Rockdale City Council v Micro Developments Pty Ltd

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New South Wales


Court of Appeal


CITATION: Rockdale City Council v Micro Developments Pty Ltd [2008] NSWCA 128
HEARING DATE(S): 18 March 2008
 
JUDGMENT DATE: 
5 June 2008
JUDGMENT OF: Giles JA at 1; Hodgson JA at 119; Campbell JA at 120
DECISION: Appeal and cross-appeal dismissed.
CATCHWORDS: Negligence - council misstates zoning of property - property developer purchases it - can not develop for home units - retains property - years later zoning changed and property developed - assessment of developer's loss - claimed money tied up in property and unable to carry out a series of developments - whether developer's retention of property was failure to mitigate- whether reduction in development activities due to money being tied up in property - open to trial judge to make broad assessment of loss - other issues concerning tax and interest as part of assessment.
CATEGORY: Principal judgment
CASES CITED: Banco de Portugal v Waterlow & Sons Ltd (1932) AC 452;
Bowen v Blair (1933) VLR 398;
Chappel v Hart [1998] HCA 95; (1998) 195 CLR 232;
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1933] FCA 259; 26 IPR 261;
Fink v Fink (1946) 74 CLR 127;
Jazabas Pty Ltd v City of Botany Bay Council [2000] NSWSC 58;
Malec v J C Hutton Pty Ltd (1990) 169 CLR 368;
Patel v Hooper & Jackson (1999) 1 WLR 1792;
Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434;
Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd (1976) 1 NSWLR 5;
Sellers v Adelaide Petroleum NL (1992) 179 CLR 332;
Seltsam Pty Ltd v McNeill [2006] NSWCA 158; (2006) 4 DDCR 1;
State of New South Wales v Moss [2000] NSWCA 13; (2000) 54 NSWLR 536;
Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422.
PARTIES: Rockdale City Council - Appellant
Micro Developments Pty Ltd - Respondent
FILE NUMBER(S): CA 40180/07
COUNSEL: R W Seton SC & G J Gemmell - Appellant/Cross-respondent
B W Rayment QC & R Scruby - Respondent/Cross-appellant
SOLICITORS: McCabe Terrill, Lawyers - Appellant/Cross-respondent
Philip Sim & Associates - Respondent/Cross-appellant
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): ED 50164/02
LOWER COURT JUDICIAL OFFICER: Bergin J
LOWER COURT DATE OF DECISION: 22 December 2006; 14 March 2007 (interest and costs)
LOWER COURT MEDIUM NEUTRAL CITATION: Micro Developments Pty Ltd v Rockdale City Council [2006] NSWSC 1400; Micro Developments Pty Ltd v Rockdale City Council, Bergin J, 14 March, unreported (interest and costs)




                          CA 40180/07
                          ED 50164/02

                          GILES JA
                          HODGSON JA
                          CAMPBELL JA

                          Thursday 5 June 2008
ROCKDALE CITY COUNCIL v MICRO DEVELOPMENTS PTY LTD
Judgment

1 GILES JA: In November 1997 Micro Developments Pty Ltd (“Micro”), a property developer, purchased for development 147 Russell Avenue, Dolls Point (“the property”) in reliance upon the zoning Residential 2(c2) in a section 149 Certificate issued by Rockdale City Council (“the…

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Details
Case
[2008] NSWCA 128
Decision Date

CaseChat Overview and Summary

Rockdale City Council appealed and Micro Developments Pty Ltd cross-appealed from a judgment of the Supreme Court of New South Wales concerning a claim in negligence. The dispute arose from the Council's misstatement of the zoning of a property purchased by Micro Developments, which prevented the intended development of home units. Micro Developments retained the property for several years until the zoning was subsequently changed, allowing for development. The core of the litigation concerned the assessment of Micro Developments' loss resulting from the Council's negligent misstatement.

The primary legal issues before the Court of Appeal were whether Micro Developments had failed to mitigate its loss by retaining the property for an extended period, and whether the trial judge had erred in assessing the loss by considering the reduction in Micro Developments' capacity to undertake other developments due to its capital being tied up in the subject property. The court also considered issues relating to the inclusion of tax and interest in the assessment of damages.

The Court of Appeal affirmed the trial judge's findings, holding that it was open to the judge to make a broad assessment of Micro Developments' loss. The court reasoned that the retention of the property was not necessarily a failure to mitigate, particularly given the subsequent change in zoning which ultimately allowed for development. Furthermore, the court accepted that the trial judge was entitled to consider the impact of the capital being tied up in the property on Micro Developments' ability to pursue other development opportunities, as this represented a real loss flowing from the Council's negligence. The court found no error in the trial judge's approach to the assessment of damages, including the consideration of tax and interest.

Consequently, both the appeal by Rockdale City Council and the cross-appeal by Micro Developments Pty Ltd were dismissed.

Orders

Orders of the court

Appeal and cross-appeal dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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