Lavender View v North Sydney Council [1999] NSWSC 699 (14 July 1999)

Last Updated: 14 July 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Lavender View v North Sydney Council [1999] NSWSC 699

CURRENT JURISDICTION: Construction

FILE NUMBER(S): 55045/97

HEARING DATE{S): 08/03/99, 09/03/99. 10/03/99, 11/03/99, 12/03/99, 15/03/99

Dates of Mention: 25/03/99, 09/04/99, 16/04/99, 30/04/99, 07/05/99, 15/05/99, 21/05/99, 04/06/99, 12/07/99

JUDGMENT DATE: 14/07/1999

PARTIES:

Lavender View Regency Pty Limited - Plaintiff

North Sydney Council - Defendant

JUDGMENT OF: Rolfe J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Mr M.H. Tobias QC/Mr R.C. McDougall QC/Mr T.J. Davie - Plaintiff

Mr B.W. Walker SC/Mr B.J. Preston/Mr I.R. Pike - Defendant

SOLICITORS:

Norton Smith/Coudert Partners - Plaintiff

Phillips Fox - Defendant

CATCHWORDS:

Assessment of Damages where the defendant admitted liability for negligence

Held, in the particular circumstances, the plaintiff had acted as it would, if there had been no negligence

Held not a case in which it is appropriate to apply the test for damages in Armory v Delamiri [1722] 1 Stra 505; Houghton & Anor v Immer (No 155) Pty Limited & Anor (1997) 44 NSWLR 46 considered

ACTS CITED:

DECISION:

Judgment for plaintiff for $224,321.51 exclusive of interest.

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

CONSTRUCTION LIST

ROLFE J

WEDNESDAY, 14 JULY 1999

55045/1997 - LAVENDER VIEW REGENCY PTY LIMITED v NORTH SYDNEY COUNCIL

JUDGMENT

HIS HONOUR:

Introduction

1 Milsons Point is one of several suburbs in the Municipality of North Sydney on the northern foreshores of Sydney Harbour adjacent to the Sydney Harbour Bridge, and hence close to the Central Business District of Sydney via that Bridge. During the last fifteen years or so it has been the subject of considerable commercial and residential property development, and it is regarded by many as a desirable area in which to live.

2 The defendant, North Sydney Council, ("the Council"), for which Mr B.W. Walker of Senior Counsel, Mr B.J. Preston of Counsel and Mr I.R. Pike of Counsel appeared, is the authority primarily responsible for considering and either granting or refusing development and building applications within the Municipality pursuant to the provisions of the

Environmental and Planning Assessment Act 1979, ("the Act"), the Local Government Act and various other Acts, statutory codes and planning schemes. Applications to the Council to exercise these powers, and the manner in which the Council does so, create, in many cases, intense interest from local residents and a conflict of views between them and developers as to the extent to which further development should be allowed and the form of it. The resolution of such conflicts is a matter, in the first instance, for the elected councillors, who may properly have regard to what they perceive to be appropriate local considerations, as well as professional and planning advice, in reaching their conclusions. Their decisions, which become the Council's, can be, in most cases, the subject of appeal to the Land and Environment Court, ("the Court"). Relevantly for present purposes there are Class I appeals, which are concerned, generally speaking, with the Council's decisions on the merits of such applications, and Class IV appeals, which cover, once again speaking generally, questions as to the legal validity of such decisions.

3 The plaintiff, Lavender View Regency Pty Limited, for which Mr M.H. Tobias of Queen's Counsel, Mr R.C. McDougall of Queen's Counsel and Mr T.J. Davie of Counsel appeared, began, under its former name, to acquire adjacent properties with frontages to Glen and Cliff Streets, Milsons Point, the whole area acquired being known as 26 - 30 Glen Street, Milsons Point. There was erected, on part of the land, a building known as the SBS Building. In 1988 the Council had given approval to a development application, DA1011/88, for the erection of a sixteen storey building at 28 - 30 Glen Street comprising fourteen storeys of sixty residential units and two storeys of retail/restaurant accommodation. In 1990 the Council gave approval to a further development application, DA1268/90, for the erection of a fourteen storey residential building at 28 - 30 Glen Street.

4 The plaintiff was, at all material times, controlled from a practical point of view by its managing director, Dr Stanley Quek, who is highly experienced in the acquisition and development of real estate, through various companies, in Australia and elsewhere. His aim was to erect a block of high quality home units on the land to be known as "The Colonnades", with some retail and other facilities, and to sell them. Not unnaturally he wished to maximise the development so that the plaintiff would enjoy as high a profit as possible. This led to tension between the plaintiff, on the one hand, and some local residents and councillors, on the other, because, in an attempt to achieve this objective, the plaintiff proposed a building the bulk and size of which caused concern and led to opposition to the development.

5 On 17 February 1994 Dr Quek caused the plaintiff's initial architects, Bruce Swalwell Architects, to lodge a development application, DA1082/94, with the Council. This development application was referred to in the proceedings as "DA1" and, after extensive negotiations and various amendments to the plans, it was approved by the Council on 8 February 1995 subject to conditions. The conditions included that the building was to be built "strictly" in accordance with the plans submitted with DA1, which could not be done lawfully because they did not comply with certain relevant building requirements, and that an application be made to modify DA1 pursuant to s.102 of the Act. These requirements obliged the plaintiff to make at least two further applications to the Council before it would have final approval to build. Each application would have required the councillors to exercise their discretion in granting or refusing it.

6 It was not in issue that the Council, in granting DA1 on the terms and in the circumstances which it did, acted contrary to law so that a challenge to it in Class IV proceedings would, almost inevitably, result in its being declared invalid and void, subject to a matter to which I shall now refer. Nor was it in issue that on 6 April 1995 the Council caused notice of its decision to grant DA1 to be published in purported compliance with s.104A of the Act; that the notice did not comply with the requirements of that section; and that if it had DA1 would have been impervious to challenge, in the sense that the validity of the consent could not be questioned in any legal proceedings except those commenced in the Court by any person at any time before the expiration of three months from the date on which such public notice was given. Further, it was not in issue that the persons, who ultimately challenged DA1 successfully, would not have done so within the period of three months from 6 April 1995, their objections and challenge manifesting themselves well after the expiry of that period.

7 In October 1995, before the plaintiff submitted its final building plans and its request for a modification of DA1 pursuant to s.102, the triennial local government elections were held. They resulted in changes in the composition of the Council in that a number of councillors, who ran on a policy that new development in the Municipality, and particularly in Milsons Point, was excessive in size and bulk, were elected. Thereafter, the plaintiff was confronted with a Council at least potentially less sympathetic to the development than its predecessor.

8 On 24 November 1995 the solicitors for various objectors gave notice of their intention to challenge the validity of DA1 and, on 1 February 1996, they commenced Class IV proceedings in relation to it. This application could not have been pursued if the notice published by the Council, in purported compliance with s.104A, had been valid.

9 In due course the Court held DA1 to be invalid and void. It was not in issue that any modification of DA1 pursuant to s.102 would have fallen with that finding, because the modification could have no greater validity than the development application on which it was founded; nor that the plaintiff understood that from the time the challenge was mooted. In these circumstances the plaintiff lost the benefit of DA1, a result it had understood was probable at least from the commencement of the Class IV proceedings. It had, therefore, after becoming aware of the challenge, undertaken various other steps to obtain a development approval and, ultimately, on 15 June 1998, the Council resolved to determine DA74/98 by consenting to it. This development application was referred to in the proceedings as "DA4". Between DA1 and DA4 there were two further development applications, which were referred to in the proceedings as "DA2" and "DA3". DA4 provided for a smaller development than that proposed in DA1, DA2 and DA3 and, accordingly, the plaintiff will have less units to sell than it potentially would have had but for the invalidity of DA1. I say "potentially" because the plaintiff was not assured that the further consents necessary to develop conformably with DA1 would be granted. The building work has now commenced, although it is not anticipated that it will be finished until late 2000.

The Proceedings

10 By a Summons issued on 25 September 1997 the plaintiff sued the Council seeking to recover damages in respect of the allegedly negligent failure by it to consider and properly grant DA1, and to advertise the granting of consent to it in a proper manner. On 19 June 1998, Hunter J made an order, pursuant to Part 31 rule 2, that at the hearing, which was scheduled to commence on 29 July 1998, the issues of liability pleaded in paragraphs 1 to 25 of the Amended Points of Claim, and certain liability issues in a proposed Amended Cross-Claim, be heard prior to the remaining issues. In essence this meant that the issues of liability were to be determined prior to those of damages. The proceedings commenced before me on 29 July 1998 and, on 31 July 1998, the plaintiff was granted leave to file a Second Further Amended Points of Claim to which the Council filed a Defence on the same day. On 3 August 1998 the parties resolved the issues of liability, the cross-claims being disposed of in circumstances which mean that it is unnecessary to consider them further.

11 The parties brought in Short Minutes of Order to give effect to their agreements and, as between the plaintiff and the Council, the following are the relevant orders:-

"3. Direct entry of judgment for the plaintiff against the defendant for damages to be assessed in respect only of the cause of action concerning the defendant's negligent failure to give a proper and effective public notice pursuant to s.104A of the Environmental Planning and Assessment Act of its consent to DA1082/94.

..........

8. Order that there be an inquiry into the amount of damages which the plaintiff has sustained by reason that, but for the defendant's negligent failure to give a proper and effective public notice pursuant to s.104A of the Environmental Planning and Assessment Act of its consent to DA1082/94, the plaintiff would have had a consent, in the terms of Annexure `A' hereto, which consent would have become effective and would have operated from 8 February 1995 and which could have been relied upon by the plaintiff without risk of any legal challenge thereto."

12 The issue for decision now is the amount of damages to which the plaintiff is entitled in consequence of the Council's negligent failure to give a proper and effective notice pursuant to s.104A. Several matters in relation to that can be noted immediately. Although the plaintiff made a claim for damages for loss of opportunity, that was not pressed at the hearing, save in a very limited way to which I shall refer. Secondly, although the Council pleaded failure by the plaintiff to take all reasonable steps to mitigate its loss and contributory negligence on the plaintiff's part, neither of these allegations was pursued. The Council's failure to press the assertion that the plaintiff did not take reasonable steps to mitigate its loss did not proceed on the basis that there was loss caused by the Council, but rather on the basis that the plaintiff did what it would have done, irrespective of whether the Council had been negligent, so that the particular circumstances did not give rise to a claim of failure to mitigate. Thirdly, the various experts retained by the parties conferred and reached a substantial measure of agreement on amounts which, if appropriate as a matter of law, should be included in the assessment of damages. This, if I may say so with respect, was an eminently sensible approach and greatly reduced the hearing time.

The Issues

13 The plaintiff's claim is based on the hypothesis that if the Council had not been negligent in relation to the giving of the notice under s.104A, it would, at all times, have had a valid development approval in the terms of DA1, upon which it could have relied without risk of legal challenge. On that hypothesis the plaintiff has submitted that the development would have continued on the basis of DA1as modified by a second s.102 application, which was referred to in the proceedings as "102(2)", rather than the first such application, which was referred to as "102(1)", and that this would have avoided any significant diminution in or interruption to the development. The submission continued:-

"This assumes that 102(2) would have been submitted in about March 1996 and approved by Council relatively shortly thereafter."

14 The plaintiff's alternative position was that development would have continued based on DA1, as modified by 102(2), but with an interruption so that building work did not re-commence until 1 June 1997. This submission assumed that 102(2) would have been lodged on 21 October 1996, (as it was), and would have been determined by approval of the Council, as the plaintiff submits it would have been, by December 1996. However, the submission also accommodated another alternative, namely that 102(2) would have been determined in December 1996 by the Council by refusal, but that it would have been approved by the Court after an expedited hearing. The submission was that the appeal would have been heard and determined by an Assessor or the Court in February or March 1997, a decision would have been given in April 1997, and an amended building approval would have been granted approximately a month later, so that construction would have re-commenced no later than 1 May 1997, although the plaintiff accepted that on these hypotheses construction would have commenced on 1 June 1997. (These positions are set forth, inter alia, in paragraphs 6.1.1 and 6.1.2 of the plaintiff's written submissions on damages furnished on 15 March 1999.)

15 The plaintiff pointed to the fact that it had entered into a building contract with Multiplex Constructions Pty Limited, ("Multiplex"), on 12 January 1996 for the carrying out of the building work, and that once approval in the form of DA1 was granted it commenced a marketing campaign, which enjoyed a good measure of success, by selling units off-the-plan, although such sales were subject to the building being completed basically in accordance with the plans. The plaintiff submitted that it was inconceivable that it would take any steps which would place these contracts in jeopardy.

16 The Council's principal submission was that even if it had not been negligent in the manner it conceded for the purpose of these proceedings, the plaintiff would have acted in essentially the same way as it did, viz it would have pursued developmental approval in various forms to maximise the development, although not through the vehicle of DA1 because that did not provide for the building it wanted to construct, and it would have done so until forced by the failure to gain approval to a development of that size to submit when it did, on 19 February 1998, DA4. It was submitted that irrespective of the legal challenge to DA1, the plaintiff would have lodged DA2 when it did, and that the Council would have rejected it, as it did, and that the plaintiff's appeal to the Court would have been unsuccessful, as it was. Thereafter, it was submitted, the plaintiff would have submitted DA3, which the Council would have rejected, as it did, and the plaintiff's appeal to the Court would have been unsuccessful, as it was. The submission of DA4 and its approval would have taken place when it in fact did, so that the Council's negligence did not alter the course of events, which would have happened irrespective of its negligence.

17 The fundamental premises underpinning these submissions were that the terms of DA1 necessarily left the plaintiff in the Council's hands as to the approval of the building application and the modification to DA1 pursuant to s.102; that by the time the plaintiff made these applications it was dealing with councillors different from those who had approved DA1; that subsequent actions on the part of the Council made clear that it would not have approved what the plaintiff was seeking, which step the Council was entitled to take consistently with the proper exercise of its functions, and that the plaintiff had not established that the Court would have reversed the Council's decisions; that the plaintiff would have continued to press for as large a development as it could achieve until forced to submit DA4; and that in consequence the building would not have proceeded earlier than it has, so that the plaintiff cannot establish that it has suffered much of the damage for which it now claims.

18 The Council submitted that the proper findings to make are that:-

(a) the plaintiff did not wish to pursue DA1 as the development vehicle;

(b) the plaintiff intended, irrespective of the legal validity of DA1, to lodge DA2 when it did;

(c) even if the plaintiff had pursued DA1 the first s.102 application, (102(1)), would have failed, which was conceded;

(d) 102(2) would not have been lodged until it was on 21 October 1996;

(e) 102(2) would not have been approved by the Council whether it was lodged in March/April 1996 or on 21 October 1996;

(f) the Court would not have granted approval to 102(2) on appeal whenever it was lodged; and

(g) accordingly, the plaintiff would have been remitted to a development conformably with DA4, which would not have been lodged and approved until it in fact was, with the consequence that the Council's negligence has not been causative of any substantial loss to the plaintiff.

19 In the plaintiff's written submissions of 15 March 1999, the Council's primary position was stated as being that there would have been no development in accordance with DA1 and 102(2), and that the only development which would have been carried out is that permitted by DA4. The plaintiff accepts that if that be found to be correct it has not suffered any loss of profits for which the Council is liable. In its written submissions on damages the plaintiff, after setting forth its primary and alternative positions, stated two other "scenarios". The first was that to which I have just referred. The second was that under the Council's alternative position, which involved that the development would have been carried out under DA1 and 102(2), the recommencement of building works would have been delayed until 1 December 1997 by reason of the appeal against the refusal of 102(2) not being expedited, but ultimately being successful. This requires a different calculation of damages. I should make it clear that the Council did not concede for a moment the factual basis of the plaintiff's success on appeal. This position was very much a fall-back one.

20 Thus the issue for determination was whether the Council's negligence in failing to advertise properly the consent to DA1 was causative of the loss the plaintiff alleges it has suffered. There are two important issues, at least, relevant to this. The first is that the plaintiff must establish that but for the negligence it would have pursued DA1 through 102(2). It was not suggested that DA1 did not have to be pursued through an application under s.102, and the evidence was that after 102(1) was abandoned the vehicle used was 102(2). The second is that if it had, either the Council would have approved the modification pursuant to 102(2) if 102(2) had been lodged in March/April 1996, or, alternatively that it would have approved 102(2) as lodged on 21 October 1996, which it did not, and, in that event, the Court, on appeal, would have. The Court was not required to consider this issue because it held that DA1 was void, thus denying 102(2) any effect. Mr Tobias submitted that in determining what the Court "would have done" it was not for me to seek to place myself in the Court's position and decide what I would have done as the Court, but rather it was for me to determine what, on the balance of probabilities, I consider the Court would have done if it had heard the appeal from the Council's refusal of 102(2).

Damages

21 The plaintiff's case is one whereby it seeks to recover damages for the defendant's admitted negligence. Prima facie the damages are to be assessed by reference to the financial loss the plaintiff suffered in consequence of that negligence, i.e. the amount of its loss because DA1 was able to be declared invalid and void by reason of the specified negligence. Therefore, it is necessary to compare what would have happened if DA1 had not suffered that fate, ("the hypothetical case"), and what did happen, ("the actual case"), to see the extent to which the plaintiff suffered loss.

22 Armed with DA1, the plaintiff had a vehicle through which it alleges it could have developed the land in a manner which would have produced for it an asserted financial benefit. Deprived of DA1, the plaintiff submitted that it was forced to seek other approval for the development, which ultimately resulted in DA4, which gave it an asserted inferior financial result. The plaintiff contends that the essential measure of its loss is the difference between the two amounts. There is no novelty in comparing the hypothetical and the actual in assessing damages for negligence, it being kept firmly in mind, of course, that the plaintiff carries the onus of establishing the quantum of such loss. In each case the Court must decide whether the plaintiff has satisfied it what would have happened, but for the negligence, and what did happen in consequence of the negligence. Both the hypothetical and the actual may be in issue. An injured employee may allege that but for the employer's negligence he or she would have continued to work until retirement and gained promotion with the employer with increased remuneration but, in consequence of the negligence he or she can no longer engage in gainful employment and thus has suffered damages by way of loss of earning capacity, including at the promotion level. In such a case both the hypothetical and the actual may be challenged and, to the extent to which they are and allowing for the shifting evidentiary onus, the plaintiff carries the ultimate onus of proving the loss for which he or she contends.

23 The matters to which I have just referred are trite law. But the plaintiff submitted that:-

"Obviously, there are always difficulties in trying to determine the probabilities of a party's conduct in what is a hypothetical situation: in such circumstances it is appropriate that doubts arising as a consequence of such a situation brought about by the defendant's admitted wrongdoing should be resolved against the defendant: cf Houghton v Immer (No 155) Pty Limited (1997) 44 NSWLR 46 at 59C-E."

Prima facie, this submission does not accord with the fundamental proposition that the onus is on the plaintiff, whether the tortious wrongdoing is admitted or found after a contest, to prove the amount of damages. Houghton was not a case concerned with tortious liability, but with equitable compensation in consequence of a fraud on the minority, which rendered a special resolution voidable in equity. At first instance it was held that because of what had transpired it was too late to grant the relief the plaintiff claimed and that, in lieu thereof, the plaintiff was entitled to equitable compensation.

24 At p.56 Handley JA, with whom Mason P and Beazley JA agreed, said that equitable compensation is intended to compensate for loss caused by conduct which equity holds to be fraudulent. He continued:-

"Since the defendants are not in a fiduciary relationship with the plaintiff and have not committed a tort, they are not accountable for profits derived from the project ... The award should compensate the plaintiff but it is no part of its function to strip profits from the defendants, or to punish them for wrongdoing."

His Honour said that compensation had to be balanced to avoid over-compensation to the plaintiff and the penalising of the defendants. He referred to the valuation evidence, much of which he considered irrelevant in the light of his earlier analysis. His Honour was of the view that the Court was not concerned, inter alia, with an analysis of a hypothetical development. He then considered the trial Judge's findings on compensation, which he did not consider could be upheld, and proceeded to the question whether the Court of Appeal could assess it. Whilst he acknowledged that the accounting issue would normally be referred to a Master, he was of the view that in that case that should only be done as a last resort and if no other course was fairly open and, at p.59, continued:-

"The defendants, having improved common property without lawful authority, and attempted to effect a fraud on the minority, are wrongdoers, and their failure to keep and produce proper accounts of the actual expenditure on the common property has made it difficult to assess the compensation due to the plaintiff: compare Armory v Delamirie [1722] 1 Stra 505; 93 ER 664. In my judgment the Court should assess the compensation in a robust manner, relying on the presumption against wrongdoers, the onus of proof, and resolving doubtful questions against the party `whose actions have made an accurate determination so problematic': see LJP Investments Pty Limited v Howard Chia Investments Pty Limited (1990) 24 NSWLR 499 at 508."

25 His Honour's reference to Armory v Delamirie shows how different that case was from the present. There the chimney sweep sued a jeweller for damages for conversion of a jewel he had found in a chimney. As the jeweller, in whose possession the jewel was, refused to produce it so that it could be valued the Court held that the amount of damages was to be presumed against him to be the greatest value that a jewel of that type could have. Clearly the plaintiff's claim could not be frustrated by the wrongdoer's conduct, as may have happened in Houghton. Similarly in Howard Chia, Hodgson J considered that the defendant's wrongful act and the absence of any decision maker from the witness box made a decision on what course the defendant would have taken "highly problematical", thus justifying the Armory v Delamirie approach "and resolving the question of value against the party whose actions have made an accurate determination so problematic".

26 Mr Walker submitted that there is no evidence in the present case that any conduct on the Council's part has made an accurate determination of the damages "problematic" or "so problematic", nor caused the plaintiff difficulty in quantifying the damages. All the material from which damages can be assessed is in the possession of the plaintiff or available to it. It has formulated its claim on a number of hypotheses it has sought to establish. It is not suggested the Council could have produced any material, which would have assisted the plaintiff in this assessment, and that it has refused to do so.

27 The case is, therefore, one where this Court must, in my opinion, assess damages for negligence in conformity with the basic principles to which I referred initially.

Causation

28 Both parties relied on the recent decision of the High Court in Chappel v Hart (1998) 72 ALJR 1344. At paragraph 34(6) McHugh J repeated the accepted formulation in this area that, subject to the shifting onus at trial, the onus was on the plaintiff to prove the damages suffered in consequence of tortious conduct. In footnote 33, after stating that the subjective theory of causation was applicable, his Honour said:-

"In determining the reliability of the plaintiff's evidence in jurisdictions where the subjective test operates, therefore, demeanour can play little part in accepting the plaintiff's evidence. It may be a ground for rejecting the plaintiff's evidence. But given that most plaintiffs will genuinely believe that they would have taken another option, if presented to them, the reliability of their evidence can only be determined by reference to objective factors, particularly the attitude and conduct of the plaintiff at or about the time when the breach of duty occurred."

Mr Walker relied on this footnote in support of the submission that the Court must, in assessing the evidence, have regard to the objective facts in determining the subjective intent. Mr Tobias relied on the passage from the judgment of Kirby J in sub-paragraph (8) at p.1367, where his Honour said:-

"Once a plaintiff demonstrates that a breach of duty has occurred which is closely followed by damage, a prima facie causal connection will have been established. It is then for the defendant, by evidence and argument, to establish that the patient should not recover damages": His Honour's emphasis.

This was said in the context of the shifting onus of proof. I do not understand his Honour to be saying that the onus, in the end, does not rest on the plaintiff.

The Hypothetical Case

29 The plaintiff contended for the various hypotheses, which were expressly adopted as disclosing what might have happened, but for the negligence, and to which I have referred.

Mr Walker submitted that one cannot have alternative factual situations, which will give rise to alternative results for the purpose of assessing damages, but that the Court must find the facts as established by the plaintiff's evidence and, on the basis of that finding, consider any possible alternatives flowing from what the plaintiff has proved. The submission was that the proved facts may give rise to alternative results, but that it is not permissible to conduct a case on the footing that there may be alternative, but conflicting, basic facts. Therefore, he submitted, it was not permissible to run a case on the basis that 102(2) would have been lodged in March 1996 but, if that was not accepted, then it would have been lodged in October 1996. In my opinion, the onus is on the plaintiff to establish, on the balance of probabilities, what it would have done in the hypothetical case. A case based on apparently conflicting and contradictory factual premises may make it difficult for the plaintiff to establish what it would have done. If the plaintiff fails at that level there may be no sufficient factual basis on which to determine damages.

30 In the absolute terms in which Mr Walker put the submission, I do not accept it. One may well have a case where the plaintiff asserts that but for the negligence he or she would have done various things, which could be said to be alternatives e.g. an employee may say that had he or she been able to continue to engage in gainful employment he or she would have received promotion as an employee of the negligent employer, but if that had not happened he or she would have moved on to another employer in a higher position, which would have given an income commensurate with that on promotion. However, Mr Walker's submissions, notwithstanding their initial generality, were directed to the facts of this case. In my opinion, the Court must decide what the plaintiff has established, on the facts of this case and the onus being on it, it would have done, but for the negligence. The two positions put forward by the plaintiff as to what it would have done are inherently inconsistent. The first is that it would have lodged 102(2) in about March 1996 and the Council would have approved it. The second is that it would have lodged it in October 1996 and either the Council would have approved it or, if it did not, the Court on appeal would have. It is necessary to decide whether it would have followed one path or the other and, if it did, what would have happened. The plaintiff then sought to erect a case that in March 1996 it would have lodged DA2 and 102(2) in the hypothetical situation, and thus had the best of both worlds. Mr Tobias, in his written submissions of 12 March 1999 (paragraph 14), conceded that there was no "direct evidence" that this two-pronged attack would have been followed. That was not one of the hypotheses put forward for the assessment of damages and, in my opinion, it tends to confuse the situation because the hypothetical case proceeds on the assumption that there was no reason not to lodge an application under s.102 because, on the hypothetical case, there was no danger that the foundation for such an application, viz DA1, would have been struck down. Therefore, the inference is that if DA2 would have been lodged in any event, for which there was a sufficiently strong evidentiary base to satisfy me that that would have happened, there was no point in lodging 102(2) at that time, because DA2 represented, I am satisfied, the building the plaintiff wanted. It is intellectually very difficult to find that the plaintiff would have pursued its first stated course, viz to have lodged 102(2) in March 1996, and, notwithstanding that it would have, that it would have followed the second, viz to have lodged 102(2) in October 1996. If it had pursued the first successfully, there would have been no need to pursue the second. If the first proved unsuccessful there would have been no real point in following the second because the consequences could hardly have been expected to be different having regard to the similarity of that proposed in 102(2) and DA2. Thus the plaintiff has difficulty in asserting that, as a matter of fact, it would have followed the first course, but, if that is rejected, I should find that it would have followed the second, when the two are at odds. As I have sought to say the formulation of the case based on differing and inconsistent hypotheses, and based on at least one factual premise which did not find itself into the case for damages, creates problems for finding that the plaintiff would have pursued any particular course. It does not mean that the plaintiff cannot establish a case. It makes it more difficult for it to discharge the onus and thus do so.

The Development Approval: DA1

31 DA1 stated that it was not an approval to erect a building under Chapter 7 of the Local Government Act 1993; that such an approval was required prior to the commencement of any work on site; that any variation to DA1 could only be made with the written approval of the Council; and that major variations would require a new or amended development application. The first condition provided:-

"Development is to be carried out strictly in accordance with Plan Numbers A100A-A124A as amended, dated 22/12/94, drawn by Bruce Swalwell Architects, and received by Council on 23/12/94, except as varied by the conditions listed hereunder. Any minor modification to the approved Plans will require the lodgment, and consideration by Council of a separate application pursuant to Section 102 of the Environmental Planning and Assessment Act 1979. Modifications will require the lodgment of a new Development Application."

32 The second condition stated that:-

"A formal Building Application accompanied by plans and specifications SHALL BE submitted in accordance with the Building Code of Australia, the Local Government Act, 1993 and the specific conditions of this consent."

The Building Code of Australia is referred to in certain of the documents as "the BCA" and I shall refer to it as such.

