Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 4)
[2004] VSC 522
•17 December 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 8264 of 2003
| PREMIER BUILDING & CONSULTING PTY LTD (ACN 066 568 367) | Plaintiff |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) & ORS | Defendants |
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JUDGE: | BYRNE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 and 8 December 2004 | |
DATE OF JUDGMENT: | 17 December 2004 | |
CASE MAY BE CITED AS: | Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No. 4) | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 522 | |
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Practice and Procedure – pleadings – strike out application.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G J Digby QC Mr N Pane Mr T R O Boston Mr C Shaw | Baker & McKenzie |
| For the Defendants | Mr J E Middleton QC Mr T J P Walker | Freehills |
| For the 2nd Defendant (North Suburban) | Mr M Dreyfus QC | Blake Dawson Waldron |
| For the 4th Defendant | Mr B F Quinn | Monahan & Rowell |
| For the 5th Defendant | Mr J H Gobbo QC Mr D Aghion | Deacons |
| For the 6th Defendant | Mr C C Macaulay SC Mr A Hanak | Herbert Geer & Rundle |
| For the 7th Defendant | Mr P Over | Slater & Gordon |
| For the 8th Defendant (McMullin Nominees) | Mr A G Uren QC Mr C J Wren | Mallesons Stephen Jaques |
HIS HONOUR:
This proceeding was commenced in October 2003 by writ with statement of claim endorsed on it. The statement of claim has been much amended and further parties have been added in April 2004, August 2004 and September 2004. The pleading filed in September, which is entitled further amended statement of claim, was subject to some criticism on behalf of the defendants and application was brought by the firstnamed defendant, Spotless Group Ltd (“Spotless”), the thirdnamed defendant, Ensign Services (Aust) Pty Ltd (“Ensign”), and a proposed ninthnamed defendant, Spotless Services Ltd (“Spotless Services”), which I shall collectively refer to as “the Spotless Parties”, and by the sixthnamed defendant, Moreland City Council (“the Council”), to strike out parts of it. In response, counsel for the plaintiff have circulated a proposed amended statement of claim which they have entitled Second Further Amended Statement of Claim. As a matter of convenience, the parties were content to deal with their pleading complaints by reference to this proposed document which in this judgment I simply refer to as the statement of claim. I am content to proceed on that basis, approaching the applications as if the statement of claim were a pleading filed in the Court which is subject to application under Rule 23.02.
I need hardly mention that my concern with the statement of claim is with it as a pleading. Accordingly, I will act with respect to those parts of it (if any) which offend the formal rules of pleading or where they are insufficiently particularised or where the claim as pleaded is manifestly hopeless. I am not concerned to deal with the plea or a claim which is otherwise said to be likely to fail.
The gist of the claim is that the plaintiff, Premier Building and Consulting Pty Ltd (“Premier”), is the owner of the land situate at and known as 227-231 Barkly Street, Brunswick (“Premier’s property”) upon which it has constructed a 49 unit residential development. On the adjoining land situate at and known as 225 Barkly Street, Brunswick (“the neighbouring property”) one or other of the Spotless Parties, or companies for which they are responsible, had for many years conducted the business of dry cleaners and laundry. It is said, too, that a dry cleaning business has also been conducted by Spotless on Premier’s property in the 1970s. Premier alleges that the Premier’s property has been contaminated by white spirit and PCE which had been used in these businesses and which had been discharged into the environment. This has meant that Premier’s property is not fit for residential purposes until it is decontaminated and that Premier has incurred or will incur the expense of this and loss of profits from the development as well as other losses.
Premier’s claim against the Spotless Parties is pleaded in nuisance[1], negligence[2] and for compensation under s. 62A of the Environment Protection Act 1970[3]. All statements of fact in this judgment are taken from the statement of claim and all references are to paragraphs in that pleading unless otherwise indicated.
[1]Paragraphs 9A-11H, 43
[2]Paragraphs 15A-16, 18A-24C, 27A-27D, 40A, 40B and 42
[3]Paragraph 145
Paragraphs 5A and 5B
The complaint here is that the particulars seek to incorporate by reference the content of a lengthy witness statement and, in the case of paragraph 5A, certain other documents. I have not examined these documents. I agree in principle that the pleading should itself set out the substance of what is relied on. This is, of course, not the evidence to be led in support of the allegation but a description of what is contended for. I will direct that proper particulars be provided.
