buffer zone between residential and industrial estates. Its enhancement for a barbecue and play area required landscaping under the relevant condition. As Council’s expert Mr Howes recognised, this would necessarily have entailed replacement of any trees removed, a point of some significance.

19 These conclusions are supported by the trial judge’s findings, which were substantially credibility based. There were no incontrovertible facts or uncontested testimony cited which would demonstrate that the trial judge’s factual conclusions were erroneous; compare Fox v Percy (2003) 214 CLR 118 at 128. In particular, I conclude that the trial judge was correct in her conclusions concerning representations made to Mr Neal of Tellamist namely that “Council had represented to the plaintiff that there would be a buffer between its land and the plaintiff’s land with reference to the Public Reserve as both open space and also a koala corridor” (Judgment at [96]). I also accept her conclusion that in the events that happened Tellamist was denied prior warning of and did not know of the trees to be felled before the critical August 1991 trespasses or of any intention to construct a drain of such significant proportions on that buffer zone, so as to have been thereby “ambushed” (Judgment at [97]). The trial judge then concluded that Tellamist “understood, reasonably in my view, that a buffer of trees and vegetation was to be maintained in which it was to construct a landscaped playground and barbecue area”.

20 Those findings further negate the likelihood of candour on Council’s part to any enquiry by the hypothetical purchaser. Was Council seriously going to disclose upon enquiry that its intention is to trespass on to the Public Reserve, ignore its own Tree Preservation Order, and knock down the trees for an unapproved dish drain, and that whether Council thought it already owned the land or not? Council could likewise hardly be expected to say, we will wait for the dedication to take effect, then give the legally necessary consents for the benefit of our own industrial development so as to remove the trees, disregard Tellamist’s residential consent conditions, and put in the dish drain when (a) this was never Council’s intention choosing instead to bypass any such approval process by trespass, and (b) its capacity to do so would clearly have been open to legal challenge. There is no legal presumption that the purchaser would be told the truth in a valuation context.

21 Those factual findings also show that there was nothing to alert the hypothetical purchaser to the impending trespass or to council’s hypothetical intentions post-dedication. This is so, given that the hypothetical purchaser would know of Tellamist’s conditions requiring dedication as well as the Tree Preservation Order, the enhanced, landscaped buffer zone within, and of the complete absence of any reference to a drain in Council’s earlier consent to its own light industrial estate. The hypothetical purchaser would assume the dedication was for the purpose of maintaining a “buffer zone” between Tellamist’s residential development and Council’s own industrial estate, exactly as it was described in the condition requiring the landscaped enhancement. Indeed that enhancement within the Public Reserve was itself hardly compatible with an open 8 metre dish drain.

22 Moreover, Council’s secrecy found by the trial judge towards Tellamist, pre-August trespasses, strongly militates against it drawing any attention to the engineering drawing with the drain in its development file. Indeed there was no evidence that such file would have been open to public inspection in any event and I would infer otherwise. To do so would simply have alerted Tellamist to Council’s intentions. But even if made available, what would the purchaser make of the drawing with the drain, knowing that (a) the drain was never approved or required under either Council’s or Tellamist’s development, and (b) there had been no variation to the earlier consent to Council’s development seeking approval for the drain as was legally necessary if the drain were to go ahead. Council, if asked, would if it told the truth, have to say it would not be bothering with any of these approvals, whether under the Tree Preservation Order or otherwise, but intended rather to go on to what was still Tellamist’s land and knock down the trees for the drain. To say the future dedication would suggest otherwise is refuted by Council’s own actions. That is so on the basis that Council either knowingly trespassed, or thought it owned the land already and did not bother with the necessary approvals which required application of proper planning principles.

23 The other area where I respectfully differ, is as to exemplary damages, insofar as consciousness of wrongdoing may be attributed to an incorporated body in my view, by combining the knowledge of those principally involved amongst Council officers and its agents. Though the High Court in Krakowski v Eurolynx Properties Pty Limited (1995) 183 CLR 563 (583) applies this to the conscious dishonesty of fraud, a fortiori it should be applicable to contumelious or conscious tortious wrongdoing given that it does not call for the strict proof of fraud.

BACKGROUND –contested factual issues. BACKGROUND –contested factual issues

24 It is helpful to start with a list of dramatis personae in these events, taken uncontroversially from the written submissions of the appellants.

Mr Neal	Principal of Tellamist
Mr Rennie	Surveyor acting on behalf of Tellamist
Round & Associates	Designers of cluster development on behalf of Tellamist
Messrs Skelton, Mooney, Chalkley, Teer, Spackman	Neighbours on Gilchrist Road or Soldiers Point Road.
Mr Bluth	Proof of conveyancing costs (solicitor)
Mr Way	Proof of real estate commissions (real estate agent)
Mr Glover	Engineering expert called by Tellamist
Mr Fagan	Tellamist’s expert valuer
Sharon Neal	Daughter-in-law of Mr Neal and neighbour on Gilchrist Road
Mr McMahon	Property officer of Council
Mr Atkinson	Consultant surveyor for Council industrial subdivision.
Mr Douglas	Planner of Council
Mr Michael Davies	Council’s Assistant Engineer
Mr Rod Stanton	Chair of Council’s Development Assessment Panel in early 1989, whose name appeared on the correspondence between Council and the original vendor of the land, Casmer Associates Pty Ltd.
Ms Martin	Planner of Council and likely taker of Ex 36 photographs
Mr Howes	Council’s expert valuer
Mr Castor	Arborist expert called by Council

25 The first appellant and the respondent owned relevantly from December 1988 parcels of land adjacent to each other (Judgment at [2-3]). In 1990 both parcels of land were undeveloped bushland. The Council parcel (Lot 596 of DP27382 and Lot 1 of DP561040 fronting Soldiers Point Road, Salamander Bay) was to the south of the Tellamist land (Lot 2 DP561040). To the south of that Council land was an already existing industrial estate. In September 1990 the Tellamist land was cleared except along its southern boundary adjacent to the Council land where trees were retained so forming a treed buffer zone. In or about April 1991 the Council land was cleared (Judgment at [56]). That left only that band of trees on the southern boundary of the Tellamist land in an area known as the public reserve lands. It is in respect of that public reserve land containing the band of trees that the trespasses, the subject of the damages claim, principally occurred.

The extent of the original screen and replantingThe extent of the original screen and replanting

26 The appellants and the respondent disagreed on the extent to which the original buffer zone provided a screen between the two parcels of land. Relevant matters include:

(b) the Council’s subsequent lack of response to a letter from Tellamist in March 1992 requesting details of proposed planting (Judgment at [98]; and

(c) replanting would not have restored the natural bushland setting with mature trees (Judgment at [100]).