33 On 8 May 1995 Building Application 95/275 was submitted to the Council and, on 30 May 1995, it approved the request to demolish the SBS building. Subsequently it approved bulk excavation on the site.

34 On 6 August 1995, the plaintiff commenced its off-the-plan marketing programme and, on 9 November 1995, Multiplex commenced construction work although, at that stage, it had not entered into a formal contract with the plaintiff. On 10 November 1995 the Council determined BA95/275 by consenting to it subject to a number of conditions and on certain bases. The approval noted that it was for a proposed multi-storey residential flat building containing 170 units with retail shops at street level and underground parking. Condition 117, which is of importance in the proceedings, provided:-

"The submitted building application plans do not entirely mirror the approval Development Consent plans in a number of respects. In particular the terraces at Levels 15, 16 and 19 are not stepped back the equivalent distances as approved in the consent plans. A Section 102 application is to be submitted which outline all the changes between the Building Application and the Development Consent plans prior to any excavation taking place.

(Reason: Construct in accordance with approved consent.)" (The Council's emphasis.)

This condition, in essence, reflected the requirement that development was to be carried out "strictly in accordance with" the designated plans. More significantly, it called for an application pursuant to s.102 of the Act.

35 Section 102, in so far as it is relevant, provides:-

"(1) Upon application being made in the prescribed form by the applicant or any other person entitled to act upon the consent, a consent authority which has granted development consent under this Division may modify the consent where:

(a) it is satisfied that the development to which the consent as modified relates is substantially the same development,

(b) it is satisfied that no prejudice will be caused to any person who objected to the development application the subject of that consent,

.....

(3A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 90 as are of relevance to the development the subject of the application."

Sub-sections (1)(a) and (b) contain provisions described as "the threshold provisions" over which an applicant must step, by satisfying the Council or the Court, for the purpose of activating s.102.

36 Section 90 required the Council, in determining an application, to take into consideration a number of matters specified therein, which were referred to in the proceedings as the "merit" matters or considerations.

37 A matter which attracted attention during the hearing was that before a modification could be made pursuant to s.102, the "threshold" requirements of sub-ss.(1)(a) and (b) had to be achieved. A further matter, which was the subject of argument, was the extent to which the provisions of sub-s.(3A) applied in requiring the Council to have regard to s.90 considerations. The question, according to the plaintiff's submission, was whether, at all material times, sub-s.(3A) operated to apply s.90 considerations only to the amendments or modifications put forward in the s.102 application, or whether it operated to allow the Council to consider s.90 matters generally conformably with the majority decision, on this point, of the Court of Appeal in North Sydney Council v Michael Standley & Associates Pty Limited [1998] NSWSC 163; (1998) 43 NSWLR 468, which judgment was given on 12 May 1998. The purpose of engaging in this exercise was not to submit what the proper interpretation of sub-s.(3A) was, but how the Court would have applied the sub-section, having regard to a number of its own decisions prior to the Court of Appeal's decision. The Council submitted that I should assume that the Court would have applied the sub-section consistently with the law and, therefore, in accordance with the Court of Appeal's later decision. Alternatively, it submitted that the plaintiff's interpretation of the Court's decisions was too narrow, and that the Court had held that one considered s.90 matters not only as they related directly or solely to the amendments and modifications, but also in so far as they impacted on the development as a whole.

38 On the other hand, it was not in issue that further development applications could be lodged, which would be determined in accordance with the provisions relating to such applications and without it being necessary for the "threshold" requirements of s.102 to be met, thus allowing the Council to revisit all s.90 matters. The reason these considerations were thought to be of importance is probably clear. The plaintiff wished to assert that DA1 gave it a right to develop, subject to compliance with the conditions, and that the vehicle provided by s.102 for the necessary modifications and amendments raised no s.90 impediments once the two threshold issues were satisfied. Thus a newly constituted Council could not revisit the s.90 matters on which it may have taken a more stringent attitude than its predecessor, which in granting approval to DA1 had found those matters favourably to the plaintiff. The plaintiff's submission was that that would have been the position under the Court's previous decisions and, on appeal, the Court, uninstructed by the Court of Appeal's decision, would have followed those decisions. On the other hand the Council put the submissions to which I have referred and, based on them, submitted that s.90 considerations would have been fatal to 102(2) both before the Council and the Court.

What Happened Thereafter

39 On 19 December 1995 the plaintiff lodged with the Council s.102 Application 3326/95, ("102(1)"). It was common ground that this application could never have succeeded. On 12 January 1996 the plaintiff entered into a building contract with Multiplex and, on 1 February 1996, the Class IV proceedings were commenced in the Court to seek to have DA1 invalidated.

40 On 17 and 19 February 1996 respectively demolition work was completed and excavation work commenced and, on 4 April 1996, DA1163/96, ("DA2"), was lodged. The plaintiff asserted that this was lodged because of the challenge in the Court to the validity of DA1. Prima facie this submission has some attraction because, as I have mentioned, it was not in issue that a modification of a development application, pursuant to s.102, could only be as valid as the original application. Therefore, if the challenge to the validity of DA1 was successful, any modifications to it pursuant to s.102 would fall. It was the plaintiff's primary case that but for the challenge it would have lodged 102(2) at about that time, which would have been approved by the Council, with the consequences to which I have referred, and that it would not have lodged DA2 then. The prima facie attraction lost some of its appeal when it is realised that DA2, which made only "minimal" concessions in relation to the contentious issues of size and bulk, put the plaintiff squarely back in the position of having to satisfy the relevant s.90 requirements, in the first instance to the newly elected councillors. This is also highly significant because there was a very real issue as to whether DA2 would have been lodged, irrespective of the Council's negligence, on 4 April 1996. On either basis, viz whether 102(2) or DA2 would have been lodged, it was conceded that the plaintiff would have been dependent, in the first instance, on the Council's further approval. Once this is understood there is no apparent reason why the pursuit of 102(2) provided the plaintiff with a better position than the pursuit of DA2, unless it is correct to say that the Council, in considering 102(2), could only have had regard to limited s.90 matters. This potentially difficulty for the plaintiff is underscored when the similarity between the two developments, i.e. 102(2) and DA2, particularly in relation to bulk and size, is appreciated. That similarity, it was submitted, makes it difficult to see how either the Council or the Court would have come to a different result in determining each.

41 The lodging of DA2 led to an agreement that the hearing of the Class IV proceedings be vacated, which the Court did on 26 April 1996, and that they not be re-listed unless the hearing dates obtained were after the Council had determined DA2, which determination was not to include any deemed refusal, or the expiration of six months from the date of any order vacating the hearing. Plainly it was contemplated that if DA2 was approved, the plaintiff would not seek to proceed with DA1. Prima facie it may be said that this was because of the challenge to it. However, that is not consistent with the lodging in October 1996 of 102(2), nor with the plaintiff's evidence that it did not wish to build in accordance with DA1 in any event.

42 On 21 May 1996 a building application was lodged in relation to DA2, but this was not assessed as the Council determined DA2 by rejecting it on 26 August 1996. This was notwithstanding a report from an independent consultant recommending that it should be approved. It will be necessary to consider what DA2 sought in a little detail. Suffice to say, for the moment, that it made little or no concession by reducing the bulk and size of the development as proposed in DA1, notwithstanding that the plaintiff had been advised by a senior planning officer of the Council in February 1996 that this would have to be done if the s.102 application was to have any real chance of success. It tried to retain as much of DA1, in the sense of the number of units, as possible. This is not a criticism of the plaintiff, which, for understandable commercial reasons, wished to have as many units available for sale as it could achieve. However, it is very relevant in considering what steps the plaintiff would have taken.

43 On 28 May 1996, the plaintiff appealed against the deemed determination of DA2 by refusal of consent in consequence of the Council's failure to approve or reject it within a specified period.

44 On 28 June 1996 the excavation work was completed and contract works suspended.

45 Talbot J heard the plaintiff's appeal against the rejection of DA2 in early September 1996 and, on 11 September 1996, he refused consent. His Honour, essentially, was of the view that the bulk and size of the proposed development was excessive.

46 On 21 October 1996 the plaintiff lodged a s.102 Application 3149/96, which is 102(2), being the application the plaintiff has asserted it would have lodged in late March/early April 1996, but for the asserted invalidity of DA1. On 3 December 1996, the Class IV proceedings were re-listed and, on 16 December 1996, the Council determined 102(2) by rejecting it. On 18 December 1996, Mr Andersons of Peddle Thorp & Walker Pty Limited, ("Peddle Thorp and Walker"), which architect was then retained by the plaintiff, submitted DA1651/96, ("DA3"), to the Council. It will be necessary to refer to this application in more detail but I note, at this stage, that it also attempted to retain as many units as possible and, therefore, made little change to the bulk and size of the proposed development, notwithstanding the advice of Mr Andersons.

47 On 4 March 1997 the plaintiff appealed against the deemed determination of DA3 by rejection and, on 1 April 1997, Council resolved to determine DA3 by refusing consent. The plaintiff also appealed against the refusal to approve 102(2), and this matter was listed for hearing before Talbot J, together with the Class IV proceedings, on 1 April 1997.

48 On 15 April 1997 the Council notified Peddle Thorp & Walker that DA3 had been determined by refusal of consent. On 21 April 1997, the site was handed back to the plaintiff by Multiplex and, on 24 April 1997, the plaintiff terminated the contract with Multiplex with effect from 30 April 1997, on the basis that it was frustrated. On 30 April 1997 Talbot J declared DA1 was granted contrary to law and was void and, accordingly, there was no basis upon which the appeal against the refusal of 102(2) could proceed. This latter determination was not in issue.

49 In July 1997 the appeal against the refusal to approve DA3 was heard in the Court by Talbot J and, on 20 August 1997, his Honour determined the appeal by refusing consent.

50 On 25 September 1997 these proceedings were commenced.

51 9 January 1998 was the date for practical completion of the initial contract between the plaintiff and Multiplex dated 12 January 1996, which had been terminated.

52 On 19 February 1998 DA74/98, ("DA4"), was lodged by Peddle Thorp & Walker and, on 15 June 1998, the Council resolved to determine it by consent, issuing its notice of determination on 3 July 1998. On 2 September 1998, BA98/557 was submitted to the Council for approval and, on 20 October 1998, marketing commenced by sales, once again, off-the-plan. On 7 December 1998, the Council determined BA98/557 by approving it.

What The Plaintiff Would Have Done But For The Negligence

53 What the plaintiff would have done, but for the Council's negligence, depends essentially on the evidence of Dr Quek. His first witness statement, all of which statements were marked as Exhibit B, was made on 28 May 1998. He set out his position, duties and functions with the plaintiff and its acquisition of the relevant land. In paragraph 3 he referred to another company, Greencliff Developments Pty Limited, ("Greencliff"), which became the manager for the project. This was a company essentially under his management and control. He described the consolidation of the various pieces of land and, in paragraph 5, stated that the plaintiff purchased the land "with the intention to develop it by constructing a building consisting predominantly of residential units with associated commercial/retail areas ...". The development involved the demolition of the SBS Building. Dr Quek traced the submission of DA1 and various steps taken in relation to that and, in paragraphs 8 and 9, recounted that the project was subject to the plaintiff's obtaining all necessary consents from the Council, and that the plaintiff intended to carry out the project so as to make a profit for its shareholders by the sale of the units. None of this evidence was in issue.

54 The concluding three paragraphs of the statement were:-

"10. If I had known that the consent to DA1082/94 was invalid as at 8 February 1995, I would not have:

(a) caused Lavender View to submit building application 95/275 or caused that application to be prosecuted. This building application was approved by Council on 10 November 1995;

(b) caused Lavender View to obtain Council's consent to the demolition of the SBS building or caused that building to be demolished commencing in late June 1995;

(c) caused Lavender View to enter into a contract with Multiplex Constructions Pty Limited (Multiplex) on 12 January 1996 to carry out the construction of The Colonades;

(d) caused Lavender View to commence bulk excavation of the Land in or about late November 1995 following approval of building application 95/275. I refer to the document from Bruce Swalwell Architects dated 7 July 1995, indicating proposed milestone dates including the date 1 October 1995, to commence bulk excavations.

11. In addition, if I had been informed as at 8 February 1995, that there was no realistic prospect of obtaining consent for the Project or to a substantially similar development, or a development of similar size, I would have taken steps to ensure that Council's consent to DA1268/90 did not lapse, so that, if necessary, development could have been pursued in accordance with that consent.

12. If consent to DA1082/94 had been refused by North Sydney Council, or if I had known that the consent to DA1082/94 was invalid, and there was no realistic prospect of obtaining consent for the project or for a substantially similar development or a development of similar size, I would have reviewed all Lavender View's options, including developing the vacant land in accordance with DA1286/90 and selling or refurbishing and selling the SBS Building. If, at the time, there was no realistic prospect of obtaining consent for the project or for a suitably similar project or development of similar size, it is most likely that I would have decided that Lavender View should proceed to develop part of the land in accordance with DA1286/90 and to proceed with the sale or the refurbishment and sale of the SBS Building. I refer to a memorandum I received from Geoff Davey dated 5 September 1995." (My emphasis.)

Paragraph 10 set out what Dr Quek would not have done had he known that the consent to DA1 was invalid as at 8 February 1995. Put shortly he would not have had the plaintiff carry out any steps to further the development conformably with that consent. Dr Quek does not say, in that paragraph, what he would have done. In paragraph 11 he dealt with what he would have done if he had been informed of the matters to which he referred. This paragraph was directed to the difficulties confronted in obtaining consent to develop "a substantially similar development, or a development of similar size", a matter with which he dealt further in paragraph 12, which paragraph reinforced his wish "for a suitably similar project or development of similar size". Paragraphs 11 and 12 make clear that Dr Quek wanted "a substantially similar development" or "a development of similar size". This was his evidence as at 28 May 1998 and it was strongly corroborative of that part of the Council's case which focussed on that desire of Dr Quek and led, as the Council's submissions ran, to the steps he took prior to the submission of DA4. It is also to be noted that the plaintiff's claim for damages was not predicated on any of the hypotheses in paragraphs 10, 11 and 12.

55 There was no suggestion in these paragraphs that but for the potential invalidity of DA1, he would have caused 102(2) to be lodged in late March or early April 1996, notwithstanding the importance this assumed in the case the plaintiff ultimately presented.

56 Dr Quek made a further statement on 13 November 1998. He referred to evidence he gave on 29 July 1998 in which he made reference to an instruction to lodge a s.102 application, and to his having said that had the Council rejected that application, being 102(1), for whatever reason, he would then, depending on the objections, probably have appealed. He said he did not proceed with that application because the necessity for it was superseded by the decision to submit DA2. Part of the Council's case was that Dr Quek would have relied on DA2 in early 1996 in an attempt to achieve his objectives, which would have been, arguably, at odds with the making of 102(2). His evidence is corroborative of the evidence that DA2 would have been lodged irrespective of any challenge to the validity of DA1, and, of course, if DA2 had been approved, it would have rendered DA1 and 102(2) unnecessary. The reason submitted for pursuing DA2 and 102(2), in the hypothetical case, was that the plaintiff thereby had two approaches. That does not answer the question why two approaches were necessary in the hypothetical case when there was no challenge to DA1. The more likely answers are that, firstly, the plaintiff did not wish to proceed with DA1 and, therefore, did not lodge 102(2) in about March 1996, but that it wanted to build conformably with DA2, which it in fact lodged in April 1996. He continued, in paragraph 5:-

"I also made reference, in my evidence, to the fact that in October 1996 I purported or attempted to lodge a section 102 application, which the Council rejected. This was submitted for two reasons. First, the Land and Environment Court had determined the second development application by a refusal, after the Council rejected it. Although there was some doubt as to the validity of DA1082/94, there remained, in my mind, the possibility that it could be built, and I was aware that the development as represented by DA1082/94 would require to be modified so that it complied with the provisions of the Building Code of Australia. Secondly, I had been advised that, if Lavender View Pty Limited (Lavender View) instituted proceedings against Council based on the invalidity of DA1082/94, it would need to be able to demonstrate that DA1082/94 could have been built. For that reason, Lavender View should submit a section 102 application that was totally compliant with that DA save for changes necessary to bring it into compliance with the Building Code of Australia."

The first stated reason is strongly corroborative of the view that 102(2) would not have been submitted, on the hypothetical case basis, at the same time as DA2, but that that was only done, and would only have been done, after DA2 was rejected and in consequence of that rejection. That corroboration is provided by virtue of the belief that notwithstanding some doubt as to the validity of DA1, there remained in Dr Quek's mind the possibility that, subject to modification to comply with BCA, development could have proceeded conformably with DA1. If there was no doubt about the validity of DA1 it is difficult to see why the same chronology would not have been followed, i.e. 102(2) would have been lodged after DA2 had been finally determined, if 102(2) was necessary, as it would have been.

57 Commencing at paragraph 6 Dr Quek said that he assumed that no proceedings had been launched to challenge DA1, and that the consent to that development application was unchallenged "and, in fact, there was no risk of any legal challenge to it". He referred in paragraph 7 to the entry by the plaintiff into the building contract with Multiplex on 12 January 1996, with a date for practical completion of January 1998, and to his concern to ensure that the date for practical completion was not delayed. In paragraph 8 he stated:-

"In those circumstances, if I had been advised that the first section 102 was unlikely to be approved by Council or the Land and Environment Court on appeal, then I would most probably have instructed that a further section 102 application be lodged which would be likely to be accepted, either by the Council or the Land and Environment Court on appeal without delay, so that any delay to the progress of construction could, if possible, be avoided or minimised."

This paragraph suggested that if Dr Quek had been so advised he would, in all probability, have given instructions for 102(2) to be lodged in March or April 1996.

58 In paragraphs 9, 10 and 11 Dr Quek dealt with DA3 and noted his instructions to Peddle Thorp & Walker that:-

"I would like you to produce a design and submit a development application which, as far as possible, maximises the commercial use of the land for residential development, while taking into account the comments of the Land & Environment Court in the judgment which constituted the determination of DA2."

59 In paragraph 12 Dr Quek referred to the refusals of the appeals by the Court in relation to DA2 and DA3, and stated:-

"In neither instance was I advised that there was no prospect of the appeal succeeding. I attended the hearing of both of the Class I appeals. At the end of each hearing I was optimistic that the DA would be determined by consent."

Thus Dr Quek, who was an experienced developer, saw no good reason not to pursue either DA2 or DA3, both of which would have provided the type of building the plaintiff was seeking to build. There is no justification for believing that the plaintiff would have acted differently in the hypothetical case in seeking to maximise the development.

60 The balance of the statement dealt with loss of opportunity which, save for one minor matter, is no longer relevant.

61 In his statement of 7 March 1999 Dr Quek annexed a note of a meeting with his legal advisers, which apparently took place in the chambers of Mr Tobias on 20 October 1996, when there was a review and overview of DA1 and an opinion as to its likely validity. The note indicates that it was most likely fundamentally flawed through the Council's negligence in not properly assessing SEPP 1 objections at the time of its submission, and that the Class IV proceedings were to be considered next, and, after certain consideration as to whether and how those proceedings may go forward, it was stated that if they proceeded "then DA1 will be declared void and 6/6A's development potential reduced". The note continued:-

"8. Dependent on the strategy of timing the following needs to happen.

(a) Determine the Class 4, or determine whether it will be reactivated.

(b) If not to be reactivated, then submit a section 102 and BA to NSC based on DA1 which only addressed the BCA issues. NSC will be bound to deal with it since it is not contesting the validity of DA1. If not dealt with after forty days then go through the normal appeal process.

(c) If Bingham or NSC wish to reactivate the Class 4 then submit a new DA along the line of Talbot's decision."

The reference to Mr Bingham is because he was the person who, apparently, was principally involved in initiating the Class IV proceedings. The suggestion that 102(2) should be pursued seems to spring from that conference, and not from any earlier consideration which would have operated if there had been no negligence, and 102(2) was lodged the day after the conference.

62 In his statement Dr Quek said that he received advice in relation to the submission of DA3 and his obligation to mitigate damages, and he recorded, in paragraph 6, the following oral advice given by Mr Tobias:-

"I think you should submit a further development application, taking carefully into account the contents of Talbot J's decision in the determination of DA2. You should also bear in mind that if and when DA1 is declared null and void and you decide to sue North Sydney Council for negligence, you should be seen to have acted reasonably in mitigating any damages sustained by you as a result of the Council's negligence."

DA3 was prepared and lodged on 18 December 1996, two days after the Council determined 102(2) by rejection.

63 He continued that, to the best of his recollection, that advice was given in October 1996 after DA2 had been determined by the judgment of Talbot J, which must have been so having regard to the terms of the advice, and that the obligation to mitigate damages was a consistent theme of the legal advice he obtained "since doubt was first cast on the validity of DA1". He said similar advice was given shortly after DA3 had been determined by rejection by the Court, which occurred on 29 August 1997, once again by Mr Tobias in conference. He continued, in paragraph 9:-

"This advice was part of the reason why I gave Andrew Andersons the instructions in relation to maximisation which I refer to in paragraph 11 of my statement of November 13. As I understood it, if DA3 took into account the problems raised in Talbot J's judgment but maintained a similar net saleable area to that of DA1, then I would be seen to have acted reasonably in limiting the damages suffered by Lavender View."

Although Mr Tobias submitted that DA3 would not have been pursued but for the legal challenge to DA1, I am satisfied that it was part of the natural progression by the plaintiff to seek to maximise the development, and it would, therefore, have followed the rejection of DA2.

64 Subsequently in the statement Dr Quek referred to problems in relation to balconies on the boundary between 6 and 6A Cliff Street not complying with the requirements of the BCA, and extensions westward to the apartments at Levels 15 and 19. He said a meeting was held with an officer of the Council, Mr Darroch, which appears to have been in February 1996, when Mr Darroch said to him that he did not feel that the current s.102 application, which was 102(1), would be approved unless amendments were made to the setbacks on the boundary and the extensions on Levels 15 and 19. He said Mr Darroch continued:-

"You will be required to submit not only a new section 102 but an amended BA in order to remedy the breaches to both BCA on the boundary with 6 and 6A as well as to delete the proposed extensions to Level 15 and 19."

65 Dr Quek said that after the meeting he instructed Mr Swalwell to proceed with the necessary drawings in preparation for these submissions and:-

"Having spoken to the planners personally for the first time at that meeting I was convinced that there was no other route to be taken but to submit amended plans as requested. I was disappointed because we had sold some of the flats that would be affected by the requested changes."

The evidence makes it clear that Dr Quek "never believed section 102 number 1 would be approved after Mr Darroch had given his advice" in February 1996: Tp.81. Notwithstanding Mr Darroch's advice, a new s.102 application was not submitted. Dr Quek said that that he had been advised that a defect within 102(1) was that it was not substantially the same development as DA1: Tpp.84-5, and at Tp.107 he said:-

"MR WALKER: Q. In February '96 you knew that the Multiplex plans were different from DA1, didn't you?

A. Yes.

Q. In February '96 you knew that the BA plans were different from DA1, didn't you?

A. Yes.

Q. And in February '96 you knew that 102 number 1 could not be approved, didn't you?

A. In its own form, yes.

Q. And those three things I asked you about you knew at the same time, didn't you?

A. Yes.

Q. And they meant that DA1 had ceased to be the building in the form you wanted to build it; isn't that right?

A. Not necessarily so."

Dr Quek was then cross-examined about that which the plaintiff wanted to build. I shall refer to this evidence.

66 It is necessary to keep firmly in mind that the plaintiff's primary case was that but for the asserted invalidity of DA1 it would have submitted 102(2) in March/April 1996. In paragraph 20 Dr Quek continued:-

"However, subsequently on advice from my legal advisers including Mr Tobias it was decided that it would be better to submit a fresh development application instead of an amended 102 because of the risk that if the original development application was declared invalid any modification of it would be invalid as well. To the best of my recollection Mr Swalwell was instructed to issue a new development application in March 1996 and the original 102 amendment application was abandoned."

The "original 102 amendment application" is a reference to 102(1). The clear inference is that 102(1) was abandoned for the reasons set out in Dr Quek's evidence in paragraph 65, and because the plaintiff did not wish to proceed with that building. This was reinforced by the evidence of Dr Quek at Tpp.98-99, which culminated in his agreement that the plaintiff "did with DA2, on an urgent timetable, following Mr Darroch's advice effectively the same thing as you would have done had there been no legal challenge". Thus, so the Council's submission ran, DA1 ceased to be the vehicle through which development was pursued and DA2 became the means nextly pursued. When all the evidence is considered I am of the view that this submission should be accepted.

67 In his opening, Tp.10, after referring to Mr Darroch's statement to Dr Quek that in all probability the Council would not approve 102(1), because it did not consider that it was substantially the same development, and that that application was abandoned, Mr Tobias said:-

"Given that there was a challenge to that consent, then there was little point in pursuing the 102 application until that challenge had been determined. That's why it was thought better to go back to square one, as it were, and lodge DA2, which of course would be untainted if consent to it was granted by the challenge to DA1."

DA2 was lodged on 4 April 1996. However, the opening was not supported by the evidence called by the plaintiff, and particularly by that of Dr Quek. The evidence established to my satisfaction that DA2 would have been lodged when it was whether or not there was a legal challenge.

68 At Tp.12 Mr Tobias said:-

"It is common ground that the first one" (102(1)) "the December 1995 one, would not have been approved because the view was that it was not substantially the same development. It might have prejudiced people who objected to the original application."

69 He continued, Tp.13:-

"The one that would have been approved was the one that ultimately was lodged on 21 October 1996, except our case is that it would have been lodged back in February or March 1996 had it not been for the legal challenge because it was the legal challenge that necessitated the lodgment and the pursuing of DA2.

.... either in February or March of 1996. This becomes of some critical significance because of the delay factor involved in terms of the plaintiff's damages. Your Honour, as I have said, the Class I appeal for DA2 had been lodged on 28 May 1996. The builder ran out of work to do legally and the contract works were suspended on 28 June after he had finished the bulk excavation because of the challenge to the development consent, which, of course, if that went down, then so would any building approval upon which it was based, including any s.102 approval upon which it was based."

70 Therefore Mr Tobias was making it clear that the plaintiff's case was that having been told in February 1996 that 102(1) would not be approved, which was accepted, it became necessary to either prepare a new s.102 modification, which, having regard to the challenge to the validity of DA1, would not have been of any effect if DA1 was held to be invalid, or to prepare another development application. The course was taken of submitting DA2, rather than 102(2) at that stage. His opening that it was the "legal challenge", which stimulated DA2, has to be considered in the light of the evidence that DA2 would have been lodged irrespective of the legal challenge, which establishes that DA2 was not stimulated by the legal challenge and would have been lodged irrespective of it because DA1 was not the vehicle through which the plaintiff wished to exploit the land.

71 The Council determined DA2 and DA3 by refusal and, on appeal from each such refusal, Talbot J dismissed each appeal holding, put shortly, that the development proposed was still too large.

72 At Tp.17 Mr Tobias stated:-

"Had there been no legal challenge, it is our case that the s.102 application, that is the October 1996 s.102 application, would have been lodged in February, early March of 1996 and would have been approved by the end of April, early May 1996 by the Council on the recommendation of Mr Darroch and Mr Epstein."

This hypothesis did not involve the possibility of determination by rejection and an approval on appeal to the Court, which the plaintiff initially expressly disclaimed. The submission relied solely on the assumption of a favourable recommendation from Mr Darroch and that the councillors would have accepted it and approved 102(2). Mr Darroch had no involvement with DA2 after 4 April 1996.

73 He continued that it would then have been necessary to amend the building approval, which would have been approved "within a couple of months" with the consequence that the works would never have been suspended and Multiplex would have continued to erect the building in accordance with the building programme it had undertaken. For the reasons I have given the hypothesis on which this time sequence was based did not contemplate initially an appeal and, therefore, did not assume a determination by the Council by rejection.

