Contract and tort - Trade Practices Act 1974 (Cth) - Claim for loss of commercial opportunity - Nature of contractual obligations undertaken by defendant acting as architect and town planning adviser - Whether duty of care extends to the taking of positive steps beyond agreed professional task

Special qualities of plaintiff's site secured by planning consent for 12 months under current town planning scheme - Pending town planning scheme with reduced height limits - Expiry of existing consent while building plans being finalised - Plaintiff's project barred by gazettal of new scheme - Whether representations made by defendant as to viability of project - Extent to which defendant's duty of care affected by terms of contract and plaintiff's ambivalence about project - Defendant found to be in breach of common law and statutory duties in failing to warn or inform plaintiff about risk of gazettal

Whether sufficient causal link between misconduct complained of and loss suffered - Identifying and valuing loss - Likelihood of project being completed - Whether reasoning in Sellars case applies - Whether damages to be assessed at date of breach or date of trial - Assessment of damages for loss of opportunity - Amount of compensation payable to plaintiff reduced pursuant to reasoning in Sellars case - Payment of interest

Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s 4

Trade Practices Act 1974 (Cth), s 51, s 52, s 82, s 87

1 The plaintiff, Peter Michael Berryman, was at all material times the proprietor of a property known as 20 Hensman Street, South Perth. The plaintiff contends in these proceedings that on or about 28 September 2000 he engaged the defendant company, Hames Sharley (WA) Pty Ltd, to provide services for the redevelopment of the subject property by the construction of three luxury multiple residential dwellings. The nature of the services to be provided and the exact terms of the contract are in dispute. However, in essence, the plaintiff alleges that as a consequence of certain actions and omissions on the defendant's part the project did not proceed with the result that the plaintiff is entitled to relief.

2 It was common ground at the trial that with the assistance of the defendant the plaintiff applied for and obtained a grant of planning consent from the City of South Perth dated 18 December 2001 for 'three grouped dwellings' (the planning consent). By condition 25 of the planning consent the validity of the approval was to cease if construction was not substantially commenced within 12 months. Construction did not commence within the prescribed period. Shortly afterwards a new planning scheme was gazetted with height restrictions that ruled out the possibility of obtaining a fresh planning consent and proceeding with the project in the form originally proposed. It was a central issue at the trial as to whether the defendant could be held responsible for an alleged failure to extend or renew the original planning consent.

3 The plaintiff did not proceed with the proposed or any form of development and continued to reside at the property. His claim for relief was directed essentially at an alleged loss of opportunity to proceed with the project. This required that his claim be defined with precision so that each party would be able to call expert evidence bearing upon the value of the property if the project had proceeded.

4 The matter was listed for trial initially on 25 July 2006. However, as a consequence of a significant controversy at that time as to the way in which the plaintiff's claim for damages was formulated, the claim was amended and the trial had to be adjourned. This allowed for further steps to be taken in relation to the presentation of expert evidence in response to the amendments. The matter was then relisted for trial. Both parties accepted that the burden of proof lay upon the plaintiff throughout to make out his claim upon the balance of probabilities.

5 The plaintiff described his personal circumstances as at mid 2000 in his witness statement (exhibit 45). He said that the property was his family home and he had lived there for over 30 years. He was the major shareholder of a company which owned and operated a business of car sales trading under the name and style of Berryman Car Sales. Through his business he had access to considerable financial resources.

6 In the course of his evidence at the trial the plaintiff said that he was essentially a self-made man. He had been operating his business, which was a second-hand or used car business, from caryard premises at 575 Newcastle Street in Northbridge. Cars were sold from those premises and he attended the premises six days a week. In August 2000 he decided to make enquiries about developing the Hensman Street property.

7 The plaintiff said in his witness statement that one of his neighbours was William George Hames who lived nearby at 29 Ridge Street, South Perth. The plaintiff had known Mr Hames since about 1970 as a neighbour and friend and as a person who had bought several vehicles from the plaintiff's car dealer business. He understood that Mr Hames was an architect and town planner. With that thought in mind, he approached Mr Hames and had an initial meeting with him in about August 2000 in the front room of the subject property in order to talk about a redevelopment project.

8 According to the plaintiff, 'the substance' of what he said to Mr Hames at that meeting was that he wanted to build a three-storey luxury home unit building on the property with one floor for each home unit and to the intent that the plaintiff would live in the top unit. He had not decided what he would do with the bottom and middle unit. He would consider renting or selling those units or retaining them all indefinitely with a view to leaving them to his children in his will. He had promised his late wife that the property would be left to their three children. That was why he had in mind three units so that he could leave one to each child.

9 On the plaintiff's account of what took place at the initial meeting, he asked Mr Hames if what he (the plaintiff) had in mind was the type of work Mr Hames did and, if so, whether he would do this project for the plaintiff. The plaintiff had never done this sort of thing before and did not know what to do and wanted to get it right. Because of the recent demise of his wife and some difficulties with his own health, he did not want to have any problems with the project and wanted Mr Hames to do all the necessary work. It was therefore important that Mr Hames handled the project from start to finish.

10 According to the plaintiff, the substance of Mr Hames' response was that he did the type of work required and would be pleased to handle the project for the plaintiff from beginning to end. He and his business, Hames Sharley (the defendant in these proceedings), had a lengthy experience doing projects of this type. The firm employed architects and town planners and could do all the work required to complete the project. Moreover, Mr Hames himself was a member of the City of South Perth's Town Planning Committee and its Design Advisory Board, so he knew all the right people and what was going on in the City. He said that Hames Sharley would prepare a site potential report. He advised the plaintiff to stay away from the City because, as a non-professional person, the plaintiff might upset the City and Mr Hames wanted to deal with the City himself to ensure the project ran smoothly.

11 I note in passing that Mr Hames, in his witness statement at trial, gave evidence that can be related to the plaintiff's evidence about these matters (exhibit D35). Mr Hames said that he holds the Degrees of Bachelor of Architecture (Hons) from the University of Adelaide and Master of City Planning and Urban Design from Harvard University. He has been working as an architect since 1960. He worked initially for institutions such as the South Australian Housing Trust and the Western Australian Housing Commission. In the early 1970s he and another architect, David Sharley, formed the firm which was destined to become the defendant company, known simply as Hames Sharley. Mr Hames has been a director of that company since 1983. He is a Life Fellow of the Royal Institute of Architects, a member of the Planning Institute of Australia and a Fellow of the Australian Property Institute.

12 Mr Hames said in evidence that in mid 2000 he had a discussion with the plaintiff at the premises of Berryman Car Sales in West Perth concerning a proposed redevelopment of the subject property. This led to a meeting at the plaintiff's house.

13 According to Mr Hames, the plaintiff said he was interested in constructing a three storey building with a view to retaining the top floor apartment and selling the lower two apartments. He wanted the apartment to be luxurious; classical in style; have large windows to take advantage of the views; have recess windows; have large balconies; have the bedroom located on the eastern side; have landscaped gardens and be white, cream or grey/blue in colour. He said also that he wanted the same feel to the apartment as his current house. The plaintiff wanted to be able to sit out on a balcony with a view of the river and read the newspaper, as he did in his current house. He wanted to develop the property because he liked the area.

14 According to Mr Hames, he told the plaintiff that a site potential report was required prior to commencing any work on the project because it was necessary to identify any potential problems which could arise as a result of the town planning regulations. He said that the defendant company was engaged initially to prepare a site potential report and proceeded to do so. Research for the report was undertaken by Darren Youens who was associated with the defendant company.

15 It emerges, then, that there were differences between the two principal witnesses as to where the initial discussion was held and as to the scope of the plaintiff's requirements. The plaintiff said he wanted Mr Hames to handle the project from start to finish. According to the defendant, he was asked initially to prepare a site potential report.

16 It was common ground at the trial that as at mid 2000 the applicable City of South Perth town planning scheme was TPS5 which permitted four 'grouped' dwellings to be developed on the site. A proposed TPS6 projected rezoning of the subject property from R35 to R25/40. This would reduce the opportunity to develop the site with four grouped dwellings and would enable only three grouped dwellings to be developed.

17 Mr Hames said in evidence that in 2000 he was aware that TPS5, as it affected South Perth, was under review and had been under review since 1998.

18 According to Mr Hames, he told the plaintiff that in his belief there was room to negotiate with the City of South Perth on the basis of allowing for 'multiple' dwellings to be built on the site in return for the retention of certain trees and increased open space left on the site. He explained that multiple dwellings are dwellings which are stacked vertically; grouped dwellings are side by side.

19 I note in passing that as at mid 2000 the height restriction on the subject property was 10.5 metres. Much of the surrounding area had a height limit of 7.5 metres. It seems that there was no discussion about height restrictions in the course of the initial exchanges. Mr Hames was aware that TPS5 was under review, but it was a matter of controversy at the trial as to when he personally first became aware that the new TPS6 would reduce the height limit on the subject property to 7.5 metres. It was a matter of controversy also as to whether the plaintiff was sufficiently informed and/or warned about the effect of the change.

20 It was common ground between the parties that prior to 1 September 2000, as a consequence of the initial discussions, the defendant company proceeded with the preparation of a site potential report and delivered the same to the plaintiff under cover of a letter dated 1 September 2000. It will now be useful to look at the terms of the 1 September letter (exhibit 1) and the first site potential report (exhibit 2).

21 The defendant's 1 September letter opens in this way:

Please find copy of our initial assessment of your site in regard to its development potential. Your indicated preference for 3 multiple dwellings will need to be negotiated with Council. The codes allow four grouped dwellings (which are side by side dwellings) whereas your requirement is multiple dwellings (ie. stacked vertically) is not defined under the R35 code.

Hames Sharley would be most pleased to act as your architect and town planner for this project.

We understand that it is your intention to build three luxury multiple dwellings to be held by yourself and you occupying the penthouse. Specific details will be developed once a formal commission is enacted.

Our planning services would include all applications and representations to Council in regard to this development application.

Our architectural services would include full service for the design, contract documentation, tendering and contract administration services for the project.

22 The defendant's 1 September letter went on to refer to the defendant company's base fee of 6% of the final or estimated costs of the works and indicated that certain specified proportions of the base fee would be recovered progressively at different stages. These stages were described as schematic design, design development, contract documentation and contract administration. It was said further that the firm rendered monthly accounts for services rendered.

23 In regard to secondary consultants, such as, civil, structural, mechanical and electrical engineers, quantity surveyors etc, the defendant recommended 'that these appointments be by yourself'. However, the defendant was willing to advise on the methods of engagement.

24 Mr Hames closed the letter by saying that his firm could provide the plaintiff with a building of quality which would enhance an excellent site.

25 The first site potential report included an introduction describing the lot size (1,212 square metres) and noted that the local authority was the City of South Perth. The local Town Planning Scheme zoning was said to be residential R35, the number of permissible dwellings was said to be four grouped dwellings, the plot ratio was said to be 'not applicable', the height limit was given as 10.5 metres.

26 The introduction contained an observation at par 1.1.10 to this effect:

The City of South Perth is currently in the process of reviewing their existing Town Planning Scheme. The site is proposed to be zoned R.25/40.

27 The first site potential report included this passage under the heading 'Comment':

The issues that are associated with this proposal are involved with height and impact upon the surrounding development.

A minor concern exists over a classification in the Residential Planning Codes of multiple or grouped dwellings. Multiple dwellings are not defined in the R.35 density code. A multiple dwelling is where any part of a dwelling is vertically above part of any other. It is anticipated that this can be negotiated with Council.

The attached development concept complies with the height requirements of the Town Planning Scheme and shows the possible development opportunities that exist on the site (See Attachment I).

The opportunity currently exists to develop the site for 4 grouped dwellings however the Draft Town Planning Scheme proposes that the site be zoned Residential R.25/40 which means that to achieve the higher codes you must comply with a number of criteria. These criteria are shown in Attachment II. An assessment of the criteria reveals that the site can only comply with 5 of the criteria which makes the maximum density available, under the draft Town Planning Scheme, R.25. R.25 enables only 3 dwellings to be developed. An opportunity for an additional dwelling will be lost if the draft Town Planning Scheme is enacted.

Visual privacy of the adjoining neighbours will be the biggest issue that needs to be addressed and this can be accommodated by taking advantage of the view to the south west.

28 I note in passing, as a matter bearing upon the central issues, that the first site potential report appears to accept that the development potential of the site could be adversely affected if the new TPS6 was put into effect. However, it is important to keep in mind that the adverse effect being spoken of was the loss of an opportunity for an additional dwelling rather than the loss of an opportunity to proceed in the manner being proposed, namely, the construction of three luxury multiple dwellings (that is dwellings stacked vertically).

29 There is a reference to height as an issue associated with the proposed development but there is no reference to a more specific issue that might arise if the relevant planning controls were amended to restrict the height of the building to 7.5 metres. The report simply notes that 'the attached development concept complies with the height requirements of the Town Planning Scheme'.

30 The first site potential report included indicative sketches for 'multiple dwellings' and various annexures bearing upon the nature of the planning controls. These included in Appendix II the Proposed Town Planning Scheme Standards in respect of Dual Density Coding: R25/40. It included also Appendix III which consisted of a document dated February 2000, bearing the heading 'Planning Policy No. P34 Residential Density - Interim Introduction of Proposed Town Planning Scheme No. 6 Provisions'.

31 The P34 policy document observed that the policy was applicable to all land within the City of South Perth where residential development is permitted. The policy objective was said to be to promote orderly and proper planning by introducing certain residential density controls 'contained within the latest version of the proposed Town Planning Scheme No. 6 endorsed by Council, which are essential to protect the integrity of the proposed Scheme'.

32 Clause 3(a) provides that in assessing applications for planning consent the Council (or its officers acting under delegated authority) shall have regard to the relevant density codings imposed by the No. 5 Town Planning Scheme as well as those to be imposed by No. 6 Town Planning Scheme.

33 Mr Hames said in evidence that he discussed this 'letter of engagement' with the plaintiff. He explained that, as indicated in the letter, the Hames Sharley services would be provided in stages. The plaintiff would have to engage secondary consultants such as engineers and quantity surveyors.

34 The plaintiff said in his witness statement that he read the defendant's 1 September letter and report. He noted that the letter made reference to a formal appointment. A day or so later he spoke to Mr Hames, asking him what the next stage was and what the approximate cost of the development would be.

35 According to the plaintiff, Mr Hames said that he was going away but would ask his associate Dean van Niekerk, to send out a more detailed proposal with a costing. By letter dated 18 September 2000 from Hames Sharley (being a letter signed by Dean van Niekerk) a proposal was put to the plaintiff in which it was said that the estimated cost of the project was $1.25 million to $1.5 million. Hames Sharley would charge $8,250 for their services in order to obtain planning approval for the project (exhibit 3).

36 Having regard to later events, it will be useful to look at the defendant's 18 September letter closely.

37 It commences by saying that a detailed brief 'is yet to be formulated' but it is understood that the plaintiff was giving consideration to building 'three luxury multiple residential dwellings' on the subject property. Specific accommodation and user requirements/preferences were to be established after a site visit with the plaintiff with topographical and physical constraints being identified at that time.

38 The 'scope of work' was described as being to prepare schematic design suitable for lodgement with the City of South Perth for development approval purposes. Town planning input to assist in this stage would be provided. The design was also to be used to establish an 'indicative estimate of likely construction costs'. The documentation associated with those services was then described and certain 'exclusions' were referred to which included 'other consultants (if required)'.

39 It seems that the defendant's 18 September letter was accompanied by a lengthy memorandum headed '20 Hensman Street, South Perth. Description of General Scope of Works for Stages of Work to Delivery of Product'. The defendant's Scope of Works document referred to the various specific forms of design that would have to be completed such as structural, mechanical, hydraulic and electrical design and referred at length to the provision of contract documentation services.

40 The plaintiff was unsure when exactly he received the Scope of Works document but to the best of his recollection it came with the letter of 18 September 2000. I am prepared to find as a fact that it did so. For ease of reference, when I refer to exhibit 3 or the defendant's 18 September letter it can be assumed that I am referring also to the defendant's Scope of Works document.

41 The plaintiff sent a letter dated 28 September 2000 to Hames Sharley saying that he had no problems with the proposed fee structure of $8,250 (exhibit 4). However, before he committed to the project he wished to find out what his rights were to 'the design, plans, approvals etc'. Mr Hames informed him by telephone that whatever work had been paid for by him would belong to him. The plaintiff said in his witness statement that he then accepted the proposal from Hames Sharley contained in 'its letters to me as we had discussed'. Mr Hames said words to the effect that he would have the drawings prepared for the project and discuss them with the plaintiff when they were ready.

42 According to Mr Hames, his firm had been engaged to produce schematic designs suitable for lodging with the city of South Perth for planning consent.

43 It seems that from September 2000 to about mid 2001 the plaintiff liaised with Mr Hames about the project. During this period Hames Sharley prepared drawings which were shown to the plaintiff. According to Mr Hames, the plaintiff commented upon the plans from time to time and changes were made. At one stage the plaintiff went to Melbourne to study apartment buildings he admired, and in due course provided Hames Sharley with photos of the same. By letter dated 26 March 2001 Hames Sharley informed the plaintiff that the preliminary construction cost estimate was approximately $1.89 million but this was indicative only (exhibit 5).

44 The defendant's 26 March letter enclosed drawings which purported to bring together the ideas for redevelopment of the site upon the basis that the areas of the apartments were 269 square metres with balconies being additional to that area. These were said to be large apartments and were in the luxury category in regard to size. The 'preliminary construction cost estimate' was said to be approximately $1.9 million. This estimate was 'indicative only' and would depend on final finishes and equipment selection as well of final areas of the apartments.

45 The defendant's letter asked the plaintiff to review the plans. It said that on the plaintiff's receipt of his comments and approval the documents would be used to commence discussions with the City of South Perth which, in the event of a positive response, could lead to completion of the 'schematic design stage' of the units and lodgement of the documents for a development approval.

46 Between August and December 2001 the plaintiff received correspondence from Hames Sharley and had discussions with Mr Hames about the progress of the application for planning approval. The plaintiff also paid fees referable to the design process. In due course, Mr Hames gave him an application for planning consent. This described the proposed development as 'three grouped dwellings' with an approximate cost (excluding land) of $2.2 million. The estimated time of completion was said to be 'asap upon approval'. The application for planning consent was signed by the plaintiff and dated 29 October 2001 (exhibit 7).

47 The application form was then submitted to the City of South Perth by Hames Sharley under cover of a letter dated 31 October 2001 (exhibit 8). The covering letter enclosed documentation relating to the Council's earlier approval of the project 'in principle'.

48 By a faxed letter to the City of Perth dated 9 November 2001 updated copies of certain of the drawings, namely, SKO4 and SKO5, were forwarded to the City of South Perth together with a copy of the survey of the property (exhibit 9). These drawings reflected changes referable to a report that had been obtained concerning the preservation of trees on the property.

49 It was common ground between the parties that the application was approved by the City of Perth. The grant of planning consent described the determination date as 18 December 2001 in respect of 'three grouped dwellings' (exhibit 10).

50 I note in passing that although the plaintiff's 31 October application and the planning consent employed the language of TPS5, and spoke of three 'grouped' dwellings, the consent in fact allowed for three multiple dwellings, that is, three apartments stacked vertically. In the manner foreshadowed by Mr Hames in the first site report this outcome had been negotiated with Council by making provision for the retention of certain trees upon the property. This appears from a letter from Hames Sharley to the City of South Perth dated 3 August 2001. According to that letter the Residential Planning Codes (Part 3 - Grouped Dwellings) stated that 'under exceptional circumstances it is possible to permit a development involving dwellings partly or wholly above another to be classified as grouped dwellings' (exhibit 6).

51 The same letter noted that the 'existing Town Planning Scheme identifies this and the surrounding lots as having the potential to develop to a maximum height of 10.5 metres, which is the height proposed in the development application'. It was this letter that had led to the Council's earlier approval of the proposed development 'in principle'. The letter was signed not by Mr Hames but by Darren Youens on behalf of Hames Sharley.

52 The 18 December planning consent was granted subject to 26 conditions a number of which have an important bearing upon the matters in issue. In particular, the conditions included the following:

1. The finished floor level for the main portion of the ground floor unit shall be a maximum of RL 27.60. The remainder of the dwelling, which has various levels throughout, shall also be reduced by 390mm accordingly.
2. All existing trees intended to be retained as indicated on the site plan and addressed in the arboricultural report shall be identified for retention on the Working Drawings and on the required landscaping plan and shall be protected prior to and during construction, and shall not be removed without the prior approval of the Council. At a suitable distance away from the base of the trees, protection zones shall be established by means of installation of sturdy temporary barrier fences to prevent entry by construction staff, heavy mechanical machinery and the storing of building materials and soil.
3. The validity of this approval shall cease if construction is not substantially commenced within 12 months of the date of grant of Planning Consent.

53 The planning consent concluded with a so-called 'Important Note' to the effect that:

This Planning Consent is NOT an authorisation to commence construction. A BUILDING LICENCE MUST BE OBTAINED from Council's Building Services Department prior to commencing any work of a structural nature

54 The importance of this note was highlighted by the use of bold print and being placed in a special box at the end of the planning consent form.

55 Let me now turn to the 'attached plans' the subject of the application and the related 18 December planning consent.

56 It was common ground at the trial that the planning consent plans were the three coloured sketch plans marked 40893 SK03 rev G, SK04 rev F and SK05 rev D showing three multiple or stacked dwellings on the property that had been forwarded to the City of South Perth. These sketch plans formed part of exhibit 9.

57 SK03 is described as the site plan. The other two plans show the north, south, east and west elevations, and the basement car park plan. The dimensions of the uppermost or penthouse unit (unit 3) are given as 'floor area 267 m2, entry 31 m2, balcony 6m2'. The position of various trees on the site are depicted.

58 I pause here to note that although the 18 December planning consent plans are to scale and measurements are provided, they were, according to Mr Hames, simply schematic design plans prepared for the purpose of obtaining planning consent only.

59 Having regard to Mr Hames' evidence, and the evidence of Mr Davison from Pindan Constructions, I accept, and so find, that the exhibit 9 planning consent plans could not be regarded as contract or working drawings sufficient to obtain a building licence or to commence construction. It is a matter of controversy, which I will come to later, as to whether these were plans from which the proposed building could be accurately costed. On the defendant's case, Hames Sharley had completed the scope of work defined by the agreement between the parties, namely, the firm had completed schematic design plans suitable for lodgement with the City of South Perth for development approval purposes. Further, as foreshadowed by Mr Hames in his earlier correspondence, various consultants had to be appointed before contract or working plans and specifications could be finalised.

60 It appears from earlier discussion that in order to obtain planning approval in principle Hames Sharley had managed to persuade the plaintiff to commission an arboricultural report as a means of obtaining the Council's dispensation concerning a multiple dwelling development on the subject property. According to Mr Hames, the plaintiff said that he did not want to pay for such a report, but eventually recognised that it had to be provided to assist the Council in considering whether to approve multiple dwellings. Indeed, the plans submitted to the Council initially had to be modified in order to accommodate the recommendations in the report. The arboricultural report was mentioned in condition 18 of the 18 December planning consent.

61 Further, by letter dated 20 December 2001 Mr Bercov, the Manager of City Planning at the Council, advised Hames Sharley that in addition to conditions set out in the planning consent the Council had resolved that two lemon-scented gum trees on the property were to be included within the registry of Tree Preservation Orders and the plaintiff's agreement was required in that regard (exhibit 28).

62 Mr Hames said in his witness statement that in January 2002 he met with the plaintiff to discuss the planning consent and the conditions that had to be attended to. He emphasised that the conditions had to be complied with because the Council had granted the plaintiff approval for multiple dwellings rather than grouped housing and on the basis of protecting the amenity of the area. The plaintiff protested, saying that he was not going to lower the level of the structure or put the trees in the Register. He felt that he ought to be able to do what he wanted with the trees.

63 By letter dated 18 January 2002 the plaintiff wrote to Mr Hames as follows:

I am still concerned that the Council wants to reduce the base level of the new structure by approx 300mm. I do not believe this is a reasonable request taking into account that the present structure has been in place for many decades.

However if the Council is prepared to reconsider this particular provision I would be more than happy to discuss the inclusion of the two particular lemon scented gums on their tree register. (exhibit 11)

64 Mr Hames said in his witness statement that he then had a further discussion with the plaintiff and made it clear that the plaintiff was not in a position to barter with the Council in that way. The conditions were non-negotiable. Further, as to reducing the floor level of the ground floor, this was a comparatively small matter which could be re-evaluated once the engineering drawings were obtained.

65 According to Mr Hames, at about this time also the plaintiff said that he wanted a balcony to take advantage of the river views, although the proposed balcony overlooked a neighbour's house. Mr Hames drafted a letter to be signed by the neighbour indicating that he had no objection to the proposal.

66 Further, by letter dated 26 February 2002 Mr Hames wrote to the plaintiff seeking instructions to engage a firm of quantity surveyors, HW & Associates, to give an indicative cost estimate of the project (exhibit D23) mentioning that their fees would be $2,400 exclusive of GST. The enclosed letter from the quantity surveyors indicated that costing a project of this kind was a sophisticated exercise whereby a detailed estimate would be 'broken down into approximately 25 elements such as external walls, roof, floor finishes etc so that it can clearly be seen where costs would occur. Within each element all items of work will be measured and priced separately in detail'. Where details were not available (such as structural and services designs) it would be necessary to make assumptions based upon experience and talking to other consultants or subcontractors.

67 Mr Hames did not receive a response to the 26 February D23 letter so he spoke to the plaintiff by telephone and was told that the plaintiff refused to appoint a quantity surveyor. The plaintiff allegedly said that he did not want to spend the money.

68 I pause to say that the plaintiff did not refer to the 26 February D23 letter concerning the appointment of quantity surveyors and there was no evidence in rebuttal. Thus, I find that the evidence given by Mr Hames about this matter is correct.

69 Mr Hames went on to say that, after speaking to the plaintiff, he wondered how Hames Sharley could advance the job without an indicative cost estimate. He believed that the only way to advance the project was to appoint engineering consultants.

70 As to this phase of the relationship between the parties, the plaintiff in his evidence at trial presented a slightly different picture. He said that the various conditions were acceptable to him, although he did ask if anything could be done about condition 17. This led to steps being taken to get the consent of neighbours. The plaintiff understood from what Mr Hames said that to satisfy condition 25 concerning the 12 month time limit all that was required was demolition of the house and the laying of the cement pad for the ground floor unit.

71 The plaintiff said in evidence that the letter dated 18 January 2002 (exhibit 11) was written by him at Mr Hames' suggestion in an attempt to 'trade off' with the Council, by agreeing to have specified trees placed on the Preservation Register in exchange for the Council agreeing to vary the height limits in condition 17. He was concerned about the conditions concerning reduction of the level and the trees but he did not say at any stage that he was not prepared to comply with the same. It was his belief at this time that there were no problems with the planning consent and he was well on the way to developing his property as permitted by the consent.

72 Under cross-examination the plaintiff said that he was not minded to appoint a quantity surveyor at this stage because building plans had not been finalised and there were outstanding matters to be attended to.

73 I feel obliged to say in passing that I cannot easily accept that at this stage the plaintiff truly believed that he was well on the way to developing his property as permitted by the 18 December planning consent. There is no independent evidence or contemporary document reflecting or providing grounds for any such belief. In fact, the surrounding documents and circumstances are to the contrary. The plaintiff had been told by the defendant that he would have to engage third party professional consultants, including quantity surveyors, in order to advance the project. He had declined to appoint the quantity surveyors and had not taken any step towards the appointment of professional consultants.

74 The plaintiff said in his witness statement that in March 2002 the plaintiff's son was negotiating for the purchase of a property at 11 Ridge Street adjoining the subject property. The plaintiff's son acquired the site in question soon afterwards with funds provided by the plaintiff. Thus, the plaintiff effectively controlled the combined properties being Lot 2 (20) Hensman Street and Lots 4 and 5 (11) Ridge Street, South Perth. This caused him to discuss with Mr Hames what could be done to develop the land as one parcel. He then requested Mr Hames to provide another site potential report.

75 It was common ground at the trial that Hames Sharley prepared and delivered a second site potential report dated March 2002 concerning the combined lots (exhibit 12).

76 The second site potential report noted that the three residential lots in question gave rise to an L-shaped configuration. The purpose of the report was to outline the planning controls governing redevelopment and to investigate how amalgamating the lots might increase the overall development potential of the land for strata title development. The report noted at par 1.1.3 that the existing zoning of the three lots was residential R35. The City of South Perth was currently reviewing existing TPS5 which was to be superceded by TPS6. The new scheme proposed a residential coding of R25/40.

77 The second site potential report at par 1.1.8 to par 1.1.12 dealt with development potential under TPS5 and development potential under TPS6. The report emphasised that the potential of the three lots was likely to reduce with the introduction of the City's TPS6. If the current potential of the properties was to be secured a subdivision application had to be submitted to the planning commission 'as soon as possible'.

78 The report contained further observations concerning the timing of the new scheme. It noted that TPS6 had been a work in progress since 1998. The report continues in this way:

With the introduction of any new Scheme there will be a period of overlap. This is where the current Scheme continues to have the force of law and yet the authority refers to the proposed Scheme as a 'seriously entertained planning proposal' and has regard to the provisions therein.

TPS No.6 has already been advertised and is currently being readvertised with modifications requested by the Hon Minister for Planning and Infrastructure. After this round of advertising the Scheme will again be forwarded to the Hon Minister for final approval. Given that the proposed Scheme has progressed this far, the City regards it as a seriously entertained planning proposal.

If a development application was submitted now, for either Lot 2, 4, or 5, the City would assess the application in accordance with the proposed zoning, being R25/40. This is outlined further in the City's policy P34, (attached as Appendix 3)

79 Importantly, for present purposes, the report goes on to note at par 1.1.11 and par 1.1.12 that the maximum building height prescribed by the current town planning scheme is 10.5 metres. However, as to proposed development controls, the City of South Perth had advised that specific development controls relevant to the lots would generally not change with the introduction of the new scheme, though a number of interpretations of the scheme and certain policies may have been reworded.

The maximum building height prescribed by the Scheme will be 7.0 metres.

The proposed Scheme also refers to the provisions of the Residential Planning Codes.

81 The second site potential report suggested that there was benefit in amalgamating and re-subdividing the subject properties. However, for present purposes, it is not necessary to explore the reasoning in the report because the proposal did not proceed further.

82 Before leaving the report, I note that in the final paragraph the author of the report asserted again, having regard to the likely introduction of TPS6, that if the current potential of the properties was to be secured a subdivision application should be submitted as soon as possible.

Evidence concerning the site potential reports

83 The plaintiff was cross-examined at some length as to what he knew about the possibility of changes to the relevant planning controls. He confirmed that he read the first site potential report and observed a reference to the City of South Perth being in the process of reviewing their existing town planning scheme and related comments, although he probably did not understand the observations concerning R Codes. He acknowledged that he received the second site potential report but said that he did not read it in detail (ts 230).

84 The plaintiff conceded that he knew that there was a current town planning scheme, being TPS5, but did not know that there was a proposed scheme, TPS6 (ts 232). According to him, he read the second site potential report but did not take it in. He could not recall reading the passage at par 1.1.12 of the second site potential report to the effect that under the new scheme the maximum building height prescribed by the scheme would be 7 metres (ts 235).

85 It is clear from the plaintiff's answers under cross-examination that he decided not to proceed with the venture concerning the three lots, but not necessarily because of any information or reasoning contained in the second site potential report.

86 I pause here to note that the second site potential report was said by the defendant to be relevant because that report spelled out clearly to the plaintiff that if TPS6 came into force his project for three multiple dwellings on the subject property - Lot 2 (20) Hensman Street, South Perth - would be adversely affected because the maximum building height prescribed by TPS6 would be 7 metres.

87 On the defendant's case, the second site potential report made it clear also that TPS6 might come into force in the near future. This meant that, if anything had to be done with a view to ensuring that TPS5 was the operative point of reference, it had to be done 'as soon as possible'.

89 It seems that in mid 1999 the plaintiff had formed a relationship with the proprietor of a design business in Subiaco, Rosemaree Cunningham. They were closely involved with each other at the time the 18 December planning consent was obtained and for several years thereafter, although they did not cohabit.

90 It was clear from the evidence given by the plaintiff and Ms Cunningham at trial that the plaintiff trusted Ms Cunningham and respected her judgment about matters of interior design and the layout of buildings. She began to play an increasingly important role in assessing plans relating to the project and in communicating with Mr Hames and others at Hames Sharley. There was some evidence before me that as matters concerning the project progressed she became an informal or de facto 'project manager' on the plaintiff's behalf.

91 At about the time that the plaintiff was giving consideration to the second site potential report Ms Cunningham took it upon herself to approach a building firm known as River Stone with a view to obtaining a budget estimate for the construction of the proposed development on the subject property, that is, three luxury multiple units on the property at 20 Hensman Road, South Perth.

92 By letter dated 27 March 2002 Diane Wainwright, a building and design consultant at River Stone, provided a budget estimate based on the concept sketch provided and upon River Stone's standard level of specification (exhibit 13). It was said that the cost of the development should fall within the $1.5 million to $1.7 million range. The standard specification was said to include all working drawings, engineer's plans, building licence fees, construction and site costs.

93 I pause here to note that after some controversy at the trial the River Stone estimate was admitted as an exhibit for the limited purpose of establishing that such an estimate was received. It was thought to be relevant as a piece of evidence serving to explain later conduct by the plaintiff. The author of the River Stone estimate was not called as a witness and a ruling was therefore made by me, pursuant to evidentiary rules concerning the exclusion of hearsay and evidence of opinion (otherwise than by a qualified expert), that the letter could not be received as evidence to establish the truth of the matters asserted, especially as to the likely cost of the development.

94 The plaintiff presented evidence from Kerry Rix who was the principal of the building firm known as Site Project Management Pty Ltd to say that, following an approach from the plaintiff in May 2002, he costed the project at $2,354,926.60 all inclusive.

95 The plaintiff agreed under cross-examination that in May 2002 he gave Hames Sharley plans for the project to a Mr Rix of Site Project Management Pty Ltd or SPM and asked him to provide a budget estimate. He could not recall receiving an estimate from Mr Rix in the sum of $2,354,926.60. Mr Rix made it clear that he would not build the apartments so the matter was not taken further.

96 Under cross-examination Mr Rix was of the view, to the best of his recollection, that he probably provided the plaintiff with a verbal estimate that the project would cost between $2.3 million and $2.5 million (ts 374). He did not have any further involvement with the proposed development. Mr Rix confirmed that to provide an accurate costing and to obtain a building licence he would have required a full set of working drawings. He acknowledged that the steps to be taken or process to go through in order to move from the sketches with which he had been provided to a building licence could be about six months (ts 376).

97 According to the plaintiff, in early April 2002 he had a conversation with Mr Hames in which he made it clear that he was not interested in proceeding with the venture addressed by the second potential report. However, he did wish to proceed with the project on the subject property. He asked Mr Hames to get on with the drawings so that the plaintiff could get the building licence from the City of South Perth.

98 Further, the plaintiff referred to the figures obtained from River Stone and asked Mr Hames to account for the difference between the building costs estimated by River Stone at $1.5 million and the building costs foreshadowed by the Hames Sharley letter dated 18 September 2000 of $1.25 million to $1.5 million. The plaintiff said that he needed more accurate figures so that he could go to his bank and request a loan for the required amount.

99 The plaintiff allegedly made it clear also that henceforth Mr Hames should talk to Ms Cunningham about everything concerning the project. The plaintiff and Ms Cunningham were going to travel to Melbourne in May 2002 to look at developments of a similar kind with a view to picking up ideas concerning the finishes and external appearance of the units as the plaintiff had decided that he would live in the top floor unit.

100 Mr Hames is alleged to have replied that in order to go to the next stage Hames Sharley would have to prepare more detailed design drawings. In addition, he would get a quote from a builder and would send the plaintiff a cost proposal for the next stage of the works.

101 This evidence was contested by Mr Hames at the trial. He said in evidence that he had worked with Ms Cunningham on another project. He knew of her role as a designer and of her relationship with the plaintiff. He accepted that she became increasingly involved in the project as a spokesperson for the plaintiff. However, according to Mr Hames, he did not know that the plaintiff, with her assistance, had asked for and obtained an estimate from River Stone. He did not see the River Stone letter until after the present proceedings had commenced.

102 Mr Hames said in evidence that by May 2002 he had become increasingly frustrated with the lack of progress on the project. Engineers and a quantity surveyor had to be appointed in order to advance the project. With that thought in mind, he spoke to the plaintiff and suggested that Pindan Constructions be retained. The plaintiff was reluctant to proceed in that way because he thought that Pindan, being a big company, was likely to have high overheads and be too expensive. Nonetheless, Mr Hames said that he proceeded to approach Pindan with a view to obtaining a budget estimate for no charge on drawings that Hames Sharley had prepared.

103 It was common ground at the trial that by letter dated 21 May 2002 Pindan by its Business Development Manager, Scott Davison, provided what was described as a 'budget estimate submission' (exhibit 14).

104 Scott Davison gave evidence at the trial of the action as a witness called by the plaintiff. He said that Mr Hames asked him to give an estimate for the project upon the basis that the owner wanted to build upmarket dwellings. At that time Pindan was involved in construction of the Princeton Apartments which were to be finished to the standard of upmarket residences and it was decided that these could be used as a benchmark 'but with a bit extra'. He then personally prepared an estimate based upon a reasonably high standard of finish to fit in with the quality of the proposed development. He said in evidence that in 2002 estimates which he provided were reasonably accurate within 5% to 10% of firm prices.

105 The 21 May Pindan estimate was $2,007,500 'for the complete construction of three high quality residential apartment units over three levels on an undercroft carpark including all site works'. The estimate was said to be based upon the Hames Sharley preliminary plans numbered 40893 SK03 rev G, SK04 rev F and SK05 rev D and associated discussions. It was said to be 'an indicative budget estimate only' based upon square metre rates, preliminary documentation and was subject to confirmation. According to attached documentation the budget estimate was valid for a period of 90 days only from the date of the estimate. No allowance had been included for any cost escalations. No allowance had been included for any design or consultancy fees, disbursements or contingency sum. Further, no allowance had been included for any demolition works or clearance of the site.