Paragraph 6
In this paragraph it is alleged that the eighthnamed defendant, McMullin Nominees Pty Ltd, in 1962, applied for and obtained the permits necessary for the construction and operation of a laundry and dry cleaning business on the neighbouring property. No complaint is made about this plea and I assume for present purposes that it is the fact. What is complained of is the added allegation that this was done on behalf of Spotless. No particulars of this are provided nor is any argument offered to justify this. I will order that the particulars be provided.
Paragraphs 7B, 7E, 7I and Paragraphs 7C, 7F, 7J
It is convenient to treat these matters together for they raise similar issues. The facts alleged by Premier in its statement of claim as to the suggested contaminating activities conducted on the neighbouring property between 1962 and 1987 may be summarised in the following chronology as to the use of this property.
1957-1987
Spotless in occupation[4].
1958-?
McMullin registered proprietor[5].
1962
McMullin applies for and obtains permits for the construction and operation of a laundry and dry-cleaning business[6].
1963-1978
The business is conducted by Spotless Laundry Pty Ltd, now a deregistered company.
1978-1982
The commercial laundry business is conducted by Spotless Supply Services Pty Ltd, now a deregistered company.
1982-1987
The commercial laundry business is conducted by Ensign[7], which occupied the property from 1 July 1982[8].
[4]Paragraph 2(b)
[5]Paragraph 3F(b)
[6]Paragraph 6
[7]Paragraph 3D
[8]Paragraph 3A(b)
It will be seen that the operators of the business between 1963 and 1982 are now deregistered. Premier seeks to attach to Spotless responsibility at law for the acts of those companies and of Ensign in two ways: by alleging agency[9] and by alleging a common enterprise[10]. Spotless Supply Services Pty Ltd (“Spotless Supply”) was at the time it was operator a wholly owned subsidiary of Spotless Services[11]. Each of the operators[12], as well as McMullin and Spotless Services[13], was or is a company within the Spotless Group of companies and Spotless was the holding company or the ultimate holding company of each of them.
[9]Paragraphs 7B, 7E, 7I
[10]Paragraphs 7C, 7F, 7J
[11]Paragraph 7E particular (a)(i)
[12]Paragraph 7B, 7E particular (a) and 7I
[13]Paragraph 7E particular (b)
In the particulars given under paragraphs 7B, 7E and 7I it is alleged that the existence of the agency relationship is to be implied from matters including that: Spotless exercised complete dominion and control over the operator company; Spotless was involved in the business in a way that was over and above that expected of a holding company; and Spotless and the operator company were concurrently occupying the neighbouring property.
On behalf of the Spotless Parties it was submitted that the pleas of agency were embarrassing. In fact, what was contended was that the assertions of fact made in the paragraphs and in the particulars would not, if made out, support the conclusion of agency. The test which I must apply is that set out by Barwick CJ in General Steel Industries Inc vCommissioner for Railways (NSW) [14]. I was referred to the useful analysis of the application of the law of agency where the actor company is controlled by a parent company in Briggs v James Hardie & Co Pty Ltd[15]. In the course of the discussion his Honour pointed to the present uncertainties of the law in this area. I was referred, too, to the decision of Einstein J in Idoport Pty Ltd v National Australia Bank Ltd[16] where his Honour observed that that the existence of agency in these circumstances will depend upon an investigation of all aspects of the relationship[17].
[14](1964) 112 CLR 125 at 129-130
[15](1989) 16 NSWLR 549 at 567 and ff, per Rogers AJA
[16][2004] NSWSC 695 at [144]
[17]See also Halsbury Laws of Australia [120-3010]
Against this background, I would not take it upon myself to find that it was fanciful to conclude that the facts asserted by Premier in each case would not support a finding of agency as alleged. I will not strike these paragraphs out [18].
[18]I note in passing that counsel for Premier have accepted that the words “in particular” should be deleted from paragraphs 7B particular (a), (b), 7E particulars (a)(i)(ii), (b)(i)(iii) and 7I particular (a)(i)(iii).
