Port Stephens Shire Council v Gibson & Ors [2006] HCATrans 128 (10 March 2006)

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Port Stephens Shire Council v Gibson & Ors [2006] HCATrans 128 (10 March 2006)

Last Updated: 21 March 2006

[2006] HCATrans 128

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S537 of 2005

B e t w e e n -

PORT STEPHENS SHIRE COUNCIL

Applicant

and

BARRY ROBERT GIBSON AND JEANETTE OLIVEA GIBSON

Respondents

Office of the Registry
Sydney No S538 of 2005

B e t w e e n -

PORT STEPHENS SHIRE COUNCIL

Applicant

and

ROBERT ARTHUR BOOTH AND JANETTE JAY BOOTH AND MICHAEL WILLIAM BURCHER

Respondents

Applications for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 MARCH 2006, AT 9.56 AM

Copyright in the High Court of Australia

__________________

MR D.L. DAVIES, SC: If your Honours please, I appear for the applicant with MR A.M. PICKLES. (instructed by Riley Gray-Spencer)

MR J.E. SEXTON, SC: May it please the Court, in both matters I appear with my learned friend, MR R.D. MARSHALL, for the respondents. (instructed by Carroll & O’Dea)

GLEESON CJ: Yes, Mr Davies.

MR DAVIES: Your Honours, there are three points. In relation to the first, may I take you to the application book on page 336 to clarify what the first special leave question is. The matter has been raised in the respondents’ argument. There is no dispute that the Council owed a duty and the question should properly be expressed as, “If a local council is under a duty . . . whether any such duty . . . is discharged by” the 149 certificate. That is the first point we wish to make.

Your Honours, the point is simply that whatever was done at the time of the approval of the development application, that the warning contained in the 149 certificate was a sufficient discharge of the duty that the Council had as a result of having to approve that development application. The point flows on, we say, from what was said in the joint judgment in Brodie at page 559, where it is said that the duty:

may oblige the particular authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger.

We say here that because there was a discretion involved at the time of the exercise of the development application, that is whether to approve it and, if so, with what conditions, the only discharge of the duty that was necessary because of the aircraft noise was to warn those who would purchase in the development that aircraft noise was a problem. There was a provision in the 149 certificate stating where in the ANEF contours the land was situated and then there was an invitation for the applicant to come to the Council to discuss the matter. The 149 certificate appears at page 276 of the application book at line 25. It is paragraph 5 that is quoted there:

Council’s records indicate that the land is contained within the Australian Noise Exposure Forecast (ANEF) 20 contour and consequently may be subject to noise exposure from aircraft. Standards and measures which can be adopted to minimise the impact of noise on buildings are detailed in ‘Australian Standard 2021-1985 . . . Information as to the extent of the ANEF 20 contour is available from Council’s Community Planning Department”.

Your Honours, because this is a case of pure economic loss, it is obviously not sufficient for there to be a mere reasonable foreseeability of loss. There has also to be an extra concept which this Court recently affirmed in Woolcock Street Investments as saying vulnerability was the point here. The vulnerability is to be understood, it was said, as a reference to the plaintiff’s inability to protect himself/herself/itself from the consequences of a defendant’s want of reasonable care either entirely or at least in a way which would cast consequences of loss on the defendant.

The joint judgment in Woolcock quoted Justice McHugh in Perre v Apand where he said:

If the plaintiff has taken, or could have taken steps to protect itself from the defendant’s conduct and was not induced by the defendant’s conduct from taking such steps, there is no reason why the law should step in –

Although vulnerability has been discussed in the context of the existence of a duty, it also applies, we say, in the discharge of the duty. We seek to rely on what was said in the joint judgment in Brodie to make that extension if it was necessary.

The Court of Appeal in this case - Justice Giles gave the main judgment – referred to two other cases which he said were similar, namely Bamford and Finlayson, and he said they were not distinguishable from this case. In fact, in both of those cases the council should never have approved the development in the first place. That is what makes the important distinction here. There was a discretion here to approve this development which could have been done with or without conditions and was in fact done with conditions.

HAYNE J: What is the level of generality of the points that you seek to agitate? At the moment I am left with an impression of points of great specificity specific to this legislation and the facts and circumstances of this case.

MR DAVIES: The point of generality is simply – and it arose also I think in Woolcock – where a council perhaps has approved something or a builder has built something and there is then some mechanism, statutory or otherwise, where an incoming purchaser is able to make appropriate inquiries to protect themselves against some breach that might have taken place. So in Woolcock, for example, a certificate could have been obtained from the council about the building. Here, throughout New South Wales and probably elsewhere, a certificate such as the 149 certificate can be obtained which alerts people to risks involved in buying into the project.

That is the point of generality. There is power under 149 for councils to provide various pieces of information and certainly information concerning some enumerated risks and any other risks associated with the property. In that sense we say that the case has general importance. Can a council discharge its duty by giving notice of some sort that there are risks here and that purchasers should either make further inquiries of them, the council, or take other measures such as here, for example, in getting an acoustical engineer report on the matter.

HAYNE J: I just harp a moment on it because it may be important. Duty having been conceded below, the case seems to hinge upon what had to be done in discharge of an admitted duty.