106 Mr Davison said in his witness statement that Pindan did not usually become involved in the process of obtaining a development approval or building licence. Usually an owner provided the approval and building licence and Pindan then negotiated a contract with a firm price.

107 He said further that when a contract has been signed, the client has established that it has the required finance, and the building licence is available, then, within an agreed timeframe, usually in the order of four to six weeks, Pindan commences work on site.

108 Mr Davison estimated it would have taken 12 to 18 months to build the proposed units, depending on supply of materials and labour. The estimate provided was the building cost of Pindan, GST inclusive. The owner would have incurred further costs for an architect and other consultants which he estimated to be 10% of the amount of the Pindan building costs, which were outside of Pindan's direct control or contract. The owner would also have incurred financing, sales and marketing expenses.

109 Mr Davison said further that if the owner had entered into a building contract with Pindan in late 2002 or early 2003 the price for the building would have been the estimated $2,007,500 plus 5% to 10%. If the owner had contracted with Pindan and provided a clear and unobstructed site, with the existing building demolished, and met all of Pindan's requirements, then Pindan would have probably commenced work on site, with a construction period of between 12 to 18 months.

110 I pause here to note that on the plaintiff's case at trial this evidence was relied upon to support an inference that in the absence of the defendant's alleged breach of duty building work on the subject property could have been commenced early in 2003 and been completed in or about November 2004. Accordingly, the plaintiff's particulars of claim, and much of the valuation evidence on both sides, was directed to the value of the subject property as at November 2004, including reference to hypothetical development exercises calculated by reference to such a date, and the Pindan estimate.

111 Under cross-examination Mr Davison confirmed that the Pindan estimate was produced in response to instructions from Mr Hames. He did not meet the plaintiff or Ms Cunningham then or at any time thereafter. The Pindan estimate was 'indicative information' so it was by no means a firm quotation and it was not something that Pindan would enter into a building contract with. It was a 'reasonable approximation' of what you would expect the building to cost. There would be a lot of work to do, including discussions with the client, to arrive at a firm quote.

112 Mr Davison went on to say that the plans he had seen were very preliminary. There were no architectural structural details and no confirmed or finished schedule. He could foresee months of negotiation work with the architect or the client to come to a fixed point where he would be prepared to give a fixed price quote.

113 More particularly, he would need structural drawings, confirming the actual structural details, such as suspended slabs and load-bearing walls. These would normally be provided by a structural engineer. Service drawings would be provided by hydraulic, electrical and mechanical engineers. Bearing in mind what he had at May 2002 it would probably be not less than six months to reach a point at which he could give a fixed price quotation. It was considerations of this kind that lay behind the comment as to exclusions that the budget estimate was valid for 90 days only. It was not an estimate to be accepted for the purpose of a contract (ts 363).

114 By letter dated 28 May 2002 Hames Sharley delivered the Pindan estimate to the plaintiff (exhibit 15). Mr Hames said in his covering letter that, as discussed, in order to advance the project more detailed design documentation was now required. He went on to describe the work to be completed as follows:

Detailed Design : Scope of Work

Detailed design takes the approved sketch design and develops and adds detail, refinement and clarification to all aspects of the design. The work of other consultants is coordinated and integrated with the architectural design and documentation.

• An updated estimate is prepared.
• The client's approval is sought before proceeding to documentation.

We will also require the appointment of secondary consultants such as civil, structural, mechanical and electrical engineers in order to incorporate their detailed design and advice into the building. This will then allow us to accurately assess the cost and building complex.

This work will then allow a more accurate cost estimate to be completed as it will determine much of the issues of design as we have discussed and will also determine the specification in regard to materials and quality of finishes.

Once that has been determined and agreed by yourself the subsequent stages are Contract Documentation, Tendering of the works and Contract Administration.

The fee to complete the Detailed Design stage of works will be $24,900 (twenty four thousand nine hundred dollars).

We can commence this work when you require and it would take approximately 6 weeks to complete.

115 The letter enclosed a document headed 'Description of General Scope of Works for Stages of Works to Delivery of Product'. This corresponds to the Scope of Works document mentioned earlier. The list included reference to various forms of design work such as architectural, structural, mechanical and hydraulic indicating in most cases that a separate consultant was required.

116 The list went on to refer to contract documentation services in which respect, at par 5.15, the list refers to the need for a building application consisting of preparation of documents by the architect for lodgement with the relevant authorities for building approval. Further, the list ran on to refer to tendering and negotiating services and contract administration.

117 I feel obliged to observe at this point that the plaintiff and/or his 'representative' Ms Cunningham did not seem to be in the habit of responding in writing to letters or reports submitted to them. They generally made no attempt to summarise in written form what had been discussed or decided upon at any of the meetings. Certainly, on this occasion it appears, and I so find, that the plaintiff did not provide any written instructions in response to the 28 May Hames Sharley letter.

118 In his witness statement the plaintiff asserted that the plan of action including the fee of $24,900 specified in the defendant's 28 May letter was acceptable to him. He did not suggest that he or Ms Cunningham took any steps to appoint secondary consultants or that he instructed Hames Sharley to proceed accordingly. Moreover, there is no evidence in writing to that effect.

119 According to the plaintiff, at about the date of the defendant's 28 May letter, he told Mr Hames that he was happy with the upgraded proposal and for him to proceed with the work. He and Ms Cunningham went to Melbourne in May 2002 and took photographs of buildings which had finishes they liked. They had a further meeting with Mr Hames upon their return.

120 The plaintiff said in evidence that this further meeting took place in early July 2002. Mr Hames showed him drawings prepared by Hames Sharley. He gave Mr Hames the photographs he had taken in Melbourne and asked him to consider those when preparing the next set of drawings. According to him, he asked Mr Hames how the project was going and whether he thought they were running out of time to comply with the planning approval. Mr Hames allegedly replied that time was not a problem and if it became a problem he would get a 12 month extension of the planning approval. The plaintiff could not point to any document or other evidence corroborating his version of this meeting.

121 Ms Cunningham asserted in her witness statement that she and the plaintiff travelled to Melbourne in May 2002 and took photographs of a number of apartment buildings for the purpose of getting ideas for the design of the proposed apartments. In her statement she did not comment directly upon the Pindan estimate and related events such as the request for a quote given to Mr Psaros. She simply asserted that from mid 2002 to mid 2003 she attended a number of meetings with the plaintiff, Mr Hames and others from Hames Sharley at which the plans and drawings for the project were considered.

122 According to Ms Cunningham, changes were discussed. Mr Hames or others from Hames Sharley, undertook to make alterations. By this process the design of the proposed units was advanced. She said in evidence that she did not take notes of the meetings. She recorded the dates of meetings in an electronic form on her computer but those records have now been deleted and cannot be retrieved.

The Hames evidence concerning the 28 May letter

123 Mr Hames in his witness statement and evidence at trial presented a different picture. According to him, after receipt of the Pindan estimate, he conveyed to the plaintiff that the project could not be progressed unless engineers were appointed to allow completion of the design development stage and to bring the project to the contract documentation stage. He said that once the contract documentation stage was completed tenders could be called for or negotiations undertaken directly with a builder. It would take a period of six to eight weeks for the design development and then Hames Sharley would have to produce the contract documents which would take approximately 12 weeks.

124 According to Mr Hames, the plaintiff said that he did not want to appoint engineers. He did not want to proceed yet. Then, in July 2002, the plaintiff phoned Mr Hames and said that his mates had recommended he speak with Danny Psaros of Psaros Developments regarding the project. He had in mind to obtain a quotation from Mr Psaros to undertake the construction. If Mr Psaros was appointed, it was contemplated that the role of Hames Sharley in the project would come to an end.

125 The plaintiff asked whether Mr Hames would have an issue if Psaros took over the project. According to Mr Hames, he said that he did not have an issue, and agreed to accompany the plaintiff and Ms Cunningham to inspect a development in Cottesloe which had been undertaken by Psaros.

126 According to Mr Hames, there was a meeting on site at an apartment development in Eric Street, Cottesloe which was being built by Psaros Developments. Mr Hames was accompanied by a fellow architect from Hames Sharley, Mark Popplewell, who had become involved in the preparation of drawings by Hames Sharley. The meeting led to a confirmation by Mr Hames, for the plaintiff's benefit, that the Psaros development was of a quality equal to the proposed development and an arrangement for the drawings prepared by Hames Sharley to be handed over to Mr Psaros so that the latter could take over the project.

127 By this time, after lengthy periods of what Mr Hames described as 'client inactivity', it seemed to Mr Hames that the project lacked a sense of purpose. After handing over the drawings to Mr Psaros, he believed that the Hames Sharley brief in relation to the project had come to an end.

The plaintiff's property listing and bank application

128 The plaintiff said in evidence that at about this time (mid 2002) an estate agent from the firm Paxton Hoad mentioned that the building company Multiplex could be interested in buying the subject property. This led to the plaintiff giving the agent authority to sell dated 3 July 2002 at $1.825 million. According to the plaintiff, he was then told that Multiplex was not interested and that was the end of that matter. The land was never offered for sale to the public nor advertised and it was not his intention to do so.

129 The plaintiff said also that at about this time, based on the cost estimate received from Pindan, he made an application to borrow $2.5 million from the Commonwealth Bank to build the units. By letter dated 29 July 2002 the bank gave approval in principle to such a loan for two years at 7% (exhibit 17).

130 The plaintiff was cross-examined about his application to the Commonwealth Bank on 22 July 2002 for finance and the suggestion contained in his letter that the building would be completed and marketed over an 18 month period, and the facility cleared at this point. He said that this came about because a particular person had indicated that if he decided to sell one of the units she would be interested in purchasing a unit. He agreed, as indicated above, that a few weeks earlier he had listed the property for sale (in its undeveloped state) for $1,825,000. The exclusive agency agreement signed by the plaintiff dated 3 July 2002 was received in evidence (exhibit D3).

131 The plaintiff agreed under cross-examination that he did not deal with Pindan in relation to its estimate; this was done by Mr Hames (ts 251). He agreed that he received the Pindan estimate with the 28 May Hames Sharley letter. He agreed that he did not give the instructions sought by Mr Hames in that letter concerning the appointment of secondary consultants (ts 252).

132 These exchanges occurred between the cross-examiner and the plaintiff concerning the position in mid 2002:

You personally never contacted Pindan, did you?---No.

You didn't contact them in May 2002 when the budget estimate was being obtained by Mr Hames?---No, I didn't.

And you did not contact them at any time thereafter?---Not that I recall.

Not after you were not going to go ahead with Psaros in August 2002, you didn't go back to Pindan?---No, I did not.

After you got the quote from Zorzi in December 2002 or January 2003, you didn't go back to Pindan then?---No I didn't; no.

So as at August, or as at early September 2002, isn't the position this: the estimates for carrying out the work to achieve what you wanted were getting higher?---That's correct.

They had reached a point by that stage where they were unacceptable to you?---Certainly two of them were.

And because they were unacceptable you had to then further consider whether you were going to go ahead. Correct?---I certainly considered it but never changed my mind. (ts 283)

133 It was common ground at the trial that in mid 2002, after his receipt of the Pindan estimate, the plaintiff attended a meeting at the Eric Street apartments that were being built by Psaros Developments. This led him to asking Mr Psaros to provide him with a quote for the three proposed multiple dwelling luxury apartments to be constructed on the subject property in South Perth. It remained a live issue at the trial as to whether these events or anything said or done by the plaintiff amounted to a termination of the contractual relationship between the plaintiff and Hames Sharley.

134 The Psaros response to the plaintiff's request is contained in a letter to the plaintiff dated 15 August 2002 (exhibit 32). The letter included a passage to the effect that a reliable 'budget estimate' to erect and complete the development would be $2,713,538. In order to provide the estimate it was assumed that the level of finish required would be of a standard equivalent to the Psaros Eric Street development. The estimate included a project management fee of $130,000 which covered the cost of secondary consultants and related architectural and design documentation which would be managed and co-ordinated by Psaros.

135 The Psaros measurement of sketch plans provided by Hames Sharley revealed in summary form interior areas as follows: undercroft (315.59), ground level (295.41), first floor (302.18), second floor (302.18). Mr Psaros said in his 15 August letter also that he had taken the liberty of making some fundamental design suggestions including the deletion of four covered carparking bays, an increase in the basement size and changes in the design of the basement.

136 The Psaros letter concluded by asserting that if the budget estimate was acceptable the programme outlined by him would permit a start on the site in mid January 2003. The steps envisaged by the programme were a letter of intent to be signed by the parties, a meeting with the architect to arrange handover of the project and an understanding of planning approval conditions, documentation and liaison with consultants which would take approximately 10 to 12 weeks. An application for building licence was to be submitted to the Council by the third week in November. Estimates would be firmed up and a building contract would be available for signing prior to Christmas. Demolition was to commence in the first week of January 2003 with the builder to take site possession on the third Monday in January if demolition was complete.

137 I note in passing that in outlining the programme of action, Mr Psaros observed: 'We assume that planning approval has been granted'. Further, he said that any planning condition/revised documentation was to be prepared and submitted by the architect to the South Perth Council. Fees associated with that phase of work had not been allowed for in the estimate. This suggests that in the course of instructing Mr Psaros the plaintiff had not drawn his attention to the existence of the 18 December planning consent, and the important condition 25 that building work had to be substantially commenced within 12 months of the approval.

Cross-examination of plaintiff as to Psaros letter

138 Under cross-examination, the plaintiff's recollection was that he inspected the Eric Street apartments with Mr Psaros and the latter's friend Mr Unmack. However, he did recall an occasion when Mr Psaros turned to Mr Hames in his presence and asked whether he was prepared to make available the drawings that Hames Sharley had prepared so that Psaros could take over the project. The plaintiff recalled Mr Hames saying that he was prepared to allow that to be done (ts 255). He could not recall the details of the conversation. He believed that Mr Hames did in fact provide the drawings to Psaros.

139 The plaintiff agreed under cross-examination that he asked Mr Psaros to prepare a budget estimate. However, having looked at the Psaros estimate, and after taking some advice from Mr Hames: 'I decided to stick with him' (ts 257). 'The Psaros estimate quote was too dear' (ts 258). The plaintiff agreed that while he was dealing with Mr Psaros there was nothing that Mr Hames was expected to do (ts 258). The plaintiff agreed with the cross-examiner's proposition that Mr Hames was 'out of it' for the time being. The plaintiff added 'until I had made up my mind, correct' (ts 259).

Cross-examination of Mr Hames as to Psaros letter

140 Under cross-examination Mr Hames agreed that he was never specifically told by the plaintiff that his role (the Hames role) had come to an end because the plaintiff was looking to Mr Psaros for further action. However, this was the inference Mr Hames drew because he had been asked to hand over his documents upon the basis that Psaros was going to prepare the working drawings and carry forward the project, with the result that there was no further role in the matter for Hames Sharley (ts 562). Mr Hames confirmed that the plaintiff did not show him the 15 August Psaros estimate and he never knew at what figure Psaros had priced the project (ts 545).

141 I find as a fact that the plaintiff did not reply to the Psaros letter and did not have any further dealings with Mr Psaros. However, there is a contested issue as to how this came about.

142 The plaintiff said in his witness statement that at some time between 15 August 2002 and 3 September 2002 he saw Mr Hames in his office in Subiaco and showed him the quote contained in the Psaros letter. Mr Hames allegedly responded to the effect that the price was too dear, the plaintiff and Ms Cunningham should look at a development in Fremantle built by Pindan, a result of that kind could be produced for the plaintiff by Mr Hames and Pindan, more detailed costs would be discussed in detail at their next meeting.

143 According to the plaintiff, he accepted this advice and said that he wanted Mr Hames to carry on with the project. The plaintiff had not been seriously in negotiation with Psaros but had only wanted to get a check on the various costings. At about this time he requested and obtained a valuation from Simon Martin to the effect that the three units would be worth $4.35 million upon completion, and this valuation gave him further comfort about the proposed development. Ms Cunningham's witness statement did not refer to these matters.

144 On the other hand, Mr Hames said in his witness statement (at par 296) that on 4 September 2002 the plaintiff told him that he did not want Psaros to proceed with the project. He did not provide Mr Hames with any reasons as to why he did not want to deal with Psaros. Until discovery in these proceedings Mr Hames was unaware of the Psaros quote or the conditions mentioned in the Psaros letter.

145 Mr Hames said further in his witness statement that in September 2002 Hames Sharley were 'recommissioned by Peter'. Under cross-examination, Mr Hames described the course of events in slightly different language by saying that at that time he was engaged to 'restart the project'.

146 I must now look at certain crucial issues arising out of events that are said to have taken place in early September 2002, that is, a little more than three months prior to expiry of the 12 month period prescribed by the grant of the 18 December planning consent.

147 The plaintiff alleged at par 16 of his statement of claim that between 18 December 2001 and 18 December 2002 the plaintiff proceeded with the project. The claim referred to the obtaining of estimates and said further that the agreement was varied so that Hames Sharley agreed to prepare detailed design drawings and other documents for the project as proposed in the Hames Sharley 28 May letter for an additional fee of $24,900.

148 It was said further in the claim that at a meeting between the plaintiff and Mr Hames on or about 3 September 2002 at the office of the defendant the plaintiff told Mr Hames that he was prepared to demolish the existing home on the property and to lay a concrete pad for the project so as to comply with condition 25 in the planning consent, but the plaintiff did not cause that work to be done because in response Mr Hames said it was not necessary.

149 The plaintiff pleaded further at par 17 of the claim that at the alleged 3 September meeting Mr Hames told the plaintiff in substance that to comply with condition 25 in the planning consent required demolition of the home and laying the concrete pad for the project, but there was no need for the plaintiff to undertake that work because the defendant would take care of getting a 12 months renewal or extension of the consent, and so there was no need to worry about the expiry date of 18 December 2002.

150 The plaintiff pleaded further that as a consequence of the alleged 3 September meeting the terms of the agreement were varied so that Hames Sharley agreed to make an application to the City of South Perth for a renewal or extension of the consent.

151 The defendant at par 8 to par 12 inclusive of its statement of defence denied these allegations. In essence, it contended that the plaintiff refused to satisfy the conditions of the 18 December planning consent concerning a reduction in the floor height (condition 17), placement of trees on the registry of tree preservation orders (condition 18), a substantial commencement of construction within 12 months in order to preserve the validity of the approval (condition 25).

152 In its pleading the defendant referred also to the events mentioned earlier in these reasons for judgment concerning a revision of plans, the commissioning of the second site potential report and the provision of the Pindan estimate. The defendant went on to plead that, notwithstanding requests by Hames Sharley, the plaintiff did not authorise Hames Sharley to engage the services of a quantity survey or (letter dated 11 January 2002) or of professional engineers (letter dated 29 May 2002) to enable the defendant to complete drawings to a standard adequate to obtain a building licence and to satisfy the conditions in the planning consent.

153 I note in passing (as to a matter of detail) that by letter dated 11 January 2002 Hames Sharley sought instructions from the plaintiff as to a letter from the next door neighbour. By 26 February D23 letter Hames Sharley sought instructions as to the appointment of a quantity survey. As to that matter I will henceforth refer not to the 11 January letter as pleaded but to the 26 February D23 letter from Hames Sharley to the plaintiff.

154 The defendant pleaded also (by par 10.5) that by the second site potential report the defendant informed the plaintiff that the draft of TPS6 proposed a building height reduction for the subject property to 7 metres by reason of which the plaintiff knew, or ought to have known, that the property remained subject to the possibility that the plaintiff's ability to construct a three storey building of the kind proposed might be reduced by reason of the plaintiff's failure to authorise the engagement of professional engineers. Further, the plaintiff did not enable Hames Sharley to secure the right for the plaintiff to be able to construct a three storey building on the property under the 18 December planning consent.

155 The defendant pleaded also (at par 11.3 (5 and 6)) that new R Codes were introduced by the state government on 4 October 2002. This and substantial changes requested by the plaintiff and Ms Cunningham during October and November 2002 required that the project drawings be modified. Further, the defendant alleged that on 29 November 2002 the plaintiff and Ms Cunningham took the plans away with a promise to have a last look and provide an 'all clear' in January 2003. However, the plans were only returned in April 2003 with a request to complete changes and then to resubmit for new planning approval.

156 Put shortly, then, it emerges from a review of this part of the pleadings that, on the plaintiff's case, the plaintiff was ready, willing and able to do whatever was required to comply with the crucial conditions of the 18 December planning consent before it expired and gave Hames Sharley sufficient instructions to preserve the plaintiff's position under the planning consent.

157 It is said that the defendant breached the contractual and other duties to which it was subject by failing to carry out its obligations and by representing to the plaintiff that an extension or renewal of the 18 December planning consent could be and would be obtained so as to preserve the plaintiff's position.

158 Hames Sharley denies these allegations and denies that the representation complained of was made.

159 For ease of reference, I will refer to the various evidentiary issues encompassed by this part of the pleadings as the 'planning consent compliance issue'. More particularly, I will refer to the plaintiff's plea as to what was allegedly said by Mr Hames at a meeting on 3 September 2002 about the obtaining of an extension or renewal of the 18 December planning consent within the prescribed time as the 'alleged 3 September representation issue'. I will call the various statements allegedly made by Mr Hames to the effect that Hames Sharley would take care of getting a 12 months renewal or extension of the planning consent, as pleaded at par 17 of the statement of claim, the 'alleged 3 September representation'.

160 It is against this background that I must now look at the events preceding the expiry of the 18 December planning consent in more detail.

161 The plaintiff said in his witness statement that in late August, or early September, he had engaged Andrew McDonald of Perth Demolition to demolish the home on 11 Ridge Street so the land could be subdivided and sold. At this time he discussed with McDonald demolition of the house on the subject property at 20 Hensman Street, South Perth. McDonald told the plaintiff it would be a difficult house to demolish because he could not use the concrete right of way to get access as the work would damage the right of way which was being used by other people. It would therefore be necessary to build a temporary road from Hensman Street. McDonald quoted the plaintiff $10,000 to demolish his home if the work was done at that time.

162 The plaintiff said further (at par 72) that he and Ms Cunningham met Mr Hames in his office on or about 3 September 2002 to review detailed design drawings. During the meeting he informed Mr Hames about his exchanges with the demolition contractor. Mr Hames said that it was not necessary for the plaintiff to now demolish his home or lay the concrete pad because he (Hames) could get a 12 months renewal or extension of the 18 December planning consent. The plaintiff need not worry about expiry of the consent on 18 December 2002 because Mr Hames would take care of getting the consent renewed or extended for 12 months.

163 According to the plaintiff they then discussed changes to the project plans, being changes that Mr Hames said could and would be made. A time was fixed to view the revised drawings on 27 September 2002 in accordance with a timetable suggested by Mr Hames. Prior to the proposed meeting the plaintiff received a letter dated 26 September 2002 in which his bank gave him approval for a facility of $2.8 million to assist with the development of the subject property (exhibit 18).

164 The plaintiff said that following the meeting on 27 September 2002 he received a faxed letter from Hames Sharley dated 4 October 2002 enclosing drawings which had been revised: 'as a result of our meeting of 27 September 2002' (exhibit 35). The author of the letter, Mr Popplewell of Hames Sharley, requested that he be advised of anything missed or of any other plan changes required as Hames Sharley intended to begin the elevations and three dimensional modelling of the building the next week. Notes on the attached plans indicated that on all three floors the walls were to be adjusted to widen a central corridor, ground floor landscaping features were to be added in, a new glazing alignment was to be made on the first floor to match the new alignment on the ground floor below, the balcony on the second floor was to be reshaped, certain columns in the basement were to be deleted and realigned.

165 The plaintiff said that he and Ms Cunningham were away from Perth on holidays in the second half of October 2002 but at the end of that month they had a meeting with Mr Hames in which minor changes were discussed. Following that meeting Ms Cunningham provided the plaintiff with a faxed letter from Hames Sharley dated 4 November 2002 written by Mr Popplewell noting that the total balcony area shown for the second floor level was dependent on the balcony around the living room/dining room being equal in size to that currently shown on the first floor plan (exhibit 36). At about this time the plaintiff received a fee claim No 2 from Hames Sharley dated 31 October 2002 for $9,130 (exhibit 37). The plaintiff paid this account a month later on 29 November 2002.

166 The plaintiff said in his witness statement that in early December 2002 he met Mr Hames. During the meeting Mr Hames said that as a result of the implementation of new residential building codes the drawings required some minor changes to a few doors and windows. In early 2003 he received an invoice from Hames Sharley dated 20 December 2002 being fee claim No 3 for $8,250 (exhibit 38). He and Ms Cunningham were on vacation away from Perth from about 20 December 2002 until mid-January 2003 with the result that the invoice first came to his attention in January.

167 I note in passing that both these invoices referred to the Hames Sharley letter of 28 May 2002 in advancing a claim for 30% completion of detailed design (No 2 dated 31 October) and 60% completion of detailed design (No 3 dated 20 December).

168 It was common ground at the trial, and I so find, that no application for an extension or renewal of the planning consent was lodged by or on behalf of the plaintiff by any party prior to expiry of the 12 month period prescribed by the planning consent on 18 December 2002. The planning consent therefore expired or, putting it another way, ceased to be effective. The project could not proceed unless a new planning consent was obtained by the plaintiff. That required the plaintiff's signature on the relevant application form.

169 Under cross-examination the plaintiff said that his recollection of events going back seven years was 'fair to good' (ts 221).

170 The plaintiff was cross-examined at some length as to whether, in or about October 2001, prior to the grant of the 18 December planning consent, he gave detailed instructions or specifications to Mr Hames as to his requirements for the project, that is, the number and the nature of the various rooms and living areas, and the nature of the finishes. The tenor of his evidence was that various matters of detail were discussed but not all. However, he reiterated the assertion at par 28 of his witness statement that he gave Mr Hames specifications for a development in Eric Street, Cottesloe dated October 2001 to assist Mr Hames to understand what he wanted.

171 When pressed, the plaintiff acknowledged that he obtained the so-called 'preliminary specification' from the building company Psaros Development. It was put to him that there was a reference in the final paragraph on the first page of the 15 August Psaros letter (exhibit 32) to 'a copy of the specification brief and monetary allowances which is on a par with Eric Street, Cottesloe'. The plaintiff appeared to concede that the Eric Street specification may have come with the Psaros letter or at about that time. He could not remember when exactly he provided it to Mr Hames (ts 249).

172 I have to say that the answers given by the plaintiff, when considered in conjunction with the Psaros letter itself, lead me to conclude, and I so find, that the Eric Street specification, albeit dated October 2001, was not passed by the plaintiff to Mr Hames towards the end of 2001, prior to grant of the 18 December planning consent, but was first received by the plaintiff on or about 15 August 2002 as an enclosure with the Psaros letter.

173 The cross-examiner pressed the plaintiff as to whether he gave Mr Hames a copy of the 15 August Psaros letter and, as to that, his answer was: 'Not that I can recall' (ts 249). He confirmed this later, saying that Mr Hames was not given a copy of the Psaros 15 August letter because: 'It wasn't his business' (ts 289). 'It had nothing to do with Mr Hames' (ts 272).

174 It was put to the plaintiff by the cross-examiner that he did not give the Psaros quote to Mr Hames because by that time the plaintiff was dealing direct with Psaros and Hames Sharley was effectively out of the picture. This was denied by the plaintiff. He denied also that if the Psaros terms were acceptable to him he intended to proceed via Psaros to complete the design and to build the development (ts 249).

175 Under cross-examination the plaintiff agreed that he gave Ms Cunningham the job of project manager in approximately September 2002. The plaintiff himself had a less direct involvement once she had assumed that role (ts 261). He left it on the basis that she would report back to him.

176 The plaintiff agreed under cross-examination that during the course of September 2002 he told Ms Cunningham that he was becoming frustrated with the project. It was at that stage that he, in effect, made her the project manager (ts 286). He agreed that Mr Hames did tell him during the course of September and October 2002 that he would need another development approval because amongst other things there had been changes to the plans (ts 286). According to the plaintiff, Mr Hames did not say there would have to be a fresh application.

177 The plaintiff agreed that by September 2002, particularly in the light of the Psaros estimate, his commitment to the project was 'faltering'. However, he 'never tossed the idea out the window. It was always going to go ahead' (ts 287).

178 The following exchanges occurred between the cross-examiner and the plaintiff concerning the position as at early September 2002 and the status of the development approval or 'DA':

Had you engaged anybody as at early September 2002 to demolish the house?---I'd certainly got a quote from a demolition company.

Had you given that person instructions to go ahead?---No, I hadn't because I spoke to Mr Hames at Hames Sharley and said to him, 'I've got a demolition person who has inspected my place. He has given me a quote of $10,000 to knock it down. Am I running out of time with this, and if I am running out of time with this, should I engage him to demolish the house?' He said, 'Don't worry, I can get an extension of the DA for 12 months.' I took that as being correct as I relied on him and trusted him and that as far as I'm concerned was the end of the conversation, and I had no further talks with Andrew McDonald from Perth Demolition about it at that time or any time in 2002.

After you got the quote from Psaros, the wind went out of the sails, didn't it?---It certainly did for 2002.

Because of that quote?---No.

Well, you didn't contact Psaros any further. You certainly didn't propose going ahead with him, did you?---I had made up my mind to take Mr Hames' advice and relook at the whole thing and get further quotes on it, and that was the discussion between him and I, believe it or believe it not, that he believed that it could be built for about 2.4, and I believed him. (ts 284)

179 The cross-examiner then obtained certain answers from the plaintiff which had the effect of describing in a summary form the position in the period following the grant of the 18 December planning consent:

So from December 2001 when development approval had been obtained through to August 2002 matters really hadn't progressed much at all, had they?---No.

And you knew from Mr Hames' letter to you of 28 May 2002 that there were things that he had to do and he was waiting for instructions which you never gave him?---Correct.

And that in the meanwhile all that happened is that there were further discussions in July and September 2002 which involved making further changes to the plans?---Correct.

And you knew as a result that detailed plans had not yet been prepared?---Correct.

And you knew that that was what the builders in their budget estimates had been looking for if you wanted a more specific price?---Correct.

And you knew, because Mr Hames had raised it with you, that a quantity surveyor could have given you a more precise estimate sometime during 2002, but you didn't want to engage a quantity surveyor?---I was under no pressure to engage one on the timing factor. (ts 284)

180 The plaintiff continued to assert that Mr Hames had made it clear that he could get an extension of the existing planning consent in early September 2002. The plaintiff was pressed strongly about the making of the alleged 3 September representation but denied that he had created or made up his evidence in regard to that matter (ts 287). He said that he would not have proceeded with Hames Sharley unless he had been given the assurance that an extension or renewal of the existing planning consent could be obtained (ts 288).

181 The plaintiff agreed that he knew that before he could get a building licence he would have to get a builder. That would involve the builder proposing a contract including a price that was acceptable to him. As at September 2002 those requirements had not been satisfied, and he was not in a position to proceed further. However, when pressed, the plaintiff continued to assert that he had been assured that the 18 December planning consent could be renewed and 'it wasn't a problem' (ts 289).

182 These further exchanges then occurred in the course of cross-examination:

And would you agree with me that by September 2002 the plans were undergoing significant changes, or did you not know?---To the best of - I think the basic footprint was still very much the same. There were some internal changes in the units which I was aware of, but as you are aware, I cannot go and say that was that or that was that. I don't read plans that well, and it was being done by Mr Hames and Rosemaree, who I had complete confidence in.

And you left it on the basis that she would report back to you?---That's correct.

All right. There were further changes made - and perhaps you don't know what they are but we'll come back to that - and it reached a point, did it not, where in November 2002 Mr Popplewell met with you and Rosemaree Cunningham and gave you a packet of drawings as they then stood. Do you recall such an occasion?---Yes, I think I do.

And you and Rosemaree took the drawings off Mr Popplewell and told him that you would come back in January 2003 once you had had a look at them. Is that right?---I don't recall the date of that particular discussion saying we would come back in January 2003. If there was a date put on it, it would've been put on by Rosemaree Cunningham.

Well, let me put this to you: it's the case, isn't it, that neither you nor Rosemaree Cunningham came back after 29 November [2002], which is when we say this meeting took place - you did not come back before April 2003 with instructions to Hames Sharley to do anything. Do you agree with that?---No, I wouldn't.

So do you say that either you or Rosemaree brought the plans back at some earlier stage?---No, but I am well aware that Rosemaree Cunningham was in touch with Mark Popplewell from Hames Sharley's office on several occasions through December of 2002. (ts 261)

183 It was put to the plaintiff that he knew that the look of the development was different in September 2002 to how it looked in December 2001. He answered this by saying that on his understanding 'the footprint was the same' (ts 270).

184 Under cross-examination the plaintiff agreed that he did not engage a quantity surveyor to assess the project. This was because he had been assured by Mr Hames that he (Hames) could get an extension of the development approval for 12 months from December. Thus, there was no point in engaging a quantity surveyor.

185 The plaintiff acknowledged that the Psaros letter indicated in plain terms that it would be necessary to reapply for planning approval. He said that it was not necessary to raise this aspect of the Psaros letter with Mr Hames because the subject had been raised with him and Mr Hames had made a statement about the matter which made it unnecessary to put the Psaros view to him (ts 272).

186 In the course of re-examination, the plaintiff dealt with the allegation that between December 2001 and August 2002 not much progress had been made with the project, which might suggest that he was not committed to the project. He acknowledged that he was 'sidetracked' from getting on with the project initially by acquiring the property in Ridge Street, which led to preparation of the second site potential report, and this 'did slow things down' (ts 315). However, if he had been told or warned in any way that this might prejudice the development approval he had then he would have gone as fast as he could to do what was necessary (ts 315).

187 Ms Cunningham said in her witness statement that on or about 3 September 2002 she attended a meeting with the plaintiff and Mr Hames at the office of Hames Sharley to view and discuss the proposed floor plan drawings for the development. Towards the end of the meeting the plaintiff said he had engaged a demolition contractor, Andrew McDonald of Perth Demolition, to demolish the house at 11 Ridge Street, South Perth which was immediately behind the subject property. McDonald had provided a verbal quote to demolish the plaintiff's home on the subject property and recommended that be done while he was undertaking the Ridge Street demolition, otherwise it would be a difficult home to demolish if the only access was to be the right of way. The plaintiff then asked Mr Hames if he should have his home demolished now, so the project could get underway.

188 According to Ms Cunningham, Mr Hames said that there was no need to do this. He explained that in order to comply with the planning consent, the plaintiff would need to demolish the home as well as lay the concrete pad. He said also it was not necessary for the plaintiff to do that work now because he could get a renewal or extension of the planning consent. The plaintiff should not worry about the consent expiring in December because Mr Hames would take care of getting the consent renewed or extended for 12 months. The meeting ended with Mr Hames undertaking to prepare revised drawings to be considered at the next meeting towards the end of September. She said that the discussion about Mr Hames obtaining an extension of the approval was short and to the point. There was no equivocating about it.

189 Ms Cunningham went on to speak of attending further meetings on 27 September, 4 October, 16 October and 31 October. She said that on 17 December 2002 she made a call to a builder named Adam Zorzi, about having him or his father price the proposed development. She made an appointment to meet with him on 19 December 2002.

190 Ms Cunningham said further that because she needed plans for the meeting with Zorzi, she made a telephone call to Mark Popplewell and at that time asked him whether anything had been done about getting the extension for the development approval. Mr Popplewell said no, he didn't think so, but it would not be a problem. A renewal could be obtained in the New Year because the changes to be made to the plans were minor and should be limited to changes to the windows on the west side. She responded that this was all very well but she wished to put it on record that she did not think the plaintiff should have to pay another application fee. Mr Popplewell said that if there was to be any question about extra fees or who was to pay them she would have to talk to Mr Hames about that. On that note the telephone call ended.

191 Ms Cunningham said that a short while later she called Hames Sharley to talk to Mr Hames but as he was not available she spoke to his secretary. She mentioned that Mr Hames had said he would take care of getting a renewal or extension of the plaintiff's building approval so if there was going to be another fee to be paid she thought Hames Sharley should pay it. The secretary said she would pass the message on to Mr Hames and ask him to get back to Ms Cunningham. In fact Mr Hames did not get back to her. Her next discussion with Mr Hames was in early March 2003.

192 Under cross-examination Ms Cunningham confirmed that a budget estimate was obtained from River Stone as a result of her initiative, although she did speak to the plaintiff about it first (ts 321). She was told about an estimate from Pindan by Mr Hames but she did not recall ever seeing such an estimate (ts 324). She saw the estimate obtained from Psaros and discussed that with the plaintiff. Later, in December 2002, she arranged for an estimate to be obtained from Mr Zorzi. The Zorzi estimate was around $3 million (ts 324).

193 Ms Cunningham did not accept that the plaintiff effectively appointed her as project manager. Rather, she was asked to look at the floor plan layout, internally and externally, and to take the role of selecting the finishes (ts 324). In that capacity she dealt with Mr Popplewell of Hames Sharley, but the plaintiff was present at most meetings about changes to the plans. She would not agree that the plaintiff showed little interest in the detail of the plans (ts 325).

194 Ms Cunningham was pressed by the cross-examiner as to whether Mr Hames made the alleged 3 September representation that he would apply for an extension or renewal of the planning consent. She insisted that he did so but she could not be 'sure exactly which word he used' (ts 329). She went on to say this:

Yes, I'm not sure which word he used. I would - I would say that 'renewed' was probably more what he said, but I didn't really understand that there was a difference, so I can't be certain about which word was used. (ts 330)

195 According to Ms Cunningham she had a conversation with Mr Hames about the matter and with Mark Popplewell in December when the matter was under discussion on both occasions. This meant that she could not be certain which word was used. She said that it was possible both were used: 'I did not know there was a difference'. She was not prepared to accept that Mr Hames never used the word 'extension' and she denied that he told the plaintiff in her presence that a new approval would have to be obtained (ts 330).

196 Ms Cunningham insisted that she did see Mr Popplewell during December 2002 in the course of picking up the plans from his office to give to Mr Zorzi. There was a discussion at that stage about an extension or renewal of the development approval (ts 331).

