Barry Edward and Thelma June Harrington v Greenwood Grove Estate Pty Ltd

Supreme Court of NSW|2011-05-11|Before: Slattery J

al Pty Ltd v Stevens & Ors (1990) NSW Conv R 55-552 Walton's Stores (Interstate) Limited v Maher (1988) 164 CLR 387 Category: Principal judgment Parties: Plaintiff- Barry Edward Harrington and Thelma June Harrington Second Plaintiff- Paul Francis Hickey and Penelope May Hickey Third Plaintiff- Angus Neil Lambie Fifth Plaintiff- Joanne Scotcher Sixth Plaintiff- Robert Andrew Warren and Katrina Maree Warren Seventh Plaintiff- Jacqueline Ulrick nee Williams Defendant- Greenwood Grove Estate Pty Ltd Representation: Plaintiffs- J.Robson SC, C. Simpson Defendant- P.Tomasetti SC; S.Nash Plaintiffs- Somerville Laundry Lomax solicitors Defendant- McCartney Young Lawyers File Number(s): 2010/246191 Publication restriction: No.

Judgment 1The six plaintiffs in these proceedings are the registered proprietors of six blocks of land in a residential estate development known as "Greenwood Grove" ("the Estate") at Lennox Head on the North Coast of New South Wales. The defendant, Greenwood Grove Estate Pty Limited, developed the Estate from 2005. 2In March 2005 the defendant commenced marketing lots in the Estate for sale. The plaintiffs' purchased their lots in the Estate between April 2005 and November 2007. Prior to these purchases the defendant gave each plaintiff a "Management Plan" that set out the objectives of the Estate's development and described features of the Estate in words and published photographs of it. These proceedings arise out of differences between the content of that Management Plan and the defendant's present proposals for the development of the Estate. 3The Management Plan which was dated 16 March 2005 (Exhibit D), and described the Estate as comprising 19 lots, 14 of which were proposed to have one residential dwelling each constructed upon them although one of these lots, Lot 19, was proposed as a duplex. Each of the plaintiffs purchased one of these single residential lots. Of the remaining five lots, three had existing residences constructed on them. The Management Plan also described the proposal for the remaining two other lots (Lots 4 and 8) in the Estate, which were substantially larger than the 15 single residential lots, as being for "integrated style development". Essentially this meant that the defendant planned more dense development for Lots 4 and 8. The Management Plan depicted Lots 4 and 8 as having a total of 16 dwellings constructed on them, 10 on Lot 8 (Lots 8a - 8j) and 6 on Lot 4 (Lots 4a - 4f). The layout of the Estate as depicted in the Management Plan is reproduced in Figure 1, an annexure at the end of these reasons. 4Since purchasing their lots, all but one of the plaintiffs constructed dwellings on their new properties and presently live on the Estate. The defendant still owns the two largest lots in the Estate, Lots 4 and 8, together with Lot 19, all of which it now proposes to develop. 5In June 2010 the defendant lodged a development application ("the 2010 development application") with the local authority for the Lennox Head area, the Ballina Shire Council, under State Environmental Planning Policy (Affordable Rental Housing) 2009 (NSW) (" SEPP (Affordable Rental Housing) 2009 ") seeking approval to develop Lots 4, 8 and 19 by the construction of 74 residential units on these three lots. The 2010 development application substantially increased the density of the development of Lots 4, 8 and 19 from 18 units to a total of 74 units. After consultation with the Ballina Council in November last year the defendant withdrew the 2010 development application but re-lodged an application in a substantially similar form in February this year ("the 2011 development application"). 6The plaintiffs now claim relief to permanently restrain the defendant from pursuing the 2011 development application currently lodged with Ballina Council. The plaintiffs' claim is put on several bases: that there was an express or an implied term in the sale contracts between the defendant and the plaintiffs (or a collateral contract to the same effect) that the Estate development would be carried out only in a manner consistent with the Management Plan and that the 2011 development application is substantially inconsistent with the Management Plan; that the defendant represented to each of the plaintiffs that Lots 4 and 8 would be developed in accordance with the Management Plan in the form shown to the plaintiffs before they exchanged the contracts for sale, thereby misleading the plaintiffs, inducing them to enter those contracts for the purchase of the land and contravening Trade Practices Act 1974 (Cth), s 52; and, that the defendant's conduct also founds an equitable estoppel against it in favour of the plaintiffs, preventing it from further pursuing development proposals inconsistent with the Management Plan. The effect of the plaintiffs' case is to have the defendant withdraw the 2011 development application and to return to a development application proposal with 18 not 74 dwellings on Lots 4, 8 and 19 as reflected in the original Management Plan. 7The relief the plaintiffs seek are orders: restraining the defendant from taking any further steps in relation to the 2011 development application; requiring the defendant to withdraw the 2011 development application; and, requiring the defendant, when it disposes of land in the Estate development, to oblige any purchaser also to comply with the Management Plan. 8The facts are not in substantial dispute. The defendant concedes that the Management Plan was given to each of the plaintiffs before they purchased the lots. But the defendant concedes that the 2010 and 2011 development applications are both inconsistent with the Management Plan. The defendant does not concede that the plaintiffs relied upon the Management Plan to enter into their individual contracts. Only one of the plaintiffs, Mr Warren, a solicitor, was cross-examined. I infer, for reasons that will be explained below, that the Management Plan induced each of the plaintiffs to enter into the contract for sale. 9The defendant deploys both general law and statutory contentions in answer to the plaintiff's claim. The defendant contests there was an express or implied term in the contracts of the kind alleged and contests that there was any collateral contract of the kind alleged. The defendant denied engaging in misleading or deceptive conduct and contended that no equitable estoppel arose, principally because when the Management Plan is examined in context, the defendant says it implied flexibility for future change of the kind that has now occurred. Finally, even if any of these causes of action were otherwise made out, the defendant contended that provisions in SEPP (Affordable Rental Housing) 2009 and the Local Environmental Plan for the Ballina Shire, the Ballina Local Environmental Plan 1987 ("the Ballina LEP "), prohibited the plaintiffs from relying upon their private contractual rights to constrain the development of the land that would otherwise be permitted under the Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act "). 10Although both parties advanced evidence about the impact of the proposed development on the amenity of the plaintiff's lots, at the end of the first day of hearing, the Court determined that this issue would be dealt with only if and when the Court reached the point of formulating the remedy that it might grant if the plaintiff's claim were otherwise made out. Amenity issues could be considered later at a separate hearing about the form of relief. But the expert evidence was nevertheless read to illustrate on the present hearing, the nature of the amenity allegations that the plaintiffs made and that the defendant contested. The plaintiffs called expert evidence from Mr Darryl Anderson and the defendant from Mr Stephen Connelly. Much was put in issue between these experts. Leaving aside the expert evidence, the lay evidence of the plaintiffs and an objective comparison of the Management Plan's depiction of Lots 4 and 8 in contrast to the treatment of Lots 4 and 8 in the 2011 development application, is a sufficient basis for the Court to infer that if the latter is approved that it will have quite a different impact on the plaintiffs than had something close to the Management Plan been approved. 11All six plaintiffs had a common interest in the proceedings and were represented by the one set of solicitors and counsel. Mr J. Robson SC and Mr C. Simpson appeared for the plaintiffs. Mr P. Tomasetti SC and Mr S. Nash represented the defendant. 12It is necessary to examine the background to the development, the contracts between the plaintiffs and the defendant, and the statutory framework in more detail before determining the merits of the plaintiffs' various causes of action and claims to relief.

Early Development of Greenwood Grove Estate 13The defendant first applied to Ballina Council in December 2003 to subdivide the land that became the Estate ("the 2003 development application"). The defendant already owned the land proposed for development, which was then identified as Lots 12, 13 and 15 in DP258095. 14The development site is just under a kilometre in a direct line from the village of Lennox Head. The site is also approximately 8 kilometres from the township of Ballina. The land forms part of a larger housing estate which has already been partly developed, called the "Greenfield Road Estate" and which had been progressively opened up by residential subdivision commencing in 1978. 15The subject land is close to several surviving tracts of littoral rainforest in the Lennox Head area. Remnants of littoral rainforest are growing within Lots 4 and 8. One objective of the defendant's 2003 development application and the 2010 and 2011 development applications was, and is, to preserve the integrity of these rainforest remnants. 16The 2003 development application sought approval for the subdivision of Lots 12,13 and 15 in the existing Deposit Plan to create 16 new lots and to accommodate three lots for existing dwellings, making a total of 19 Lots. It also proposed setting aside Lots 4 and 8 for future Community Title Development. One lot, Lot 19, was to be a duplex lot. 17The Estate development site was, as counsel for the plaintiff aptly put it, shaped somewhat "like a trident": see Figure 1. Lots 4 and 8 form the base of the trident shape and were situated at the northern end of the development. The other lots form the centre of the trident and its shafts. The rainforest remnants flourish in the centre of Lot 4 and towards the western end of Lot 8. The development is bounded on the southern side by Greenfield Road. 18The Estate features a vehicular roundabout in the centre of the trident shape. Access to the roundabout runs in an approximately North-South direction through Rosewood Place down the central shaft of the trident shape. The final form of the Estate development as described in the Management Plan is the same as that proposed in the 2003 development application: see Figure 1 at the end of these reasons. 19The defendant's 2003 development application created lots for the construction of 13 new single dwellings, such as those purchased by the plaintiffs and one duplex: see the hatched residences in Figure 1. These single dwelling lots were between 1200 and 1270 square metres in area. All of them were in excess of 1200 square metres. But Lots 4 and 8 were much larger. The 2003 development application described Lot 4, a lot of 8,518 square metres as "proposed future Community Title lot, with potential yield of up to 6 dwelling houses, including a permanent reserve for flora and fauna protection". Lot 8, a lot of 12,599 square metres, was described as "proposed future Community Title lot, potential yielding up to 10 houses". If Lots 4 and 8 were subdivided into the numbers of lots foreshadowed in this Management Plan description, each resulting subdivided lot would comprise an area in excess of 1200 square metres. 20Ballina Council approved the 2003 development application on 24 June 2004. The Council imposed conditions for the deferred commencement of the development until the defendant provided additional information to the satisfaction of the Council regarding the use of Lots 4 and 8. These deferred development conditions meant that development of the whole Estate, not just Lots 4 and 8, could not commence until the conditions were satisfied. The relevant parts of Ballina Council's determination and these deferred commencement conditions are:- "Determination: The development application has been determined by Ballina Shire Council on 24 June 2004 by way of the grant of consent subject to the conditions specified below:

Deferred Commencement 1.1 The submission of additional information to the satisfaction of Council regarding the proposed use of Lots 4 and 8 for Community Title Subdivision. This information should include information regarding the following issues, in the format of a Management Plan for each site:

An assessment of the ability of each Lot to satisfactorily cater for the proposed number of dwellings having regard to site constraints, the amenity of surrounding residents and the housing density of the locality. This assessment should include the impact of the dwellings on significant vegetation and the impact of this style of development on the locality;
A 10 metre buffer zone is to be established adjacent to all areas of remnant and/or rehabilitated rainforest on Lots 4, 8 & 19. No permanent building structures will be permitted within the 10 metre buffer zone;
Precise identification of all vegetation to be removed to facilitate the construction of the subdivision;
Precise details on all rehabilitation and revegetation works proposed throughout the site and the timing of such activities;
Detailed performance targets for the proposed rehabilitation and revegetation program;
The proposed rehabilitation and revegetation program is to reflect the recommendations of the report by Mr Peter Parker, dated 20 April 2004 in regards to the extent of the rehabilitation area;
Details on methods to be utilised to ensure the long term protection of all threatened plants species located on Lots 3, 4, 8 & 19; and
A detailed Community Title Covenant as detailed on pages 45 & 46 of the Flora and Fauna Assessment prepared by Aspect North dated November 2003. 1.2 Stormwater attenuation shall be demonstrated to the approval of Council's Engineer, that all open area stormwater attenuation basins shall not exceed a maximum water depth of 1.2m for stormwater events up to, and including a 100 year average return interval. Stormwater attenuation shall be achieved such that the downstream property owner drainage rights and wetlands are not unduly impacted by the stormwater discharge from the site. 1.3 Lots 19, 8 and 4 are to achieve a density of one dwelling per 1,200 square metres. 1.4 The applicant is to obtain a formal 'Site Audit Statement' as per the form approval under Section 53B of the Contaminated Lands Management Act 1997. The Audit Statement will need to be prepared and submitted by a NSW DEC Accredited Site Auditor and will need to indicate suitability of the site for its intended land use. This Notice of Consent does not commence until a formal site audit statement is submitted to and approved by Council." 21It is evident from these deferred development conditions in relation to Lot 4 and Lot 8 that Ballina Council's concerns included (1) preservation of the amenity of surrounding residents, such as the plaintiffs, the purchasers of the single residential lots, and (2) the density of housing development in the locality. In the deferred development conditions the Council required the production of further information to it in order to assess the proposed future use of Lots 4 and 8. The June 2004 development approval contained: other general conditions; conditions relating to matters to be attended to prior to construction, during construction and prior to the issue of a subdivision certificate; and other conditions relating to use during occupation.

