Jazabas Pty Limited v City of Botany Bay Council S100/2001 [2002] HCATrans 184 (19 April 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S100 of 2001

B e t w e e n -

JAZABAS PTY LIMITED

Applicant

and

CITY OF BOTANY BAY COUNCIL

Respondent

Application for special leave to appeal

GLEESON CJ

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 APRIL 2002, AT 9.56 AM

Copyright in the High Court of Australia

MR B.W. RAYMENT, QC: May it please your Honours, I appear with my learned friend, MR D.T. KELL, for the applicant. (instructed by Segal Litton & Chilton)

MR M.H. TOBIAS, QC: I appear with MS J.M. JAGOT, your Honours, for the Council. (instructed by Phillips Fox)

GLEESON CJ: Yes, Mr Rayment.

MR RAYMENT: Your Honours, the Council in this case belatedly recognised that having regard to the matters referred to in section 90 of the Environmental Planning and Assessment Act, because of what had been stated in a 1986 risk assessment study which was in their possession, a medium density residential development on land, including this land, was not reasonably capable of being approved. They established a rule to that effect in 1996, 10 years after they first got the study. The only evidence called in the case which came from the Council's own records was, essentially, to that effect.

In paragraph 220 of the judgment of the Court of Appeal in Mr Justice Fitzgerald's judgment at page 286 to 287 there is set out the terms of one of the Council's own documents of 1997 discussing the matter in relation to this very land:

it has come to the notice of the Manager - Planning and Environment that the site is within the boundaries of a risk reduction zone -

that is established in the 1986 study -

and given this situation, the knowledge of which surfaced after the granting of Consent, that the Building Application should not be determined or if determined, refused by reason of potential hazard implications.

It is also the position of the Manager, that had this information been known when the Development Application was lodged, the application would have been recommended to Council for refusal.

The matter continues in paragraph 221, a more senior officer expressing the same view and querying whether in truth it was known that the study existed or was relevant. In paragraph 235 on page 292 a report of Mr Dowsett is set out which describes the land as:

sterile to the development of the kind the zoning permits.

In the Land and Environment Court when my client appealed from the deemed refusal of its building application the Council's statement of issues, which is at page 290 in paragraph 229, concluded that it was impossible to build a building on the land which would be immune to the risks identified in the study. That is set out in paragraph 229. They say in (b):

The deficiencies referred to in (a) above are incapable of being remedied in that there are no reasonable or practical measures available that could make the proposed buildings and their curtilages safe for occupants in the event of a substantial release of toxic chlorine gas -

This land was 300 metres from storage tanks containing toxic chlorine gas.

GLEESON CJ: As I understand it, there was not in the Court of Appeal any difference of opinion about the existence of a duty of care or the scope of the duty of care. The point of departure is really on page 239 at paragraph 103, is it not, in Justice Beazley's judgment, and a similar approach in the President - - -

MR RAYMENT: Yes, that paragraph 103 in Justice Beazley's judgment is in her Honour's judgment, a short answer, as it were, to the case that we made. Her Honour said:

Mrs Cuthbert's answer -

when asked expressly by my client would there be any problem obtaining a development approval

"I don't believe so" -

her Honour says that that:

reflected the reality of planning approvals at the time.

That is, her Honour assumed the development application would at that time have been approved.

GLEESON CJ: The President deals with the same point on page 237, paragraph 96, lines 35 to 40.

MR RAYMENT: Yes. The point at issue in the case is whether when we ask is there any problem in obtaining development approval, having regard - - -

GLEESON CJ: A question that was asked in the context of an earlier document that had gone out. The question was, as it were, prompted by something that the Council had said, was it not?

MR RAYMENT: Yes. The Council said, "We want everybody to know that we have decided to prepare a development control plan for this land." And if you look at the terms of it, it is plainly on the basis that the very kind of development that they ought to have realised they should not permit was assumed to be a feasible development because they talk about residential flat development. No residential flat development at all should have been considered in respect of this land because of what was in the risk assessment study.

So, any consideration of the risk assessment study and this land producing the contemplation of a development approval was negligent and negligent on the basis of the materials which the Council itself recognised some years later, three years later. Of course, they led to the problems that the applicant in this case suffered. He was deferred and perpetually told - he was kept in the dark for four years about the true position and, finally, his building application was deferred and he had to appeal. The matter was only revealed, as it were, over the course of the next five years of holding the land and suffering loss when he could have been making profits elsewhere.