197 According to Ms Cunningham, she could recall that changes were made to the plans during September 2002 but could not be exact as to which changes took place on which date (ts 325). She recalled the size of each unit being reduced by 20 square metres and the main corridor on each of the floors being widened. She could not recall specifically a reduction in the number of car bays but could recall that the glazed wall in the entrance lobby was changed to a solid wall and that the position of the bi-fold doors to the balcony was altered (ts 327).

198 Under cross-examination Ms Cunningham accepted that on 29 November 2002 there was a meeting at Hames Sharley's office attended by the plaintiff, herself, Mr Hames and Mr Popplewell. She could not specifically recall being given a set of the drawings as they then stood at that meeting; she could not recall taking any such plans away upon the basis that she and the plaintiff would return in January 2003 and give Hames Sharley the all clear to go ahead.

199 Ms Cunningham accepted that she approached Mr Zorzi for an estimate after the meeting of 29 November 2002 but was not prepared to accept that she approached him with the drawings given to the plaintiff and herself on 29 November 2002. According to her, she spoke to Mark Popplewell by telephone and arranged to pick up certain drawings after the November meeting. On the day after that telephone conversation she collected a set of drawings from Mr Popplewell so that she could go to see Mr Zorzi. However, she agreed that she and the plaintiff did not talk about the drawings with Hames Sharley again until early 2003 (ts 328).

The Hames evidence as to September 2002 events

200 Mr Hames gave evidence in his witness statement concerning the events in September 2002 and thereafter bearing upon the planning consent compliance issue and the alleged 3 September representation issue.

201 It is important to understand that the Hames witness statement was not prepared as a statement in response to the witness statements of the plaintiff and Ms Cunningham, because the various witness statements on each side were exchanged simultaneously, close to the original trial date. However, Mr Hames did address the allegations in the statement of claim made by the plaintiff concerning the planning consent compliance issue and the alleged representation issue.

202 In his witness statement Mr Hames specifically denied saying to the plaintiff on 3 September 2002 that there was no need for the plaintiff to demolish the house on the subject property and lay the concrete pad for the project in order to comply with the 12 month time limit prescribed by condition 12 because Hames Sharley could get a 12 month extension or renewal of the approval. He denied saying that there was no need to worry about the expiry date of 18 December 2002. He did not tell the plaintiff or Ms Cunningham that they could get an extension of the existing approval.

203 Mr Hames said that on 4 September 2002 the plaintiff told him that he did not want Mr Psaros to proceed with the project and this led to Hames Sharley being recommissioned by the plaintiff.

204 I pause here to note that the evidence as a whole indicated that the relevant meeting took place on 3 September 2002. For that reason, notwithstanding the Hames evidence to a meeting on the following day, I will henceforth proceed upon the basis that the relevant events took place on 3 September 2002.

205 Mr Hames said that following Hames Sharley's recommencement of the project in early September 2002 he sought the assistance of Peter Helfer at the Hames Sharley office in Victoria because the drafting staff at the Perth office were committed to other projects. Mr Hames wanted to action changes requested by the plaintiff and Ms Cunningham as soon as possible. Accordingly, on 4 September 2002, he wrote to Mr Helfer and asked him to prepare a site plan which included plans for the basement, ground, first and second floors, elevations and general sections (as required) to explain the scheme (exhibit D25).

206 Mr Hames said also in his witness statement that as from September 2002 it would have been impossible to prepare the contract documentation, tender the project, obtain a building licence for the development and achieve substantial commencement on the site prior to the approval lapsing on 18 December 2002 given that only schematic designs and partial design development documentation had been completed. Hames Sharley did not have any computer generated drawings available, there had been no involvement of any engineering sub-consultants such as civil, structural, mechanical, hydraulic or electrical engineers, being consultants of the kind (on his view of the matter) which he had previously asked the plaintiff to appoint by the Hames Sharley 28 May letter.

207 According to Mr Hames, during September 2002 Hames Sharley continued to work on revisions to the plans, including changes in layouts and areas. He said that Ms Cunningham was looking to make alterations with a view to reducing the cost of the project. These alterations included a reduction in the size of each unit by 20 square metres, a reconfiguration of the basement to provide a reduction of the number of car bays from 12 to 9 bays. There were also to be general amendments to the ground floor, first floor and second floor such as widening the main corridor, the glazed wall in the entrance lobby was changed to a solid wall, the position of the bifold doors to the balcony was altered, there was a reduction in the size of the living/dining room, the kitchen, laundry and powder room was replanned to work with the reduced size of the living/dining room, the footprint of bedroom two was changed, the window in bedroom three was enlarged, the design of the stairs from the basement to the ground floor entrance floor were changed, a bedroom/study was added to the north of the lift core.

208 Mr Hames' witness statement went on to refer to a number of more specific changes to each of the three floors. There were also specific changes to the basement in that the location of four columns in car bays 1 to 4 were changed, the storage area in the basement was reduced and the lift position was altered. There were major design changes to the drawings as the floor plan dimensions were altered.

209 According to Mr Hames, on 23 September 2002 he was informed by Mr Popplewell that Ms Cunningham had telephoned that afternoon to say that the plaintiff was frustrated with the builders and did not want to be involved in the project. Mr Popplewell said that Ms Cunningham was to take on the role of project manager and was to be responsible for the liaison with Hames Sharley. He advised that Ms Cunningham was keen that the central corridor be of generous width, the bedrooms be enlarged, the lift lobbies be reduced in size and the internal styling be less classic and more neutral. She had confirmed her request that the floor area of the building be decreased in order to reduce the cost of the project.

210 Mr Hames said in evidence that on 24 September 2002 the following changes were also effected as requested by Ms Cunningham and the plaintiff, namely, there was a new layout based on a different structural grid, the layout of the bedrooms on the eastern side of the building was altered, all bedrooms were increased in size, the built-in robe in bedroom three was moved to a different location to provide more space in the sitting area.

211 Mr Hames said that on 26 September 2002, the plaintiff and Ms Cunningham instructed Hames Sharley to make further changes to the drawings which included removing the steps between the entry lobby and the living room in unit 3, deleting bedroom three in unit 3 and amalgamating it with the sitting room.

212 According to Mr Hames, on 26 September 2002 Mr Popplewell produced the basic elevations for the west and south facades to the building. Hames Sharley in Victoria was requested to produce the final elevations. These events are said to be evidenced by exhibits D28 and D29.

213 Mr Hames said in evidence that on 27 September 2002 he and Mr Popplewell met with Ms Cunningham at the Hames Sharley office. She said that the plaintiff was fed up with dealing with builders and the entire development process. She said that she would take over the management of the project and that Hames Sharley should deal with her rather than with the plaintiff.

214 Mr Hames said in evidence that on 4 October 2002 Hames Sharley forwarded the floor plans incorporating the changes requested to the plaintiff and Ms Cunningham (exhibits D31 and D32). According to Mr Hames, the drawings were substantially modified and as such Hames Sharley needed to lodge this new set of drawings for development approval from the Council. Hames Sharley advised the plaintiff and Ms Cunningham that the elevations and three dimensional modelling needed to be undertaken.

215 It seems that on 4 October 2002 the Western Australian State Government introduced the new residential design codes - the R Codes. As at that date TPS5 remained the applicable planning scheme. In order to conform with the requirements of the new R Codes, the drawings that Hames Sharley had prepared on behalf of the plaintiff had to be amended. The changes to the R Codes meant that the plaintiff had to obtain a new approval from the Council because the drawings had to be substantially altered. The new R Codes imposed the following requirements, namely: shadow analysis (that is, the plan must depict the shadow that will be cast onto neighbouring properties at 12 noon mid winter); details of any building elements having an effect on the privacy enjoyed by neighbouring properties and proposals for maintaining privacy.

216 According to Mr Hames, at this point in time the plaintiff had lost the opportunity to obtain a building licence based on the original drawings because there was not sufficient time to obtain a building licence pursuant to the 18 December planning consent and achieve substantial commencement. The plaintiff would have to apply for another development approval.

217 Before turning to further exchanges between the parties and revisions of the plans, it will be useful to look at the cross-examination of Mr Hames in regard to the September events and certain other matters mentioned in his witness statement.

218 Under cross-examination Mr Hames acknowledged that as at 2001 Hames Sharley held itself out as architectural experts and as experts in urban and regional planning. The skills in question were equivalent skills and that was the position at all material times (ts 514).

219 Mr Hames acknowledged under cross-examination that at the outset the plaintiff was keen to pursue the project. However, he went on to say that the plaintiff's interest 'waxed and waned' (ts 512). The plaintiff was keen sometimes but there were long intervals in the course of the process. He acknowledged that he was never told by the plaintiff that the plaintiff wanted to abandon the project or that he would not go ahead (ts 512).

220 Mr Hames acknowledged under cross-examination that the 18 December planning consent was undoubtedly important because the proposed development was particularly well suited to the site and the planning consent obtained was exceptional, that is, it allowed for multiple dwellings as an exception to the provisions in TPS5 concerning grouped dwellings and allowed for preservation of certain trees on the site which were important to the plaintiff. The planning consent plans reflected what was a good solution in that they unlocked expansive views by way of a three level building on an elevated site. It was a unique type of development in that area (ts 508 - 510).

221 Mr Hames agreed that any development under TPS6 was subject to a height restriction of 7 metres. It followed that the proposed project had the advantage of higher views. However, it would not necessarily give better views because, in both cases, the planning controls concerning neighbouring properties had to be observed. Nonetheless, he accepted that the 18 December planning consent was well worth preserving because quality apartments of the kind allowed for on a quality site would become a valuable asset (ts 512).

222 Under cross-examination Mr Hames said that he personally became aware that TPS6 imposed a height restriction of 7 metres when he was so informed by one of his planners, Isla Finlay or Darren Youens, when the site potential report was prepared. He read the report and noted that it gave an indication that the new height restriction was foreshadowed in the draft TPS6 (ts 506). In this part of his evidence I took him to be referring to the second site potential report prepared by Hames Sharley in March 2002 because that is the report in which the 7 metre height restriction in TPS6 was expressly mentioned.

223 Under cross-examination Mr Hames said that there were several meetings in September 2002 (ts 515). Most of the meetings occurred in his office. He recalled a meeting at that time with the plaintiff and Ms Cunningham, and with Mr Popplewell in attendance, at which there was discussion about a demolition contractor providing the plaintiff with a quote to demolish his home for $10,000. Mr Hames denied saying to the plaintiff at that meeting that it was not necessary for him to demolish his home because Mr Hames could get a 12 months renewal or extension of the planning consent (ts 517). According to him, he would never have said that because every application has to be considered on its merits and one cannot get an extension.

224 Mr Hames said that at the meeting in question he explained to the plaintiff that demolition of his home and the laying of a concrete pad would not constitute 'substantial commencement' within the terms of the planning consent. Moreover, it was necessary to have a building licence and that required that there be a set of contract documents or working drawings.

225 According to Mr Hames, the parties discussed the fact that the plaintiff was changing his drawings and that Hames Sharley were going to prepare drawings for a new development application (ts 517). Mr Hames never said that he would get the planning consent renewed or extended. He said that Hames Sharley were preparing the drawings for a new application. At that stage, he did not say that he would make another application because he had to complete drawings to the plaintiff's satisfaction.

226 Mr Hames said that as at September 2002 it was his intention to obtain another planning approval. He knew at that time that it was not possible to extend or renew a planning approval. He knew also that it was possible to apply for an approval prior to expiration of the existing planning consent, by lodging the same or original drawings. However, the plaintiff was giving Hames Sharley instructions to change the drawings so Mr Hames concluded that he did not want to lodge the same drawings.

227 Mr Hames acknowledged that if the same drawings had been lodged in September 2002 it would take only about six to seven weeks for the application to be determined by the City of South Perth (ts 523). However, he doubted that, even speaking hypothetically, the new approval would have issued because new R Codes had been gazetted on 4 October 2002 and the City would have had to take those into account.

228 Under cross-examination Mr Hames said that as at September 2002 it was absolutely impossible to commence construction by 18 December 2002 in order to comply with the conditions of the planning consent because there were no working drawings or contract documentation. These exchanges with the cross-examiner then occurred:

Okay, so you say it was absolutely impossible. If that was the case why didn't you apply in September 2002 for a new development application?---Because Mr Berryman was changing his plans. He wanted - he had had meetings with Danny Psaros and Rosemaree then became the project manager, adviser, and they were altering their plans.

You would agree, would you not, that as an interim measure you could at least have lodged the original plans for a new DA as at September 2002? You could have done that, couldn't you?---You could have, but then we were then lodging a plan that he didn't want to build.

Yes, but you would have preserved the development approval for another year?---You would have preserved something, but he advised me that he didn't want to build. We were still operating under town planning scheme number 5, so we were going to make a new application with the plans that he wanted, not the plans he didn't want.

Do you agree that you could in fact have protected his position as at September 2002 by making an application for a new DA in accordance with the original plans? I'm not asking you what he wanted. Do you agree with that proposition or not?---I have to say, Mr Mendelow, that it would be very strange in my 30 years of experience that I make application for a DA which somebody don't want to build.

Do you agree - - -?---Yes, you could have made an application - - - . (ts 527)

229 Mr Hames said under cross-examination that from September 2002 onwards he continued to work on the project by attending to the plaintiff's instructions (via Ms Cunningham) to make substantial changes to the drawings. When asked if he told the plaintiff and Ms Cunningham that if they made changes to the drawings they were going to lose the benefit of the 18 December planning consent and that would be the end of it, Mr Hames responded as follows:

I think it was plainly obvious that we could not achieve substantial commencement of this project under the then approved development application. (ts 528)

230 When he was pressed about this and was asked whether he acknowledged that he did not in fact expressly tell them that they would lose the planning approval, he responded that 'they knew' (ts 528). He went on to say that as they were changing the plans and as substantial commencement could not be effected 'we had to make a new application, and they knew that; we discussed that' (ts 528). This was at the September meeting.

231 The cross-examiner asked Mr Hames whether the plaintiff was told that it was too late for the existing development approval (DA) to be used, that is, the 18 December planning consent. This exchange occurred:

Did you say to him in September 2002 that it's too late for the existing DA to be used?---Mr Mendelow, that's when we had the discussion about knocking over the house and pouring a concrete slab and I said, 'That's not substantial commencement. We are not going to get substantial commencement; we are going to have to make a new development application.'

Where did you say that in your statement, that you're going to have to make a new development application and you told that to him in September 2002?---I can't - I don't know.

I don't think it is there. Would you agree with that?---I haven't - I'm sure - if that's the case I'll accept that.

Why did you not put that in your statement if that's what was said?---Well, I don't know. To me it was obvious what we were doing. (ts 550)

232 Mr Hames was cross-examined about a conversation he allegedly had with Mr Popplewell in January 2003 in which he inquired whether the planning approval could be extended. He said that, from memory, he approached Mr Popplewell to find out whether Hames Sharley had satisfied all the requirements of the new R Codes. He was sure he would not have used the word 'extended' because, as an experienced planner, he knew that an approval could not be extended because every application has to be considered on its merits, having regard to the legislation in force at the time. By that stage, Mr Popplewell knew that the 18 December planning consent had expired and he doubted that there was any discussion about that (ts 529). He had discussions with Mr Popplewell about making a new application (ts 531).

233 Under cross-examination Mr Hames agreed that the planning services his firm was providing were to include all applications to Council. He did not tell the plaintiff in September 2002 that he was taking care of a re-application for planning approval. He told him that Hames Sharley were preparing documents so that a new application for planning approval could be lodged (ts 532).

234 The plaintiff said in his witness statement that he did not have any contact with Mr Hames or Hames Sharley from mid December 2002 until he received an invoice from the firm which came to his attention in January 2003. He contacted Mr Hames to query the invoice and to find out what progress had been made with the project. They agreed to meet and on 5 March 2003 the plaintiff and Ms Cunningham attended the Hames Sharley office to meet Mr Hames. Mr Popplewell from Hames Sharley was at the meeting but came in late.

235 According to the plaintiff, he asked Mr Hames if he had obtained an extension of the planning consent but was told that he had not, and an application for an extension had not been made. When the plaintiff called for an explanation Mr Hames said that they had not made the application for an extension of the 18 December planning consent because the City of South Perth would not accept anything submitted under TPS5 due to the imminent adoption of TPS6. He said further that getting the extension was not the fault of Hames Sharley. An extension could not be obtained because of the government changing the building rules and the City changing its town planning scheme.

236 According to the plaintiff, he protested and described what he had been told as 'bullshit'. Mr Hames then said words to the effect that he agreed, he was sorry, he knew it was all his fault, he should have got the extension. Mr Hames went on to say that what should be done now is to make changes to the drawings and lodge an application for a new planning approval. Few changes were required to the building but they were insignificant, relating to matters such as the windows because of the new privacy laws. It would be easy to make the changes to the drawings because they were all on CAD at the Hames Sharley Melbourne office.

237 The plaintiff said in evidence that those present then discussed changes to the plans prepared by Hames Sharley in 2002 to the windows and a change to the toilet positions and minor changes to the interiors. Mr Hames said he would make the changes and lodge the amended drawings with the new application for a planning consent as soon as the drawings had been finished. The plaintiff instructed Mr Hames in effect to fix the drawings and make the application. Mr Hames said he would look at the invoice and get back to the plaintiff. In fact, in due course, the plaintiff paid the account.

238 The plaintiff said that in or about late June or early July 2003 he signed an application for planning approval and paid an application fee of $1,931.75.

239 The form in question was submitted to the City of South Perth by Hames Sharley under cover of a letter dated 2 July 2003 (exhibit 20). I will look at the details of the application later.

240 The plaintiff said in his witness statement that on or about 20 July 2003 Mr Hames telephoned him and said that he had bad news. When pressed, he went on to say words to the effect that he had 'fucked up' with the height limits. The new TPS6 lowered the height limits with the result that the plaintiff could build only a two storey and not a three storey building. This was because under the old TPS5 the plaintiff could have built to 10.5 metres but under the new TPS6 the limit was 7 metres. He said further there was a solution which was to apply to amend TPS6.

241 According to the plaintiff, the parties agreed to meet. On 25 July 2003 Mr Hames sent him a fax with a memo note dated 23 July 2003 (exhibit 21).

242 The exhibit 21 handwritten memo was to this effect:

Peter,

As discussed memo re height problem.

Please review and we can discuss it on Tuesday next week and decide our direction.

243 The typewritten memo dated 23 July which accompanied this handwritten note is lengthy and purports to set out the history of the matter and various facets of the problem to be addressed. I will look at this again later. However, I note in passing at this stage that it is said by the author of the note at par 4 that the first time any problem with height was identified was when Justin Hansen was doing a detailed check of the scheme against the new scheme which has a new height limit for properties of 7 metres (reduced from 10.5 metres). Buildings in excess of height limits are an item that cannot be approved by officers under delegation nor council approval. It would entail a variation to the planning scheme.

244 The plaintiff said in evidence that on 29 July 2003 he went to the Hames Sharley office and sat in the reception area. Mr Hames was on the phone and as this continued for 40 minutes or so the plaintiff became irritated and left. Mr Hames later rang the plaintiff at his office. This led to a long conversation in which Mr Hames appeared to be saying that the problem in getting another consent to build the three storey unit development was the fault of everyone else but him. He said how difficult it was to see the changes in the height limitations in the new scheme. According to the plaintiff, Mr Hames went on and on but at the end the plaintiff simply said that he was not interested. On the plaintiff's account, this ended the relationship between the parties. I will look at what steps were taken by the plaintiff to engage alternative advisers in due course.

245 Ms Cunningham said that after the events of late 2002 her next discussion with Mr Hames was in early March 2003 at the Hames Sharley office. The meeting was attended by the plaintiff, herself, Mr Hames and Mr Popplewell, with the latter arriving late at the meeting.

246 According to Ms Cunningham, the plaintiff asked Mr Hames if he had got the extension of the approval but was told that he had not and he had not made a new application. He said that this was because the Council would not accept applications under the old scheme so close to the changes to the new scheme TPS6.

247 According to her, the plaintiff said that this was 'bullshit' whereupon Mr Hames said that he was sorry and knew that it was all his fault. He went on to say that the application would have to be made after TPS6 was in force but it would not be a problem because the changes required to the plans were insignificant. The changes were then discussed and Mr Hames was instructed to fix up the plans and make the application.

248 Ms Cunningham said that this was her last involvement in a discussion with Mr Hames or Mr Popplewell.

Cross-examination of the plaintiff and Ms Cunningham

249 Under cross-examination the plaintiff agreed that he did not write to Mr Hames at any stage prior to March 2003 in relation to what Mr Hames had said; that is, (on the plaintiff's case) that Hames Sharley was going to get an extension of the planning consent (ts 293). The plaintiff did not write to Mr Hames in March 2003 (after the alleged meeting at which the plaintiff was informed by Mr Hames that an application for extension of time had not been made) because there was no point in doing so. They had agreed to go ahead and relodge the plans (ts 293). The plaintiff denied fabricating his evidence to the effect that at a meeting in March 2003 Mr Hames had apologised for his failure to apply for an extension.

250 Under cross-examination, Ms Cunningham continued to assert that there was a meeting in March 2003 attended by Mr Hames, Mr Berryman and herself at which there was discussion about Mr Hames not having lodged a new application for development approval. According to her, it was discussed. 'There was a heated argument about it' (ts 335).

251 Before turning to the evidence of Mr Hames concerning the events of 2003, it will be useful first to look at the evidence of his colleague at that time, Mr Popplewell, concerning his involvement with the project and his dealings with the plaintiff and Ms Cunningham.

252 Mark Mayo Popplewell provided a witness statement in the course of the trial (exhibit D45). He said that he obtained the Degree Bachelor of Architecture in 1983 from Herriot Watt University in Edinburgh. He described his qualifications and background, including reference to migrating to Australia in 1997. He worked with Hames Sharley for six years until mid 2003 when he took up a position with another firm of architects in this state.

253 Mr Popplewell said that he met the plaintiff as a consequence of his involvement with the proposed development of the subject property. He assisted Mr Hames by amending the relevant plans and elevations on the computer as changes were made by the plaintiff and Ms Cunningham.

254 He first became involved in the project in late July 2002 when Mr Dean van Niekerk, the manager of Hames Sharley, approached him with respect to the development. Mr Popplewell was responsible for altering the design aesthetics as necessary to suit the plaintiff's preferences and to ensure that the drawings complied with the new R Codes.

255 Mr Popplewell said in evidence that instructions were usually provided to him at meetings attended by the plaintiff and Ms Cunningham, and sometimes by Ms Cunningham on her own at the offices of Hames Sharley from around July 2002 to December 2002. He never received direct instructions from the plaintiff. Ms Cunningham appeared keen to get the project resolved but the plaintiff did not.

256 In the course of his evidence Mr Popplewell referred to receiving a telephone call from Psaros Developments as a consequence of which he provided the relevant drawings to Danny Psaros as requested.

257 Mr Popplewell provided lengthy evidence concerning various changes that were made to the plans as matters proceeded. I will look at this part of his evidence at a later stage.

258 Mr Popplewell referred at par 89 of his witness statement to the plaintiff's allegation that at a meeting on 3 September 2002 he told Mr Hames that he was prepared to demolish the existing home on the subject property and lay a concrete pad for the project. Mr Popplewell recalled attending such a meeting in early September 2002 but he did not think Ms Cunningham was there.

259 According to Mr Popplewell, the plaintiff said at the meeting that if he started building he would be okay. He made an almost joking reference to laying a concrete slab.

260 According to Mr Popplewell, the discussion was about the fact that the planning consent would expire in December. Mr Hames told the plaintiff not to do anything about the slab as it would not be possible to achieve anything by it. Mr Popplewell asserted that the plaintiff left the meeting knowing that he could not just drop a slab down.

261 Mr Popplewell observed also in evidence that it would have been impossible for the plaintiff to begin substantial commencement by doing what he proposed because as at September 2002 no building licence had been obtained. Further, the building did not have a 'concrete pad' as such. It was to have a basement which required excavation and the preparation of accurate structural calculations and drawings before any such work could be carried out. At that stage the plaintiff had not appointed a structural engineer.

262 Mr Popplewell went on to say that during September 2002, at a meeting at the Hames Sharley office, Ms Cunningham told him that the plaintiff was nervous about the project and that she had to assist him with its development and completion. It was in this context that further discussions about changes to the plans proceeded. As I have indicated, I will turn to the details in that regard later. For present purposes, it is sufficient to note that on Mr Popplewell's evidence various changes were made and new plans and drawings produced. During this period Mr Popplewell was liaising with the Melbourne office of Hames Sharley.

263 Mr Popplewell said in evidence that he continued to meet with Ms Cunningham and on 4 November 2002 sent her a letter about the project including confirmation of the floor areas of the design (exhibit 36). He said in evidence that there never seemed to be any programme in place for completion of the project. The programme of the job or deadlines were never discussed at any stage. The only sense of urgency he ever experienced was when the plaintiff and Ms Cunningham wanted some changes made to the drawings in November 2002. That was because the plaintiff and Ms Cunningham were going away on holiday and wanted to have the design stage of the project tidied up before they departed.

264 On 21 November 2002 Mr Popplewell faxed the Melbourne office and requested a set of drawings that he could present to the plaintiff and Ms Cunningham prior to their departure (exhibit D43). A week later, on 29 November 2002, he and Mr Hames met with the plaintiff and Ms Cunningham at the Hames Sharley office and provided them with drawings. They took these away on the basis that they would give an all clear in January 2003 to enable Hames Sharley to complete detailed design in collaboration with a structural engineer and mechanical engineer who were yet to be appointed. The matter was left on the basis that until Mr Popplewell received instructions in response to these drawings he was unable to proceed further.

265 According to Mr Popplewell, the plaintiff would also have had to apply for a new development approval, even prior to the original 18 December planning consent expiring, because the design of the project had materially changed as a result of amendments requested by the plaintiff and Ms Cunningham in September 2002. He believed that the drawings as altered would not have fitted within the original planning consent because they had been significantly amended in September 2002, that is, the apartments were made longer and thinner, there were fewer carbays in the basement, the units had been reduced in size, the elevations and roof form had been changed.

266 Mr Popplewell said in evidence (at par 172 of his witness statement) that on 18 December 2002 Ms Cunningham called at the Hames Sharley office to collect further copies of the drawings. He met her in the reception area and took her into one of the meeting rooms. The meeting took approximately five minutes. He denied telling Ms Cunningham (being an allegation forming part of the plaintiff's case) that Hames Sharley would immediately apply to renew the consent and a fee paid by the plaintiff for the consent would be credited against the fee payable on that application. There was no discussion at the short meeting on 18 December 2002 about applying to renew the consent or making any application to the City of South Perth.

267 Mr Popplewell said that his involvement in 2003 involved an assessment of what was required after the original development approval had lapsed. As part of that process he prepared an email to Mr Hames on 14 January 2003 advising him what further information Council required to submit plans (exhibit 60).

268 In January 2003 he phoned the City of South Perth to find out what the situation was in relation to the planning consent. He spoke to Mr Christian Buttle and asked whether it would be possible to extend the 18 December planning consent. It was his belief that it could not be extended but he wished to confirm this. Mr Buttle said it was not possible unless the drawings were unchanged from those submitted when the planning consent was granted.

269 He said in evidence that his involvement in the project after January 2003 was minimal. Another architect, Gary McIntosh, took over his role in the project. His role ceased entirely following his resignation from Hames Sharley in mid 2003.

270 Mr Popplewell acknowledged under cross-examination that he was aware of a planning consent which was to expire on 18 December 2002. He accepted that prior to the expiration he was not aware of a possibility that TPS6 might come into play. He was not aware of that until TPS6 was gazetted on 28 April 2003. It followed that he was not aware that TPS6 prescribed a height restriction of 7 metres on any development in that area (ts 585).

271 He acknowledged that there was a meeting in September 2002 when there was talk about the plaintiff demolishing the premises on his property, although he came late to the meeting. He did not remember Ms Cunningham being there. It was discussed that the planning consent would expire in December but he could not remember actual concern about that fact (ts 586).

272 The witness could not recall an amount for the proposed demolishing being mentioned or any issue concerning difficulty of access. There was talk about a re-application for approval being necessary. This was a 'new planning application' which was probably to be for twelve months (ts 587).

273 He said that the question of applying for a new approval during the currency of the existing planning consent was not even considered because by that time Hames Sharley was basically redesigning the building. He did not remember discussion about the planning consent being renewed or extended, but there was discussion about a re-application (ts 587).

274 He agreed that a brand new application prior to expiration of an existing approval could be made but they were not advanced enough to do it at that stage because paperwork and drawings had to be attended to. He could not see why they would have lodged another application in the original form because the original had substantially changed. There was no discussion about putting in the same application. He could see no benefit in putting in the original application except if a decision had been made to build the original building. There was no explanation to the plaintiff that if he chose to change the plans he could thereby lose the benefit of the planning consent he had but he could not believe that such a point would not have been discussed. He personally had no discussion to that effect with the plaintiff (ts 588).

275 According to Mr Popplewell talk about demolition work was in the context of the plaintiff wanting to commence development almost immediately. However, this was laughed about because it would be wholly impossible to do that. Mr Hames and Mr Popplewell explained that they were not in a position to commence because they had already redesigned the new building and one would not be able to commence development without a building licence which takes a considerable amount of time to get (ts 589). It was explained that Hames Sharley would be applying for a new approval (ts 589).

276 Mr Popplewell recalled under cross-examination a telephone call from Ms Cunningham shortly before Christmas about wanting to collect some plans. He could not remember any talk about whether getting the approval that had previously been discussed had been effected. He denied that there was any talk about such a matter (ts 590). He would have remembered something like that because to go for a planning approval requires a considerable amount of work and paperwork. A question like that would have raised alarm bells with him because it would have meant a lot of time and effort to get such an application together (ts 590). There was no talk about who would pay any extra fee.

277 Mr Popplewell agreed under cross-examination that in January 2003 he made an enquiry of the City of South Perth and was told that there was no such thing as an extension of time for a planning approval (ts 591). He only made this enquiry because Hames Sharley was about to submit a brand new application and he wanted to establish that this was the right course rather than applying for any extension. He 'highly suspected' an extension could not be obtained but he wished to establish that fact (ts 591).

278 Mr Popplewell said that he could not recall a meeting about the project in March 2003 at which the question was raised whether an application had been made. He could not recall meeting Ms Cunningham at any time in 2003 (ts 592). He was not at a meeting where there was a heated exchange about whether an application for an extension had been made (ts 593).

The Hames' evidence concerning events of 2003

279 Mr Hames said in his witness statement (at par 361 and following) that in January 2003 he asked Mr Popplewell to do an appraisal of the current drawings to ensure that they satisfied the requirements of the new R Codes. As part of the design work being undertaken in early 2003, an additional bedroom was being added to the drawings, as required by the plaintiff in late 2002.

280 Mr Hames said that he did not hear from the plaintiff or Ms Cunningham until April 2003 when the plaintiff returned the drawings. By this time Mr Popplewell had resigned from Hames Sharley and Gary McIntosh became the project architect.

281 Mr Hames acknowledged that TPS6 came into effect in late April 2003. He did not previously know that this would happen because it is impossible to know when a new town planning scheme will be consented to.

282 He confirmed that Hames Sharley lodged a fresh application for planning consent on 2 July 2003. However, in the end, the application was rejected on the basis that with the gazettal of TPS6 the height limit had been reduced from 10.5 metres to 7 metres. He then conferred with the plaintiff with respect to the height limits on the property.

283 According to Mr Hames, at that stage the plaintiff said that he would utilise the services of a Mr Peter Webb to pursue that matter.

284 On 8 October 2003 the City of South Perth wrote to Hames Sharley to say that the 2 July application had been withdrawn due to conflict with the maximum building height limit prescribed by TPS6.

285 Mr Hames said further in evidence (at par 388) that on 23 January 2004 Peter D Webb & Associates wrote to the City of South Perth lodging an application to amend TPS6 to restore the height limit to 10.5 metres. A month later the City wrote to the plaintiff and advised him that the Council had resolved not to provide planning approval with respect to the project.

286 I note in passing that the witness statement of Mr Hames did not deal with the plaintiff's contention (at par 90 of the plaintiff's witness statement) that there was a meeting on or about 5 March 2003 at which the plaintiff enquired as to whether an application for an extension had been made. However, he was asked questions about this in the course of cross-examination.

287 Mr Hames said under cross-examination that he could not recall a meeting at his office with the plaintiff in early March 2003 (ts 533). He denied that the plaintiff questioned him at such a meeting as to whether he had obtained an extension of the planning consent. Mr Hames' belief was that the first meeting in 2003 occurred not in March, but in late April. At the April meeting Hames Sharley was asked to prepare plans for lodgement with the Council (ts 534).

288 Mr Hames said that he probably had not put in a responsive witness statement answering certain key allegations in the plaintiff's witness statement including an allegation that Mr Hames, at a meeting in March 2003, had apologised for his failure to apply for an extension, because he was not asked by his lawyer to put in such a statement.

289 Under cross-examination, Mr Hames said that he probably first told the plaintiff in May or June 2003 that the 18 December planning consent had lapsed and the plaintiff could not get a fresh grant of approval under TPS5 (because by then TPS5 had been replaced by TPS6).

290 Mr Hames confirmed in the course of cross-examination that a new application for approval was made in July 2003. However, the plans in question were definitely not the same plans as those in existence at September 2002 because 'substantial alterations' were made by the client (ts 525). He pointed out that although certain of the July 2003 planning application plans were dated September 2002 this was simply a consequence of the architectural practice whereby the date of the original plan remains the same, denoting the date on which the design concept was brought into existence, but various revisions thereafter were progressively noted upon subsequent additions of the original plans.

291 Mr Hames acknowledged under cross-examination that the 2 July 2003 application for planning consent was accompanied by plans specifying a development of 10.5 metres in height. He accepted that this did not conform to the 7 metre height restriction in the new TPS6. This was probably because Gary McIntosh of Hames Sharley was the project architect at that point in time and he must have assumed from his conversation with Council officers prior to lodgement that the plans satisfied all of their requirements.

292 When pressed, Mr Hames agreed that he personally was not aware that the height limitation under TPS6 was 7 metres (ts 540, ts 541). He agreed that in telling the plaintiff the July 2003 application had been rejected he told him that a mistake had been made concerning the height limits. He went on to suggest that the solution was to apply to amend TPS6.

293 I pause here to note that the evidence of Mr Hames at this stage of the cross-examination did not seem to square or sit comfortably with his assertion at an earlier stage that he was aware that TPS6 imposed a height restriction of 7 metres as a consequence of reading what was said about that matter in the second site potential report. I will return to this evidentiary issue later. However, it is possible that Mr Hames had in mind a distinction between knowing what was foreshadowed in the draft TPS6 and knowing precisely what was prescribed by TPS6 as to heights limits once the new scheme was actually gazetted.

294 Mr Hames acknowledged under cross-examination that if an application for planning consent had been lodged prior to gazettal of TPS6 on 29 April 2003 such an application could have been determined under TPS5. He accepted also that it was open to Hames Sharley to file another application at any time after 18 December 2001 seeking either a new or different consent to the development the subject of the 18 December planning consent (ts 544). However, as he saw it, he was waiting for instructions from his client who was reviewing the drawings (ts 544).

295 Mr Hames was asked under cross-examination as to whether, during the course of 2002, he conveyed a sense of urgency to the plaintiff. He responded by referring to his letter of appointment which described the various stages that had to be completed and to the 28 May letter and Pindan quote which indicated that consultants had to be appointed and contract documentation completed (ts 548).

296 Mr Hames said that the 28 May letter sufficiently conveyed a sense of urgency to the plaintiff that unless he got on with the project immediately he was going to lose his development approval (ts 548). He said that as from September 2002 onwards everybody around the table knew that a new application had to be made because there were alterations being made to the plans. 'We were not going to get substantial commencement, so we had to make a new application'. Hames Sharley were not working on the project during July and August because the plaintiff was talking to Psaros about taking over the project (ts 549).

297 Under cross-examination Mr Hames accepted that he did not ever tell the plaintiff that he (Hames) had any concerns about whether the proposed application for planning approval would be accepted the second time around (ts 565).

298 It will be useful now to look at the evidence of Christian Buttle who gave evidence on behalf of the plaintiff. He said in his witness statement that he was the Team Leader in Planning Services at the City of South Perth and had planning qualifications. Until 2002 South Perth had a Planning Department then managed by Mr Rod Bercov and a Building Department. Mr Buttle confirmed that the 18 December planning consent was granted to the plaintiff by the Council.

299 This witness confirmed also that in order to commence construction under the consent the owner had to obtain a building licence which required the owner to apply for a licence supported by working drawings including section drawings, specifications and engineering details. Further, as part of the process, if there was an existing building on the land then a demolition licence had to issue.

300 Mr Buttle drew on his experience to say that it takes about four weeks for a building licence to issue once all the required papers are filed, conditions of planning consent have been fulfilled and building licence drawings consistent with those upon which the planning consent was issued are provided to the City.

301 Mr Buttle also gave evidence as to the planning controls affecting the subject property. His evidence in that regard was generally consistent with the assertions contained in the two site potential reports prepared by Hames Sharley.

302 Mr Buttle confirmed that the 1991 R Codes were replaced by the 2002 R Codes with effect from 4 October 2002. He described the requirements relating to land coded R35 under the 2002 R Codes. Building height was introduced into the Codes. However, the City of South Perth TPS5 contained provisions which prevailed over those contained in the Codes and accordingly this was an irrelevant change. He said that none of the changes introduced by the 2002 R Codes affected the 18 December planning consent because the proposed development complied with all the requirements set out in the new Codes.

303 Mr Buttle confirmed that TPS6 was gazetted on 29 April 2003. Prior to that date planning policy No 34 required South Perth to have some regard to the then proposed TPS6 on housing density. This did not affect the consent issued for the subject property.

