All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
9 His Honour pointed to the need for the court to feel some sense of actual persuasion of the existence of each element of the cause of action. That did not mean that proof is to be achieved other than on the balance of probabilities. It directs attention to the concept of proof, and the concept of satisfaction. (See, too, my judgment, with which McColl and Bell JJA agreed, in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [44] to [55].)
10 The consequences of those considerations was, McLelland CJ in Eq said, that a party relying on spoken words as the foundation of a cause of action for misleading or deceptive conduct might face serious difficulties, "in the absence of some reliable contemporaneous record or other satisfactory corroboration".
Credibility
11 Mr Bart and Mr Bettar gave evidence by affidavit, and were cross-examined. I had concerns with aspects of the evidence of each of them. Further, I think, the evidence of each was overlaid, unconsciously or otherwise, by perceptions of self-interest and by a serious - indeed, fixed - view that BBB had been wronged at the hands of Aldi. In those circumstances, I think, the evidence of each of them, in relation to the relatively small areas of factual dispute, needs more than usually close examination before it can be accepted.
12 Each of Mr Bart and Mr Bettar insisted, at every possible opportunity, that BBB had reached a "binding agreement" with Aldi, and that they acted (and caused BBB to act) on the faith of that binding agreement. However, it appears, each of them perceived this binding agreement to be something less than a "legally binding agreement". The distinction is one that is difficult to understand, and their evidence does not assist in this regard. Mr Bart's evidence in particular is difficult to accept on this point, coming as it did from an experienced, and apparently astute, capable and successful, businessman. He recognised that, in general, for an agreement involving the disposition of an interest in land to be enforceable, it should be in writing. Nonetheless, he maintained, it was his understanding that BBB had achieved a "binding" agreement with Aldi.
13 There were other aspects of Mr Bart's evidence that gave me concern: for example, his evidence that he believed that the parties were "wholly in agreement" by the end of September 2006. This was inconsistent with the facts, and no basis for such a belief was shown. Again, when questioned on BBB's negotiations with another supermarket operator to take a lease of the space that was the subject of the discussions with Aldi, Mr Bart denied that he sought to use this in his "negotiations with Aldi to try to get Aldi over the line… " (T176.30). That denial, which was clear and emphatic, was inconsistent with an email sent by Mr Bart to Mr Bettar on about 8 June 2007, instructing Mr Bettar to do that very thing in a meeting with Aldi to be held in a few days time. Even when confronted with this document, Mr Bart refused to acknowledge the obvious, and said that "[w]hat I was really doing was venting - venting my spleen and my frustration as much as anything else" (T177.25).
14 Further, as to Mr Bart, it became apparent during his cross-examination that he had no real recall of events. He relied very heavily on his affidavit, and I observed that whenever he was questioned about a matter of detail, he would refer to it carefully before giving an answer. I do not go so far as to say that Mr Bart did this to ensure that his evidence in cross-examination was consistent with his affidavit. I do however think that, as I have indicated, it shows that his recollection was otherwise defective.
15 Mr Bettar, too, was given to looking backwards and forwards through documents before answering questions. I noticed that, when he had a volume of the court book before him and was being questioned on a particular document, he would search back and forth through the court book either before answering or during his answer; and he would also do so while the next question was being formulated. He was requested to confine his attention to the particular document on which he was being questioned, but I noticed that he continued to look at other documents, although less frequently than before.
16 Further, as to Mr Bettar, it is clear that he is under some degree of financial strain. He said, more than once (and not always in response to the particular question that had been asked) that his family had mortgaged all of its assets to provide its share of the capital for the joint venture. I think that this is something that has contributed to - indeed, explains - the perception of self-interest and the view that BBB had been wronged by Aldi, to which I have referred.
17 Mr Bettar, too, was cross-examined about BBB's dealings with another supermarket operator referred to at [13] above. He claimed to have been told by a representative of that operator that it could not trade out of the basement. However, both contemporaneous documents and Mr Bettar's own affidavit (of 5 June 2009, para 13 read in conjunction with T144.5-.35) show otherwise.
18 Having said that, I acknowledge that many of the matters of which Mr Bettar gave evidence were consistent with his contemporaneous documents. It was not put to him that those documents were fabricated, or false, and I do not find that they were. Mr Watson submitted that the contemporaneous documents provide support for Mr Bettar's evidence; and to some extent, they do. This is not always of great significance, because the documents report on (for example) conversations as one might expect: in a conclusory, impressionistic or summary form. Further, there is a tendency in Mr Bettar's affidavit to overstate, or exaggerate, in a way beneficial to BBB, what is said in documents that he puts in evidence. I do not know whether this tendency is due to natural optimism, the factors of self-interest and grievance to which I have referred or a more general inclination to seek to improve BBB's case. If that tendency were due to innate factors rather than factors connected with the litigation, it might give some reason for questioning the accuracy of Mr Bettar's contemporaneous documents. However, notwithstanding those doubts, I am prepared to start with a predisposition in favour of accepting Mr Bettar's evidence to the extent that it is supported by his contemporaneous documents.