The Management Plan 22The defendant did not produce its Management Plan until March 2005. The Management Plan is central to the issues in these proceedings. The defendant prepared it for two purposes: to give to Ballina Council to satisfy the conditions of the Council's June 2004 development consent; and also, to provide to potential purchasers of the lots in the Estate. Indeed it was provided to the plaintiffs when the defendant's agents marketed the Estate to them. 23The Management Plan is a marketing document. It commences with a "Vision Statement" that extols the advantages of the Greenfield Road district. It addresses the reader upon the assumption the reader has already purchased a lot and is enjoying the amenities the Estate has to offer. Mr Chris Condon, a principal of the defendant signed the vision statement, which is reproduced below:- "Vision Statement The Greenfield Road area of Lennox Head is one of the most sort- after [sic] locations in the region. Greenwood Grove provides a new opportunity to become a part of this tranquil north coast setting. The pockets of remnant and rehabilitated rainforest and expansive views over Seven Mile Beach offer contrasting living environments. So, you can chose to go exploring through the rainforest, sit back on your balcony chair and enjoy the views of the water or take a short stroll to the village of Lennox Head to meet with friends or to go for a surf. At Greenwood Grove we hope to inspire sustainable living so that the rainforests and distinctive character of the site will be preserved into the future. Implementation of detailed ecological restoration management principles and site planning and architectural guidelines, helps us to achieve this vision - and the great views, well what can I say... Enjoy!" 24In the "Preamble" that immediately follows the Vision Statement the Management Plan describes that the Estate's development will be managed in a predictable scheme according to a set of established guidelines that are set out in the Management Plan but leaving some room for variation. The "Preamble" describes this scheme of managed development the following way:- "Preamble Overview of the Implementation of the Greenwood Grove Management Plan The Greenwood Grove Estate Pty Ltd may allow (but is not required to allow variations to some aspects of this management plan on the basis of specific design merit. Design merit is determined at the total discretion of Greenwood Grove Estate Pty Ltd. In no way does compliance with the management plan exempt a structure or constructible item from compliance with the requirements of Ballina Shire Council. Greenwood Grove Estate Pty Ltd may make changes to the management plan to accommodate any changes in the statutory controls, design guidelines, policies and regulations of Ballina Shire Council or any other authority. The Approval Procedure The approval process includes the following steps:

A compulsory pre-Council assessment stage administered by Greenwood Grove Estate Pty Ltd.
You must obtain approval from Greenwood Grove Estate Pty Ltd before applying to Ballina Shire Council for building approval. You must also obtain approval from Greenwood Grove Estate Pty Ltd for all 'building works' which include:

Any proposed external construction, alterations, additions or extensions and/or repairs to a dwelling or associated building or structure, including painting and repainting;
any construction of/or alterations or additions to any fence, retaining wall, wall, exterior lighting, driveway or recreational structure, and
landscaping (of more than 2sq.m) or tree planting. Decisions by Greenwood Grove Estate Pty Ltd are given prior to the approval of any requirements of the local authority and not in lieu of. In the event that Greenwood Grove Estate Pty Ltd allows a variation from these design guidelines, the variation will neither set a precedent nor imply that the approval will be repeated.

You must prepare documents or drawings describing or illustrating the proposal in sufficient detail to make an informed assessment.
You must submit two (2) copies of the required documents and drawings together with the application fee of $250.00 (two hundred and fifty dollars) to; The Design Review Panel Greenwood Grove Estate Pty L td PO Box 65 Lennox Head NSW 2478 If there are any variations to the management plan, you must describe them and set out the justification for the variations based upon merit. Greenwood Grove Estate Pty Ltd is under no obligation to approve variations. The Decision Greenwood Grove Estate Pty Ltd, in its absolute discretion, may

approval;
approve with conditions or
refuse an application" 25The Management Plan then sets out its objectives and points out that one of its principal purposes is to incorporate the dwellings to be constructed on Lots 4 and 8 into the larger development of the Estate. This was expressed in the next section of the document, "Background" in the following way:- "Background This management plan applies to 'Greenwood Grove' residential development located at Greenfield Road, Lennox Head (see Site Layout Plan on page 4). The management plan provides guidelines that seek to achieve a sustainable living environment, which protects and enhances the existing rainforest and exhibits a coastal and rainforest style character. The subdivision consists of 18 lots (lots 1-11 and 13-19). Two of these lots (4 and 8) are an integrated style development. 1A Management Plan Objectives The aims of this plan are:
To incorporate dwellings on lot 4 and lot 8 up to the approved density having regard to site constraints, the amenity of surrounding residents, the housing density of the locality and significant existing rainforest vegetation. Site planning
To provide guidelines for the orientation and siting of dwellings to maximize solar benefits, protect from adverse weather conditions and contribute to a high amenity streetscape (particularly relating to lots 4 and 8- integrated lots). Architecture and built form
To clearly define a character and style of dwelling that is appropriate for the site and one which will reflect either a coastal or rainforest character (consideration will be given to key built form elements such as building heights, fencing, garage arrangements, roofing and materials)." 26The Management Plan also stated other Management Plan objectives including, objectives relating to landscaping of Estate lots, objectives to allow residents to beautify and personalise their lots ensuring bushfire and rainforest protection, objectives for protection, rehabilitation and revegetation of the rainforest remnants and threatened species and, objectives to encourage land use practices and environmental design measures to enhance the sustainability of the rainforest remnants. 27The Management Plan contained a great deal more detail than is reproduced here. It contained detailed specifications about the layout, site planning, residence design, building envelopes, setbacks, construction on Lots 4 and 8, architecture and built form character, vegetation, roof form and pitch, rainforest protection rehabilitation and revegetation, and a programme of care for the rainforest remnants. A particular feature of this detail within the Management Plan was the specification of the character and density of construction on Lots 4 and 8. The Management Plan made clear that although lots 4 and 8 were undeveloped at that time, the character of their development could clearly be seen and understood. 28To market the Estate, the defendant needed to satisfy the deferred conditions of the June 2004 development consent. The defendant did this by February 2005. 29On 4 March 2005 the Council notified the defendant of a decision the Council had made at an ordinary meeting held on 24 February 2005 about the deferred commencement conditions. At the February 2005 meeting the Council resolved that the deferred commencement conditions had been adequately addressed. The letter notified this to the defendant in the following terms:- "(1) That the applicant be advised subject to the amendments as outlined in the report, the deferred commencement conditions of DA2004/605 have been adequately addressed, however Council advises that it does not accept that consented to (sic) two lots 4, 8, 19 are suitable for development with multiple dwellings thereon. (2) That Council confirms the provisions of DCP1 for this subject land." 30In the same letter Ballina Council informed the defendant that the amendments "outlined in the report" referred to in the resolution, were particular amendments to the Management Plan and the Ecological Restoration Management Plan Stage 1. Council's letter also identified a number of specific amendments to those documents that are not relevant to the matters now in issue between the parties. These amendments included for example an alteration to the lot boundary between Lot 19 and Lot 4 to ensure that a 10-metre buffer zone for the rainforest area was preserved on Lot 19, where that lot is closest to the Lot 4 rainforest remnant. The Council's 4 March 2005 letter also included a program for a year's maintenance and monitoring activities for the proposed restoration and rehabilitation program for the rainforest on Lots 4 and 8. 31The defendant now had clearance to proceed with its development. The effect of Ballina Council's February 2005 decision was that the development of the Estate on lots other than Lots 4, 8 and 19 was approved to proceed. But the defendant still had to satisfy the Council's reservations about aspects of what the defendant had proposed for those three lots. The defendant submitted the Management Plan to Council to address some of Council's concerns about these three lots. But it was always contemplated that a further development application would be required before these three lots could be developed in the future. About the same time the defendant commenced marketing the Estate to prospective purchasers, including the plaintiffs.