304 Mr Buttle said that the time it takes to receive and determine an application for planning consent depends upon the circumstances. If the planning section has delegated authority then the target time is 14 working days if neighbour consultation is not required. If it does not have delegated authority the application must be decided by the Council in which case there is no target time but submission deadlines suggest that an application must be lodged around six to seven weeks prior to the date of the Council meeting. An application which was undecided within 60 days of lodgement under TPS5 was deemed to have been refused.

305 This witness confirmed also that it is not necessary to wait for a consent to expire before applying for a new or replacement consent. An application for planning consent can be made during the currency of an existing consent. Until 29 April 2003 any undecided application would have been determined under TPS5, but thereafter under TPS6. For an application to have been decided under TPS5 would have required it to be filed no later than early March 2003 to give the Council six to seven weeks to decide the application.

306 Mr Buttle said that if an application for planning consent had been made in the same form and content as the application preceding the 18 December consent there was no apparent reason why that application would not have been granted with the consent issuing within the usual timeframe of six to seven weeks from the date of lodgement.

307 He said further that on 6 June 2003 his colleague Justin Hansen and he met with Gary McIntosh from Hames Sharley and discussed plans they proposed to lodge for the property. There was no discussion about the height limit imposed by TPS6. Hansen was a planning officer working in the planning section.

308 Mr Buttle said that he was then unaware TPS6 had reduced the height of the development to 7 metres because there were 14 precincts within the scheme and he had not previously been asked to look at the height limits applying to the relevant precinct.

309 He confirmed that on 4 July 2003 the second application for planning consent was lodged. The application had to be refused because the building did not comply with the height limits. Hames Sharley was informed of the height problem.

310 Mr Buttle confirmed also (at par 68) that TPS5 did not contain any provision authorising extension or renewal of a planning consent. TPS6 does contain such a provision being cl 7.9(7)(a). Under TPS5, upon expiry of the 18 December planning consent, it would have been necessary to lodge a new application and for planning consent to have been granted in order for there to have been a new valid approval.

311 Mr Buttle confirmed that Mr Hames was a member of Design Advisory Consultants or DAC. This was a group of architects used by the City in an advisory capacity, but it was not a committee of the City of South Perth. Hames had been a member of DAC going back to the commencement of Mr Buttle's employment with the City in 1997.

312 Mr Buttle said that notes were retained of DAC meetings. If concerns were identified with respect to an application the notes of the meeting might well form the basis of further discussion to be had with an applicant. DAC could consider a preliminary proposal before a formal development application was made, as evidenced by a fax he sent to Mr Hames on 24 August 2001 dealing with 20 Hensman Street. No development application had been received from the plaintiff at that time.

313 Mr Buttle said that discussion in relation to a new scheme to replace TPS5 began in the early 1990s. Discussion was at a reasonably advanced stage when he arrived at the council in 1997. A draft of TPS6 had been prepared which was advertised for public comment in late 1998.

314 Mr Buttle said that he was not directly involved in the drafting of TPS6. The second advertising for TPS6 may have occurred in 2001. The Minister had the ultimate power to approve a new scheme after receiving a scheme report that had been presented to the Department of Planning.

315 Let me now round off the narrative by turning to events after 2003.

316 It will be apparent from the evidence given by Mr Hames mentioned earlier that the 2 July application was refused, an attempt was made to amend TPS6, but in the end it became apparent that the project could not proceed.

317 The plaintiff referred to these matters in his witness statement. He said (at par 119) that on his behalf Mr Webb made an application to amend TPS6. By fax dated 8 March 2004 Webb advised him that the application to amend TPS6 had been refused.

318 The plaintiff said that it had been his intention to proceed with the project and complete construction of a three storey, three unit development as permitted by the 18 December planning consent. It was an agreed fact at the trial that he had sufficient financial resources to carry out his intention if he decided to proceed with the development. I will therefore not traverse at any length the evidence given by him concerning his financial resources as at 2001 and 2002.

Cross-examination of the plaintiff as to later events

319 In the course of giving further evidence at the trial concerning the possibility of proceeding with a modified version of the project which conformed to the requirements of TPS6, the plaintiff said that there were various reasons why he would not wish to proceed with that sort of development. It was nothing to do with the economics of the matter. Such a development would have to be a 7 metre development and not a 10.5 metre development.

320 The plaintiff then proceeded to deal with the alternative project portrayed on the plans exhibited to Mr Hames' supplementary witness statement and drew attention to certain features such as the absence of a lift and a basement carpark of the kind originally proposed. The absence of these features and a reconfiguration of the living areas meant that the alternative concept was not suitable. He said that the original concept designed by Mr Hames fitted the block and suited him 'right down to the ground' (ts 597).

321 Under cross-examination, the plaintiff acknowledged that since his dealings with Mr Hames he had taken no step in relation to any development of the subject property save for obtaining some advice from an architect named Peter Jodrell (ts 272). The plaintiff paid a fee for that advice, being advice probably provided in 2004 or 2005.

322 Under re-examination the plaintiff indicated that his instructions to Mr Jodrell principally concerned a proposal to develop the subject property and the adjoining lot in 11 Ridge Street. However, he decided not to proceed with this because by then he was involved in the current litigation concerning the subject property.

323 The pleadings are lengthy and contain reference to various documents and matters of detail which have already been touched upon in these reasons for judgment. Accordingly, for the sake of an orderly exposition, and with a view to identifying the central issues in the case, I will present the pleaded cases of the parties in a summary form.

324 For the time being I will look only at those parts of the pleadings which bear upon liability. I will turn to issues concerning the plaintiff's claim for damages or other relief at a later stage.

325 The plaintiff alleged at par 4 and par 5 of the statement of claim as amended that on or about 28 September 2000 the parties entered into an agreement in which Hames Sharley agreed to provide its services for the redevelopment of the subject property by the construction of three luxury multiple residential dwellings for a fee of $8,250.

326 The agreement was said to be partly written and partly oral being comprised by the 18 September letter and scope of works document and by a later telephone conversation in which the proposal in the letter was accepted by the plaintiff.

327 The express terms of the agreement were said to include an undertaking by Hames Sharley to prepare schematic designs suitable for lodgement with the City of South Perth for development approval (par 6). The implied terms of the agreement as varied later were that Hames Sharley would exercise reasonable skill and care in providing its services (par 7(a)); it would do all things reasonably necessary to enable the project to be completed and provide its services within a reasonable time (par 7(b)); it would not prejudice the interests of the plaintiff by any act or omission (par 7(c)); it would act as the architect and town planner for the project (par 7(d)); the planning services would include all applications and representations to the City of South Perth and for the project (par 7(e)).

328 These terms were said to be implied because they were reasonable and equitable, they gave business efficacy to the agreement, they were obvious, capable of clear expression and did not contradict any express term of the contract. Further, the implied terms were in accord with the common intention of the parties as expressed in the defendant's 1 September letter.

329 The plaintiff pleaded at par 10 that at all material times Hames Sharley knew or should have known that from 11 December 1998 the City of South Perth had been reviewing TPS5 and that, if adopted, TPS6 would adversely affect the project by rezoning the subject property R25 and so limit the development of the property to the construction of up to three grouped dwellings to a height of 7 metres.

330 The plaintiff's par 10 height restriction knowledge plea is supported by various particulars including reference to the first and second site potential reports and the Hames Sharley assertion in the latter that one of the changes in TPS6 was that the maximum building height prescribed by the new scheme would be 7 metres.

331 It was alleged at par 11 to par 15 of the claim that Hames Sharley applied for and obtained the 18 December planning consent on behalf of the plaintiff. This established that the validity of the approval would cease if construction was not substantially commenced within 12 months.

332 The plaintiff alleged at par 16 that between 18 December 2001 and 18 December 2002 the plaintiff proceeded with the project. The particulars in support of the plaintiff's par 16 advancement of project plea include reference to the obtaining of construction cost estimates from various parties and the obtaining of approval from the Commonwealth Bank for a facility totalling $2.8 million for the purpose of the project on 20 September 2002.

333 Importantly, it is alleged at par 16(g) of the claim that within this period the agreement was varied in that Hames Sharley agreed to prepare detailed design drawings and other documents as proposed in the 28 May Hames Sharley letter for an additional fee of $24,900. I will call this the 'plaintiff's par 16(g) May variation plea'.

334 I dealt with the next part of the claim in earlier discussion concerning 'certain issues'. The plaintiff alleged at par 17A that as a consequence of the alleged 3 September representation the terms of the agreement were varied in that Hames Sharley agreed to make an application to the City of South Perth for a renewal or extension of the 18 December planning consent. I will call this the 'plaintiff's par 17A September variation plea'.

335 The plaintiff went on to refer to expiry of the consent and gazettal of TPS6 on 29 April 2003. It was said that the City could not issue a replacement consent for the project because TPS6 limits the height of buildings on the property to 7 metres.

336 The plaintiff pleaded at par 22 that Hames Sharley breached the implied terms pleaded in par 7(a), (b) and (c) of the claim by making the alleged 3 September representation (which was allegedly incorrect) and by failing on or about 3 September 2002 or at any time thereafter to inform the plaintiff of the effect of the proposed TPS6 and the new height limit of 7 metres. Further, Hames Sharley failed to inform the plaintiff that he should do all things necessary to comply with condition number 25 in the 18 December planning consent prior to 18 December 2002 so as to avoid the risk of TPS6 replacing TPS5.

337 It was said further in par 22 of the claim that Hames Sharley failed to qualify the alleged 3 September statement with a warning or otherwise failed to give a warning to the effect that if the conditions of the 18 December planning consent were not satisfied within the prescribed time, and the renewal or extension of the consent was not obtained before TPS6 replaced TPS5 it would not be possible for the plaintiff to complete the project. I will call this the 'plaintiff's failure to warn plea'.

338 It was pleaded at par 23 of the claim that if Hames Sharley had not breached the agreement the plaintiff would have done all things necessary to cause all of the conditions in the 18 December planning consent to be satisfied by 18 December 2002 or he would have requested Hames Sharley to immediately do what was required to renew or replace the 18 December planning consent.

339 The plaintiff alleged also at par 25 that Hames Sharley was in breach of the agreement in failing to inform the plaintiff that the defendant had not proceeded with the application to renew or extend the consent. If informed, the plaintiff would have done things necessary to make the required application and as a consequence the plaintiff lost the chance of renewing or extending the planning consent.

340 The plaintiff pleaded at par 27 that because of the breaches of the agreement pleaded in par 22 and par 25 the plaintiff suffered loss and damage in that the value of the property has been diminished and the plaintiff has lost the difference between the value the property would now have if the project had been completed (less the costs required for completion of the project) and the value of the property in its present (undeveloped) state. I will call this the 'plaintiff's breach of contract plea'.

341 Under the heading 'Duty of Care' the plaintiff pleaded further that as a consequence of events surrounding negotiation of the agreement and the relationship between the parties created by the agreement, Hames Sharley owed the plaintiff a duty to exercise reasonable skill and care in providing its services and not by any negligent act or omission to cause damage to the plaintiff.

342 It was said at par 31 that the conduct of Hames Sharley complained of in par 22 and par 25 of the claim was negligent and in breach of the alleged duty of care. I will call this the 'plaintiff's negligence plea'.

343 Particulars in support of the plaintiff's negligence plea were that Hames Sharley failed to make any or any proper enquiry or research about the effect of TPS6 on the property and the project; if Hames Sharley had made proper enquiries it would have become aware of the height limit of 7 metres; it would or should have informed the plaintiff of that fact; it would or should have immediately made application for the issue of a replacement planning consent on or about 19 December 2002. The plaintiff relied also upon the facts and matters pleaded in support of the plaintiff's breach of contract plea. It was said that because of the negligence of Hames Sharley the plaintiff has suffered loss and damage. In other words, again, there was said to be a causal link between the misconduct complained of and loss suffered by the plaintiff.

344 Under the heading 'Trade Practices Act' the plaintiff pleaded at par 37 that the alleged 3 September representation was incorrect, misleading and deceptive or likely to mislead and deceive. The statements comprising the alleged 3 September representation were representations as to future matters within the meaning of s 51A of the Trade Practices Act 1974 (Cth). It was said that the defendant had contravened s 52 of that Act.

345 It was said further that because of the contravention the plaintiff had suffered loss and damage of the kind previously alleged. Pursuant to s 82 and alternatively s 87 of the Trade Practices Act the plaintiff was entitled to compensation and other relief from Hames Sharley. I will call this the 'plaintiff's TPA plea'.

346 The plaintiff pleaded at par 42 of the claim that further, and alternatively, because of the facts and matters relied on and the relationship between the parties created by the agreement, Hames Sharley was under an obligation to disclose to the plaintiff the effect of the height limit of 7 metres in the proposed TPS6, that the plaintiff should do all things necessary to comply with condition number 25 in the planning consent prior to 18 December 2002 and to warn the plaintiff of the failure to do so. It was said that Hames Sharley had failed to discharge its obligation to disclose and this amounted to misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act. I will call this the 'plaintiff's alternative TPA plea'.

347 In summary, then, the plaintiff, in his statement of claim, relied upon three areas of potential liability.

348 First, as to the plaintiff's breach of contract plea, it was said that the agreement as varied by the alleged May variation and the alleged September variation contained express and implied terms which imposed a broad duty of care and obliged Hames Sharley to do all things reasonably necessary to enable the project to be completed. In the end, the agreement as varied obliged Hames Sharley to apply for a renewal or extension of the 18 December planning consent or otherwise to obtain a planning consent for the project pursuant to TPS5, before TPS6 came into force, so as to avoid the adverse effect of the new 7 metre height restriction.

349 Further, and in any event, as reflected in the plaintiff's failure to warn plea, Hames Sharley was obliged to warn or inform the plaintiff prior to the coming into force of TPS6 of the adverse effect of that scheme upon the project.

350 Hames Sharley was said to be in breach of its obligations under the agreement as varied and, 'because of the breaches', the plaintiff had suffered loss and damage. Counsel on both sides at the trial were inclined to characterise the claim for loss as a claim for loss of opportunity. For the time being, and for ease of reference, I will use the same shorthand expression.

351 Second, as to the plaintiff's negligence plea, the plaintiff alleged that the relationship between the parties created by the agreement and related circumstances gave rise to duties of care of the kind just mentioned. Hames Sharley was negligent and in breach of its duty of care in failing to apply for a renewal or extension of the 18 December planning consent, in failing to obtain a planning consent for the project under TPS5, and in failing to warn or inform the plaintiff as to the adverse effect of TPS6 coming into force.

352 Third, as to the plaintiff's TPA plea, the plaintiff said that Hames Sharley had contravened provisions of the Trade Practices Act in that the statements comprising the alleged 3 September representation were misleading and deceptive, or likely to mislead and deceive, as a result of which the plaintiff had suffered loss and damage.

353 Hames Sharley joined issue with the plaintiff as to the nature and terms of the agreement and as to most of the other matters raised in the statement of claim.

354 Hames Sharley pleaded at par 3 of its statement of defence that on or about September 2000 the parties entered into an agreement by which Hames Sharley provided its services to the plaintiff to provide a feasibility study of what redevelopment could be undertaken on the property, this being evidenced by a letter dated 1 September 2000.

355 Further, on or about 18 September Hames Sharley agreed to provide its services as architects to design three multiple residential dwellings for construction at the property as evidenced by a letter dated 18 September 2000.

356 Hames Sharley admitted at par 6.1 of the defence that it knew that the City of South Perth had been reviewing TPS5 since about 1998 with a view to introducing TPS6 and that the latter might adversely affect the property by rezoning it and/or affecting development on the property and/or reducing the height of buildings that could be built on the property. Hames Sharley went on to refer to the conditions attached to the 18 December planning consent. It was said that the plaintiff refused to agree to conditions 17 and 18 (concerning the two lemon-scented gum trees and a reduction in the floor height) with the result that unconditional development approval was never secured prior to 18 December 2002. It was said further that by refusing to comply with the conditions the plaintiff did not enable approval to be secured.

357 Hames Sharley denied that between 18 December 2001 and 18 December 2002 the plaintiff proceeded with the project. More particularly, it was said at par 10.4 of the defence that the plaintiff did not authorise Hames Sharley to engage the services of a quantity surveyor (letter dated 11 January 2002) or of professional engineers (letter dated 29 May 2002) to enable Hames Sharley to complete drawings to a standard adequate to obtaining the building licence and to satisfy the conditions in the 18 December planning consent. (In earlier discussion I noted that the letter concerning the engagement of a quantity surveyor was actually the Hames Sharley D23 letter to the plaintiff dated 26 February 2002).

358 Hames Sharley said further at par 10.5 that by the second site report it informed the plaintiff that TPS6 was a seriously entertained planning proposal which proposed a building height reduction to 7 metres. By reason of this, the plaintiff knew, or ought to have known, that the property remained subject to the possibility at any time of changed zoning and being subject to a new town planning scheme that might reduce its development potential and the ability to construct a three-storey building.

359 It was said at par 11 that the plaintiff did not authorise the engagement of professional engineers as a consequence of which the plaintiff did not enable Hames Sharley to secure the right for the plaintiff to be able to construct a three-storey building on the property under the 18 December planning consent. It was said further at par 11.3 that the plaintiff did not assist Hames Sharley to proceed. In that regard Hames Sharley relied upon facts and matters relating to the Pindan estimate, the Psaros letter and the request for substantial changes to the plans allegedly made by the plaintiff and Rosemary Cunningham during October and November 2002.

360 Hames Sharley pleaded at par 17.4 that Hames Sharley was not able to make an application for a new planning consent prior to 29 April 2003 (that is, the date on which TPS6 was gazetted) by reason of the conduct of the plaintiff in refusing to comply with the conditions on the consent (par 17.4.1), the plaintiff's failure to instruct Hames Sharley, or permit Hames Sharley, to engage experts (par 17.4.2); the plaintiff's consideration of further alterations in the first part of 2003 (par 17.4.3).

361 In respect of each of the three discrete areas of alleged liability, Hames Sharley denied that the plaintiff had suffered loss and damage as alleged or at all. Further, and in the alternative, it was said at par 26 that if Hames Sharley caused the plaintiff loss, then the plaintiff caused or contributed to the loss and its claim should be reduced pursuant to s 4 of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA) and/or s 82(1B) of the Trade Practices Act by an amount to reflect the plaintiff's responsibility for this loss by reason of the matters pleaded in the defence.

362 It emerges from my review of the pleadings and the evidence given at trial that I must begin by determining the nature and constituents of the agreement made by the parties.

363 As to this first issue the plaintiff contended that the agreement was made on or about 28 September 2000 and, subject only to the alleged May and September variations, ran onwards until mid 2003. On the plaintiff's case, the broad supervisory role of Hames Sharley envisaged by the agreement as varied gave rise to a duty of care which was breached by Hames Sharley.

364 That is, on the plaintiff's case, Hames Sharley knew or ought to have known that the 18 December planning consent had a special value for the plaintiff, having regard to the adverse effect upon the project if the 7 metre height limit provided for by TPS6 came into force. Pursuant to its duty of care as a skilled adviser, Hames Sharley, should have taken steps to ensure that the plaintiff's position was protected by either performing the obligation to renew or extend arising under the September variation or, in any event, by warning the plaintiff about TPS6 and taking steps to obtain a new planning consent under the existing scheme. It failed to do so and was thereby in breach of its duty of care.

365 On the other hand, Hames Sharley denied having a broad supervisory role. It said that the services to be provided by Hames Sharley under the agreement were to be provided in stages. The obligations of Hames Sharley, including its duty of care, or any duty to warn or inform, had to be viewed accordingly.

366 On this view of the matter, Hames Sharley was engaged initially to provide a feasibility study and then to design the project. The performance of further work depended upon compliance with the conditions of the 18 December planning consent. This in turn depended upon further instructions being received from the plaintiff, especially as to the appointment of other professionals such as a quantity surveyor and professional engineers.

367 On the Hames Sharley case, the plaintiff's failure to advance the project prior to expiry of the 18 December planning consent, and the plaintiff's negotiations with Mr Psaros, meant that as at the end of August 2002 there was no obligation upon Hames Sharley to take any further steps.

368 Then, in early September, Hames Sharley was recommissioned to redesign the project in circumstances which made it clear that the 18 December planning consent was a dead letter. Thereafter, the plaintiff again failed to advance the project by approving changes to the project in a timely way. Issues concerning the liability of Hames Sharley including any issue as to an alleged failure to warn or inform had to be viewed in this context; that is, the plaintiff's commitment to the project seemed to be waxing and waning.

369 This brings me to the second principal issue. There is an important factual issue to be resolved as to whether the various statements comprising the alleged 3 September representation were made. If these statements were made by Mr Hames as alleged the plaintiff is in a position to assert that the agreement was varied and that liability can be attached to Hames Sharley because the alleged 3 September representation was incorrect. Moreover, Hames Sharley failed to obtain a renewal or extension of the 18 December planning consent.

370 Such a finding will point the way to a further issue to be resolved, namely, the question of causation: whether a failure to obtain a renewal or extension, or a related failure to warn or inform in that context, can be said to have caused or brought about the loss of opportunity complained of.

371 On the other hand, if the findings of fact and law contended for by the plaintiff in respect of the second principal issue are not made (that is, essentially, it is found that the alleged 3 September representation was not made) there will then be a further or third principal issue to be resolved: whether, in any event, Hames Sharley was in breach of a contractual or statutory obligation, or was negligent, in failing to warn or inform the plaintiff about the adverse effect of TPS6.

372 If it be held with respect to the third issue, that there was an improper failure by Hames Sharley to warn or inform the plaintiff, it will again be necessary to deal with the causation issue, albeit in a slightly different context.

373 It will now be useful to look at the legal principles bearing upon these issues.

374 It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty. An intention to contract is essential. In Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422, 428 a majority of the High Court indicated, consistently with what has been described as the objective theory of contractual assent, that the law is concerned not with the real intentions of the parties, but with the outward manifestations of those intentions.

375 There are various decided cases to similar effect. For example, in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 549 (Gleeson CJ) indicated that the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party.

376 Gleeson CJ explained also at 550 that, in the search for an objective determination of the intention of the parties, it may be both appropriate and necessary to have regard to the commercial circumstances surrounding the exchange of communication and in particular to the subject matter of those communications. See also Vass v Commonwealth of Australia [2000] FCA 47; (2000) 169 ALR 486; Seven Cable Television Pty Ltd v Telstra Corp Ltd (2000) 171 ALR 89, 115.

377 The authors of Carter & Harland, Contract Law in Australia (4th ed) observe that the basic classification of statements made prior to entry into the contract is between terms and representations. If a person to whom the statement was made would have concluded that the maker of the statement intended to guarantee its truth, it is a term whether or not there was an actual intention to accept contractual responsibility. The authors observe also that the more important the content of a statement the more likely it is that the parties intended it to be a term of the contract. Perhaps the most important factor is the relative position of the parties, and their respective knowledge of the facts. See generally Carter & Harland [606] - [610]; see also Ellul v Oakes (1972) 3 SASR 377.

378 The requirements in respect of terms implied in fact are those stated by Lord Simon in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266:

Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (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; (5) it must not contradict any express term of the contract. (282)

379 In relation to informal contracts which are not complete on their face, the High Court in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 , 422, 442 approved the following statement by Deane J in Hawkins v Clayton (1988) 164 CLR 539:

Where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. The general statement of principle is subject to the qualification that a term may be implied in a contract by establishing mercantile usage or professional practice or by a past course of dealing between the parties. (573)

380 A term that a duly qualified adviser will exercise reasonable skill and care providing his or her services is imposed by law in a contract for professional services: Astley v Austrust Ltd (1999) 197 CLR 1, 22 - 27. Further, the common law also imposes a duty on the parties to a contract to co-operate in achieving the objects of the contract: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 607.

381 These observations were made in Voli v Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74 (Windeyer J):

An architect undertaking any work in the way of his profession accepts the ordinary liabilities of any man who follows a skilled calling. He is bound to exercise due care, skill and diligence. He is not required to have an extraordinary degree of skill or the highest professional attainment. But he must bring to the task he undertakes the competence and skill that is usual among architects practising their profession. And he must use due care. If he fails in these matters then the person who employed him thereby suffers damage, he is liable to that person. This liability can be said to arise either from a breach of his contract or in tort. (84)

382 In Tallerman & Co Pty Ltd v Nathan's Merchandise (Vic) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93 Taylor J observed at 144 that the parties to an agreement may vary some of its terms by a subsequent agreement. They may, of course, rescind the earlier agreement all together, and this may be done either expressly or by implication, but the determining factor must always be the intention of the parties as disclosed by the later agreement. Variation may involve partial rescission but this does not necessarily completely destroy the contractual relationship between the parties. It merely modifies that relationship by cutting out part of the rights and obligations involved therein, with or without the substitution of new rights and obligations in their place. Partial rescission is not the extinction of the contract but the variation of it.

383 In Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 Gleeson CJ, Gaudron, McHugh and Hayne JJ said:

When the parties to an existing contract enter into a further contract by which they vary the original contract, then, by hypothesis, they have made two contracts. For one reason or another, it may be material to determine whether the effect of the second contract is to bring an end to the first contract and replace it with the second, or whether the effect is to leave the first contract standing, subject to the alteration. For example, something may turn upon the place, or the time, or the form, of the contract, and it may therefore be necessary to decide whether the original contract subsists. (533)

384 The mutual rights and duties of a professional person such an architect and the client were regarded for many years as regulated exclusively by the express and implied terms of the relevant retainer. However, as indicated by the observations of Windeyer J in Voli the law has now evolved to the conclusion that concurrent liabilities in both contract and tort may arise in cases of professional negligence.

385 Thus, prima facie, a plaintiff may sue a professional adviser in either contract or tort or both. Where concurrent liability in tort and contract exists the plaintiff has the right to assert the cause of action that appears to be the most advantageous to him in respect of any particular legal consequence: Astley v Austrust Ltd (20).

386 In such a case, as indicated in Voli, an implied term of the contract under which the service is supplied is that the professional will exercise reasonable care and skill in providing the service. However, the extent of the professional's liability to the client may depend upon or be affected by the terms of the contract. The terms may confine or exclude the existence of a duty of care owed by one party to the other: see generally Walmsley v Abadee & Zipser, Professional Liability in Australia [130] to [132].

387 However, even in the absence of a contract of retainer, the adviser stills owes a professional duty of care in tort. A necessary, although not sufficient, condition of the existence of a duty of care is reasonable foreseeability of the kind of injury that has been suffered by the person to whom the duty is owed. A risk is foreseeable if it is real, not far-fetched or fanciful; it can be real even if it is extremely unlikely to occur. Reasonable foreseeability must be determined at the time of the alleged breach: Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) v Hannell [2007] WASCA 158; (2007) 34 WAR 109 [299] - [301].

388 In Midland Bank Trust Co Ltd v Hett Stubbs & Kemp (a firm) [1979] Ch 384 the court rejected a plea that a solicitor, who had been instructed to advise the client on the tax implications of exercising an option to purchase land, should also have checked to see whether the option was registered. Oliver J said at 402 that there is no such thing as a general retainer in that sense. The expression 'my solicitor' is as meaningless as the express 'my tailor' or 'my bookmaker' as establishing any general duty apart from that arising out of the particular matter in which his services are retained. The extent of his duty depends upon the terms and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do. In the same case the learned judge observed at 434 that a contract gives rise to a complex of rights and duties of which the duty to exercise reasonable care and skill is but one.

389 It follows that even where concurrent liability in contract and tort exists careful consideration must be given to the contractual matrix with a view to defining the task undertaken by the professional on behalf of the client from which the duty to exercise care may be thought to arise. See, for example, Mohr & Mohr v Cleaver & Cleaver [1986] WAR 67.

390 This approach was approved in Carmody v Priestley & Morris Perth Pty Ltd [2005] WASC 120; (2005) 30 WAR 318. It was said in that case at [98] that although the contract of retainer will be an important indicium of the nature of the relationship which gives rise to the common law duty of care, it will not chart exclusively the parameters of that duty, for it has been held in some cases that the duty of care may require the taking of positive steps beyond the specifically agreed professional task or function where the steps in question are necessary to avoid a real and foreseeable risk of economic loss being sustained by the client.

391 The approach reflected in these cases was visible in Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325. Anderson J said at 332 that whenever a lay client gives instructions to a legal practitioner to perform specialist legal services involving the exercise of professional skill, there is imposed upon the solicitor a duty to give any advice reasonably necessary to protect the client's interests in the transaction whether expressly requested or not.

392 In Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479 the High Court held that except in the case of an emergency or where disclosure would prove damaging to the patient, a medical practitioner has a duty to warn the patient of a material risk inherent in proposed treatment. A risk is material if, in the circumstances of the particular case, a reasonable person in the patient's position, if warned of the risk, would be likely to attach significance to it or if the medical practitioner is or should reasonably be aware that the particular patient, if warned of the risk, would be likely to attach significance to it. Generally speaking, whether the patient has been given all the relevant information to choose between undergoing and not undergoing the proposed treatment is not a question the answer to which depends upon medical standards or practice.

393 In Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1 Malcolm J said at 53 that, in his opinion, the approach adopted in Rogers v Whitaker was applicable to legal practitioners. It was a nice question whether there was a duty on the part of a barrister to volunteer advice beyond the scope of the brief, although counsel may well and generally would volunteer additional advice which was considered relevant, but not specifically raised in the instructions. There is no implied undertaking that the advice is correct, but only that the requisite degree of professional skill and care has been exercised in the giving of the advice.

394 In a case where statements were made by a solicitor concerning the wisdom of the client's proposed investment, the adviser was thought to owe a duty to exercise reasonable care in providing accurate, complete and balanced information and advice to the client in relation to those statements, even in the absence of a contract of retainer: Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321.

395 The plaintiff must also show that breach of the duty of care caused a material injury or loss. I will say more about the legal principles concerning causation later. However, it is apparent from the High Court's decision in Chappel v Hart (1998) 195 CLR 232 that in this context the courts will take a commonsense view of causation. If the plaintiff can prove a breach of duty followed by harm of a foreseeable kind, then a cause or connection will generally be assumed unless the defendant can point to an intervening event or some other reason to the contrary. It is not essential that the defendant's conduct be the sole cause of the plaintiff's loss. Causation will be established if it materially contributes to the loss. Further, it is not essential that causation be established by direct evidence, for the court may determine by inference what effect the relevant conduct must be taken to have had: Townsend v Roussety & Co (WA) Pty Ltd (350 - 355).

396 In Amaca's case Martin CJ at [29] approved the view that the evidentiary onus may shift in the sense that where the plaintiff has proved a breach of duty by the defendant and that the breach increased the risk of injury and that risk eventuated, then in the absence of evidence that the breach has no effect or that the injury would have occurred even if the duty had been performed, it will be taken that the breach of the common law duty of care caused or materially contributed to the injury.

397 Similar principles govern claims for economic loss. An innocent party may recover, as damages for breach of contract, the loss of an opportunity to pursue a commercial advantage caused by the breach: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64. The loss of an opportunity, assuming it to have value, is a form of economic loss recoverable in tort or for breach of s 52 of the Trade Practices Act: Poseidon Ltd & Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332, 348.

398 Let me now return to the issues to be resolved.

399 Hames Sharley pleaded at par 3 of its statement of defence that initially the parties entered into an agreement evidenced by the Hames Sharley letter dated 1 September 2000 whereby Hames Sharley was to provide a feasibility study of what development could be undertaken on the subject property.

400 I find that this preliminary agreement was the start of the contractual relationship between the parties. When the plaintiff first approached Mr Hames he did not have a clear sense of what he wished to do or could achieve in redeveloping the property. It was therefore likely, and I so find, that as a first step the parties arranged to define his requirements more exactly, and this was done by provision of the feasibility study comprising the first site report.

401 It might be thought that little turns upon such a finding. However, it is important to keep in mind that the 1 September letter contains a passage to the effect that 'Hames Sharley would be most pleased to act as your architect and town planner for this project'.

402 Moreover, the letter referred to the plaintiff's 'preference for three multiple dwellings' which 'will need to be negotiated with council'. The site report contained a comprehensive review of the relevant planning controls including reference to the possibility that the property could be adversely affected if the draft town planning scheme was enacted (that is, TPS6), although Hames Sharley's comment in that regard was focused not on any reduction in the height restriction but upon the possible reduction in the number of units that could be built.

403 These observations suggest that in identifying and construing the terms of the principal agreement (which I will come to in a moment) by reference to the outward manifestation of the intentions of the parties, both parties were aware that the work to be performed by Hames Sharley would proceed in stages and was conditional upon the plaintiff providing Hames Sharley with instructions from time to time as to how he wished to proceed.

404 In other words, Hames Sharley was not to be regarded as a professional adviser acting pursuant to a general retainer or as a project manager with a broad supervisory role who had undertaken to guarantee or secure a particular result. Hames Sharley was acting as a professional adviser with the terms and limits of its contractual duties being determined and related to what the firm was instructed to do.

405 However, to my mind, the terms and conditions of the preliminary contract as evidenced by the 1 September letter established that from the outset the parties proceeded on the assumption that Hames Sharley was to act as architect and planner. The plaintiff relied upon Hames Sharley to provide advice concerning the effect of planning controls upon the project and the steps that had to be taken to ensure compliance.

406 A few weeks later Hames Sharley delivered to the plaintiff the 18 September letter and the scope of works document. I find that by his letter dated 28 September, and in the course of a subsequent telephone conversation, the proposal contained in the defendant's 18 September proposal was accepted by the plaintiff. I am therefore satisfied, upon the balance of probabilities, that the agreement contended for by the plaintiff at par 4 of the statement of claim was entered into by the parties. I consider that I must look at the 18 September letter in determining and construing the express terms of the agreement. I note in passing that the letter commences with a reference to Hames Sharley undertaking 'architectural and planning services for the above project'.

407 I find that, as pleaded by the plaintiff at par 7 of the claim, the agreement was partly written and partly oral and included the express terms pleaded at par 6 of the claim. Importantly, Hames Sharley was to prepare schematic designs suitable for lodgement with the City of South Perth for development approval purposes.

408 I consider, having regard to the legal principles mentioned earlier, that the agreement included the implied terms pleaded in par 7 of the claim save for the term alleged at par 7(b). The other implied terms such as a term that Hames Sharley would act as the architect and town planner for the project (par 7(d)) and that Hames Sharley would exercise reasonable skill and care in providing its services (par 7(a)) are in accordance with the nature of the relationship between the parties. They were reasonable and equitable, necessary to give business efficacy to the contract, capable of clear expression, not contradictory to any express term and obvious.

409 However, to my mind, it follows from my earlier observations that the implied term alleged in par 7(b) that Hames Sharley would do all things reasonably necessary to enable the project to be completed and provide its services within a reasonable time is too broadly expressed. The agreement provided for the work to proceed in stages, commencing with schematic designs, and with further work to be undertaken in response to specific instructions from the plaintiff.

410 There was no controversy between the parties concerning the quality of the initial schematic designs or the obtaining of the 18 December planning consent. However, I must pause here to make some further observations upon the role of a professional adviser.

411 As I have indicated, a professional adviser such as a medical practitioner or a solicitor or an architect cannot be regarded as a guarantor or insurer of the outcome desired by the client. Subject to the requirements of the particular contract, the role of the adviser as Windeyer J observed in Voli's case is to exercise due care, skill and diligence on behalf of his client in striving to achieve the desired outcome. A professional adviser cannot compel a client to do one thing or another. If professional advice is provided with due care, in a manner that can be understood by a reasonable person, the adviser is entitled to assume that the advice will be heeded. If the advice is sound, and includes any qualifications that are necessary, but the client nonetheless decides to proceed in a manner contrary to the advice, liability will generally not attach to the adviser.

412 The plaintiff in the present case, by his own account, was an experienced and successful businessman. I am prepared to accept that he knew little about the City of South Perth's planning controls but, to my mind, Hames Sharley was entitled to assume that he could take in advice and information put to him in plain language and could understand the importance of a deadline.

413 Accordingly, having regard to the plain language of the 18 December planning consent and the highlighting of the 12 month period allowed by the consent, I have little difficulty in finding, first, that the plaintiff knew that the planning consent would expire unless building work was substantially commenced upon the site within 12 months; second, that Hames Sharley exercised due care in conveying that information to the plaintiff after the consent was obtained. I will come back to the question of what is meant by 'substantially commenced' and whether the plaintiff was sufficiently informed as to the meaning of that term in due course.

414 It follows from these findings, and from my view of the contractual relationship, that the plaintiff was aware that he had to take steps to progress the project by giving further instructions to Hames Sharley. I find that by the D23 letter dated 26 February 2002 Hames Sharley advised the plaintiff to proceed with the appointment of quantity surveyors with the result that the plaintiff's awareness of what was expected of him was made clear.

415 This view of the matter was not seriously disputed at the trial. Counsel for the plaintiff seemed to accept that it was not open to the plaintiff simply to sit back and do nothing, and then be at liberty to complain later that Hames Sharley had failed to comply with the conditions attached to the 18 December planning consent. The dispute between the parties was concerned largely with the sufficiency of the steps taken by the plaintiff to progress the matter and whether he was lulled into a false sense of security by the advice he received and/or failed to receive from Hames Sharley.

416 This brings me to a related issue, namely, the potentially adverse affect upon the project if the draft town planning scheme TPS6 was enacted. It appears from the first site report that the plaintiff was told in general terms that his project could be adversely affected by TPS6 but the report did not include any specific reference to a reduction of the existing height restrictions of 10.5 metres to 7 metres which would impact directly upon the project.

417 Moreover, unlike the plain language of the 18 December planning consent, the nature and degree of seriousness of this threat was a matter that arguably could not be left with the client to work out for himself. It was arguably a matter that required careful and detailed explanation by the expert adviser before the client could reasonably be expected to understand the exact nature of the risk posed by the draft new scheme TPS6.

418 Hames Sharley admitted at par 6.1 of its statement of defence that it knew that TPS6 might adversely affect the property by rezoning it and/or reducing the height of buildings that could be built on the property. Hames Sharley contended at par 6.2 and par 10 that by its first and second site reports it informed the plaintiff that the property was subject to the possibility of rezoning by TPS6 and, more particularly, that the relevant height limit would be reduced to 7 metres if the new scheme was enacted. However, this pleading was presented to the court on behalf of the defendant, Hames Sharley, and did not directly address a related and important evidentiary issue as to Mr Hames' state of knowledge.