Paragraphs 7C, 7F and 7J seek to involve Spotless or Spotless Services as a participant in a common enterprise to conduct the business on the neighbouring property. In their submission counsel for Premier made it clear that these paragraphs are not intended to fix Spotless with a separate liability jointly with the operator; they are simply to establish a factual basis for piercing the corporate veil between the operator and Spotless or the operator and Spotless Services and Spotless. What is put is that, where companies are participating in a common enterprise and their relationship is such that each is relevantly indistinguishable from the other, the parent is liable for the acts of the subsidiary. This is a liability which is conceptually different from that of principal’s liability for the acts of its agent which is pleaded in paragraphs 7B, 7E and 7I, but it is alleged to depend upon the same facts. In the circumstances, little saving in terms of trial time would be obtained by striking it out. But, in any event, I am not persuaded that the prospects of success are sufficiently remote to warrant that course.
Paragraphs 8A, 9A, 9B
These complaints were not pressed.
Paragraph 10A
In this paragraph Premier alleges that on a date or dates unknown to it, but after 1972, Spotless contaminated the Silurian bedrock with white spirit[19]. The complaint made is that particulars are not provided of how the nuisance was created and that further specified particulars are not given. In order to make out this nuisance it is necessary that Premier allege that the use and enjoyment of Premier’s property by it or its predecessor in title was substantially and unreasonably interfered with and that Spotless or someone for whose conduct it is responsible caused this[20]. The acts upon which this allegation are based occurred, it would seem, from 1975, some 24 years before Premier agreed to purchase the property. It seems clear enough that Premier alleges that in some way Spotless released the white spirit or permitted it to be released into the soil so that it contaminated the bedrock under the Premier property. It is, to my mind, necessary for Premier to specify how this was done and if this be not known, how its case is to be put. The particulars currently given do not deal with this. They allege only that the white spirit was brought onto, used by and was stored in underground tanks on the neighbouring property. I will order that particulars of the creation of the nuisance be given. I will not order the further particulars sought by the Spotless Parties in paragraph 8 of their submissions.
[19]See also paragraphs 5B and 9A
[20]Halsbury Laws of Australia [415-635] – [415-710]
Paragraphs 10B, 10F, 10J, 10K, 11B, 11F, 19 and 20
In each case the paragraph alleges that one or other of the Spotless Parties knew or ought to have known something. In some cases particulars have been provided but, in most, nothing is particularised. Pleading knowledge is always difficult, for a party will rarely know what goes on in the mind of an opponent, particularly when it is a corporation. In most cases it is a matter of pleading an admission, which is in fact a matter of evidence, or inference from facts. Nevertheless, R.13.10(3)(b) requires this. Commonly, a state of mind is proved from circumstantial evidence, as appears to be the case here.
The response of Premier is that paragraphs 19 and 20 adequately identify this knowledge. I agree. I will not order further particulars.
Paragraphs 10C, 10G, 10L, 11C, 11G
In each case, these paragraphs allege that one or other of the Spotless Parties failed to take reasonable steps to bring the white spirit nuisance or the PCE nuisance to an end. The allegation seems to be that the Spotless Parties did nothing or, if they did something, it was ineffective. Given the nature of the contamination, this is sufficient. I will not make an order.
Paragraphs 15A, 15B, 15C
These paragraphs are said to fall with the other paragraphs which are the subject of complaint. I will not strike them out in any event. The facts alleged and the particulars given are sufficient.
Paragraphs 22A-22D
In these paragraphs it is alleged that it was reasonably foreseeable to one or more or other of the Spotless Parties that current or subsequent owners would suffer the loss which the plaintiff says it has in fact suffered in this case. The complaint is that Premier must plead actual knowledge or foreseeability at the relevant time that the damage it now complained of was likely to be caused by specific acts or omissions. I am certainly not sufficiently confident that this is the law in Australia to make an order with respect to these paragraphs.
Paragraphs 24A, 24B, 24C, 26
In each of these paragraphs it is alleged that one or other of the Spotless Parties owed a duty of care to the current and subsequent owners and or occupiers of the property adjoining or surrounding the neighbouring property and in particular the Premier property. Duties of care are specified in the paragraphs.