Marketing to the Warrens 32The plaintiffs tell a common story about how the defendant induced them to buy lots in the development. The story is principally told through the version of events given by one of the plaintiffs, Mr Robert Warren. The defendant cross-examined Mr Warren. In this section the Court first makes findings about Mr Warren's purchase with his wife of a lot in the Estate. I then make findings about the transactions involving the other plaintiffs, who were not cross-examined. 33Mr Warren is a partner in the firm of solicitors who act for the plaintiffs in these proceedings, Messrs Somerville Laundry Lomax of Lismore. He says that he became aware of blocks being available for sale in the development in early 2007. Mr Warren, who lives at Lennox Head drove out to Greenwood Grove and looked at several blocks for sale. Impressed with the semi rural environment, low traffic level and wide-open spaces, Mr Warren considered the Estate would be a good place in which to live. Mr Warren has lived in the Lennox Head area for 18 years and wished to remain a resident of the district. He also considered that the purchase of a block in the Estate would be a good investment decision. Mr Warren and his wife looked at a number of other established homes and vacant blocks in the area. She shared his views and they decided that the Estate was the best option for them for either a family to live in or for the acquisition of an investment property. 34Mr Warren read the Management Plan in October 2007. He was aware the defendant was selling a number of lots in the development. He had concerns about purchasing a lot. One of his concerns was how the other lots might be developed and in particular whether they might adversely impact upon the lot he wished to buy. Mr Warren says, and I accept, that he read the Management Plan and that upon reading it he was satisfied that the plan to develop the Estate and the restrictions that it imposed on the ways that the Estate lots might be developed would ensure that the area would retain its peaceful and semi rural character. 35Mr Warren says, and I accept, that he made his decision to proceed in part by looking at the Management Plan before he was issued with a contract for sale. Eventually, in November 2007, Mr Warren and his wife purchased Lot 9 in the Estate from the defendant for a consideration of $400,000. Lot 9 is the lot in the Estate closest to the undeveloped Lot 8. 36Perhaps not surprisingly, unlike any other purchaser plaintiff, Mr Warren carried out his own conveyancing work for the purchase. He recalls that on reading the draft contract before he signed it, that the contract included the Management Plan. He says, and I accept, that he was satisfied by its inclusion in the contract. He says, and I accept, that he "would not have entered into the contract if [he] had thought that the future development of the other land in Greenwood Grove could occur in a way that was significantly different to what was described in the Management Plan". I infer that he was satisfied as to this both from his reading of the contract and from the inclusion of the Management Plan in the contract. 37He further says, and I accept, that he was sure that he was never told by the agent handling Estate sales or anyone else on behalf of the defendant that land in the Estate might be developed in a way that was significantly at odds with what was described in the Management Plan. 38The defendant's counsel, Mr Tomasetti SC, cross-examined Mr Warren both to show that Mr Warren did not himself rely upon the Management Plan and that when acting as solicitor for the 2007 purchasers that he caused them not to rely upon the Management Plan. Despite a vigorous and effective cross-examination this attack ultimately failed to support the contentions that were said to be based upon it for several reasons. 39First, Mr Warren said that: he "didn't go through every clause in the standard contract for sale"; he had an awareness of clauses such as Ballina LEP Clause 29 "in a rudimentary fashion"; and he did not really know what State Environmental Planning Policies were and assumed that they were not important although they could apply to land. This kind of frank evidence tended in my view to reinforce rather than, as the defendant contended, to undermine his evidence that he had relied upon the Management Plan. The fact that he did not engage closely with the effect of the Ballina LEP Regulation 29 and the SEPP (Affordable Housing) 2009 Clause 9 tend to emphasise the effect of the Management Plan upon his mind. His principal area of legal expertise lay in the personal injuries field rather than in conveyancing, extends to explain this evidence. 40Secondly, he was aware of the lodgement of the 2007 development application in April that year ("the 2007 development application") before both he and his wife exchanged contracts and before Mrs Scotcher and Mr Hickey exchanged their contracts later that year. He also knew that the defendant's 2007 development application increased the number of lots to be developed. He said "I think the lots increased from 16 to 18 " and that he was there was a variation from the management plan. The defendant submits that he therefore could not reasonably have relied upon the management plan as providing a fixed and unchanging plan for the future of the Estate. But I accept his evidence that he nevertheless thought that the 2007 development application "was consistent with what was in the management plan". I do not think that anything in the 2007 development application alerted Mr Warren to the idea that Lots 4 and 8 could be developed quite differently from the way they were described in the Management Plan. 41Thirdly, the defendant relies upon Mr Warren's evidence that he did tell Mrs Scotcher that the ultimate design of Lots 4 and 8 could be varied from what was in the Management Plan. But this evidence does not assist the defendant greatly because I accept Mr Warren's evidence that he regarded the scope for variation as minor, " there was a possibility of some variations and minor variations to what was in the management plan ". Moreover I find that whatever he did say to Mrs Scotcher it did not cause her to believe that anything more than minor variation to the Management Plan was possible. 42But despite his belief, by the time of contract the representations in the Management Plan were importantly modified as is explained later in these reasons.

The Marketing to the Other Plaintiffs 43I draw the same inference of reliance upon the Management Plan about all the other plaintiffs, as I have drawn in Mr Warren's favour. I find that the defendant's marketing plan influenced each of them to enter into their respective contracts to buy a lot in the Estate. They all say that they were induced to enter into their contracts from receiving the information in the Management Plan. I accept all of their evidence to this effect. Some more detailed findings in respect of the other plaintiffs appear later in this section. 44The inferences that each plaintiff relied upon the Management Plan are supported by the objective probabilities. The Management Plan was a powerful marketing document that was highly material to each plaintiff's decision to purchase. It sought to define the future environment in which the land to be purchased would be enjoyed. Through its real estate agent, the defendant, gave the Management Plan to all the plaintiffs in the course of marketing the Estate. I further infer from this conduct, and from its content, that the defendant crafted the Management Plan in order to market the Estate to potential purchasers. The Management Plan was, in my view, calculated to induce the plaintiffs each to enter into the contracts that they did by seeking to reassure them that there was a stable plan to preserve the amenity of their lots during any future development of the Estate. 45This can readily be seen from the following aspects of the Management Plan. The Vision Statement in Greenwood Grove is associated with the "tranquil north coast setting" and "management principles and a site planning" so that the "distinctive character of the site will be preserved into the future". The document resonates with concepts of stability, tranquillity and ordered planning. The Preamble and the Management Plan emphasise the limited circumstances in which it may be changed "on the basis of specific design merit" and of its own motion "to accommodate any changes in the statutory controls, design guidelines, policies and regulations of Ballina Shire Council or any other authority", thereby inferring the stability of the Management Plan as the controlling plan for the future Estate development. These ideas are further reinforced in the background section which identifies the aims of the plan in relation to the undeveloped lots as being to incorporate dwellings "up to the approved density" having regard to "...the amenity of surrounding residents, the housing density of the locality...". The Management Plan was aptly crafted to give the impression that the defendant intended it to wholly govern the future development of the site. 46The inference is strong in these circumstances that the Management Plan was a material inducement to the plaintiffs' respective decisions to purchase. Wilson J set out the applicable principles in Gould v Vaggelas (1984-5) 157 CLR 215; [1985] HCA 85 at 236-237 and explained that if a representation is calculated to induce a representee to enter into a contract and the person does so then a fair inference of fact arises that the representation induced the person to enter into the contract:- "Having made those findings, the trial judge proceeded to deal with the submission strongly advanced at the trial by Mr Pincus and maintained both before the Full Court and this court that a misrepresentation is no ground for relief unless it induces the representee to enter into the contract and that on the evidence the Goulds had failed to establish the fact of inducement. His Honour correctly elucidated the law in this regard. He referred, inter alia , to Smith v Chadwick (1884) 9 App Cas 187 at 196; Arnison v Smith (1889) 41 Ch D 348 at 369; Holmes v Jones (1907) 4 CLR 1692 at 1710 and Cheshire and Fifoot on the Law of Contract (4th Aust ed) paras 1028 and 1029, and from them drew the applicable principles, which can be re-stated as follows:- (i) Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. (ii) If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. (iii) The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. (iv) The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract. ... Compare, also, Redgrave v Hurd (1818) 20 Ch D 1 at 21; Barton v Armstrong [1976] AC 104 at 120. However, decisions of this court leave no room to doubt that the ultimate onus of proving inducement rests upon the party seeking relief in respect of the fraudulent misrepresentation. In Holmes v Jones (4 CLR) at p 1706, O'Connor J makes it plain that before the plaintiffs can succeed in an action of deceit 'they must show, not only that the representation was fraudulent, but also that that fraudulent representation induced the contract which was afterwards entered into'. Isaacs J, in the same case, was even more direct. He said, at p 1710: 'The plaintiffs have the onus of proving that the representations they complain of were material, and that they were induced to act upon them.' Likewise, in Potts v Miller (1940) 64 CLR 282 at 296, Dixon J observed that the circumstances of the case were such as to place a heavy burden on the plaintiff in satisfying the jury that the false statement formed an operative inducement." 47I have no doubt that the Management Plan also induced the plaintiffs other than Mr and Mrs Warren to enter into their contracts. I infer this not only from the fact that the Management Plan was calculated to induce potential purchasers to enter into the contract, but I accept the evidence of these other plaintiffs that the Management Plan did influence them to enter into their contracts. But again, as is explained below, the representations in the Management Plan were modified at the time of contract, so the Management Plan is only part of what was put before the plaintiffs. 48The issues were complicated by the fact that Mr Warren was the solicitor for a number of the plaintiffs who purchased their properties in 2007. The plaintiffs acquired lots in the Estate in two groups, one group in early 2005 and the second group in 2007. The group of plaintiffs who purchased in 2005 were: Mr and Mrs Harrington (the first plaintiffs), who purchased Lot 14 in April 2005; Dr Lambie (the third plaintiff), who purchased Lot 16 in May 2005; and Ms Ulrick (the seventh plaintiff), who purchased Lot 17 in May 2005. 49The group of plaintiffs, including Mr Warren, who purchased in 2007 were Mrs Joanne Scotcher (the fifth plaintiff), who purchased Lot 13 in June 2007; Mr and Mrs Hickey (the second plaintiffs) who purchased Lot 10 in late November 2007, as did Mr and Mrs Warren (the sixth plaintiffs). The only plaintiffs not mentioned here are the named fourth plaintiffs whose claim was deleted before hearing and who did not pursue any claim against the defendant. Thus, there were only six plaintiffs pursuing claims at hearing. 50Although Mr Warren acted for this group of later-purchasing plaintiffs, Ms Scotcher and Mr and Mrs Harrington, notwithstanding the challenges to his evidence, I infer that Ms Scotcher and Mr and Mrs Harrington relied upon the Management Plan to make their respective decisions to acquire their lots for the reasons that are explained in this section, which deals briefly with my findings arising from the evidence of these other plaintiffs. 51Mr and Mrs Harrington. I accept the Harringtons evidence about their decision to purchase their lot and that the giving of the Management Plan to them and their reading of it was an important influence in their decision to purchase their lot. Mr and Mrs Harrington say that in 2003 they decided to purchase a block of land on which to build a home. The defendant's real estate agent gave Mr Harrington a copy of the Management Plan in March 2005. He read it carefully and discussed the contents with his wife. They had many discussions together about the purchase of a lot in the Estate. They even considered together the possibility of a future purchase of one of the villas, which the Management Plan illustrated would be built on Lots 4 and 8. Mr Harrington was impressed by the quality requirements for the Estate set out in the Management Plan and that as a result the estate would be quiet and would maintain its value. Mr Harrington and his wife purchased Lot 14 in the estate for $400,000 in April 2005. After purchase Mr Harrington and his wife carefully designed their home to ensure it complied with the Management Plan. Their home was constructed at considerable expense and was completed in November 2007. They then moved into their home on the Estate and have lived in it ever since. They also gave evidence like the evidence of other plaintiffs that if they had been made aware of a proposal by the defendant to undertake an affordable housing development of 74 single and two story dwellings on Lots 4 and 8 that they would not have purchased their lot from the defendant when they did. In view of their reasons for purchasing lot 14 it is not difficult to infer that they would not have purchased lot 14 in these circumstances. 52Dr Lambie . Dr Lambie, a dentist, and his wife have lived on the Estate since September 2007 when they completed the building of their house on Lot 16, which they purchased from the defendant for $400,000 in May 2005. Dr Lambie says that he carefully read the Management Plan he " believed that the developer would ensure that the development would proceed as it was described in the management plan " and that he " was satisfied that this would ensure that the area retained its quiet, attractive and semi rural nature ". Dr Lambie and his wife made several enquiries of the defendant about what was to occur with Lots 4 and 8. They were satisfied from those enquiries that only small-scale development was proposed for Lots 4 and 8, as was shown on the Management Plan. I accept Dr Lambie's evidence as to this and the rest of his evidence about his and his wife's decision to purchase their lot, Lot 16, and the influence of the Management Plan upon their decision to purchase. Dr Lambie gave evidence similar to that of other plaintiffs, which I accept, that had he been aware of a proposal by the defendant to undertake an affordable housing development of 74 single and two story dwellings on Lots 4 and 8 that they would not have purchased their lot in the estate from the defendant. Also like the other plaintiffs Dr Lambie and his wife have built a home on their lot, and in doing so followed the procedural requirements of the Management Plan for approval of their design. Dr Lambie and his wife have spent substantial sums to engage architects, construct their home, and complete fencing and landscaping for their lot. 53Ms Ulrick. I accept all of Ms Ulicke's evidence about her decision to purchase her lot. Ms Ulrick and her husband looked at purchasing a lot in the estate from early 2005. I accept Ms Ulricke's evidence that she read the Management Plan carefully, the one attached to the draft contract, which she obtained from the defendant's real estate agent. She formed a view as a result of reading the Management Plan that " the Estate would be a very high quality development in a quiet rural setting ". Ms Ulricke and her husband were also concerned about the proposed development for Lots 4 and 8. But in consultation with her husband she decided to purchase Lot 17 for $425,000, at what she considered to be a premium price, because she " thought that Lots 4 and 8 would be governed by the stringent requirements set out in the Management Plan ". I accept her evidence that the contents of the Management Plan influenced her to purchase her lot. Ms Ulricke and her husband submitted plans for the building of a home on Lot 17 to the defendant for its approval in accordance with the Management Plan. After that approval was obtained her plans were lodged with and approved by the Ballina Council. She then spent considerable sums on constructing the house, landscaping the lot, installing a pool and installing feature walls and other personal improvements to the lot. The house was completed in May 2008 when Ms Ulricke and her husband moved into it. Ms Ulricke also gave evidence, which I accept, that is similar to the evidence of other plaintiffs, that had she been aware of a proposal by the defendant to undertake an affordable housing development of 74 single and two story dwellings on Lots 4 and 8 that she would not have purchased her lot in the Estate. 54Mrs Scotcher. Mrs Scotcher purchased Lot 13, which is close to Lot 4, in June 2007. After mutual discussions she and her husband made a joint decision to purchase the lot for $355,000. I accept all the evidence of both Mr and Mrs Scotcher about their purchase. Mr Scotcher says that they obtained the Management Plan from Mr Warren and that Mr Scotcher spent " several hours carefully reading the management plan so that [he] could understand how the proposed development would take place ". After Mr Scotcher did this he discussed the possible purchase of a lot in the Estate with his wife. Mr Scotcher says that he was " satisfied that we could live next door in nearby to the development proposed for [Lots 4 and 8] ". Mrs Scotcher says that she and her husband preferred the Estate over another development they were looking at because the Estate had much larger blocks and a lower density living area. Mrs Scotcher considered that the 16 unit proposed development for lots 4 and 8 illustrated in the Management Plan was sufficiently well spaced out that it would " not detract from the open nature of the estate " and that they would not " create an amount of traffic that was unsuitable for our needs ". I accept Mrs Scotcher's evidence that this was an important consideration in her decision to purchase Lot 13 because they wanted their children to be able to live on a safe street without much traffic. They purchased Lot 13 in June 2007 and have since constructed a home on that site at a significant expense. They both also say, and I accept, that had they been aware of a proposal by the defendant to undertake an affordable housing development of 74 single and two story dwellings on Lots 4 and 8 that they would not have purchased their lot in the estate from the defendant. 55Mr and Mrs Hickey. In July 2007 Mr and Mrs Hickey began looking for block of land upon which to build a family home. They looked at a number of developments together. In the interests of the safety and well being of their children their principal concern was in looking for a large size block of land in an area with very limited traffic volume. The Estate was very attractive to them because it appeared to meet these requirements. Mrs Hickey read the Management Plan thoroughly and says that as a result of reading it and " in particular the stringent controls on design and desired nature of the adjoining houses I believed that this development would be suitable for a family's needs ". They went ahead and purchased Lot 10 for $410,000. After the purchase they engaged an architect to prepare plans for the construction of a house in accordance with the specifications in the Management Plan. They say, and I accept, that they changed the design of their house to accommodate a request by the defendant developer to preserve the ocean views of other allotments in the estate. They then constructed their house, at a significant expense, which they moved into in about August 2010. Mr and Mrs Hickey gave evidence similar to that of other plaintiffs, that had they been aware of a proposal by the defendant to undertake an affordable housing development of 74 single and two story dwellings on Lots 4 and 8, that they would not have purchased their lot in the estate from the defendant. I accept their evidence as to this and the rest of their evidence about their decision to purchase their lot and the influence of the Management Plan upon their purchase decision-making. 56In light of these findings the position of each of the plaintiffs can be treated the same way in these reasons. Each plaintiff relied upon the Management Plan in much the same way and it was an important influence upon each plaintiff's decision to purchase his or her lot. Then, after purchase, the Management Plan had continuing effect upon each plaintiff, influencing each one to expend significant sums of money to develop his or her lot, being development that each plaintiff undertook in accordance with the Management Plan.