419 On the Hames Sharley case at trial, shortly after the 18 December planning consent was issued, and at least 12 months before TPS6 was in fact gazetted on 29 April 2003, the plaintiff, by the second site report, delivered to him in March 2002, was arguably informed about the risk. The report contains a passage in which the provisions of the two schemes (TPS5 and TPS6) were contrasted and it was said that 'the potential of lots 2, 4 and 5 is likely to reduce with the introduction of the City's town planning scheme number 6'. It is said specifically that 'the maximum building height prescribed by the scheme will be 7.0 metres'.

420 Nonetheless, it is clear from the evidence that observations of this kind appeared only in the second site report and in the context of an alternative form of development involving the subject property and two neighbouring lots which did not proceed. Hames Sharley was not able to point to or rely upon any other document or occasion prior to the gazetting of TPS6 which could be said to have informed the plaintiff about the adverse effect of the 7 metre height restriction proposed by the draft scheme (TPS6).

421 Moreover, even if it could be said that by a careful and detailed reading of the first and second site reports a reasonable person in the position of the plaintiff could have worked out for himself that the draft scheme TPS6 represented a threat to his position, no clear advice was provided to him in the reports or otherwise as to whether the presence of a threat meant that the conditions of the 18 December planning consent should be complied with as a matter of urgency, or a fresh planning consent under TPS5 be obtained before TPS6 was brought into force.

422 Mr Hames accepted under cross-examination that the 18 December planning consent was of exceptional value to the plaintiff and worth preserving because it was not only a good solution for the site in solving the problem with the trees but also was a valuable entitlement in circumstances where the project was at variance with the existing scheme (TPS5); that is, the existing scheme allowed for grouped dwellings only on the site, rather than multiple dwellings, unless special conditions could be negotiated (as in fact happened).

423 Mr Hames said under cross-examination that he personally first became aware that TPS6 imposed a height restriction of 7 metres when the information was provided to him by one of the planners he employed (ts 506). This assertion was consistent with his witness statement and was made early on in the cross-examination. The context suggested that he was referring to the second site report in early 2002.

424 However, Mr Hames said later, while being cross-examined about the second ill-fated application for planning consent in mid 2003 (by which time TPS6 was in force) that he did not personally become aware that the height limit under TPS6 was 7 metres until that time (ts 540, 541). It is material to note also that it was only then that Mr Buttle, a planner employed by the City, realised that the height limits affecting the subject property had been reduced. This makes it unlikely that it was a matter that had been raised by Mr Buttle with Hames Sharley or his staff prior to mid 2003. It appears from par 4 of the exhibit 21 memo dated 23 July 2003 that the matter was first identified as a significant issue by Mr Buttle's colleague, Mr Hansen, shortly after the new application was submitted to the City in mid 2003.

425 I found Mr Hames to be generally a truthful witness. However, as to matters of this kind, where work concerning the project was being undertaken by others in his firm, I found him to be not entirely reliable, especially as to matters of sequence and timing. I perceived a tendency on his part to assume, by a process of reconstruction, that if a matter was mentioned in a document then he was probably aware of it, at the time when the document was prepared, even though others had been more intimately involved in the creation of the relevant document.

426 In the end, I concluded that this tendency was at work in regard to this evidentiary issue. His witness statement contained assertions that in 2000 he was aware TPS5 was under review. He then asserted, not as a matter of belief or awareness, but as a matter of fact that at that time the height restriction on the property was 10.5 metres. Much of the surrounding area had a height limit of 7 metres. He went on to refer to the first and second reports.

427 I am of the view that it was as a consequence of having the chronology reflected in his witness statement in mind that, in the course of his cross-examination, he asserted that he personally became aware that TPS6 altered the height restriction, this being a matter mentioned in the second site report.

428 However, I have to say that early in the cross-examination concerning this issue the answers he gave were somewhat tentative and not entirely convincing. For example, he said that he personally became aware that TPS6 imposed a 7 metre height restriction 'I think at the time when we wrote the site potential report it was foreshadowed in a draft TPS6'. He said that the information was 'provided to me by one of the planners that I employed, Isla Finlay or Darren Evans'. He went on to say 'they wrote a report, I read that report and in that report from memory it gave an indication that draft TPS6 did have that consideration or was considering that option'.

429 It can be seen that there was a degree of hesitancy or vagueness in his response to the questions. This can be contrasted with further cross-examination about this matter at a later stage concerning the rejection of the ill-fated second application for planning consent in mid 2003. On two occasions (ts 540 and ts 541) Mr Hames acknowledged unequivocally that he was not aware that there was a height restriction of 7 metres under TPS6. He agreed also that, in speaking to the plaintiff at that time about the fact that the second application for planning consent had been rejected, he told the plaintiff that there had been a mistake with the height limits.

430 Prior to mid 2003 there appears to be no reference in the contemporary documentation to the height limit issue save for a passing reference to the height limit of 10.5 metres in a letter dated 31 August 2001 to the City signed by Mr Youens on behalf of Hames Sharley and the reference in the second site report to the contrast between TPS5 and TPS6. The former document evidences that Hames Sharley should have known and did know of the restriction but the letter does not foreshadow the possible adverse impact of TPS6 being gazetted and does not establish that Mr Hames personally knew of the difference between the two planning schemes. Moreover, the second, mid 2003 application for planning consent, was formulated on the assumption that the former design, which complied with the 10.5 metre height restriction, would still be in order. It appears to have been a matter of surprise to Mr Hames to learn that the second application had been rejected because of a reduced height restriction.

431 Accordingly, in the end, I conclude, and so find, that notwithstanding the reference in the second site report to the reduced height limit in TPS6, Mr Hames was not personally aware prior to mid 2003 that the project would be adversely affected by reduced height restrictions if TPS6 was gazetted, or, putting it another way, if he was personally aware of that prospect prior to delivery of the second site report, his awareness was not treated by him as a matter of pressing concern and he made no mention of it in speaking to either the plaintiff or Ms Cunningham prior to his telephone call to the plaintiff in mid 2003, immediately following the Council's rejection of the second application for planning consent. I am of the view, and so find, that the adverse effect of this was identified as an issue by Mr Hanson shortly after the new application was submitted in early July 2003.

432 Let me now return to the central issue under consideration, namely, the nature of the contractual relationship between the parties.

433 It emerges, having regard to the findings I have made to this point, that as at early 2002 Hames Sharley had fulfilled the first phase of the agreement by obtaining the 18 December planning consent pursuant to schematic designs of the project that were satisfactory to the plaintiff.

434 Hames Sharley had provided the plaintiff with full and sufficient advice and information that the conditions attached to the 18 December planning consent had to be attended to within 12 months. This required, inter alia, that a building licence be obtained and construction be substantially commenced within the prescribed period. This required, in turn, that professional consultants be engaged, estimates of costs be obtained, more detailed plans be completed, and a builder be appointed.

435 However, there is an issue to be resolved as to whether the plaintiff had been provided with sufficient advice or information as to the potentially adverse effect of TPS6. It is doubtful, having regard to my finding as to Mr Hames' state of knowledge, that Mr Hames himself warned the plaintiff of the potentially adverse effect of TPS6 being gazetted, but that is not the end of the matter, bearing in mind the information concerning TPS6 in the first and second site reports.

436 I will return to the TPS6 height restriction issue in due course. However, in order to complete my findings concerning the first or nature of contract issue, I must now look at the next phase of the contractual relationship and determine whether the agreement was varied in May 2002 as alleged by the plaintiff.

437 The plaintiff alleged at par 16(g) of the claim that the agreement was varied whereby Hames Sharley agreed to prepare detailed design drawings and other documents for the project as proposed in the Hames Sharley 28 May letter for an additional fee of $24,900.

438 This plea was denied by Hames Sharley on the basis that the plaintiff had failed to progress the project by authorising Hames Sharley to engage the services of the quantity surveyor and professional engineers to enable Hames Sharley to complete drawings adequate to obtain a building licence and to satisfy the condition in the 18 December planning consent.

439 I find that Hames Sharley did prepare the 28 May letter and that it was received and considered by the plaintiff. I remind myself that the 28 May letter enclosed a budget estimate from Pindan amounting to a development cost of $2,007,500.

440 The letter, prepared and signed by Mr Hames, said that 'As discussed, in order to advance this project, more detailed design documentation is now required'. The letter indicated also that Hames Sharley required 'the appointment of secondary consultants such as civil, structural, mechanical and electrical engineers in order to incorporate their detailed design and advice into the building'.

441 This letter undoubtedly had the capacity to vary the contractual relationship between the parties, but without necessarily displacing any of the express or implied terms I have previously found formed part of the agreement. This is because, in my view, the extra duties were entirely consistent with what had gone before. The effect would be to leave the agreement standing subject to an alteration, that is, subject to the expanded scope of services to be performed. I have in mind the Tallerman and Sara Lee cases mentioned earlier and the notion that although a variation can be characterised as the making of a second or further contract, the crucial question is whether the first contract is brought to an end or whether the effect is to leave the first contract standing, subject to alteration.

442 Here, a further crucial question is whether the Hames Sharley offer to complete the detailed design stage of the works for a fee of $24,900 was in fact accepted by the plaintiff so as to effect the alteration contended for at par 16(g) of the claim.

443 The plaintiff said at par 58 of his witness statement that at about the date of the letter he told Mr Hames that he was happy with the upgraded proposal and for him to proceed with the work. The plaintiff said that he and Ms Cunningham went to Melbourne in May 2002 and took photos of buildings they liked. They had a further meeting with Mr Hames in early July at which they were shown drawings Mr Hames had prepared.

444 On the other hand, according to Mr Hames, the plaintiff said after receipt of the 28 May letter that he did not want to appoint Hames Sharley for the next stage of the project. He did not want to appoint engineers. In July the plaintiff phoned to say that he was considering obtaining a quotation from Mr Psaros and if Psaros was appointed it was contemplated that the Hames Sharley role would come to an end. It was common ground at the trial that following inspection of a Psaros site in Eric Street, Cottesloe plans prepared by Hames Sharley were passed to Mr Psaros pursuant to the plaintiff's instructions.

445 There is no contemporary documentation bearing upon acceptance by the plaintiff of the 28 May letter. The issue must be resolved by reference to the testimony of the various witnesses.

446 Under cross-examination the plaintiff said that his recollection of events was 'fair to good'. However, when I come to the question of his credibility, I have reservations about the quality and reliability of his evidence. This is principally because, as I perceive it, he was not given to expressing himself exactly or allowing for subtleties in his description of conversations or events. Thus, the plaintiff was inclined to present a picture of compliance with the 18 December planning conditions running smoothly onwards upon the basis that he had essentially left matters in the hands of his professional advisers. However, I find that in fact, with the assistance of Ms Cunningham, he dealt with River Stone and with Mr Rix without reference to Hames Sharley, and in other ways was inclined to act independently. Further, there are indications that his interest or commitment to the project waxed and waned in that in mid 2002 he put the property on the market at one stage. It is an undisputed fact that the plaintiff did not appoint professional consultants in the manner recommended by Hames Sharley in the 28 May letter. It is an undisputed fact that shortly after receipt of the letter the plaintiff sought to bypass Hames Sharley in order to deal direct with Mr Psaros.

447 When I assess the plaintiff's credibility, having regard to these facts and matters, I must give weight also to the fact that the plaintiff increasingly left the details of the project to be ironed out or discussed by Ms Cunningham. Thus, I am by no means convinced that he himself has a clear recollection of his own dealings with Hames Sharley. As to some matters he was somewhat imprecise as to what had occurred.

448 For these reasons, I am not satisfied that the plaintiff accepted the proposal in the 28 May letter in a phone conversation of the kind he described in his evidence. In my view, the agreement was therefore not varied in the manner contended for.

449 In my view, and I so find, the agreement was not formally terminated but a stage was reached when the plaintiff was not prepared to progress the project in the manner recommended by Hames Sharley by authorising the appointment of professional consultants. The parties had reached an impasse.

450 I consider, and so find, that upon the plans being delivered by Hames Sharley to Mr Psaros at the request of the plaintiff in mid 2002 there were no further services to be performed by Hames Sharley.

451 In my view, the parties had so conducted themselves as mutually to suspend performance of their duties under the contract: DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423, 434.

452 I pause here to say that even if it be held, contrary to the findings I have made, that the plaintiff accepted the proposal in the 28 May letter as alleged, and the agreement was thereby varied as alleged, this would lead to the same conclusion. On that view of the matter, the agreement as varied was abandoned or abrogated by mutual consent as a consequence of the plaintiff's failure or refusal to give further instructions to Hames Sharley, and his conduct in arranging for the plans to be delivered to Mr Psaros.

453 If the relationship between the parties had ceased with the delivery of the plans to Mr Psaros then, for the reasons I have given, it is doubtful whether the plaintiff would have been able to complain of any failure by Hames Sharley to advance the project. However, such a view is academic, because it is an undisputed fact that in September 2002 the parties came together again and Hames Sharley undertook further work for the plaintiff.

454 Accordingly, within the framework of the first issue, that is, the issue as to the nature of the agreement between the parties, there are further subsidiary issues to be resolved including the question of whether the agreement was varied or reconstituted as alleged in September and, if so, whether, in addition to the express and implied terms previously described, the agreement as varied now included a term referable to the alleged 3 September representation. On the plaintiff's case, the term in question is that pleaded in par 17A of the claim; namely, Hames Sharley agreed to make application to the City of South Perth for a renewal or extension of the 18 December planning consent.

455 I have described the events leading up to the alleged 3 September meeting and the position of the respective parties in earlier discussion, especially at that part of these reasons introduced by the heading 'Certain issues'. I will not repeat what was said previously. I have also expressed certain reservations about the credibility of the plaintiff and of Mr Hames. Let me now turn to steps taken by the plaintiff after receipt of the Psaros letter dated 15 August 2002.

456 The plaintiff acknowledged under cross-examination that after receipt of the Psaros quote the wind 'went out of his sails' for 2002. He did not proceed any further with Psaros. He had made up his mind to take Mr Hames' advice and have him: 'relook at the whole thing and get further quotes on it, and that was the discussion between him and I, believe it or believe it not, that he believed that it could be built for about 2.4, and I believed him' (ts 284).

457 I am satisfied, and so find, that it was against this background that a meeting was held on or about 3 September 2002 at the Hames Sharley office concerning the future of the project. This meeting was attended by the plaintiff, Ms Cunningham and Mr Hames. Mr Popplewell from Hames Sharley attended also although I am of the view that he arrived after the meeting had started.

458 The meeting was held because the plaintiff had decided not to proceed further with Mr Psaros but wished to talk about the future of the project and find out whether Mr Hames was prepared to undertake further work on his behalf. I find that the plaintiff did not convey the details of the Psaros letter to Mr Hames but he did make it clear to those present that he was concerned about the cost of the project and wanted various changes to the project as depicted in the previously approved schematic design.

459 All of those present, including Mr Popplewell, accept that early on at the meeting the plaintiff referred to a demolition quotation he had obtained. He referred also to the possibility of demolishing the existing residence and laying a concrete pad in order to comply with the 18 December planning consent. I am satisfied, and so find, that statements to that effect were made by the plaintiff.

460 However, I am satisfied that it was put to him quickly by Mr Hames that the proposed course of action would be futile because a concrete pad could not be laid without proper planning and, in any event, such a step would not be sufficient to satisfy the planning condition 25 that construction had to be 'substantially commenced' within 12 months.

461 Further, I find that the plaintiff and Ms Cunningham quickly acceded to this analysis and that section of the discussion went no further. However, the fact that the plaintiff had raised this matter does suggest that to some extent the 12 month time limit was present to his mind as at early September 2002. This is a matter which might be thought to have a bearing upon duties of care relied upon by the plaintiff including an alleged duty to warn or inform the plaintiff about the risk of TPS6 being gazetted. I will return to that aspect of the plaintiff's case later.

462 For the time being, the crucial question to be resolved is whether discussion concerning the proposed demolition and concrete pad came to an abrupt end because it was thought by those present to be futile (as contended by Mr Hames and Mr Popplewell) or because it was put to the plaintiff by Mr Hames that Hames Sharley would take care of getting a 12 months renewal or extension of the 18 December planning consent.

463 I am of the view that in seeking to resolve this issue I must keep in mind the context of the discussion. It follows from my earlier findings that prior to the meeting on 3 September the relationship between the parties was in suspension. However, the plaintiff had recently decided not to proceed with Psaros and with the assistance of Ms Cunningham wanted Mr Hames to 'relook at the whole thing'. It is apparent from the many and significant changes to the project plans that were effected in the weeks following the 3 September meeting that the purpose underlying the 3 September meeting was to review the project and chart a new course. It must have become apparent to Mr Hames and Mr Popplewell at an early stage of the meeting that the plaintiff was not minded to construct three multiple dwellings strictly in accordance with the schematic design to which the 18 December planning consent related.

464 Notwithstanding the reservations I have expressed, I am inclined to give weight to that part of the testimony of Mr Hames in which he said it would not be consistent with his practice as an architect, or consistent with the logic of the situation, to apply for planning approval in respect of a building that the client did not in fact wish to construct. I give weight also to his evidence to the effect that each application for planning consent had to be dealt with on its merits and he knew that it was not possible to obtain a renewal or an extension. A fresh application for planning approval would have to be made.

465 The evidence given by Mr Popplewell was consistent with that of Mr Hames as to this aspect of the matter and underpins the views I have just expressed. Mr Popplewell said that the proposed alterations would not have fitted within the original planning consent. A new or replacement consent was required.

466 Moreover, it follows from the findings I have made previously, that, in my view, as at 3 September 2002, Mr Hames was personally unaware that the introduction of the new draft town planning scheme TPS6 might bring into play a reduced height restriction that would obstruct the project. This and other features of the situation suggest that he was not inclined to treat the expiry of the 18 December planning consent as a matter of urgency. As at 3 September his firm was not in default (because the plaintiff had suspended the relationship by dealing with Psaros) and, in circumstances where the plaintiff and Ms Cunningham were clearly contemplating significant changes to the design of the project, it does not seem likely that Mr Hames would refer to a renewal or extension or undertake to renew or extend the existing planning consent. It seems more likely that he would speak of obtaining of a new planning approval.

467 I have to give some weight also to the possibility that anything Mr Hames said about obtaining a new planning approval might have been misconstrued by the plaintiff and Ms Cunningham. I have observed that the plaintiff was inclined to describe matters in a general way and, as to this particular matter, Ms Cunningham, although more precise in her habits of thought and expression, was hesitant as to what exactly was said. An assertion by Mr Hames that a further planning approval would have to be obtained, and would be obtained, might have been regarded by the plaintiff and Ms Cunningham as an assertion that the existing 18 December planning consent would be renewed or extended. It is significant that, on all accounts of what occurred, the words in contention occupied little time and with the plaintiff and Ms Cunningham being inclined to act on what was put to them by Mr Hames.

468 Accordingly, in the end, I am not satisfied upon the balance of probabilities that the assertion contended for by the plaintiff was made by Mr Hames as alleged. I find that if any statement was made by Mr Hames that had the effect of easing the concern of the plaintiff about the forthcoming expiry of the 18 December planning consent, it was simply an assertion to the effect that a further application for planning approval would be made in due course with the implication that it was likely to be approved.

469 Put shortly, I accept that Mr Hames uttered the words he referred to in the course of cross-examination: 'We are not going to get substantial commencement; we are going to have to make a new development application' (ts 550).

470 I pause to say also that for the reasons I have just given, I am not satisfied that at an earlier meeting in July 2002 the plaintiff referred to the 12 month time limit and was told by Mr Hames that if time became a problem he would get a 12 month extension of the 18 December planning consent (as alleged at par 60 of the plaintiff's witness statement). Having found previously that the plaintiff did not accept the proposal contained in the 28 May letter, and was not minded to proceed further with Hames Sharley, I find that no representation concerning renewal or representation was made by Mr Hames in mid 2002 as alleged. To my mind, a finding that such a representation was made would be inconsistent with the undisputed fact that in mid 2002 the plaintiff left Hames Sharley to negotiate with Mr Psaros.

471 The consequence of these findings is that, in my view, the agreement was not varied as alleged so as to add to the express and implied terms previously established a further term of the kind described in par 17A of the statement of claim to the effect that Hames Sharley would take care of getting a 12 months renewal or extension of the 18 December planning consent and so there was no need to worry about the expiry date.

472 It follows from this finding also that it is not open to the plaintiff to assert that Hames Sharley was in breach of the alleged par 17A term because Hames Sharley failed to obtain a renewal or extension of the 18 December planning consent or acted negligently in representing to the plaintiff that a renewal or extension could be obtained. It is not open to the plaintiff to enforce his TPA plea by establishing that the alleged 3 September representation amounted to misleading or deceptive conduct or to enforce his negligence plea in regard to this matter.

473 However, it emerges from these findings that as at the 3 September meeting the agreement between the parties was varied in that, as alleged in par 17 and par 17A of the claim the plaintiff was told in substance that there was no need to worry about the expiry date. The assumption of those present at the meeting was that a fresh planning consent would be obtained. This view of the matter is consistent with the defendant's plea at par 11.3.4 of the defence that it was only after the quote from Psaros of $2.7 million was acquired that Hames Sharley was requested to recommence the project.

474 In other words, it was common ground between the parties on the pleadings, and at the trial, that a variation was effected in early September 2002 (with the result that the parties remained in a contractual relationship) although it was in controversy as to whether the relationship was conditioned by the 3 September representation as alleged by the plaintiff. I have found it was not so conditioned. However, I have little difficulty in going on to find that Hames Sharley agreed to undertake further work on behalf of the plaintiff in order to advance the project; that is, the provision of services for the redevelopment and design of three luxury multiple residential dwellings upon the property. The agreement between the parties was varied or reconstituted to that extent by the making of a second or further agreement. Further, I am satisfied that the agreement as varied remained subject to the implied terms I have previously identified as applicable because, in essence, the further services to be performed by Hames Sharley were generally consistent with the intentions of the parties reflected in the original 18 September letter.

475 It follows that I must now turn to the third issue; that is, whether, in any event, Hames Sharley was in breach of a contractual or statutory obligation, or was negligent, in failing to warn or inform the plaintiff about the potentially adverse effect of TPS6.

The alleged failure to warn or inform issue

476 It was common ground between the parties that as at mid 2000 when the plaintiff first approached Mr Hames TPS5 imposed a height restriction of 10.5 metres upon buildings in the subject area. However, and indeed since 1998, planning had been proceeding on the new TPS6 which was in draft form.

477 It was not known when TPS6 might come into force but it was certainly regarded as a seriously entertained planning proposal. This emerges from the presence of the P34 planning policy document which required that in the assessment of applications for planning approval consideration was to be given to the terms of the draft TPS. It emerges also from the defendant's second site potential report of March 2002 (exhibit 12). This noted that the City would assess an application in accordance with the proposed zoning (being R25/40) and that the potential of the subject property was likely to reduce with the introduction of the new TPS6.

478 It was common ground between the parties also that the 18 December planning consent was to remain in force for 12 months. The schematic design drawings were in conformity with TPS5 in providing for a structure not exceeding the maximum height of 10.5 metres. However, the drawings would not comply with the relevant planning controls if TPS6 were brought into force because the latter scheme allowed for a building height of 7 metres only.

479 On the plaintiff's case, having regard to the planning policy document P34, it was vital that the 18 December planning consent granted under TPS5 be complied with, otherwise, in the event of the new TPS6 being brought into force, the plaintiff would lose the opportunity to develop a building of the kind proposed (that is, a building which exceeded 7 metres in height).

480 It follows from all of this that there is considerable force in the plaintiff's contention that the 18 December planning consent had an exceptional value to the plaintiff. It allowed for three multiple dwellings (stacked vertically) on a site that might otherwise have been limited to three grouped dwellings; it allowed for a building of 10.5 metres in height at a time when there was a real likelihood that the height allowance would be reduced; it approved a structure which opened up expansive views and permitted the plaintiff to retain the trees upon the property. For ease of reference, I will call these factors the special qualities associated with the 18 December planning consent.

481 In determining whether Hames Sharley was in breach of duties owed to the plaintiff, in either contract or in tort, it is necessary to begin by looking at the nature of the contractual relationship between the parties. However, it is part of the plaintiff's case that in the end the special qualities associated with the 18 December planning consent had a bearing upon the nature and scope of the duties in question. Further, the special qualities could be regarded as circumstantial evidence bearing upon the inferences to be drawn as to whether certain events and conversations occurred as alleged by the plaintiff and his witnesses.

482 The plaintiff argued that the agreement was expressed in general terms and reflected a broad undertaking by the defendant to exercise architectural and town planning skills on behalf of the plaintiff to facilitate completion of the project. However, I have held that the defendant was initially engaged for certain specific purposes being, first, the provision of a feasibility study; second, the provision of a schematic design for three multiple dwellings with a view to obtaining planning consent.

483 On the plaintiff's case, the defendant's general duties continued after the grant of the 18 December planning consent, but subject to the alleged May and September variations. I found against the plaintiff in that regard but accepted that, between the grant of the 18 December planning consent and the delivery of the project plans to Mr Psaros at the plaintiff's request, Hames Sharley remained subject to contractual duties to advance the project, which it performed. Further, at a meeting on 3 September 2002 a second or 'further agreement' was made, whereby Hames Sharley undertook to revise the plans with a view to obtaining a fresh approval, and that this can be regarded as a variation of the original agreement. Having regard to my previous findings, this means that the implied terms referred to at par 7 of the plaintiff's claim (save for the term alleged at par 7(b)) continued to apply, and had a consequential effect upon the defendant's common law and statutory duties.

484 While dealing with the pleadings and the evidence, I noted that Hames Sharley was engaged also to perform a discrete task, namely, the provision of a feasibility study in respect of the plaintiff's joint development proposal concerning the subject property and two neighbouring lots known as the Ridge Street property.

485 Hames Sharley pleaded that, in the course of completing this discrete task, as appears from the second site report, it provided the plaintiff with information that the project for the subject property could be adversely affected by the coming into force of TPS6. On the Hames Sharley case, it was apparent from the second site report that if the 12 month period allowed by the 18 December planning consent was allowed to expire the project might be prejudiced by the reduced height restriction of 7 metres prescribed by TPS6.

486 It follows from this review, and I so find, that as a consequence of the 3 September meeting Hames Sharley undertook to prepare plans amending the project in accordance with the plaintiff's requirements and, once the plans were finalised, to assist the plaintiff in applying for and endeavouring to obtain a fresh planning approval. The agreement as varied included the implied terms identified as applicable to the agreement in earlier discussion.

487 I note in passing that Hames Sharley, by its statement of defence, did not plead the position I have just described with precision. However, having denied that the agreement was varied in May and September 2002 as alleged by the plaintiff, in various passages of its statement of defence, and in the way its case was presented at trial, Hames Sharley seemed to accept that upon being commissioned to 'restart' the project in early September 2002 it was in a contractual relationship with the plaintiff thereafter. It was entitled to and did in fact charge fees for its services. Thus, Hames Sharley pleaded, at par 11.3.4 to par 11.3.6 of the defence, along the lines of my summary, that during October and November the plaintiff and Ms Cunningham requested changes to the plans. It was alleged in the pleading that: 'the plans were only returned in April 2003 with a request to complete changes and then to resubmit for new planning approval'.

488 It emerges, then, having regard to the findings I have made, that the plaintiff approached the defendant in early September 2002 with further instructions and that the defendant agreed to provide further services. The contractual relationship was subject to certain implied terms which included that Hames Sharley would exercise reasonable skill and care in providing its services. Further, that in acting as the architect and town planner for the project, Hames Sharley would not prejudice the interest of the plaintiff by any act or omission. These implied terms are pleaded at par 7 of the defence.

489 The presence of these implied terms raises an issue as to whether the agreement in its original form, or the agreement as varied, imposed an obligation upon Hames Sharley to warn or inform the plaintiff that he should endeavour to comply with the conditions attached to the 18 December planning consent in order to avoid being adversely affected by the reduced height restrictions in TPS6. Further, if the conditions could not be complied with by 18 December 2002, was Hames Sharley, pursuant to the implied term, and especially its duty of care, obliged to warn or inform the plaintiff that a fresh approval should be applied for under TPS5 as a matter of urgency?

490 The plaintiff's position at trial was that even if the plaintiff's plea as to the alleged 3 September representation was not accepted, the defendant, on its own account, ought to have warned or informed the plaintiff about the risk to his position posed by the draft scheme (TPS6) and was in breach of an implied duty of care to take steps to preserve the plaintiff's position under the existing planning scheme (TPS5).

491 In other words, if Hames Sharley was aware or should have been aware that a 7 metre height restriction might come into force, and thus obstruct a proposed 10.5 metre development, the defendant firm ought to have put this information in front of its client squarely so that the client could take steps to overcome the problem.

492 In addressing this issue I must give weight to the legal principles and decided cases mentioned earlier. It has been held that although the contract of retainer will be an important indicium of the nature of the relationship, it will not chart exclusively the parameters of the duty of care.

493 In some cases the duty of care may require the taking of positive steps beyond the specifically agreed professional task where the steps in question are necessary to avoid a real and foreseeable risk of economic loss being sustained by the client: Carmody. There may be a duty to give any advice reasonably necessary to protect the client's interest whether expressly requested or not: Dalleagles.

494 As I have indicated in earlier discussion, if it be held that Hames Sharley was in breach of an alleged duty in failing to warn or inform, a further question of causation will then have to be addressed as to whether the breach caused loss. In other words, can it be said that 'but for' the failure to warn or inform the plaintiff would have had an ongoing opportunity to complete a project of the kind allowed for by the 18 December planning consent. I will look at the issue of causation in due course if necessary.

Resolution of the failure to warn or inform issue

495 Hames Sharley acknowledged at par 6.1 of its statement of defence that it knew that the City of South Perth had been reviewing TPS5 since about 1998 with a view to introducing a proposed TPS6. It knew that TPS6 might adversely affect the property by rezoning it and/or affecting development on the property and/or reducing the height of buildings that could be built on the property.

496 I remind myself that as appears from the Hames Sharley letter of 3 August 2001 to the City signed by Mr Youens, the defendant was aware of the 10.5 metre restriction under TPS5 as a matter bearing upon the plaintiff's project. If that letter is considered in conjunction with what is said about the reduction to 7 metres in TPS6 in the second site report, it would have been clearly apparent that the plaintiff's project would be adversely affected if TPS6 were gazetted. However, it is questionable whether Mr Hames personally made that analysis.

497 I have little difficulty in finding that Mr Hames personally knew that work was taking place on the draft town planning scheme TPS6 and that it was a seriously entertained planning proposal that would probably be brought into force in due course. He was aware, in general terms, that it could have an adverse effect upon the property. However, it emerges from my previous findings that I am not persuaded that he personally knew prior to the grant of the 18 December planning consent that TPS6 might reduce the height restrictions from 10.5 metres to 7 metres in regard to the subject property. However, having regard to the obligations Hames Sharley had undertaken under the agreement, I consider that both the defendant firm and Mr Hames, as at 18 December 2001 when the planning consent was granted, ought to have been aware that the project could be adversely affected by the gazetting of TPS6.

498 It was clear by then, the schematic design having been completed, that the three multiple dwellings comprising the project would exceed 7 metres. Hames Sharley had contracted to provide planning services and had entered into discussions with officers from the City of South Perth upon the basis that it would achieve the best possible result for the plaintiff in respect of the project. Moreover, once the 18 December planning consent was obtained, Mr Hames and his colleagues in the firm were fully informed as to the special qualities associated with the 18 December planning consent.

499 Against this background, I am satisfied, and so find that after December 2001 in the performance of its duty to exercise reasonable care Hames Sharley was obliged to warn or inform the plaintiff that there could be adverse consequences if he failed to comply with the conditions attached to the 18 December planning consent. Hames Sharley could not compel him to advance the project promptly or to comply with the conditions in question prior to expiry of the consent on 18 December 2002 but it was obliged to place the information squarely before him. I am prepared to accept that the nature of the warning or the way in which the information was provided might depend upon the surrounding circumstances and the way in which matters were progressing.

500 In other words, if, soon after the 18 December planning consent was granted, the plaintiff appeared to be proceeding expeditiously with the project by appointing professional consultants or taking other steps recommended by Hames Sharley, then it could be argued that the need for a warning or the provision of information did not require emphasis. In a situation of that kind, even if TPS6 was brought into existence, it would still be open to the plaintiff to complete the project in accordance with the 18 December planning consent issued under TPS5, provided the conditions were fulfilled within the prescribed period of 12 months.

501 In arriving at this conclusion, I am of the view that the present case falls within the principles enunciated in Carmody and Dalleagles to the effect that in certain cases there may be a duty to give any advice reasonably necessary to protect the client's interests whether expressly requested or not.

502 As I proceed to dwell upon the actual circumstances of the present case, it becomes apparent that as the prescribed 12 month period ran on there was an increasing risk that the plaintiff would not fulfil the conditions in question, and especially condition 25 concerning the commencement of construction, within the prescribed period. There can be little doubt that Hames Sharley was aware of the increased risk of non-compliance because, by its 28 May letter, it endeavoured to set out a summary of what was required in order to obtain the building licence and commence construction. An important feature of its advice was the requirement that the plaintiff appoint a surveyor and professional engineers. However, it is clear from the evidence considered as a whole that Hames Sharley did not present to the plaintiff in written form clear and unequivocal advice to the effect that if he failed to comply with the conditions the project might be obstructed by the introduction of TPS6 because of the reduced height restrictions in that scheme.

503 To my mind, and I so find, by 28 May 2002, Hames Sharley, which was still in a contractual relationship with the plaintiff, was under a duty to warn or inform the plaintiff that the project could be adversely affected by TPS6. By that time it was clear that the plaintiff was not proceeding expeditiously and further delay could be fatal because plans had to be finalised before a building licence could be obtained and a builder engaged to commence construction within the prescribed time.

504 Hames Sharley endeavoured to answer the case against it in regard to this aspect of the matter by pointing to the information contained in the second site report. This was said to constitute a sufficient warning or provision of information concerning this issue. Hames Sharley relied also upon the 28 May letter and related discussions all of which made it clear to the plaintiff, it was contended, that he had to proceed expeditiously. These documents and events were said to establish that, as to any alleged duty to warn or inform, Hames Sharley had discharged the duty in question.

505 I do not consider that this is a sufficient answer to the plaintiff's case concerning the alleged failure to warn or inform issue. The first site report referred to TPS6 in general terms only and made no mention of the impending reduction of height restrictions. It is true that the second site report referred to the prospect of an incoming 7 metre height restriction explicitly. However, this information was not presented in the context of what was required in order to complete the 20 Hensman Road project but in the context of a development proposal of a different kind concerning the property and two neighbouring lots.

506 It is true that by a painstaking attention to the observations in the second site report and matters of detail the plaintiff might have concluded that there was a risk to the project if TPS6 was gazetted but this was not spelt out clearly. Moreover, even if he had arrived at that conclusion, his analysis might have been led astray by the fact that he had a planning consent under the existing scheme and therefore did not have to be concerned about any changes to the planning controls.

507 Put shortly, in my view, and I so find, the information in the first and second site reports and the 28 May letter cannot be regarded as a sufficient performance of the Hames Sharley obligation to warn or inform as to the possible adverse effect of TPS6. There were no other documents or conversations that Hames Sharley could point to or rely upon which indicated that the plaintiff had been properly warned or informed prior to expiry of the 12 month period prescribed by the 18 December planning consent.

508 I am of the view, and so find, that by 28 May 2002, at a time when Hames Sharley was still involved in a contractual relationship with the plaintiff, it was under a duty to warn or inform as to this matter but was in breach of implied terms of the agreement previously identified in failing to do so, subject to resolution of the causation issue.

509 When I turn to events after 28 May I am conscious, again, that the defendant cannot point to any document that contains an explicit warning. It does not appear that any such warning was given at the 3 September meeting by either Mr Hames or Mr Popplewell, principally because (having regard to my earlier findings) the two men representing the defendant at that time were not personally aware that TPS6 reduced the maximum height to 7 metres in a manner that threatened the plaintiff's project. Under cross-examination Mr Hames conceded that he did not ever tell the plaintiff he had concerns about the application being accepted the second time round (ts 565).

510 In the end, I consider, and so find, that no information or warning was given to the plaintiff as to the adverse effect of TPS6 being gazetted. Thus, as at the meeting of 3 September 2002, when the agreement was varied in the manner I have described, and it was clear that further work was to be undertaken by Hames Sharley in order to advance the project, Hames Sharley was in breach of implied terms of the contract in failing to warn or inform the plaintiff, in a clear and emphatic way, that upon the expiry of the prescribed 12 month period on 18 December 2002, the plaintiff could lose the special qualities associated with the planning consent under the existing scheme in the event of TPS6 being gazetted.

511 I consider also, and so find, that, for the reasons I have given, Hames Sharley acted negligently in failing to warn or inform the plaintiff in circumstances where it could be reasonably foreseen that economic loss would be suffered if TPS6 was gazetted with the result that the project, in its proposed form, could not proceed due to the reduced height restrictions.

512 Finally, I am of the view that as at 28 May 2002, and again as at 3 September 2002, the failure of Hames Sharley or any person on its behalf to warn or inform the plaintiff about the risk associated with TPS6 amounted to an infringement of provisions of the Trade Practices Act in the manner alleged by the plaintiff in his alternative TPA plea, subject to resolution of the causation issue.

513 Accordingly, I must now turn to the causation issue.

General observations on the causation issue

514 In his closing address, counsel for the plaintiff drew upon certain passages in Cheshire & Fifoot, Law of Contract (8th Aust ed) [23.6] - [23.15], to support the plaintiff's position.

515 The authors of the text assert that the first step in establishing a right to damages for breach of contract is to identify a loss. Damages for breach of contract are awarded on the principle that the injured party is, so far as money can do it, to be placed in the same situation as if the contract had been performed. The law sets out to measure the difference between the position which would have been created by full performance of the contract and the position which has actually been created by its breach. A monetary value is placed on each position. A loss has been suffered if the value of the hypothetical position is greater than that of the actual position. Damages are awarded to cover that loss.