74 Mr Tobias' submissions continued that by September 1996, when the marketing programme stopped as a consequence of the challenge to the validity of the consent, some 103 of the 166 units had been sold with a total contract value of about $53.7m. He submitted that in September 1996, after Talbot J refused DA2, it was realised that the configuration of the building would have to change radically, with the result that all those contracts would have to be terminated, and that the chances of being able to rely on DA1 were dependent upon the Class IV proceedings, and:-

"The plaintiff's case will be that the building would have proceeded unhindered and it would have received the proceeds of sale in or about April of 1998. What has happened, however, is that the plaintiff has pursued, and has been required to pursue, DA2, DA3 and DA4 to ultimately obtain a valid consent in circumstances where, firstly, it has incurred significant expense in relation to each of those development applications, secondly, it has been required to pay Multiplex money, part of which is now wasted, and, thirdly, it has incurred liability for interest not only to the bankers but also to its shareholders in respect of which it obtained loans that, together with the share capital of Lavender View, under the original acquisition of the land for some $11m odd and also funded the obtaining of the development consent in February 1995."

75 Mr Tobias opened, and so much did not seem to be in dispute, that all the contracts were ultimately terminated and the plaintiff had to restart selling the units in DA4. The approval is for 141 units in DA4 as opposed to 166 units in DA1. The modification proposed in 102(2) did not reduce the number of units below 166. A basic question is whether the plaintiff could ever have obtained development approval for a building of sufficient size to provide for more than 141 units.

76 I did not request Mr Walker to open but, on 10 March 1999 at a time which was convenient, I invited him to address me as to the Council's case. At Tp.322 Mr Walker said that the issue in terms of identifying whether any loss was suffered revolved entirely around the status of DA1 in the financial fortunes of the plaintiff, there being no doubt that the plaintiff is to be treated as an entity intending to exploit the land. He submitted that the first question was whether DA1 was ever the vehicle intended to be used for that exploitation, because it had within it an element, which meant that one could never be secure as a developer simply with DA1, namely that a building that would be consistent with it could not be built in accordance with building codes and thus the requisite building application would necessarily differ to some extent from the building plans submitted with DA1.

77 Mr Walker relied upon the fact that even before Dr Quek was aware of any challenge to the validity of DA1, an acceptance of and reliance on it necessarily involved the plaintiff's being put back into the hands of the Council for the purpose of its modification pursuant to s.102 and in relation to the building plans. Mr Walker continued:-

"In the hypothetical case, he" (Dr Quek) "would have been correct in believing it to be valid. That's the only difference between the actual case and the hypothetical case for this part of 1995. His conduct would have been no different."

By that Mr Walker meant that although Dr Quek would have been entitled to believe he had a valid consent, he would have been left with the difficulties of making it operative by either obtaining the additional consents, which were necessary before it could be built, or applying for another development application.

78 Mr Walker's submissions continued that when DA1 was submitted it was not, in any way, influenced by the Council's negligence, which is undoubtedly correct. Accordingly, DA1 represented what would have happened hypothetically, as well as what happened actually in the progression to the desired exploitation of the land, i.e. irrespective of any alleged invalidity, (for none was then suggested), DA1 would have been submitted.

79 Mr Walker continued, Tp.326, that 102(1) did not reduce, or did not reduce more than minimally, what had been proposed, and that DA2 was put up in consequence of a business risk taken by Dr Quek, which he thought was worth taking to get what he wanted. Mr Walker submitted that there was no reason why Dr Quek would have acted more cautiously if he thought DA1 was valid, than if he thought it was invalid. He said that Dr Quek was well advised, and that in relation to DA's 2 and 3 he once again took the risk. He continued that DA's 2 and 3 were submitted because Dr Quek wanted to build something different from DA1 and because, in any event, he was back in the hands of the Council under DA1.

80 At Tp.330 Mr Walker said that the position could be summed up by saying that DA4 was the best the plaintiff could achieve and that there was no loss which had anything to do with any supposed differential between a hypothetical development and the actual development. Mr Walker submitted that there were four answers to the submission that 102(2) would have been submitted in March or April 1996. Firstly, that Dr Quek had denied that would have occurred. Secondly, that on the narrative as he had outlined it there was no reason to suppose in commonsense why it would have occurred, there being nothing in the nature of the hypothetical case, that is one which accepted the validity of DA1, that meant that the plaintiff would have proceeded to 102(2) any earlier than it did; thirdly, that Dr Quek only intended to use DA1 as a launching pad; and, finally, even if 102(2) had been submitted earlier both the Council and the Court would have refused the application or, to put it more accurately, that the plaintiff has not proved, on the balance of probabilities, that this would not have happened. I have noted that it was not part of the plaintiff's initial submissions that 102(2), if lodged in March/April 1996, would have been determined by rejection, thus necessitating an appeal to the Court.

The Oral Evidence Of Dr Quek

81 Dr Quek agreed, in cross-examination, that he met Mr Darroch in February 1996 in the presence of Mr Swalwell and some others, and that Mr Darroch told him that he did not think 102(1) would be supported in its current form and that there would have to be reduction in scale. He knew at that time that the scale or bulk of the development was controversial and, having been furnished with the information by Mr Darroch, he told Mr Swalwell that he, Mr Swalwell, would need to look at the s.102 modification application to see where it could be reduced. Dr Quek regarded that as an instruction to Mr Swalwell, and, in February 1996, he understood that a reduction in overall bulk of the development was required, which may have involved a reduction in the saleable floor space. These concessions pointed to a far more wide ranging reduction in size and bulk than those contended for by Mr Tobias as involving some change to balconies and reduction in creep. The evidence of Mr Darroch confirmed, in my opinion, that the need for reduction was of the type Dr Quek conceded.

82 Dr Quek said he was not able to point to documents, which reduced the scale in March or April 1996, including a reduction of scale for a s.102 modification application: Tp.67.

83 Dr Quek made it clear that, whilst disappointed with Mr Darroch's advice, he accepted it and whilst he thought reductions could be made, that was never done: Tp.68. He repeated, Tp.69, that he believed reductions were possible, and that he was determined that there be no reduction in the net saleable area. At Tp.70 Dr Quek said he knew and believed the scale could be reduced. When he was asked whether he accepted that his instructions were never carried out he replied:-

"Events followed where it was decided to proceed with a new DA",

that being the lodging of DA2 on 4 April 1996. Dr Quek agreed, Tp.71, that the kind of development proposed by DA2 was more or less the same as proposed by the combination of DA1 and 102(1), and, at Tp.72, that in certain areas the bulk of DA1, when aggregated with 102(1), was too great. But he disagreed that DA2 did not effect any reduction, although, soon after he said:-

"Q. What reduction in scale or bulk was introduced by DA2 below the aggregate of DA1 and s.102 No 1?

A. I would say in the scale of things it would very minimal.

Q. So minimal that they can, for all intents and purposes, be treated as the same in this Court, can't they?

A. No it affected the ...

Q. Were they minimal or not?

A. DA 2..

Q. Were they minimal or not?

A. Minimal in terms of the bulk, yes."

84 At Tp.75 Dr Quek repeated that the reduction in DA2 was minimal, and continued:-

"Q. Which means, does it not, that the business decision for which you personally were responsible at the time was one which took the risk that if you didn't follow Mr Darroch's advice, you would not get approval; do you agree?

A. Yes.

Q. And you took that risk because the rewards for the company were such as to render it a reasonable business decision, you thought, to chance your arm with a new DA which did not reduce bulk; is that correct?

A. Yes.

Q. Right up to and including the lodgment in April 1996 of DA2 you knew, didn't you, that you had to get approval for a 102 modification or approval of a new DA before you could proceed with the project; is that right?

A. Yes."

The second answer is strongly suggestive of Dr Quek's being concerned only with DA2 at that stage, and the third answer is somewhat suggestive of this, in the sense that DA2 was the course adopted in preference to 102(2). However, the suggested invalidity could have remained a reason for this, although, on the whole of the evidence, I am satisfied that DA2 would have been lodged when it in fact was irrespective of the suggested invalidity of DA1.

85 At Tp.76 Dr Quek agreed that he knew from a very early stage, even before DA1 was approved, that the building application may well introduce variations or refinements of the design contained in the DA1 drawings, and that whether the changes introduced at the building application stage needed a modification of DA1 depended on judgments made "by the regulators".

86 He also agreed that he knew, at least by February 1996, that there was a controversy in relation to the bulk of developments "like yours". At Tp.78 he said:-

"Q. We will return then to February 96 and the conversation with Mr Darroch. In light of what you've told us, Dr Quek, it was very clear to you by then that unless there could be approval of a 102 modification or a new DA, your project could not go ahead as you wanted it; is that right?

A. Unless there were changes, yes."

87 He agreed that at that time he probably did not want a reduction in the net saleable area, and that the only thing stopping a reduction in bulk and scale was his desire to maximise profit. It is clear that this commercially understandable reason lead to the lodgment of DA2, and, also, to the submission that but for the alleged invalidity 102(2) would have been submitted earlier.

88 Dr Quek agreed that he knew from February 1996 that 102(1) would never be approved, but he would not agree that he never had any reason to believe that DA2 would not be approved. He agreed, Tp.83, that when he lodged DA2 it made no concession to reduction in bulk advised by Mr Darroch and notwithstanding the existing controversy about that, nor to the changes in the composition of the Council.

89 At Tpp.84-85 Dr Quek agreed that he had been told that a defect with 102(1) was that the development was no longer substantially the same development, and that there needed to be a reduction in bulk to have prospects of approval. However, he said that he believed that that was in certain restricted areas.

90 At Tp.91 Dr Quek said that an important reason for proceeding with DA2 was because of the challenge to DA1, and the alternative, "but for that problem, would have been to accept Mr Darroch's advice and modify 102(1)".

91 It was put to Dr Quek, Tp.92, that DA2 was a project which was very similar to the combination of DA1 and 102(1), with which he agreed essentially, and that the adoption of the course involving such a proposal did not follow Mr Darroch's advice totally. Dr Quek said that he followed the new DA2 route, rather than the amended 102 route, because of the legal challenge. Up to this point, subject to the evidence at Tp.75 which I have quoted, it had seemed reasonably clear, and prima facie logical, that DA2 was the result of the legal challenge to DA1. However, at Tp.95, Dr Quek continued:-

"Q. The work they did to amend the 102 involved considerations which were relevant to the eventual form of DA2; is that right?

A. Yes.

Q. What they were asked to do was to change its form from a 102 amendment to a new DA; isn't that right?

A. Yes, and also to negotiate with Council in the form that was required by Council.

Q. All of which would have happened with or without a legal challenge; isn't that right?

A. Yes.

Q. It follows, doesn't it, that there is no reason you can give why there would have been a section 102 in the form of section 102 number 2 in February or March 96 in the absence of a legal challenge; do you agree?

A. Yes."

92 This evidence, if accepted and given its full weight, was substantially destructive of the primary basis on which the plaintiff put its case, because it acknowledged, firstly, that the architects were asked to change the form from "a 102 amendment to a new DA", which Dr Quek agreed would have happened with or without a legal challenge, and, secondly, that in the absence of a legal challenge Dr Quek could advance no reason why there would have been a 102(2) in February or March 1996. In giving the evidence Dr Quek did not appear to be under any misapprehension and, in submissions, it was not suggested that he was. It was submitted that his evidence had to be read in context and allowing for the fact that he may have made a mistake under cross-examination, and that it would be wrong to make a finding based "on one unguarded answer in the witness box three years after the event". Earlier Mr Tobias had said that one could not do much about the concession at Tp.428, to which I shall refer, but that it had to be read "against the context of his other evidence on the same topic". A little earlier, Tp.485, Mr Tobias conceded that the evidence on when DA2 would have been lodged "is mixed", and that there could be no doubt "that Mr Walker put questions to Dr Quek perfectly clearly, perfectly properly, to assert that he would have put in DA2 irrespective of the challenge". However, the evidence is consistent with the evidence quoted in paragraphs 66 and 77, and particularly the answer to the second question quoted in paragraph 77. It also put in context the answer to the third question, in that it acknowledged that rather than follow the 102(2) path, the DA2 one was chosen.

93 The cross-examination continued, Tpp.95-96:-

"Q. Following your awareness of the legal challenge it was, I suppose, important for you that DA1 was vulnerable and might be declared invalid; is that correct?

A. That was the legal advice I had, yes.

Q. You, on the other hand, remained confident right to the bitter end that it would be saved; is that right?

A. Yes.

Q. So when his Honour comes to look at your conduct to evaluate what you would have done in a different position, he's looking, is he, at the conduct of a man confident that DA1 would be upheld but accepting advice to be careful in case you were wrong; is that correct? Is that how you would describe yourself?

A. Not exactly. I would say that I was unable to believe, with the experience that I had, that the development approval approved by an approving body could have had a legal challenge such as that. I've never met up with it before.

Q. Leaving aside your fortunate life as a developer, Dr Quek, by then you knew beyond a shadow of a doubt that it was happening and to you?

A. Exactly.

Q. From when you knew that, should his Honour treat you as a person who, although optimistic about DA1, nonetheless took steps to be careful lest you were wrong?

A. Yes.

Q. The first thing you did in that spirit was to lodge DA2 rather than merely an amended 102?

A. Yes."

94 This evidence, in my opinion, was of significance, because it established that from the time Dr Quek became aware of the legal challenge to the validity of DA1, which was in early 1996, he chose the course, although acting carefully, of lodging DA2 rather than an amended 102. Therefore, notwithstanding that Dr Quek remained confident that DA1 would be upheld, he did not take the step, which would have been consistent with that belief, viz of lodging 102(2), but lodged DA2. This is significant because if he had intended to lodge 102(2) in March/April 1996, his confidence in DA1 and reasons for believing that it would be upheld, would have meant, in my opinion, that he would have done so.

95 Dr Quek agreed, Tp.97, that from April to August 1996 the plaintiff was working on an urgent timetable to get DA2 through, and that all steps taken by the plaintiff both to mitigate its loss and to press on with the project were taken as urgently as possible. By the end of August 1996 he knew that DA2 had struck an obstacle in the form of the Council's rejection, and that there was still a fundamental problem for the project about bulk and scale.

96 On 21 October 1996, 102(2) was lodged at a time when Dr Quek regarded DA2 as no longer a justified reason for optimism, although he was still optimistic about the validity of DA1, in the sense that he said he had to be as it was the only thing on which he could rely. He agreed that on 21 October 1996, treating DA1 as still something that might be saved, 102(2) was lodged, and:-

"Q. And that, when you look back on it all, that step would not have been taken any earlier with or without the legal challenge, would it?

A. That would have been a natural step following the advice I had from Darroch, if not from a legal adviser. I would substitute that with ..

Q. Why didn't you take it straight away? It was the natural step ..

MR TOBIAS: You interrupted him, Mr Walker.

MR WALKER: Sorry.

Q. Is there something you want to add?

A. I said that that particular 102(2), as you referred to it, would have been the logical step that would have been taken after Darroch had said he would not accept a 102(1) if not for the advice that the DA - that DA1 could be invalid and it was best to work towards a new DA": Tp.98.

This seemed a reasonable explanation for not proceeding with 102(2) in view of the legal challenge to DA1, although the evidence has to be considered in the light of all his evidence, much of which was not consistent with this approach. Of particular significance is the evidence of Dr Quek's confidence in DA1, which I have quoted in paragraph 93. The initial question is whether 102(2) would have been pursued, rather than DA2, but for the legal challenge. If that question is answered in the affirmative, the next is what would have been the fate of 102(2). In my opinion, however, it should be answered in the negative. The evidence satisfies me that DA2 would have been pursued in April 1996 and that 102(2) would not have been lodged until 21 October 1996.

97 At Tp.99, Dr Quek said:-

"Q. Doesn't that mean that in terms of getting planning approval you did with DA2, on an urgent timetable, following Mr Darroch's advice effectively the same thing as you would have done had there been no legal challenge?

A. Yes.

Q. But it turns out - and this is one of the development risks of this kind of land owning - that both Council and the Court were against you and so you turned obviously to the next thing left for you; is that right?

A. Yes.

Q. And that turned out then to be DA3; is that correct?

A. Yes." (My emphasis.)

This evidence made even clearer the evidence he had given earlier, viz that even if there had been no legal challenge, so that the hypothetical position had become the actual position, Dr Quek, after receiving Mr Darroch's advice in February 1996, would have pursued DA2 and, if he had not succeeded with that, DA3 would have been undertaken. The first question clearly afforded Dr Quek the opportunity of asserting that he would have pursued 102(2). I have no doubt that Dr Quek would have referred to it if that had been his plan and, equally, no doubt that he did not refer to it because it was not part of his development plan.

98 Dr Quek said, Tp.100, that 102(2)'s rejection did not come as a surprise, but he added:-

".. I believe after the DA2 was rejected at Court, we went on to a two-pronged attack. One was to submit a 102(2) and the other one was to prepare drawings for a new DA, the DA3": Tp.100. (My emphasis.)

This added emphasis to the fact that 102(2) would not have been pursued at the same time as DA2, and that, irrespective of the legal challenge, DA2 would have preceded 102(2). The "two-pronged attack" stemmed from the advice received from Mr Tobias on 20 October 1996. The submission that it would have been followed earlier must, in my opinion, be rejected as being contrary to what happened and to Dr Quek's evidence. I have recorded Mr Tobias' submission that there was no direct evidence that DA2 and 102(2) would have been lodged as a two-pronged attack.

99 At Tp.104 Dr Quek agreed that the salient difference between DA3 and DA4 was a reduction in scale. He said the prime reason for submitting DA4 was that the plaintiff had already failed to obtain approval for two DA's, and instructions were given to talk to the Council and find out what it wanted and to build accordingly. He continued:-

"Q. So get the best you can; is that right?

A. That's right.

Q. Get the best you can?

A. Get the best from the Council officers at the time and the response from the councillors.

Q. So DA4 is the outcome of advice given to you and work for you to get the best you could from the Council at the time; is that right?

A. Yes."

100 At Tpp.105-106 Dr Quek agreed that the building application required a development, which was not substantially the same development as DA1, and that the Multiplex plans were "even more different from DA1 than the BA plans", although he said the latter changes were within the acceptable parameters of changes that could have been done by negotiation or by an amended BA.

101 He was asked whether he set out by a building contract to construct a building according to DA1 and he replied:-

"DA1 as it was was a set of indicative drawings and indicative drawings had to be progressed to a stage where there were more designs. When you come to construction, you had to go from a DA to a BA and some more construction definitions. There are bound to be changes in the development process. When we lodged a BA there were investigations - there were negotiations and I believe meetings between the architects and Council planners, and that's the reason why I believe that a BA was approved and a DA was approved I'm sure not by just the technical department but with the technical department's consultation with the planning department. I was confident that at that time whatever plans I had marketed would have been approved."

102 Thereafter Mr Walker pursued the question as to whether there was an intention to have the project completed in accordance with DA1, and Dr Quek was cross-examined about the difference between the DA1 plans and the building contract plans. He agreed, Tp.107, that in February 1996 he knew the Multiplex plans were different from DA1, and that the BA plans were different from DA1, and that in its own form 102(1) could not be approved. He said those three pieces of information did not necessarily mean that DA1 had ceased to be the building in the form he wanted to build it. I have set forth this evidence in paragraph 66. He was then referred to a minute of 8 March 1996 and agreed that at that time he suggested the plaintiff should lodge the original development application with BCA compliance "plus minor changes to the balcony", which would constitute "a complying DA", and one different from DA1 under, he hoped, a modification pursuant to s.102. He was referred to the words in the minutes about change "which would produce the building in the form we want to build it" and, in answer to the question that the building was different from DA1, he said it would have been a modification of the original DA1, although he agreed that by that time he had been told that the modification the plaintiff had sought of DA1 could not be approved in its current form and needed to have reduced scale.

103 At Tpp.109-110 he was asked whether he agreed that the minute showed that by mid-March 1996 the plaintiff did not intend to turn the land to commercial development in accordance with DA1, to which he replied "Yes, it needed a 102". Notwithstanding this answer, I am satisfied that he decided on DA2 rather than 102(2). Dr Quek was cross-examined as to the intention of the plaintiff and, at Tp.111, he said:-

"Q. Is it then correct that your company, regardless of the legal challenge, regardless of the challenge or its success, intended to develop this land differently from DA1?

A. Yes, in certain areas, yes.

Q. Your company regardless of the legal challenge, always intended to place itself back in the hands of the Council to approve or not approve the development it wanted to build; do you agree?

A. I disagree.

Q. But you did set out to place yourself back in the hands of Council when you lodged s.102 number 1, didn't you?

A. I was under the understanding that the ...

Q. Mr Tobias can ask you questions to explain that. If you could just answer my question directly. You did put yourself back in the hands of the Council in the form of s.102 number 1, didn't you?

A. Yes.

Q. And that was done quite regardless of the legal challenge, wasn't it?

A. Yes."

104 Dr Quek agreed that to submit a s.102 application necessitated putting the plaintiff "back in the hands of the Council regardless of the challenge", and:-

"Q. When you put in a BA which is different from the DA so as to require a 102 to be made, you've put yourself back in the hands of Council again, haven't you?

A. Yes.

Q. And the company always intended to do that regardless of the legal challenge, didn't it?

A. Yes."

This evidence established a quite important cornerstone for the Council's case, viz that irrespective of the legal challenge, the plaintiff would have been forced to seek further approval from the Council and there was no guarantee that the Council would consent.

105 After being referred to a letter from Bruce Swalwell Architects, Dr Quek agreed, Tp.113, that what the plaintiff wished to build was a project different from DA1, which he clarified by saying that "it would be DA1 with modification by s.102". He had agreed earlier, Tp.98, that that led to a development relevantly the same as DA2. This was a significant concession, which went a considerable way to establishing that DA1 was not the means by which the land development would be implemented. This applies even allowing for the qualification to the answer.

106 Dr Quek was then referred to another communication from the architects of 19 March 1996, which enclosed copy correspondence with Multiplex and which he agreed informed Multiplex "about a new DA". He agreed that in discussions about a new DA changes were referred to as emanating both from Greencliff and Multiplex. He was referred to various changes, and said:-

"Q. Because Lavender View Regency Pty Limited simply could not build what it wanted to without fresh planning approval, which you knew and accepted; is that right?

A. Yes."

107 At Tp.120 Dr Quek said:-

"Q. In order to build what it wanted to build, it either had to modify DA1 or get a new DA; is that right?

A. Yes.

Q. And to get a new BA or amended BA; is that right?

A. Yes.

Q. And the fact that the company was in that position at the end of March 1996 was not brought about, I suggest to you, by the legal challenge to DA1; do you agree?

A. Yes."

What the plaintiff had to establish was that the course it would have taken to build what it wanted, if there had been no legal challenge, was by modifying DA1 pursuant to s.102. That was its primary case. This evidence assists me in concluding that that is not what it would have done. In my opinion, the evidence establishes that if there had been no legal attack the plaintiff would have pursued DA2 alone, and that the two-pronged attack of DA2 and 102(2) was an idea of a much later date, if, indeed, it was ever a proposal.

108 Commencing at Tp.121 Dr Quek was cross-examined about the risks inherent in the development and subsequent sale of the units. He agreed that in building conformably with DA4 the plaintiff was in a position to offer 141 units, and that whether it would have been in a position to offer the 166 units that it wanted to build depended on matters on which it took a calculated risk. He continued, at Tpp.122-123:-

"Q. And DA1 is not itself an approval to build the project you wanted to build, is it?

A. DA1 was an approval to build a building.

Q. Please, Dr Quek, we've been down here before. You understood my question, didn't you, perfectly well? DA1 was not an approval to build the project you wanted to build; do you agree?

A. Yes.

Q. What was offered to the market was not DA1; it was something which might result from DA1 modified and a BA that might result from a new DA and a new BA; is that right?

A. Yes.

Q. You took the risk when you went to the market ..

A. Yes.

Q. .. about not being able to build what you promised to sell them; is that right?

A. No, I took the risk only after I was told by my architects and consultants that the shape and form of what we're putting in for the DA was acceptable at Council. That's the reason why the BA was submitted in that form.

Q. But by November you knew, did you not, that you had to put in a modified DA to be able to build?

A. A modified section 102, yes, yes.

Q. So whatever else you may have believed, by November 95 you knew that you were back in the hands of Council, didn't you?

A. We knew that it was to submit a 102 to bring it in line with the BA drawings.

Q. None of that came as a surprise because you already knew that DA1 had been superseded in the mind of the company which wanted to build something different from DA1?

A. I knew that DA1, the marketing drawings that were marketed were a deviation from DA1.

Q. You agree with what I say, don't you?

A. Yes, in certain areas." (My emphasis.)

This evidence underscored the point that DA1 was not the development vehicle. Therefore, even as a starting point, reliance on the modification of DA1 conformably with s.102 was a shaky foundation for the plaintiff's primary case. The concession that DA1 was not an approval to build the project the plaintiff wished to build makes it the more probable that DA2 would have been lodged when it was, irrespective of the legal challenge, and that the plaintiff would have proceeded on that basis.

109 Dr Quek agreed that the plaintiff reserved the right not to proceed with the construction, to rescind the contracts and not to be liable for damages if it did so. He further agreed that was a protection against risk. I am satisfied that Dr Quek was balancing the risk of building as many units as possible, and, ultimately achieving that end, as being of primary importance even if it occasioned some delay. His acceptance of the risk element in some of the steps taken makes this clear. Accordingly, the plaintiff, notwithstanding that it had entered into contracts, retained the right not to proceed with the construction at all, in which circumstances it would not be liable for damages or to complete in the circumstances set out in Clause 34 of the contracts for sale in which event either party was entitled to rescind. This leads to the conclusion that Dr Quek proposed to cling tenaciously to obtaining as many units as possible and to taking the commercial risk of achieving that, whilst the plaintiff could elect, under its contracts for sale, not to build at all, or not to complete. The contractual position of the plaintiff, in regard to not proceeding, appears from Special Condition 52, which provided:-

"52 SPECIAL RIGHTS OF VENDOR

52.1 Despite any other provision of this contract, the vendor reserves the right to decide not to proceed with construction of the Building and, if the vendor so decides, the right to rescind.

52.2 The vendor may exercise the rights reserved in clause 52.1 in the vendor's absolute discretion.

52.3 The vendor may only exercise the right to rescind reserved in clause 52.1 by written notice to the purchaser on or before 1 December 1995 and if that right is not so exercised it may not be exercised.

52.4 If the vendor rescinds under this clause 52 then:

(a) the contract is rescinded from the beginning; and

(b) the deposit is to be refunded to the purchaser immediately; and

(c) all interest earned on the deposit is to be paid to the purchaser in accordance with clause 27."

However, that was only available until 1 December 1995.

Special Condition 34 provided:-

"34. Completion Subject to Condition.

34.1. Completion is subject to and conditional on the registration of the documents referred to in Schedule 2.

34.2. If the documents referred to in Schedule 2 are not registered on or before the date stipulated in Schedule 3, then either party may rescind by written notice to the other.

34.3. The vendor must use all reasonable endeavours to have the documents referred to in Schedule 2 registered on or before the date stipulated in Schedule 3."

The document referred to in Schedule 2 was "Strata Plan", and the date specified in Schedule 3 was "30 September 1998".

Thus, the plaintiff was entitled to rescind, conformably with this special condition provided it used all reasonable endeavours. There was no evidence that any purchaser took the stance that it had not.

110 At Tp.153 Dr Quek agreed that the fate of DA2, DA3 and s.102(2) "were pretty clear indications of failure by Lavender View in gaining a new consent"; that they were for what he would describe as substantially similar development or development of a similar size to DA1; and that if they failed the plaintiff would be driven to look at something else.

111 At Tp.155 Dr Quek said the plaintiff was forced to move to a new development application, although he added that it could have moved on to a modified s.102 application. He agreed that unless the plaintiff reduced the scale, a modified s.102 application "would be incapable of approval", and that he was determined not to reduce the scale if he could help it and, at Tp.156:-

"Q. So you decided to chance your arm with a new development consent altogether, didn't you?

A. We put in a new development application that was reflective of DA1 and the culmination of the BA that was approved.

Q. Given your commercial ambitions for this site, if you'd been told at the beginning of 1995 that there was a legal defect with DA1, you would have lodged a development consent for a project substantially similar to it or of similar size, wouldn't you?