It appears to be the Premier’s case that the white spirit or the PCE found its way into the soil during the periods between 1963 and 1987 when one or other of the Spotless companies was operating the laundry and dry cleaning business or the commercial laundry business on the neighbouring property. Premier was not incorporated until 26 October 1994[21] and entered into the agreement to purchase the Premier property on 11 November 1999[22].
[21]Paragraph 1(a)
[22]Paragraph 43
The claim is therefore a claim against a plaintiff which did not exist when the wrongful acts occurred and whose loss is pure economic loss.
It is said that the pleading must set out the factual basis for the existence of the duty, the scope and content of the duty, the type of damage which duty is to prevent, the person who is to be the beneficiary of the duty and the co-relation between the negligent acts and omissions and the damage suffered. I am mindful that this is a difficult, contentious and developing area of law. I have been referred to and have considered the various views expressed by the members of the High Court in Perre v Apand[23]; Bryan v Maloney[24]; Modury Triangle Shopping Centre Pty Ltd v Anzil[25]; Tame v New South Wales[26]; and Woolcock Street Investments Pty Ltd v CDG Pty Ltd[27].
[23](1999) 198 CLR 780
[24](1995) 182 CLR 609
[25](2000) 205 CLR 254
[26](2002) 211 CLR 317
[27][2004] HCA 16
In this case the pleading identifies the class of persons to whom the duty is said to be owed; it makes it clear that it is to prevent contamination to adjoining land of a harmful product. It is but a small step to foresee that the loss which might be suffered may be physical harm to persons on the affected land or, as is the case here, economic loss to persons whose use of the land is affected. I will not strike out the paragraphs.
Paragraph 27A
If further particulars of the breaches and duty are sought they should be asked for.
Paragraph 35 and 37
It is said that the causal steps in these allegations of causation are not self-evident and should be set out or the paragraphs struck out.
Paragraph 35 alleges that the construction of the units on the Premier property ceased in late March 2003 by reason of the contamination. In paragraph 5C, Premier alleges that it first became aware of the contamination to its property on 7 March 2003. There is therefore a temporal coincidence. Moreover, in paras 64, 68 and 33 it appears that the construction work was being conducted at that time in breach of the environmental conditions, Condition 28, to the planning permit. Given the circumstances, it is not difficult to understand the suggested causal relationship. Nevertheless, if there is some other factor, such as a stop work order by some competent authority, this should be pleaded.
Likewise I will not strike out or order particulars of paragraph 37.
Paragraphs 40A, 40B, 42 and 145
Particulars of loss and damage are incomplete. In its submission in reply Premier says that the information is contained in various reports. This is not a satisfactory answer and the particulars should be provided.
A further complaint with respect to paragraphs 40A, 40B and 42 is the insufficiency of the allegation that the losses were caused by the breaches referred to. I will not make any order as sought. It is evident from the paragraphs preceding paragraph 40A how it is suggested the loss was caused by the wrongful acts which in turn caused or permitted the contamination of the Premier property.
Paragraphs 140A, 143B and 145
Paragraphs 139A and following bring an alternative statutory claim against Spotless. On 18 November 2003 and 27 February 2004 the EPA issued to Premier as occupier of the Premier property a clean-up notice pursuant to s.62A(1) of the EPA Act. By s. 62A sub-s. 2, an occupier in receipt of such notice may recover compensation for the costs of compliance against “the person who has caused or permitted the pollution to occur”.
The paragraphs here in question allege that Spotless, Ensign and Spotless Services is, each of them, the person who caused or permitted the pollution to occur. The point taken on behalf of those parties is that on the proper construction of the statute, it is only the actual polluter or permitter who may be liable under s. 62A(2); not a person who may be vicariously liable or liable as a principal for the acts of the polluter or the permitter. Some argument was presented in support of this contention but no direct authority was cited.
Given the nature of a pleading summons, I would be reluctant to make what is in effect a final determination of such a legal point. In any event, some of the pleas made in the common law claims against these parties do allege that they permitted the pollution to occur. Furthermore, no good purpose would be served by striking out these claims. The defendants remain before the Court to answer the common law claims and these raise similar factual issues as those in the statutory claims. As a matter of discretion therefore I would refuse this relief.