516 Damages calculated in accordance with this principle protect the expectation created by a contract that it will be performed. Hence, damages for breach of contract are often described as expectation damages. The law protects not only the expectation of performance as such but also the expectation of receiving the benefit which will flow from its performance. The full value of the hypothetical performance is the basis on which loss is assessed.

517 The corollary of the principle that the plaintiff is to be put into the position that would have resulted from performance is that the plaintiff is not entitled to be placed in a better position. This means that if the plaintiff would have made a loss had the contract been performed no damages are awarded for its breach.

518 The authors indicate that damages for breach of contract can be described as a combination of expectation and reliance damages. So it was said in Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 by Mason, Wilson and Dawson JJ at 12 that a plaintiff suing for breach of contract is entitled to damages for loss of bargain (expectation loss) and damage suffered, including expenditure incurred, in reliance on the contract (reliance loss).

519 The authors assert at [23.8] that damages in tort and under s 82 of the Trade Practices Act are not awarded on the basis of loss of an expected performance. Rather, they are assessed so as to put the claimant in the position he or she would have occupied had the tort or statutory contravention not been committed. However, tort and statutory obligations often overlap with contractual obligations. This occurs particularly in the supply of professional services, where the provider is subject to a duty of care both implied in the contract with the recipient and imposed by the law of negligence. In such cases the loss is normally the same in tort and contract, but the ambit of recovery may be affected by differences in the treatment of contributory negligence and remoteness, and the plaintiff may therefore elect which ever is the most favourable basis of an award.

Specific observations on the causation issue

520 It follows from earlier discussion that a plaintiff is required to show that the loss or damage complained of was caused or materially contributed to by the defendant's default. The issue of causation is divided into two questions: the question of causation in fact and the further question of whether the defendant is in law causally responsible for the damage: Amaca's case at [389].

521 As to causation as an issue of fact, the same rules apply in contract and tort. Further, it has been held in respect of claims advanced pursuant to s 52 and related provisions of the Trade Practices Act that the term 'by' in s 82 of the Act invokes the common law concept of causation: Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514. Thus, in the present case, as to each cause of action it must be determined whether there was a necessary connection between the alleged breach of duty and the loss or damage complained of.

522 It emerges, then, that the issue of whether the loss was caused as a matter of fact must be distinguished from the further issue as to whether the loss or damage is compensable in law. In the latter case, it is necessary to decide as a matter of policy, whether the consequences are too remote from the breach of duty or contract. The rules governing that decision are the principles of remoteness of damage. Even if a cause or connection exists, damage that is too remote as a matter of law does not give rise to liability.

523 As to the factual question of whether the defendant's act actually brought about the event complained of, the court must decide whether the damage would not have occurred 'but for' the wrongful act.

524 The so-called 'but for' test, applied as a negative criterion of causation, has an important role to play but it is not a comprehensive and exclusive test of causation; value judgements and policy considerations necessarily intrude. The same principles apply to the question of whether any other act contributed to or intervened to break the chain of causation: March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506; Bennett v Minister for Community Welfare [1992] HCA 27; (1992) 176 CLR 408.

525 I mentioned in earlier discussion that it is apparent from Chappel v Hart that in this context the courts will take a commonsense view of causation. If the plaintiff can prove a breach of duty followed by harm of a foreseeable kind, then a cause or connection will generally be assumed unless the defendant can point to an intervening event or some other reason to the contrary.

526 This approach is reflected in the reasoning of McHugh J in Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 [97] where his Honour made these observations:

The common law concept of causation recognises that conduct that infringes a legal norm may be causally connected with the sustaining of loss or damage even though other factors may have contributed to the loss or damage. Every event is the product of a number of conditions that have combined to produce the event. Some philosophers draw a distinction between a condition that is necessary only and a cause that is both necessary and sufficient to produce the event. The common law has avoided the technical controversies inherent in the logic of causation. Unlike science and philosophy, the common law is not concerned to discover universal connections between phenomena so as to enable predictions to be made. The common law concept of causation looks backward because its function is to determine whether a person should be held responsible for some past act or omission. Out of the many conditions that combine to produce loss or damage to a person, the common law is concerned with determining only whether some breach of a legal norm was so significant that, as a matter of common sense, it should be regarded as a cause of damage.

Causation issues concerning loss of opportunity

527 The authors of Cheshire & Fifoot observe at [23.14] that the law awards damages for loss of any foreseeable chance or opportunity of benefit which can be causally linked to a breach of contract. Such damages are obviously appropriate to the breach of a promise to provide a chance, for example, the chance to win a prize. But recovery extends also to the loss of a chance which was not promised but which would nevertheless have been created by a performance of the contract. Damages are thus awarded for deprivation of a commercial opportunity, whether by breach of contract, tort or statutory contravention. They are assessed by reference to the prospect of success.

528 The latter precept can be illustrated by the Sellars case, mentioned earlier and being one of the cases principally relied upon by counsel for the plaintiff. In that case Adelaide Petroleum NL and its directors sued the defendant for damages for loss of opportunities of gain which would have been created if a contract with another party, which was abandoned because of the defendant's misleading conduct, had become operative. The operation of the abandoned contract was subject to contingent conditions. The trial judge held that there was a 40% chance that the conditions would have been fulfilled. The plaintiffs were therefore entitled to 40% of the value of the benefits which they would have realised. The High Court approved the judge's award.

529 It was held by the High Court in Sellars that loss of an opportunity to obtain a commercial advantage or benefit is 'loss or damage' within s 82(1) of the Trade Practices Act. Further, that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s 52(1) of the Trade Practices Act should be ascertained by reference to the court's assessment of the prospects of success of that opportunity if it had been pursued.

530 I take account of the observations of Mason CJ, Dawson, Toohey and Gaudron JJ in Sellars to this effect:

On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable. (355)

531 Their Honours went on to make these further observations:

The conclusion which we have reached on this question finds support in other considerations. The approach results in fair compensation whereas the all or nothing outcome produced by the civil standard of proof would result in the vast majority of cases in over-compensation or under-compensation to an applicant who has been deprived of a commercial opportunity. Furthermore, it is an approach which conforms to the long-standing practice of taking into account contingencies in the assessment of damages. (355)

On the findings made by the trial judge, the Pagini contract would have been entered into but for the contraventions of s 52(1). Although, on the probabilities, it would not have been completed, there was a significant chance that it would be completed. It follows that the Full Court of the Federal Court were not in error in dismissing the appeals.

532 It follows that loss of an opportunity is compensable even if its realisation is unlikely on the balance of probabilities provided the claimant can establish in accordance with that standard of proof that he has sustained some loss or damage: Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638.

533 The reasoning in these cases appears to proceed from the premise that generally in proving loss proof of past events must at least attain a balance of probability, but if it does, the fact is treated as a certainty. However, this all or nothing approach could work injustice if applied to the assessment of future damages because the future is uncertain. Thus, it is more equitable to discount the damages by making an allowance for contingencies rather than to deny damages altogether or allow them in full. Thus, in cases involving the loss of a commercial opportunity, whereas the general standard of proof ordinarily applies to the issue of causation, requiring the plaintiff to prove on the balance of probabilities that he has sustained a particular loss, here the requirement is met by proof that the breach of contract or tort caused the loss of a commercial opportunity of some value.

534 In Commonwealth of Australia v Amann Aviation Pty Ltd Deane J made certain observations about matters of this kind:

In many cases, proof of the full extent of the loss or injury sustained will involve establishing an evidentiary foundation for positive and detailed ultimate findings by the court upon the balance of probabilities. There are, however, cases where considerations of justice or the limitations of curial method render ultimate findings, about what would have been or will be, impracticable or inappropriate. In such cases, damages must be assessed on some basis other than findings about what would have ultimately happened if the repudiation or breach had not occurred or about the precise ultimate implications of the situation which exists after the repudiation or breach. In particular, it may be appropriate that damages be assessed by reference to the probabilities or the possibilities of what would have happened or will happen rather than on the basis of speculation that probabilities would have or will come to pass and that possibilities would not have or will not. (118)

535 His Honour went on to make these further observations:

If, for example, what the plaintiff has lost by reason of the defendant's repudiation or breach of contract is a less than 50 per cent but nonetheless real and valuable chance of winning some contest or prize, of being the successful tenderer for some commercial undertaking or of deriving some other advantage, in circumstances where a court can decide that a proportionate figure precisely or approximately reflects the chance of success but can do no more than speculate about whether, but for the defendant's wrongful act, the plaintiff would have actually won the contest, prize or tender or derived the advantage, it would affront justice for the court to hold that the plaintiff was entitled to no compensation at all for the lost chance of competing or striving or for the wasted expenditure which was incurred in obtaining or performing the contract. In such a case, considerations of justice require that the plaintiff be entitled to recover the value of the lost chance itself and that the defendant be not allowed to take advantage of the effects of her own wrongful act to escape liability by pointing to the obvious, namely, that it is theoretically more probable than not that a less than 50 per cent chance of success would have resulted in failure. Thus, for example, a plaintiff whose action against a third party has become statute barred by reason of a defendant solicitor's breach of contract may recover damages by reference to the court's assessment of what the chance of success in the action against the third party would have been even though that assessment is 50 per cent or less. (118)

536 It appears from Sellars and related cases that the valuation process of a loss of chance is ascertained by reference to the degree of probabilities and possibilities inherent in the plaintiff succeeding had the plaintiff been given the chance which the contract promised. However, it is essential when assessing loss of chance that the court looks at the value of the chance, not what would have been received had the benefit or opportunity materialised: Howe v Teefy (1927) 27 SR (NSW) 301.

537 These cases prompted counsel for the defendant in his closing submissions to assert that the task before the court in the present case was to place a fair and reasonable value on the chance. In assessing the loss of a chance to develop a multiple dwelling or group dwelling on the site, the court had to turn its mind not to the value of the benefit of developing the property and the profit derived, but the value of the chance to develop the property.

538 Let me now return to the circumstances of the present case.

539 I have found that the defendant did not make the alleged 3 September representation and therefore did not specifically undertake to apply for or obtain a renewal or extension of the 18 December planning consent. However, I have found also that the defendant was in breach of contractual and other duties in failing to warn or inform the plaintiff that in the event of TPS6 being gazetted the plaintiff could lose the special qualities associated with the 18 December planning consent.

540 It follows from my review of the decided cases that in determining whether there is a sufficient causal connection between the alleged breach and duty and the loss complained of (that is, loss of an opportunity to complete the project), I must determine whether the breach of duty was so significant that, as a matter of commonsense, it should be regarded as a cause of the loss of an opportunity of some value; that is, but for the defendant's failure to warn or inform there was a real prospect that the plaintiff could have and would have taken the opportunity to complete the project and secure a benefit of the kind contended for.

541 Having regard to the pleadings, I must keep in mind that the project is defined in general terms as the redevelopment of the subject property by the construction of three luxury multiple residential dwellings. It was common ground that this was to have been to a height exceeding 7 metres in the manner allowed for by the 18 December planning consent which was issued under TPS5.

542 It is said in par 22 of the claim that the defendant was in breach in failing to give a warning to the effect that if the conditions of the 18 December planning consent were not satisfied prior to 18 December 2002 and the renewal or extension of the consent was not obtained before TPS6 replaced TPS5, it would not be possible for the plaintiff to complete the project.

543 At par 23 it is said that if the defendant had not breached the agreement 'the plaintiff would have done all things necessary to cause all of the conditions in the consent to be satisfied by 18 December 2002 or to have requested the defendant to immediately do what was required to renew or replace the consent'. I will refer to these steps as the plaintiff's par 23 plea.

544 The loss allegedly suffered was described in general terms by counsel for the respective parties as loss of the opportunity to complete the project. More particularly, it was pleaded at par 27(e) that the plaintiff has lost the value the property would now have if the project had been completed less the costs required for the completion of the project and the value of the property in its present state.

545 In dealing with this part of the dispute I am conscious of a need to distinguish between evidence bearing on the general question of whether the plaintiff was truly committed to the project and the more specific question of whether the plaintiff would have done what was required to renew or replace the consent, notwithstanding certain events which arguably revealed a degree of ambivalence on his part as to whether he really wanted to complete a project that might turn out to be more expensive than first envisaged.

546 On the one hand, it might be said that if it is clearly apparent from the evidence as a whole that in the 12-month period following the 18 December planning consent the plaintiff had simply lost interest in the project, due to indifference or cost factors or a decision to sell the land, then a finding to that effect in relation to the general question would obviously have a bearing upon the more specific question. In other words, even if he had been properly informed about the TPS6 gazetted risk, it seems unlikely that the plaintiff would have sought to renew or replace the planning consent if indeed he had decided to abandon the project.

547 There is evidence before me that points to a degree of ambivalence on the plaintiff's part. He failed to respond to the defendant's advice in February and May 2002 that third party consultants be engaged so that building plans could be finalised with the precision required to obtain a building licence. As evidenced by the events surrounding preparation of the second site report, he canvassed the possibility of undertaking an entirely different form of development. On 3 July 2002 he gave an agent authority to sell the land at $1.825 million. The plaintiff was generally tardy, even apathetic, in progressing the matter and made it clear to Ms Cunningham that he did not want to be bothered by the details. Moreover, he was clearly concerned by the size of the estimates he had received. Indeed, under cross-examination, as mentioned earlier, he acknowledged that by September 2002 the estimates were getting higher and two were unacceptable.

548 For ease of reference, I will henceforth refer to these matters collectively as 'matters evidencing the plaintiff's ambivalence'. However, in dealing with what the plaintiff said under cross-examination, I must refer also to a further passage in which he said that he considered not going ahead 'but never changed my mind' (ts 283).

549 In the end, I am not satisfied that the matters evidencing the plaintiff's ambivalence (being the evidence I have just described in summary form) are sufficient to rebut the plaintiff's assertion that he never changed his mind. There are various other facts and matters which weigh against the drawing of an inference that prior to 18 December 2002 he had lost interest in the project to such an extent that, even if he had been warned, he would not have done whatever was necessary to comply with or to renew or replace the 18 December planning consent.

550 Importantly, there is no evidence before me that the plaintiff told the defendant or any other party that he did not wish to proceed. His dealings with Mr Psaros and Ms Cunningham were consistent with his testimony that he did wish to proceed with the project, albeit in a manner that was arguably less straightforward than the defendant might have hoped for or expected. The plaintiff provided an explanation for the attempted sale, and the undisputed fact is that he did not proceed with it. Most importantly, it is clear from all accounts of the 3 September meeting and the revisions to the plans that followed that the plaintiff was minded to pursue the project, and that Mr Hames and his colleagues understood this to be so and proceeded accordingly. The fact that the plaintiff was prepared to pay for services being provided - which he did by discharging the defendant's invoices - underpins my conclusion. Further, the plaintiff applied for finance. As appears at par 78 of his witness statement by letter dated 26 September 2002 the Commonwealth Bank gave him approval for a facility of $2.8 million to build the units.

551 Having regard to the evidence as a whole, I consider, and I so find, that at all material times prior to 18 December 2002 the plaintiff had in mind to proceed with the project.

552 The finding I have just made concerning the general question bears upon but does not necessarily resolve the more specific question of whether, if properly informed about the risk of TPS6 being gazetted, the plaintiff would have done all things necessary to comply with the conditions of the 18 December consent or to have requested the defendant to do what was required to renew or replace the consent. Nor does such a finding mean that, if properly informed, the project would have been completed. Findings as to both these matters depend upon various contingencies including an assessment of the nature and strength of the plaintiff's commitment to the project.

553 However, for the time being, it is sufficient for me to find that the plaintiff did not abandon the project, although the degree of his commitment to it may have waxed and waned.

554 It emerges from the reasoning in Sellars and related cases that in dealing with causation the plaintiff must satisfy the court that the breach of duty caused the loss of a commercial opportunity which had some value. If an entitlement to relief is established it will then be necessary for the court to assess the prospects of success of the opportunity if it had been pursued. It is at this latter stage that an appraisal of the nature and strength of the plaintiff's commitment to the project may again become relevant. However, in the meantime, I must return to the more specific question of whether the plaintiff, if properly informed, would have acted in the manner pleaded in par 23 of the claim.

555 I have held that the duty to warn or inform arose by 28 May 2002, by which time, principally due to inactivity on the part of the plaintiff, the risk of non-compliance with the 18 December planning consent had become obvious (as evidenced by the defendant's 28 May letter). However, as to the period between 28 May and 3 September 2002, I am not satisfied on the balance of probabilities that, if he had been properly warned or informed, he would have acted as alleged in the plaintiff's par 23 plea.

556 I arrive at this finding for these reasons. The defendant's 28 May letter conveyed a degree of urgency, especially concerning the appointment of third party consultants, but the plaintiff failed to respond in a meaningful way. In the absence of any written corroboration, and having regard to my reservations about his credibility expressed previously, I do not accept that he gave verbal instructions to the defendant to progress the matter. The matters evidencing the plaintiff's ambivalence weigh against the plaintiff's case in regard to this issue.

557 Moreover, for the reasons previously given, the plaintiff's dealings with Psaros lead me to find not only that performance of the contractual relationship with the defendant was suspended, thus relieving the defendant of the obligation to tender further warnings or advice, but also that the plaintiff, being now in the hands of a new adviser, was not likely to and would not have acted as alleged in the plaintiff's par 23 plea.

558 This brings me to the meeting of 3 September and subsequent events. I have held previously that the 3 September representation concerning an alleged undertaking by Mr Hames to extend or renew the 18 December planning consent was not made by or on behalf of the defendant. My finding was influenced by my perception that although TPS6 (and thus the height restriction) was a seriously entertained planning proposal which ought to have been known about by the defendant, it was not personally known to Mr Hames as at 3 September.

559 Thus, in the absence of any sense of impending peril, and in circumstances where the client was insisting upon changes to the original plans, Mr Hames proceeded upon the assumption that a fresh planning consent under TPS5 would have to be applied for and obtained. His conduct amounted to a factual representation that such a consent could be and would be obtained.

560 However, I am satisfied that as at 3 September 2002, notwithstanding a degree of ambivalence on his part, the plaintiff, assisted by Ms Cunningham, was minded to push ahead with the project. This was a common theme emerging from the evidence of all of those present at the meeting: that the plaintiff wanted Mr Hames to carry the matter forward by reviewing the plans; Mr Hames was willing to act, and in coming weeks, did act accordingly; the plaintiff obtained finance. I give some weight also to the plaintiff's evidence that he was conscious of the 12-month deadline on the 18 December planning consent and it was for this reason that he canvassed the possibility of proceeding with demolition. Moreover, I take account of the fact that it was a comparatively inexpensive matter to finalise plans sufficient to obtain a fresh planning consent (as evidenced by Mr Buttle's evidence and by the handling of the plaintiff's original application).

561 When I look at these matters in combination, and take account of the plaintiff's testimony in support of his pleaded case, I am of the view, and so find, that at all material times between the meeting on 3 September 2002 and the gazettal of TPS6 on 28 April 2003, if properly informed as to the adverse impact upon the project in the event of TPS6 being gazetted, the plaintiff would have acted as alleged in the latter part of the plaintiff's par 23 plea; that is, that he would have requested the defendant to do immediately what was required to replace the 18 December consent with a fresh planning consent.

562 Putting it another way, and more precisely, if properly informed prior to 18 December 2002, with a view to keeping alive an opportunity to proceed with the project, the plaintiff would have done whatever was necessary to ensure that the defendant on his behalf replaced the existing consent with a fresh consent under TPS5 concerning the project, albeit with some revisions to the original schematic plans. I will continue to refer to this as the 'latter part of the plaintiff's par 23 plea'.

563 I note in passing that, having regard to the evidence of Mr Hames and Mr Buttle, the proper information or warning would have made it clear to the plaintiff that an extension or renewal was neither available nor appropriate but it was open to the plaintiff to lodge a fresh application concerning the project in accordance with TPS5, notwithstanding that an existing consent was still current.

564 Further, in the event of the plaintiff not being properly informed until after 18 December 2002, he would have as soon as possible done whatever was necessary to ensure that the defendant on his behalf applied for and obtained a consent under TPS5 generally conforming to the consent previously obtained. I infer, and so find, from the Buttle and related evidence, that a fresh application under TPS5 providing for the 'special qualities' could have and would have led to the grant of a planning consent corresponding essentially to the 18 December consent.

565 It is an undisputed fact that no such application was lodged prior to TPS6 coming into force, and no such consent was obtained. It is clear to me also, and I so find, that upon the gazettal of TPS6 on 29 April 2003 the plaintiff lost the opportunity to proceed with the project in that the new height restriction ruled out the development originally proposed. This is evident from the City's later rejection of the fresh application for approval dated 3 July 2003 and its subsequent refusal to amend the planning scheme.

566 It follows from this analysis concerning the causation issue, and I so find, that the defendant's breach of duty in failing to warn or inform was so significant that, as a matter of commonsense, it should be regarded as a cause of some loss. I make this finding upon the basis that if a planning consent for the project corresponding to the 18 December consent had been in force prior to the gazettal there was a real prospect that the plaintiff could have and would have acted to complete the project and secure a benefit of the kind contended for. He had the financial means to complete the project; he wished to do so. However, it follows from earlier discussion that the quantum of the loss remains to be assessed.

567 The task in regard to assessment is not to determine a loss of profit or simply to compare the value of the land in its undeveloped and notionally developed states. In assessing the loss of a chance to develop a multiple dwelling, the court must turn its mind not to the value of the profit of developing the property and the profit derived, but to the value of the chance to develop the property. This will involve an inquiry into the possibilities and contingencies concerning the proposed development including further reference to the strength of the plaintiff's commitment to the project.

568 Put shortly, then, in circumstances where it is an agreed fact that the plaintiff had the financial means to pursue the project, and in circumstances where I have held that he was minded as from 3 September 2002 to proceed with the finalisation of revised plans, I am satisfied that, if properly warned, he would have done whatever was necessary to replace the 18 December planning consent with a fresh consent under TPS5 before the height restriction in TPS6 came into force. As I have indicated, it was a comparatively inexpensive step to take in order to keep alive a chance to proceed with the project. It is apparent from the evidence I will come to shortly that the failure to warn or inform was the cause of at least some loss. The exact quantum of the loss remains to be assessed.

569 For the sake of completeness, I feel obliged to say briefly that having regard to the findings I have made I do not see any merit in the defendant's plea at par 26 of the defence that the plaintiff caused or contributed to the loss. The matters evidencing the plaintiff's ambivalence may have confused the situation to a certain extent but as to the failure to warn or inform on and after 3 September the plaintiff was dependant on Hames Sharley's professional skills. Even if the plaintiff had read and fully understood what was said in the second site report about height restrictions, and applied the reasoning to his project, he would have been in the hands of his professional adviser as to what, if anything had to be done in order to avert the risk.

570 Further, gazettal of TPS6 cannot be regarded as an intervening act or event which broke the chain of causation. The gazettal was the mischief or adverse event which ought to have been foreseen and averted by the provision of information or a warning by the defendant in its role as a professional adviser.

572 It emerged in the course of my review of certain legal principles in earlier discussion that a plaintiff may now sue a professional advisor in either contract or tort or both. Where concurrent liability in contract and tort exists the plaintiff has the right to assert the cause of action that appears to be the most advantageous to him.

573 It has been held in respect of claims advanced pursuant to s 52 and related provisions of the Trade Practices Act based upon misleading conduct that the term 'by' in s 82 of the Act invokes the common law concept of causation: Wardley. Further, the measure of damages in tort is appropriate in most, if not all, cases under pt V of the Trade Practices Act, especially those involving misleading or deceptive conduct and the making of false statements: Gates v City Mutual Life Assurance Society Ltd.

574 Thus, in the present case, the plaintiff's claim for damages due to an alleged loss of opportunity was the same in respect of his causes of action in contract, tort and under the Trade Practices Act, being a claim for loss of opportunity. It emerges from the decided cases that in regard to the supply of professional services tort and statutory obligations often overlap with contractual obligations.

575 The decided cases give rise also to a further issue which is of considerable importance in the present case. As a general rule, damages for tort or for breach of contract are assessed at the date of the breach. However, it has been said that this rule will yield if, in the particular circumstances, some other date is necessary to provide adequate compensation: see Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351, 367 (Wilson, Toohey and Gaudron JJ).

576 However, if damages are to be assessed at the date of breach, subsequent events known at the later date when the court's assessment is being carried out are to be taken into account. See HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 [39]. I will say more about this later. However, I note that it was a contested issue in the present case as to whether the damages allegedly referable to a loss of opportunity to construct three multiple dwellings on the subject land to a height of 10.5 metres in accordance with TPS5 should be assessed as at the date of the alleged breach of duty, being a date prior to the enactment of TPS6 on 29 April 2003 (described in the plaintiff's particulars of loss as December 2002), or whether the damages should be assessed as at the date of trial (described in the particulars as July 2006).

577 The plaintiff's position, in regard to the question of whether an alternative development complying with TPS6 could or should have been undertaken, was that the plaintiff was not obliged to 'mitigate' the loss of opportunity complained of in the circumstances of the present case. Counsel for the plaintiff contended that no principle of law requires an owner such as the plaintiff to build a development that was neither agreed to nor contemplated by the parties. I accept that this is so and will proceed accordingly: see Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613.

578 It will now be useful to return to the pleadings and to look at the manner in which the claim for damages was formulated in respect of each cause of action, although, pursuant to the reasoning outlined above, it emerges that the final figure contended for as a measure of the plaintiff's alleged loss is the same in each case.

The primary claim and the alternative claim

579 The plaintiff contends primarily for a figure of $2,076,000, being a claim for loss assessed at the trial date of July 2006. He contends, in the alternative for a figure of $1,503,000, being a claim for loss assessed at December 2002 as the date of breach. The premise underlying the plaintiff's stance in each case is that if the 18 December planning consent or a consent in the same form under TPS5 ('the TPS5 consent') had been kept in force the project consisting of three luxury multiple residential dwellings to the height exceeding 7 metres would have been completed by November 2004.

580 These contentions were disputed by the defendant. On the defendant's case, irrespective of whether the TPS5 consent was kept in force the plaintiff was not sufficiently committed to the project to complete it. This and other factors require (having regard to the reasoning in Sellars) that the loss contended for be assessed by reference to the value of the chance, and this in turn requires an evaluation of the contingencies and possibilities bearing upon completion.

581 Further, and in any event, even if the premise underlying the plaintiff's claim for loss were accepted, the figures contended for were not substantiated by the evidence. Indeed, on one view of the matter, it is said, the plaintiff did not suffer any loss because the value of the proposed development did not exceed the value of the land in its existing state, having regard to what was arguably an over capitalisation of the site and other factors including rising land values in the subject area.

The nature of the plaintiff's claim for damages

582 I will begin by looking at the plaintiff's claim in contract. The plaintiff pleaded at par 27 of the statement of claim that because of the breaches of the agreement complained of the plaintiff has suffered loss and damage. It was said that TPS5 enabled the subject property to be developed by construction of three strata titled lots or group dwellings of three levels to a maximum height of 10.5 metres. TPS6 allowed for three strata titled lots or grouped dwellings of two levels to a maximum height of 7 metres. The value of the property had thereby been diminished.

583 The plaintiff went on to plead at par 27(d) that the plaintiff has lost the profit that would have been generated upon completion of the project. He said further at par 27(e) that 'the plaintiff has lost the difference between the value the property would now have if the project had been completed less the costs required for the completion of the project and the value of the property in its present state'. The plaintiff claimed also at par 27(f) additional fees amounting to $4,844.75 incurred by the plaintiff in attempting to reinstate the 10.5 metre height limit.

584 Having regard to the principles mentioned earlier, the plaintiff proceeded upon the assumption that as the claim for loss of opportunity in respect of all three causes of action was essentially the same, the damages in relation to each cause could be presented in an identical form.

585 It emerges from HTW Valuers v Astonland Pty Ltd [14] that such an assumption may not always be sound. However, the case at trial was fought upon the basis that the claim could be presented in this way. Thus, the structure of the contract claim reflected in [27] was replicated at [35] in respect of the claim in tort and at [40] in respect of the Trade Practices Act claim. Controversy at the trial centred upon first, the date at which the claim for damages was to be assessed, second, the manner of assessment of the various constituents of the claim (having regard especially to the valuation of the land, the costs required to carry the project into effect), third, the proper approach in valuing the alleged loss of an opportunity or chance in the present case (having regard especially to the likelihood of the project actually being undertaken and completed).

586 This brings me to the plaintiff's particulars of claim. The particulars in their final form were presented to the court in a document dated 5 September 2007 which was described as 'Plaintiff's Amended Further Particulars of Loss and Damage pursuant to the Order by the Honourable Justice Hasluck in Chambers on 28 March 2007'. This arose out of the adjournment of the trial in July 2006 owing to what was arguably a lack of particularity as to the constituents of the plaintiff's alleged loss. For ease of reference, I will simply call this document the 'plaintiff's particulars of loss'.

587 For ease of exposition, I will begin by looking not at the plaintiff's primary claim for loss assessed as at the trial date but at the plaintiff's alternative claim assessed as at December 2002. The reasoning underlying the presentation of the primary claim and the alternative claim is essentially the same but it will preserve a clear sense of chronology if I look initially at the alternative claim which has been formulated with an awareness that, as a general rule, damages for tort or for breach of contract are assessed at the date of the breach.

588 It was put to me, in the course of discussion at the trial concerning the alternative claim, that at first blush the date of the breach could be characterised as 18 December 2002, being the date on which the 18 December planning consent expired; hence, the use of the term 'December 2002' as a benchmark for calculating the loss on this scenario.

589 However, it was recognised by both sides at trial that the plaintiff's case was more extensive. The allegation was that the defendant had not only failed to ensure compliance with the conditions and/or obtain a new planning consent prior to 18 December 2002 but also had failed to obtain a new planning consent in the same form prior to the enactment of TPS6 on 29 April 2003. Against this background, counsel on both sides were prepared to accept that if a finding of default by the defendant was made in respect of any of these matters prior to the enactment of TPS6, the valuation evidence, which was ostensibly directed to the position as at the end of December 2002, could nonetheless be taken to be applicable in respect of the period running through to the end of April 2003. I will proceed accordingly.

590 In seeking to understand the plaintiff's claim for loss, it is important to keep in mind also some important factors.

591 First, as to construction costs, the plaintiff relies essentially upon the evidence of Scott Davison, who was the Business Development Manager at Pindan Constructions in 2002 and upon the evidence of a quantity surveyor, Paul McEvoy.

592 The thrust of Davison's evidence was that Pindan provided an estimate in May 2002 based upon the 18 December planning consent plans (SKO 3 to SKO 5). According to Davison, if the owner had entered into a building contract with Pindan in late 2002 or early 2003, the price for the building would have been the estimated amount of $2,007,500 plus 5% to 10%, with a construction period of between 12 to 18 months. Mr McEvoy's evidence was led to substantiate a construction cost figure of $2.7 million in the period August 2003 to November 2004.

593 Thus, as I will indicate shortly, the plaintiff's calculations proceed from the premise that construction would have been undertaken in the period August 2003 to November 2004, leading to a completed project consisting of three multiple dwellings on the subject property as at November/December 2004.

594 It follows that, December 2004 becomes a key date in determining the value of the land in the course of assessing the plaintiff's loss.

595 Second, it is an undisputed fact that the plaintiff continues to own and reside at the subject property and has not undertaken any alternative form of development upon the land in accordance with the planning controls allowed for by TPS6.

596 The valuation evidence presented to the court suggested that the value of land in the area has risen since the date of the breach, and thus a query might arise as to whether the plaintiff can be said to have suffered any economic or financial loss. The plaintiff therefore seeks to establish, as a central feature of his case, that he is seeking compensation for loss of the opportunity to build three multiple dwellings of the kind envisaged by the 18 December planning consent plans.

597 On the plaintiff's case he is not obliged, pursuant to principles of mitigation or otherwise, to undertake an alternative form of development that was neither agreed to nor contemplated by the parties.

598 It is against this background that the plaintiff's particulars of loss in respect of his alternative claim for $1,503,000 assert that, in calculating the value of the plaintiff's lost opportunity, the quantum of loss is to be calculated by reference to the loss of opportunity for the plaintiff to develop the land with three multiple dwellings, being the difference between the value of the developed land after expenses, and the value of the land as is (that is, the value of the land as at December 2004).

599 It is said that it is inappropriate to calculate the quantum by comparing the value of the land conditioned by TPS5 against the value of the land conditioned by TPS6 because that disregards the quantum of the loss of opportunity.

600 The plaintiff goes on to assert that he continued to own the land and units. If the plaintiff had sold the land as is then the interest he would have received on the sale proceeds would have been less than the increase in the value of the land as is, with the result that it is inappropriate to deduct interest income; put another way, by retaining the land the plaintiff has mitigated the amount of the claim.

601 The plaintiff's reasoning includes reference to: the fact that the penthouse unit was to be used as the plaintiff's residence; the cost of construction; the application of GST; the borrowing of the cost of construction; the construction period; the notion that it would be inappropriate to use estimates of future value as at April 2003 of the value of the completed units as at November 2004, because comparable or actual values can now be used - there is no need for the court to guess or speculate.

602 Further, it is said that no adjustment to the quantum of damages is required post-November 2004 on account of ongoing interest payable on the costs of construction of $2.7 million because of rent income and the probability of the value of the units increasing post that date.

603 After bringing to account the various considerations the plaintiff relies upon a calculation which describes the value of three multiple dwellings at November/December 2004 as $5,625,000. From this must be deducted the cost of construction in the period August 2003 to November 2004 of $2.7 million, interest on construction finance at 7.23% during the construction period of $122,000 and the value of the land at December 2004 of $1.3 million.

604 This gives rise to an amount claimed for loss of opportunity as at December 2002 of $1,503,000.

605 The plaintiff's reasoning concludes with these observations in the plaintiff's particulars of loss (alternative claim):

(xlii) The product of the above is at December 2002 the plaintiff owned land which had a value of about $1m. The alleged breaches by the defendant denied to the plaintiff the opportunity to develop his land so that by November 2004 it would have had a net value to him of $2,803,000.00, thus the plaintiff has lost $1,803,000.00.

(xliii) The calculation of the loss, if made at December 2002 would have required predictions and estimations but, because the calculations are to be made post November 2004, the plaintiff can rely on actual real estate transactions.

(xliv) It could be contended to account for that loss being made between December 2002 and November 2004 the $1,803,000.00 should be discounted, if so that should be at a rate no greater than 5.5% per annum.

(xlv) Alternatively it could be contended the estimated value of the land as is in November 2004 should be deducted from the $2,803,000.00, if so that estimated value can now be based on actual values and is no more than $1,350,000.00, therefore reducing the loss to $1,453,000.00.

(xlvi) However, no reduction should be made because calculating compensation at the date of the breach will produce an unjust result to the plaintiff because the loss of opportunity is permanent and ongoing, his real loss is far greater than $1,803,000.00 and on balance the quantum should not be calculated in a manner which benefits the defendant.

(xlvii) It may further be contended the plaintiff would have sold either or both of the ground and mid-floor units but if so the quantum of compensation would be the same because instead of having the units the plaintiff would have had the value of the units as at the date of completion in November 2004.

606 I will call these observations at pars (xlii) to (xlvii) the plaintiff's reasoning as to the alternative claim. I note in passing that in this reasoning the alternative claim is quantified at $1,803,000 but elsewhere, as indicated in earlier discussion, the claim is quantified at $1,503,000. This discrepancy arises because the value of the subject land as at December 2002 is loosely described in the reasoning at par xlii as 'about $1m' but is more exactly described in the plaintiff's numerical calculation (based upon the plaintiff's expert evidence) as $1.3 million. It is immediately obvious that once the difference of $300,000 is brought to account (as an amount to be set off against the 'as if complete' value of the land) the alternative claim is indeed $1,503,000.

607 The plaintiff's primary claim for $2,076,000 is based upon essentially the same reasoning as in his alternative claim. However, on this occasion, the assertion of loss and related calculation is assessed at the trial date of July 2006 upon the basis that in the special circumstances of this case, and having regard to the reasoning of the High Court in Johnson v Perez, just compensation requires that damages be assessed at the later date.

608 On this calculation the value of three multiple dwellings at July 2006 is said to be $7 million. From this must be deducted the cost of construction in the period August 2003 to November 2004 of $2.7 million, interest on construction finance of $122,000, interest on construction finance from completion of construction in November 2004 to trial date in July 2006 of $309,000, the value of the land at July 2006 of $1,875,000.

609 After crediting to the plaintiff rent at $52,000 on the ground floor and first floor units from December 2004 to July 2006 of $82,000 the amount claimed for loss of opportunity as at July 2006 is said to be $2,076,000.

610 On this occasion a claim for interest at 6% per annum pursuant to s 32 of the Supreme Court Act 1935 (WA) is made at the rate of $341 per day.

611 The plaintiff's reasoning in respect of the calculation comprising the primary claim concludes with these contentions:

(xvii) No adjustment to the quantum of damages is required post July 2006 on account of ongoing interest payable on the $2,700,000.00 because of rent income and the probability of the value of the units increasing post that date.

(xviii) The proper date of calculation of the loss or damage is the date of trial.

(xix) If the quantum of loss or damage is to be calculated on the basis the plaintiff would have sold either or both the ground and mid-floor units on completion in November 2004, the value of the units at that date were respectively $1,750,000.00 and $1,875,000.00.

(xx) If so the calculation in para 1 is readily capable of being adjusted to reflect what the plaintiff would have had in July 2006 to be the top floor unit plus one or both of the ground and mid-floor units and alternatively the cash from the sale of those units with consequential savings in interest and reduced rent.

612 In summary, then, as to the plaintiff's alternative claim for compensation in respect of the alleged loss of opportunity to construct three multiple dwellings on the subject property the plaintiff contends for a figure of $1,503,000 as the appropriate assessment of damages as at the date of breach (December 2002) plus accruing interest. As to the primary claim, the plaintiff contends for a figure of $2,076,000 as at the date of trial (July 2006) plus accruing interest.

613 In earlier discussion I referred to the evidence of Scott Davison from Pindan in regard to the construction costs. However, I must now turn to additional expert evidence adduced by the plaintiff in support of his contentions.