A. In early 1995?

Q. Yes.

A. Yes.

Q. And it would have gone through the ordinary processes?

A. Yes.

Q. As to whether it would be consented to or not; correct?

A. Yes.

Q. When it actually came to doing that, you failed, didn't you?

A. When it came to doing that?

Q. When you actually came to do that ..

A. But we had a consent in DA1.

Q. Please, Dr Quek. When it actually came to you putting in new development applications for developments of substantially new sizes, you failed, didn't you?

A. We failed in getting the DA2 yes.

Q. And DA3?

A. And DA3 yes.

Q. You didn't succeed until you reduced in scale to DA4; is that correct?

A. Yes.

Q. But your assessment, given the advice you had from lawyers, from planners, and from architects, was that the attempt was worthwhile?

A. Yes." (My emphasis.)

The point of this questioning, obviously enough, was to show that the plaintiff would have pursued the same course as it did, even if told of a legal defect with DA1 at the commencement of 1995. That involved getting as many units as possible, which, in turn, included not making any compromises in size and bulk until forced to do so. In my opinion, this cross-examination assists in concluding that the plaintiff would have pursued the same course irrespective of the invalidity of DA1 and the negligence of the Council.

112 Mr Tobias submitted that the plaintiff would not have made an application under s.102(1) to reduce the scale, bulk and size of the building because that would have meant that it did not cross the first s.102(1) threshold. I am satisfied that the plaintiff neither wished to build the development for which DA1 provided, nor that it was under any misapprehension that unless it made substantial concessions in relation to bulk and size, it would receive consent. DA2 was a fresh attempt to obtain as much as possible, whilst recognising the risk.

113 Dr Quek was then asked whether, if there had been any challenge to DA1 in early 1995, he would have taken the same course, and he said that he would have sought legal advice. He agreed that if that advice was that there was a prospect of getting a new development consent for a substantially similar size or substantially similar development he probably would have pursued that course, particularly given that that was what was actually done in 1996.

114 At Tpp.199-200 Dr Quek said:-

"Q. The 102 number 1, DA2 and DA3, they were the developer's efforts to change away from DA1 to get approval for what it wanted to build, weren't they?

A. Yes.

...

Q. Dr Quek, please just answer my question. Most of the work during what you call the DA1 period are for plans, be they BA's or 102's or other DA's, which are different from DA1; do you agree?

A. Yes." (My emphasis.)

This reinforced that what the plaintiff wished to build was different from that contemplated in DA1. As I have said reliance on the invalidity of DA1 as a starting point for the assessment of damages, on the basis that this was what the plaintiff would have built if it could, ceases, therefore, to have the significance it otherwise would.

115 At Tp.202 Dr Quek said:-

"MR WALKER: Q. There's no question in your mind that from the beginning of 1995, after consent was given to DA1, Greencliff's efforts moved to plans which were modifications of, alterations of DA1, including the BA, the contract building plans to Multiplex, the 102 number 1, DA2, DA3 and 102 number 2; do you agree?

A. Yes."

116 In re-examination, Tp.205, Dr Quek said that he did not wish to reduce the net saleable area because some of the units had been sold and he had received legal advice that the plaintiff should mitigate its loss.

117 At Tp.208 Dr Quek was asked about DA2. He said he did not want to reduce the net saleable area at the time it was submitted because he had a series of meetings with his various advisers, including Mr Tobias, and was told to submit a new DA to take in and incorporate "what we would have built".

118 At Tp.210 Dr Quek said that at the time he lodged DA2 he did not, based on legal advice, make any concession to reduction in bulk and, subsequently on that page, he said that he was advised that it was best to proceed with a new development application because an amended s.102 application would fall if DA1 was declared void.

119 At Tp.212 Mr Tobias read to Dr Quek the evidence he had given at Tp.107, which I have quoted, and concluding with the answer that it was not necessarily so that DA1 had ceased to be the building in the form the plaintiff wanted to build. He was asked what he meant by that and he said:-

"I would say to you to answer is that the BA and the 102 that came from it were refinements to the DA1 that was there, refinements that take into unit layouts, take into glass lines, take into balconies, and they were considered by me to be minor changes. I could have, however, brought those back to DA1 at any time."

However, that would not have assisted the plaintiff because of the conditions to which DA1 was subject.

120 At Tpp.415-416, on the fourth day of the hearing, Mr Tobias stated that he wished to make clear the basis upon which the plaintiff was putting its case. He said that given the events that in fact occurred up to and including October 1996 and the steps taken by Dr Quek in relation to DA2 and 102(2) "then but for the defendant's negligence, the course of events would have been as follows":-

"One, in December 1996 the Council would have approved that application rather than have refused it. As a consequence of that, it would have taken four or five weeks to prepare an amended building application, see Exhibit K, and a further two months allowing for the intervening holiday period for the building application to have been determined by the Council. The evidence of that relied upon is Mr Darroch's evidence in paragraphs 19, 20 and 26 of his statement of 6 March, and some evidence I think of Mr Sanders that I haven't yet had the opportunity to identify.

As a consequence, that would take us to March 1997 and building works would have been recommenced about a month later in April 1997. The basis of the latter is that Mr Sanders proceeds upon the assumption, which we accept in his evidence, that approval would have been obtained and work would have been recommenced in the same month, the month he of course refers to as November. Therefore, work would have recommenced in about April 1997.

The alternative scenario is based upon the defendant Council having refused the 102(2), as in fact it did in December 1996, necessitating an appeal which, as your Honour knows from the chronology, was in fact lodged and taking that as the starting point, the submission we'll be putting is that one can infer, from the evidence when that application would have been made to expedite that appeal, that given the pending building operations, the contract still being on foot at that time, as the chronology indicates, expedition in all probability would have been granted and then the matter determined by the Land and Environment Court in February or March of 1997, a decision the following month as per Mr Sanders, an amending building approval approximately a month later and, using the same time gaps with construction, then recommencing in or about May 1997. They are the alternative fall back positions as against Mr Sanders' November 1997 that we wish to pursue."

121 Mr Tobias agreed that he had not articulated any such case in opening and Mr Walker submitted that he should be allowed to cross-examine Dr Quek in relation to it. Mr Tobias opposed that "in principle", asserting that the way in which the claim was thus put did not arise out of any evidence that Dr Quek had or had not given. He said it was "totally hypothetical". That is so, but, of course, it had to rely on an evidentiary foundation, that being, essentially, credible evidence that the plaintiff would have acted in this way. I formed the opinion that Mr Walker should be granted leave to further cross-examine Dr Quek and that cross-examination commenced at Tp.418. Dr Quek agreed that it was his understanding that the plaintiff's case "now includes" a version that 102(2) would have been made when it actually was and rejected by the Council, as it actually was. He said that DA3 was lodged simply and solely because of the Council's negligence, and that he would not have sought approval in the form of DA3 had DA1 been valid.

122 At Tpp.420-421 Dr Quek said that he would not have taken any steps towards DA3 had DA1 been valid, and that 102(2) represented the height of his ambition for this land if DA2 was rejected, although he said DA2 would not have been put forward but for the invalidity of DA1. I do not accept this evidence, which, in my opinion, was inconsistent with evidence given earlier by Dr Quek to which I have referred, and evidence he gave later, which led to the concession made by Mr Tobias, which I have recorded. Dr Quek said that 102(1) was withdrawn because he was told there was no use pursuing a s.102 application when DA1 "was going to be likely to be void". In fact it was conceded that 102(1) was doomed to failure. This led to his being asked why 102(2) was pursued, and he said it came up in October 1996 and:-

"We applied for it after October in order to - because we were reliant on the original DA1 we had applied at that time for a DA2, which was both rejected by Council and by L&E Court. We had at that time, therefore, to test the validity of DA1 - rely on DA1 and so therefore a new section 102(2) was put forward."

This evidence was consistent with the advice Dr Quek said Mr Tobias gave in October 1996.

123 The evidence continued:-

"Q. I thought you just told his Honour that you switched from 102 number 1 to DA2 because you were told not to rely on the validity of DA1; is that right?

A. Yes.

Q. Somehow that changed, did it, and later you were told to use 102 number 2 because you could rely on the validity of DA1; is that what you mean to suggest?

A. No. At that time when DA2 became invalid or was - DA2 - sorry. Can I repeat myself? At that time when DA2 was rejected by both Council and the L&E Court, there was no option available for us but to fall back onto the DA1.

Q. You had already decided before lodging the 102 number 1 that you wanted to build something different from, that is, at least a modification of, DA1, hadn't you?

A. Section 102(1) was reflective of the BA.

Q. So you say ..

A. That was approved.

Q. However, you were told that it would not be and could not be approved, weren't you?

A. I was told it could not be approved because of the - because at that time we were undergoing challenge from Mr Bingham, from the neighbours next door": Tp.422.

124 Dr Quek was challenged on that answer on the basis that Mr Darroch had told him that 102(1) could not be approved and there was a need for a reduction in scale, which he said occurred in February 1996. The cross-examination continued and established that the plaintiff took the DA2 route "which was more or less DA1 plus 102 number 1". At Tp.424 Dr Quek said:-

"Q. In order to build the building you wanted to build, you put in DA2, didn't you?

A. We did put in DA2 because of the fact that there was a challenge to it, to the DA1.

Q. You either had to put in a new DA - I won't go over the other day. You either had to put in a new DA?

A. Or a 102.

Q. Is that right?

A. Yes."

125 Dr Quek was taken through the steps which had been followed, and he agreed that he made a two pronged approached with DA3 and 102(2) in October 1996, which corroborated that that approach was made well after DA2 had been lodged and rejected by the Council and on appeal. He agreed that if DA1 was valid the plaintiff would still have needed further building and planning approval to build what it wanted, that it still would have abandoned 102(1), and that it still would have attempted and failed with DA2. However, he disagreed that the next step, even without negligence, with the new team of architects and a fresh approach would have been to proceed with DA3 and, having given that answer, he was asked why, if he was assured of the validity of DA1, he would not have made the DA3 application but would have made the DA2 application, to which he asked "The DA2 or the 102(2)". The evidence continued:-

"Q. No, my question stands. Can you give any reason why, if you had been assured of the validity of DA1 ...

A. Yes.

Q. .. You would not have made a DA3 application but you would have made a DA2 application?

A. I might have made a DA2 application if I was - at that time there was no invalidity and there was no challenge ..

Q. You've said you would already, twice?

A. Yes.

Q. So that's established that you would have done DA2 anyhow.

A. Yes." (My emphasis.)

126 This answer threw up another concession that DA2 would have been pursued in any event. In my opinion, Dr Quek's evidence is overwhelming that he would have pursued DA2 in any event in April 1996, and that that would not have been done as part of a two-pronged attack with 102(2). When one reviews the whole of his evidence there is nothing inherently improbable about this.

127 Firstly, his evidence satisfies me that he did not want to build in accordance with DA1 and did not intend to do so. Secondly, he was aware that any development after the granting of DA1 was dependent on his getting further approvals from the Council. Thirdly, his consistent evidence was that he would have lodged DA2 in any event and irrespective of the legal challenge to DA1 and, I am satisfied, he would have done so and that that would not have been done in tandem with 102(2). Fourthly, 102(2) was lodged soon after the conference with Mr Tobias and the receipt of advice that it was necessary to ascertain whether DA1 could have been built. In all these circumstances, and the conclusions to which I have come are supported by further evidence to which I shall refer, I do not consider that the plaintiff would have lodged 102(2) before it in fact did, but I consider that before doing so it would have pursued DA2, as it did. Accordingly, the plaintiff's primary case must fail.

128 Mr Tobias submitted, Tpp.586-7, that there would have been nothing inconsistent in accepting that Dr Quek would have lodged 102(2), if there had been no challenge, even if it be found that he would also have lodged DA2 at the same time. However, the evidence of Dr Quek satisfies me that he would not have done this, but that he would have lodged DA2 in February/March 1996. It also satisfies me that he would not have lodged 102(2) until he in fact did. The basic reason for this was, I am satisfied, that he did not wish to proceed with DA1. Mr Tobias made the submission, which I do not accept, that Dr Quek was not challenged on his evidence that he would have proceeded with 102(2) in March/April 1996. An essential thrust of the cross-examination was the chronology which would have been followed in the hypothetical circumstance and it was clearly in issue at an evidentiary level, how Dr Quek would have proceeded.

129 Mr Tobias submitted that DA1 was always the scheme Dr Quek sought to pursue, and it is that upon which he would have fallen back but for the legal challenge. I do not accept this. In my opinion, Dr Quek made it plain that this is not what he wanted to do.

130 Mr Tobias conceded that the evidence as to whether Dr Quek would have lodged DA2 in any event was "conflicting": Tp.602. He said he accepted "as one must, the evidence from Dr Quek upon which reliance is placed". He submitted that it was open to me to conclude that DA2 would not have been lodged, and continued:-

"One has to always approach evidence in the witness box some three years after the event as to a hypothetical of a person at the hands of a skilled cross-examiner with some equanimity."

He submitted that the evidence had to be considered in all the circumstances, which is, of course, correct. However, the evidence of Dr Quek was consistent and firm. It was given without any suggestion that he did not understand the questions and, to the contrary, I am satisfied that not only did he understand them fully, but that he had a lively appreciation of the issues and the impact of his evidence on them. Dr Quek was an astute and careful witness, who would not, in my opinion and to my observation, have made an incautious or unthinking answer, let alone a concession. Further the concessions were made on several occasions and a couple of days apart and they were consistent with the probabilities. For all these reasons I reject Mr Tobias' submissions that they constituted incautious and unthinking remarks on which I should place no reliance, and that I should conclude that DA2 would not have been lodged.

131 Mr Tobias accepted, as is obvious, that if I find, as I do, that DA2 would have been lodged when it was in any event and before 102(2), and that 102(2) would have been lodged when it was, as I do, "then of course the timing becomes somewhat different". So do the consequences.

The Evidence Of Mr Andrew David Darroch

132 Mr Darroch, whose witness statement was made on 16 October 1998 and is Exhibit A, was formerly an employee of the Council. He is now the manager of a planning consultant and has experience as a town planner.

133 From December 1995 to July 1996 he was the Assessments Manager of the Council and he considered, inter alia, applications under s.102. He set forth the procedures adopted when such an application was received, including its allocation to the planning officer who dealt with the original application sought to be modified. He said it would be likely that a modification application in relation to a significant development, such as the plaintiff's, would have been drawn to his attention shortly after it was received, and that at that stage it was likely that he would only have been made aware of the nature of the application, and perhaps made a brief preliminary assessment of the proposed modifications in conjunction with the planning officer involved. He stated that if it looked as though the modification application was totally unacceptable the usual practice was to notify the applicant and give it the opportunity to readdress the proposal before notification and advertising.

134 In paragraph 8 he said that assuming it was not decided to refer the plans immediately back to the applicant, or perhaps if the applicant refused to accept any initial suggestion to readdress the application, the planning officer, who was to deal with it, being the responsible officer, would refer the modification to the relevant departments within the Council and, after receiving comments from them, would assess it and prepare a draft report to be forwarded to the Assessments Manager. He, in that position, would read the report, look at the plans and comment where he thought appropriate. He would not consider it appropriate to carry out checks of specific matters, because they should have been considered by the responsible officer, unless he observed an obvious error, but he would look at the interpretation and implementation of the requirements of the relevant planning instruments by the officers and, normally, endorse his comments on the report in handwriting and then discuss them with the responsible officer. If he was unable to obtain resolution with the responsible officer the matter would be referred to the Council's Director of Planning and Environmental Services.

135 Mr Darroch would consider, firstly, whether s.102 modifications meant that the development, as modified, was substantially the same as that contemplated by the original approval: s.102(1)(a); and secondly whether the modifications would cause prejudice to any of the objectors: s.102(1)(b).

136 For the purpose of making his witness statement he looked at a number of documents referred to in Annexure "ADD2". He said he had no recollection of an involvement with the assessment or consideration of either 102(1) or 102(2). He thought that if 102(1) had been pursued, or if he was still employed when 102(2) was made, it is likely he would have been involved with the preparation of the report to be submitted to the councillors in relation to them.

137 In paragraph 20 he said that had he been involved with the assessment of 102(1) he believed he would have recommended refusal, on the basis that it would cause further prejudice to those who originally objected to the proposal, and that it would adversely affect the amenity of the surrounding properties in terms of the heads of consideration under s.90. He, therefore, considered s.90 was a relevant consideration in determining 102(1), which makes it difficult to see why it would not also have been relevant in looking at 102(2). In paragraph 21 he said 102(1) increased the bulk of the building in various ways, which he described, such increase being significant and affecting views from the buildings to the north. These concerns, he considered, caused further prejudice to previous objectors. He noted several other matters which had the same effect. He concluded that 102(1) failed the test by causing prejudice to the objectors and not satisfying certain heads of consideration under s.90 of the Act. As I have noted, it was not in issue that 102(1) could not have succeeded.

138 Commencing with paragraph 29, he opined that if he had been involved with the assessment of 102(2) he believed he would have recommended it for approval. He said the amended application "is considered to be substantially the same as the previous approved development application; it would not cause further prejudice to the persons who originally objected to the approved development application and the amended proposal would not adversely affect the amenity of the surrounding properties in terms of the heads of consideration under s.90 of the Act". Once again Mr Darroch had regard to s.90 considerations, although his view was that they should be decided favourably to the plaintiff.

139 He expanded upon this by saying that 102(2) proposed minor changes to the external envelope of the building, mostly concerned with reconfiguring the balconies on the north western corner, and resulted in a decrease in building bulk. He acknowledged there were some changes to the configuration at ground floor level, but said they did not adversely affect the bulk scale of the building and that the net resulting floor area "is minor". He dealt with the car parking levels, and expressed the opinion that 102(2), whilst it increased the height of the plant room, decreased "the overall footprint". He thought the change to the height of the plant room was minor and satisfactory, and that 102(2) did not adversely affect the matters raised in the objections to the approved development application, namely views, bulk and scale, shadowing, traffic and wind effect. He concluded that he believed 102(2) "to be reasonable and in my opinion would have been recommended for approval if I had been involved in its assessment". The plaintiff's basic submission, on this point, was that 102(2) would have gone forward with this favourable recommendation and, in the circumstances, it would, in all probability, have been approved. Those are a number of reasons why I do not accept that these things would have happened.

140 In a second statement, which Mr Darroch made in March 1999, he referred to certain timing issues raised by another town planner, Mr Sanders, who was called on behalf of the Council, and, commencing at paragraph 13, he set out a conversation he had with representatives of the plaintiff in February 1996 in relation to 102(1). He said:-

"I don't think the section 102 application can be supported in its current form and will have to be reduced in scale."

He recalled Dr Quek saying to either Mr Swalwell or Mr Ritchie, who apparently worked for Mr Swalwell:-

"You will need to look at the section 102 modification application to see where it can be reduced."

141 At paragraph 14 he said he would have expected the amended s.102 application to change the orientation of the balconies, so that they no longer faced the boundary, and to scale back the amendments that were being asked for in 102(1). He would also have anticipated an amended s.102 application somewhere between 102(1) and what became the October 1996 application, during which time he would have expected negotiations in relation to 102(2) "with the outcome that an amended section 102 application, even if it resulted in a development somewhat larger than the development resulting from the application as modified by the October 1996 section 102 application, would have been recommended for approval". He said consideration of 102(2) would have been expedited and, in paragraph 17, that 102(2) "would definitely have been acceptable". In the context of his statement he was referring to acceptability by him. This followed a sentence that it would have been formally submitted by him to the Council. On the basis of his recommendation for approval, he suggested that an amended s.102 application and building application could have been approved by late April or early May 1996, if submitted separately, or earlier if the BA had been submitted with the amended s.102 application. In the concluding paragraph Mr Darroch disagreed with Mr Sanders' opinion that it would have taken until November 1997 before construction could have commenced.

142 At Tp.30 Mr Darroch said that after the conversation in February 1996 he did not have any involvement in preparing recommendations or taking any other step professionally concerning 102(1). He agreed he was familiar with DA2, but he could not recall how similar DA2 was to a combination of DA1 and 102(1). He had no involvement with DA2 from the time of its lodgment, or with 102(2) between 21 October 1996 and 16 December 1996, when 102(2) was rejected.

143 He agreed, Tp.31, that the upshot, so far as he was concerned, of his advice in the February meeting was that 102(1) was doomed to failure, and he expected that it would be amended.

144 At Tp.33 Mr Darroch was challenged in relation to his assessment of the fate of 102(2). He agreed that his view as to what would have happened did not include any consideration by him of what was actually discussed or decided by the Council in relation to it and leading up to its refusal on 16 December 1996, and that the Council itself is the decision-making body subject to an appeal to the Court. He said he did not consider what happened in Council because it was not available, in the sense that the minutes do not record in a sufficiently full format what transpired to understand what was actually said at the meeting and why the councillors came to the decision. He agreed the result was recorded, that he was aware of the result, and that he did not take it into account. This was a very strange view. I would have thought that if one wished to say that something would have been approved, which was refused, there was an obligation to state why he considered the refusal was vitiated. As Mr Darroch did not know the basis on which the application was refused, he could not comment. He said he did not take it into account because it was irrelevant so far as his consideration of how he would have recommended 102(2) to the Council. None-the-less, he agreed that his recommendation did not mean that the councillors would approve, and that, in my opinion, was a significant problem with his evidence on this point. He explained the result, which he opined, in the following terms, Tp.34:-

"Q. Do you understand your evidence to be directed only to what you would have recommended and not to an outcome; is that what you mean?

A. What my evidence - what I understand my evidence is to say is that - is to give what I would have recommended in the matter and I believe I said that if - well, it would have been in my experience, if the matter hadn't been controversial or hadn't become controversial, that it was likely that the Council would have supported my recommendation.

Q. How close to what your hypothetical recommendation would have been was the recommendation actually given by the Council officer about s.102 number 2?

A. I think we were opposed.

Q. Sorry?

A. I think we're totally opposed.

Q. So that the actual recommendation given to the Council is utterly at odds with the one you would have given; is that what you mean?

A. That's right." (My emphasis.)

The reference to the matter being controversial is not insignificant. In my opinion, the controversy had become more focussed by late 1996 in consequence of the failure of DA2. However, there can be no doubt it existed in February 1996 when Mr Darroch advised Dr Quek that there would have to be some reduction in scale and bulk. This was in the context of newly elected councillors, a number of whom had campaigned on the platform of reducing size and bulk.

145 Mr Darroch advanced the view that that Council officer's recommendation was, in his belief, affected by the validity or invalidity at law of DA1. He expanded upon this by saying that he considered that the opposition to the development and the legal challenge influenced the decision by the Council officer making the recommendation. However, he disavowed any suggestion that that Council officer did anything "improper", and he agreed the difference was "a professional difference", and:-

"Q. It is a matter upon which opinions notoriously differ between planners in relation to such matters as scale of development; is that correct?

A. Yes, there are professional differences.

HIS HONOUR: Q. Is it a matter you have taken into account from time to time when considering applications of this sort, namely, local controversy?

A. I've certainly taken local controversy into account. I think it's an important part of the process to understand and to take into account and give an appropriate weighting to the public opinion."

Thus the "controversy" and public opinion would have played a part at the Council decision making level.

146 At Tp.37 Mr Darroch agreed that the councillors rejected 102(2) in accordance with the view presented to them, which was a view upon which there could be a professional difference, but in no way improper in relation to a consideration of politics or controversy. This was important evidence in light of the attack made by Mr Tobias that no councillor or Council officer was called to say how the decision was reached, such that I should, in some way, draw a Jones v Dunkel inference. I shall deal with this later. It was also important in answering Mr Tobias' submission that the Council could not, by an unreasonable exercise of discretion, deprive the plaintiff of the consent it had. Of course, the Council could not, but the evidence does not suggest that the exercise of discretion was, in any way, improper or activated by improper motives.

147 At Tp.38 Mr Darroch was asked to describe what differences were required to be made to 102(1), which he agreed would not have succeeded, to bring about 102(2), which he considered would have succeeded. He said it was really necessary to look at an alternative application, which was somewhere between the extent of the two 102 applications, and then to make an assessment in terms of its appropriateness:-

"So, yes, I have given it consideration but, no, I haven't gone through all of the alternatives available and considered whether what is the impact of those alternatives to say which would be appropriate and which wouldn't. It's really something for negotiation." (My emphasis.)

This was another piece of evidence with which I had difficulty, at least in part. Although Mr Darroch was prepared to assert that 102(2) would have been approved, he apparently had no idea of that for which it would provide and, in any event, as he made clear, there would have to be negotiation. Thus the lodgment of 102(2) was but the first step so far as he was concerned. Thereafter, the parties would have been required to negotiate.

148 Mr Darroch acknowledged, Tp.39, that any change to 102(1) would have to be considered to make an assessment of its merits, but none was presented so that he did not do that exercise, and that he did not do any hypothetical exercises "because there is a myriad of possibilities". He continued:-

"Q. So where along a continuum of scale, bulk, floor space ratio or whatever else, you might locate the change from failure to success can't be known from your evidence in this Court; is that right?

A. No - that's right.

Q. And so there is nothing that can be done now to test any of that part of your opinion against anything which actually happened; is that right?

A. That's right."

This evidence confirmed the remarks I have just made. I have come to the firm conclusion that Mr Darroch's evidence was so vague that no reliance can be placed on it as establishing that he would have recommended approval. He simply did not know what would have been proffered, what would have been acceptable to him, and what he would have achieved in the negotiation process. The answer to the first question had even more significance. Mr Tobias submitted that the changes to 102(1) would only have been minor in relation to certain balconies and some creep and other relevantly inconsequential matters. He submitted that otherwise matters of scale and bulk could not have been changed without leading to a different development contrary to s.102(1). Mr Darroch was given every opportunity by the first question quoted to make that point, if it was a valid one. He did not reject the premises in this question, nor seek to confine himself to the matters for which Mr Tobias contended. His answer was far more consistent with his more general statement to Dr Quek concerning bulk and size.

149 At Tp.40 Mr Darroch agreed that the essential issue was whether or not the building was too big, and that was not only a major part of the controversy but also at the heart of the professional planning issues. This is consistent with his evidence to which I have referred in paragraph 148 and the views I have formed based on it. He agreed, therefore, that the professional planning issues were concerned with the matter of controversy. He added that a change of personnel in the planning department of the Council was a large part of the controversy to which he was referring. The personnel controversy arose because staff members left as a consequence of this application. He said certain staff were dismissed because they were thought by the Council to have been at fault in dealing with DA1.

150 At Tp.43 Mr Darroch confirmed that he was not suggesting there was anything improper in the making of the recommendation to the Council by Mr Beattie, and he agreed, once again, that the planning issues involved professional views upon which minds could differ.

151 He further agreed that the only negotiations he put forward as likely to provoke the amendment of a s.102 application were those set forth in paragraph 13 of his second statement, and he recalled what Dr Quek said to the architects. He agreed that the theory of timing about a second 102 application depended upon the developer responding in a timely fashion to hints, perhaps heavy hints, from Council officers, and that the hint he had given was "a heavy hint", which, from his experience, normally provoked an amendment from a developer wanting a consent to be modified. He agreed the reductions to which Dr Quek was referring were in bulk, which he imagined, one way or the other, would reduce the amount of saleable area available to the market. This is also consistent with the evidence in paragraph 148.

152 At Tp.46 Mr Darroch agreed that one of the reasons for rejection of 102(2) was that it was not substantially the same development. He disagreed with that assessment, but he said he did not suggest it was in any way an improper basis, being a matter of professional disagreement between him and the Council officer, who made the recommendation, and, presumably, of disagreement between him and the councillors, who made the decision.

153 In his statement of 7 March 1999 Mr Darroch, who had referred to paragraph 1 of his previous statement, repeated that in his opinion it was likely that 102(2) would have been recommended for approval, and continued:-

"Further, in my opinion, assuming that the underlying consent was valid and not the subject of legal challenge, Council would have been most likely to approve such an application."

For the reasons I have given, I do not accept that Mr Darroch was in a position to make such a statement. Further, the plaintiff has not satisfied me that the Council would have come to that conclusion.