The Contracts for Sale 57The plaintiffs signed contracts for sale in relevantly identical terms. There were some minor differences between these contracts, which arose from the parties using different editions of the Law Society Contract for Sale. Counsel for both parties analysed the terms of the contracts in submissions, both as to their general and special conditions. Both parties used Mr and Mrs Warren's contract for the analysis in submissions and I will also use it in these reasons. It was not suggested that any term contained within any plaintiff's contract relevantly differed from the terms of the Warren's contract. So any differences among these contracts were ignored in the hearing. 58The Warren contract for sale was made using the 2005 edition of the Law Society Contract for the Sale of land. The land sold to Mr and Mrs Warren as purchasers was identified as Lot 9. The purchase price was $400,000, which was paid by a deposit of $40,000 with the balance payable on completion. The Warren Contract was exchanged on 30 November 2007. 59Mr and Mrs Warren made a claim for misleading and deceptive conduct arising not only from the provisions of the Management Plan but from the terms of the contract itself. The defendant submitted that some of the warnings in the standard terms of the contracts were relevant to that claim. On page 2 of the contract under the heading "Warnings" the following text appeared:- "Various Acts of Parliament and other matters can affect the rights of the parties to these contracts. Some important matters are actions, claims, decisions, licenses, notices, orders, proposals or rights of way involving..." 60The Warren contract then sets out a lengthy list of public authorities, utilities, transport, industrial, telecommunications and service, and energy authorities. One of these authorities is described as "infrastructure planning and natural resources". The warning provision in the contract then contains the advice "if you think that any of these matters affect the property, tell your solicitor". 61The Warren's contract also contains a supplementary notice to vendors and purchasers in the following form:- "IMPORTANT NOTICE TO VENDORS AND PURCHASERS Before signing this contract you should ensure that you understand your rights and obligations, some of which are not written in this contract but are implied by law." 62The defendant took the Court to a number of the standard terms in the contract, commencing with Clause 10.1.9, which provides as follows:- "10.1 The purchaser cannot make a claim or requisition or rescind or terminate in respect of: ... 10.1.9 anything the substance of which is disclosed in this contract (except a caveat, charge, mortgage or writ)." 63The Management Plan was attached to the contract. A standard clause of the contract governed attachments to the contract in the following terms:- "Miscellaneous 20.1 The parties acknowledge that anything stated in this contract to be attached was attached to this contract by the vendor before the purchaser signed it and is part of this contract. 20.2 Anything attached to this contract is part of this contract." 64In addition to the standard terms of the 2005 edition of the Law Society Contract for the Sale of Land the parties agreed that other specially agreed clauses would form part of the contract. One of the specially included clauses, Clause 36, governed the operation of the Management Plan within the contract. Clause 36 was expressly concerned with obligations of the purchaser. But the plaintiffs argued that it was of wider effect and created obligations in the defendant/vendor as well. Clause 36 provides as follows:- "36 Management Plan 36.1 Attached to the Contract is a management agreement setting out, amongst other things, architectural and landscaping requirements in relation to some or all of the lots in the plan of subdivision (Management Plan) 36.2 The purchaser acknowledges and agrees that:- 36.2.1 it has read the Management Plan and understands that its terms will be included in a restriction on use which will burden the property on completion; 36.2.2 it is bound, both before and after completion, buy the Management Plan as if those parts of the Management Plan which apply to the property were covenants by the purchaser in this Contract; 36.2.3 the purchaser may not lodge a development application with Ballina Shire Council for the construction of improvements on the property until such application has been approved by the vendor in accordance with part (ii) of the Management Plan; 36.2.4 the vendor may release an owner of a lot in the plan of subdivision from its obligations under the Management Plan and the purchaser will have no claim against the vendor or any other person as a result of such release; 36.2.5 if the purchaser sells the property before improvements are constructed on the property then the sale must be subject to the transferee entering into a deed, in a form reasonably required by the vendor, under which the transferee agrees to be bound by the provisions of this special condition 9. 36. The provisions of this Clause 36 do not merge on completion." 65The parties also agreed upon conditions that related to the registration of the plan of subdivision, and in particular in Clause 38.2, which provided as follows:- "38.2 The vendor discloses and the purchaser acknowledges that the development approval granted to the vendor, a copy of which is annexed to this Contract (Consent), is subject to a number of deferred commencement conditions. The purchaser acknowledges and agrees that it may not raise any objection, rescind or delay completion as a result of: 38.2.1 the creation of any easements or covenants which must be created to satisfy any conditions of the Consent; 38.2.2 any works which the vendor undertakes, either before or after completion, which are required to satisfy the conditions of the Consent provided that any works on the property after completion must only be effected with the approval of the purchaser, such approval not to be unreasonably withheld or delayed; and 38.2.3 any variation to the sewerage works, as constructed, and those contemplated in the draft sewerage plan attached to this Contract." 66The specially agreed clauses also provided, in Clause 39, for the registration of a Conveyancing Act 1919 (NSW) , s 88B instrument that created restrictions on the use of the land in the Estate and created easements for the Estate. Clause 39 provided as follows:- "39 Easements and restrictions as to user At the time of lodging the Plan for registration, the vendor will cause to be lodged and registered with the Plan a section 88B Instrument, whereby restrictions on use and/or easements are to be created. The purchaser acknowledges and agrees that the section 88B Instrument has not yet been prepared but will include those easements and restrictions set out in the Draft Plan or the plan attached and marked 'B' and those referred to in clauses 38.2 and 38.4. The purchaser accepts the property subject to such easements and restrictions and agrees to make no claim, objection or requisition or rescind or terminate in relation thereto or in relation to any minor additions thereto." 67The annexures to the contract included the s 88B instrument. It not only created easements in the Estate but it provided for restrictions on use of the land in the Estate, burdening each lot in favour of each other lot in the terms of the restrictions on development set out in the Management Plan, and so that the obligations in the Management Plan applied to every purchaser of a lot in the Estate. The restrictions were:- "5 Terms of Restriction on use fifthly referred to in the Plan (a) No development application may be lodged with Ballina Shire Council for the construction of improvements on the Lot Burdened unless such application has first been approved under page (ii) of the Management Plan. (b) No buildings or other improvements may be constructed on the Lot." 68The "Management Plan" is defined in the s 88B instrument as "the management plan dated 16 March 2005 available for viewing at Ballina Shire Council". It was common ground in these proceedings that the Management Plan given to the plaintiffs was the same as that identified in the s 88B instrument. The reference in Clause 5(b) of the s 88B instrument to "such application has first been approved under page (ii) of the Management Plan" is a reference to a page numbered Roman "ii" in the Management Plan, Exhibit D, which is the page that contains the whole of the Preamble set out earlier in these reasons and only the Preamble. Thus the s 88B instrument Clause 5(a) required the approval procedure set out in the Preamble to be followed before a lot owner in the Estate could lodge a development application with Council for that lot. That is what each of the plaintiffs did. 69Finally, the contract annexed a Planning Certificate under the EPA Act , s 149(2). It is not necessary to set out the full terms of the certificate. It applied to the land and identified a series of local environmental plans and deemed environmental planning instruments, which apply to the subject land, commencing with the Ballina LEP (referred to in the certificate by the acronym " BLEP "). It also identified Development Control Plans prepared under Environmental Planning and Assessment Act , s 72, namely the North Coast Regional Environmental Plan 1988. The EPA Act , s 149 Certificate described potentially applicable State Environmental Planning Policies the following way:- "1(3)(a) As at the date of this certificate, the following State environmental planning policies (SEPPs) apply to the subject land. Clause 29 of the EP & A (Savings & Transitional) Regulation 1998 affects the provisions of certain SEPPs and how they apply to the land. A copy of clause 29 is attached and should be read in conjunction with the SEPPs listed. Any enquiries on the SEPPs should be directed to the NSW Department of Infrastructure, Planning and Natural Resources." 70The EPA Act , s 149 Certificate dealt with the potential application of these local, regional and State planning policies the following way:- "2(a) Under the provisions of the planning instruments listed in Items 1(1)(a) and (b) above, the subject land is within the following zone(s): ZONING 2 (a) LIVING AREA ZONE 2(b)-(d) The purposes for which the planning instruments listed in Items 1(1)(a) and (b) above provide that development may be carried out within the zone: -without the need for development consent; or -only with development consent' or -for which development is prohibited, are listed in clause 9 - Zone objectives and development control table of the BLEP 1987. Reference should also be made to the special provisions that may regulate or prohibit certain development contained within Part 3 - Special Provisions of the BLEP 1987 -Refer to Attachment No. 1(9/2006). In addition to the controls contained in the BLEP 1987, clause 29 of the EP & A (Savings & Transitional) Regulation 1998 sets out further circumstances where development consent is required for particular development. These circumstances may include development that does not require consent under the BLEP 1987. A copy of clause 29 is attached. 2(e) Minimum Standards for the Erection of a Dwelling-House: There are no development standards within the BLEP 1987 that stipulate the minimum land dimension or area upon which a dwelling-house may be erected in the subject zone. 2(f) Critical Habitat The subject land is not identified as including or comprising critical habitat as prescribed in the Threatened Species Conservation Act 1995 or (subject to section 5C) Part 7A of the Fisheries Management Act 1994." 71Although the EPA Act , s149 certificate refers to the attachment of the Ballina LEP, Clause 29 to the certificate, the form of the EPA Act , s 149 certificates in the plaintiffs' contracts in evidence does not have Ballina LEP Clause 29 attached. 72The legislative framework in relation to these policies and the statutory provisions, which apply them to the restrictions on development in this case, are set out later in these reasons. After the purchases by the first group of plaintiffs in 2005, and before the purchases by the second group of plaintiffs in 2007, the defendant made a further development application, this time in respect of only Lots 4 and 8.