614 It follows from earlier discussion that the valuation evidence was directed essentially at establishing the value of the subject land in its undeveloped form and its developed form (that is, 'as if complete' in the manner envisaged by the project). The land was valued in its respective forms as at November 2004, being the moment when the project would supposedly have been completed.

615 The plaintiff adduced evidence from Philip Edwards to the effect that he is an experienced valuer. There is no need to review his credentials in detail. Suffice it to say that he is a licensed valuer who worked for the Valuer General's Office during the 1980s and since then has been employed by or associated with various companies and firms as a valuer of properties. He said that he has undertaken a broad range of residential valuations for private, government and financial institution clients and has been working with Hegney Property Valuations since January 2006.

616 In early 2007 Mr Edwards received instructions from the plaintiff's solicitors to prepare a valuation of the subject property on an 'as is' basis as at December 2002, November 2004 and July 2006 based upon comparable sales evidence. He was instructed also to prepare 'as if complete' valuations as at November 2004 and July 2006, by comparable sales evidence, in respect of the project in question; that is, a proposed three level compartment complex to be constructed on the subject property.

617 The Edwards' report dated 1 February 2007 was received in evidence as exhibit 53. In describing his methodology Mr Edwards observed (at par 1.0) that his valuation was made on the basis of 'market value' as adopted by the Australian Property Institute; that is, 'the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms' length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion'. Unless otherwise stated, all valuation figures were GST inclusive.

618 I note in passing that this definition is consistent with, and appears to be based upon, the well known reasoning of the High Court in Spencer v Commonwealth [1907] HCA 82; (1907) 5 CLR 418. An approach of this kind was not put in issue by the parties and I will proceed accordingly.

619 In describing his methodology Mr Edwards' went on to say also (at par 9.0) that the property was valued by him on a 'direct comparison' basis, being the analysis of sales of similar properties having regard to factors such as location, land area, topography and development potential. He prefaced his analysis of the sales evidence with a concession that not all properties examined were directly comparable. However, 'a range of evidence has been put forward to provide the best cross section for valuation purposes'.

620 Mr Edwards also made these observations at par 1.1 of his report:

1.1 ASSUMPTIONS

The 'As If Complete' valuations are based upon drawings prepared by Hames Sharley namely Project number 40893 sko 3 revG, sko4 rev5 and sko 5 revD.

Additionally and more importantly the 'As If Complete' valuations are based upon Hames Sharley sketches dated May 2002, drawing numbers DD 11 - 14 inclusive and DD 17 and 18.

Preliminary costings and quality of fitout was provided by Pindan Constructions in a letter addressed to Hames Sharley dated 21 May 2002. This will be discussed in further detail later in the report.

The valuation is prepared based on the following assumptions:

• Any improvements to the property have been granted the necessary approvals from the relevant authorities.

621 Having described his methodology, Mr Edwards reviewed the physical features of the land and the nature of the existing and proposed improvements. He noted that the most outstanding attribute about the subject property was the view corridor of the Swan River in a south westerly direction from the front of the allotment and restricted Perth city skyline glimpses/views to the north. He said that the highest ridge point on the existing house appeared to approximate with the floor level of the proposed unit 3. More expansive views could only be unlocked from a three level building.

622 The Edwards report referred also to planning controls and zoning. The author of the report noted that under TPS5 the land was zoned residential R35 with a height limit of 10.5 metres. The new and current TPS6 was gazetted on 29 April 2003. Density coding changed to R25/40 and the maximum height was reduced to 7 metres with the result that it is 'now not possible to construct the proposed development on the subject land'.

623 Mr Edwards observed in his report that retrospective valuations are more difficult to carry out than current valuations given the passage of time and the difficulty of obtaining accurate information and accurately gauging market sentiment and the relevant valuation dates. In this instance the problem was further compounded by the fact that the proposed development was to have been carried out in a more 'suburban' part of South Perth.

624 Mr Edwards went on to say (at par 8.0) that the major difficulty was obtaining the necessary comparable sales evidence for the 'as if complete' valuations. He made these observations:

Unfortunately there is nothing that is strictly comparable and we have therefore based our assessments upon settled sales of strata titled units/apartments in South Perth around the relevant dates, and supplemented these with sales of newly constructed houses on small lots, also around the same valuation dates. Suffice to say, the approach is very subjective.

625 It was against this background that Mr Edwards proceeded to his analysis of the sales evidence comprising various properties in South Perth. With respect to the 'as is' value at December 2002 the sales evidence ranged in value from a price of $1.5 million obtained for a property at 88 Mill Point Road, South Perth at the high end to $640,000 for a property at 53 Anstey Street, South Perth at the lower end. Some of the sales were in respect of town houses or a block of units. I note in passing that a 1950s built character brick and tile house of four bedrooms and one bathroom at 34 Karoo Street, South Perth was sold for $790,000 in mid 2002. Mr Edwards concluded that the fair market value of the subject property 'as is' as at December 2002 was $865 per square metre for a total value of $1,050,000.

626 Mr Edwards went on to review the sales evidence bearing upon the 'as is' value of the subject property subsequently and expressed the view that the fair market value of the subject property as at November 2004 was $1,100 per square metre for a total value of $1.3 million. The fair market value of the subject property as at July 2006 was $1,550 per square metre for a total value (rounded) of $1,875,000.

627 Mr Edwards then turned to an analysis of the comparable sales evidence bearing upon the 'as if complete' position as at November 2004 and as at July 2006.

628 Mr Edwards arrived at this conclusion in respect of the 'as if complete' November 2004 values at page 19 of his report:

Based on the above sales evidence we have adopted the following values:

Lot 1: 247m2 at $6000/m2 equals $1,500,000.

Lot 2: 266m2 at $6000/m2 equals $1,600,000.

Lot 3: 266m2 at $6750/m2 equals $1,800,000.

Total $4,900,000

629 Mr Edwards arrived at this conclusion in respect of the 'as if complete' July 2006 values at page 22:

Based on the above sale evidence we have adopted the following values:

Unit one - 247m2 @ $8,000/m2 = $1,975,000

Unit two - 266m2 @ $8,000/m2 = $2,125,000

Unit three - 266m2 @ $9,000/m2 = $2,400,000

Total equals $6,500,000

630 I pause to observe that in speaking to his report Mr Edwards confirmed that his 'as if complete' valuations were based upon the Hames Sharley sketches specified in par 1.1 of his report being the exhibit 9 18 December planning consent sketches and the subsequently prepared exhibit 20 sketches that were submitted to the City of South Perth in mid 2003 (ts 282). He confirmed also that the 'as is' figure at December 2002 of $1,050,000 was a valuation under TPS5, being the scheme in force at that time (ts 385).

631 Under cross-examination Mr Edwards confirmed that he was not instructed to address the question of the cost of carrying out any proposed development. He simply looked at the nature of the proposed development, and then, on a comparable sales basis, endeavoured to find comparable sales as at November 2004 and July 2006. He arrived at a per square metre rate and used that as a basis to determine the 'as if complete' values for the land as developed in accordance with the project.

632 As to the sketches and drawings upon which his reasoning was based, he 'took it' that the 'first drawings' (that is, the exhibit 9 18 December planning consent drawings) were more conceptual drawings which had some 'rough areas' which approximated with the areas that were in the second lot of plans (that is, the exhibit 20 mid 2003 plans). He agreed that he had not undertaken an exercise to compare the areas on the first set of plans with the areas on the other (ts 390). Mr Edwards understood, as indicated at par 1.1 of his report, that the second or exhibit 20 mid 2003 plans had been lodged with the City of South Perth. He said that 'so I'm assuming that what I valued was what was approved' (ts 391).

633 Mr Edwards agreed that he had only referred to the Pindan costings letter to get an appreciation in broad terms with what the development might entail. He did not have regard to the validity of the estimate as the cost of carrying out the project.

634 Mr Edwards agreed that the subject property was located some streets back from the South Perth foreshore. He agreed that there has been no development of the kind proposed in the immediate area of the subject property. However, he thought that it was a well thought out design for the particular site. He agreed that it was difficult to find comparable sales evidence for that type of development. However, he was of the view that the proposed project was a good use of the site as it opened up views to the east and to the west. He would characterise it as a low to medium rise development.

635 Mr Edwards acknowledged that generally the high density development was on the peninsular north of Mill Pont Road, and back in the suburbs in the vicinity of the subject property was lower to medium density development. When pressed, he agreed that historically there had been more of the proposed style of development on the peninsular north of Mill Point Road. He did not agree that his inability to find comparable sales evidence suggested that the market was not receptive to a development of the kind proposed in the 'suburban' area of South Perth where the subject property was located.

636 The cross-examiner then addressed the comparable sales evidence more specifically. It was put to Mr Edwards that when he spoke of there being no conclusive sales evidence he was saying in effect that there was no evidence sufficient to determine the question of value. He said that he had drawn some conclusions and applied what he believed was a fair rate to the subject property. In dealing with the 'as is' exercise as at July 2006 he agreed that the fourth and fifth items of sales evidence were some distance away in Salter Point and Attadale. He disputed that these two sales were effectively irrelevant to his analysis and said simply that it was part of the evidence being considered. He had not placed his reliance entirely upon those two sales. He agreed that they were inferior or slightly inferior as sales evidence.

637 Mr Edwards agreed under cross-examination that in addressing the 'as if complete' exercise in November 2004 he was seeking to come to a per square metre rate. In determining value he had sought to ascertain for each of the proposed units in the project a per square metre rate and had multiplied that by the area of each proposed unit by reference to the sketch plans before him. However, he agreed that the size of a unit for sale might make a difference to the price that someone might pay.

638 Mr Edwards agreed that some of the sales evidence being utilised might have superior views to the subject property. He agreed that a development feasibility or a hypothetical development exercise was an acceptable method of valuation and could be used as a backup for the comparable sales method. However, he had not undertaken such an exercise.

The plaintiff's expert witness - Paul McEvoy

639 In addition to the valuation evidence provided by Mr Edwards the plaintiff adduced expert evidence from Paul McEvoy who is a quantity surveyor. It will be recalled that in respect of both the plaintiff's alternative claim and the primary claim the plaintiff's reasoning brought to account the cost of construction in the period August 2003 to November 2004 which was said to be $2.7 million. The evidence of Mr McEvoy was directed to substantiating this figure.

640 It will not be necessary to traverse Mr McEvoy's credentials in their entirety. Suffice it to say that he has university qualifications from South Africa, he is a Fellow of the Australian Institute of Quantity Surveyors, and has had 39 years of quantity surveying experience. He is a director of the firm Rawlinsons (WA) which is said to be the longest established quantity surveying firm in this state. Mr McEvoy is also a director of Rawlhouse Publishing Pty Ltd, publishers of Rawlinsons Australian Construction Handbook and Rawlinsons Construction Cost Guide.

641 Mr McEvoy received instructions from the plaintiff's solicitor (Haydn Robinson) by letter dated 8 November 2006 and eventually prepared a first report by letter dated 15 November and a supplementary report by letter dated 17 November 2006. These written exchanges were received in evidence as exhibit 47 (ts 342).

642 It emerged during the course of Mr McEvoy's evidence (including cross-examination) that he is one of the authors of the Rawlinsons Australian Construction Handbook which has been put out annually since 1983 and is said to enjoy a wide circulation throughout Australia. It is regarded as the foremost publication on building costs in Australia.

643 Mr McEvoy said under cross-examination that the data included in the handbook comes from a list of suppliers, subcontractors and contractors that the authors contact once a year with a view to obtaining prices for the various items of work detailed in the text. These prices are validated also by reference to tenders being assessed by Rawlinsons in the course of the firm's work as quantity surveyors.

644 Mr McEvoy acknowledged that as to building price indices the handbook contains an introductory note to the effect that it represents a guide to percentage variation in building costs for each year since 1996. This facilitates the updating of known costs to 'approximate current levels'. The indices are not valid for housing, small projects or remote country work, nor do they reflect the relative cost differential of the various cities.

645 I note in passing that the introductory passage concerning 'How to Use This Handbook' concludes with a further passage to this effect:

At all times when using any of the foregoing figures, the nature and specific requirements of the particular project must be borne in mind.

646 Mr McEvoy described the written materials that were submitted to him so that he could undertake an all inclusive costing for the construction of three multiple dwelling units upon the subject land. He acknowledged under cross-examination that he did not have detailed drawings for construction or any mechanical, electrical, structural or hydraulic drawings. His estimate was based not upon measurements at the site but simply upon the drawings supplied to him with the operative point of reference being the exhibit 20 mid 2003 drawings; that is, 'the ones that were lodged with the City of South Perth in 2003' (ts 348).

647 Under cross-examination Mr McEvoy acknowledged also that in order to utilise data in the handbook he made his own judgment that it was appropriate to use the category of multi unit low density housing (at item 13.2.1.2 at page 56 of the handbook) and upon the basis that it would be a high standard finish. He was not instructed to make that judgment but assumed 'given the drawings, the architect, the area, it would be unlikely that it would be anything but a high standard' (ts 344). He acknowledged also that although the building costs range for the relevant category indicated by the handbook was $1,310 to $1,385 per square metre, he (Mr McEvoy) had selected a figure of $1,416 upon the basis that the basic figure in the handbook did not include air-conditioning.

648 In essence, Mr McEvoy said that the figure of $1,416 was made up of $1,350 representing the average between the high and the low figure specified for the relevant category but as adjusted for air-conditioning and after removing an allowance for contingency. His methodology was to measure the areas of the various components, having regard to the drawings mentioned earlier, and apply rates per square metre drawn from the handbook (adjusted where necessary) to the areas depicted on the subject plans. This methodology was applied in relation to the basement carparking, the units on three levels, a storage building and the other components listed in his report including external works.

649 It is against this background that I come now to the exhibit 47 McEvoy report dated 15 November 2006 which reads as follows:

20 Hensman Road, South Perth

We have estimated the cost of this project from design development sketches DD 11, 12, 13, 14, 17 and 18. The estimate is at prices current at the financial midpoint of the construction, i.e. June 2004 as requested in your letter dated November 8, 2006:

$

Basement car parking 409,000

Units on three levels 1,450,000

Storage building 8,000

Car parts 18,000

Lift 88,000

External works 240,000

*Professional fees 11% 244,000

Total (excluding GST) 2,457,000

GST 245,700

TOTAL (including GST) 2,702,700

*Includes architectural, structural, mechanical, electrical and hydraulic engineers.

The estimate excludes:

• Future rise and fall
• Principal's direct costs

650 Under cross-examination Mr McEvoy said that the item 'external works' pointed to works outside the building including demolition. He said that the external works could not be precisely calculated by reference to a dollar rate per square metre. One component of the overall figure was the sum of $126,000 made up of $45,000 for landscaping, $45,000 for retaining walls, $5,000 for demolitions and $21,000 for stairs. The item for stairs was in the nature of an estimate.

651 Under re-examination directed to the applicability of the rates drawn from the handbook Mr McEvoy said that he did not characterise the project in question as a small project and that in determining the appropriate rates he drew also upon his own expertise in arriving at an appropriate estimate.

The plaintiff's expert witness - Samantha Dempsey

652 The plaintiff adduced expert evidence from Samantha Dempsey who is associated with the firm known as Dempsey Real Estate carrying on business at 78 Mill Point Road, South Perth. The estate agency in question specialises in apartments, managements and provides services to a wide range of clients. She said that she had been asked to make an estimate of rental from the units to be constructed upon the subject land upon the assumption that they were completed in 2004.

653 She confirmed during the course of her evidence-in-chief that she made her estimate of the rental having regard to both the exhibit 9 18 December planning consent plans and the exhibit 20 mid 2003 plans. She proceeded on the assumption that each apartment would have an internal area of 250 square metres approximately. She said that in her opinion $1,000 per week could have been obtained for each apartment. It was possible that the units could have enjoyed 100% occupancy.

654 Ms Dempsey's report dated 9 November 2006 reads in part as follows:

The subject apartments would provide approximately 250sqm of quality 4 bed accommodation in a premier South Perth location.

Upon completion in 2004 the apartments would have been comparable with several along Millpoint Road and Ray Street South Perth that we had under management.

These rentals ranged in price from $800 - 1200pw for unfurnished long term accommodation.

Taking these rentals into consideration during 2004 and 2005 we would estimate loss of rental may have been in the vicinity of $1000 per week per apartment.

Gross rental per unit being $52,000 should the unit have full occupation for the year. Fees to be deducted would have been approximately 10% per annum per property.

It is impossible to advise demand for this particular property in 2004 and 2005, we did however lease properties in this price range and therefore it could have been possible that the units may have enjoyed 100% occupancy. (exhibit 48)

655 Ms Dempsey was cross-examined as to the qualifications appearing in her report. She acknowledged that as to the occupancy rate she was not really expressing a view one way or the other. She acknowledged that her report did not deal with the situation in 2006 but was dealing with 2004 only. Further, she had not seen any final detailed drawings as to how the project might look upon completion. She drew the figure of 250 square metres from the plans provided to her.

656 The plaintiff relied upon the evidence of these expert witnesses in order to substantiate the figures set out in the plaintiff's particulars of loss.

657 Thus, as to the plaintiff's alternative claim (alleged loss at December 2002) the 'as if complete' value at November/December 2004 contended for was $5,625,000. (The Edwards evidence put the 'as if complete' November/December 2004 value at $4.9 million).

658 It will be recalled that various amounts were debited against the alleged value of $5,625,000 in order to arrive at the alleged claim for loss of opportunity as at December 2002 of $1,503,000.

659 The first debit was $2.7 million in respect of the cost of construction in the period August 2003 to November 2004. On the plaintiff's case this figure is substantiated by the evidence of Mr McEvoy (as reflected in his exhibit 47 15 November 2006 letter) that the total cost of construction, including GST, would be $2,702,700.

660 Further debits were $122,000 in respect of interest on construction finance and the sum of $1.3 million in respect of the value of the land as at December 2004. The latter figure is said to be substantiated by the Edwards opinion that the fair market value of the subject property as at November 2004 was $1,100 per square metre for a total value of $1.3 million.

661 The plaintiff's alternative claim (December 2002) for $1.3 million was presented in his particulars of loss as follows:

Value of 3 multiple dwellings at November/December 2004

Cost of construction in the period August 2003 to November 2004

Interest on construction finance of $2,700,000.00 at 7.23% from August 2003 to November 2004 (limited to 7.5 months due to the loan drawdown being spread over the period).

Amount claimed for loss of opportunity as at December 2002

662 As to the primary claim (alleged loss at trial date of July 2006) the plaintiff's particulars of loss attributed a value of $7 million to the 'as if complete' property as at July 2006. In addition, on the credit side, the plaintiff brought to account the sum of $82,000 representing rent of $52,000 on the ground floor and first floor units from December 2004 to July 2006, being a figure based upon the exhibit 48 Dempsey report and related evidence. This produced a total amount credited to the plaintiff of $7,082,000.

663 Various amounts were then debited against the total figure in order to arrive at the amount claimed for loss of opportunity as at July 2006 of $2,076,000. Those debits included interest, the cost of construction of $2.7 million (based upon the McEvoy evidence) and land value at July 2006 of $1,875,000 (based upon the Edwards opinion; that is, the fair market value of the subject property as at July 2006 was $1,550 per square metre for a total value (rounded) of $1,875,000).

664 The plaintiff's primary claim (trial date July 2006) was presented in his particulars of loss as follows (per amendments at trial ts 187):

Cost of construction in the period August 2003 to November 2004

Interest on construction finance of $2,700,000.00 at 7.23% from August 2003 to November 2004 (limited to 7.5 months due to the loan drawdown being spread over the period).

Interest on construction finance of $2,700,000.00 at 7.23% from November 2004 to July 2006 (19 months at $16,267.00 pcm)

Rent at $52,000.00 on ground floor and first floor units from December 2004 to July 2006

Balance [ie amount claimed for loss of opportunity at July 2006]

665 As to the amount said to be due in respect of each claim the plaintiff included a claim for interest on the amount in question pursuant to s 32 of the Supreme Court Act 1935 (WA) at the rate of 6% per annum. I will deal with that aspect of the matter later.

666 In addition to the expert evidence I have just described, the plaintiff relied also upon the evidence of another valuer, David Stuart Liggins. However, for reasons which will become apparent, it will be convenient to deal with his evidence separately.

The plaintiff's expert witness - David Stewart Liggins

667 David Stewart Liggins said in evidence that he has been a licensed valuer since 1971 and has been involved in valuation work 'across the board' concerning residential, industrial and commercial properties. In the year 2000 he commenced his own business as a licensed valuer. He is also a member of the Board of Valuers for the WA Planning Commission. He said also that he is a senior sessional member of the State Administrative Tribunal relating to real estate and valuation issues.

668 Mr Liggins said that under instruction from the plaintiff's solicitors he prepared three reports in relation to this matter being a first report dated 9 June 2005, a second report dated 13 September 2005 and a third report dated 21 July 2006. Counsel for the plaintiff acknowledged that he would not rely upon the second report, with the result that it was not received in evidence. The evidence-in-chief of Mr Liggins was directed principally to his third report but with this to be considered in the context of his first report in which the subject property and relevant planning controls were fully described.

669 In the course of his evidence-in-chief, while speaking about his first report dated 9 June 2005, Mr Liggins acknowledged that the hypothetical development analysis set out at pages 15 and 16 of that report proceeded upon the assumption that the accommodation area of the three apartments amounted to 750 square metres. It was said at page 5 of that report (pars 1.1) the plans prepared by Hames Sharley dated September 2002 outlined the development of three apartments, each on one level above the other with lift access to basement carpark (at street level) for the parking of nine vehicles (three per apartment) plus storerooms, bin areas and visitor parking. Each apartment comprised approximately 250 square metres of enclosed accommodation plus balconies of 22 square metres on the north and 40 square metres on the south plus extensive paving and landscaping with reflection pool and water features on ground level. In other words, the aggregate of 750 square metres for the accommodation area was derived from the original or 18 December planning consent sketch plans.

670 He was then referred to those passages in his third report dated 21 July 2006 which suggest that the total accommodation areas amounted to 900 square metres. He said in evidence that 'those figures were basically from Psaros's tender' (ts 409).

671 He was then asked whether, for the purposes of his calculations in the third report, he had worked off accommodation comprising 900 square metres or accommodation comprising each unit being 250 square metres, being an aggregate of 750 square metres. He said in answer to that question: '750 square metres' (ts 410).

672 Mr Liggins was pressed about this in cross-examination; that is, about what might be regarded as an anomaly in his reasoning. The tenor of the answers he gave in cross-examination, which extended over many pages of transcript, seemed to be to this effect with respect to the various exercises reflected in his first and third reports: his third report was the operative point of reference; the third report at par 4 referred to accommodation areas of ground floor 295.41 square metres, first floor 302.18 square metres, second floor 302.18 square metres, giving rise to a total accommodation area of 900 square metres; these areas were used for the purpose of calculating construction costs in respect of the three residential units; nonetheless in bringing to account the sale proceeds or 'gross realisation' in respect of the units he had (as indicated in his first report) calculated the cost by reference to assumed areas of 250 square metres for each of the three units, being 750 square metres in all.

673 There also appeared to be some lack of clarity in his reasoning as to the meaning of the term 'market value'. On the one hand, he seemed to accept that the Institute's definition mentioned in earlier discussion (derived from Spencer's case) was apt. However, in the course of his evidence, he seemed to give credence to the notion that where the land was retained by the owner (as in the present case) for subjective reasons those reasons could affect the value. Thus, he observed at pars 5 and 6 of his report that the 'as is' value of the property at December 2002 was $1,505,000 if the plaintiff decided to proceed with a view to occupying the top unit but would be $1,277,000 if the property was sold to a third party.

674 Further, I feel obliged to say at the outset, it is apparent from the first and third Liggins reports that in presenting calculations based upon a hypothetical development method Mr Liggins had utilised a text described as the Ralph Beattie Bosworth Construction Costs Guide. He observed at par 2 of his third report that Ralph Beattie Bosworth, located in Kings Park Road, West Perth, was one of Perth's largest quantity surveyors and put out a compendium each two years of all relevant building budgets, monitoring and control of building construction costings in Western Australia.

675 The Ralph Beattie Bosworth Guide was obviously a text of the kind referred to by Mr McEvoy in his evidence. However, the fact is that I have no first-hand evidence before me as to the reliability of the Ralph Beattie Bosworth Guide, although no specific objection was taken to the absence of such evidence by counsel for the defendant.

676 It follows from these preliminary observations that at times it was difficult to obtain a clear and coherent picture of the opinions being presented by Mr Liggins. However, as the plaintiff seeks to rely upon his evidence, and certain of the Liggins figures appear to be reflected in the plaintiff's particulars of loss, I must review the Liggins evidence in some detail.

677 Mr Liggins said in his third or final report dated 21 July 2006 that further to his earlier reports he was instructed by the plaintiff's solicitor to value the subject property at three discrete dates being 18 December 2002, December 2004 and July 2006. As to the former, the property was to be valued, firstly, by the direct comparison method, secondly, by the hypothetical development method utilising the Ralph Beattie Bosworth Guide and, thirdly, by the hypothetical development method utilising the development cost specified in the 21 May Pindan letter and the 15 August Psaros letter.

678 Mr Liggins was instructed also to confirm the quarterly reports published by the Real Estate Institute of Western Australia indicating the increases in the value of real estate in South Perth in 2002 and 2006.

679 As I have indicated, in his reports Mr Liggins reviewed the nature of the subject property and referred to the planning controls. He observed at par 3 of his third report that, in his opinion, the improvements existing at the dates of valuation represented little or no added value to the land and the 'highest and best use' in accordance with zoning under TPS5 was the development of three apartments on the ground, first and second level above basement garages as per the Hames Sharley plans taking advantage of the maximum permitted height of 10.5 metres. He made these observations at par 4 of his third report:

Perusal of the Hames Sharley plans and the estimates from nominated builders indicate the following dedicated areas to each apartment;

Ground Floor - 295.41 square metres of accommodation plus balconies and courtyard areas of 235.41 m2,

First Floor - 302.18 square metres of accommodation plus balconies and courtyard areas of 160.35 m2,

Second Floor - 302.18 square metres plus balconies and courtyard areas of 84.45m2

Accommodation - 900 square metres

Courtyards and Balconies - 480 square metres

Garages - 316 square metres

Gross Area 1,696 square metres

The 'common areas' include escape stairs, service core, lift servicing all floors from the basement car park (each owner having 2 dedicated car bays and a storeroom) plus the ground level landscaped grounds outside the building envelope.

680 Having made various observations concerning the grant of planning consent and the nature of the planning controls, Mr Liggins in his report then proceeded to address the sales of comparable properties.

681 As to the crucial date of 18 December 2002, Mr Liggins considered that the value of the subject property by the direct comparison method would be $1.2 million. The value of the property at that date by the hypothetical development method utilising RBB construction costs would be $1.1 million. The value of the property by the hypothetical development method utilising the costs in the 21 May Pindan letter would be $1,340,000 and the value utilising the 15 August Psaros letter would be $1,340,000.

682 I note in passing that Mr Liggins' calculation concerning the RBB construction costs is set out as follows:

The Hypothetical approach allowing for indicative costs of Ralph Beattie Bosworth Quantity Surveyors addresses the relevant components of a development as follows:

Gross realisation that the sale of three apartments $4,500,000

Deduct selling and marketing costs 4% $180,000

$4,320,000

Profit and risk 10% $392,700

Total $3,927,300

Ralph Beattie Bosworth indicative costs to construct $2,569,400

$1,357,900

Deduct interest on development costs

7.5% for half the development period ie 6 months $112,800

$1,245,100

Interest on holding costs for the purchase of the land

7.5% for 12 months $91,200

$1,153,900

Deduct rates and taxes and settlement costs $8,000

$1,145,900

Deduct stamp duty on purchase of land 4% $46,465

Residual value of land (rounded) $1,100,000

In my opinion there are a number of vagaries with 'book' costs and the most appropriate assessment of construction costs is obtaining firm estimates from reliable builders.

683 Mr Liggins concluded in his third report that the value of the property as at December 2004 by the direct comparison method was $1.5 million. The value of the property at that date by the hypothetical development method utilising RBB construction costs was $1,565,000. The latter figure was arrived at by bringing to account items of the kind represented in the calculation mentioned earlier but, importantly, with the gross realisation of the three apartments on completion in December 2004 being estimated as $5,625,000.

684 According to Mr Liggins, the value of the property as at July 2006 by the direct comparison method was $1,950,000. The value of the property at that date by the hypothetical development method utilising RBB construction costs was $1,990,000. The latter calculation proceeds from the premise that the gross realisation in respect of the three apartments in July 2006 would have been $7 million.

685 As I have indicated, Mr Liggins was cross-examined at some length concerning the assumptions and calculations presented in his report. He was cross-examined also as to the meaning of the term 'market value'. During the course of the exchanges concerning that issue he eventually conceded, in the context of debate about the value of the property as at December 2002, that the market value would be what a knowledgeable third party purchaser was prepared to pay for the property, which would be the figure of $1.2 million. As to the calculation referred to earlier on the hypothetical approach with indicative costs drawn from the Ralph Beattie Bosworth Guide he acknowledged that he had not provided for GST in the exercise he was doing (ts 425).

686 It will be apparent from the observations I have made that I approach the evidence given by Mr Liggins with considerable caution both as to his calculations and as to his views concerning the comparable sales. I note in passing that he characterised his hypothetical development method as being essentially a means of checking the validity of the estimates he arrived at by the direct comparison method.

687 In summary, then, in seeking to understand the plaintiff's particulars of loss by reference to the evidence, I am inclined to proceed upon the basis set out in my overview of the plaintiff's expert evidence mentioned earlier. However, I am conscious that certain of the figures in the plaintiff's particulars of loss can be related to evidence given by Mr Liggins.

The defendant's expert evidence - David Moore

688 The defendant supported its case by calling an expert witness, David Brian Moore. He said that he commenced his employment in the late 1970s with a real estate firm based in South Perth. He was later employed as a property valuer with the R&I Bank. He then worked as a senior valuer for Brendan Hubble Pty Ltd, later known as Sellmans. He left that employment 17 years ago to join with two others in founding the firm Christie Whyte Moore. He has been a licensed valuer since 1984.

689 Mr Moore said in evidence that he was instructed by the defendant's solicitors to prepare three retrospective valuations of the subject property as at 18 December 2002 (the subject of his first report exhibit D10), as at 16 November 2004 (the subject of his second report exhibit D11) and as at July 2006 (the subject of his third report exhibit D12). In the course of preparing those reports he met the plaintiff, he inspected the property, he took photographs of the existing building and made enquiries at the City of South Perth as to the zoning and other planning controls.

690 Mr Moore went on to say that he was provided with sketch plans of an approved development being the exhibit 9 or 18 December planning consent plans. He was not provided with the exhibit 20 mid 2003 plans and therefore did not make any use of the latter plans in the valuations he carried out. He first saw those plans a week or so prior to giving his evidence at the trial (ts 449).

691 It appears from Mr Moore's first report that he was instructed to assess the market value of the subject property upon the basis that the attributes of the property included, first, approval to construct a three storey multiple development (that is, essentially in accordance with the project or exhibit 9 18 December planning consent plans); second, as if with a notional approval to construct a three unit grouped development.

692 In other words, the valuation requirement (at par 13.0 of the first report) was 'to assess the market value of the site assuming the approval obtained' (that is, a planning approval obtained for development of three multiple dwelling units over three levels) and, in the alternative, 'without the approval obtained and in accordance with the local planning scheme' (that is, the likelihood of an approval for three units as a grouped development).

693 It emerges from the reasoning in Mr Moore's report that, in his view, in order to properly assess the market value of the site, it was necessary to consider these alternative forms of development. Mr Moore defined market value in essentially the same manner as Mr Edwards (being a definition derived from Spencer's case) with the result that it was necessary to give proper weight to the characteristics and potential of the subject property, viewed objectively.

694 Mr Moore's reasoning, as I understand it, proceeded from the premise that as at 18 December 2002, in assessing the potential of the site, proper weight had to be given to the presence of the 18 December planning consent which allowed for three multiple dwellings on the site. However, because the exhibit 9 plans were sketch plans only, for which no final approval or building licence had been granted, the plans were possibly subject to change either at the desire of the developer or alternatively pursuant to council requirements. Accordingly, Mr Moore's valuation methodologies included consideration of an alternative form of development being a notional grouped dwelling development of the site comprising three units. In his view, a development of the latter kind would be consistent with TPS5 as the operative local planning scheme as at the date in question.

695 Mr Moore's assessment for group dwellings assumed a similar size unit construction as the Pindan proposal for the three multiple dwelling units. The Rawlinson Construction Cost Guide as at December 2002 suggested that the cost of constructing two level group dwellings to a high standard was well below that of a three level multiple dwelling complex.

696 Mr Moore said that the valuation exercise he undertook was primarily a comparison with market transactions or sales of property. He made use of comparable sales, first, as evidence bearing upon the value of development sites; second, as evidence bearing upon the value of units or apartments in South Perth. The sales evidence in the second case permitted him to gauge what the end value of a built form unit on the subject property in accordance with the exhibit 9 sketch plans might be (ts 450).

697 Mr Moore also made use of Real Estate Institute of Western Australia quarterly market data as a means of observing the trend in the market. He said that 'it it is most important to place yourself back in the market and the market circumstances that occurred at the date of valuation' (ts 450). However, he had no regard to the REIWA data in terms of making assessments of value.

698 Mr Moore accepted that the subject property was a good residential address. It was in an elevated position. Hensman Street shared that characteristic with streets nearby such as Ridge Street, Karoo Street and Forest Street which are regarded as good streets within South Perth. They have been predominantly single residential locations.

699 However, Mr Moore went on to observe that the prime positions within South Perth were properties on The Esplanade, on the Mill Point Peninsular and around Mill Point Road in elevated positions that overlook the park and back across Perth water. Those properties have uninterrupted views at least one way and often two ways. His understanding of the evidence in South Perth was that the positions that offer the most prestigious views achieve the highest prices for units or apartments within the locality. As one moves away from the most prestigious positions, there is a reduced desire on the part of buyers to pay the prices that they would pay for properties on The Esplanade.

700 Mr Moore was then invited to apply those observations to the circumstances of the present case in which three level multiple dwellings were proposed for the subject property in Hensman Street. He made these further observations:

It was interesting. I had a really good look at all of the properties in and near 20 Hensman Street. There hasn't been another development constructed either before the dates of valuation, during the course of the dates of valuation or subsequent to the dates of valuation that were on the scale of development proposed for this site, as per the sketch plans. I am very much of the view that the scale of development being contemplated for viability purposes and the price you would need to achieve for the end product was pushing it into a price range where firstly there was no evidence that anybody would pay that price in this locality which hence suggested that there would be an over-capitalisation of the development itself. (ts 452)

701 These observations which were made by Mr Moore in his evidence-in-chief, echoed comments made by him in his first report. He said there that prices achieved in Hensman Street were below those achieved in superior river frontage and aspect positions. In effect, there was somewhat of a price ceiling in Hensman Street which would impact upon what the market would be prepared to pay for constructed units. The pricing of the subject units in Hensman Street would therefore have to reflect a price advantage by comparison with superior river front positions.

702 Mr Moore went on to make these further observations at par 13 page 23 of his first report:

Our valuation methodology on a direct comparison basis has regard to this market sensitivity to potential over capitalisation of development in Hensman Street. An over capitalisation of this site in Hensman Street would occur where the quality and size of unit constructed exceeds what the market is prepared to pay in that location ... We have some concern that the intended development for this site represented an over capitalisation for the location as a consequence of the unit sizes and finish being quite expensive such that the end price derived for the units would be in excess of what the market was prepared to pay in the location. We are of the opinion that due to Hensman Street not having a river front position or elevated position with unrestricted river views in close proximity to the river the price constraints exist for units intended to be constructed the site.

703 Mr Moore referred to the proposal to construct units in accordance with the Pindan construction costs in respect of three multiple dwelling units having a total living area in the complex of 712 square metres. He concluded that the proposed development as costed by Pindan did not achieve an increase in site value. The market constraint in pricing in this non-riverfront position, and a developer's requirement for an acceptable development profit, impacted adversely on site affordability for the proposed development.

704 In Mr Moore's view, undertaking a lesser scale development with the end unit prices being considerably lower than that required under the Pindan proposal would provide for more certain development profit outcome and more certainty in achieving unit prices at the same underlying land value.

705 It was against this background that Mr Moore in his first report referred to various 'comparable' sales and proceeded to outline his methods of valuation.

706 Mr Moore's direct comparison methodology was based on applying an appropriate value, expressed in a rate per square metre of site area, having regard to all factors impacting upon the property's value, included the age and condition of the building, zoning and development density, location and other relevant attributes. The adopted rate per square metre was based on a direct comparison to sales of comparable properties analysed on a similar basis.

707 Mr Moore said that in his opinion very little difference in value existed for the property whether it be in accordance with the 18 December planning consent actually obtained or in accordance with the local zoning (that is, in accordance with the alternative or grouped dwelling form of development mentioned earlier). He noted that the planning consent obtained provided for development to an R25 density on the site. This was below the density development permitted under TPS5 of R35. In his opinion, it was a moot point as to whether a developer would undertake the multiple dwelling development (that is, in accordance with the 18 December planning consent) or a grouped dwelling development of the site at a lower construction cost.

708 In drawing together the sales evidence Mr Moore observed that a summary of the sale rates analysed as follows: 88 Mill Point Road at $1,042 per square metre and is a superior site; 34 Karoo Street at $910 per square metre was reflective of a much smaller site in one of South Perth's premier positions; 6 Parker Street and 3 Parker Street at $913 per square metre and $984 per square metre were in his opinion superior sites in a superior position. This pointed to a prevailing value as at 18 December 2002 of $850 per square metre of site area.

709 Mr Moore said that when the operative figure of $850 per square metre was applied to the subject property (with a site area of 1,212 square metres) a valuation by the direct comparison method produced a value of $1,030,200 as at 18 December 2002.

710 Mr Moore went on to say that a second valuation methodology employed by him was to undertake a hypothetical redevelopment valuation analysis for the property.