The Moreland Council Application
The gravamen of Premier’s claim against the Council concerns its conduct in preparing an amendment to the Moreland Planning Scheme which came into force on 4 May 2000[28] and its role in implementing and enforcing the planning scheme. The effect of the Moreland Planning Scheme was that the Premier property which had been light industrial and/or extractive industrial became zoned mixed use within an environmental overlay.
[28]Paragraph 54A
Under s. 12(2)(a) of the Planning and Environment Act 1987, the Council is obliged to have regard to the Minister’s directions in preparing a planning scheme. Minister’s Direction No. 1, dealing with potentially contaminated land obliged the Council to satisfy itself that environmental conditions of the land would be suitable for the proposed use, where this included residential use[29].
[29]Minister’s Direction cl. 4
In paragraph 5 of the Minister’s Direction, two alternative courses are prescribed: first, the Council must obtain a Certificate of Environmental Audit before the proposed scheme is exhibited and distributed for comment pursuant to Part 3 Division 1 of the Planning and Environment Act. Such a certificate would issue only where the subject land is not considered to be potentially detrimental to any beneficial use[30]. The consequence of the adoption of this course would be that, in the present case, the Premier property would not have been zoned mixed use and therefore not appropriate for Premier’s development project, at least until a certificate had been obtained after decontamination works had been carried out. The second course available under the Minister’s Direction is for the Council to provide in its planning scheme for the obtaining of a Certificate of Environmental Audit or a satisfactory Statement of Environmental Audit before the residential use or associated construction work might commence.
[30]Planning and Environment Act s. 4
This second course was the course adopted by the Council with respect to Premier’s property. There were, however, some complications. On 21 December 2000, the Council issued to Premier’s agent, the Fifthnamed defendant Keen Planning Services Pty Ltd, notice of its decision to grant a planning permit[31] and on 24 April 2001 the permit issued[32]. In each case the notice and the permit contained a Condition 28 which required Premier, before commencing the construction or use, to provide to the Council…. The condition stopped there without specifying what was to be provided[33]. On 15 January 2001, Premier’s agent was advised by the Council of the things which under cl. 28 were to be provided. These included a Certificate of Environmental Audit[34]. The planning permit which was issued on 24 April was later amended on 3 August 2000 to the same effect[35].
[31]Paragraph 58
[32]Paragraph 62
[33]Paragraph 59
[34]Paragraph 60
[35]Paragraph 64
Demolition work preparatory to construction on the neighbouring property was carried out in July and August 2001 notwithstanding that a Certificate of Environmental Audit required by Condition 28 of the August 2001 amended planning permit had not issued. Excavation was completed in September 2001[36] and in the same month construction work was commenced[37]. In each case these activities appear to have been in violation of Condition 28 of the planning permit. It is implicit from the claims made by Premier against Keen that it, Premier, was unaware of the requirements of the planning scheme and of the planning permit that a certificate be obtained, alternatively that Premier believed, wrongly, that a report prepared by the seventhnamed defendant, Kilpatrick & Associates Pty Ltd, was in fact such a certificate[38].
[36]Paragraph 68
[37]Paragraph 33
[38]Paragraph 112
The claim of Premier against the Council is that it was in breach of its statutory duty to take reasonable care alternatively that it was in breach of a common law duty to take reasonable care in the following respects:
(a)It pursued the second course so that the Certificate of Environmental Audit was not provided and the land rendered suitable for residential use prior to the rezoning[39].
(b)It failed prior to the granting of the planning approval to seek from Premier information as to how it intended to satisfy the requirements of the Environmental Audit overlay[40].
(c)It failed to ensure that a Certificate or Statement of Environmental Audit had been issued prior to the commencement of construction[41].
(d)It issued the planning permit without including the details of Condition 28.