154 Mr Darroch agreed that considerations of bulk would have dominated the discussion on 16 December 1996. This, in turn, in my opinion, would have raised s.90 considerations, with which, as I have noted, Mr Darroch agreed. No conceivable reason was advanced why those reasons would not have been equally applicable in February/March 1996. Mr Darroch had referred to them in his conversation with Dr Quek and it is unthinkable that the councillors would not have been concerned about them.

155 Mr Darroch seemed to suggest, at one stage, that the Council elected in September 1995 brought a different approach to the development application. That was probably correct, but he agreed, Tp.54, that in his planning experience there is no expectation that there will be no difference between former and subsequent councils, and further that in February 1996 when he had his conversation with Dr Quek and his architects it was known that there were different councillors with different views, particularly in relation to the bulk and size of projects, such as that proposed by the plaintiff. Mr Darroch confirmed that, in his professional opinion, 102(1) should not have been approved, and that he was not suggesting there was anything improper about the influence of politics in refusing 102(1), (although it was withdrawn), nor in councillors or council officers called on to consider s.90 matters taking into account local views and feelings. He agreed that bearing in mind the controversy, the result of the election, and the requirement for a s.102 modification before a building application could be issued, he would have expected the plaintiff, in February 1996, to lodge a s.102 modification with some prospect of success, which did not happen, and further that nothing like that happened for a very long time, which did not fit his theory of people responding or being provoked by an appropriate "heavy hint" to put in an amended s.102 application to obtain approval. He continued, Tp.55:-

"Q. You can't explain how it is that what you hypothesise is so much at odds with what actually happened when Dr Quek was told by you `reduce or you'll fail'?

A. No, I can't explain that."

In my opinion, this adds force to the conclusion that DA2 would have been lodged in any event in an attempt to maximise the development, and that there was no intention to lodge 102(2) in March/April 1996 as there was no desire to build conformably with DA1.

156 It was then put to him that his theory that 102(2) would have been approved by the Council was speculation without foundation, and he said that it was speculation of what he would have expected based on his experience in dealing with applicants in such matters and as an officer of the Council. In my opinion this evidence was effectively eroded by Mr Darroch's agreement that he had never come to a conclusion as to the type of s.102 application, which would be required, and that he considered that any such application would have been the subject of negotiation in any event. Without knowing the "bottom line" for his approval and whether the plaintiff would have agreed, one cannot say, as Mr Darroch sought to do, that he, let alone the Council, would have approved.

157 These problems confronting the plaintiff in relation to 102(2) were explained by Mr Darroch in the following terms:-

"Because the planning process is not that precise. It's a negotiation process.

Q. You haven't tried to work out what it is; is that right?

A. I haven't worked it out, no.

Q. As to 102 number 2, you can't say there's anything improper or unreasonable about what actually happened to it, can you?

A. I don't think there's anything improper, no.

...

Q. You don't think there's anything unreasonable about what happened to the 102 number 2 in actual fact, do you?

A. Well, in my professional opinion, I think the Council officer's recommendation was unreasonable. I don't agree with what he has recommended."

Ultimately Mr Darroch agreed that there was a difference of opinion on a matter of judgment, but he disclaimed any suggestion that the Council officer and an outside consultant acted unreasonably in coming to a view different from his: Tp.58.

158 At Tp.59 Mr Darroch agreed, as was obvious, that the development could have been reduced in size, and he said there was no technical difficulty in doing that, but that Dr Quek raised with him the matter of some off-the-plan sales. He also agreed that a reduction to obtain a modification could have been done very quickly within a matter of a few weeks.

159 In re-examination Mr Darroch said that 102(1) was greater in bulk than DA1, and that when he was suggesting a reduction in scale he was referring to the bulk of 102(1). He meant by that, he said, the building bulk, and the modification to which he was referring was the reduction of the added bulk, i.e. the bulk in 102(1) in excess of that in DA1.

160 Mr Darroch concluded, Tp.61, by saying that he did not think the recommendation by the Council officer was unreasonable, in the sense that "one is entitled to put that recommendation to the Council", but he did not believe "it was a properly thought out suggestion". Earlier in his evidence Mr Darroch had said that recommendations he had made to the Council had not always been accepted.

The Effect Of Mr Darroch's Evidence

161 I do not consider that Mr Darroch's evidence assisted the plaintiff. He agreed, as was not in issue, that 102(1) could not have been approved, and that he suggested strongly to Dr Quek and his architects that there would have to be a reduction in scale. He would have expected that a developer, anxious to obtain consent, would have brought in an alternative submission quickly, but this did not happen. He also said that s.90 matters would have to be considered in evaluating 102(2).

162 The plaintiff relied upon his evidence principally, as I understood it, to support its case that he would have recommended to the Council that 102(2) be accepted, the inference, at least, being that the Council would have adopted his recommendation. I do not consider that his evidence leads to these conclusions, notwithstanding the apparently unequivocal statements in his witness statements. These were significantly eroded in cross-examination.

163 Firstly, he was unaware of the reasons why the Council refused 102(2) and, therefore, he did not pay any regard to their reasons. I have commented on this failure. He thought that if the matter had not been controversial the Council would have supported his recommendation. He did not suggest that the Council gave any improper emphasis to matters of politics or controversy. Secondly, he conceded that the recommendation of the Council officer against approval was not an improper one, although he ventured the view that it had not been thought out properly. He agreed that it reflected a legitimate difference of professional views on which appropriate minds could differ.

164 Thirdly, and very significantly in my view, Mr Darroch had no clear concept of what would have been acceptable by way of 102(2). He had not done the exercise and, in any event, he regarded the final terms as a matter for negotiation. He did not accept that the mere lodging of a further submission seeking to accommodate the suggestions he had made would mean that he would have recommended approval. That would have been the starting point for negotiation, as the planning process "is not that precise". I reiterate that without knowing what he would have regarded as acceptable, and the extent to which Dr Quek would have made concessions in the negotiation process, it cannot be said that 102(2) would have been approved even by Mr Darroch. It remained speculation.

165 In the end his evidence did not satisfy me that a town planner acting reasonably, could not have recommended rejection; that the Council acting reasonably could not have taken into account the controversial issues together with all the other matters they were obliged to consider and rejected 102(2); and that, in any event, he had any clear view as to what would have been acceptable for all the reasons I have stated.

166 When all these matters are taken into account there was no evidentiary basis left to support any of the positive assertions Mr Darroch put forward in chief. The matter could only be viewed as one which, after the submission of a further application, would have to be worked out through negotiation at the end of which and, of course depending on the extent that the parties were prepared to give way, there could be a legitimate difference of professional town planning opinion. Finally, the failure by Mr Darroch to work through what he would have regarded as acceptable made it somewhat rash for him to be suggesting, when taken with the matters to which I have referred, that he would have recommended approval. Mr Walker also submitted alternatively that if 102(2) had been lodged in March/April 1996, contrary to his primary submission, that that would have occurred when DA2 was lodged, i.e. on 4 April 1996, and that as Mr Darroch acknowledged he had nothing to do with the applications from that date, he would not have made any recommendation in relation to 102(2) in any event. I consider this alternative submission is correct, but as I am not satisfied that 102(2) would have been lodged at that time it is only necessary to note it.

The Evidence Of Mr David Reuben Epstein

167 Mr Epstein made a statement on 16 October 1998, Exhibit C. He was formerly an officer in the town planning section of the Council and recalled 102(1) being received by it in December 1995. He said that given his awareness of the history of the matter it is quite likely that had it been necessary to deal with 102(1), he would have been responsible for preparing the initial report which, after discussion with the Assessments Manager, would have been provided to the Council for consideration. However, he did not recall what became of 102(1) and his examination of documents indicated it was not pursued.

168 He also noted from the file that 102(2) was submitted, but by that time he had left the Council's employment. He continued that had he not left, it is possible, given his previous involvement, that he would have had an involvement in preparing the report for submission to the Council in relation to that application.

169 In paragraph 10 he said that he had been asked recently to consider the s.102 amendment applications, i.e. 102(1) and 102(2), and provide his opinion whether it is likely, given the criteria for approval for s.102 amendment applications, which he understood to be relevant and applicable at that time, that he would have recommended that the applications be approved.

170 In relation to 102(1) he said that it sought to increase the bulk and scale of the development in various ways he specified, and concluded that the development as proposed to be so modified was not substantially the same. He was also of the opinion that the development would prejudice the objectors to DA1.

171 In relation to 102(2), he opined that this application generally brought the plan of the development into alignment with the development application plans as approved in February 1995. His final view was:-

"Having regard to the matters for consideration under s.102 it is my opinion that the development as modified by the second s.102 amendment is substantially the same as the development as approved, and that no further prejudice would be caused to any person who objected to the development application the subject of that consent."

172 Mr Epstein conceded, in cross-examination, that he had not read any of the expert evidence for or against the granting of the development consent in the Class I proceedings, and agreed that his assignment did not include looking at that material notwithstanding that 102(2) was rejected.

173 Although he said he had read certain of the material that was before the Council before it reached its decision on 16 December 1996, and was aware that there were opinions different from his, he came to his opinion regardless of what the Council had concluded and of what the report before it stated.

174 He agreed the report before the Council contained professional views different from his and to which he paid no regard and, further, that this is an area classically for the judgment of town planners. He was asked whether he thought his judgment would be assisted by looking at that of others, to which he replied:-

"I guess you could say that, yes."

This, in my opinion, was a clear acceptance of the obvious. A professional person, expressing a view on a matter on which he agrees that minds can reasonably differ, places himself in an impossible position by not considering those views and how, in reaching a contrary conclusion, he can explain why the contrary views are not appropriate.

175 He conceded that the fact that persons came to judgments differing from his did not mean that they were acting unreasonably, and he repeated that he had paid no regard to the views which differed from his. Finally, he agreed that his report did not contain any consideration of the requirements of s.90, but he did not suggest that they were irrelevant. In re-examination Mr Epstein said that he would have given consideration to s.90 matters, which reinforced his view as to their relevance and was consistent with the evidence of Mr Darroch and Mr Sanders. These views are inconsistent with the fundamental approach taken by the plaintiff to the application of s.90 in these circumstances, but consonant with what I consider was the view flowing from the Court's decisions at that time.

176 His evidence, if I may say so with no disrespect to him, carried the matter no further so far as the plaintiff was concerned, and merely confirmed the point being made by Mr Walker that in this area various planners could legitimately come to different opinions. If I may say so, I find it extraordinary that Mr Epstein would venture an opinion without having regard to that of others. Additionally, his evidence did not assist the plaintiff in relation to the applicability of s.90 considerations.

The Evidence Of Mr Terence Paul Byrnes

177 Mr Byrnes, whose witness statement was prepared in November 1998 and became Exhibit D, has extensive experience in architecture, planning and urban design. He stated that he had been instructed to consider and assess "the circumstances of" DA1, and the likelihood of 102(2) being approved.

178 In relation to DA1 he concluded, at paragraph 3.11:-

".. it follows that the development application 1082/94, the subject of the consent, was not capable of being built according to the relevant building codes and requirements without further amendment, via a section 102 Application or a building application."

179 In Section 4 of his report he turned to 102(2). After a lengthy consideration of the plans he considered whether the development was substantially the same as approved in DA1 and, at paragraph 40.93, concluded:-

"That the development as proposed to be modified is `substantially the same development' and therefore passes the first threshold test under s.102 of the Act."

180 Mr Byrnes nextly considered whether there was any prejudice to those persons who originally objected to the application and, after detailing many matters, he said, in paragraph 4.107:-

"In summary, it is concluded from the analysis of any prejudicial change, the original application as proposed to be modified would not prejudice any person who originally objected, and section 102 application (two) passes the second threshold test."

181 The next matter Mr Byrnes addressed was the s.90 assessment. His view was that there was nothing there which, in his opinion, would have prevented approval of 102(2). His position in regard to s.90 matters is set forth in a letter written by Mr Sanders, to which I shall refer. His ultimate conclusion, in paragraph 4.115, was:-

".. that the section 102 application as submitted to Council was capable of assessment as a section 102 application and worthy of support and a consent."

182 Mr Byrnes then considered the Council's assessment of 102(2) and, in paragraph 4.135, expressed the view, consistently with the view to which he had come as to its acceptability, that "the conclusions reached by the Council officers and the Council are not supported".

183 In Section 5 of his report he considered and assessed building application 95/275 and he dealt with 102(1) in Section 6, expressing the conclusion that it revealed:-

".. that the modified development is substantially the same development, albeit at the margin, and that the modifications are unlikely to cause prejudice to any person who objected to the original Application."

184 In this respect he was at variance with all other witnesses and with the common ground on which the case proceeded.

185 In Section 7 he said:-

"The most obvious conclusion reached when considering the merits of the two Section 102 Applications, is that Section 102(Two) was more comfortably able to satisfy the `tests', while Section 102(One) approached the limits of what would be an acceptable Section 102 Application modification application."

186 Mr Byrnes had consulted with the defendant's expert, Mr H.M. Sanders, and he was shown a letter, which became Exhibit 6. It was signed by Mr Sanders and headed "Summary of Matters Discussed With T.P. Byrnes 8/3/99". He said he thought it was a fair summation in all respects, it stating:-

"Section 102(2) compared with DA.

We agreed that the overlays which had been prepared to compare Section 102(2) with DA1 were correct.

We agreed that the differences between Section 102(2) and DA1 were as listed in the tabulation which accompanied my draft letter to Mallesons Stephen Jaques dated 15 November 1996 (see Annexure 5 to my February statement) and that the differences as described were consistent with Mr Byrnes' description of them in his Statement dated November 1998.

However, we did not agree on the inferences which one might draw from the agreed description of the differences.

Section 102(2) Compared With DA2.

We agreed that the overlays were a correct depiction of the two applications.

However, we did not agree as to whether Section 102(2) and DA2 were the same, or sufficiently similar, for the purposes of considering and comparing the impact of the two buildings. Mr Byrnes did not therefore agree with the conclusion I had reached regarding the likely outcome of an appeal in respect of Section 102(2).

Section 102(2) And The BA.

We agreed that even if Section 102(2) had been approved it would still have been necessary to amend the BA.

Other Matters

We agreed that Section 102(1) was not a valid Section 102 application.

We agreed that the remaining points where we differed, in addition to those noted above were:

The timing of the processing of the various applications;

The interpretation of the words `strictly in accordance with' in Condition 1 of DA11;

Whether any prejudice would have been caused to an objector to DA1 by Section 102(2);

Whether Section 90(1) considerations in respect of a Section 102 application should relate to the differences between the da [DA] and the s102 application or to the overall building as proposed to be modified; and

Whether or not DA1 and Section 102(2) were substantially the same.

I have not had the opportunity discuss this document with Mr Byrnes or to show him a draft. He may wish to consider how best to obtain this information.

I expect to hear from Mr Ingham regarding the one matter which we discussed, namely the description of the differences between Section 102(2) and DA1.

1 In view of our agreement that the BA would need to be amended even if Section 102(2) had been approved, this may not be an issue - see page 11 of my Statement."

187 At Tp.169 Mr Byrnes said that he gave evidence before Talbot J as a forensic expert in support of the appeal in relation to DA2, which included an overall assessment so far as an expert can and should do it of what were then called the s.90 matters. He agreed that as a matter of its own character in terms of planning history, at the heart of a s.90 assessment of the project at the time it took the DA2 form were questions of bulk and scale, and that his support for DA2 in the Court was based upon his opinion that on the merits it should receive consent. He also agreed that others gave evidence, which disagreed with his, and that Talbot J preferred the other evidence. He agreed enthusiastically, Tp.170, that this is an area where experts form opinions, give evidence to explain and support them, and, at the end of the day, a decision is reached. In the Court differing opinions were expressed from the same disciplines as those in which he is skilled, which reached a contrary conclusion, and he said:-

"Q. And for those reasons, in light of all your experience in your professional area and from your forensic appearances in particular, you accept that conclusions different from yours are reasonably open by people skilled or who have had the benefit of hearing skilled evidence in this area; is that right?

A. I do."

188 At Tp.171 Mr Byrnes was asked whether he had given consideration to the report of Mr Beattie, the Council officer who made the recommendation, in relation to 102(2). He said it was available to him, but he did not refer to it expressly or impliedly in his report, although he was obviously aware that he was at odds with the recommendations and Council's reasons for refusal. However, he readily conceded that he had Mr Beattie's opinions, and that he took them into account in preparing his and reached a different conclusion, and:-

"Q. And that, I suggest to you, is as ordinary an occurrence as it was for the Judge to differ from you or the witnesses called on the other side in DA2 to differ from you; is that correct?

A. That's right."

189 In re-examination Mr Byrnes set out the various witnesses for the competing views called before Talbot J on the hearing of the DA2 appeal. He agreed that there was a body of respectable opinion for both sides.

190 Mr Byrnes' evidence left the matter on the basis that whether 102(2) should or should not have been recommended for approval by the Council's officers was a matter for their professional opinion, as to which there could be legitimate differences. Whilst he did not agree with the Council officers' opinion, he did not criticise it save as differing from his view on a matter where different views were permissible. Thus his evidence was supportive of the view that the councillors, in reaching their conclusion to reject the application, could not be said to have been acting in an improper, capricious or arbitrary manner. Rather, the conclusion to which they came was properly open on the material before them.

The Evidence Of Mr Neil Ingham

191 Mr Ingham, who is an expert town planner, and whose witness statement became Exhibit E, stated that he had been requested to provide an opinion regarding 102(1) and (2). He expressed the view that 102(1) "was not able to be approved under the provisions of s.102", and that 102(2) should have been approved under that section. It is unnecessary to deal with his consideration of 102(1). In relation to 102(2) he said that he attempted to note the main differences between the consent plans and the plans submitted with it in tabular form and, having done so, he stated that the majority of the amendments "had generally been undertaken in order to address conditions of the development consent or requirements of the BCA". Although he discerned some differences, he considered they were minor and he said:-

"The above changes result in some minor differences to the bulk and scale to the building shown on the consent plans, mainly in regard to the roof top plant room.

In view of the above, I am of the opinion that the Second Section 102 application does detail a development which is `substantially the same' as that which is detailed on the consent plans (as amended by the conditions of the consent)."

192 He also considered the requirements of s.102(1)(b) and concluded that the plans submitted with 102(2) "would not prejudice the objectors to the original DA". He did not give any consideration to s.90 matters.

193 In his oral evidence in chief Mr Tobias raised the absence of any reference to s.90 considerations. Mr Ingham explained this by saying that the changes to the application were improvements and did not bring about, in his opinion, any need for further consideration of that section. He said it was his understanding that s.102(3A) applied to the changes that were being made, and that if there were substantial changes one would give consideration to s.90 implications, but if there were not, one only looked at the changes and the import of s.90 in relation to them. He did not regard the proposed changes as raising a s.90 issue. This made clear, as had the plaintiff's other evidence, that s.90 considerations could be relevant, although it was his view, in the circumstances of this case, that they were not.

194 In cross-examination he said that in expressing those views he was not presuming to give a legal opinion. He was aware that there was potentially a change in the law brought about by the decision in Michael Standley, but he said that he had formed his opinion about what the Council should have done on what he understood to have been the regime before that decision. He said, Tp.176, that he agreed that as at mid-December 1996, to the extent that the application sought to modify DA1 s.90 had to be applied, but he did not think that s.90 considerations could be regarded as having no role only if the modification had no impact on any aspect of DA1. He continued that if it had no significant impact, then he would say that. He did not recall Stein JA's dissenting reasons on this point in Michael Standley and, generally speaking, he was not aware of certain specific Court decisions, although his understanding in relation to the operation of s.90 came, he said, from lodging s.102 applications and from arguing matters in the Court.

195 Mr Ingham agreed that the questions of "substantially the same development" and "prejudice to any objector" were threshold matters, although he said that a determination of them frequently resolved the issue. He also agreed that merit matters may arise.

196 At Tp.183 he said that it was probably true that the project produced by 102(2) would have been much closer to DA2 than to DA4. He was also of the view that 102(2) "is much closer to DA1 than it would be to DA4": Tp.184. In my opinion, this evidence was significant in supporting the submission of Mr Walker that there was a "family similarity" between DA1, DA2 and 102(2). This evidence was also of importance in considering the way in which the Council was likely to view 102(2). If there was such a similarity there was less likelihood that the Council would approve 102(2), if it had already subjected DA1 to stringent conditions and rejected DA2. He did not know sufficient about DA3 to comment on it. He continued:-

"Q. Putting it all together then, including what follows from your last answer, doesn't it mean that in your opinion section 102 number 2 is much closer to two developments both of which failed before Council and Court than it is to the one development DA4 which now has consent?

A. That's correct.

Q. And what that indicates to you, amongst other things, is that your opinion is one with which reasonable minds can reasonably differ so as to reach the opposite conclusion; do you agree?

A. Well, I am simply going on my experience of the use of section 102 when - and applying experience to those applications and in my opinion from that experience the first section 102 would have failed and the second 102 would have been approved, or should have been approved.

Q. What about an answer to my question?

A. Well, other people can say what they like. I'm simply saying what I believe from my experience.

Q. I understand that. When you say `other people can say what they like', do you accept that what has happened in this case demonstrates that other people have said differently from you, have come to the opposite conclusion about whether approval should be granted and you're not able to say that they are therefore unreasonable people; do you agree?

A. Well, I agree that other experts have come to a different view about some of the matters that I've raised."

197 Mr Ingham said that he did not consider the views of Talbot J in relation to DA2 and DA3 because he did not believe they were relevant to the issue before him, and he expressed the view that there would be "a fairly strong likelihood" that an appeal from the refusal of 102(2) would have led to approval.

198 Mr Ingham's evidence reinforced what, by then, was almost common ground, viz that 102(2) was a matter on which the opinions of town planners and those with allied expertise, acting reasonably, could legitimately differ. It emphasised that 102(2) was "closer" to the two developments, which failed before the Council and the Court, than to DA4. Of course it is known that the Council refused 102(2) and that the appeal against that refusal would have been heard by Talbot J, who rejected DA2 and DA3, but for his Honour's decision on the Class IV application. The plaintiff must, therefore, satisfy me that in the presence of conflicting evidence about 102(2), which depicted an approval closer to DA2 and DA3, than to DA4, Talbot J would have allowed the appeal in relation to 102(2).

The Evidence Of Mr Andrew Andersons

199 The witness statement of Mr Andersons dated 8 March 1999 became Exhibit F. He is an architect and a principal director of Peddle Thorp & Walker, and before receiving a commission on 10 October 1996 he had a meeting with Dr Quek, who asked him to come up with a new design for the site:-

".. that is capable of being approved by North Sydney Council and addresses the various criticisms made of DA2 by the Land and Environment Court. Here is a copy of that judgment for you to look at. I would like to maintain as much development potential as possible but I realise that there may have to be some reduction necessary to achieve approval."

Thus, in October 1996, Dr Quek was instructing his architect to compromise on size as little as possible, so that the plaintiff could have the maximum number of units notwithstanding that he understood that there "may" have to be some reduction to achieve approval. He was not suggesting that 102(2) should be lodged, but was following the development application route with the request that as much saleable area as possible be retained. This approach was inconsistent with the use of DA1 as the vehicle through which development should take place.

200 Mr Andersons said that before accepting the commission he wanted to study the plans, which were the subject of the application that was rejected by the Court, and the judgment to determine whether he could do what the planning and urban designs required within the parameters of his instructions. He said he would not have accepted the commission if he did not think he could produce a design "with a realistic chance of approval that met the criteria specified". He explained the steps he took to try to achieve that and, on 16 December 1996, DA3 was submitted. Up to that time Mr Andersons was confident that the scheme would be approved, although he became less confident in the light of certain statements made by some councillors.

201 In cross-examination Mr Andersons said it was made clear to him at a meeting on 16 October 1996 with representatives of the Council that the height of the project was a major concern, and he agreed that a minute prepared by Peddle Thorp & Walker of the meeting stated that he was told there must be a reduction in height.

202 He agreed that by 18 October 1996 the position was that the plaintiff required 17,000 square metres of net saleable area to be maintained as part of the design brief, and the number of apartments and their type to be maintained as much as possible.

203 At Tp.223 Mr Andersons said that he had read the judgment in relation to the appeal against the rejection of DA2 and he agreed that the previous scheme "was massive and monolithic" such that "the general monolithic mass of the building should be reduced". This was a somewhat damning condemnation of what the plaintiff proposed and supportive of the view of councillors, concerned about over-development, that DA2 should have been rejected and, inferentially, that 102(2), because of its similarity, should suffer the same fate. Mr Andersons agreed that the maintenance of 17,000 square metres of net saleable area and a reduction of scale was quite a challenge, which involved investigation, balance and skill, and that by 22 October 1996 Peddle Thorp & Walker had formed the view that there had to be a significantly different building, and that if there was not "it would likely fall foul of similar problems as the one which had been rejected by Council and Court": Tp.224. Mr Andersons did not express the view that the Council or the Court in refusing the applications already made had not been acting reasonably. Rather his description of the proposed building would tend to indicate that they were.

204 Mr Andersons was referred to a minute of a meeting on 22 October 1996, which became Exhibit 10, and which stated that Peddle Thorp & Walker identified four issues to which the new proposal had to have regard as being the need for a significantly different building, no less unit numbers, amenity of apartments to be improved, and perhaps the providing of more units with smaller area. He said that that was a fair summary of Peddle Thorp & Walker's position.

205 He continued that as at October 1996 Peddle Thorp & Walker saw the challenge as being to reduce monolithic bulk, but to maintain either saleable area or saleable apartments, a statement of those objectives indicating the degree of challenge. He agreed that the minutes of the meeting of 15 October 1996, Exhibit 8, made it clear that height must be reduced, with which he concurred. Mr Andersons was shown a document of 13 November 1996, which was prepared by Peddle Thorp & Walker's project architect, which said that "Cliff Street" must reduce in height, and at the outset noted that the bulk needed reducing.

206 On 14 November 1996 Mr Andersons wrote to Greencliff setting forth various problems. A post script to the letter stated:-

"As you are aware, height is a contentious issue on this project and it is essential we have more and correct information regarding neighbouring structures."

207 Mr Andersons agreed that the letter was saying that Peddle Thorp & Walker's task would be easier if the plaintiff was prepared "to wear further reduction in this area".

208 At Tp.229 Mr Andersons was asked whether there were reductions in the scale and bulk of the plan being put forward by Peddle Thorp & Walker after 14 November 1996. He said he could not remember specifically, but if there were they would have been "fairly minor". He continued "in general terms it proceeded on that basis". Mr Andersons said that by February 1997 he was seeking to persuade the plaintiff to reduce the height, but that that was causing difficulties to the plaintiff, notwithstanding his professional opinion that it should reduce the height more than it was appearing to do.

209 A position had thus arisen in which Mr Andersons was trying to persuade Dr Quek to reduce the height of the building, which Dr Quek was resisting. He said that his feeling at the end of the process was that generally the scheme propounded by Peddle Thorp & Walker would probably be approved subject to some reduction in the height, although he agreed that if that was not a condition the Council would reject the scheme and:-

"Q. That was a risk that you understood ...

A. Yes.

Q. The developer represented by Dr Quek was prepared to take?

A. Yes.

Q. Notwithstanding your advice about the risks; is that right?

A. Yes."

210 Mr Andersons' evidence made it clear that Dr Quek was not prepared to give up very much as at late 1996. Notwithstanding Mr Andersons' advice, Dr Quek was maintaining that stance, which involved his trying to obtain a building Mr Andersons described as "massive and monolithic". Any changes were "fairly minor" and such that there was a risk, which he understood the plaintiff was prepared to run, that the Council would reject the scheme. Thus, even after the rejection of DA2, the plaintiff was still prepared to run the risk of rejection to achieve as many units as possible. There is no reason to think that in the hypothetical situation it would not have adopted the same strategy.