The 2007 Development Application 73In April 2007 the defendant tried to implement a development proposal for Lot 4 and Lot 8 that was close to the one provided for in the Management Plan. It varied slightly from the Management Plan by proposing the creation from Lots 4 and 8 of 18, rather than the originally illustrated 16, lots (and dwellings). A comparative review of the 2007 development application shows it to be consistent with the Management Plan. In any event the parties agreed about the consistency between the Management Plan and the 2007 development application (Exhibit 6) in the following terms:- " Greenwood Grove Estate Pty Limited ats Harrington and Others Admission by Plaintiff to Notice to Admit Facts dated 29 April 2011 The 2007 development application is generally consistent with the Greenwood Grove Management Plan (GGMP) but for the fact that the 2007 development application proposed 2 additional dwellings. Dated: 10 May 2011" 74The 18 units proposed in the 2007 development application were to be created entirely out of Lots 4 and 8 and did not encroach upon the rainforest remnants nor upon the other lots in the Estate. Although there were 18 rather than 16 lots, the report accompanying the 2007 development application claimed that it satisfied the Council's requirements for a minimum site area for each site. Council's requirement for a minimum site area is 1200 square metres. 75But the Council rejected the defendant's April 2007 development application. The Council's earlier letter of 4 March 2005 in relation to the 2003 development application, which had indicated that the deferred conditions were satisfied, foreshadowed the issues that Ballina Council still expressed to be of concern in April 2007. The Council's notice to applicants of its determination of the 2007 development application, given on 24 April 2008, rejected the application on the following grounds:- "Determination: The development application has been determined by Ballina Shire Council on 24 April 2008 by way of refusal for the following reasons:

The proposed development is inconsistent with the objectives of the L1 - Low Density (Large Lots) Control Plan Area and relevant provisions contained within Chapter 1 of the Ballina Shire Combined Development Control Plan.
The proposed development is incompatible with the character and amenity of the surrounding residential area.
The proposed development is unsuitable as it does not adequately respond to the environmental features and constraints of the land.
The proposed internal road design is inadequate and does not meet the standards specified within the Northern Rivers Design Manual.
The proposed stormwater management design does not comply with Chapter 13 - Stormwater Management of the Ballina Shire Combined DCP nor the Northern Rivers Drainage Design Manual.
The grant of consent would be contrary to the public interest." 76There is no basis in the evidence in this case to infer that the defendant included in the 2007 development application features that would make it likely that that application would fail. Indeed it would be difficult to infer that in 2007 the defendant was setting up its 2007 development application to fail, because it anticipated the passage and commencement of SEPP (Affordable Rental Housing) 2009 approximately two years later on 31 July 2009. No witness was called to give oral evidence on behalf of the defendant. It was not possible therefore for the plaintiffs' counsel, Mr Robson to put this hypothesis to the defendant's management. But on the evidence I see no basis for drawing such an inference, partly because of the efforts and resources that I infer the defendant expended in constructing the 2007 development application but also because of the further action the defendant took in attempting to have the application approved. 77The defendant did not accept the Council's rejection. It appealed against the decision to the Land and Environment Court of New South Wales. Pepper J heard the matter and decided that the defendant's application should be rejected: SJ Connelly Pty Ltd v Ballina Shire Council [2010] NSWLEC 151. 78In the meantime the New South Wales State Government promulgated a new State and Environmental Planning Policy to encourage affordable rental housing: SEPP (Affordable Rental Housing) 2009. The details of this policy are not of present relevance. But its introduction did provide an opportunity for the defendant to make a further application to Council in respect of Lots 4 and 8.

The 2010 and 2011 Development Applications 79In June 2010 the defendant lodged a further development application seeking approval for the erection of 74 "affordable rental housing" dwellings pursuant to SEPP (Affordable Rental Housing ) 2009. This was far more dense development of Lots 4 and 8 than was contemplated in the Management Plan. The application comprised a mix of single and double story dwellings ranging from one to three bedrooms in size. The development was said to propose "quality, affordable housing solutions for the Ballina Shire" and to protect and enhance the local area's habitat and environmental values "whilst maintaining a high level of amenity for existing and future residents of Greenwood Grove". The plaintiffs dispute this last statement. 80The Council was not required to determine the defendant's June 2010 development application because it was withdrawn in November last year. However the defendant lodged an application in substantially identical terms with the Council in February 2011 ("the 2011 development application"). In these proceedings the plaintiffs seek to restrain the defendant from proceeding with the 2011 development application and to require the defendant to give notice of its withdrawal to Ballina Shire Council. 81It is not necessary to examine the contents of the 2011 development application in any detail for the purpose of determining the matters in issue on the pleadings. The 2011 development application's building layout is conveniently reproduced in Figure 2 at the end of these reasons. Examination of the 2011 development application building layout plans for Lots 4 and 8, show much more dense block style development than was the case in the Management Plan as shown in Figure I.