MR DAVIES: That is correct, your Honour.

HAYNE J: That seems to be a highly fact-specific inquiry yielding no general principle.

MR DAVIES: I do not want to repeat myself, but your Honour appreciates the point I am making that where in any situation there is another means, and in this case the Council itself who has the duty provides the means of the warning, that has a certain generality, we would submit. We say that Justice Giles was wrong in suggesting that it was not inevitable that a 149 certificate be obtained because the vendor disclosure regulation, as we pointed out in our written submissions, made it obligatory for that to be provided to a purchaser. We add it would be a rare case where a purchaser would not in fact obtain their own certificate in any event.

Certainly the evidence in this case was that had purchasers gone to the Council, they would have been shown the contour map, they would have had the standard pointed out to them and suggestions made as to what might have happened. In this case none of the purchasers, the evidence was, ever read the section 149 certificate. Their solicitor, who was a common solicitor to those of the matters tried, did read the certificate, merely understood that 20 ANEF was the lowest contour but made no further inquiries and there was no evidence that he actually understood what that meant in practical terms. So in that sense there was no reliance by the purchasers on the actual wording of the certificate which it is suggested was not entirely accurate.

That, your Honours, takes me to the second point which is a point, I concede, does not stand entirely independently. That is the point nevertheless of importance about the good faith defence under section 149(6). This Court has recently considered the good faith provisions of section 733 of the Local Government Act in Bankstown City Council v Alamdo and said that because of those provisions, it was not appropriate to lay down any particular test of what amounted to good faith other than to say that there must be something more than negligence because otherwise the good faith test would have nothing to operate on. The wording of section 149(6) is not identical with section 733. As far as we are able to determine, this Court has never given consideration to that provision and we are left therefore, at least in this State, only with this Court’s view that there needs to be something more than negligence but with no other guidelines in the matter.

What I said before, that this does not stand independently, if we were not successful in persuading your Honours on the first ground, a successful finding on the 149(6) defence would certainly be of inestimable benefit for councils throughout New South Wales but would probably not change the outcome of this case, I would have to concede. However, if your Honours were minded to grant leave on the first point, we would strongly urge your Honours also to grant leave on the second point so that the two matters which do tend to tie in can be decided together. The first point that we make, however, can stand entirely separately, which is whether the certificate discharges the duty.

The third point, your Honours – and this point does stand alone and is of some significance – is the question of damages here. The evidence was that when the purchasers bought, they believed that the land was within the ANEF 20 contour. The relevant ones with which we are here concerned have hung on to this land and the latest ANEF forecast for 2012 puts the land into the 20 contour. In the interim period, I have to tell you – and your Honours may have picked this up – it was put in the 25 to 30 contour on the map. It is now back to the 20.

So we would say in those circumstances that because the claim is only for the damages for diminution in value of having purchased this property, there are some consequential losses which I will deal with, but the principal claim is for diminution in value. The fact that the land is now back in the contour of what everyone believed it was at the time means that no loss has been suffered in the matter.

Your Honours, a similar question arose in the valuer case – I apologise that this was not sent up. I do not want to take your Honours to it in any detail – of Flemington Properties v Raine & Horne. The valuer was ultimately held to have correctly valued land, but the claim was that it was overvalued and that the purchasers would never have purchased if they had known that the value was less than the valuer stated. They hung on to the land and by the time of trial they had sold a portion of it for a very large profit and the undisputed value of the remainder of the land was well in excess of what they had purchased it for.

At first instance Justice Lehane, although he found the valuer not liable, went on to say, applying cases like Kizbeau and others, that there could not be any loss even though at the time of purchase, on the assumption the valuer was wrong, they had paid too much for the land. The Full Court touched on this only to note what Justice Lehane had said at pages 354 and 355 but they said that because of their decision on the liability, this raised very interesting questions and they were not prepared to deal with the matter.

My point is only this, that it is a similar point to the one we make here. It is a point that affects valuer cases and other sorts of cases like this where there may have been, if the person had sued immediately after the breach of duty – that was something that was considered in HTW Valuers v Astonland – there would have been a loss but, by the time the trial has come along, there is not in fact a loss but a profit. HTW Valuers v Astonland, although a very recent decision of this Court, did not need to go into that question; it only needed to discuss what was the appropriate point on which damages should be assessed.

The significance of this point for this case is, your Honours, that there are 26 cases in all associated with this development. At the moment we are up here on three of those cases but the result in these three cases will
obviously affect what happens from a damages point of view and also from the point of view of the section 149 certificate in the other 26 cases. There is a very significant amount of money involved and significant principles. For those reasons, we say that it would be appropriate for special leave to be granted.

GLEESON CJ: Thank you, Mr Davies. We do not need to hear you, Mr Sexton.

The outcome of this case turned on the application of settled principles to the particular facts and circumstances. Having regard to the concurrent findings made at first instance and in the Court of Appeal the case does not raise an issue suitable to a grant of special leave to appeal and there are insufficient prospects of success of an appeal to warrant a grant. The application is dismissed with costs.

AT 10.14 AM THE MATTER WAS CONCLUDED