211 This attitude casts further grave doubts on the fate of 102(2), whether one accepted the hypothesis that the plaintiff had submitted it in late March/early April 1996 or the fact that it was lodged in October 1996. Mr Darroch made clear that had 102(2) been submitted in March/April 1996, it would not have been accepted without more but would have been the subject of negotiation. The attitude Dr Quek was likely to have taken to negotiations is manifested by his apparent refusal to accept Mr Darroch's heavy hint, and his unwillingness to accept Mr Andersons' advice. As Mr Ingham thought that the proposal it contained was closer to DA2 and DA3, (the latter of which Mr Andersons agreed only brought about "fairly minor" reductions in scale and subjected the plaintiff to the risk that the Council would reject it), the conclusion that 102(2) would not have been approved by the Council, if lodged in March/April 1996, is difficult to escape. Dr Quek had agreed the relevant changes were "minimal". Further, the prospect of the same Judge, who had rejected DA2 and DA3, accepting 102(2) in the form for which the plaintiff was insisting, seems unlikely in the absence of any meaningful changes. However, it is not necessary for me to reach that latter conclusion because, as Mr Tobias agreed, the onus is on the plaintiff to established that Talbot J would, as a matter of probability, have approved it. However, Mr Tobias invited me to compare certain material relevant to the differences in what was proposed in 102(2) and to come to my own conclusion as to which body of expert opinion should have been accepted. I do not intend to follow this course. Firstly, as I have said, there was an abundance of evidence that on this topic different minds, expert in the relevant field, could come to conflicting opinions. If the matter was for my determination I would have to decide which evidence I preferred and, in coming to that decision, to have regard to the evidence from which the experts drew their conclusions. Secondly, the matter is not one for my decision. It was expressly agreed that the issue I had to decide was whether, if the Court had considered 102(2), the plaintiff has satisfied me, on the balance of probabilities, that the Court would have allowed the appeal. That being the matter for my decision it is not helpful for me to intrude my own view in a field where experts can legitimately differ.

212 But at this point it is necessary to keep carefully in mind the distinction between the requirements for a DA approval and those for a s.102 approval. In the former case all matters, including the s.90 considerations, must be taken into account. In the latter the appellant must pass the two relevant threshold tests, and the question then arises as to the extent to which the Court at that time, and unaided by the decision in Michael Standley, would have approached the s.90 matters. As I have pointed out, it did not seem to be in issue that s.90 matters would have to be considered, the real question being the extent to which they were applicable, if at all, to the modifications and amendments proposed to 102(2).

213 The view taken by the Court prior to Michael Standley was expressed by Stein JA in Michael Standley. His Honour, at p.482, noted that s.102(3A) was inserted in 1992 following earlier decisions of the Court to the effect that relevant s.90 considerations had to be taken into account when determining modifications. His Honour said:-

"The amendment confirmed this approach and was passed, as I understand it, for more abundant caution and to make plain to decision-makers their responsibility in assessing such applications."

214 His Honour dissented from the majority view that the section directed the decision-maker to consider any s.90 matter relevant to the whole development as modified, and re-affirmed the view he had expressed, as a Judge of the Court, that the s.90 heads of consideration were those "of relevance to the subject of the modification application". His Honour crystallised his views thus:-

"It is clear that s.102(3A) requires the decision-maker to address the s.90 heads of consideration relevant to the modification application. That is the application before the consent authority. To the extent that the application seeks to modify the previously approved development, s.90 must be applied. But when the modification has no impact on any aspect of the already approved development, s.90 considerations have no role to play." (My emphasis.)

After further consideration, his Honour said, p.483, that the correct approach to s.102(3A) "is to assess the impact and effect of the modification on that already approved and take into account any s.90 considerations relevant to that effect or impact". This indicates quite clearly that when the modification is concerned with objectionable bulk and size, the s.90 considerations appropriate to bulk and size should be considered when reviewing the modification.

215 I shall assume that his Honour's views reflected the approach which would have been taken by a Judge of the Court before Michael Standley. Mr Tobias' submission was that this was so, but that that approach would not have caused a re-visiting of any s.90 matters. The modifications were concerned with bulk and scale and the overall appearance and effect of the proposed building. That type of modification must have impacted on what had already been approved and, therefore, raised for consideration s.90 matters relevant thereto. There was a body of evidence, which supported this view.

216 Section 90 considerations include the impact of the development on the environment; the effect of the development on the landscape or scenic quality of the locality; the character, location, siting, bulk, shape, size, height, density, design or external appearance of the development; the area to be occupied by the development; the relationship of the development to adjoining land and other land in the locality; and the existing and likely future amenity of the neighbourhood. In my opinion these matters would have been relevant to the modification application. Certain of them were central to it and the problems this development had encountered. The Court in my view must have had regard to them, even on the basis of its own then decisions.

217 In these circumstances I cannot be satisfied that if the s.90 considerations had been taken into account as, in my view they had to be, 102(2) would have been approved by the Court on appeal.

A Substantial Attack On The Council's Defence

218 In response to the plaintiff's contention that the Council would have approved 102(2), Mr Walker pointed to the fact that it had not.

219 When the councillors considered 102(2) they had before them a recommendation that the plans and documents submitted to amend DA1 did not represent a modification, which could be approved under s.102 because the proposed development was not substantially the same, and because the proposal increased prejudice to persons, who previously objected, by impacting adversely on the streetscape. The recommendation was signed by Mr Beattie, the Acting Assessments Manager, and endorsed by Mr Ryan, the Director of Planning and Environmental Services. The report was quite detailed and at page 6 identified the two matters under s.102 to which reference was made in the recommendation, and continued:-

"In addition, Section 102(A) (sic) also requires the consent authority to take into consideration such matters referred to in Section 90 which were relevant to the application."

It then addressed the issues and said, inter alia, that the proposed amendments raised "no further significant issues under the provisions of Section 90 ........ other than those issue (sic) raised by the original application". The concluding paragraph referred to the matters on the front page of the report and recommended rejection. The councillors resolved that the report be adopted.

220 Mr Tobias submitted that the report merely "parrotted" the draft report of Mr Sanders, an independent expert retained by the Council. An analysis of both reports demands that this submission be rejected. Mr Tobias nextly submitted that the Council officers had not been called to explain the report. The report speaks for itself and, whilst it was subject to some criticism and disagreement, it was not disputed that it was a report evidencing a conclusion to which a town planner could properly come.

221 Mr Tobias submitted that the officers had raised no s.90 considerations and, as the Council resolution only referred to an adoption of the report, the councillors had not given consideration to such matters. I do not agree with either of these submissions. The report referred to s.90 considerations and, on a fair reading of it, stated that there were still significant s.90 issues, although no "further" ones. This was dealt with in submissions at Tp.577.

222 In my opinion, the s.90 issues were clearly left open for consideration by the councillors. Even if they were not, there was nothing to prevent the councillors from having regard to them. Mr Tobias submitted that the councillors should have been called to explain how they reached these conclusions. I consider that the critical issue was the result at which they arrived in circumstances where the evidence established that this was a matter on which minds could properly differ. For reasons to which I shall now refer I do not consider that the failure to call either the Council officers or the councillors leads to any adverse finding in relation to the refusal.

223 Mr Tobias submitted that I should not be satisfied by that resolution because the Council had failed to call either the town planners, who had made the recommendation to it, or the councillors to explain why they had come to that decision and, so it was submitted, in those circumstances I should draw the Jones v Dunkel inference, (Jones v Dunkel & Anor [1959] HCA 8; (1959) 101 CLR 298), and conclude that they could have said nothing which assisted the Council's case.

224 Mr Walker submitted that in the absence of any evidence that in reaching the decision either the Council had acted so unreasonably that its decision could not, on any view, be upheld, or it had reached the decision by acting in dereliction of its duties and, thus, perhaps in circumstances which could be described as "corrupt", there was no reason why any officer or councillor should have been called. The submission was that the Jones v Dunkel inference only arises to support an inference for which there is an independent evidentiary basis, which in the present case there was not as there existed a decision of the Council and, unless there was evidence to enable it to be vitiated in one of the two ways to which I have referred, which there was not, the plaintiff could not attack it, at least collaterally in these proceedings. The proper attack would have been by way of an appeal, which was pursued but, because of other events, became otiose.

225 This was not, however, a case where there was an absence of relevant evidence in relation to the decision making process. The fact was that there was uncontradicted evidence that professional opinions on these points could differ properly, the conclusion from which was that there was no valid reason for attacking the Council's decision making process in circumstances calling for some explanation.

226 The principle on which Mr Tobias relied does not, in my respectful opinion, assist him. Kitto J stated it thus, at p.308:-

"But what should have been added, and not being added was in the circumstances as good as denied, was that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence. The jury should at least have been told that it would be proper for them to conclude that if Hegedus had gone into the witness box his evidence would not have assisted the defendants by throwing doubt on the correctness of the inference which, as I have explained, I consider was open on the plaintiff's evidence."

227 At p.319 Windeyer J said:-

"Until facts were proved from which an inference of negligence could be drawn, the defendant was not called upon to say anything. His Honour, however, had thought that such an inference could be drawn; he had refused to direct a verdict for the defendant, and had left the matter to the jury. Having done so, he should have directed them appropriately on the conclusions they might draw from the silence of Hegedus. In my view he did not."

228 In Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited & Anor (1991) 22 NSWLR 389 Handley JA said, at p.418:-

"In my opinion the Court should not draw inferences favourable to the insured on these matters when no attempt was made to prove them by direct evidence and in particular when no relevant questions were asked of Mr Ferrarese. Rather it seems appropriate to apply the principles of Jones v Dunkel ..

There appears to be no Australian authority which extends the principles of Jones v Dunkel to a case where a party fails to ask questions of a witness in chief. However I can see no reason why those principles should not apply when a party by failing to examine a witness in chief on some topic, indicates `as the most natural inference that the party fears to do so'. This fear is then `some evidence' that such examination in chief `would have exposed facts unfavourable to the party'."

229 Although Mr Tobias relied upon this case it seems to me, with respect, that it does not assist his submissions in this regard. It was not in issue that the Council had refused consent and that the Council officers had recommended against consent. So much was proved and it was clearly within their power to do so. The evidence was that the decision was one on which minds could legitimately differ. There was not a skerrick of evidence that the Council officers or the councillors, who were the decision makers, had acted unreasonably or in dereliction of their duties, such as to call for any explanation. No basis was laid for the drawing of any adverse inference, the reaching of which would be more easily achieved by the failure to call the Council officers or the councillors.

230 The simple fact remains that there was a decision of the Council refusing consent to 102(2). In my opinion, an obligation would only have fallen upon the Council to call its officers and councillors to justify the decision if there was evidence led, which there was not, that the decision was reached in an improper manner in one of the ways to which I have referred. In the absence of any such evidence there was no obligation on the Council to call any evidence as to how the decision was reached, it not being in issue, at least so far as Mr Darroch was concerned, that in reaching the decision the Council could take into account the controversy, and it not being in issue, so far as a number of witnesses were concerned, that so far as the town planning situation was concerned different minds could, legitimately, reach different conclusions.

The Approach Of Talbot J

231 On 20 August 1997 Talbot J gave his decision in relation to DA3, which he recorded was for 160 apartments and various other facilities, and he noted that in proceedings 10286 of 1996 the Court refused development consent for DA2, which comprised a building of twenty eight levels, including twenty three of residential units, three basement levels wholly below ground level and two levels of plant room accommodating 170 apartments, four retail shops and parking for 159 vehicles.

232 At p.2 he said that it was obvious that the architectural design of the building "is quite different to its immediate predecessor", and that in many respects "it has improved aspects of the building when viewed from vantage points around Milsons Point and from the Harbour". He referred to the evidence and to Mr Andersons' explanation:-

".. (h)ow the design attempts to take into account physical considerations of the site, the local built environment, the aspect from the three street frontages and the appearance of the development from the Harbour".

He observed that Mr Andersons nevertheless recognised "that it was necessary to abandon the parameters set by the development standards contained in the LEP".

233 His Honour referred to the evidence of Mr Seidler, who said he regarded the building as "an asocial monument to greed", and that the proposal "greatly exceeds the index allowed for FSR by nearly three times and the provisions of DCP21 by contravening its aims and objectives and failing to meet requirements in respect of overshadowing, view preservation, street scape and amenity and floor space".

234 At p.7 he said:-

"The brief accepted by Mr Andersons, broadly speaking, was to address the urban design aspects of the previous proposal criticised by the Court, while at the same time attempting to achieve the client's expectation of providing the same level of accommodation. It is fair to say that there is a significant weight of evidence which suggests he has been successful in achieving the former objective. Although there has been some loss of units, the second objective has been satisfied in general terms. While adhering to the view that he was entitled to abandon the parameters set by the provisions in the LEP which, in his opinion, failed to take account of the circumstances of the site, he nevertheless maintained that many of the requirements in the DCP have been incorporated in aspects of the proposal." (My emphasis.)

235 Subsequently, on the same page, his Honour continued:-

"There can be no doubt that the building will have visual prominence when viewed from almost every aspect.

The form of the proposed tower is such that it steps up from the Alfred Street frontage so that its highest point is situated some distance to the west of the high points of adjoining existing development before it reduces down to the level of the middle element of the building. The real height of the building will exceed the actual height of the adjoining Tower Life and Duxton Hotel buildings. It will be more in line with the advertising excrescence which has been added to the Tower Life building.

Setting aside the impact of additional traffic generation, which the Court accepts as marginal, the development standards controlling height and FSR are directed at ensuring that development is of an appropriate scale and intensity and has an acceptable impact on the locality in general and the neighbouring properties in particular. There can be no argument that the location of the site is sensitive in relation to views available to and from the Harbour and within Milsons Point itself."

236 After referring to a number of planning considerations, his Honour said, at p.9:-

"The presence of the Harbour and the intensity of existing development along the ridge of Alfred Street justifies a reduction in the size, bulk and height of development on the land below the ridge and sloping down to the foreshore. In the context of the planning objectives, adherence to the purpose of the controls is reasonable. There is no evidence to show that a requirement for relatively lower scale development off the ridge is inconsistent with the encouragement of proper management, development and conservation of the environment to the purpose of promoting the social and economic welfare of the community or the promotion and co-ordination of the orderly and economic use and development of the land in accordance with s.5(a)(i) and (ii). The object of the Act is to create a balance between the competing interests for a better environment on the one hand, and the need to meet the demands by the community for residential and commercial accommodation on the other."

237 The judgment concluded:-

"Despite a worthy attempt to present a design which addresses the circumstances and idiosyncracies of the site, the Court has not been satisfied that the SEPP 1 objection is well founded. The Court is not able to form the opinion that the granting of consent to the development application would be consistent with the aims and objectives of SEPP 1. The underlying purposes of the development standards in question will not be satisfied. There is no justification for setting aside the development standards for the other reasons put forward on behalf of the applicant."

238 Many of the matters to which his Honour referred would have been relevant to a consideration of 102(2), if the appeal from the Council's decision had proceeded before him, and, in particular, to a consideration of the relevant s.90 matters, to which, for the reasons I have given, I am satisfied his Honour could have had regard.

239 Even if Talbot J had not been the Judge determining the application under 102(2), I am not satisfied that his Honour's reasoning would not have appealed to other Judges of the Court in relation to the modification pursuant to 102(2). Once the various considerations under s.90, to which I have referred, were allowed to intrude into the situation the plaintiff accepted that it would have had great difficulty in obtaining the Court's consent to that modification. Even if there was no concession in that regard, in my view the Court could not, even on the application of s.102(3A) which was then applied by the Court, have overlooked matters referred to in s.90, which impacted directly upon the desirability of the proposal in 102(2).

240 The plaintiff has failed to satisfy me that the Court, on appeal, would have given consent to 102(2).

The Evidence Of Mr James Martin McGreevy

241 Mr McGreevy, who is a construction manager employed by Multiplex, made a witness statement on 9 March 1999, which became Exhibit J.

242 In October 1995 he was the project manager at the site, Multiplex having tendered for the demolition works of the existing SBS Building. A separate "design and construction" building contract was entered into between Multiplex and the plaintiff on 12 January 1996 providing for practical completion on 9 January 1998. The demolition works, including bulk excavation, began on or about 9 November 1995.

243 Some time after 31 October 1995 Mr McGreevy was told by Mr Swalwell that s.102 drawings were being prepared to satisfy the Council's requirement that the BA submitted drawings correlated to the DA submitted drawings and, on 7 December 1995, Mr McGreevy received a set of the s.102 submitted drawings, which were very similar to the building contract drawings, the latter being more detailed as they showed the dimensions of the structure. He recalled that work was suspended at the end of June 1996 after the completion of the excavation work, and that construction could not proceed further because the plaintiff had not received an approved set of documents from the Council for the building works.

244 In paragraph 11 Mr McGreevy expressed the view that had he been asked by representatives of the plaintiff to build in accordance with the 102(2) drawings in June 1996, this would not have resulted in any delay to the progress of the works, but because the contract was "design and construct" there may have been an increase in the amount of design work required to be carried out by Multiplex.

245 Mr McGreevy traced the critical path and steps which could have been taken and, in paragraph 18, said that the time when change may have begun to impact on the critical path would have been if changes were introduced after the facade had been installed. In paragraph 19 he said that having reviewed the 102(2) drawings, he did not consider that they would have had a significant effect on the overall construction programme if they had been issued prior to commencement of the installation of the facades and "even then, the impact on practical completion is hard to gauge". He continued, in paragraph 20, that the main impact on the progress of the works would have been the need to fast track the design to ensure that it met on-site construction programme requirements. He referred to certain problems and to the fact that the result of fast tracking may have exposed Multiplex to variation costs from sub-contractors, for which costs Multiplex would have sought reimbursement from the plaintiff, thus increasing the cost of the project.

246 Mr McGreevy agreed, Tp.242, that the 102(2) drawings were not, when he prepared his statement, in a fit state to commence building immediately. He agreed work would have been done by Multiplex to have produced either BA or construction drawings before work could commence; that throughout the project Multiplex had always been at considerable pains to remind the plaintiff that the drawings had to be consistent with those for which there was consent; that from the earliest times he personally had complained to the plaintiff about design being developed in a way which did not reflect the approved BA; and that from the earliest times he was telling the plaintiff that it was imperative that there be approvals gained for the documented design drawings. He agreed that he warned the plaintiff in February 1996 that unless such drawings were in place adverse effects would flow for the plaintiff, including the fact that otherwise abortive design work would have taken place, that redesign would delay documentation and that the construction programme could be jeopardised. The documentation to which he was referring included construction drawings and amended BA drawings. He also agreed that he made a number of complaints to the plaintiff about having the plans conform with the relevant approvals, and that the consequences of not doing so would include delay and additional cost.

247 At Tp.246 Mr McGreevy was referred to paragraph 11 of his statement in which he made the assumption of being asked to build in accordance with 102(2) drawings in June 1996. He agreed those drawings required working up either for a new BA or an amended BA, and to be put into shop or for construction state, which would take some time. He also agreed that excavation was completed by 28 June 1996, at which stage there were no plans which would have enabled Multiplex to continue building because the contract drawings did not accord with the current state of approvals. He said that he was told that there was a prospect of having approvals by 29 July 1996, although this did not eventuate and the delay caused the work to eventually stop: Tp.248.

248 He said there would have been serious disruption and delay to the work for which Multiplex had contracted if there was no approval. He agreed the detailed design was the responsibility of Multiplex, subject to its being within what was lawful in terms of the consents.

249 Mr McGreevy's evidence made it clear that he was insisting that the plaintiff obtain the necessary approvals, and that without those approvals the final plans could not be finalised and the work continued. Contrary to the plaintiff's case, the position was that as at 28 June 1996 there were no plans which would have allowed building work to go forward. In my opinion, even without negligence, this would have been so because the plaintiff would have pursued DA2 in any event with the consequences which befell it; and because the plaintiff would not have lodged 102(2) before it in fact did, viz on 21 October 1996.

The Evidence Of Mr Harvey Mark Sanders

250 Mr Sanders, whose witness statement became Exhibit 15, was the only town planning expert called on behalf of the Council. He dealt with essentially the same general matters as Mr Byrnes and Mr Ingham and, in paragraph 6.6, expressed the following conclusion:-

"On the basis of the assessment which I have made of all the relevant material it is my opinion that in the event that DA1082/94 had not been held to be invalid, construction work on the project could not have commenced until all of the documentation was in an appropriate and acceptable form. As I have noted above, it is my opinion that the earliest that work could have commenced would have been in or around November 1997."

251 In a letter to the Council, which was stated to be a draft, dated 15 November 1996 and to which a report was attached, Mr Sanders assessed 102(2) and recommended that the Council determine that the application could not be approved under s.102 on the basis that it was not substantially the same development as DA1, and that it would cause prejudice to objectors. Mr Sanders was also aware that it was necessary to take into account s.90 considerations. He stated, in paragraph 6.6:-

"On the basis of the assessment which I have made of all of the relevant material it is my opinion that in the event that DA1082/94 had not been held to be invalid, construction work on the project could not have commenced until all of the documentation was in an appropriate and acceptable form. As I have noted above, it is my opinion that the earliest that work could have commenced would have been in or around November 1997."

252 Mr Sanders agreed in cross-examination that he was engaged by the then solicitors for the Council in July 1996 after a Class I application had been lodged against the deemed refusal of DA2 and before the Council dealt with that application. He was asked in July 1996 to determine whether he could support the Council's case, and he said his commission was to give his opinion on the proposal and what he might do, as a town planner, if the Council were to refuse consent.

253 Mr Sanders was aware that an outside consultant, Mr George, had recommended approval of DA2. He did not agree with that recommendation or the reasons for it. He prepared a report for the appeal in relation to DA2 in August 1996 and, after that appeal was unsuccessful, he was asked to consider whether 102(2) represented substantially the same development as DA1 and whether, in his opinion, any prejudice would be caused to objectors to that development. He wrote his draft letter on 15 November 1996 expressing the views to which I have referred, and it was his understanding that there was a recommendation to the Council to refuse consent. The report was by Mr Beattie and was endorsed by Mr Ryan. He agreed the resolution of the Council was that Mr Beattie's report be adopted.

254 Mr Sanders agreed that it is common practice for the proposal, the subject of the development consent, to undergo design refinements between the granting of that consent and building approval, which sometimes required a s.102 modification and, in extreme cases, a new application.

255 Mr Tobias cross-examined Mr Sanders in respect of the last sentence in paragraph 1.13 stating:-

"However, irrespective of any such changes, it would be necessary for there to be consistency between the development consent, as it may have been modified, and the building approval, as it may have been modified, before construction work could commence on a particular development proposal."

Mr Sanders said that that proposition reflected his understanding that before work could commence, irrespective of any changes that might occur after that happened, there needed to be conformity and consistency between the documentation for the building application and the development application.

256 Mr Sanders said he based his letter of 15 November 1996 on a comparison of the DA1 plans and the 102(2) plans, and a consideration of the objections in relation to DA1, although he did not recall seeing those objections.

257 Mr Sanders agreed that he did not have the detailed objections available to him, but he pointed out, with some force in my opinion, that his letter was based upon the statement:-

"To the extent that the proposed modification will result in a building with a greater adverse visual impact on the neighbours, we are not satisfied that no prejudice would be caused to any persons who objected to the development application."

258 Mr Sanders was then cross-examined on the various changes to which he made reference in the schedule to the draft letter and, in dealing with the number of bedrooms, Mr Sanders agreed with Mr Tobias' proposition that it was a question of fact and degree.

259 Mr Sanders maintained that the changes affected the bulk and scale of the proposal and changed its envelope. He repeated, at Tp.289, that the terms of the overall envelope were different for the purpose of his analysis and were not substantially the same. He said, Tp.290, that he concluded that overall, taking all factors into consideration, the development was not substantially the same development, and that went to matters other than the envelope, and he continued:-

"Q. A matter upon which, would you agree, experts' minds always seem to differ?

A. They can differ - not always, but they can."

260 Of course, to a substantial extent, this was the point being made by Mr Walker and it underlined the cross-examination of the various witnesses called for the plaintiff that on these matters those with appropriate expertise can legitimately hold different views. Accordingly, the Council, as the initial decision maker, must determine the matter, essentially, on the basis of various conflicting, but none-the-less reasonably held, views and such other relevant matters as it considers appropriate, and the Court must do the same, although it may not have regard to the "political" aspects.

261 After further detailed cross-examination Mr Sanders said, Tp.296, that his considered opinion was, and still is, that the development is not substantially the same as that reflected in the 102(2) drawings. Mr Tobias then turned to a consideration of s.102(3A) and the circumstances in which s.90 considerations were to be applied. Mr Sanders said that having come to the conclusion that the development that was sought to be modified was not substantially the same, then he would "of necessity apply my s.90 considerations to the overall development". He added that if he had come to the conclusion that the development was substantially the same he would have still given consideration to the impact of the overall development as sought to be modified, which approach he took because he understood them to be the considerations that were given by town planners at that time. Mr Sanders expressed the view that prior to May 1998 there were different views as to how s.90 should be applied in such circumstances, and he said that s.90 considerations were also applied because of the possibility of a series of applications under s.102, the gist of that view being that if one overlooked the s.90 implications, one could reach a situation in which, by dint of a number of s.102 applications, a substantially different development could be achieved, overall, without the s.90 considerations having been addressed.

262 In my opinion, essentially for the reasons to which I have referred, it was appropriate to have regard to s.90 considerations in the circumstances of this case even on the approach then followed in the Court.

263 Mr Sanders was referred to paragraph 4.9 of his report in which he referred to the excessive bulk and scale of the development. It was put to him, Tp.300, that the scheme depicted in 102(2) was far closer to DA1 than to DA2. He said he was not able to give an unqualified answer because he had not made that "three-way comparison". However, he confirmed his view that 102(2) was similar to DA2 in terms of its overall bulk, scale and design. This added point to the impact of s.90 considerations in an appeal against the refusal of 102(2). He maintained that the external envelopes of DA1 and 102(2) did not represent to him substantially the same development for the purposes of s.102. However, he pointed out that he was, of necessity, making a different comparison between DA1 and 102(2), on the one hand, and DA2 and 102(2) on the other, because the first comparison demanded a finding that the development was "substantially the same", whereas the second did not. He said that the comparison that he undertook of DA2 and 102(2) was to determine what conclusion might have been reached regarding the impact of that development "which was a bit different test from the tests that I was undertaking in relation to the comparison between DA1 and" 102(2) "where I was simply trying to identify what the differences were and what the totality of those differences were to determine whether I could conclude whether or not the development was substantially the same ..". He repeated, after further cross-examination, at Tp.302, that DA1 and 102(2) were substantially different and, for emphasis, that they were not substantially the same.

264 Commencing at Tp.304 Mr Sanders was cross-examined about the times for approvals and appeals about which he had expressed an opinion, and he agreed that he had assumed that there were no steps taken to expedite any of the processes, and that a developer may attempt to have matters expedited. Although he allowed five months from September 1996 to February 1997 for the determination and ultimate refusal of 102(2), he said he was aware that it took less than two months between October and December 1996.

265 Mr Sanders also assumed the lodgment of a Class I appeal in February 1997 and a period of four months for its determination. He allowed a further period of four months from the approval of 102(2) to the lodgment and approval of an amended BA. It was put to him that these times could be shortened. He agreed that was possible, although, as I understood his evidence, he said it depended on the particular circumstances. He was not prepared to defer to the views of an architect in this respect, thinking that architects were often more optimistic than town planners.

266 Mr Sanders was asked about Mr Beattie's recommendation and, particularly, Mr Beattie's observation that:-

"The current plans before the Council do not significantly increase the bulk of any elements of the building but the appearance of the building is less satisfactory than was approved."

267 Mr Sanders said that those observations were a different proposition from one as to whether the proposal is substantially the same development or not, and that any significant increase in the bulk of any elements of the building was only one factor to take into account in coming to a final determination on that point: Tp.311. Mr Sanders said, Tp.312, that he would agree with the proposition that the plans did not significantly increase the bulk of any elements of the building, and that he did not agree with Mr Beattie's comments in relation to s.90 considerations.

268 Mr Sanders' evidence was corroborative of the case for which the Council contended. It reinforced the ability of appropriately qualified minds to differ on issues relevant to this case and the applicability of a consideration of s.90 matters to 102(2). I think that Mr Sanders may have been a little pessimistic in his time estimates, and, if it became relevant, I would not be satisfied that, on the plaintiff's second hypothesis, building work would not have commenced by 1 June 1997.