27 The appellants on appeal did however accept (T, 11.51) the trial judge’s finding that, though the screen provided something less than an impenetrable barrier “there were sufficient trees, plants and undergrowth to provide at least a pleasant bushland setting and a limited screen against the Council’s light industrial estate …”. The trial judge’s findings follow a review of the expert evidence relied upon and is important:

“82 On the state of the evidence, it is difficult to know just how many trees were felled by the Council during its trespasses. However, I am satisfied that prior to the trespasses there were sufficient trees, plants and undergrowth to provide at least a pleasant bushland setting and a limited screen against the Council’s light industrial estate in the area between the proposed cluster development on the plaintiff’s land and the Council’s land.” (at [82])

28 That position emerges sufficiently clearly from the plaintiff’s Exhibit 5 (Blue, 1097), an aerial photo taken in approximately 1989. It can be compared to the post-trespass position in the aerial photo taken in approximately 1992 (plaintiff’s Exhibit 6 Blue, 1098). These were before us on appeal.

29 The appellants have contended that there was no photographic evidence put at trial of the buffer zone between the time that the Council and Tellamist cleared their lands but prior to the date of the main trespass in August 1991 (Orange, 53P-V).

30 The respondent disagreed with these submissions and demonstrated that it had produced photographic evidence of the zone at that time (Orange, 75F–76Y). I would accept that.

31 The trial judge had earlier commented on photos produced by the appellants that were supposedly taken at the end of July 1991. These photos were not produced until the trial (Red, 57F):

“A copy of the photographs was provided to the plaintiff on 18 February 2003. When Mr Neal was shown some of these photographs in cross-examination, he accepted that there were sections in the photographs that indicated that there was not an effective “screen” between the Council’s land and the plaintiff’s land.”

32 The trial judge also earlier quoted a report by Mr Castor, an expert arborist called by the appellants, noting (at [75]) that the defendant had relied upon his expert evidence and his expert qualifications as an arborist.

33 The trial judge continued:

34 The appellants stated that Mr Castor came to a similar conclusion as the trial judge in regard to how effective a screen the buffer zone was. Importantly, the appellants also stated that the evidence of Mr Castor was significant because his conclusion was ultimately that, whilst there were trees on this property, the visual screen came not from the large trees – the canopies of which existed high above the line of sight – but from the lower growth, grass and other shrubs beneath that larger canopy. This shrubbery Mr Carson described as the limited screening. The appellants believed that when the trial judge was discussing the limited screening, she was speaking of that about which Mr Castor gave evidence. Mr Castor’s evidence was that within 12 months enough greenery could have been planted to create a visual screen within the line of sight sufficient to screen the areas from each other (T, 79.42 to 80.4). It was not the evidence of Mr Castor that the large trees could be easily replanted and provide a screen within a short period of time. The trial judge summarised her evidence at [78] as follows:

“[78] Mr Castor estimated that it would cost approximately $44,000 to prepare the land and plant tube stock of local canopy and mid canopy trees and under storey seed and provide a watering system. That estimate relates only to plantings that would take some years to grow to a reasonable height to create a visual screen. Mr Castor also gave evidence that it is possible to buy more mature trees at a greater cost. The smaller of these at a height of about 3 to 4 metres can be purchased for approximately $100 per tree, however to replace the mature aged trees that were destroyed could cost up to $10,000 per tree. Mr Castor also noted the 90% mortality rate of these trees when replanted.”

35 The main conclusion that the appellants wished to draw from this evidence was that Mr Fagan, a valuer for the respondent, who came to a different and higher final value for damages than that of Mr Howes, had based his figures on there being an impenetrable screen between the properties. The appellants argued that, given the trial judge had not come to this conclusion, therefore the report of Mr Howes should have been preferred by the trial judge to that of Mr Fagan.

36 In response, the respondent pointed out, correctly, that Mr Fagan had not described the screen as impenetrable (Blue, 2/426F-I); he described it as “an effective arboreal screen” so the industrial development was camouflaged from the proposed cluster homes. The trial judge noted that passage from Mr Fagan in her judgment:

“The proposed Public Reserve consisted of natural bush land and possessed a stand of mature trees together with general undergrowth. The trees were generally of at least 15 metres in heights and together with the undergrowth provided an effective arboreal screen thereby camouflaging the industrial development being undertaken by the Council from the proposed “cluster home” development to be undertaken by Tellamist Pty Limited.” (at [79])

37 The respondent in its oral submissions submitted that camouflage meant something that “obscures something so that one can’t discern it” (T, 130.41-.44), that is, not something that is impenetrable.

38 Mr Ellicott, QC, counsel for Tellamist, brought to the Court’s attention two photos of the buffer zone in question from the backyard of the house of Mr Neal’s daughter, Sharon Neal. The photos show the stark nature of the zone after the trees were removed. The photos do not however attempt to show with any precision how the trees were effective in providing a screen between Tellamist land and Council land. However, that does not mean that the trial judge’s findings depended on that. The trial judge was well aware of the relative deficiencies in the photographic evidence. While acknowledging that it was difficult to know just how many trees were felled, the trial judge was able to reach the conclusion she did at [82] quoted earlier.

39 Importantly, the trial judge also substantially rejected Mr Castor’s evidence concerning the cost and feasibility of reinstating the buffer zone screening, having carefully reviewed these (at [75] and following). The trial judge did not accept, for reasons which I consider were well open to her, that “tube stock” could have provided a comparable screening in 12 months at a fraction of the cost. She thus concluded:

“[98] The defendants claimed that the plaintiff failed to mitigate its loss by refusing to replant the buffer area. The plaintiff did replant the buffer area but was subjected to a further trespass in December 1991 when saplings were destroyed. The ambush together with the damage done to the saplings that were planted in December 1991 and Mr McMahon’s refusal to respond to Mr Neal’s letter in March 1992 requesting details of the proposed plantings are matters that seems to me to explain the plaintiff’s attitude in relation to replanting the buffer area, however they are not matters that support the claim made by the plaintiff for the total loss of profits. I am satisfied that the plaintiff took a reasonable course in testing the market with the duplex before it proceeded with further development of the site. On Mr Neal’s evidence, it appears that the plaintiff sought an extension of the consent for the cluster development and that the Council refused that extension. It ultimately sought a return to the original consent and the development of the 12 lots remaining in that subdivision.