[39]Paragraph 114A
[40]Paragraph 114(b)(a)
[41]Paragraph 114(b)(b)
I turn now to the parts of the statement of claim which the Council would have me strike out. First, it is said that Premier’s case against the Council in respect of its pursuing what I have described as the second course is predicated on an unstated and evidently false assumption – namely that the Council was obliged to pursue this course. This, it was said, appears from paragraphs 95(h), 96(a) and 120. In paragraph 95(h) it is alleged that “At all material times the Council knew or ought to have known that… prior to the rezoning... the Council was required to ensure that a Certificate or Statement of Environmental Audit had been issued…” It was said that this plea, as one of knowledge, is not sufficient and that a plea of this as a fact was evidently unsustainable because the Council was given by the Minister’s Direction a choice of the two courses.
In response, it was argued on behalf of Premier that upon a proper construction of paragraph 5 of the Minister’s Direction, read in the light of the explanatory paper, the second course adopted by the Council was not in fact open to it: it is available only where testing of the land before rezoning is “difficult or inappropriate”. For present purposes, I do not have to express a view as to the correctness of this submission. It is sufficient that it be not unarguable. I am satisfied that it is not unarguable.
The debate then shifted to the question whether Premier should plead that the testing was not difficult or appropriate as a material fact. Premier says that this is not necessary. Its position is that, as a matter of construction of the relevant statutory documents, the second course is not available unless testing is difficult or appropriate. It then appears to put as an alternative that it does in fact allege in paragraph 114 particular (a) that it was not difficult or inappropriate to test Premier’s property before notice of rezoning was given. This plea, is, however, not one setting up the statutory obligation of the Council; it is an allegation of breach of duty.
As a matter of pleading, the fact that testing is or is not difficult or inappropriate must be asserted by the party which bears the burden of establishing this fact[42]. In this case, each party puts this burden on the other. Again in this case, it is not for me in a pleading application to resolve this impasse. It is sufficient that I observe that if neither party makes an allegation as to the difficulty or appropriateness of the testing I will not receive evidence of this. If either or both parties make an allegation about this matter, it must be particularised.
[42]R. 13.05
Next, it was said that the description of the Council’s duties of care are expressed in vague language and lack content. These allegations are found in paragraphs 99D and 99E which are in the following terms:
“99D.By reason of the matters pleaded at paragraphs 95,96,97A(a)(iii), 97A(b)(ii), 7A(c)(ii), 98(b) and 99B herein, the Council owned Premier a common law and/or statutory duty to take reasonable care in undertaking the tasks of and incidental to its responsibilities under the EP Act and the Minister’s Direction insofar as was applicable to Premier’s Property, the rezoning and the construction and development of the apartments and underground car parking spaces.
99E.Further, by reason of the matters pleaded at paragraphs 95, 96, 97A(a)(i) and (ii), 97A(b)(i), 97A(c)(i), 98(a), 99A, 99B and 99C herein, the Council owed Premier a common law and/or statutory duty to take reasonable care in undertaking the task of and incidental to the administration and enforcement of the new format Moreland Planning Scheme insofar as was applicable to Premier’s Property and to the construction and development of the apartments and underground car parking spaces.”
To my mind, it is embarrassing and productive of confusion to roll up the duty allegations in this way, particularly as the nature of the various duties is not self-evident. What appears to be alleged in each paragraph is:
·a common law duty to take reasonable care in undertaking the tasks of and incidental to the Council’s responsibilities under the Environmental Protection Act 1970 and the Minister’s Direction…; and
·a statutory duty to take reasonable care in undertaking the task of and incidental to its responsibilities under the Environmental Protection Act and the Minister’s Direction…
So far as the common law duty is concerned, this is comprehensible. The second duty is obscure. In its terms it seems to suggest that the statute imposes on the Council the responsibility to take reasonable care. No provision to this effect is pleaded and none was mentioned in argument. If it is intended to allege a common law duty to perform a statutory power or statutory obligation with due care, this should be pleaded and the factual basis for this alleged. I will therefore strike out paragraphs 99D and 99E.
I fear that the confusion in paragraphs 99D and 99E might have infected the allegations of breach in paragraph 114 which depend upon them. Paragraph 114(a) deals with breaches of the duty alleged in paragraph 99D with respect to the Council’s role in the rezoning. Three particulars are provided. None of them, on its face, is an allegation of breach of the duty of care.
What is alleged in particular (a) is this:
“(a)The Council imposed the Environmental Audit overlay condition on Premier’s Property in circumstances where it was neither difficult nor inappropriate to test Premier’s Property before a notice of the rezoning was given.