711 This methodology required the assessment of realisable values for each of the three units when completed. Having ascertained the total gross realisation figure, allowances were made for each of the expense variables associated with undertaking the development with a view to deducting the same from the total gross realisation figure and thus arriving at the residual land value of the site.

712 The expense variables included a deduction for GST on the sale of new units; selling, advertising, legal and settlement fees; developer's profit margin; construction and development costs; interest on the development costs; rates and taxes paid over the project; opportunity costs or interest holding costs on the land during the total project period and stamp duty on the initial land acquisition.

713 Mr Moore said that an allowance of 15% for profit and risk (as at 18 December 2002) was 'essentially the ratio or percentage of profit that a developer would be prepared to take or accept for undertaking the development risks attached to that particular development. In this case the development risks were quite high under both scenarios, notwithstanding that there was an approval' (ts 454).

714 Mr Moore noted that for the purpose of his assessment he had adopted the construction cost estimates provided by Pindan being an estimated total cost of some $2,007,000 inclusive of GST for the construction of three units having a total living area of 712 square metres being some 237 square metres each. He noted in passing that this living area was less than that indicated on the sketch plans supplied. He observed also that the units at 237 square metres each in area were substantially larger than most residential apartments constructed in South Perth. This had the desirable effect of providing more living accommodation in a sought after location. However, it resulted in the quantum of value escalating to a level whereby a pricing resistance might exist, particularly in 2002.

715 Mr Moore said that he had adjusted the building cost quoted by Pindan for GST and to the 18 December 2002 valuation date so as to arrive at a cost of $1,825,000 net of GST. In his view, for the purpose of project feasibility analysis, and hence calculating profit on cost, GST must be excluded from the construction cost. Developers and builders are normally registered for GST. The GST paid to the builders and other consultants inclusive within their cost is usually claimed back by the developer. He said also that due to the lack of finalisation of plans and building costs, he was of the view that ultimately the hypothetical development valuation methodology was quite subjective and at best a check methodology rather than a primary valuation methodology.

716 Mr Moore's hypothetical development method for three multiple dwellings was set out in detail at Annexure 6 to his report. His figure for gross realisation in respect of the three units on completion was calculated at the rate of $1,384,444 per unit (based on sales evidence) giving rise to a total gross realisation figure of $4,153,333. After bringing to account the items mentioned in earlier discussion, including construction costs of $1,825,000 and a 15% profit and risk allowance, the residual land value was said to be $981,125.

717 Mr Moore's hypothetical development method in respect of the notional or grouped dwelling alternative (three units but not on three levels) was set out in Annexure 7 to his report. The gross realisation on this occasion was calculated at the rate of $830,667 for each of the three lots producing a total gross realisation figure of $2,492,000. After bringing to account the various items mentioned earlier including (in this case) construction costs of $712,000 and a profit and risk allowance of 15% the residual land value was said to be $970,188.

718 In the course of his evidence-in-chief at the trial Mr Moore affirmed that his primary method of valuation was the direct comparison with sales evidence. 'The hypothetical development models are a check. They are not a primary method of valuation' (ts 454). He noted that the interesting thing about doing the two exercises was the indication that undertaking the three multiple dwelling units as approved 'didn't really add any value to the site above undertaking what the three two-double townhouse development would have achieved' (ts 454).

719 It was against this background that in the end, as appears in the valuation summary at par 15.4 of his first report, that Mr Moore adopted the figure of $1 million as representing the market value of the subject property as at 18 December 2002. His figure excluded any GST in that his valuation assumed that there was no GST payable on the sale of the property 'as is'.

720 Mr Moore's second report was constructed in much the same manner as his first report. He confirmed that he was instructed to assess the market value of the site as at 16 November 2004 upon the basis that its characteristics and potential included an approval to construct a three storey multiple development in the manner of the 18 December planning consent and, in the alternative, a notional approval to construct three units as a two storey grouped development in accordance with the local planning scheme.

721 Mr Moore presented details of the relevant sales evidence for the purpose of the methodology associated with his 'direct comparison - rate per square metre of site area method'. I note in passing that he appeared to give particular weight to a property at 18 Hensman Street which was contiguous to the subject property. It sold in January 2005, being some two months subsequent to the relevant date, for $1.8 million or some $984 per square metre. Mr Moore observed that 'the sale of the adjoining property which is similarly improved and offers virtually identical site aspect and views at $984 per square metre strongly indicates the market value of the subject property should not vary greatly from that' (at page 28 of the second report).

722 Mr Moore went on to say that, having considered all of the sales evidence, he was of the opinion that the underlying land value of 20 Hensman Street was $990 per square metre. Application of this rate to the site of 1,212 square metres resulted in a sum of $1,199,880. Mr Moore rounded this figure to $1.2 million and adopted it as the market value of the land as at 16 November 2004.

723 In accordance with the reasoning outlined in his first report, Mr Moore then proceeded to the hypothetical development method as a second valuation methodology.

724 On this occasion, in respect of three multiple dwellings, the gross realisation in respect of three lots at $1,613,867 per lot produced a total gross realisation figure of $4,841,600. After bringing to account adjusted construction costs of $2,246,575, and an adjusted profit and risk allowance of 12%, Mr Moore concluded that the residual land value was $1,102,065.

725 His calculation in respect of the hypothetical redevelopment of three two level group dwellings (that is, the alternative or notional development) was set out at Annexure 7. The gross realisation figure in respect of three lots at $949,333 per lot was $2,848,000. After bringing to account construction costs of $876,472 and a profit and risk allowance of 12% and the various other items mentioned earlier the residual land value was said to be $1,054,079.

726 It was against this background that Mr Moore adopted the figure of $1.1 million as the market value of the subject property as at 16 November 2004. His valuation excluded any GST which might be payable on the sale of the property.

727 Mr Moore's third valuation proceeded in the same manner as before but on this occasion with a view to establishing the market value of the subject property as at July 2006.

728 Having considered all of the sales evidence described in his third report, he was of the opinion that the underlying land value of the subject property as at July 2006 was $1,450 per square metre. Application of this rate to the site area of the subject property (that is, 1,212 square metres) resulted in a sum of $1,757,400. This figure was rounded off to $1,750,000 for the purpose of the direct comparison methodology.

729 Mr Moore's hypothetical redevelopment in respect of three multiple dwellings was presented in Annexure 6. On this occasion, three lots at $1,874,933 per unit produced a total gross realisation figure of $5,624,800. After bringing to account construction costs of $2,463,750 and a profit and risk allowance of 10% Mr Moore concluded that the residual land value calculated pursuant to this method was $1,451,948.

730 His calculation as to the hypothetical redevelopment in respect of three two level group dwellings was presented at Annexure 7. A gross realisation of $1,376,533 per lot produced a total gross realisation of $4,129,600. After bringing to account construction costs of $1,139,200 and a profit and risk allowance of 10% the residual land value pursuant to this exercise was said to be $1,709,779.

731 It was against this background that Mr Moore concluded that the market value of the subject property as at July 2006 was $1,750,000. His valuation excluded any GST which might be payable on the sale of the property.

Observations on Mr Moore's evidence-in-chief

732 It will be useful at this stage to pause briefly and contrast the evidence as to value given by Mr Moore with certain of the figures set out in the plaintiff's alternative claim (December 2002) and the plaintiff's primary claim (trial date July 2006), being the figures presented under the heading in this judgment: 'Overview of plaintiff's expert evidence'.

733 As to the alternative claim, the plaintiff contends that the value of three multiple dwellings at November/December 2004 was $5,625,000. This, in effect, was a gross realisation figure based upon evidence given by Mr Edwards and Mr Liggins. (The view of Mr Edwards was that the 'as if complete' November 2004 value of the three units was $4.9 million).

734 On the other hand, as appears at Annexure 6 of his second report, Mr Moore was of the view that the gross realisation of three multiple dwellings as at November 2004 was $4,841,600. It emerges, then, that there is not a large difference between the figures contended for by Mr Edwards and Mr Moore respectively as to this item but the figures referred to by these valuers are well below the Liggins' figure of $5,625,000 contended for in the plaintiff's particulars of loss.

735 I note also that there is a significant difference between the supposed cost of construction of $2.7 million mentioned in the plaintiff's particulars of loss as to the alternative claim (being a figure based upon the McEvoy evidence) and the construction costs of $2,246,575 relied upon by Mr Moore in his calculations.

736 Further, the plaintiff's alternative claim suggests that the value of the subject property at December 2004 was $1.3 million. (This figure can be related to the Edwards evidence that the fair market value of the subject property as at November 2004 was $1,100 per square metre for a total value of $1.3 million).

737 This contrasts with the Moore evidence that the market value of the subject property as at 16 November 2004 was $1.1 million.

738 As to the plaintiff's primary claim, the plaintiff's case is that the value of three multiple dwellings as at July 2006 was $7 million. In other words, this is the gross realisation figure obtained upon selling the 'as if complete' units. (This is referable to the Edwards evidence at page 22 of his report that the July 2006 values amounted to $6.5 million).

739 The plaintiff's figure of $7 million can be contrasted with the gross realisation figure for three lots of $5,624,800 referred to by Mr Moore at Annexure 6 of his third report.

740 In the plaintiff's primary claim the cost of construction is again said to be $2.7 million (based on the McEvoy evidence) which compares with the construction costs of $2,463,750 utilised by Mr Moore.

741 The plaintiff's particulars of loss in respect of the primary claim allege that the value of the land as at July 2006 was $1,875,000, being a figure which must be brought to account as a debit. This can be contrasted with the figure of $1,750,000 which is said by Mr Moore in his third report to be a market value of the land as at July 2006.

742 The general tenor of the evidence given by Mr Moore suggested that the differences between the respective positions of the parties is influenced to a significant degree by Mr Moore's perception that a property in Hensman Street, albeit in an elevated position and in a good residential area, could not attract the prices likely to be paid for properties on the river front; that quality apartments upon the subject property might be restricted to a 'ceiling' value imposed by the less favourable situation of the proposed development. In other words, a development of the kind proposed could be regarded as a form of over-capitalisation of the site.

743 It seems that differences between the figures contended for by the parties are also explained to some extent by differences between them as to the calculation of construction costs and the areas of accommodation to be provided by the proposed development.

744 It is with these observations in mind by way of overview that I come now to the cross-examination of Mr Moore.

745 The cross-examiner began by taking Mr Moore to that part of his third report (exhibit D12) concerning the July 2006 valuation in which Mr Moore had multiplied 712 square metres at $7,900 per square metre to arrive at a total gross realisation figure of $5,624,800.

746 Mr Moore was asked whether, in the event of it being held that the operative area was 727 square metres, the same calculation would be made but with the final figure (representing the gross realisation value) inevitably being increased owing to the extra metreage. He acceded to this in a qualified way but observed that 237 square metres was already a very large unit for this location. This meant that if there was any significant increase in the size of the unit he would have an increasing concern about the market's willingness to pay the price produced by such a calculation.

747 He was then pressed about references to 727 square metres of living area elsewhere in the third report. He said that he arrived at this figure by measurements extracted from details on the exhibit 9 sketch plans. He went on to say that it was not appropriate to use 727 square metres in a building cost sense and in a valuation perspective, because all areas were taken as internal measurements. He made reference to the Pindan costing at 712 square metres and said that he had elected to use that as an appropriate costing for a hypothetical development model. It also seemed to fit in with being a slightly lesser measurement than an external measurement and he therefore concluded that 712 square metres was the appropriate area to use. He said that when strata apartment units are bought and sold, they are bought and sold having regard to the strata area of the unit which is measured by reference to the internal surface of the walls (ts 465).

748 Mr Moore referred also to the R35 position under the local planning scheme and a maximum permitted plot ratio of 0.6. The site could only be developed with a maximum of 727 square metres. His understanding was that a local authority would use gross building area, measured externally. He accepted that if he were wrong about the plot ratio issue, so that a landowner could build beyond 727 square metres, this would affect his appraisal. In other words, if you could build more on the site it would affect the valuation.

749 The cross-examiner then took Mr Moore to the details of the planning controls. After various exchanges Mr Moore eventually agreed that he may have been mistaken when he ascribed a maximum plot ratio of 0.6 to the subject property after the new R codes came in, and that as to R25 with respect to maximum plot ratio no restriction was specified (ts 472).

750 The cross-examiner pressed Mr Moore as to the validity of his approach in using the same value rate for each of the three proposed units. He responded by returning to his concern that it might be difficult to find a buyer prepared to pay a top price for a penthouse unit in that location. Mr Moore was then referred to his second report and questioned about a perceived inconsistency between the view he had just expressed and a differentiation of value ascribed to the different levels in the second report. He contended that this was an appropriate appraisal having regard to the 2004 market evidence but this view did not necessarily translate to the 2006 market.

751 Mr Moore was asked whether he agreed with the proposition that for an extra $300,000 a prospective purchaser would pay to gain unimpeded views in three different directions; that is, a purchaser in July 2006 would have been willing to pay $300,000 more to be in the top unit than on the ground floor. Mr Moore responded that in this instance he doubted that such an outcome would occur. His concern was again the issue of 'value compression', namely, that if you reach a ceiling of value and you get compression in the sense that a purchaser will not pay more. As at 2006 he was not prepared to ascribe any additional value to being on the top floor as opposed to being on the first floor (ts 478).

752 The cross-examiner noted that Mr Moore's 2002 'as is value' was $1 million (his 'as if complete' value $4,153,333); his November 2004 'as is value' was $1.1 million (his 'as if complete' value was $4,841,600); his July 2006 'as is' value was $1,750,000 (his 'as if complete' value was $5,624,800). This indicated an increase in the 'as is' values between December 2002 and 2004 as being from $1 million to $1.1 million; that is, an increase of about 10%. However, the increase in the 'as if complete' values in that period was approximately 16.5%. Mr Moore said that the sales evidence explained and justified the difference.

753 The cross-examiner then noted that as to the comparison between November 2004 and July 2006 there was an increase in the 'as is' value of 59% from $1.1 million to $1,750,000. The 'as if complete' values in that period had gone from $4,841,600 to $5,624,800, being an increase of 16% or so. Mr Moore was asked on what basis he attributed the discrepancy between 59% in respect of the 'as is' value in relation to the 16% increase in the 'as if complete' scenario. Mr Moore said again that the sales evidence explained and justified the supposed discrepancy. Moreover, he continued to have concerns about over-capitalisation. This explained why there would be a relatively small increase for developed units on a site at this location.

754 The cross-examiner then asked on what basis Mr Moore reached an increased figure between November 2004 and July 2006 of 59% when the change suggested by the REIWA publications in respect of the South Perth area was 14.9%. Mr Moore said that the REIWA publication was concerned with median prices, being the mid-point in a range of data across South Perth properties in various areas, and for that reason could not be treated as decisive. Moreover, as indicated previously, he continued to be concerned about the over-capitalisation factor.

755 In the course of re-examination Mr Moore clarified what he meant by the term 'value compression'. He responded as follows:

Well, it really means that if you're towards the ceiling or upper level of what a property could attract in the market, then it doesn't matter how much more features, facilities, size you add to that property, be it a unit, be it a house, the market won't necessarily pay any more, so ultimately if you get two properties that are quite different in scale and in quality selling at very similar prices, because one has been overcapitalised, you're actually getting a compression in values. (ts 485)

756 He went on to say that, in his opinion, value compression as a factor applied to the subject property at each of the three valuation dates dealt with in his three reports.

757 In the course of earlier discussion I held that there was a causal link between the breaches of duty complained of and compensable economic loss to the plaintiff in the form of a loss of opportunity to complete the project, but without attempting at that stage to assess the quantum of the loss.

758 This finding was made pursuant to the precept that loss of a chance is compensable even if its realisation is unlikely on the balance of probabilities: Malec v JC Hutton Pty Ltd. However, it emerged from a consideration of Sellars that if loss of a commercial opportunity is proven, then damages for deprivation of a commercial opportunity should be ascertained by the court's assessment of the prospects of success of that opportunity, had it been pursued.

759 It follows that it is appropriate to begin the process of assessment by seeking to determine the value of the benefit foregone on the assumption that the benefit would have been realised and then, pursuant to the reasoning in Sellars, to examine the prospects of success by reference to the surrounding contingencies and possibilities.

760 To my mind, the first step in the circumstances of the present case is to make a finding as to the appropriate date for the assessment of damages. I touched upon the decided cases in that regard in earlier discussion.

761 The general rule in contract is that the appropriate time at which to assess damages is the date of breach. For example, where goods are sold and in breach of the contract there is a failure to deliver them, the damages are, prima facie, the difference between the contract price and the market at the date of the breach. In Hocking Stuart (Hawthorn) Pty Ltd v Vernea [2005] VSCA 129 Byrne AJA of the Court of Appeal observed at [9] in respect of a failed land transaction that, as a general rule, the assessment is undertaken as at the date of breach, although this is not a universal rule.

762 Prima facie, in the case of a contract for the supply of professional services the general rule is appropriate in regard to breaches of common law and statutory duties of the kind complained of in the present case because the relationship and responsibilities of the parties are essentially conditioned by the contractual relationship.

763 The most clearly established departure from any principle requiring the assessment of damages at the time of the breach or of the wrong is in personal injury and fatal accident cases. In cases of that kind, as emerges from the reasoning of the High Court in Johnson v Perez, damages can justly be measured as at the date of trial or, more accurately, the date of judgments because the assessment of damages at the latest possible time enables circumstances which would otherwise have been mere prophecies to be reviewed or relied upon as facts.

764 Likewise, it has been held in the context of commercial litigation, as in Kizbeau Pty Ltd v WG & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281, there may be circumstances in which it is permissible to take into account subsequent events in the course of assessment. For example, in that case the court took into account relevant events that occurred after the purchase of the business in question which bore upon the determination of the value of the business at the date of purchase. Thus, in Kizbeau it was thought appropriate to take into account amendments to a planning scheme that occurred after the purchase of the business and had an effect upon what activities could be conducted on the premises.

765 In the present case, I am not persuaded that a departure from the general rule is justified. My principal finding against the defendant is that it was in breach of various duties prior to the gazettal of TPS6 on 29 April 2003 in failing to warn or inform the plaintiff about the potentially adverse consequences of such a gazettal. The case was argued at trial by both parties upon the basis that for the purposes of calculating loss, and with a view to avoiding unnecessary complexity, the date of breach in respect of such a finding could be calculated back to December 2002. It was on that basis that the plaintiff's alternative claim was presented, and challenged by the defendant, by opinions as to value referable to that benchmark.

766 It is apparent that the alternative claim contains various elements of prophecy as to future events, but these are of a kind that are familiar in cases involving the expression of expert opinions. As it happens, the experts have been in a position to take account of actual comparable sales in formulating their opinions and estimating loss. This is all part of a familiar process of estimating loss in a case where opinions as to value are required.

767 To my mind, in circumstances where a building programme was not actually embarked upon, and where the gazettal of TPS6 does not impact upon the purported values in respect of an 'as if complete' valuation of the project, because the valuers are presuming the existence of a project completed in accordance with a consent granted under TPS5, it cannot be said that there are subsequent events of the kind alluded to in Johnson v Perez and Kizbeau. There are no subsequent events which can truly be said to reflect or bear upon the loss earlier suffered. Compensation for delay in obtaining relief is ordinarily provided for by an allowance of interest.

768 Accordingly, in the present case, I am of the view, and so find, that the damages are to be assessed at the date of breach. This means that the primary point of reference as to the first part of the task before me is the plaintiff's alternative claim (alleged loss as at December 2002) for loss of opportunity, being a claim for loss of $1,503,000. The calculation underlying that figure is the first of the two calculations appearing under the heading 'Overview of plaintiff's expert evidence' earlier in this judgment.

769 In effect, as I noted in earlier discussion, the plaintiff proceeds from the premise that the plaintiff would have completed the project by November/December 2004 and the figure claimed represents the value of the economic benefit he would have had but had to forego due to the defendant's breach of duties.

770 In the alternative claim the value attributed to three multiple dwellings as at November/December 2004 is given as $5,625,000. I have reviewed the evidence bearing upon this figure. It emerges from earlier discussion that the figure in question is based upon the evidence given by the plaintiff's valuer, Mr Liggins. However, for the reasons given previously, I have reservations about the Liggins evidence and am not persuaded that such a figure can be adopted. In that regard, it is material to note that the evidence given by the plaintiff's other valuer, Mr Edwards, was that the 'as if complete' value of the three units was $4.9 million. This compared to the evidence given by Mr Moore on behalf of the defendant that the gross realisation of three multiple dwellings as at November 2004 was $4,841,600.

771 The reasonably close relationship between the figures given by Mr Edwards and Mr Moore reinforces my view that the Liggins figure should be treated with caution. Moreover, as I look at the comparable sales relied upon by the valuers, I incline to the view that there is some force in the opinion advanced by Mr Moore on behalf of the defendant that a site of this kind, in a part of South Perth set well back from the riverfront (albeit on rising ground), could be over capitalised.

772 Further I give weight to Mr Moore's view that the size of the proposed luxury apartments might lead to what he described as price compression. I am conscious also that Mr Edwards had to acknowledge that it was difficult to identify precisely equivalent comparable sales because a development of the kind proposed had not been undertaken in that part of South Perth.

773 Accordingly, for all these reasons, in the end, I am of the view that the evidence of Mr Moore should be preferred. Thus, I consider, and so find that the value of three multiple dwellings as at November/December 2004 of the kind proposed should be regarded as $4,841,600.

774 It then becomes necessary, as appears from the alternative claim, to set off against the value of the completed project various items commencing with the cost of construction in the period August 2003 to November 2004. The figure contended for by the plaintiff in that regard, is $2.7 million in which respect the plaintiff relies principally upon the evidence of Mr McEvoy.

775 It emerges from earlier discussion that the evidence concerning the cost of construction is not entirely satisfactory. Building plans sufficient to obtain a building licence, and reflecting the input of professional consultants, were never finalised. It emerges from the McEvoy evidence that he was left to calculate the building costs upon the basis of various assumptions made by him as to the quality of the premises and having regard to inferences based upon the schematic plans that were in fact prepared.

776 In my view, the evidence given by Mr Davison from Pindan cannot be regarded as a satisfactory basis for checking the opinion expressed by Mr McEvoy because the Pindan estimate was prepared in May 2002 and did not purport to be a firm quotation. It was simply 'indicative information' (ts 358). Further, and in any event, the Pindan estimate is considerably less than the figure contended for by Mr McEvoy. On the other hand, I accept that Mr McEvoy is an experienced quantity surveyor and there is no challenge to his credentials in that regard.

777 In the end, notwithstanding a degree of hesitation about his evidence, arising from cross-examination and the matters I have mentioned, I am inclined to give weight to his evidence and to find, as I do, that the cost of construction in the subject period would have been $2.7 million. In arriving at that conclusion I am conscious also that I was not presented with persuasive evidence to the contrary.

778 Having regard to the evidence given by Mr Davison from Pindan I will accept also that if the required planning consent was in force, and detailed building plans had been finalised, the project could have been completed within the subject period of August 2003 to November 2004. I consider that there is sufficient evidence before me to justify a finding that interest on the construction finance of the kind contended for in the plaintiff's alternative claim calculation of $122,000 is justified.

779 It appears from the plaintiff's alternative claim calculation that the final item to be set-off against the value attributed to the 'as if complete' project is the value of the land as at December 2004.

780 I noted in earlier discussion, especially under the heading Observations on Mr Moore's evidence-in-chief, that there was a divergence of opinion between the valuers as to this item.

781 The figure contended for of $1.3 million as the purported value of the land at December 2004 was based essentially upon the Edwards evidence that the fair market value of the subject property as at that date was $1,100 per square metre, making a total value of $1.3 million. This contrasted with the Moore evidence that the market value of the subject property at that date was $1.1 million. Again, for the reasons I have given previously, I give greater weight to the evidence of Mr Moore. I am not convinced that the potential of the property was of the order contended for by Mr Edwards and, in my view, there is little in the sales figures relied upon which directly underpins his estimation of value. Accordingly, I prefer the evidence of Mr Moore and will find that the value of the land as at December 2004 was $1.1 million.

782 The items to be set off against the value of the project as if complete amount to $3,922,000. When this figure is set off against the figure I have accepted as the value to the completed project, namely, $4,841,600 the difference amounts to $919,600. This contrasts with the amount claimed for loss of opportunity as at December 2002 in the plaintiff's alternative claim calculation of $1,503,000.

783 I note in passing that in the plaintiff's alternative claim the difference between the value of the project as if complete and the three debit items to be set off against it is described as the amount claimed for loss of opportunity. It follows from earlier discussion that, in my view, having regard to the reasoning in Sellars, the plaintiff's so-called claim for loss of opportunity should properly be characterised as the amount of the economic benefit that might have been available to the plaintiff if the project had been completed or, putting it another way, if the opportunity had fully materialised. However, in a case involving a claim for loss of opportunity, as I have indicated, damages for deprivation of the opportunity must be ascertained by the court's assessment of the prospects of success of that opportunity, had it been pursued.

784 Accordingly, I must proceed to the second step of determining whether the potential benefit of $919,000 would have been realised, having regard to the surrounding contingencies and possibilities. However, before doing so, for the sake of completeness, I must deal briefly with the defendant's plea that upon the basis of Mr Moore's evidence, the proposed development did not add value to the site, with the result that the plaintiff suffered no loss.

785 If I understand the defendant's argument correctly, it is said, having regard to Mr Moore's figures, the undeveloped value of the land was $1 million as at 18 December 2002 and $1.1 million as at 16 November 2004; his hypothetical development method, utilizing the Pindan estimate, showed residual land values at the same dates of $981,125 and $1,102,065 respectively, which suggested that no benefit was to be gained by undertaking the development.

786 It is true that I have been prepared to give some weight to the evidence of Mr Davison in regard to the general feasibility of the project and the length of the construction period. However, in the end, I was not satisfied that the Pindan 'estimate' could be characterised as a reliable computation of the construction cost. I have held that the higher McEvoy figure of $2.7 million for construction costs should be treated as the operative point of reference in calculating the quantum of the alternative claim (although, admittedly there was no evidence before me that a builder was prepared to complete the project by November 2004 at that price). This means that the contrast between the developed and undeveloped values attributed to the land on the Moore figures is flawed.

787 Further, and in any event, there is evidence before me, which I accept, that upon completion of the project the plaintiff would have been in possession of a property capable of generating substantial rental income, in addition to allowing for his proposed residential occupation of the top floor. It follows that even if the capital appreciation of the property was fixed at $1,102,065 (as contended for by Mr Moore) or at $919,000 (as determined by me), being amounts which are either equal to or less than the undeveloped value of $1.1 million attributed to the land by Mr Moore (which was accepted by me), it cannot necessarily be said that the project was not worth pursuing and would not have been pursued.

788 The plaintiff would only be precluded from obtaining relief upon the basis that there was no causal connection between the breaches of the various duties complained of and any compensable economic loss if it had emerged from the evidence that the costs of the project would probably exceed the value of three multiple dwellings, leaving the plaintiff with no gain at all.

789 However, as it happens, I have been satisfied upon the balance of probabilities that by completing the project in accordance with the scenario and timeframe contended for by the plaintiff he would have secured a commercial benefit of $919,000. The size of that figure, compared to the value of the land in its residual or undeveloped state, can be regarded as a factor or contingency bearing upon the plaintiff's ambivalence and the prospects of the project being completed, but it does not, of itself, rebut the plea that there was a loss of a commercial opportunity of at least some value.

790 It is apparent from Bellgrove's case that a plaintiff who has secured to himself certain rights in respect of a building project is not obliged to undertake an alternative development (or, likewise, to refrain from any development) simply because such a course might be thought to produce a better financial outcome. In Cottrill v Steyning & Littlehampton Building Society [1966] 1 WLR 753 where both parties were aware that the subject land was to be developed for a profit, damages were assessed at the market value of the land at the date of completion less expenses attributable to carrying out the development.

791 It is for these reasons that I am of the view that the approach to the assessment of damages reflected in the plaintiff's alternative claim is the proper approach, subject to a further evaluation being made (having regard to the surrounding contingencies and possibilities) as to the prospects of the opportunity being fully realised.

Findings as to contingencies and possibilities

792 In the course of previous discussion I have reviewed the evidence bearing upon the strength of the plaintiff's commitment to the project. I have accepted, because it was an agreed fact at the trial, that the plaintiff had the financial means to complete the project. However, it is apparent from evidence I have touched upon previously that, quite understandably, he was not prepared to write a blank cheque in respect of the project. He said in evidence that certain of the estimates that were presented to him were unacceptable.

793 I drew attention also to certain matters evidencing the plaintiff's ambivalence concerning the project during the course of 2002. I concluded eventually that he would have been minded to proceed with the comparatively inexpensive task of obtaining a fresh consent under TPS5 if he had been properly informed that the gazettal of TPS6 could bar completion of the project. However, this does not necessarily lead to the conclusion that the project would have been completed within the timeframe reflected in the plaintiff's alternative claim. The plaintiff's claim is based upon that timeframe.

794 The decided cases reflect an awareness of the difficulty facing a court in trying to make an evaluation of the contingencies and possibilities. The cases indicate that it is permissible and appropriate for the trial judge in a case of this kind to make an informed estimate as to the prospects of the opportunity being pursued to a successful conclusion. I will proceed accordingly.

795 I am conscious that the plaintiff did not at any time appear to have a pressing personal need or financial incentive to complete the project. By his own admission he was comfortably accommodated in the existing residence upon the property and that remains his position today. It does not appear from the evidence that either he or any member of his family had an immediate requirement for accommodation in the completed project, although, as I have found, it was a project or ambition he wished to fulfil if that could be achieved. He had the financial means to achieve his ambition but was not willing to spend money recklessly or unwisely.

796 I have to take account of the fact also that upon the basis of the evidence before me I cannot necessarily assume that final building plans would have been prepared to his satisfaction by August 2003 or that a building programme would have been carried out with sufficient expedition to enable completion by November/December 2004. In other words, although I have been prepared to hold that a building programme could have been completed within that time, I consider that it is necessary for me to review certain contingencies and possibilities bearing upon the question of whether construction would have commenced in mid 2003 and been completed in November/December 2004 as envisaged by the plaintiff's alternative claim.

797 To my mind, the matters evidencing the plaintiff's ambivalence are significant. There is force in the defendant's testimony that the plaintiff's interest in the project waxed and waned. He, himself, admitted that by September 2002 his commitment to the project was faltering, 'although he never tossed the idea out of the window' (ts 287). It is true that he obtained a facility for bank finance of $2.8 million in late September and had the means to complete the project at that price but he thought the Psaros figure of $2,713,538 was too high and hoped that the project could be brought in for $2.4 million (ts 284). And yet, the McEvoy evidence shows that in reality it was more likely to be the former figure, and possibly higher. The plaintiff said that the Zorzi estimate of $3.3 million was out of the question (ts 267). Indeed, he almost fainted. Ms Cunningham gave evidence that he was nervous about the project and showed little interest in the detail of the plans (ts 325). The plaintiff accepted, under cross-examination, that the trees were never entered on the municipal registry (ts 244). This creates a degree of doubt as to whether he was prepared to accept that condition.

798 In addition, to the considerations I have mentioned there is a degree of ambiguity in the evidence before me as to whether a builder could in fact have been engaged to embark upon and complete the project by November 2004 in the manner envisaged by the McEvoy estimate. It is open to me to infer from the Davison and McEvoy evidence that such an undertaking was feasible, but I do not have direct evidence from a builder to that effect. I understand from Sellars and the other decided cases that it is permissible for the trial judge to make an informed appraisal of the prospects in that regard.

799 To my mind, it follows from all of this that there was a real likelihood that even if the plaintiff had been warned, and had pressed ahead to obtain a fresh planning consent before TPS6 was gazetted, he might ultimately have been disinclined to proceed with the project. In arriving at this conclusion I give weight also to Mr Moore's opinion that the development represented a risk of over-capitalisation of the site, with the corollary that the land could prove to be as valuable at November/December 2004 in its undeveloped state. The plaintiff's actions suggest that the plaintiff was a cautious man and the evidence as a whole gives me reason to believe that considerations of this kind might, in the end, have deterred him from demolishing his existing home and putting his hand to a building contract at a price in the order of $2.7 million which might not have produced a sufficient financial benefit.

800 Further, in the period after 3 September, although the plaintiff evinced a wish to proceed, the evidence reveals further uncertainty as to what was to be the final form of the development. The footprint of the building may have remained the same but there were significant internal changes, and these had to be approved by a man who, on his own admission, found it frustrating to deal with such matters and to focus upon the details.

801 In this context I give weight also to the evidence from Mr Davison from Pindan who said, under cross-examination, that at a stage where only a planning consent had been obtained he could foresee months of negotiation work with the architect or the client to come to a fixed point where he would be prepared to give a fixed price quote. This too weighs against the likelihood of the plaintiff's project at a contracted price of $2.7 million or less being commenced in or about August 2003 and completed by November/December 2004.

802 In all the circumstances, and having regard especially to a history of indecision on the part of the plaintiff as matters proceeded, I consider that the plaintiff's prospects of completing the project successfully by November/December 2004 in the manner envisaged by the alternative claim must be discounted to a significant degree. In the end, I consider, and so find, that the likelihood of the plaintiff successfully completing the project by November/December 2004 was no higher than 33%. It follows from this that in my view the quantum of loss for which he is to be compensated should be fixed at $306,300 being one-third of the figure of $919,000 which I defined in earlier discussion as the amount representing the value of benefit foregone.

803 I am of the view that the plaintiff is entitled to recover also the additional fees of $4,844.75 referable to the attempted reinstatement of the original height limit. These fees were incurred as a consequence of the defendant's default.

804 Having regard to s 32 of the Supreme Court Act 1935 (WA), I will allow a claim for interest at the rate of $6 per centum per annum upon $311,144.75, being the total amount in question, as from 31 December 2004 (being the date when the loss accrued) until the date of judgment.

805 The terms and conditions of the agreement between the parties evidenced by the defendant's letter dated 18 September 2000 were as alleged at par 4 of the plaintiff's claim. The defendant was to act as architect and planner in advancing the plaintiff's project to construct three luxury multiple residential dwellings upon the subject land. The height of the project building exceeded 7 metres in the manner allowed for by the planning consent which was issued to the plaintiff under TPS5 on 18 December 2001.

806 The agreement included certain implied terms that in acting as architect and town planner the defendant would exercise reasonable skill and care in providing its services. This brought with it an obligation of the kind pleaded at par 23 of the claim that the defendant would do all things necessary to cause all of the conditions in the consent to be satisfied by 18 December 2002 or to inform or advise the defendant what was required to renew or replace the consent.

807 By early 2002 the defendant had fulfilled the first phase of the agreement by obtaining the 18 December planning consent pursuant to schematic designs of the project that were satisfactory to the plaintiff. The plaintiff had been provided with full and sufficient advice that the conditions attached to the 18 December planning consent had to be attended to within 12 months.

808 The agreement was not varied in May 2002 in the manner contended for by the plaintiff. The agreement was not formally terminated but a stage was reached when the plaintiff was not prepared to progress the project in the manner recommended by the defendant. Upon the plans being delivered by the defendant to Mr Psaros at the request of the plaintiff in mid 2002 there were no further services to be performed by the defendant and no liability can be attached to the defendant for any acts or omissions on its part between then and 3 September 2002. The parties had so conducted themselves as mutually to suspend performance of their duties under the contract between them.

809 The contractual relationship between the parties was varied at a meeting held on 3 September 2002 as a consequence of which the defendant undertook to provide further services to the plaintiff at his request. The consequence of this meeting was that the obligations imposed upon the defendant by the implied terms of the contract were revived. However, no representation was made by or on behalf of the defendant at that time to the effect that the defendant would obtain an extension or renewal of the existing 18 December planning consent. The services to be performed by the defendant were essentially to revise the existing plans in a manner satisfactory to the plaintiff and then to apply for a fresh planning consent under TPS5 in respect of the revised plans.

810 However, importantly, I have held that as a consequence of the implied terms the defendant was in breach of the contract in failing to give the plaintiff a warning or information to the effect that if the conditions of the 18 December planning consent were not satisfied prior to 18 December 2002, or if a fresh consent was not obtained before TPS6 replaced TPS5, it would not be possible for the plaintiff to complete the project, because the project did not comply with the 7 metre height restrictions contained in TPS6. The matters mentioned in the defendant's second site report of March 2002 were not a sufficient warning.

811 The defendant was therefore in breach of its duties under the contract and in breach of its common law and statutory duties in failing to warn or inform the plaintiff. I was not satisfied that if the plaintiff had been properly informed he would have done all things necessary to cause all of the conditions in the consent to be satisfied by 18 December 2002 because by 3 September it was too late to commence construction. However, I was satisfied that the plaintiff, if properly warned or informed, would have requested the defendant to immediately do what was required to renew or replace the consent.

812 It follows that upon gazettal of TPS6 on 29 April 2003 the defendant was in breach of its various duties because thereafter the plaintiff was deprived of the opportunity he had to complete the project by the height restrictions in TPS6. There is sufficient causal connection between the defendant's breach of duty and loss of opportunity suffered by the plaintiff. I was satisfied on the balance of probabilities that the breach was the cause of at least some loss.

813 The appropriate date for the assessment of damages in the circumstances of this case is the date of breach. Having regard to the way in which this matter was argued at trial the date of breach in the present case was characterised as December 2002 with damages to be assessed accordingly.

814 The assessment of damages required essentially that the assessment be related to the value of the chance to develop the property. Having regard to the reasoning in Sellars case, this required the court to assess the value of the commercial benefit foregone by the plaintiff and then to assess the prospects of the opportunity represented by the benefit being brought to a successful conclusion, having regard to the relevant contingencies and possibilities. The quantum of the plaintiff's loss in that regard has been assessed at $306,300. The plaintiff is entitled to recover also additional fees of $4,844.75 plus interest pursuant to s 32 of the Supreme Court Act upon the total amount ($311,144.75) as from 31 December 2004 (being the date when the loss accrued) to the date of judgment.

815 I will hear from the parties as to whether any further orders or directions are required.