[99] ……

[100] These trespasses converted the outlook from the site of the cluster development, proposed to be marketed to retirees, from a pleasant bushland environment into a harsh and barren industrial environment . The aim in assessing the damages is to place the plaintiff into the position it would have been in 1991 if the trespasses had not occurred. In my view that could not have been done by planting the small trees and plants referred to by Mr Castor. They would have taken years to reach a state that the felled trees and vegetation were in at the time of the trespasses. Mr Castor agreed that some of the trees were 20 years old and some were 60 years old. It was a natural bushland setting or, as the Council had called it, a “koala corridor” (tr 156 and 191). I think it is too simplistic to claim that all that was needed was some replanting. Certainly, when the plaintiff attempted to replant the area its efforts were thwarted by a further trespass and destruction of saplings.

[101] Mr Neal’s unchallenged evidence was that he replanted 300 saplings prior to the further trespasses in December 1991. Having regard to the photographic evidence, it is not unreasonable to conclude that there were at least 20 to 25 trees of between 20 to 60 years of age on the proposed public reserve to the south of the cluster development site. If one applies Mr Castor’s figure of $10,000 per tree, a total of between $200,000 and $250,000 is reached. That figure would need to be increased by reason of the very high mortality rate to say $300,000 to $350,000. There is then the extra cost of plants and shrubs for undergrowth and the watering system and labour. This would bring the cost to approximately $315,000 to $365,000. The uncertainty of survival of the mature trees that are replanted is also an unsatisfactory aspect of assessing the damages on this basis.

40 I should add that the drain of 8 metre width would have precluded much of any replanting, just as it led to the removal of the trees in the first place. The trial judge found at [99] that the respondent had not consented to the drain when consenting to the Council’s subdivision, being unaware of it, having “been led to believe that the buffer was to remain and be enhanced by works in the area, with the construction of the playground and landscaped barbeque area …”

41 Finally, as to Mr Castor’s evidence, the respondent in its written submissions fairly deals with it in these terms as also the failure to mitigate:

Based on the above evidence the Trial Judge was entitled to and correctly rejected the replanting proposal advanced by the Appellant as it would have taken take at least 20 years to establish trees of equivalent size to that removed (Red 72 B-L).

TCN Channel 9 Ltd v Hayden Enterprises Pty

Conclusion Conclusion

42 There is no basis for concluding that it was other than well open to the trial judge to conclude as she did, that

(b) the tree removals converted the outlook from the respondent’s site for its proposed cluster development from a pleasing bushland environment into a harsh and barren industrial development, and

(c) reinstatement could not properly occur merely by planting small trees and plants, given the native trees felled from the buffer zone, and

(d) likewise the size and position of the drain would have precluded an effective screening by way of replanting so that the appeal grounds based on failure to mitigate (grounds 10 and 15) should not succeed.
Nature of “Buffer Zone” or “Public Reserve” and representations Nature of ‘Buffer Zone’ or ‘Public Reserve’ and representations

43 A further issue is the nature of the buffer zone or public reserve. The appellants submitted that there was no mention or agreement that it was to contain trees or a visual screen (T, 62):

“It was merely a convenient description of the public reserve area as being a point of separation between the light industrial development and the residential development.”

44 However, first Condition 6 of Council’s consent of 9 August 1991 to what was described as the 36-lot cluster development of Tellamist (Judgment at [23]) provided that the buffer area (or public reserve) was to incorporate:

45 Moreover, Condition 6 needs to be read with Condition 10. It, importantly in the context refers to “contribution toward the provision of open space and/or community facilities”. There is no mention at all of use of the Public Reserve for an 8 metre drainage facility for the commercial purpose of Council’s industrial development. After dealing with other s94 contributions Clause 10 provides:

“The Public Reserve at the rear of proposed development shown on the approved survey plan (file No. 89/025) shall be dedicated to Council prior to release of Building Application.”

Details of stormwater drainage shall be provided

46 Finally, under the heading “Reasons for Conditions” the consent states that “Conditions to comply with the requirements of …. Council’s Tree Preservation Order”. Then under the heading “Advices” it is provided “a Consent for the removal of any trees should be obtained from the Council’s Environmental Health Department under the provision of the Tree Preservation Order applying to this land” and attaching a copy of the Order. That Order is introduced with these words:

“1. A Tree Preservation Order applies to the whole of the land within the shire of Port Stephens. This Order prohibits the ringbarking, cutting down, topping, lopping, removing, injuring or wilful destruction of any tree or trees, except with the written consent of the Council. ….”

47 Then follows an explanation for and of the order in these terms:

“Pursuant to its powers under clause 41 Interim Development Order No. 2 Shire of Port Stephens, Council has made a Tree Preservation Order which applies to all land situated within the Shire of Port Stephens.

Such Order applies to all species of trees and it prohibits the ringbarking, cutting down, topping, lopping, removing, injuring or wilful destruction of trees except with the prior consent of Council.

It is Council’s desire to retain a bushland atmosphere throughout the shire and to obtain a harmony between development and the natural beauty of the area.

In the planning stage of all development projects, thought should be given to the retention and/or replanting of trees. If this is not done we will surely lose our unique natural heritage which is one of the areas’ greatest attractions.

Council’s Adopted policy for the Preservation of Trees :

1. ………….

2. ………….

3. Subdivisions – At the subdivision stage of development, Council requires all trees to be retained with the exception of the following cases which may be removed:

1. Trees which would interfere with survey work.

2. Trees of the specified girth measurement as set out in Paragraph 2.

must

reticulation of water

48 As the evidence later shows (see [80] to [82] it was only because Council placed fill up to 1 metre in depth on its lots adjoining the buffer zone that water from Tellamist’s land no longer drained into a natural depression. Otherwise such a drain need not have been required on what was still Tellamist’s land, being the intended Public Reserve, thereby denying its community use as also intended. Mr Glover, Tellamist’s expert clearly supports that conclusion; the drain could have been placed elsewhere.

49 A fair inference is that this communal area as set out in the consent would not have been compatible with the August 1991 clearing of the land of “all of the trees, saplings and shrubs treated upon the proposed public reserve” (para 21 of Mr Neal’s affidavit of 19 December 2001), and the construction in that proposed public reserve during the period from 10 to 14 August 1991 of a drain approximately 8 metres in width (para 23 of above affidavit).

50 There is no sufficient basis in the evidence for assuming that the removal of the trees would in any event have occurred in order to create the barbecue area or children’s play area. Indeed it was instead required to be landscaped and was only an area within the much larger buffer area. More importantly, the requirement of landscaping would have necessitated replacement of trees removed.

51 Mr Howes states in his report, by way of something “reasonable to assume” “that the works required by Condition 6 could not have been undertaken without removing some or all of the trees removed by Council” (Blue, 3/624). In fact, given the size of the buffer zone relative to what would be entailed by a modest landscaped barbecue and play area within it (see for example Blue, 5/1080) there is no reason to assume all trees, or even substantially all trees, would have had to be removed, quite apart from the landscaping requirement. But in any event he goes on to refer to the requirement for landscaping in Condition 3 (he overlooks the landscape requirement specifically in Condition 6), and recognises that “the tree removal would be minimised or replaced” by the developer. I mention these matters noting that Ipp JA in part relies on removal of trees for the barbecue/play area, in concluding against there being any damage. I respectfully reach a different view.