I take the reference to the Environmental Audit Overlay Condition to be a shorthand reference to the decision of the Council to pursue the second course. Particular (b) alleges a failure to ensure that a Certificate of Environmental Audit issued before the rezoning; particular (c) alleges a failure to ensure that Premier’s property was environmentally suitable before the rezoning. It might be contended by Premier that the Council might have adopted the second course either as a deliberate legal decision based upon a negligently erroneous assumption that it had an unfettered choice (the position adopted by it in argument) or that it made a negligently erroneous factual decision that testing was difficult or inappropriate. In each case it is not sufficient to allege no more than error. Want of reasonable care must be alleged and particularised.
Moreover, particulars (b) and (c) appear not to be separate breaches but consequences of the Council’s decision to pursue the second course. Assuming that the Council decided, correctly or incorrectly, to pursue this second course, neither of the matters complained of in particulars (b) and (c) arises as a separate matter of complaint. Paragraph 4 of the Minister’s Direction and paragraph 3 of the Explanatory Statement impose a fundamental obligation on the Council: it must, in preparing the zoning amendment, satisfy itself that the environmental conditions are then or will be in the future be suitable for residential user. Paragraph 5 of the Minister’s Directions stipulates that, in satisfying this obligation, the Council must pursue one of two courses. If it elects to pursue the second course (whether this be the correct decision or not) it does not follow that the land, at the time of rezoning, must then be suitable. Rather the contrary, this course contemplates that this question of suitability will be attended to in the future, at the time when the residential user is to commence. Likewise, in those circumstances, the question of obtaining prior to the rezoning a Certificate of Environmental Audit does not arise; this is part of the first course. It follows from this that, if particular (a) fails, particulars (b) and (c) do not amount to a breach of the statutory obligations; if particular (a) is made out, then particulars (b) and (c) are irrelevant.
This, however, was not the subject of argument before me in the context of paragraph 114 but it does affect the submissions which were made on the pleas as to causation in paragraphs 119-120A to which I shall later turn.
Before I turn to this, I mention a complaint which was made about paragraph 114. It was that there is an inconsistency between the allegations in paragraph 64[43] and 114(b) particular (b), where it is said that the Council was in breach of its duty of care in failing to ensure that a certificate or Statement of Environmental Audit had issued before the construction commenced. The inconsistency is said to lie in the fact that paragraph 64 alleges that the Council had inserted such a requirement in Condition 28 of the Planning Permit. There is no inconsistency here. What appears to be the allegation on this matter is that the Council as the authority responsible for the administration and enforcing of the planning scheme permitted Premier to breach it by ignoring the planning condition.
[43]See also paragraph 30
Paragraphs 119 and 120A assert that Premier acted to its detriment in various respects as a result of the Council’s negligent failure to comply with its statutory obligations prior to re-zoning. This is the breach alleged in paragraph 114(a) of the Council’s duties alleged in paragraph 99D. The structure of paragraphs 119 and 120A is to allege that Premier acted to its detriment as a consequence of two circumstances. The first circumstance, that alleged in paragraph 119, is the breach alleged in paragraph 114(a) particular (c); the second, that alleged in paragraph 120A, is the breach alleged in paragraph 114A particular (b). It does not appear that Premier alleges that it relied to its detriment upon the decision of the Council to pursue the second course which is the subject of particular (a) in paragraph 114(a). This has had the further consequence that the causal link alleged in paragraphs 119 and 120A attach themselves to allegations which, as I have demonstrated, are themselves not properly breaches of the duty as pleaded.
Putting this to one side for a moment, the causation alleged in these paragraphs does not sit comfortably with the breaches alleged. Let it be assumed that it is a breach of duty of care for the Council to rezone the land on the basis that it was not then environmentally suitable and that a Certificate of Environmental Audit will be provided later. Is it to be contended that Premier believed that the land was suitable prior to rezoning and that a Certificate of Environmental Audit had issued at that time? How is it put that the breach led Premier not to obtain a Certificate of Environmental Audit itself? It will be recalled that, as pleaded, Premier was required as a condition of its planning permit to obtain such a certificate. Likewise, how was it, in those circumstances, that Premier proceeded with the demolition and construction work in July and August 2001 without the certificate? Bearing in mind that this is a pleading summons, it is not for me to speculate what might be said in evidence about these matters. It is, however, necessary that any facts asserted by Premier to weld these broken links be provided. A similar observation may be made about paragraph 120A. The paragraphs will be struck out.