The Regulatory Framework 82The defendant's principal answer to the plaintiffs' claim in these proceedings is that none of the provisions in the Management Plan constrain the defendant from pursuing the 2011 development application with Ballina Council because SEPP (Affordable Rental Housing) 2009 ,Clause 9 and Ballina LEP , Regulation 29 suspend the operation of those constraining provisions. 83The EPA Act, s 37 permits the Governor to make State Environmental Planning Policy instruments such as SEPP (Affordable Rental Housing) 2009. And the EPA Act , s 53 permits the Minister to make Environmental Planning instruments (LEPs) for environmental planning in each local area. 84SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29 have each been made under the authority of the EPA Act, s 28 which provides as follows:- "28 Suspension of laws etc by environmental planning instruments (1) In this section, regulatory instrument means any Act (other than this Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made. (2) For the purpose of enabling development to be carried out in accordance with an environmental planning instrument or in accordance with a consent granted under this Act, an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified in that environmental planning instrument. (3) A provision referred to in subsection (2) shall have effect according to its tenor, but only if the Governor has, before the making of the environmental planning instrument, approved of the provision. (4) Where a Minister is responsible for the administration of a regulatory instrument referred to in subsection (2), the approval of the Governor for the purposes of subsection (3) shall not be recommended except with the prior concurrence in writing of that Minister. (5) A declaration in the environmental planning instrument as to the approval of the Governor as referred to in subsection (3) or the concurrence of a Minister as referred to in subsection (4) shall be prima facie evidence of the approval or concurrence. (6) The provisions of this section have effect despite anything contained in section 42 of the Real Property Act 1900 ." 85The Ballina LEP , Regulation 29 provides for the suspension of certain laws for the purposes of enabling development to be carried out. Its effect is similar to SEPP (Affordable Rental Housing) 2009 Clause 9. Ballina LEP Regulation 29 provides:- "29 Suspension of certain laws etc (1) For the purpose of enabling development to be carried out in accordance with this plan (as in force at the time the development is carried out) or in accordance with a consent granted under the Act: (a) section 314 (1) (c) of, and Schedule 7 to, the Local Government Act 1919 , (b) section 37 of the Strata Titles Act 1973 , and (c) any agreement, covenant or instrument imposing restrictions as to the erection or use of buildings for certain purposes or as to the use of land for certain purposes, to the extent necessary to serve that purpose, shall not apply to development carried out in accordance with this plan. (2) Pursuant to section 28 of the Act, before the making of this clause: (a) the Governor approved of subclause (1), and (b) the Minister for the time being administering the provisions referred to in subclause (1) (a) and (b) concurred in writing in the recommendation for the approval of the Governor of subclause (1)." 86In addition to the LEP, the SEPP (Affordable Rental Housing) 2009 similarly provides for the suspension of covenants, agreements and instruments in similar, but not identical terms. The relevant provisions of SEPP (Affordable Rental Housing) 2009 are Clauses 3, 7, 8 and 9 which provide:- "3 Aims of Policy The aims of this Policy are as follows: (a) to provide a consistent planning regime for the provision of affordable rental housing, (b) to facilitate the effective delivery of new affordable rental housing by providing incentives by way of expanded zoning permissibility, floor space ratio bonuses and non-discretionary development standards, (c) to facilitate the retention and mitigate the loss of existing affordable rental housing, (d) to employ a balanced approach between obligations for retaining and mitigating the loss of existing affordable rental housing, and incentives for the development of new affordable rental housing, (e) to facilitate an expanded role for not-for-profit-providers of affordable rental housing, (f) to support local business centres by providing affordable rental housing for workers close to places of work, (g) to facilitate the development of housing for the homeless and other disadvantaged people who may require support services, including group homes and supportive accommodation. ... 7 Land to which Policy applies This Policy applies to the State. 8 Relationship with other environmental planning instruments If there is an inconsistency between this Policy and any other environmental planning instrument, whether made before or after the commencement of this Policy, this Policy prevails to the extent of the inconsistency. 9 Suspension of covenants, agreements and instruments (1) For the purpose of enabling development on land in any zone to be carried out in accordance with this Policy or with a development consent granted under the Act, any agreement, covenant or other similar instrument that restricts the carrying out of that development does not apply to the extent necessary to serve that purpose. (2) This clause does not apply: (a) to a covenant imposed by the Council or that the Council requires to be imposed, or (b) to any prescribed instrument within the meaning of section 183A of the Crown Lands Act 1989 , or (c) to any conservation agreement within the meaning of the National Parks and Wildlife Act 1974 , or (d) to any Trust agreement within the meaning of the Nature Conservation Trust Act 2001 , or (e) to any property vegetation plan within the meaning of the Native Vegetation Act 2003 , or (f) to any biobanking agreement within the meaning of Part 7A of the Threatened Species Conservation Act 1995 , or (g) to any planning agreement within the meaning of Division 6 of Part 4 of the Act. (3) This clause does not affect the rights or interests of any public authority under any registered instrument. (4) Under section 28 of the Act, the Governor, before the making of this clause, approved of subclauses (1)-(3)." 87The defendant deployed SEPP (Affordable Rental Housing) 2009 Clause 9 and Ballina LEP , Regulation 29 against the plaintiffs. But the first issue for the Court to consider is the various legal relationships that exist between the parties, apart from the operation of Ballina LEP , Regulation 29 and SEPP (Affordable Rental Housing) 2009 Clause 9. The Contract Causes of Action 88The plaintiffs' plead three causes of action based in contract. First they rely on an alleged express term of each contract of sale that " the defendant would not carry out or permit to be carried out any development or improvement of the lots referred to in the Management Plan that is inconsistent with the Management Plan ." Secondly they plead an implied term to the same effect. Thirdly they plead a collateral contract to the same effect. The plaintiffs allege that the defendant breached one or more of these terms or the collateral contract by carrying out the development proposed in the 2011 development application. The plaintiffs claim that damages would not be an adequate remedy for such breaches and they claim various forms of injunctive relief, including a permanent restraint upon implementing any development proposal that is inconsistent with the Management Plan and an order that the defendant give notice to Ballina Council of withdrawal of the 2011 development application. Express Term of the Contracts 89The plaintiffs first plead an express term of each contract that the defendant would not carry out or permit to be carried out development or improvement of the lots referred to in the Management Plan that was inconsistent with the Management Plan. This plea is principally based upon Clauses 20.2 and 36 of the contract and the terms of the Management Plan. 90In my view the plaintiffs' first plea closely approximates the defendant's express contractual obligation to adhere to the Management Plan. But the term pleaded is slightly different from the actual obligation as the following analysis shows. Clause 36.1 is a key provision that expressly describes the attaching of the Management Plan to the contract. Clause 20 confirms that the Management Plan, once attached is "part of this contract". Clause 20 assists the inference that the Management Plan plays some contractual role between the parties. 91But the precise contractual effect of the Management Plan is not well described in the contract. Clause 36.1 refers to the attaching of the Management Plan. Clause 36.2 merely contains acknowledgements on the part of the purchaser that it has read the Management Plan and is bound by it. Clause 36 is remarkable for its failure to expressly impose upon the vendor obligations and acknowledgements similar to those imposed upon the purchaser under Clause 36.2. Despite that deficiency, the defendant is bound, in my view, by the provisions of the Preamble on page ii of the Management Plan to the extent that those provisions impose clear obligations on the defendant. The terms of Clause 36.1 are important in effecting this result. Clause 36.1 introduces the Management Plan by quite a different description, as an "agreement"; "attached to the contract is a management agreement ..." [Emphasis added]. The Management Plan clearly refers to the defendant, the vendor to each of the plaintiffs by name throughout. But no purchaser is expressly named in the Management Plan because it is a general document designed for distribution by the defendant to many purchasers. The fact that the defendant is named in the agreement, the Management Plan, but not any of the plaintiffs, partly explains why it was necessary for the sale contract with each plaintiff to express acknowledgements and agreements on the part of the purchaser in Clause 36.2 but express none on behalf of the vendor. The defendant/vendor's obligations are clear enough from the Management Plan itself. 92There are a number of indicators that the defendant is bound by the Management Plan to the extent that it is capable of having contractual force. First, the Management Plan is described as an agreement "setting out, amongst other things, architectural and landscaping requirements in relation to some or all of the lots in the plan of subdivision" [Emphasis added]. The parties intended that an agreement in the form of the Management Plan would operate to effect particular "requirements" in relation to its subject matter. The Management Plan places "requirements" on both the defendant and the plaintiffs. 93Secondly, some parts of the Management Plan are less capable of operating as contractual terms than others. For example the Vision Statement at the opening of the Management Plan is expressed in aspirational terms that are not readily capable of enforcement. In contrast the Preamble in the Management Plan is relatively precise and is an important component of the defendant's obligations under the Management Plan. In Clause 36.2.3 of the Contract the purchaser acknowledges a limitation on the purchaser lodging development applications with Ballina Council in respect of a lot, "until such application has been approved by the vendor in accordance with part (ii) of the Management Plan". The expression "part (ii)" in Clause 36.2.3 is a reference to the Preamble which contains the approval procedure that a purchaser must follow to obtain the defendant's consent before lodging a plan with Council. Implicitly at least the defendant is obliged to participate in and co-operate in the approval procedure, including by giving its approval where justified. To this extent the defendant is also bound by the requirements of the Management Plan. 94But what is the relevant content of the defendant's obligations under the agreement reflected in the Management Plan? The defendant not only has an obligation to respond to the steps initiated by a purchaser in "The Approval Procedure". The "Overview" section of the approval procedure in the Preamble is also of considerable importance. The two paragraphs in that Overview refer to two important but different functions of the defendant. The first paragraph describes the defendant's "total discretion" to allow or disallow variations to the Management Plan to deal with applications made by lot owners. This paragraph is not reserving the defendant the liberty to change the Management Plan. Rather it is dealing with applications that lot owners make to it. This follows from the use of the words "may allow (but is not required to allow)". 95But the second paragraph deals with something entirely different. The second paragraph is a limitation upon the extent to which the defendant can of its own motion alter the Management Plan. The defendant places upon itself, in my view, in this second paragraph a limitation upon its freedom to change the content of the Management Plan. This limitation was an important security for purchasers of lots in the Estate that the defendant would not later just change the Management Plan to suit itself. The defendant's capacity to "make changes to the Management Plan" was limited to changes "to accommodate any changes in the statutory controls, design guidelines, policies and regulations of Ballina Shire Council or any other authority". In my view, "accommodate" is used in this clause to mean, as the Macquarie Dictionary explains, "4.to make suitable or consistent; adapt: to accommodate oneself to circumstances. 5. to bring into harmony; adjust; reconcile: to accommodate differences ". This clause permitted the defendant to adjust the Management Plan to the extent such adjustment was necessary to reconcile the Plan to altered planning controls. But the clause authorised changes only to that extent. For example if planning controls altered, so that the layout, building or landscaping standards in the Management Plan were no longer permitted by planning authorities, then the defendant was authorised to adjust the Management Plan to deal with what would otherwise be a prohibition upon its implementation. But this clause in the Preamble did not authorise the defendant to adjust the Management Plan merely because other development options opened up to the defendant and "statutory controls" became more relaxed. Such an interpretation would go beyond the meaning of "accommodate", which in this context involves reconciling the Management Plan to any inconsistency created with its contents by changes in statutory controls. There is no need for a reconciliation of differences if all that has happened is a fresh option has opened to the defendant but the Management Plan can still be implemented. 96Thus, but for the operation of Ballina LEP , Regulation 29 and SEPP (Affordable Rental Housing) , Clause 9, the change the defendant is now proposing through the 2011 development application goes beyond the limited flexibility for change available to the defendant in the Preamble of the Management Plan. Change to the Management Plan beyond that limited flexibility would be a breach of the defendant's obligations in the agreement reflected in the Management Plan and could ordinarily be prohibited by injunction. 97Thus, the relevant express term of the contract between the defendant and each of the plaintiffs was not the one pleaded by the plaintiffs. Rather it was a term to the effect that: the defendant may make changes to the Management Plan to accommodate any changes in the statutory controls, design guidelines, policies and regulations of Ballina Shire Council or any other authority but the defendant may only make changes for that purpose. Limiting the changes this way directly flows from the use of the word "accommodate" in the Preamble. It thus becomes unnecessary to consider a number of the arguments the plaintiffs advanced to support the term which they pleaded. 98The plaintiffs relied upon cases such as Shepperd v Ryde Corporation (1952) 85 CLR 1, a case about the grant of an interlocutory injunction, which nevertheless supports the proposition that it is arguable that a purchaser who receives a pamphlet describing a proposed estate development before contract may be the beneficiary of either a collateral contract or an implied warranty that the areas described in the pamphlet would be used as the pamphlet described. But Shepperd v Ryde Corporation was only an interlocutory injunction case where the contract concerned did not have the equivalent of either Clauses 20 or 36 of the contract made between these plaintiffs and this defendant. 99But for the operation of Ballina LEP Regulation 29 and SEPP (Affordable Rental Housing) 2009, Clause 9 the defendant would, in my view, be in breach of this express term of its contract with the plaintiffs by propounding the 2011 development application. The breach is occasioned because the changes that the defendant has made to the Management Plan in the 2011 development application are not changes that have been made "to accommodate any changes in...statutory controls..." Nothing in the passing of SEPP (Affordable Rental Housing) 2009 requires the Management Plan to be reconciled with the contents of that SEPP. The full text of SEPP (Affordable Rental Housing) 2009 and some explanatory materials have been put before the Court. Nothing in those materials requires the defendant to change the Management Plan. The SEPP (Affordable Rental Housing) 2009 merely gives the defendant options for the development of lots 4 and 8 that it did not have before. The defendant seeking to develop Lots 2 and 4 in conformity with the 2011 Development Application would be a breach of the express terms that I have found in the contract. 100The defendant interpreted the Preamble differently. The defendant submitted that the first two paragraphs of the Preamble's Overview were not contractually binding and in any event gave the defendant flexibility at its discretion to change the Management Plan. But I do not agree with this submission. It does not give sufficient credit to the differences between the first and second paragraphs of the Overview. Nor does it give effect to the meaning of the word "accommodate" in the second paragraph.

Implied Term and Collateral Contract 101My findings in relation to the express term of the contract simplify analysis in relation to the allegations of an implied term or of a collateral contract. The principles that govern the implication of terms in written contracts are well established and have been stated by the Privy Council in BP Refinery (Weston Port) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 and the High Court in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that it 'goes without saying'; (4) it must be capable of clear expression; and (5) it must not contradict any express term of the contract. 102A term of the kind that the plaintiff pleads will not be implied into the contract, because it has in it the express term that I have already identified. The implied term that the plaintiffs plead is inconsistent with the express term of the contract as I have found it. It is inconsistent because the plaintiffs' implied term suggests that no change of any kind can be made to the Management Plan which is inconsistent with the plan as it was in March 2005. But the term that arises out of the Preamble's Overview is a term which does allow some changes that will produce inconsistency with the March 2005 Management Plan. But that inconsistency is only justified in circumstances where it is necessitated by changes to external statutory controls or similar requirements of Ballina Council or other authorities. 103But if I am wrong about there being an express term in the contract of the kind that I have described in the previous section then in my view the Court would imply a term to the same effect, as the express term I have found. The approach I take here is similar to that taken by Kearney J in Tarval Pty Ltd v Stevens & Ors (1985) BC9002284, at 19, and on Appeal (1990) NSW Conv R 55-552. The term satisfies the conditions necessary to grant the implications of a term into the contract. It is reasonable and equitable because it fairly adjusts the rights and obligations of the parties to deal with external intervention with their contractual arrangements. Second, it is necessary to give business efficacy to the contract because the contract would otherwise become ineffective to deal with a statutory prohibition of implementing part of the Management Plan. Third, it is obvious in the sense that it requires the parties to continue to perform the contract in accordance with the Management Plan except to the extent that they are prevented from doing so. Fourth, it is capable of clear expression in that the implied terms are little more than the second paragraph of the Overview section of the Preamble. Fifth, it does not contradict any express term in the contract. 104The occasion for relying upon doctrines of collateral contract does not arise in this case. Such doctrines may be appropriately employed when the contractual promise is not contained within the contract itself. The defendant's Management Plan was not a loose pamphlet only given to the plaintiffs as was the document in Shepperd v Ryde Corporation . Rather, Clause 20 makes it part of the contract. Only if Clause 20 is ineffective would it need to be assessed as a candidate for collateral contract. In my view it would satisfy the requirements for being a collateral contract.