52 The respondent produced a letter from Mr Walsh, of Council, to Mr Neal, a director of Castor, dated 6 September 1984, mentioning a “complimentary [sic] buffer strip out of Lot 2” which would “serve to further separate the light industrial and residential if considered necessary” (Blue, 4/940).

53 The trial judge noted a passage from the affidavit of Mr Neal (Blue, 1/192N) where Mr Neal discussed the proposed buffer zone with Mr Rennie, a consultant surveyor retained by the respondent, and Mr Davies, the Council’s Assistant Engineer (Red, 26Q):

“Davies: I’ve got some things in mind, I’ll prepare a plan and we could meet again next week.
Rennie: What about this buffer zone?

54 According to Mr Neal, there was a second meeting contained a conversation which was in the following terms (Blue, 1/193Q-194T):

Stanton: It’s not hard and fast but we suggest is an equitable way to adjust the boundaries so that we can get what we need.

Davies: The shaded area [on the plan] is the buffer zone and that would be dedicated as a Public Reserve.

Rennie: This bottom area (indicating the western section of the shades strip) is low lying and the trees should be kept there.

Davies: All of the trees in the reserve will be retained.

Stanton: Besides being a buffer zone for the residence it will have a two fold purpose, it will act as a koala corridor. It will match up with a corridor on the other side of the road and it will be another one which will tie up in the Shire.

Davies: We’ll give you land and (indicating the shaded area on the plan) this will act as a buffer zone between the two subdivisions and one won’t be able to see the other.

Stanton: The residents will be able to walk through the trees and have a barbecue, they will be able to enjoy it, its nice bush.

Neal: What about compensation? You’re taking more of my land than you’re giving me.

55 This part of the affidavit was read into evidence subject to an indulgence to Mr Henskens (for the Council) not further relevant for present purposes (T, 6Y-7B).

56 Mr Neal was cross-examined at some length on the contents of his affidavit of 29 January 2003 (T, 116-123, 156-157), including this and the previous conversation with the Development Assessment Panel to which he deposed. Mr Neal adhered to the substance of the evidence given, stating that although it was hard to remember the specific detail of the conversations which occurred 14 years ago and that he might have got the dates wrong he was confident that the record was “pretty exact” (T, 121H). Mr Neal specifically denied the suggestion that the affidavit was an ex post facto concoction of himself and Mr Rennie and that the statements attributed to Stanton and Davies were not true, although he could not be sure whether it was Stanton or Davies who talked about the ‘koala corridor’. Mr Neal did, however, accept that the affidavit was based upon earlier unsigned affidavits, and perhaps also contemporaneous notes made by Mr Rennie or by himself.

57 Mr Rennie gave no affidavit evidence as to the conversation referred to above, and he was not cross-examined upon it. Mr Davies was not called as a witness and no affidavit evidence was adduced from him.

58 Mr Stanton swore an affidavit on 19 February 2003 (Blue, 4/820). In it he deposed that he could find no record of a Panel meeting on 26 January 1989, but that there was a meeting on 27 January 1989 at which he was not present as he was on leave. The meeting was chaired by Mr Lindsay and attended by Mr Blackmore, Mr Davies and Mr Alexander. The minutes to that meeting, which are annexures, record merely that a meeting with Mr Neal and Mr Rennie was scheduled for Thursday 2 February 1989 at 12.30 pm.

59 Mr Stanton deposed that there was a meeting on 2 February 1989, which he chaired. The minutes of the meeting were annexed to the affidavit, and record that the Panel was comprised of Mr Stanton (chairman), Mr Davies, Mr Blackmore and Mr Alexander. The Minutes record only this with respect to the Tellamist land (Blue, 4/830):

2 February 1989
12.55 pm – 1.20 pm
v) John Neal & John Rennie Residential Subdivision Gilchrist Road, Salamander Bay

Advice

60 Mr Stanton deposed that he doubted that the conversation took place on 2 February, but more likely took place at the Panel meeting on 6 April 1989. Mr Stanton denied absolutely the statements attributed to him in the conversation, and deposed that he had never seen the site and “had no idea what the bushland was like”. Mr Stanton was not cross-examined on this matter. I draw no inferences from that fact, beyond noting that this meant he was not tested on these matters.

61 Mr Blackmore gave no evidence in affidavit or oral form relating to this alleged meeting and conversation, although in cross-examination he did deny other conversations with Mr Neal (as set out in Neal’s affidavit of 20 January 1995, 16 April 1991) (T, 494F-R). Mr Drummond on behalf of Tellamist appeared to be trying to put to Mr Blackmore that the conversations did take place, but the question was only clearly put with regards to the conversation of 16 April 1991. In any case, Mr Blackmore stated that he did not believe the conversation to have occurred as reported by Mr Neal.

62 The trial judge (at [97]) observed that:

was ambushed

reasonably in my view, that a buffer of trees and vegetation was to be maintained in which it was to construct a landscaped playground and barbeque area

63 At [115] the trial judge concluded:

“115 At the very least, it is evident that the Council understood that there was to be a buffer consisting of trees to provide a visual screen. Just how that was going to be achieved in the jaws of the batters of the proposed drain is not made out in the evidence. It was high-handed to knock down the trees on the reserve and then suggest to the plaintiff that the drain would be to its benefit without giving it the opportunity to make that decision for itself.”

64 The trial judge also observed at [96] that the Council had represented this area as a “koala corridor”:

“… the Council had represented to the plaintiff that there would be a buffer between its land and the plaintiff’s land with reference to the public reserve as both open space and also a “koala corridor”; (at [96])

“It was a natural bushland setting or, as the Council had called it, a “koala corridor”

Conclusion Conclusion

65 There is no basis for disturbing any of the trial judge’s findings quoted above, as to the representations made to Mr Neal on behalf of Council and the respondent’s understanding so based as to there being a treed buffer zone; it is entirely consistent with the conditions later imposed on August 1991 and the earlier minutes of 2 February 1989. Likewise, I agree that the respondent was “ambushed” by the actions of Council in trespassing without prior warning on Tellamist’s land in August 1991 and removing the trees on successive occasions.

What was the agreement between the parties?What was the agreement between the parties?