Paragraphs 120B and 121 deal with the reliance of Premier upon the wrongful acts of the Council in its administration and enforcement of the planning scheme which are alleged in paragraph 114(b). Again, neither of these paragraphs alleges reliance upon the wrongful acts particularised in part (a) of paragraph 114(b), that is, that the Council failed to seek from Premier information as to how it intended to obtain the Certificate which was required of it under the planning scheme. This breach appears to go nowhere.
What is alleged in paragraph 120B is that these adverse consequences were suffered by Premier as a result of the Council’s failure to ensure that a Certificate of Environmental Audit had issued before construction as alleged in paragraph 114(b) particular (b), presumably as required by Condition 28. The first suggested detriment is that Premier failed to obtain a certificate. As pleaded this is a nonsense. What is said is that, as a result of the Council’s failure to ensure that a Certificate of Environmental Audit was obtained before construction commenced, Premier failed to obtain a Certificate of Environmental Audit. The allegation is also factually remarkable in the light of the matters alleged in paragraphs 44 and following regarding the variation to the contract of sale agreed to by Premier. Second, it is said that, as a result of this failure by the Council, Premier continued with the work without having obtained a certificate. As to this I make the same critical observation. Third is that it entered into financial arrangements for the purchase and development. These are said to be the arrangements referred to in paragraph 117. I am unable to understand how this is so. There may be more facts to be pleaded. As presently pleaded, however, paragraph 120B must be struck out.
Paragraph 121 turns to a different matter. Here it is said that the detriment was suffered as a result of the Council issuing the original planning permit, that is the permit issued on 24 August 2001 containing the incomplete Condition 28[44]. The issuing of this incomplete document is the breach of duty of care alleged in paragraph 114(a) (b), particular (c). Three adverse consequences are alleged. First, that on the day before the issue of the planning permit, on 23 April 2000, Premier settled the contract of sale for the purchase of Premier’s property. It was contended with some force that this settlement could not have been the result of an act which had not yet occurred. In answer, reliance was placed upon the fact, alleged in paragraph 61 that the Council had on or about 23 April informed Premier of the terms of the to-be-issued permit. If this be correct it must be this advice which is causally related to the loss. This must be pleaded. The second suggested consequence of the issuing of the incomplete planning permit is that Premier proceeded with the construction on 3 September 2001. This is difficult to suppose given that the pleaded facts allege that the full text of Condition 28 had been given to Premier on 15 January 2001[45] and again on 3 August 2001[46].
[44]Paragraph 62
[45]Paragraph 60
[46]Paragraph 64
Next it is said, that, as a result of the issuing of the incomplete planning permit on 24 April, Premier, on 29 August 2001, entered into the financial arrangements referred to in paragraph 117. For the same reason, this consequence seems improbable unless there be some other unpleaded facts. The same may be said of the third suggested consequence: that as a result of the issue of the incomplete planning permit in April, Premier did not itself obtain a Certificate of Environmental Audit.
In its submission, Premier advances an argument which approaches the matter from another point of view. This submission accepted that Premier had breached the planning permit condition by performing the detrimental acts particularised in paragraph 120B. What is said is that the Council was in breach of its statutory responsibility to enforce the planning scheme by not putting a stop to this breach. This is not pleaded. The plea then says, rather audaciously, that Premier suffered its loss due to the laxity of the Council in permitting it to break the law. If this be Premier’s case their loss is not the result of the issue of the incomplete planning permit but rather the result of this laxity. It is sufficient that I say only that, whatever be its prospect of success, this contention is not pleaded.
Conclusion
I will therefore strike out with liberty to replead each of the following paragraphs of the statement of claim: paragraphs 99D, 99E, 119, 120, 120A, 120B and 121. I will direct that particulars be provided under the following paragraphs: paragraphs 5A, 5B, 6, 10A, 27A, 40A, 40B, 42 and 143.
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