19 Where there is no such foundation for Mr Bettar's evidence, and as to Mr Bart's evidence generally, I think that it is necessary to scrutinise what they say with care, and to weigh it against contemporaneous documents to the extent that they assist, and the probabilities objectively ascertained, before relying on it.
20 For Aldi, Messrs Brassington, Savell and Kopp gave evidence. Messrs Brassington and Savell are no longer employed by Aldi. Indeed, Mr Brassington left Aldi's employ at the end of January 2007, whilst the negotiations were in progress; but he was retained thereafter to continue the negotiations as a consultant on behalf of Aldi. I do not know whether or not Mr Brassington has any ongoing business association with Aldi. Certainly, it was not put to him that he did; or that his evidence was influenced by any perception of self-interest arising out of whatever (if any) ongoing business association there may be.
21 I found Mr Brassington to be an impressive and reliable witness. He appeared to have a good recall of relevant events. His answers were straightforward and responsive. To the extent that his evidence can be tested against objective matters (such as contemporaneous documents), it appears to be accurate. I do not think that Mr Brassington was motivated by any desire to serve Aldi's cause.
22 Mr Savell is now working for another company in the property management industry. He does not appear to have any ongoing connection with Aldi. I think he can be regarded as an independent and reliable witness, to the extent of his memory. However, and perhaps not surprisingly, he did not appear to have a detailed recollection of relevant events, although I am satisfied that his evidence, at least in the relatively broad terms in which it was given, can be accepted as reliable.
23 Mr Kopp was an impressive witness. He is still employed by Aldi (although with a different title). It was not put to him that he had tailored his evidence to suit his employer's case. Nor do I think that he did so. On the contrary, I think, Mr Kopp's evidence was straightforward and reliable. He seemed to have a clear recollection of relevant events, and gave his evidence in a forthright fashion.
24 One other matter that disposes me to accept the evidence of Messrs Brassington and Kopp is that, where appropriate, they made concessions, even where the concessions might have been seen not to be in Aldi's interest. By contrast, Mr Bart to some extent and, more substantially, Mr Bettar were inclined to argue, and to seek to evade points of difficulty. Although I attribute that to the factors of self-interest and grievance to which I have referred, it diminishes my confidence in the reliability of their testimony.
25 In addition, BBB and Aldi called as witnesses the solicitors who had represented them in the transaction. BBB called Mr Robert Kalde, a principal of the firm then known as KQ Lawyers, and Mr Ben Rogers, then an employee of that firm. Aldi called Mr John Brophy, of Brophy Bridge and Mirow.
26 Mr Kalde was cross-examined, relatively briefly. Messrs Rogers and Brophy were not required for cross-examination.
27 Although I express no criticism of Mr Kalde's honesty or objectivity, I note, with some disquiet, that he is now a partner of the firm of solicitors acting for BBB in this litigation, and indeed was present for most of the hearing to instruct counsel. There were two aspects of Mr Kalde's evidence that were contentious. It is, in my view, undesirable for a lawyer both to act for a party to litigation and to give evidence on a contentious matter in the interest of that party. Having said that, I do not think that Mr Kalde sought to do other then give truthful evidence to the best of his ability.
28 Aldi also called an architect, Ms Gillian Donaldson, who had been engaged to prepare plans for its proposed supermarket. There was no attack on the credibility of Ms Donaldson's evidence (which did not in any event go to the relatively few disputed questions of fact). I accept it.
29 As I have said, the disputes of fact are relatively limited, both in number and in extent. They involve, as to some meetings, a conflict between the evidence of Mr Bettar and Mr Brassington; and, as to another meeting, a conflict between the evidence of those two gentleman and their respective legal advisers. More generally, they involve disputes as to representations said to have been made by Mr Brassington at various meetings; but the significance of those disputes (and of the alleged representations) is much diminished when one takes into account what Mr Bettar in particular said in cross-examination.
30 For the reasons I have given, in general I prefer the evidence of Mr Brassington to that of Mr Bettar to the extent that they are in conflict, except in the cases to which I refer where Mr Bettar's evidence is supported by contemporaneous documents. In respect of the meetings in which Mr Kalde was involved, I prefer the evidence of Mr Brassington to that of Mr Kalde. In this case, for reasons that I shall elaborate in dealing with the particular meetings (which took place on 8 November 2006 and 30 March 2007), I think that Mr Brassington's evidence is consistent with the probabilities, regarded objectively; and that the comments attributed to him by Messrs Bettar and Kalde are inconsistent with those probabilities.