66 Casmer & Associates Pty Ltd was the original owner of Lot 2 DP 561040 prior to its sale on 15 December 1988 to Tellamist. On 9 December 1988 Council issued to Casmer a s149 Certificate for the land which contained a Tree Preservation Order. The order prohibited the felling of any trees without the prior consent of Council (Blue, 1/213). Each successive Development application was subject to that same Tree Preservation Order; in particular that to be lodged by Tellamist on 23 May 1989 for a subdivision into 27 residential lots (see below).

67 Earlier between 29 August 1984 and 1988 Council and Casmer had corresponded regarding the creation of a “buffer zone” to protect the proposed residential development by Casmer from the adverse effects of the light industrial estate to be developed by Council. Casmer received such assurance by letter dated 6 September 1984 (Judgment at [5]).

68 To facilitate the development of its land, in February 1989 Council approached Tellamist seeking an adjustment of the common boundary to enable the construction of an extension of George Road to service the proposed light industrial lots to be created on Council’s land. In the absence of that boundary adjustment the Council would not have been able to construct the extension to George Road nor maximise the development of Council’s land. Tellamist also needed this adjustment to effect its own development.

69 On 23 May 1989 Tellamist lodged with Council DA 4370/89 for the subdivision of Lot 2 DP 561040 into 27 individual lots. On 3 July 1989 Council gave its consent. That consent was subject to the Tree Preservation Order (Condition 2) so that any removal was subject to Council approval. It was also subject to payment of a monetary contribution pursuant to s94 of the Environmental Planning and Assessment Act 1979 (NSW) (Judgment at [6]).

70 Part of the Tellamist land which was the subject of the proposed 27-lot subdivision was then still owned by Council (lots 1, 9, 10, 11 and 12). The development application was lodged in contemplation of two matters occurring in the future, the first a land swap and the second a re-zoning in pursuance of that land swap, as follows:

(b) the rezoning of that part of the Tellamist land which was to be transferred to the Council as industrial land (at that time it was zoned residential) and the rezoning of that part of the Council land to be transferred to Tellamist from industrial to residential.

71 The respondent stated in its submissions that the consent did not contain any condition requiring the dedication of any “buffer zone” (Orange, 64G). Council in its submissions stated that a linen plan registered with the Registrar General contained an area marked as “public reserve” which would upon registration vest title in that land in fee simple to Council under the provisions of s340D(1) of the Local Government Act 1919 (Orange, 37G – J). A plan drawn for Tellamist by Rennie & Associates was included in the evidence (Blue, 5/1080). This plan appears to outline the proposed new arrangement between Council and Tellamist. That plan included a section titled “Public Reserve” which was included in the part of the Tellamist land that was to be transferred to Council.

72 That plan also however included a section described as “Public Reserve: land which was included in that parcel to be transferred to Tellamist from Council”. The appellants’ counsel, Mr Inatey, SC, explained that this was rectified by the letter from Mr Neal to Council on 16 October 1989 (quoted in the Judgment at [8]). This letter was consequent upon discussions regarding the land swap. It outlined that the land including the public reserve that was to be transferred to Council from Tellamist was to go ahead. However, the section of Council land, under the original boundaries, that was deemed public reserve was to remain in the hands of Council, thus deeming the whole of the public reserve Council land. The trial judge referred to this letter in her judgment (at [8]). However, earlier the trial judge recorded that the discussions which led to that agreement included the following conversation between Mr Noel, principal of the respondent, Mr Rennie, the respondent’s consultant surveyor, and Mr Davies, the Council’s Assistant Engineer:

Rennie: What about this buffer zone?
Davies: There is a lot of growth and trees on the land and it would be silly to knock it down. A Public Reserve could be provided in John’s development and this would constitute a buffer zone.”
(Neal’s affidavit 29 January 2003; para 9)

73 Council sent a letter to Mr Neal accepting the land swap proposal on 21 November 1989 (Blue, 5/1107). Council and Tellamist had thereby agreed upon a land swap to adjust their common boundary as contemplated in the plans submitted in support of DA 4370/89 and on monetary compensation for that land swap (Judgment at [9]). Council agreed to pay Tellamist $250,000 and agreed to waive the s94 monetary contribution (Blue, 3/555). The letter from Council on 21 November 1989 offered the $250,000 in “full compensation for the transfer of land as indicated on the plan the subject of Development Consent No 4370/89” (Blue, 5/1107).

74 Mr Neal agreed in cross-examination that no further negotiations took place after the letter of 21 November 1989 was sent (Black, 1/T, 108). The appellants’ position is that this was where the discussions stayed – with the agreement of both sides that the public reserve land would become the property of Council.

“There are some real questions about the Council’s entitlement to proceed with the construction of the drain when: (1) no notice to or consent from [Tellamist] had been sought; (2) the land was subject to a tree preservation order; (3) the Council had represented to [Tellamist] that there would be a buffer between its land and [Tellamist’s] land with reference to the public reserve as both open space and also a ‘koala corridor’; and (4) that it had actual knowledge that [Tellamist] had relied upon the maintenance of the buffer in deciding to proceed with the cluster development and had even made it a condition of the consent that [Tellamist] enhance the buffer area with the establishment of the playground and landscaped barbeque area.”

477 It is necessary to deal with each of these “questions” in turn, but before doing so I would emphasise that the fundamental issue is the determination of what Griffith CJ in Spencer (at 432) described as the point at which “a desirous purchaser and a not unwilling vendor would come together”. This calls for the determination of the affect of the dispute concerning the Council’s rights to the Public Reserve Land (and in particular its right to remove the trees) on the hypothetical seller and purchaser (and, thereby, the market value of the land in question). The objective merits of the arguments raised in connection with the dispute are not conclusive. They are not the fundamental issue.

478 In this context, it is noteworthy that her Honour did not proceed to answer what she described as the “real questions about the Council’s entitlement to proceed with the construction of the drain”. The point to be made is that the existence of “real questions” about the Council’s entitlement did not, without more, detract from its argument that Tellamist did not suffer any loss. Her Honour appeared to assume that the mere existence of these “questions” meant that the Council’s argument failed. That, however, is not correct. It was necessary to go on to consider how the questions identified by her Honour affected the price that a willing but not anxious purchaser would be prepared to pay for the Tellamist land.

The knowledge to be attributed to the hypothetical purchaser

479 Bergin J correctly observed that if Tellamist had proceeded with the cluster development, “a condition [condition 10] of the consent [for DA 4370/89] was that [Tellamist] was required to dedicate the public reserve area to the Council prior to the release of the building application”. In any event, as Mr Inatey pointed out, “because the Public Reserve [Land] was integral to the subdivision proposed within the development application there was no necessity for a condition of consent”.

480 Mr Fagan, the valuer called by Tellamist, agreed that a prudent purchaser of the cluster development land would be “most interested” in knowing what was going to occur on the Public Reserve Land and would make enquiries of the Council as to what would be located there.