Your Honours, we would respectfully submit that the reasoning of Justice Fitzgerald - and I am only seeking to highlight the most important parts of this case - at paragraph 249 of his judgment on that same answer, "I don't believe so", is compelling. His Honour concludes, contrary to the view of the President, who, by the way, said there was no relevant duty of care in relation to this answer. The President was alone in saying there was no duty of care in this matter at all. But his Honour there had regard to the answer, "I don't believe so", when a question was asked would there be any problem in obtaining development approval and said that it was:

no different in substance from other common phrases which are to a similar effect, such as "I don't think so" or "not in my opinion".

We would submit that is plainly right. Those expressions are qualified only in the sense that they are not statements of fact but statements of opinion. For the President this was a qualified answer, talking about her own personal opinion, and there would only be liability, so his Honour seemed to have held, if that was not honestly her opinion. Whether it was a negligently held - - -

GLEESON CJ: The President I think regarded this as a very bold question that she was asked.

MR RAYMENT: Yes, he did, and we would respectfully submit that that is also a strange finding. Justice Fitzgerald said:

Statements of opinion do not attract liability in negligence merely because they are incorrect. Conversely, erroneous and ill-considered statements of opinion -

as this was -

do not avoid liability merely because they are not deceitful or intended to cause harm.

Contra the view of the President, in this case. That is one example, paragraphs 47 to 49 of the President's judgment.

GLEESON CJ: What did the President find the negligence consisted in?

MR RAYMENT: The President found there was no negligence.

GLEESON CJ: I am sorry, I meant Justice Fitzgerald.

MR RAYMENT: It consisted in two things. First of all, writing the letter which plainly we would submit on its face, and his Honour found, was written on the basis that the kind of development was not unfeasible having regard to the town planning circumstances of the land, that is, residential flat development. It presumed that the development in accordance with the zoning was feasible on the land from a town planning point of view. Secondly, the answer to the question, "I don't believe so", put the applicant off the scent.

There was a well-known impediment to the building of a residential flat building on the land stemming from a study which the Council had in its own possession. One must remember that Mr Tobias, in this case, called no evidence from the Council officers and we will never know the basis upon which Mrs Cuthbert said, "I don't believe so".

McHUGH J: Yes, but, Mr Rayment, these are just purely factual matters. Your submissions on this issue refer to one case and that is only, in effect, to compare such and such a case and then there is a reference to your Jones v Dunkel point.

MR RAYMENT: Yes, which, your Honour, I will come to.

McHUGH J: The case does not get within 20 miles of being a special leave case. It is just a question of fact.

MR RAYMENT: We would submit that the strength of the minority judgment in this case is such that your Honours would pay close attention to the minority judgment and we would submit that the case is appropriate for the grant of special leave either on the basis of the general questions of law which we have referred to or on the basis of the interests of justice in the particular case which I will come to. Your Honours, we would submit that 257 and 258 in Justice Fitzgerald's judgment, when compared with the statements of the majority in the case, are compelling.

Now, could I go to paragraph 36 of our written submissions on this question of why Mrs Cuthbert had to be called in the matter. There was a pleading relying upon section 51A of the Trade Practices Act in this case. In paragraph 36 we submit that there were a range of possible bases upon which Mrs Cuthbert may have said, "I don't believe so", and not having called her, the other side do not get to first base, we would submit, in discharge their onus of proof under section 51A. The President accepts - paragraph 84 of his judgment - that the representor must show:

* some facts or circumstances . . .

* on which the representor in fact relied

* which are objectively reasonable and

* which support the representation made.

The possibilities to which we refer in paragraph 36 were actually submitted by the Council to Mr Justice Rolfe as reasons why the negligence was not proven in the case. Mr Tobias submitted - and it is paragraph 181 of Justice Rolfe's judgment in volume 1 of the application book at page 109 - Mr Tobias actually put to his Honour that:

Mrs Cuthbert was given no opportunity to consider the impact of the RAS or to ascertain whether the land -

that is my client's land:

fell within the Risk Reduction Zone -

That was put forward to show that what she said was not negligent. Now, if either of those matters were relied upon by her and the question of reasonable grounds arose, the other side plainly had not satisfied their onus without calling her and indicating which of these various ones it was. Of course, if it was either of those, she had no reasonable grounds for her position. That, in our respectful submission falls into both categories here. It means that really this case has gone off on a wrong basis. That has been adopted, of course, by Justice Beazley, what is said by the President about section 51A.

The next matter we refer to - and it is similar - is this. You had in this case the De Gioia principle - the Jones v Dunkel principle but the De Gioia principle, in particular, that is, the question of whether there was a policy in this matter was a matter peculiarly within the knowledge of the Council. He had an onus with respect to the matter. The other side elected not to call the Council officers who would have given effect to the policy about whose minds, as it were, the suggestion that there was a policy was a remark.