Operation of the Statutory Instruments 105Clauses such as SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29 are common clauses in many environmental planning instruments in this State. Such clauses are authorised by EPA , s 28 and have already received extensive consideration by the Court of Appeal and by judges of the Land and Environment Court and of this Court. 106In one of the earliest cases on such provisions is the decision of Talbot J in Challister Limited v Blacktown City Council (1992) 76 LGRA 10 in which his Honour explains the purpose of EPA , s 28 and clauses such as SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29:- " The purpose of s 28 is to overcome any impediment placed on development which is to be carried out in accordance with Pt IV of the Environmental Planning and Assessment Act . It recognises that the ultimate regulatory provisions in relation to the carrying out of development resides in Pt IV of the Act. If those provisions are complied with either without consent but pursuant to an environmental planning instrument or in accordance with a development consent then the regime of the Environmental Planning and Assessment Act may prevail over any other act or any rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made if it is so provided in an environmental planning instrument with the approval of the Governor. Section 28 was enacted for the purpose of enabling development to be carried out. To that end an environmental planning instrument may include the type of provision of which cl 26 is an example. In order to serve the purpose of enabling development to be carried out a regulatory instrument such as a restriction or covenant shall not apply to development which is carried out in accordance with an environmental planning instrument or in accordance with a consent granted under the Environmental Planning and Assessment Act . Section 28(2) removes any bar to the development being carried out. It has no effect on whether development consent should be granted. The terms of the restrictive covenant are not a bar to the grant of a development consent. If a development consent is granted to permit a use which is in conflict with the terms of the restrictive covenant it does not follow that the development consent will be invalid. Neither does it follow that the developer must make application to the Supreme Court to have the covenant released varied or modified if the person having the power to release vary or modify the covenant refuses to co-operate. A dose examination of s 28(2) shows that it is this last step of releasing varying or modifying the covenant to which the subsection is directed. The opportunity to make such a provision in an environmental planning instrument is intended to achieve a result whereby development which satisfies the criteria laid down by the planning legislation may proceed notwithstanding any constraint imposed by other regulatory instruments. The Parliament recognised the significance of the extent of this power by subjecting its exercise to the approval of the Governor and in some cases to the concurrences of the relevant Minister. " 107The Court of Appeal considered the provisions in 1997. In Coshott v Ludwig [1977] NSW Conv R 55-810 per Meagher JA, Giles AJA and Simos AJA agreeing, the Court said of section 28 and a clause equivalent to Ballina LEP , Regulation 29:- " The self-evident purpose of s28 of the Act and cl32 of LEP27 is to nullify and remove all obstacles to the planning principles decided on by the Council or the Minister. In this context s28 of the Act is stating, in effect, "an environmental planning instrument may state what documents should be disregarded", and cl32 of LEP27 is stating that one type of document to be disregarded is a document creating a restrictive covenant. As to the argument about the words "by or under whatever authority made", I am of the view that, although chosen without conspicuous felicity, they mean no more than "howsoever created". 108The Court of Appeal's decision in Coshott v Ludwig [1977] NSW Conv R 55-810 has been extensively applied. One example is the decision of McLaughlin AsJ in Horizons Corporations Law Pty Limited v Rizons Pty Limited [1999] NSWSC 691 where referring to Coshott v Ludwig [1977] NSW Conv R 55-810 McLaughlin AsJ said:- " That decision of the Court of Appeal in my view clearly has the effect that the consent granted by the third defendant can in no way be impeded, neither can the implementation of that consent be prevented, by any agreement which the parties to the sale might have concluded between themselves or under any agreement arising out of the management statement which was incorporated in the written agreement for sale. " 109More recently in Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Limited & Ors [2010] NSWCA 214 at [41] the Court of Appeal affirmed (Tobias JA, with McColl JA and Handley AJA agreeing) the statement in Coshott v Ludwig (1997) NSW Conv R 56, 366 at 56,638 that the self evident purpose of [ EPA ], s 28 and equivalents of Ballina LEP , Regulation 29 "is to nullify and remove all obstacles to the planning principles decided on by the Council or the Minister". These principles have been extensively applied by the Land and Environment Court, which has generally rejected arguments that EPA, s 28 should be narrowly construed and affirming the idea that s 28 is designed to facilitate development and overcome impediments placed on development so as to avoid sterilisation of land: Coles Supermarkets Australia Pty Limited v K-Mart Australia Limited [1996] NSWLEC 135 per Pearlman J; and G.H. Wainwright v Canterbury Municipal Council [1992] NSW LEC 96 per Bignold J. The principles have also been applied by single judges of this Court in relation to equivalent provisions in Local Environmental Plans: see Owens & Anor v Longhurst & Ors [1998] NSWSC 387, Young J. Another example is Natva Developments Pty Limited v McDonald Bros Pty Limited & Ors [2004] NSWSC 777, in which Palmer J said at [63] when considering clause 26 of the Blacktown Local Environmental Plan, a provision equivalent to the provisions in issue in these proceedings:- "[63] Indeed, as the evident intention of the Act and the LEP is "to facilitate development and to overcome impediments placed on development" (see Coles Supermarkets supra) and as the Act is concerned with planning, not proprietorship, there is every reason not to restrict the operation of s 28 and cl 26 by limiting the restriction to be overcome under those provisions to one which is imposed directly only upon the land to be developed. In my opinion, cl 26(1) may operate upon any covenant, agreement or instrument as long as the rights arising thereunder have the effect, unless modified, of restricting the development for which the consent is to be given." 110SEPP (Affordable Rental Housing) 2009 Part 2, Division 1 provides a Code for the development of affordable housing in this State. Clause 8 provides that if there is an inconsistency between the SEPP and other environmental planning instruments whether made before or after commencement of the SEPP then the SEPP prevails to the extent of the inconsistency. Clause 9 has been set out earlier in these reasons. Clause 14 sets out various non discretionary development standards. Clause 15 sets out its own requirements that apply to the erection of affordable housing development under that SEPP . The objectives of the SEPP (Affordable Rental Housing) 2009 are stated in Clause 3 as including the provision of a consistent planning regime for the provision of the affordable rental housing and facilitating the effective delivery of new affordable rental housing by providing incentives by way of expanding zoning permissibility and non-discretionary development standards. The SEPP applies to the whole of the State. 111In short, SEPP (Affordable Rental Housing) 2009 applies in these circumstances because the defendant has made a development application in respect of affordable rental housing. The Ballina LEP also applies because the plaintiffs have applied for development consent to the the Ballina Shire Council. 112I do not think the differences between Clause 9 and Regulation 29 are material in this case. Both of them apply to the arrangements between the plaintiffs and the defendant under the contracts. The express term that I have found above is an "agreement, covenant or similar instrument that restricts the carrying out of that development" within SEPP (Affordable Rental Housing) 2009, Clause 9(1). The effect of my findings in relation to the express term of the contract is that the defendant may not vary the Management Plan except in limited circumstances. The term so found "restricts" the carrying out of development not contemplated by the Management Plan. In my view the effect of Clause 9(1) is that that contractual restriction therefore does not apply "to the extent necessary to serve the [purpose]" of pursuing the defendant's 2011 development application for affordable rental housing on Lots 4 and 8. The position would be much the same under the plaintiffs' implied term and collateral contract arguments. They are still an "agreement" within Clause 9(1). 113Nor is the position any different under Ballina LEP , Regulation 29. The same term, in my view, constitute an "agreement, covenant or instrument imposing restrictions as to the erection or use of buildings for certain purposes" within Regulation 29(1)(c). 114The plaintiffs argued that these provisions did not apply to their estoppel claim or in relation to their Trade Practices Act claims. But for the reasons explained below those claims are not made out because the simple representations pleaded by the plaintiffs are not established. Nevertheless, I also explain in those sections that, even if the representations were made out to otherwise found the plaintiffs' estoppel claim, Clause 9 and Regulation 29 would still apply. 115Mr Robson SC carefully put arguments to defeat the conclusion in this section but his arguments were ultimately unsuccessful. Relying upon the decision of Preston CJ in Cracknell and Lonergan Pty Limited v Council of the City of Sydney [2007] NSWLEC 392 at [45] he pointed to the absurdity that would arise if all private agreements that might restrict development on land fell within the scope of EPA , s 28. His argument rightly emphasises that there can still be debate at the margins of the application of s 28 and the statutory instruments made under it. Although the application of Clause 9 and Regulation 29 in this case lead to results that the plaintiffs find very difficult to bear, they do not create the absurdities that Preston CJ had in mind in Cracknell and Lonergan Pty Limited v Council of the City of Sydney [2007] NSWLEC 392. 116Mr Robson SC also took issue with whether the Management Plan here really imposes a "restriction" on development or whether what is really happening here is the contract requires the defendant developer merely to adhere to and maintain a plan for development of the land as was described by the High Court in Shepperd v Ryde Corporation (1952) 85 CLR 1. I do not agree with this submission. Even if the Management Plan is merely characterised as a plan for the development of the land, its binding force still restricts other forms of development on the land. As Palmer J said in Natva Developments Pty Limited v McDonald Bros Pty Limited & Ors [2004] NSWSC 777 of a similar clause in the Blacktown LEP " In my opinion, cl 26(1) may operate upon any covenant, agreement or instrument as long as the rights arising thereunder have the effect, unless modified, of restricting the development for which the consent is to be given. " The rights conferred by the contracts between the plaintiffs and the defendant do restrict all forms of the development not contemplated by the Management Plan. 117The plaintiffs say too that this statutory provision should not be given an interpretation that leads to the expropriation of private rights without compensation. But EPA , s 28 has already been given very wide effect in the authorities, as Coshott v Ludwig makes clear. 118The plaintiffs also say that the restrictions that the defendant relies on is not a "covenant". Even if that were right, I have found that the restriction is also embodied in an "agreement" in the form of an express term in the plaintiffs' contracts with the defendant. A Hypothetical Question? 119The defendant submits that the plaintiff's claim can be dismissed on the basis that it is entirely theoretical. Although strictly this argument is a preliminary answer to all the relief that the plaintiff's claim, it is convenient to deal with it at this point because the defendant's argument in part depends upon the operation of SEPP, which has been dealt with in this section. I do not agree that the plaintiff's claim raises only hypothetical questions. 120The defendant puts its theoretical question argument on a number of grounds. First it says that none of the representations that the plaintiffs have pleaded prevent the defendant from making the 2011 development application in accordance with SEPP (Affordable Rental Housing) 2009. So, the defendant says, the claim is premature and theoretical until the defendant takes a step that does conflict with the pleaded representations. Second the defendant says the development may be refused, withdrawn, approved subject to unacceptable conditions, or the SEPP (Affordable Rental Housing) 2009 may be repealed, making the plaintiff's claim to relief unnecessary. Finally the defendant says that until development consent is granted on acceptable terms and conditions it cannot be known whether the defendant will be entitled to or financially able to carry out the development and therefore until then the situation is hypothetical. 121Each of these arguments of the defendant fail. They may be dealt with in order. 122First, the contention that the plaintiffs' pleaded representations do not prevent the defendant from making the 2011 development application understates the plaintiff's case. The contention ignores the plaintiffs' claim in contract. But for the operation of the SEPP (Affordable Rental Housing) 2009 it is likely that the Court would have granted an injunction to restrain the defendant from pursuing the 2011 development application. The defendant's pursuit of the 2011 development application may only be explained upon the assumption that the defendant has, in breach of its contracts with the plaintiffs, changed the Management Plan beyond merely accommodating changes in statutory controls. If the plaintiffs delayed any longer in bringing these proceedings until development approval had been given, they would have risked the defendant arguing that their claim to injunctive relief was too late because of the expenditure that it would have by then incurred. There are also disagreements about the nature of the express and implied terms of the contracts between the defendant and the plaintiffs. None of these questions are theoretical. The plaintiffs' claims are not premature or hypothetical. 