481 Mr Fagan was asked to assume that the Council would inform would-be purchasers that an open drain would be constructed on the Public Reserve Land, that this would require the trees to be felled, and that the Council intended to replant the public reserve area. Mr Fagan agreed that, on that assumption, “there would be no difference in the value of the property on a before and after basis”. He accepted that the Tellamist land, in the short term, would be “in exactly the same position” as the “after value” of the property. These views were the foundation of the opinion expressed by Mr Howes and, therefore, were common ground.

482 A hypothetical purchaser must be taken to know that the Public Reserve Land would have to be transferred to the Council before any building work could occur. The evidence is incontrovertibly to this effect.

483 Further, in my view, the hypothetical purchaser must be taken to know that compliance with condition 6 would require substantial removal of trees from the “buffer area” which was to be the Public Reserve Land. Mr Howes testified that the work necessary to comply with condition 6 would be something that a hypothetical purchaser would take into account in assessing the purchase price of the land intended for cluster development. In my view, this evidence must be accepted. As I have mentioned, Mr Howes testified that the tree removal by the Council in August 1991 would have been “substantially required” by that condition.

484 The following questions then arise: Firstly, is the hypothetical purchaser to be deemed to know the Council’s intentions concerning the drain and the removal of the trees? Secondly, is the hypothetical purchaser to be deemed to know that compliance with condition 6 could well, in any event, require the removal of a substantial amount of trees?

485 Santow JA writes in this regard:

Spencer

486 In Spencer (at 441) Isaacs J said:

“To arrive at the value of the land at [the relevant] date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”

487 In Marks v GIO Australia Holdings (1998) 196 CLR 494, McHugh, Hayne and Callinan JJ said (at 514):

Spencer v The Commonwealth

Boland v Yates

.

488 In Kenny & Good Pty Limited v MGICA(1992) Ltd (1999) 199 CLR 413 (at 648-649, [266]-[269] per Callinan J). McHugh J referred to the passage of Isaacs J’s judgment in Spencer that I have quoted above and said (at 436, [50]):

“The market for the property is, therefore, assumed to be an efficient market in which buyers and sellers have access to all currently available information that affects the property.”

489 In my view, the overwhelming thrust of these authorities is to the effect that the hypothetical seller and purchaser are to be assumed, in the hypothetical situation postulated, to be aware of all information relevant to the market price, about which a prudent purchaser would inquire.

490 Regard should also be had to those cases involving common law negligence which state that if inquiry ought to be made, and no inquiry is made, it is to be assumed that a true answer would be given. See in this regard Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 at 1606-7 per Ungoed-Thomas J and the cases of persuasive authority cited there. See also Linter Group Ltd v Goldberg (1992) 7 ACSR 580 at 640 per Southwell J. I see no reason why that approach should not be applied to the issue that presently arises.

491 On the basis of these authorities it is not to the point whether the Council might or might not have informed the hypothetical willing purchaser of the drainage plans and its intention to remove the trees. It is to be assumed that the Council would have told the hypothetical purchaser the truth. As Isaacs J said in Spencer (at 441), we must suppose both seller and purchaser “to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value”.

492 In any event, as a matter of fact, I consider that the correct inference is that the Council would have told the hypothetical purchaser the truth.

493 The Council had purported to approve the drainage plans and its approval formed part of its formal consent to the subdivision of its own land. The drainage plans formed part of the Council’s file. There is no suggestion that the Council’s consent was not a public document and that it was not capable of being inspected at the Council’s office by any interested party.

494 An examination of the area on the Public Reserve Land on which the Council intended to construct the drain would indicate, inevitably, that – for the drain to be constructed – many trees would have to be removed and the screen of trees would be materially impaired. Condition 6 also made it clear that trees would have to be removed.

495 On my reading of the transcript, it was not put to any witness of the Council in cross-examination that the Council would attempt to conceal its intentions with regard to the drain and the trees. In fact, the plans of the drain were handed over to Tellamist no later than 23 August 1991.

496 Accordingly, in my view, a reasonable hypothetical purchaser, at the time of the trespasses, on inquiry would have been told of the Council’s intentions to build the drain and to remove the trees once the land was dedicated to it. In addition, the hypothetical purchaser would know about condition 6 and its consequences.

497 The hypothetical purchaser would also know that, subject to the “real questions” to which Bergin J referred, once the Council became the owner of the Public Reserve Land there would be nothing to stop it from removing the trees and constructing the drain. The next issue is then, what regard would the hypothetical purchaser have to those questions?

The question of notice to or consent from Tellamist (question (1))

498 The first “question” identified by her Honour arises from the fact that “no notice to or consent from [Tellamist] had been sought”. I think the following points should be made about this.

499 It is irrelevant to the present issue whether the Council had given notice to or sought consent from Tellamist prior to the trespass. The true issue is whether a hypothetical purchaser would believe that, after dedication of the Public Reserve Land to the Council the Council would be required to give notice to or seek consent from Tellamist before removing the trees.

500 Assuming that the land was dedicated to the Council, then, subject to questions (2), (3) and (4), the Council, as owner of the land, would not have to give notice to or seek consent from Tellamist before clearing the trees from the site. That is to say, but for the matters the subject of questions (2), (3) and (4), there is nothing that a hypothetical purchaser would sensibly regard as requiring the Council to give notice to or obtain consent from the owner of the cluster development land before constructing the drain and removing the trees.

501 Accordingly, if the hypothetical purchaser would not regard questions (2), (3) and (4) as giving rise to a real prospect that the trees might not be removed, then question (1) would not affect the market value of the land. In truth, the hypothetical purchaser would not regard it as a question of any moment whatever.

The question arising from the existence of the Tree Preservation Order (question (2))

502 I now turn to question (2), namely the effect of the Tree Preservation Order on the market value of the Public Reserve Land.

503 A Tree Preservation Order made pursuant to the powers of the Council under cl 41, Interim Development Order No 2, Shire of Port Stephens applied to all land situated within the Shire. It precluded the cutting or removal of trees without the prior consent of the Council.

504 The Council was the relevant consent authority in regard to the Tree Preservation Order. That fact alone militated against the Tree Preservation Order being a significant impediment to actions by the Council on its own land.

505 The Tree Preservation Order had not precluded the clearing of the Council and the Tellamist land prior to the trespasses; that is, the clearing that resulted in all the trees on the Council land and the Tellamist land being removed (apart from the band of trees that remained on the Public Reserve Land).