In paragraph 39 of our written submissions we suggest that the case, as it were, proceeded on the wrong basis having regard to that principle in De Gioia which your Honour, the Chief Justice, in one of your judgments recently referred to, a case in 42 SR. If there is slight evidence about the state of mind of the other party, and that is the issue in the case, the Court is readily prepared to treat it as sufficient proof that there is a policy.

McHUGH J: I just do not follow that. It does seem to me De Gioia has anything to do with it. What De Gioia holds is that although in a particular case there may be a slight bit of evidence to get a case to the jury, the defendant tenders evidence which so neutralises that prima facie case that as a matter of law you can enter a verdict for the defendant. What has that to do with this case?

MR RAYMENT: Your Honour, the principle that we suggest emerges from it is that slight evidence will be enough to put the other party into evidence - slight evidence when it is a question of a matter within the knowledge of the other party is enough to put him into evidence.

McHUGH J: It has nothing to do with De Gioia. De Gioia is the opposite. De Gioia is authority for saying that notwithstanding that there is a prima facie case made by a plaintiff, nevertheless, when the defendant's evidence is complete there may be a verdict for the defendant, as a matter of law.

MR RAYMENT: But the remark is made that where the question is one within the knowledge of the other party slight evidence will be enough to put the defendant into evidence.

McHUGH J: What can put a defendant into evidence is a prima facie case, some evidence of negligence. You have to have evidence of negligence first. If there is nothing to contradict it, so what? De Gioia does not seem to me to have the slightest thing to do with this case.

MR RAYMENT: I will ask my learned junior to turn up the passage, if we quickly can. Your Honours, what we put about this matter is set out in paragraphs 39 and 41 of our written submissions. We submit this, that whatever you might say about the sports club application, we would say it was evidence that they had begun to apply a policy. Whatever you might say about the use of the risk assessment study to claim an exemption from State Environmental Planning Policy 28, they amounted to some evidence that there was a policy sufficient, having regard to the failure to call relevant witnesses from the defendant, to make the finding of the trial judge about whether there was a policy fully justifiable. May it please your Honours, those are the submissions we put.

GLEESON CJ: Thank you, Mr Rayment. Yes, Mr Tobias.

MR TOBIAS: Your Honours, this is no more than a question of fact. The applicant relies upon Justice Fitzgerald's judgment at pages 301 and 302, in paragraphs 257 and 258. His Honour's reasoning there is, in any event, flawed. It is flawed for the following reasons. Firstly, in paragraph 257, between lines 32 and 47, his Honour assumes that it is a given that the Council could not "consistently with s 90 of the EPA Act" approve a development application upon this land, notwithstanding the study. There was no basis for that assertion. The other side of the coin is his then finding that:

Unless a residential development of that character could reasonably have been approved on the land consistently with s 90, of the EPA Act, there was no reasonable basis for the statements - - -

GLEESON CJ: Was the planning and development application of the kind - this letter went out in the context of an auction of the land where developers were going to be likely to turn up.

MR TOBIAS: It did and it made it absolutely clear that at the time it was adopted the decision was taken to do a DCP for the land that the Council considered that the land should be appropriately developed for residential development of this kind.

GLEESON CJ: Yes. That is what I wanted to ask you, really, going to the merits. Was there a self-evident inconsistency between the RAS and development of the land?

MR TOBIAS: The RAS did no more than recommend that there should not be any increase in residential densities within the relevant zone. There was some doubt as to what precisely that meant. Did that mean any increase in residential densities over and above that which was then permissible under the relevant planning instrument or did it mean that there should simply be no further residential development? What had happened was, your Honour, that the Council had had it since 1985, between then and the time when the 149 - sorry, I think either before or just after the 149 - I am sorry. In 1995, after the certificate had been issued but before the development application had been approved, which was in June 1996, the Minister had made a new plan for Botany in which the land in question was continued to be zoned for residential purposes and that was notwithstanding that in the RAS it contemplated that planning schemes or planning instruments would, taking the recommendations into account, implement those recommendations which the 1990 plan never did.

GLEESON CJ: What ultimately happened here? There was actually a development consent.

MR TOBIAS: Development consent was granted in June 1996.

GLEESON CJ: Then it went to the Land and Environment Court in relation to the failure to give a building approval, did it?

MR TOBIAS: No - well, yes, but in between what happened was, and it is referred to in paragraph 208 on page 283, was that what happened that up until June 1996 the Council had been approving applications without regard to the RAS which was quite old at that point of time. The RAS itself proposed that it would from time to time be reviewed by the Department but at that point of time no review ever seems to have taken place. It was a departmental document.