123Second the defendant's contention that the 2011 development application may not be successful or that the SEPP (Affordable Rental Housing) 2009 may be repealed does not make the plaintiffs' action hypothetical. The defendant has not offered to withdraw the 2011 development application. Until it does the defendant should be assumed to intend in the future to pursue the application to its logical conclusion. Indeed the defendant's withdrawal of the 2010 development application and its resubmission this year indicate a determination on its part to press on towards the development of Lots 4 and 8 in a manner inconsistent with the contract. Nor could the defendant point to any public indication that SEPP (Affordable Rental Housing) 2009 was at risk of being repealed. The jurisdiction to grant declarations includes the power to declare that conduct which has not yet taken place will or will not be in breach of a contract or a law and such a declaration will not be hypothetical the relevant sense: The Commonwealth v Sterling Nicholas Duty Free Pty Limited (1972) 126 CLR 297 at 305 per Barwick CJ. 124Third, the plaintiffs' claim is not a hypothetical exercise or a request for an advisory opinion in the sense in which Courts have declined jurisdiction on that ground. Doubts about the Court's jurisdiction to deal with allegedly hypothetical issues usually arise where only declaratory relief is sought, or where the plaintiffs have not presented a concrete situation which could amount to a binding decision raising a res judicata between the parties: Bass v Permanent Trustee Co Limited (1999) 198 CLR 334, at [47] - [49]. That is not this case. Here the plaintiff have sought injunctive relief including relief that the 2011 the application be withdrawn. Here the court's interpretation of the contract will create a res judicata between the parties. Trade Practices Act Claim 125The difficulty with the plaintiffs' Trade Practices Act causes of action is that I do not think that the Management Plan was misleading in the circumstances because it was incorporated into the draft contract in a form that gave clear indication that Ballina LEP , Regulation 29 and other statutory instruments operated in relation to the contract in a way that could displace the terms agreed between the parties in the Management Plan. Nothing in the modified representation entitled the plaintiffs to conclude that the defendant would not take advantage of the Ballina LEP or the SEPP (Affordable Rental Housing) 2009. These same difficulties inhibit the plaintiffs succeeding in their estoppel claim. 126The defendant concedes that any representation it made through the Management Plan was made in trade or commerce. The plaintiffs say that the Management Plan contained representations as to the way that the development would be carried out and that those representations were misleading and deceptive because the defendant knew that the development might occur in a way inconsistent with the plan or the defendant otherwise had no reasonable basis for making the representations. 127The principal difficulty with the Trade Practices Act case is that the Management Plan although clearly relied upon to get the plaintiffs to the point of contract was modified just before the contracts were exchanged. In my view the second paragraph of the material under the heading "Overview" in the Preamble to the Management Plan was a representation of future intention by the defendant about how the development would take place. Because of its place in the Preamble under a heading "Overview of the Implementation of the Greenwood Grove Management Plan" I would call it the "Overview Representation". By it the defendant represented that its then present intention was only to make changes to the Management Plan "to accommodate changes in statutory controls" and like matters. But by the time the parties came to contract it was clear that the representation was not as simple as that. The representation changed in my view by its annexure to the draft contract. The draft contract contained clear warnings through the annexure of Section 149 Certificate and its reference to the Ballina LEP and the material on page 2 of the contract under the heading "Warnings" about the application of "various acts of parliament and other matters". In my view before contract the representation was modified so that a reasonable reader of the contract before exchange would appreciate that the Overview representations should now be read subject to the operation of the Ballina LEP , Regulation 29 and similar statutory provisions. This modified form of representation I would call "the modified representation". 128I do not think that the modified representation was misleading or deceptive. The modified representation at the time of contract contemplated the possibility that the Ba llina LEP could be modified by statutory instruments. That is what happened. 129Both the plaintiffs and the defendant at the time of contract were legally represented and able to assess for themselves the probability or otherwise that the Management Plan might have to be displaced by the provisions of the Ballina LEP or other statutory instruments. 130It is not therefore strictly necessary to decide whether the defendant has displaced its onus of proof under Trade Practices Act, s 51A. But in my view its conduct in advancing the 2007 development application is sufficient to show that it had reasonable grounds in 2005 to represent that it could and would implement the Management Plan. Estoppel 131The plaintiffs also plead their case in estoppel. Their case is based upon doctrines of promissory estoppel stated by the High Court in Walton's Stores (Interstate) Limited v Maher (1988) 164 CLR 387. In my view the plaintiff's estoppel case would not be made out but for the operation of SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29. 132The plaintiffs pleaded they had relied upon a representation which was the same in content as the express term that they pleaded in their contracts with the defendant. But I have found above that the actual express term about the defendant making changes to the Management Plan was slightly different to the term the plaintiffs had pleaded. Also the representation made more conformed with the second paragraph in the Overview section of the Management Plan's Preamble, what I have also called the "Overview representation". I am prepared to find that the defendant did make the Overview representation, as has been discussed in relation to the Trade Practices Act cause of action. But even the Overview representation was modified by the time the Management Plan was incorporated into the contract, so as to show that the Ballina LEP and other statutory instruments could alter the obligations otherwise created by the Management Plan. This is what I have called the "modified representation". My conclusions about the modified representation are also fatal to the plaintiffs' estoppel case. 133The applicable law may be concisely stated. To establish an equitable estoppel a plaintiff must prove: (1) the plaintiff assumed or expected that a particular legal relationship would exist with the defendant and the defendant would not be free to withdraw from that relationship, (2) the defendant induced the plaintiff to adopt the assumption or expectation, (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation, (4) the defendant knew or intended him to do so, (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled, and (6) the defendant has failed to act to avoid that detriment: Walton's Stores (Interstate) Limited v Maher (1988) 164 CLR 387, at 428 - 429 per Brennan J. Those elements are not made out here but for the operation of SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29. 134(1) Assumed or expected relationship. I am prepared to find that the defendant made the Overview representation. But it was modified at contract to make clear that the parties' Management Plan obligations were subject to the Ballina LEP and other statutory instruments. Although the plaintiffs said that they relied upon the Management Plan, by the time of contract the modified representation was the one available to the plaintiffs. And it is the modified form of representation that I find the defendant made to them and that could reasonably ground any assumption or expectation on their part. But that modified representation only infers an assumption or expectation on the plaintiffs' part that the Management Plan would operate subject to the Ballina LEP and other statutory instruments. 135(2) Inducement to adopt assumption. I have already found that the Management Plan induced the plaintiffs to enter their respective contracts. But the Management Plan was only part of the story. Once it was attached to the contract it constituted the modified representation and that was the inducement. 136(3) Acting in reliance . All the plaintiffs acted in reliance upon the modified representation. I infer that the modified representation in its final form influenced each of them to enter their individual contracts. After contract they each developed their individual properties. They did so by faithfully following the approval procedure in the Preamble to the Management Plan by submitting their proposed plans to the defendant. At times too they adjusted their proposed plans to the defendant's views about the substantive specifications required by of the Management Plan. The total acquisition costs and development costs of each plaintiff's property was every case either close to or in excess of $1 million. Such conduct in conformity with the Management Plan and such significant expenditure by individuals who were preparing a personal residence rather than an investment property is a sound basis to infer that the plaintiffs relied upon the modified representations. 137(4) Defendant's intention that a Plaintiff act. I infer that the defendant intended all the plaintiffs to act on the modified representations. The defendant produced and distributed the Management Plan containing the representation. The defendant then attached the Management Plan to the contract to be exchanged with each plaintiff after which it should be inferred that the defendant intended the plaintiffs to act on the modified representation. The defendant required the plaintiffs to follow the approval process in the Management Plan. The defendant required most of the plaintiffs to adjust the development of their lots in the Estate on the basis of the Management Plan. This inference is not displaced by any evidence from a witness able to vouch for the defendant's corporate intention. 138(5) Detriment if the assumption is not fulfilled . It is here and in the next element of an equitable estoppel that the modified representation made from the time of contract limits the plaintiff's capacity to make out an equitable estoppel. From the time of contract the representation in the Management Plan was modified to include reference to the Ballina LEP and reference to warnings about the existence of planning policies such as SEPP (Affordable Rental Housing) 2009. The representation was no longer one as simple as the Overview section of the Preamble in the Management Plan. Rather the representation by then also conveyed the idea that statutory instruments such as the Ballina LEP and SEPP (Affordable Rental Housing) 2009 could displace the Management Plan. When the defendant relies on the Ballina LEP to advance the 2011 development application it is not failing to fulfil the assumption I have inferred. Rather its conduct is consistent with the assumption. The plaintiffs will not therefore suffer a legally recognised detriment from the defendant's conduct. 139(6) Defendant has failed to act to avoid detriment. In the light of my findings this element is not made out, as there is no detriment. 140I have found that the plaintiffs' estoppel argument fails even before the application of SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29. But the plaintiffs also argued that the defendant's conduct in providing the Management Plan to each of the plaintiffs and making representations to the effect that it would adhere to the Management Plan were not an "agreement", covenant or instrument imposing restrictions" within Regulation 29(1)(c) or, "any agreement, covenant or other similar instrument that restricts the carrying out of that development". It is said that the defendant's conduct and its implied or oral promises are not an "instrument" or "covenant". 141I do not agree with this argument. An estoppel acts upon assumptions and expectations, rather than through enforceable promises that could be characterised as "covenants" (which in common legal parlance means "any promise": see David Securities Pty Ltd v Commonwealth Bank of Australia (1991) 175 CLR 353 at 365) or even "agreements". But at least part of what the plaintiffs rely upon is the written form of the Management Plan itself, which is still a "similar instrument that restricts the carrying out of that development" within Clause 9 and an "instrument imposing restrictions" within Regulation 29, even if part of its legal force is gained by conduct outside the document.

Conclusions and Orders 142In the result therefore I have found that but for the effect of SEPP (Affordable Rental Housing) 2009, Clause 9 and Ballina LEP , Regulation 29 the plaintiffs would have succeeded in these proceedings in contract but would have failed in estoppel and under the Trade Practices Act . However, the operation of these two statutory instruments prevents the plaintiffs from succeeding and I decline to grant an injunction or orders of the kind the plaintiffs seek in their Amended Statement of Claim. In the result therefore the plaintiffs claim will be dismissed. 143But there may well be arguments about the burden of costs that comes with this result. The defendant only amended very late to plead the Defence upon which it has now succeeded. Although the plaintiffs continued with the hearing despite the amended plea, had the plea been proffered earlier the plaintiffs may perhaps have taken a different course. In these circumstances I will hear argument about the question of costs, after which the parties can bring in short minutes of order to give effect to these reasons. FIGURE 1 FIGURE 2 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 August 2011

Trade Practices Act 1974(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (13 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (18)

Cited By (4)