506 It is arguable that, as the Council approved the engineering and drainage works required in accordance with the development consent granted in respect of its industrial subdivision, it would not have been necessary for the Council to obtain a further consent from itself for the removal of the trees. Mr Douglas, an officer of the Council involved in the process for the approval of the subdivision of the Council’s industrial land, testified that this was the case. These are matters that a hypothetical purchaser would bear in mind. If the Council were required to give a fresh consent, I accept that it would be required to act reasonably in determining whether it should, itself, comply with the Tree Preservation Order. It would, of course, take into account that it had already – tacitly – given that consent when approving its subdivision. That being so, a hypothetical purchaser would assume that the prospect of the Council not giving consent would be extremely remote.

507 Any attempt to set aside a consent by the Council to remove the trees would involve difficult litigation that would involve delay and expense. Apart from the entirely speculative chances of success in such litigation, there would remain the prospect of an appeal to the Court of Appeal.

508 In my view, the prospects of a hypothetical purchaser being prepared to pay more for the land because of the Tree Preservation Order were zero.

The question of representations about a buffer zone and a koala corridor (question (3))

509 I now turn to question (3), namely the representations by the Council to Tellamist “that there would be a buffer between [the Council’s] land and [Tellamist’s] land with reference to the public reserve as both open space and also a ‘koala corridor’”.

510 These representations were not issues to which particular attention was given at the trial. They were not raised in the pleadings and were not issues upon which firm factual findings were made. Her Honour merely said that the representations gave rise to “real questions”.

511 Even if representations were made as to the creation of a buffer, the removal of the trees did not preclude a buffer being created on the Public Reserve Land. A buffer zone does not necessarily mean a treed zone. It may simply mean a zone involving public open space between the Council land and the Tellamist land. Indeed, it was a zone on which a children’s’ play area, barbecue and landscaping had to be established, involving substantial removal of trees.

512 The representations as to the retention of trees and a koala corridor were of vague and uncertain content and in my view did not give any clear indication of the Council’s intention in these respects. Moreover, no argument was advanced explaining how representations to Tellamist could be relied on by the hypothetical purchaser. The representations do not run with the land.

513 The Heads of Agreement made no reference to any agreed restriction on the rights of the Council to cut down trees on the Public Reserve Land and it is arguable that the Heads of Agreement negate any prior representations to that effect. This question, too, does not appear to have been considered at the trial and was not investigated on appeal.

514 No evidence was given as to what Tellamist would have done had it known of the asserted falsity of the representations or what any person on behalf of Tellamist did upon learning about the falsity of the representations. There was no evidence that Tellamist complained that what was done was contrary to representations made to it.

515 In an affidavit sworn by Mr Neal on 19 December 2001, he set out what he asserted Tellamist would have done had it been notified of any proposed action by the Council to enter upon the Public Reserve Land to construct the drain and remove the trees. The steps were said to involve the making of representations to the Council about the effect of incorporating fill along the Council land, where the drain should be constructed, the specifications of the drain, the preservation of the trees and vegetation on the Public Reserve Land and the effect of the Tree Preservation Order. Mr Neal did not say that the construction of the drain and the removal of the trees were contrary to any representations made to Tellamist by the Council. He did not assert that legal action would have been taken to restrain the Council from removing the trees.

516 The representations in question cannot, alone, give rise to any rights on the part of Tellamist against the Council. Bergin J made no finding as to whether they created some kind of estoppel against the removal of the trees and this issue was not investigated at the trial. In this appeal it would not be possible to find that any such estoppel existed.

517 A hypothetical purchaser should be taken to know that the Council would firmly resist any contention that it was bound by the asserted representations. Such a person would know that resort would have to be had to difficult, costly and lengthy litigation to restrain the removal of the trees based on the allegation that the representations were made.

518 In the circumstances, I do not think that the matters raised by question (3) would cause a hypothetical willing purchaser to ascribe a value to the land intended for the cluster development based on the continued existence of the trees.

The question of Tellamist’s reliance on the buffer (question (4))

519 The final “real question” (question (4)) is that the Council “had actual knowledge that [Tellamist] had relied upon the maintenance of the buffer in deciding to proceed with the cluster development and had even made it a condition of the consent that [Tellamist] enhance the buffer area with the establishment of the playground and landscaped barbeque area”.

520 Much of what I have said concerning question (3) applies to question (4), particularly as to the meaning of “buffer”.

521 It is by no means clear from the evidence that Tellamist relied upon the maintenance of the buffer in deciding to proceed with the cluster development. Even if it did, the removal of the trees did not constitute a failure to maintain the buffer.

522 There does not appear to have been any evidence that any person in the Council knew that Tellamist relied (that is, if it did) on the maintenance of the buffer in deciding to proceed with the cluster development.

523 Nothing in condition 6 required the retention of the trees in their pristine condition.

524 I do not think that question (4) would add to the market value of the cluster development land. In my view, it would have had no affect on a hypothetical purchaser’s view of what price should be paid for that land.

Conclusion

525 In my view, for the reasons I have set out, the four “real questions” would not have carried any weight with a hypothetical purchaser. In my view, such a purchaser would not have attributed any value to the cluster development land by reason of the continued existence of the band of trees. Thus, in my view, the removal of the band of trees in the course of the trespasses did not affect the value of the land.

526 It follows that I would uphold the argument of the Council. In my view, Tellamist did not sustain a loss as a result of the trespasses.

527 It follows, also, that the claim for consequential damages must fail. Tellamist did not proceed with the cluster development and there is no real prospect of it ever doing so in the future. Tellamist’s case was that it did not proceed with the cluster development because it considered that, without the trees, the development was not economically viable. But, if that is correct, the cluster development (for the reasons I have given) was never economically viable. Accordingly, Tellamist cannot recover, by way of damages from the Council, its costs – incurred before the trespass – of preparing for the cluster development.

528 As the trespasses were established (and, indeed, admitted), Tellamist is entitled to nominal damages for the wrongful acts of the Council. I would order the Council to pay Tellamist nominal damages of $1,000 (representing $250 for each set of trespasses).

529 In my opinion the appeal should succeed and the cross-appeal should be dismissed. The judgment and orders made by Bergin J should be set aside. There should be judgment for Tellamist for $1,000. I shall say nothing about costs orders as we were requested to leave costs until further order. Mr Inatey indeed requested that at this stage the Court make no orders at all.