The Evidence of Mr Claude Arthur Jugmans

269 Mr Jugmans, whose witness statement of 19 November 1998 became Exhibit L, is a chartered accountant with extensive experience in financial investigations and the preparation of reports in relation to accounting and allied matters for the purposes of litigation. Before turning to his report it is desirable to have regard to a joint statement prepared by Mr Jugmans and Mr Mark Bryant, the expert accountant called on behalf of the Council, in an attempt to narrow the accounting issues. That report, which is Exhibit M, said that the overall methodology adopted by the experts is the same, in that both considered what would have happened, but for the tort, and what has or will happen as a result of the tort, and agreed that the damages sustained by the plaintiff can be quantified as the difference between the cash flows that would have been achieved, but for the tort, and those that have and will be achieved in the light of the tort. They further agreed that the methodology applied to cash flows before interest, and that a separate calculation should be made to allow for compensation to the plaintiff for temporary loss of pre-interest cash flows.

270 The report noted that both were provided with significantly differing assumptions and instructions as to the cash flows, comprising sales of units or gross development value, that would have been achieved by the plaintiff under DA1; the costs that would have been incurred by the plaintiff in constructing the building under DA1; the timing of the cash flows in regard to both sales and costs; and chronologies of events that would have taken place but for the tort. The report also noted that Mr Bryant was provided with assumptions and/or instructions as to the cash flows that are expected from constructing the building under DA4, as well as the costs that are likely to be incurred by the plaintiff in doing so, and that Mr Jugmans was provided with assumptions and/or instructions as to the value of the site as at July 1998. It continued that facts as to the costs actually incurred by the plaintiff were provided to both, and that with minor differences they were attempting to resolve, both Mr Jugmans and Mr Bryant agreed on the quantum of costs actually incurred by the plaintiff for the period to September 1998.

271 In paragraph 12 it was stated that in the scenario of what would have happened, but for the tort, Mr Jugmans and Mr Bryant agreed on the application of the methodology, but have been provided with different inputs into the cash flows, such as sale values and costs.

272 In paragraph 13 it was noted that they received instructions to consider differing components, particularly in regard to the sales, costs and the value of the site, under the scenario of what did and will happen as a result of the tort.

273 Exhibit M continued:-

"14. Claude Jugmans has been instructed that in order to determine the cash flows that did and will occur, as a result of the tort, he should only consider costs that have actually been incurred to September 1998 and deduct therefrom the current value of the site. This calculation produces a substantial loss in that the value of the site, on the assumptions provided to Claude Jugmans, is considerably less than the costs that have been incurred to date.

15. Mark Bryant has been instructed that in order to determine the cash flows arising from what did and will happen, the profit anticipated from developing the site under DA4 should be taken into account. This calculation produces a substantial profit in that the profit anticipated from developing the site under DA4, on the assumptions provided to Mark Bryant, is considerably in excess of the costs that have been incurred and that will be incurred in developing the site under DA4."

274 In paragraph 16 it was stated that in regard to determining the level of compensation as a result of the temporary loss of pre-interest cash flows, Mr Jugmans and Mr Bryant differed on the rate of return (or rate of interest) to be used, Mr Bryant calculating it on a compound basis using the interest rate charged to the plaintiff by its bankers, whereas Mr Jugmans calculated it using the average rate of return achieved on property projects undertaken by shareholders and associates of the plaintiff. Thus, in concept, the difference was one of rate.

275 In paragraph 18 it was stated that the differences of principle between Mr Jugmans and Mr Bryant would be resolved if the experts were instructed on the methodology to be adopted in determining the cash flows that have been and will be achieved by the plaintiff as a result of the tort:-

"In other words, in order to determine the damages suffered by Lavender is it appropriate to take account of the profit that may be achieved by Lavender on the building constructed under DA4 or is it appropriate to take account of the value of the site at the date the damages are calculated."

276 On 10 March 1990 Mr Jugmans and Mr Bryant prepared a further joint report. It was noted that Appendix 3 to Mr Bryant's report set out actual cash flows to September 1998 in relation to the development of the site, the net cash outflow as stated in that appendix being $33,243,948 after accounting for interest received and interest paid to the bank and shareholders. The net cash outflow to September 1998, excluding interest received and interest paid, amounted to $25,618,951, comprised of the base figure of $33,243,948 from which there was a deduction of interest of $7,647,942 and an addition of interest of $22,945.

277 The instructions given to Mr Jugmans in relation to the total project costs were that they were $33,320,202 including interest paid and interest received, the difference between the net cash outflow of Mr Bryant and the project costs being $76,254. The experts were still, as at 10 March 1999, seeking to resolve the difference in respect of that amount and the amount of $77,635 referred to in paragraph 11 of their statement of 5 March 1999. In essence this left a question to be determined in relation to the figure of either $77,635 or $76,254, the experts ignoring the difference between those two figures of $1,381 as immaterial.

278 In paragraph 7 they referred to the second part of Appendix 5 of Mr Bryant's report, which set out cash flows described as "actual/will happen", and to paragraph 36 of his report that actual cash flows, which did occur up to September 1998, are set out in that part of that appendix. It showed the net cash outflow for the period to September 1998 "which figure is not apparent from Appendix 5", amounting to $25,618,951, "which is the same as the net cash outflow reflected in Appendix 3, that is before taking account of any interest".

279 In paragraph 8 it was stated that the experts were in agreement that total costs or net cash flow incurred by the plaintiff to September 1998, subject to resolving the difference of $76,254, are correctly reflected in the second part of Appendix 5 under the heading "Actual/Will Happen". The matters to which I have just referred are based on the plaintiff's chronology. In relation to the Council's chronology, it was noted that Appendix 8 to Mr Bryant's report contained cash flows described as "actual/will happen". The cash flow actually achieved by the plaintiff was shown to September 1996 on Appendix 8 and not to September 1998, because Mr Bryant's instructions as to the chronology required him to make that assumption. In paragraph 10 it was stated that the net cash outflow of the plaintiff for the period to September 1996, as reflected in Appendix 8 to Mr Bryant's report, amounted to $21,319,487. In paragraph 11 it was stated that the experts agreed that total costs or net cash outflows incurred by the plaintiff to September 1996 of $21,319,487, subject to resolving the differences of $76,254, are correctly reflected in the second part of Appendix 8, that is cash flows described as "Actual/Will Happen".

280 In paragraph 12 the difference between the figures of $25,618,951 and $21,319,487 was noted as representing costs incurred between October 1996 and September 1998. That difference of $4,299,464 was "predominantly related to the costs incurred on DA3 and DA4, which are shown on page 1 of Appendix 3 to Mark Bryant's report". Those figures are set forth and show a total of $4,535,175, the remaining difference of $235,711 being yet to be reconciled.

281 In paragraph 14, under the heading "Project Management Fees", it was stated that in paragraph 26 of his report Mr Bryant indicated that costs of $1,420,000 were not "incurred" as cash payments, but as journal entries. They represented project management fees recorded as payable to Greencliff. The paragraph continued that the experts wished to make it clear that these project management fees were included in the cash flows set out in Appendix 3 to Mr Bryant's report. The project management fees are therefore included in the cash flows described as "actual/will happen" shown in Appendix 5 to Mr Bryant's report. Management fees payable to Greencliff to September 1996 are shown in Appendix 8 to his report, and project management fees, assumed after September 1996 and included in Appendix 8 to his report, were provided to him by Messrs Green and Norris.

282 In his report of 19 November 1998 Mr Jugmans set out, in paragraph 1, the instructions he had received as to the sequence of events. In paragraph 1.16 he stated:-

"On 4 April 1996 Bruce Swalwell Architects, on behalf of Lavender lodged DA116/96 (`DA2') with the Council. DA2 was in respect of a building that was substantially similar to the building described in DA1 but took account of the conditions imposed by the Council in BA1 which had been consented to on 10 November 1995. DA2 was not consented to by the Council. Lavender lodged an appeal with the Land and Environment Court against the Council's determination not to consent to DA2. On 10 September 1996 a judgment was handed down by the Land and Environment Court determining that DA2 should not be consented to by Council."

283 In the original report "BA1" read "DA1", which Mr Jugmans corrected in his oral evidence.

284 In Sub-section 2 of his report Mr Jugmans dealt with the shareholders in the plaintiff and their activities and, in Sub-section 3, with the documents he had examined.

285 In Sub-section 4 under the heading "Issues Considered", Mr Jugmans wrote:-

"4.1 We are advised that at the time DA1 was approved by Council, Lavender intended going ahead with the construction of The Colonnades as outlined in DA1. Appropriate plans were drawn up and submitted to Council as BA95/275. As a result of the conditions imposed on the consent given to the BA by Council, amendments were made to the plans in order to comply with the conditions of Council and additional land was purchased by Lavender.

4.2 We are advised that further amendments were made to the plans in terms of the second Section 102 application that was submitted to the Council on 21 October 1996. The amendments made to the plans resulted in a number of the units being reconfigured.

4.3 We are advised that the proceeds from the development and sale of The Colonnades would have been used to finance the construction of another property development project.

4.4 We have been advised that the Council has given approval for DA4 for the construction of a twenty six storey residential building on the Site (`the New Building'). It is anticipated that construction of the New Building will commence within the next couple of months and will be completed within approximately twenty four months around December 2000."

286 In Sub-section 5 Mr Jugmans set forth the approach he had adopted, noting firstly that he had estimated the losses suffered as being the loss of profit suffered by the plaintiff in not being able to develop and sell The Colonnades, "which would have been built in accordance with the amended BA 95/275 and the second Section 102 application". He referred also to the wasted costs incurred by the plaintiff as a result of the invalidity of DA1, as being additional to the loss of profit, from which he deducted the value of the site. He also considered the lost opportunity to finance another property, but, as I have noted, this claim was not pursued by the plaintiff. In paragraph 5.3 he set forth an alternative basis.

287 In Sub-section 6 he dealt with the costs of construction, commencing with noting that in January 1996 the plaintiff entered into a building contract with Multiplex to construct the building under a lump sum contract for $49,500,000.

288 In Sub-section 7 he dealt with funds invested and loaned and, in Sub-section 8, with the estimated loss of profit. In paragraph 8.6 he stated, after various calculations, that the anticipated net profit, after interest, likely to have been achieved on the development and sale of the units was $23,012,000.

289 Sub-section 9 dealt with costs incurred but not recoverable, the wasted costs being stated as $33,046,371 from which the value of the site of $9,200,000 was deducted giving a figure of $23,846,371.

290 Sub-section 10 dealt with loss of opportunity, with which it is not necessary for me to deal.

291 In his evidence in chief Mr Jugmans referred to paragraphs 4 and 6 of the joint document of 5 March 1999. He made the point that interest on shareholders' loans to the plaintiff had been excluded from each side of the cash flows, which meant that there was no difference in the result "provided one acknowledges that the differences between the cash flows give rise to interest on damages", which he confirmed was interest accruing to the plaintiff. He also said that in relation to the comparison of the actual and hypothetical cash flows it did not matter whether one included or excluded interest on shareholders' loans so long as one treated it consistently in both calculations. He then identified the differences between Mr Bryant and himself, the first being a difference in the assumptions and instructions as to the cash inflows that would have been achieved by the plaintiff under DA1, and the second being a difference in assumptions and instructions in regard to the costs that would have been incurred in constructing DA1. He said that the first assumption was dependent upon the valuation evidence and that it was hoped that the valuers would agree, and that the second assumption was dependent upon the evidence of quantity surveyors, and it was hoped that that would be agreed. In the case of such agreement, which was ultimately achieved, he and Mr Bryant would be able to apply the result thereby produced.

292 In relation to timing issues Mr Jugmans agreed that he and Mr Bryant were dependent on instructions, and in relation to the building under DA4 Mr Jugmans identified the difference as being whether the profit on DA4 should be deducted from the damages, or whether the value of the site as it is now should be deducted from them. Mr Jugmans contended for the latter because he believed that it is less speculative, and that the plaintiff has a choice as to whether or not to continue to build the building under DA4 or whether to sell the site "as it now is". He added that the figure was a fairly sure figure to take the value of the site into account rather than a speculative profit or loss that may be achieved on DA4 at the conclusion of construction.

293 Mr Jugmans acknowledged there was a risk in relation to the construction and sale of the units, which he understood Mr Bryant had not taken into account.

294 He identified a further area of disagreement as being the rate at which interest should be charged, he contending for the rate of return achieved by the shareholders on their capital, whilst Mr Bryant maintained that bank borrowing rates were applicable.

295 In relation to the second statement of 10 March 1999, Mr Jugmans said that he and Mr Bryant attempted to identify the agreements they had reached in relation to the actual costs incurred by the plaintiff to September 1998, which had been achieved subject only to the figure of approximately $77,000. He said the statement then dealt with the actual costs incurred by the plaintiff up to September 1996, but that there was an inability to reconcile the expenses incurred up to September 1996 with those incurred up to the end of September 1998. In these circumstances Mr Jugmans was unable to say categorically that all costs incurred by the plaintiff up to September 1998 were included in the cash flows used by Mr Bryant in his chronology.

296 At Tp.346 Mr Jugmans said that there were risks involved in respect of carrying out the development contemplated by DA1. He was asked to compare those risks with carrying out the development contemplated by DA4 and he said:-

"In my view because DA1 under my chronology was to have been completed already, I believe that there is less risk inherent in calculating the profit that would have been made on DA1 because events have - because events have passed. So, for example, the risk of a major building slump in Sydney has not happened, so therefore one doesn't have to allow for that risk in calculating the profit."

297 He said that the major slump to which he was referring was in prices. He also said that there had been no significant increase in costs associated with the building industry.

298 The cross-examination of Mr Jugmans commenced at Tp.348, and at Tp.349 he said:-

"Q. Does that mean that, so far as his Honour is concerned, he should understand your evidence today as the evidence of somebody who has not changed to any degree you can presently state any of the content of your report?

A. That's correct."

299 From that point Mr Jugmans was asked about the assumption at paragraph 1.10, and whether it would have been affected if he knew that the work commenced at about that time was excavation of the site. He said it would make a difference from the point of view of calculating the cash flows associated with the excavation, and that it was relevant to a calculation of damages to the extent that that excavation work was carried out at about that time and was work which would have to be carried out in any event for any comparable project on the site.

300 Nextly Mr Jugmans was asked whether it made any difference to the result in his report if the construction work commenced on 19 February 1996 by way of excavation, as opposed to 9 November 1995. He said it would only make a difference to the cash flows that were associated with that construction work, but he did not think it would change the level of damages, nor did he think that any difference would be caused if the work, which preceded the middle of February 1996, was the demolition of an existing building. However, he conceded he had not taken into account that that demolition was necessary for any comparable development of the site. He gave no explanation for what I consider to be an oversight.

301 He was referred to paragraph 1.13 in which he noted when 102(1) and 102(2) were submitted to the Council. He said he understood in the assumptions he was asked to make that 102(1) was one which simply outlined differences between DA1 and the BA. He said, Tp.351, that the effect of his opinion was to attribute money as damages by reason of money expended or opportunity to earn money lost as a result of the timing or chronology he had been asked to assume, which meant to a man of his experience that he had expressed an opinion that certain money is necessary to compensate as damages for the events set out in his assumed chronology, which he agreed assumed that his opinion was asserting that there was some causal link, from the financial and business points of view, between the events in the chronology and the damages. He agreed, Tp.352, that it is elementary that to the extent that the events which gave rise to the expenditure or which reduced an opportunity to make money were not consequences of the event giving rise to liability, they did not belong in a category of money necessary to compensate by way of damages, although he said he was making no determination of a causal link.

302 He said he made no assumption as to whether 102(1) was refused or granted, but that he had made an assumption that some kind of development based on DA1 as amended would have happened. He explained "as amended" by saying:-

"The outcome of the section 102 application because I understand that amendments were made to the structure of the building and, as a consequence, amendments were made to the selling prices that could be obtained from the sale of units in that building because of the section 102 second application."

The basis for this assumption provided further support for the submission that the plaintiff did not wish to build conformably with DA1.

303 He was then asked to identify where he had made any assumption about 102(2), which he said was in paragraph 8.5 where the selling prices were reduced by the effect of 102(2). He said that explanation was the sum total of his understanding of 102(2): Tp.353. Certainly he was not asked to assume that 102(2) would, but for the tort, have been lodged in March/April 1996. This, in my opinion, was highly significant, given that it was the primary basis on which at trial the plaintiff put its case. It supports the conclusion to which I have come that it was the intention to proceed with DA2 in about April 1996 and that it was not decided to lodge 102(2) until October 1996.

304 Mr Jugmans was then referred to paragraph 4.1, which referred to amendments to the plans, which he said he understood were conditions of the BA and "amendments made to the plans" in order to comply with those conditions, i.e. of the BA. He was asked whether it made a difference if the so-called amendments to the plan were in fact made to obtain consent for a different development, being the building which Dr Quek wanted to build, to which he replied, Tp.355:-

"I think that's really out of my hands as to whether it would have or not because it's up to the quantity surveyors or the valuers or the architects to tell me what building was going to be built and what costs and revenues were going to be incurred or received, and that's the basis on which I proceeded."

305 Mr Jugmans said that he assumed completion of the building on 9 January 1998: paragraph 10.11, it being part of his assumption that the building work would be completed by then, and he assumed no slippage, disruption or extensions of time under the building contract. He thus assumed the most favourable position to the plaintiff. He was then asked about risk in relation to the hypothetical case, and he agreed that he did not have any knowledge of what might have happened under that particular building contract in relation to delays, disruption or extensions of time. It was put to him that the risk in the hypothetical case was more or less the same as that in the actual case, and he replied that one could find out from building companies about the history of delay on contracts that were completed up until now, although that had not been done in any assumption or information given to him. He agreed he was aware that building projects were delayed and disrupted or the subject of extensions of time and that there could be a change in his "bottom line" figure if some such matters occurred. Mr Jugmans' failure to explore these matters further cause me, in part, to consider his evidence with some concern.

306 At Tp.358 he said he did not deal with DA4 on a risk of delay basis, because he did not consider the cashflows on DA4, which he described as "the actual case". He was asked about the differences between DA1 and DA4 and, at Tpp.359-360, he agreed that as DA1 was never built one could not know what would have happened except by estimates and likelihoods, and further that estimates and likelihoods are also the means by which one might reach a conclusion now about what will happen in the future to DA4. The cross-examination continued:-

"Q. Whether these particular apartments would have been attractive or not attractive on the actual market we now know about for DA1 is itself a matter of estimate rather than knowledge; do you agree?

A. Yes.

Q. Is one of the reasons why you prefer to take only land value into account when comparing the actual to the hypothetical case because of the uncertainties of the future, including the risk that a building contract might be delayed?

A. Yes, that is a risk factor.

Q. That of course is exactly the same component of risk as continues to apply to the hypothetical case, DA1, isn't it?

A. That's correct.

Q. So that doesn't justify altering the nature of the figures to be compared, does it?

A. That's correct."

There was an inherent inconsistency in this evidence, which meant, as Mr Jugmans agreed, that there was no justification for altering the figures because of that risk element. Once again this causes me to ponder on the approach he took and the methodology he adopted, in so far as it differed from Mr Bryant's approach.

307 Mr Jugmans agreed that if the timing in relation to 102(2) was as actually occurred he would have to take into account different timing, which would lead to a considerably different assumed completion date, because he had assumed that by 21 October 1996, under a contract entered into on 12 January 1996, building work beyond excavation would be well advanced, and that other factors could affect timing, as to which he said he had not been given any information, although he continued:-

"Q. But it must be implicit in what you have assumed about completion date in accordance with the building contract entered into in January 1996 a further assumption of yours that BA plans, DA plans and building contract plans were in conformity with each other to the extent necessary to allow lawful work to proceed; is that right?

A. Well, yes, it is. I mean, I never considered it that way.

Q. It must follow, must it not?

A. I'm sure it does.

...

Q. To be quite clear, you've never been asked to assume anything about dates when sets of plans were brought into conformity sufficient to permit lawful building work; is that right?

A. No, I haven't made any assumptions in that regard."

308 Pausing there I find the failure by Mr Jugmans to consider those matters somewhat extraordinary. Perhaps it is fairer to Mr Jugmans to say that it is strange that he was not asked to make any assumptions about those matters, particularly having regard to the evidence of Mr McGreevy. Central to any concept of a cashflow must be the period to which one is entitled to have regard. In the present case, having regard to the various complexities the hypothetical case would have raised, I would have expected a person seeking to ascertain the period within which the building would be erected to have made assumptions on the various steps necessary to enable lawful building work to commence and to be completed, rather than simply taking a completion date by reference to a building contract. I accept that in some cases that may have been a permissible course, for example if either all the necessary approvals had been given or would have been given without any real difficulty. However, that was not the present case. I also find it difficult to accept that it is not appropriate to take into account the risk of delays, disruptions and other exigencies of building work, particularly having regard to the scope of the building work, in determining the reality of the contractually stipulated completion date.

309 Mr Jugmans was then taken to the marketing of the units off-the-plan. He said he had made an assumption that some of the configurations of some of the units had to be changed, which would affect the selling prices by reducing them or leading to concessions being made to potential purchasers, who had already paid deposits. He agreed there were risks in selling off-the-plan, including the risk that potential purchasers would not proceed if there was a change in configuration, but he said that in looking at the risks under DA1 he assumed that if one purchaser was not going to complete the contract as a result of a change another purchaser "would be fairly easily obtained to replace" the first. He agreed this meant that he assumed a total take-up, but he was not prepared to make the same assumption in relation to DA4 because he believed that the economic conditions at the completion of DA4 "may well be different to the economic conditions that exist when DA1 was supposed to be completed". He agreed economic conditions change and, in relation to this building, that it is on a very good site, so that it should be most attractive to purchasers, and that it was going to be a top class building, thus leading to a top class building in a desirable residential area. I am not satisfied that there was any intellectually sustainable reason why one would not apply the same risk considerations to each building. Mr Jugmans did not supply any.

310 At Tp.364 Mr Jugmans said that it was his understanding, from information he received from Dr Quek or somebody that worked for him, that the plaintiff would have had the benefit of work continuing towards completion of an amended DA1 project continuously from 28 June 1996. This assumption was inconsistent with the evidence of Mr McGreevy. He said that was not included in his report as an assumption, and he did not recall anyone telling him to assume anything about the capacity for 102(1) to be approved at all. He agreed, as I understood his evidence, that if 102(1) did not have the capacity to be approved, and without such approval building work beyond excavation could not proceed, that would make a difference to the way he proceeded to his bottom line from a timing point of view. He agreed timing was critical in the sense that calculations must be made depending on timing, and that it would make a difference to critical timing if he were to assume that 102(2) was properly and reasonably refused. He said that he had not performed calculations or expressed any bottom line which took into account those possibilities.

311 Mr Jugmans agreed that if, contrary to his assumption about the relationship between DA1 and DA2, DA2 was not substantially the same as DA1 and was for a different development, that would alter his approach to the bottom line as the selling prices and the costs of construction would be different.

312 At Tp.366 Mr Jugmans agreed that underlying his report was the notion that but for the tort DA1 would have been exploited by the plaintiff. I do not accept that DA1 provided the approval vehicle through which the plaintiff would have developed. Thus a primary assumption on which Mr Jugmans proceeded has not been established. He said that part of his reasoning in paragraph 1.16, where he set out the assumption, included DA2 as part of a coherent scheme or sequence by the plaintiff towards exploitation of DA1. He said he also assumed that the form of and the necessity to make DA2 was brought about to accommodate the invalidity of DA1, which was the reason why he treated it as part of the timing sequence "which financially you opine is to the account of the defendant". This assumption does not accord with the evidence I accept, viz that DA2 would have been lodged irrespective of whether the Council was negligent.

313 He also said that, subject to questions of mitigation, if DA2 was different from DA1 he would take it out of the timing and financial consequence of DA1's invalidity, and that he was not asked in relation to the matters noted in paragraph 1.16 to assume anything about the content of DA2 or the reasons for its rejection by the Council and the Court. Nor was he asked to make any assumptions about the content of DA3, the reasons for its refusal by the Council, or the outcome of DA3 after that refusal. He assumed that the lodging of DA3, and the persistence with it to the point of a Council refusal, was part of a coherent scheme by the plaintiff to try and achieve what it had lost by the invalidity of DA1, and, if that assumption was not available, he agreed that matters to do with DA3, including delay costs referable to it, should not be put to the account of compensatory damages payable by the Council.

314 In relation to DA4 he assumed that the plaintiff did everything in its power to in fact get on with the building.

315 Mr Jugmans agreed that timing was a factor to be taken into account, but he would not agree that it was critical in that it could make a difference between loss or no loss. At Tp.370 Mr Jugmans agreed that he had not done any calculation of the element of loss critically dependent on the timing assumed, otherwise than upon the timing assumed in the passages set out in Section 1 of his report as updated with the knowledge of the BA for DA4.

316 At Tp.371 Mr Jugmans said that there was nothing he wished to change about the expression of assumptions in paragraph 4.1, which assumptions he agreed were fundamental to the expert opinion he had given attributing certain financial consequences as damages payable by the Council. He agreed that in paragraph 4.2 he went straight from DA1 and BA1 to 102(2), but he said it was not a matter of significance that he did not refer to DA2 and DA3 in that part of his report. He maintained that he regarded them in order for their costs consequences to be to the account of the Council, as necessary to be seen as attempts by the plaintiff to get the benefit of what the invalidity of DA1 took away.

317 He said that he had not been asked to make an assumption about the completion date for DA4.

318 At Tp.372, somewhat contrary to what had occurred, Mr Jugmans agreed that if he thought it fair or sensible to use the contractual date for completion for the DA1 hypothesis, then, when looking to the future of DA4 to make a proper comparison, he would do the same for it. It is clear he did not. This was another unsatisfactory aspect of his evidence.

319 Mr Jugmans said that he did not assume that approval was given to 102(1), but rather to 102(2) which was some time after 21 October 1996. He continued, Tp.373:-

"Q. It is just silly, isn't it, for your opinion to be expressed on an assumed timing that prevents anything lawfully being done until some time after 21 October 1996, apart from excavation; is that right?

A. Well, if that's the case, if that's correct and that no building could take place until whatever date it was and that changes the timing of the completion of the contract, then, as I said before, I would have to change the timing of the figures that I've used.

Q. It throws out the only way you've calculated damages, doesn't it?

A. It throws out the timing of the damages, yes.

Q. That's the only way you have calculated damages?

A. It's the only way - yes, that's right."

320 The various concessions made by Mr Jugmans, including the one to which I have just referred, and the elements of his evidence which were, in my opinion, properly the subject of attack and to which I have referred, were used in submissions to support the proposition that whatever might be the figure at which he arrived, it was not sufficiently certain to allow the plaintiff to submit that it had established its damages on the balance of probabilities. In my opinion this submission, which is supported by certain further evidence of Mr Jugmans to which I shall refer, should, generally speaking, be accepted.

321 Mr Walker then cross-examined Mr Jugmans about paragraph 5.1 of his report and paragraph 5 of the 5 March 1999 statement. He said he was sure 5.1 was the same as paragraph 5 in the 5 March statement, and that he studied paragraph 5 closely before signing it. He was asked about the statement of cashflows "that have and will be achieved" by the plaintiff as a result of the tort. He said they included DA4 cashflows, and it was then put to him that DA4 was the only known source of cashflows that the plaintiff would achieve, to which he replied that the difference in taking account of DA4 is that he had taken account of the value of the site of DA4 as it is now, and Mr Bryant had taken account of the cashflows that will emanate from the building of DA4.