What happened then was, as set out in paragraph 208, that in July 1996 there was a meeting between a departmental officer, Mr Haddad, and

Council officers in which Mr Haddad in effect said to the Council, "You have to apply the RAS" - said to the officers. Thereafter, as is set out in that paragraph, the Council agreed to seek departmental advice on every development application it received in respect of land within the relevant zone. The Department would then give advice as to whether it should be approved or not and - - -

GLEESON CJ: This being after the conversation with Mrs Cuthbert?

MR TOBIAS: Years after. The conversation with Mrs Cuthbert was at the end of 1993. This is July 1996, about a month and a half after the development application had been approved. Because of that change of policy, in the sense that a policy was then adopted to comply with departmental advice, when the building application was lodged, I think in late 1996 or early 1997 - I cannot remember the date but, in any event, after that point of time - the Council referred it to the Department, the Department advised that it should not be approved and the Council then got itself into the bind that it had the departmental advice not to approve it but it had already granted development consent.

It then did not make a decision. There was a deemed refusal and the applicant then appealed to the Land and Environment Court. The Council then considered itself obliged to call Mr Haddad from the Department who was pushing the RAS. He gave evidence that it should not be approved and the court did not approve it. This litigation was commenced. There was then an application to the Land and Environment Court appealing out of time against the assessor's decision on the basis that he erred in law in taking into account an irrelevant consideration at the building application stage. That was upheld. The building approval was granted and the land was sold, I think just before the case started before Justice Rolfe, with the benefit of the development consent and building approval.

GLEESON CJ: What has happened? Has it been developed?

MR TOBIAS: I assume it has. It was bought by a developer and I assume it has been developed. This was a single parcel of land within an already built-up residential area of Botany. There was no question, notwithstanding the RAS, of evacuating everyone. This was just a single parcel of land that had been vacant because the Council had been leasing it for a park. The owner then wanted to sell it and the Council did not want to buy it.

GLEESON CJ: Yes, thank you, Mr Tobias. Yes, Mr Rayment.

MR RAYMENT: Yours Honours, there are two matters my learned friend does not mention. The first is that the appeal in the Land and Environment Court was his appeal. He sought to appeal against - - -

GLEESON CJ: Yes, there was obviously some toing and froing by the Council.

MR RAYMENT: Yes.

GLEESON CJ: I noticed that in the papers, but what I might call the relationship between the Council and the Department seems to have accounted for some of what happened.

MR RAYMENT: But the material tendered showed that if you had a look at what the risks were that were identified in the study and you took them to be real risks, any permission to increase the number of persons exposed to such a risk would have to be crazy. If you look at what the Council itself did prior to the conversation with Mrs Cuthbert, on the basis of these very risks, for very nearby land there was an application for a sports club and it was refused because it would bring into the area of risk, which was the same area of risk that this land had, more people than before and create an evacuation risk if - - -

GLEESON CJ: Did your client sell this land to a developer?

MR RAYMENT: We just sold it with disclosure of everything that had happened in this matter.

GLEESON CJ: And with a building approval?

MR RAYMENT: With a building approval but with disclosure of what had happened in this case. Your Honour, my learned friend referred to the fact that the Minister had gazetted a scheme for the whole of Botany. That was no different from the interim development order which applied to the whole of Botany. It maintained the zoning but maintaining the zoning for the whole of the Botany area was in no way inconsistent with applying the provisions of the risk assessment study, as the Council in fact itself did. The question which we say should have been answered "Yes" in the first place, was answered "Yes" about whether there was a policy from 1996 onwards. May it please your Honours.

GLEESON CJ: This case turned on the application of settled principles of law to the facts and circumstances of the particular case. On the questions on which all three members of the Court of Appeal were in agreement, there is insufficient reason to doubt the correctness of their views to warrant a grant of special leave.

The principal point of departure between the majority and the minority in the Court of Appeal turned on the content or scope of the respondent's duty in the particular circumstances and whether in those circumstances certain conduct amounted to a breach of that duty. The difference of opinion on the latter point was essentially based on a different approach to the weight and significance to be attached to various factual considerations.

The view of the majority was reasonably open and the case does not give rise to an issue which would warrant a grant of special leave to appeal. Nor have the applicants shown that even if the case turned on its own facts the reasoning of the majority was affected by such error that the interests of justice require a grant of special leave. The application is refused with costs.

AT 10.26 AM THE MATTER WAS CONCLUDED