530 I would therefore leave it to the parties to make written submissions within 14 days as to the orders proposed.

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Last Modified: 10/05/2004

Citations

Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353

Most Recent Citation

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Cases Cited

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CITATION:	Port Stephens Shire Council & Anor v Tellamist P/L [2004] NSWCA 353
HEARING DATE(S):	18, 19 February 2004
JUDGMENT DATE:	27 September 2004
JUDGMENT OF:	Giles JA at 1; Santow JA at 2; Ipp JA at 332
DECISION:	Appeal allowed and cross-appeal dismissed.
CATCHWORDS:	TORTS - trespass to land - trespass by defendant Local Council as adjoining landowner - destruction of trees on land owned by plaintiff in consequence of the trespass - liability not in issue - DAMAGES - assessment of compensatory damages - whether compensable loss suffered - adequacy of damages - valuation - whether basis for valuation of loss appropriate - whether diminution in value of plaintiff's undeveloped land - knowledge to be attributed to hypothetical purchaser in valuing land - whether exemplary damages appropriate - whether corporate defendant in conscious and contumelious disregard of the plaintiff's rights - whether exemplary damages inadequate - PRACTICE AND PROCEDURE - whether interest on compensatory damages should be awarded for the whole period from when the cause of action arose until judgment
LEGISLATION CITED:	Environmental Planning & Assessment Act 1979 (NSW) s94 Local Government Act 1919 s340D(1) Local Government Act 1993 s7; s8(1); s220 Supreme Court Act 1970 s94(1)
CASES CITED:	Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490 Amalgamated Television Services Pty Ltd v Marsden (No. 2) (2003) 57 NSWLR 338 Beach Petroleum NL v Johnson (1993) 43 FCR 1 Bennett v Jones [1977] 2 NSWLR 355 (CA) Boland v Yates Property Corp Pty Ltd (1999) 167 ALR 575 Brambles Holdings Ltd v Carey (1976) 15 SASR 279 Carr v Sourlos (1994) 6 BPR 13,626 Cassell & Broome Co Ltd v Broome [1972] AC 1027 Clifford and Anor v Wyong Shire Council (1996) 89 LGERA 240 Closer Settlement Ltd v The Minister (1942) 17 LGR (NSW) 62 C.R. Taylor (Wholesale) Ltd v Hepworths Ltd [1977] 1 WLR 659 Commissioner of Land Tax v Nathan (1913) 16 CLR 654 Commissioner of State Revenue v Pioneer Concrete (Vic) Pty Ltd (2002) 192 ALR 56 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601 Evans v Balog [1976] 1 NSWLR 36 Farmer Giles Ltd v Wessex Water Authority [1990] 1 EGLR 177 (CA) Falkner v Bourke (1990) 19 NSWLR 574 (CA) Fire & All Risks Insurance Co Ltd v Rousianos (1989) 19 NSWLR 57 Fox v Percy (2003) 214 CLR 118 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 Gazzard v Hutchinson (1995) AustTortsRep 81-337 Gosford Shire Council v Green (1980) 26 The Valuer 425 Gray v Motor Accident Commission (1998) 196 CLR 1 Hollebone v Midhurst and Fernhurst Builders Ltd [1968] 1 Lloyd's Rep. 38 Holt v Cox (1994) 15 ACSR 313 House v The King (1936) 55 CLR 499 Housing Commission of NSW v Falconer [1981] 1 NSWLR 547 Jamal v Moolla Dawood, Sons & Co [1916] AC 175 Jegon v Vivian (1871) LR 6 Ch. 742 Johnson v Perez (1988) 166 CLR 351 Jones v Gooday (1841) 8 M & W 146 Keddell v Regarose Pty Ltd [1995] 1 Qd R. 172 Kenny & Good Pty Limited v MGICA (1992) Ltd (1999) 199 CLR 413 Krakowski v Eurolynx Properties Pty Limited (1995) 183 CLR 563 Lamb v Cotogno (1987) 164 CLR 1 League against Cruel Sports Ltd v Scott [1986] QB 240 Linter Group Ltd v Goldberg (1992) 7 ACSR 580 Livingstone v Rawyards Coal Co (1880) 5 App.Cas. 25 Lonie v Perugini & Perugini [1977] 77 ATC 4,318 Lovell v Lovell (1950) 81 CLR 513 McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Malec v J C Hutton Pty Limited (1990) 169 CLR 638 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 Micallef v ICI Australia Operations Ltd [2001] NSWCA 274 Miller v Jennings (1954) 92 CLR 190 Minister for Public Works v Thistlethwayte (1954) AC 475 Ministry for Defence v Ashman (1993) 25 HLR 513 Minter v Eacott (1952) 69 WN(NSW) 93 Murray v Commonwealth (1986) 5 NSWLR 83 Noroton Holdings Pty Limited v Friends of Katoomba Falls Creek Valley Incorporated (NSWCA, 18 October, 1996, unreported) Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 185 ALR 280 Parramatta City Council v Lutz [1988] 12 NSWLR 293 Pastoral Finance Association Ltd v The Minister (1914) AC 1083 (PC) Perri v Flavell (No 2) (NSWCA Kirby P and Powell JA, 20 September 1995, unreported) Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd (2001) 50 NSWLR 679 Public Transport Commission of NSW v Perry (1977) 14 ALR 273 Public Trustee v Hermann (1968) 88 WN(Pt.1) NSW 442 Re United Merthyr Collieries Co (1872) LR 15 Eq 46 Rentokil Pty Ltd v Channon (1990) 19 NSWLR 417 Roberts v Rodney District Council [2001] 2 NZLR 402 Rogers v Nationwide News Pty Ltd (2003) 77 ALJR 1739 Ruby v Marsh (1975) 132 CLR 642 Scott v Shepherd (1773) 96 ER 525 Scutt v Lomax [2000] EWJ 350 Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 Smiths Newspapers Ltd v Becker (1932) 47 CLR 279 Spencer v the Commonwealth (1907) 5 CLR 418 State of South Australia v Johnson (1982) 42 ALR 161 State of New South Wales v Riley (2003) 57 NSWLR 496 Swordheath Properties Ltd v Tabet [1979] 1 WLR 285 TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 The Queen v Brown (1867) LR 2 QB 630 Turner v The Minister for Public Instruction (1956) 95 CLR 245 XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd (1985) 155 CLR 448 Wasson v California Standard Co (1964) 47 DLR (2d) 71 Whitfeld v De Lauret and Company Limited (1920) 29 CLR 71 Willis v the Commonwealth (1946) 73 CLR 105 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628 Wormald v Cole [1954] 1 QB 614
PARTIES :	PORT STEPHENS SHIRE COUNCIL (First Appellant) DARACON ENGINEERING PTY LIMITED (Second Appellant) TELLAMIST PTY LIMITED (Respondent)
FILE NUMBER(S):	CA 40395/03
COUNSEL:	G INATEY, SC/ A A HENSKENS (Appellants) R J ELLICOTT, QC/ J S DRUMMOND (Respondent)
SOLICITORS:	Cantle Carmichael (Appellants) Hartmann & Associates (Respondent)

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 2067/93
LOWER COURT JUDICIAL OFFICER :	Bergin J