322 Mr Jugmans agreed that the only cashflows to be achieved would be by exploiting DA4 either by completing the building or selling the site, and that paragraph 5.1 of his report was consistent with that. He continued that it was one of the reasons why he did not look at the development for eventual sale under DA4 as the proper point for comparison, because of a perception that the risk differed between DA1 and DA4. He advanced another reason, namely that the plaintiff has a choice, as he understood it, to either sell the site or to continue with the development, but he then conceded, as must have been obvious, that that was a possibility if there was a development under DA1. Indeed he conceded it was "as much a possibility": Tp.376. When pressed that the choices were exactly the same for DA1 and DA4 he intruded into the discussion questions as to whether the Foreign Investment Review Board would grant approval, and this led to his saying that he knows now that the plaintiff has the choice to sell the land in its present condition because Dr Quek told him of that in the last couple of months. He was reminded that he had said that he did not want to change any of the assumptions at the commencement of the cross-examination, and that there was no reference to this particular matter as an assumption. All of this disintegrated when Mr Jugmans conceded that he had not been given any instructions, nor had he made any assumptions, about the position being different for the hypothetical amended DA1. He was further cross-examined about the possibility of compliance with Foreign Investment Review Board requirements for selling an amended DA1 and he agreed, ultimately, that it was not available as a reason to justify the approach in 5.1 of his report that there was in fact Foreign Investment Review Board approval for the sale of DA4.

323 If I may say so with great respect to Mr Jugmans, I found his attempt to differentiate on this particular ground, which was covered in cross-examination particularly at Tpp.379-380, quite unconvincing, and it led me to the conclusion that in certain material respects Mr Jugmans was not comparing like with like in making an assessment of the hypothetical positions which obtained under DA1 and which now obtain under DA4. The type of difficulty, which confronted Mr Jugmans, was exemplified at Tp.380:-

"Q. But everything is hypothetical about DA1, isn't it?

A. Yes, it is.

Q. Well, why does that justify treating them differently?

A. Treating, what, the assumptions on DA1?

Q. Yes.

A. I'm not treating any of the assumptions on DA1 differently."

324 Mr Jugmans was cross-examined at some length about using the value of the land without a development. He said that but for the tort he assumed there would have been development, and that after the tort he still assumed there will be development. It was put to him that in those circumstances the comparison would appear to be between developed land in a hypothetical case and developed land in the actual case, which he said was the approach that Mr Bryant adopted. He said his approach was slightly different. He did not agree that the comparison was between the hypothetical no tort development and the yet to happen tort development. He said the damages are the difference between the hypothetical development and what the plaintiff has today, which is either the value of the land or the value of the profit that will ultimately be achieved. He agreed that none of the assumptions in his report justified a different approach to the risk of building development and sales for the hypothetical DA1 from the yet to happen DA4, and that in that respect he ought, if he was being intellectually consistent, to treat them as similar for the purposes of his calculations. He agreed that for the hypothetical situation he assumed what did not happen, namely completion of an amended DA1 to the point of paying the builder everything and getting all the money from the purchasers. It was suggested to him that to be intellectually consistent he should do the same in respect of DA4 and he agreed that is the alternative calculation. He also agreed that was picked up in paragraph 5.3.

325 Mr Jugmans said that effectively the exercise conducted was to compare what would have happened under an amended DA1, and what is likely to happen under DA4, to adjust the time and to see what result is produced. However, he agreed that he had done the second part of the comparison not by a cashflow in relation to the plaintiff's stated likely gross realisations, "but by simply plugging in a single and inscrutable figure called market value". Mr Jugmans sought to defend that approach and he was then asked why it was not done by taking the market value of the land with the benefit of the amended DA1, which he said was a way "of doing it" which he accepted, and he continued:-

"Q. To be intellectually coherent you'd want to do that as an expert, wouldn't you?

A. Yes, I accept that that is correct.

Q. You've not done it, have you?

A. That's correct.

Q. What you have done is to jumble up two different approaches whereby you have risked comparing things which are not alike, do you agree? Do you agree?

A. The methodology is certainly different in that regard.

Q. What I've said to you may be unkind but is accurate; is that right?

A. If it was absolutely certain that DA4 would be developed and that DA4 would not be sold, then I accept your proposition.

Q. What makes anything about your assumptions for amended DA1 absolutely certain?

A. Reasonably certain then, not absolutely certain - reasonably certain.

Q. They enjoy the same degree, do they not, of risk; you've agreed with that?

A. They do.

Q. Returning then to what I've said, to use a cashflow approach on one side and a land value approach on the other side is to risk jumbling concepts and comparing some things which are not like; do you agree?

A. Yes, if they are all on reasonable assumptions, yes.

Q. Does it affect any of your evidence today if you're asked to assume that Lavender View Regency presently intends to develop the land in accordance with DA4?

A. Sorry, would it affect ..

Q. .. any of the evidence you've given today if you are asked to assume that Lavender View Regency presently intends to develop the land in accordance with DA4 at this present time?

A. Well, then I would take the deduction not being the value of the land as it is now; I would take the deduction as being the profit or loss that may be achieved in DA4.

Q. Mr Bryant's approach?

A. That's correct": Tpp.386-387.

This cross-examination revealed several basic flaws in the reasoning adopted by Mr Jugmans. He was undoubtedly "jumbling" concepts. He was forced to agree that on the only hypothesis I understand to be put forward, viz development and sale pursuant to DA4, he would follow the reasoning of Mr Bryant.

326 No evidence was given by the plaintiff that it intended to sell the land before completing DA4. Until Mr Jugmans mentioned the further instructions or information he had received from Dr Quek about receiving the Foreign Investment Review Board's approval to the sale this matter had not been raised. Dr Quek gave no evidence that this is what the plaintiff proposed to do: nor did anyone else on its behalf. In those circumstances it seems to me that the only reasonable assumption is to proceed on the basis that the development will be completed and, accordingly, on the concession that Mr Bryant's basic approach is correct.

The Evidence Of Mr Mark Bryant

327 The witness statement of Mr Mark Bryant of 23 February 1999, is Exhibit 18. Mr Bryant is a chartered accountant and the partner in charge of Messrs Arthur Andersen's Dispute Analysis Practice in the Asia/Pacific Region. As with Mr Jugmans his qualifications were not in issue.

328 In Part A of his report Mr Bryant set out his instructions and, in Part B, a summary of his major conclusions. In paragraph 15 the report stated:-

"We have calculated damages by comparing the profits LVR" (the plaintiff) "would have earned with DA1 approval (using NSC" (the defendant's) "assumptions as to chronology) with profits that will now actually be made (assuming DA3 application did not take place). This method calculates damages as negative $1,933,000. That is, LVR is now $1,933,000 better off than it would have been had it:

not suffered the delay from NSC's action; and

not submitted the DA3 application.

Our calculation includes interest or discount to 28 February 1999.

Details of how we calculated this amount, and the other calculations we were asked to perform, are contained in Sections D to F of our report."

329 In paragraph 16 Mr Bryant asserted that Mr Jugmans had used inappropriate methodology, principally in that he double counted costs of $33m, which he classified as "wasted" or "non recoverable"; that he failed to compare like with like, in that he added in the profits which he calculated would have been made from a developed site, but deducted the current value of the undeveloped land, rather than deducting the profits that are likely to be made from the current development; and in that he sought to compensate for loss of use of money by reference to a hypothetical, and very profitable, additional development, which he was asked to assume would have occurred had "The Colonnades" project not been deferred. It is not necessary to be concerned with this last matter as opportunity loss is not pursued.

330 In Section C Mr Bryant carried out verification procedures on income and expenditure and classified expenditure and, in Section D, he set forth profits that would have been made and that will now be made based on the plaintiff's chronology.

331 In paragraph 30 Mr Bryant summarised and calculated the profits that the plaintiff would have earned from a development of the site, but for the actions of the Council, and the cashflows that have actually occurred and are now predicted. The first matter dealt with is the chronology of the plaintiff which forms Appendix 4 to the Report. That chronology commences with the marketing of units in May 1995 and concludes with contract completion on 3 February 1998 and sale funds being received in full in April 1998. It also contemplates 102(2) having been lodged on 5 March 1996 and approval to it being given by the end of May 1996.

332 In Section E Mr Bryant calculated the profits that the plaintiff would have earned from a development of the site but for the actions of the Council, and the cashflows that have actually occurred/or are now predicted (adjusted to remove the actual costs of the plaintiff's DA3 application) all based on the Council's assumptions as to chronologies attached at Appendix 7. Appendix 7 provides for a chronology of DA4 being lodged on 16 December 1996 and funds received in August 1999.

333 In Section F there is a commentary on Mr Jugmans' report and, in paragraph 65, a particular criticism that Mr Jugmans' methodology, even after adjusting to remove the double counting of "non recoverable" costs, does not compare like with like.

334 In his evidence in chief Mr Bryant described what he understood to be the Council's primary case as being portrayed in Section E of his report. He continued, Tp.450:-

"In essence, that is that, based on the chronologies with which we were then instructed and the figures with which we were then instructed, that Lavender View is essentially in a very similar position now as it would have been; in other words, it is now completing a building, and on the chronology we have been given that had there been no tort and also had Lavender View not pursued DA3, it would be in much the same position as it now is. That is my understanding of the defendant's primary position."

335 In its written outline of submissions on damages the plaintiff asserted, correctly, that Mr Jugmans and Mr Bryant agreed that its losses were to be assessed by comparing its present position with that it would have enjoyed but for the Council's wrong, and that those losses are to be established by quantifying the difference between "actual" and "hypothetical" cash flows. It was submitted, once again I consider correctly, that the cash flows are to be compared, so far as possible, "on a like basis, and that the principal difference in principle between the experts:-

`.. is whether the plaintiff's actual position should be established by taking into account, in the relevant cash flow, the present value of the land or the estimated proceeds of the development of land'."

336 In dealing with this difference it is, in my opinion, important to note that the suggestion that the land would be sold rather than developed pursuant to DA4 was never made by or on behalf of the plaintiff, but was a matter intruded into the evidence by Mr Jugmans in the circumstances to which I have referred.

337 It was submitted that in considering that issue it is crucial to bear in mind that the exercise of determining the "actual" cash flow, being the cash flow based on the assumption that DA4 will be completed, involves establishing the present value of the calculated future cash flows. Reliance was placed on the evidence of Mr Bryant at Tpp.459-460. In that evidence Mr Bryant said that it is necessary to establish the present value of the cash flows or the difference between them, although in that circumstance it is not appropriate to make an allowance for risk. He agreed that one needed to determine what the cash flows will be; then at a point of time the positive or negative effect of that to determine whether there will be a positive income stream; and then to establish the present day value. He further agreed that the establishment of the present day value involved discounting for the time factor, although he said it did not involve discounting for the risk factor. He conceded that if he was carrying out the same exercise for the sale of a business he would discount for the risk factor "wherever there was a risk apparent". He was asked whether it was not appropriate to carry out that exercise in the present case because he was comparing the outcome of one hypothetical development with another hypothetical development and he said:-

"Yes. It did occur to me that you could attempt to apply a risk - a discount for risk for both, but in this circumstance it seemed to me more appropriate to leave both of them as raw cash flows and discount only for time value of money",

which, he agreed, meant there was no "risk weighting at all". He repeated that he had "simply excluded risk from both calculations".

338 At Tp.461 he agreed that in terms of valuing the present opportunity from an accounting viewpoint he would normally advise that there should be a discount for risk, which would involve giving consideration to the circumstances which might bear on that. In relation to the development of land he agreed that risk factors would be whether it could be carried out for the contracted costs, within the contracted time, and in circumstances where purchasers proceeded to complete. He agreed a fourth factor was the ability to sell all the units. He gave his reasons for excluding risk thus:-

"Q. In the comparison which you're undertaking, you would say, would you not, that those two matters - DA1 in the past, DA4 in the future - in effect cancel out?

A. Yes.

Q. On the basis, as you understand it, it is the same builder, similar contractual terms, etc?

A. Yes.

Q. So we can exclude that?

A. Yes."

339 He was then taken to the risk of purchasers defaulting and of sales not occurring. He agreed these would depend on economic conditions and, so far as future sales are concerned, some degree of speculation. Mr Bryant agreed he had not investigated these matters because he had been asked to assume that the degree of risk in relation to DA1 and DA4 is the same. At Tp.467 he agreed that if I were to conclude that the degree of risk is not relevantly the same for the two developments his exercise did not disclose how to reflect that degree of difference of risk.

340 Mr Bryant said he did not think the development pursuant to DA4 gave rise to the prospect of any loss, although he agreed, as is obvious, that this depended upon the assumed figures as to time and inputs.

341 He agreed Mr Jugmans' approach of taking the current land value left profit and risk elements out of consideration, although he either qualified or added to that by saying that it did not leave out the profit on the development, so much as leave out the remaining cash flows "and the remaining cash flows on any view of what is occurring are a substantial positive number".

342 It was submitted that the comparison of the plaintiff's actual and hypothetical positions involved an element of speculation or contingency in the sense, so far as DA4 was concerned, of completing "in time and on budget". Precisely the same contingencies applied in relation to DA1 and the point made by the Council is that one cannot ignore them in relation to one development, which never went ahead, and take them into account in respect of another development, which is going ahead. In the hypothetical situation one would have to allow for the vicissitudes and contingencies as in the actual situation. It does not seem to me to be an answer to this to submit, as the plaintiff did, that:-

"The only reason in principle which has been advanced or which can be advanced for failing to do so is that exactly the same contingencies, in exactly the same degree, attend the calculation of the hypothetical position."

343 In the absence of any evidence to the contrary, the onus in my opinion being on the plaintiff to produce such evidence, there is no reason why such an assumption cannot be made. This is pointed up by the further submission of the plaintiff:-

".. that if the risks attending the hypothetical situation can be distinguished either in identity or in degree from those attending the actual situation then the basis upon which Mr Bryant has calculated the plaintiff's damage is flawed so that, even if the assumptions as to time underlying it are established, it cannot be relied upon."

344 The fact is, however, that no such distinguishing elements were identified. Mr Jugmans had made no assumptions as to what would have happened: Tp.357.

345 The plaintiff's submission continued that the risks attending the two developments "are undoubtedly of the same kind", but "they are not the same in degree". There is no evidence to support this, nor to support the further submission that if DA1 had commenced at the latest by June 1997 it would now be complete and, even if construction did not commence until December 1997, it would be substantially complete. This submission is founded upon the following:-

"We know how the building industry has performed over that time and we know, as historical data, the circumstances that might have affected completion of the project in time and on budget. The same cannot be said of the completion of DA4."

If I may say so, with the greatest respect to the submission, this is pure speculation, as is any prognostication about the carrying out of the building work pursuant to DA4.

346 The submissions nextly turned to the real point of difference being the sales histories of DA1 and DA4. Reference was made to the evidence which showed that in the first four and a half months of sales off the plan of DA1 (as modified) sixty two contracts were exchanged totalling $32,569,970 in value. This was said to be 31.5% of the total value of the units and was contrasted with the position under DA4, which shows that thirty five units were sold for the first four and a half months with a total value of $18,291,450. This amounts to some 14.7% of the total unit value, and there has been, from the evidence, discounting of list prices.

347 It was further submitted that it was not appropriate to compare the two cash flows as though the risk element was the same in degree in each, because the evidence shows "very significant factors", which would require further investigation "and might warrant a revision of the assumption as to parity of risk". The submission continued:-

"Since that exercise has not been carried out the plaintiff submits that it is inappropriate to allow the defendant, being the wrong doer whose conduct has caused the plaintiff to suffer loss, to have the benefit of that risk and to put the plaintiff to bear that risk. As between a party who is innocent and a party who is admittedly guilty, any risk should be assessed against the guilty party."

In response Mr Walker submitted that this was a bold forensic approach, because it accepted that the plaintiff had not proved that there was any greater risk factor. This submission seems to hark back to the Houghton submission, which I have rejected.

348 In my opinion the onus was on the plaintiff to establish that the various risks about which it makes submissions will, as a matter of probability, come to pass, whereas that would not have occurred in the hypothetical case. Thus it was for the plaintiff to compare the situation which would have existed on the assumption that DA1 had been built, with the risk which attends the building and sale of DA4.

349 Finally, on this aspect, it was submitted that Mr Jugmans' approach effectively eliminated risk and should be preferred. On the other hand Mr Walker submitted that Mr Jugmans did not take that approach, but embraced risk and equalised it by putting all the risk factors into DA4 and none into DA1. In my opinion, the submission is correct.

350 In relation to loss of opportunity the plaintiff submitted that it accepted that its loss of opportunity damages should be measured by applying to its loss of proceeds from DA1 an interest factor. It submitted the difference between Mr Jugmans and Mr Bryant was whether that factor should be calculated at the cost of bank funds to the plaintiff, as Mr Bryant maintained, or the intra group loan rate, as Mr Jugmans maintained.

351 The reason for Mr Bryant's approach was that this was a more usual way of calculating the interest component. However, the evidence satisfied me that in this case interest was based on the way in which the plaintiff borrowed its funds and, in these circumstances, the Council being obliged to take the plaintiff as it found it, and there being no suggestion that the interest rate was devised at some later time, the rate should be that contended for by the plaintiff. Further, on this aspect, there is no suggestion that the interest rates claimed are so far away from bank interest rates as to be treated as artificial or unacceptably high.

The Agreement Between The Valuers

352 Exhibit 16 is a document evidencing agreement between the valuers, which shows that the agreed figure for the gross realisation of the units being built pursuant to DA4 will be $90.25m, and that as at 31 January 1999 the value of the site with the DA4 approval is $16.25m. It also shows agreement that DA1 with 102(2) approval would have realised $100m. This assumes, contrary to the view to which I have come, that 102(2) approval would have been obtained either from the Council or the Court.

353 The first mentioned figure reduced the gross realisation shown in Exhibit 5 of $93,653,650 by some $3m. Exhibit 5 was an analysis of units sold from 20 October 1998 to 4 March 1999.

Exhibit 17

354 Exhibit 17 comprises four facsimile transmissions of 7 March 1996. The first is from the solicitors for the plaintiff to the plaintiff enclosing a copy of a letter from them to Dr Quek of that date. In that letter the solicitors told Dr Quek that they had advised the then solicitors for the Council that there was a serious issue as to the validity of DA1; that the plaintiff had no desire to engage in any conflict with the Council which could be avoided, and that the heavy liability which the Council may have for a void development approval must be apparent to it; and that the course most likely to reduce the Council's liability and to enable the plaintiff to proceed was for the plaintiff to lodge a new DA, it being in the interests of the parties to "agree" in principle upon the terms of the DA to be submitted.

355 The letter stated that a meeting was to be held with the Council on 8 March 1996, and continued:-

"It is critical that LVR can at that time identify in precise terms, in writing and without any ambiguity, what the proposed Application will contain. Otherwise when it is lodged the officers, if they wish to resile from the views they state in the meeting, may well assert that the lodged application is different from what was discussed at the meeting."

It is somewhat strange that the plaintiff's solicitors were making this point to their client if there was no doubt how the plaintiff proposed to proceed. However, of significance was the reference to a new DA, and the absence of reference to an application pursuant to s.102. This may well be explicable in the light of the challenge to DA1.

356 The next facsimile was from the solicitors for the plaintiff to the secretary of the plaintiff referring to the letter to Dr Quek and stating that he believed it was essential that a meeting take place with the Council and its solicitor "with a view to having council `agree' to the development application which we propose to submit".

357 The letter continued that the writer could not agree that there was any point in the meeting until the plaintiff "is able to state precisely and in writing what the application will contain". It continued:-

"Dr Quek's view is firstly that this can be given to Council now and secondly that he does not want to finalise the DA documentation until after the meeting at which Council indicate its views. As I have said in the letter to Dr Quek the danger is that any uncertainty about what the application will contain will enable Council officers to resile later from their `agreement' at the meeting that it is unobjectionable.

.... Dr Quek has confirmed to me, with some emphasis, that you will be able to arrange for the preparation of final application drawings within a day or so of the proposed meeting. I am pleased to hear that is possible." (My emphasis.)

This made clear that a development application would be pursued. Of more significance, in my opinion, was the clear indication that the plaintiff had not finalised what was to be built.

358 The next facsimile transmission from the solicitors for the plaintiff to the then solicitors for the Council confirmed that the plaintiff intended "to lodge a further development application as a matter of urgency and certainly within the next few days". It continued:-

"We have previously touched upon our views as to the consequences for Council and our client of the consent being void. Those consequences will be mitigated if the application is made in a form which meets the requirements of both our client and Council and is dealt with expeditiously.

For that purpose our client requires a meeting with Council officers (with or without lawyers) to communicate with precision the content of the proposed application and to enable Council officers an opportunity to indicate their views upon the application and to indicate any changes which they consider should be made. Any amendment our client considers necessary can then be made prior to submission of the application.

In view of the gravity of the issues at stake and the extent of likely losses if further delay occurs, we ask that prompt communication between our officers be maintained."

359 Both parties sought to rely upon this correspondence. The Council's point, it being the party tendering the correspondence, was that the correspondence made it clear that the plaintiff intended to file a further development application. There can be no doubt about this. The question was why there was a necessity to do so. The plaintiff's submission was that that arose because of the challenge to the validity of DA1, which would have rendered an application under s.102 of no value if DA1 was ultimately found to be void. However, I am of the opinion, based on the evidence of Dr Quek and the material to which I have referred, that it was always the intention of the plaintiff to lodge DA2, rather than to seek to exploit DA1.

Conclusions On Causation

360 I shall return to the questions posed by the Council, which I have set forth in paragraph 18. I am satisfied that the submissions recorded in sub-paragraphs (a), (b) and (d) should be accepted. I have set forth my reasons for reaching those conclusions. I am also satisfied, for the reasons I have given, that 102(2) would not have been approved by the Council if it had been submitted in March/April 1996 or in October 1996 and that the Court would not have upheld an appeal against Council's decision. There is no reason to suppose that the Council's attitude to 102(2) would have been any different in March/April 1996. Even if an appeal had been brought from the determination by the Council by refusal of 102(2), if lodged in March/April 1996, I am not satisfied that it would have succeeded. In my opinion, the consistent refusals of a development until DA4 make it impossible to conclude, on the balance of probabilities, that the Court would have approved 102(2) at any relevant stage.

361 My conclusions, as appear from my detailed reasons, are based on my findings that the plaintiff did not intend to pursue DA1 development and elected, in lieu thereof, to proceed with DA2 seeking a substantially similar development. In the hypothetical case either situation put the plaintiff back into the hands of the Council and, therefore, potentially the Court. The plaintiff's determination to maximise the development was demonstrated by its failure to heed Mr Darroch's advice in relation to size and bulk, and Mr Andersons' advice when DA3 was being prepared.

362 For these reasons I consider that the plaintiff would, in the hypothetical case, have pursued the same course as it did in the actual case, with the consequences that DA4 would have been approved when it was. Accordingly, the plaintiff has not established that it suffered any substantial loss as a result of the Council's negligence.

Award of Damages

363 On 1 July 1999 I was furnished with a document entitled "Revised Summary of Plaintiff's Damages" by the solicitors for the plaintiff. The letter stated, inter alia:-

"We refer to the plaintiff's application made following the hearing in this matter to have the parties' experts meet to review certain of the previously agreed figures provided to Mr Justice Rolfe during the course of the hearing between 8 and 15 March 1999.

Pursuant to the granting of that application, the experts have met and the parties have agreed revised profit figures which are contained in the Revised Summary of Plaintiff's Damages.

The Revised Summary has been marked up for ease of reference so that the amendments to the original figures, which were contained in a document handed up in Court on 15 March 1999 and entitled "Summary of Plaintiff's Damages", can be readily viewed.

The revised profit figures which have been agreed upon by the parties are based upon the revised construction cost figures which are contained within the joint statement of the parties' quantity surveying experts which is also enclosed with this letter.

The evidence enclosed with this letter concludes the evidence the plaintiff wishes to submit pursuant to the application detailed above."

The letter was also signed by the solicitor for the Council "to indicate the defendant's agreement to the contents of the attached documents".

364 In the plaintiff's written submissions of 15 March 1999 four different possible situations were put forward, they representing the various approaches taken to the case in the way it was fought, and the financial consequences which would arise depending on which approach was adopted.

365 The plaintiff's primary position was that development would have continued on the basis of DA1 modified by s.102(2) without any significant interruption. That assumed that 102(2) would have been submitted in about March 1996 and approved by the Council relatively shortly thereafter.

366 This is a submission which I have rejected, and I have also rejected the further submission subsequently made that there would have been an appeal if the Council had refused 102(2), which appeal would have been successful. However, if contrary to the view to which I have come, the view is taken that the plaintiff has established this position the parties are agreed that the losses sustained by the plaintiff would have been the various figures set forth in the Revised Summary of Plaintiff's Damages, paragraph 1.1, subject to my acceptance of various evidence.

367 In paragraph 1.1.1 the damages are calculated on the basis that one takes into account the present value of the land, as Mr Jugmans did. For the reasons I have expressed I do not accept Mr Jugmans' methodology in this regard. I prefer Mr Bryant's approach that one looks at the calculated profit of DA4 and makes no allowance for the "additional unquantified risks attending" it, on the basis that the risk factors applied to both developments.

368 Another figure which has to be factored into this calculation is the appropriate interest rate. For the reasons I have given I prefer the approach that interest be calculated at shareholders' loan rates.

369 Applying these two findings, if I were otherwise of the view that the plaintiff was entitled to succeed on this basis, it would be entitled to damages in the sum of $24,840,000 and wasted costs in respect of the costs of the Class IV proceedings of $224,321.51. The entitlement to the wasted costs is not in issue, it being stated in the Council's written submissions of 22 March 1999 that if the Council's primary argument was accepted "then the plaintiff is entitled to recover its legal costs in respect of the Class 4 proceedings for DA1, agreed in the amount of $224,321.51".

The figures to which I am referring and to which I shall refer have interest calculated to 31 May 1999.

370 The second position for which the plaintiff contended was that the development would have continued based on DA1 as modified by 102(2), but with an interruption so that building work did not commence until 1 June 1997. For the reasons I have given I reject this contention. However, if it is one which finds favour elsewhere the agreed figures are, on the basis of the same determinations which I have made in respect of the first position, a loss of $13,084,000 together with the wasted costs figure.

371 The third position put forward by the plaintiff was the Council's primary position, namely that there would have been no development in accordance with DA1 and 102(2), and that the only development would have been carried out pursuant to DA4. That, in my opinion, is the correct conclusion.

372 The plaintiff has conceded that on this basis there is no loss of profit claim and, therefore, no loss of opportunity claim, but it asks for damages representing the costs incurred by it referable to DA2 and DA3, which, it submits, were steps reasonably taken by it in mitigation of its loss.

373 In my opinion the lodging of DA2 and DA3 was not taken in the context of mitigation of loss, but, rather, as a continuing attempt by the plaintiff, in the manner I have described, to obtain the type of building it wanted with as much saleable area as possible. They are steps, which would have been taken, even if there had been no negligence. In these circumstances I do not consider that the plaintiff is entitled to the loss referable to its submission of DA2 and DA3, but it remains entitled to the wasted costs.

374 If, contrary to the view to which I have come, it is considered that the plaintiff can recover damages on this basis, the agreed losses in respect of DA2 are either $6,973,000, if one includes interest at shareholders' loan rates to date, or alternatively $6,779,000, if one includes interest at Supreme Court rates to date. If I was of the view that the plaintiff was entitled to succeed on this claim I would include interest at shareholders' loan rates.

375 So far as DA3 is concerned, the respective figures are $3,524,000 and $3,424,000 and, if I was of the view that the plaintiff was entitled to succeed on this part of the claim I would have awarded $3,524,000.

376 The fourth position is the Council's fallback position, with which it is unnecessary to deal further. The figures appear in the schedule to which I have referred if, at any future stage, this is thought to be the appropriate amount.

377 In the result I am of the view that the plaintiff is entitled to its wasted costs of the Class IV proceedings in the sum of $224,321.51 with interest from 1 June 1999. The parties will have to calculate the amount based on my findings as to the appropriate rate.

Costs

378 The parties agreed that I should not, at this stage, make any order for costs. I shall, accordingly, reserve that matter for future agreement or argument.

Orders

379 I order:

(a) Judgment for the plaintiff in the sum of $224,321.51 with interest from 1 June 1999.

(b) Costs and interest be reserved for future agreement or argument.

(c) Matter stood over to Friday, 16 July 1999 for mention on the issues of interest and costs.

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LAST UPDATED: 14/07/1999