31 There is a minor conflict between Mr Brophy and Mr Rogers as to another conversation on 30 March 2007. Since neither of them was required for cross-examination, the dispute can be left, as apparently the parties were content to do, unresolved.
The expert evidence
32 The parties relied on the evidence of numerous experts. That evidence is relevant to BBB's claim for damages. Since I have concluded that BBB's claim must fail, and also because it was agreed in any event that if the question of damages arose, it should be dealt with (in the absence of agreement) once the question of liability had been decided, I shall not comment on that expert evidence. I do however note that the opposing experts conferred, and reduced the areas of disagreement between them in a very helpful way.
The project
33 The land is a site bounded by Botany Road to the east, McEvoy Street to the north, Wyndham Street to the west and Retreat Street to the south. BBB bought the land with the benefit of an existing development consent. Work under that consent had been commenced. Demolition was complete. Some works of excavation and piling were also complete.
34 The project, as approved, comprised the construction of four mixed use buildings on the site. Those buildings were titled by reference to the street that they fronted: building B (which is the building with which these proceedings are concerned), building M, building W and building R. BBB's intention was to develop and sell building B and to retain buildings M, W and R in the longer term as investments.
35 The consent provided for a development (referred to in the evidence from time to time as "scheme A") that comprised 122 residential apartments, 177 square metres of retail or commercial space and 112 residential car spaces. The consent effectively utilised the full allowable floor space ratio. Accordingly, any modification of the approved development, to increase the area for retail or commercial use, would require, in effect, that floor space be "exchanged" between one form of use and another; and in addition, there may have been absolute limits on the extent to which the responsible authority, Sydney City Council (the Council), would countenance expansion of particular uses.
36 The development approved by the existing consent provided for the retail or commercial space to be aboveground (I think, at street level) with the residential apartments built over it, and for the basement to be used only for carparking. The excavation and piling works that had been performed were adapted to those purposes.
The first stage of negotiations
37 The evidence traversed a vast number of meetings and discussions. I do not propose to refer to it all. What I will do is set out what seem to me to be the salient points, dealing in particular (but not only) with the discussions and letters which are particularised as giving rise to the representations alleged in para 8 of the contentions set out in BBB's further amended commercial list statement (FACLS). I set out that paragraph (although not the detailed particulars) at [242] below.
The initial negotiations with Aldi
38 Once contracts for the purchase had been exchanged (the purchase was undertaken by a trustee for BBB, but nothing turns on this), Mr Bart instructed Mr Bettar to find tenants for the retail and commercial spaces. Mr Bettar approached a number of prospective tenants, some of whom expressed interest in taking a lease of the available retail or commercial space in building B. One of the perspective tenants that Mr Bettar approached was Aldi. He spoke to Mr Brassington. Mr Brassington was interested, because Aldi was looking to expand its operations into the inner southern and eastern area of Sydney.
39 On 31 May 2006, Mr Bettar, Mr Nicholas and Mr Brassington met at BBB's offices in Wyndam Street. Mr Bettar prepared "minutes" of that meeting, which I accept as substantially accurate. Mr Brassington confirmed that Aldi was interested in taking about 1,150 square metres to 1300 square metres. He specified certain basic requirements that Aldi would have, and undertook to forward a "Generic Lessor / Lessee scope of works". There was some discussion of a rental per square metre. However, Mr Brassington said, Aldi preferred to own rather than rent.
40 Mr Bettar's minutes include the following items:
12. PB asked if Aldi would be interested in a shop front with escalators down to the basement level and then they would be able to have on grade parking. Joshua stated that that would definitely be his preference as they are destination shopping and signage is all they would need on street level. He also stated that on ground level he could not offer what we could get in the market.
13. NB advised that this would be a problem as we would loose [sic] FSR if we look [sic] this option and a cost of about $3.3 million would be incurred to go down another level.
14. Joshua stated that ALDI would defeinatel [sic] be interested in buying the whole level as a stratum with a shop front and he believed he could make it worth while.
41 Item 13 needs some explanation. If Aldi were to take a lease of a basement, building B would need substantial redesign. As approved, it contained one basement level (B1) for residential carparking. If that level were to be, in effect, given over to Aldi for use as a supermarket, BBB would need to construct a lower basement level (B2) for residential parking. In addition, since the approved development utilised all the available floor space ratio for the land, there would need to be some "juggling" of floor space ratio between the different uses. All of this meant that: