BINNINGUP NOMINEES PTY LTD -v- MIRVAC (WA) PTY LTD [2021] WASCA 130 (27 July 2021)

1. The Transaction Documents comprised relevantly:
   1. A Loan Facility Agreement dated 11 January 2008 between BN and Mirvac (WA), as varied on 1 October 2009 (Loan Agreement).[5]
   2. A fixed and floating charge given by BN to Mirvac (WA) dated 11 January 2008 (Charge).[6]
   3. A registered mortgage given by BN to Mirvac (WA) dated 11 January 2008 (Mortgage).[7]
   4. A Performance Undertaking given by Mirvac Ltd in favour of BN dated 11 January 2008 (Performance Undertaking).[8]
   5. A Development Services Agreement (as varied) dated 1 January 2009 (Services Agreement).[9]
2. In broad terms, under the Transaction Documents (1) Mirvac (WA) agreed to provide to BN 'Services' in relation to the carrying out of the Project, (2) BN agreed to pay Mirvac (WA) 'Project Cost Payments' each month in respect of Project Costs incurred by Mirvac (WA) as specified in sch 1 of the Services Agreement, (3) Mirvac (WA) would, under the Loan Agreement, advance funds to BN to enable BN to make the Project Cost Payments for which it was liable under the Services Agreement, and (4) ultimately, on the sale of a particular lot, the parties would share in the proceeds according to the terms of 'waterfall' provisions. The parties recognised that it would be a long-term project, and no end date was set.[10]
3. The judge found that under the Services Agreement, a Project Control Group was established to, amongst other things, approve or disapprove Budgets. BN and Mirvac (WA) had equal representation on the Project Control Group. If a dispute over a Budget arose, the dispute would be dealt with under the dispute resolution clause in cl 15 of the Services Agreement. Ultimately, if either party did not accept the determination of an expert under this clause, then (1) the land would be sold, (2) BN would be required to repay to Mirvac (WA) all monies owed, and (3) the Services Agreement would be terminated.[11]
4. Broadly speaking, the Loan Agreement required Mirvac (WA) to make an Initial Advance of $25 million and to make further advances to BN when requested, in accordance with specified funding provisions, for the purposes of enabling BN to meet its obligations to make the Project Cost Payments to Mirvac (WA). Clause 5.6 provided that, despite any other provision, BN was required to repay any unpaid part of any Advance no later than the 10‑year anniversary date of its making. The Initial Advance was made on 11 January 2008. Its 10‑year anniversary date was 11 January 2018. However, Mirvac (WA) had limited recourse to recover amounts owing by BN. Broadly speaking, this was limited to enforcement against the Project Assets and the Project Securities.
5. After making payment of the Initial Advance, Mirvac (WA) made periodic advances to BN through to September 2014, pursuant to the Transaction Documents, to enable BN to meet the Project Cost Payments invoiced by Mirvac (WA) in the course of providing the Services under the Services Agreement. The amount outstanding as at October 2014 was $42,776,962 (including the Initial Advance and interest).[12]

The planning and environmental work - broad overview

1. The planning and regulatory authorities to which development was subject included the Shire of Harvey (Shire), the Western Australian Planning Commission (WAPC), the Environmental Protection Agency (EPA) and certain Commonwealth departments (Commonwealth).[13]
2. The details of the planning issues and planning work undertaken are set out later in these reasons. Amongst other things:[14]
   1. On 23 October 2007, the Shire initiated Amendment 63 to its Town Planning Scheme to rezone Binningup south to a 'residential development zone' (proposed Scheme Amendment 63). The Shire referred proposed Scheme Amendment 63 to the EPA under s 38 of the Environmental Protection Act 1986 (WA) (EP Act). Ultimately, the EPA decided that proposed Scheme Amendment 63 was required to be advertised, and moreover, that an environmental review was required.
   2. On 9 November 2009, the EPA provided a report to the WA Minister for Environment recommending that no development be allowed on the southern part of the Binningup south site, comprising nearly half of that area.
   3. On 23 November 2009, the EPA's recommendation was appealed by Mirvac (WA) on behalf of BN.
   4. On 1 July 2010, the Minister partially allowed Mirvac (WA)'s appeal.
   5. On 22 March 2011, the Commonwealth advised Mirvac (WA) that the development would be a 'controlled action' that would require assessment under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). Amongst other things, the Commonwealth was concerned to protect a particular moth in the area.
   6. On 21 July 2011, the Commonwealth Minister approved the Project, subject to conditions. The conditions related to, amongst other things, protecting the moth.
   7. On 13 September 2011, the Shire adopted the proposed Scheme Amendment 63, which was subsequently supported by the WAPC.
   8. On 14 February 2012, the Shire approved advertising of the (then proposed version of the) Local Structure Plan and required further information to be provided by Mirvac (WA) prior to the final approval of the Local Structure Plan. The further information sought included information in relation to a second access road.
   9. On 20 May 2013, the Commonwealth removed the moth from its list of protected species. Mirvac (WA) then requested the removal of the Commonwealth's conditions relating to the moth.
   10. On 11 June 2013, the Commonwealth agreed to Mirvac (WA)'s request, and the conditions were varied.
   11. On 11 February 2014, the Local Structure Plan was approved and signed by the Shire.

The course of the Project - overview and the breakdown of the relationship between the parties

1. The judge's findings included the following:
   1. By at least late 2011, Mirvac had concerns as to the returns of the Project, particularly having regard to the delays associated with environmental issues and the state of the market.[15]
   2. Mirvac had raised its concerns with BN and wished to explore the possibility of renegotiating the terms of the Services Agreement with BN.[16]
   3. In December 2011, Mr Waller of BN told Mirvac that he knew that 'we have to make this work for both parties'.[17]
   4. In mid‑June 2012, Mirvac was in negotiations with BN by way of amendment to the Services Agreement to attempt to mitigate the impact of the delay and the yield loss arising from the Commonwealth's environmental interventions. Mirvac at this time believed that the Services Agreement would be varied.[18]
   5. Around July 2012, a Mirvac document entitled 'Draft Scenario HY13' proposed a provision in Mirvac's accounts for a loss of $18 million on the assumption that there would be a negotiated agreement for the termination of the Services Agreement.[19]
   6. On 4 February 2013, a Mirvac board paper also referred to a proposed provision against loss of $18 million, on the assumption that BN would repay the $25 million Initial Advance and agree to a termination of the Services Agreement. The board paper referred to the alternative course of action as the Land being sold englobo under the 'deadlock' provisions of the Services Agreement. The board paper referred to this latter course as one which BN would likely wish to avoid, and one which would likely lead to an even greater loss (of $27 million) for Mirvac. The board paper referred to Mirvac needing detailed legal advice in order to activate the 'deadlock' provisions to ensure that Mirvac's actions were 'fully supported by the [Services Agreement]'.[20]
   7. In the meantime, Mirvac (WA) continued to work through the necessary steps to implement Stage 1 of the Project, and at no time prior to the termination of the Services Agreement in October 2014 did Mirvac make a decision to 'exit' the Services Agreement.[21] Further, other Mirvac projects at this time, with even larger provisions than this one, continued to be developed.[22]
   8. In February 2013, Mirvac's auditors, PricewaterhouseCoopers, recommended that Mirvac provide for a greater loss (of $28 million) on the basis that Mirvac would, ultimately, with the benefit of legal advice, activate the 'deadlock' provision of the Services Agreement and the Land would be sold englobo.[23] Mirvac did not act on the recommendation and provided for a loss of $18 million.[24] There was still no intention to delay or stop work on the Project,[25] and, in 2013, Mirvac continued work on the Project.[26]
   9. On 11 February 2014, the Local Structure Plan for the Project was finally endorsed by the WAPC.[27]
   10. Mr Waller of BN was interested in increasing yield from the Land by converting the golf course into residential lots. He raised this prospect at a meeting with Mirvac in April 2014.[28]
   11. At the Project Control Group meeting on 6 May 2014, it was agreed that (1) Mirvac would prepare a feasibility analysis assessing the financial and lot yield impact of developing the golf course land for consideration at the next Project Control Group meeting, and (2) Mirvac would prepare a Budget and Programme for approval at the Project Control Group meeting in the third quarter, around September 2014.[29]
   12. By July 2014, the relationship between the parties was poor.[30]
   13. In September 2014, the development manager of Mirvac (WA) prepared a report proposing that steps be taken to amend the Local Structure Plan to convert the golf course land into residential lots. Also in September 2014, Mirvac (WA) submitted a Programme and Budget to the Project Control Group to reflect this proposal.[31] (The Project Control Group never considered this proposal prior to BN writing to Mirvac (WA) purporting to terminate the Services Agreement on 2 October 2014 - see [13] below.)
   14. On 9 September 2014, Mr Waller of BN wrote to Mirvac (WA) to advise that he intended to record all meetings of the Project Control Group. Mirvac (WA) would not agree to meetings being recorded, but said it would be prepared to have all meetings minuted by an independent minute‑taker. That proposal was rejected by BN.[32]
2. On 2 October 2014, BN sent a notice stating that it was terminating the Services Agreement. It alleged repudiation and, further or alternatively, breaches of the Services Agreement by Mirvac (WA). On 24 October 2014, Mirvac (WA) sent a notice to BN alleging that BN had repudiated the Service Agreement and purporting to accept BN's repudiation.[33]
3. It was common ground that, in one way or another, the Services Agreement was terminated in October 2014. It was also common ground that this was a Trigger Event for the purposes of cl 1.1 of the Loan Agreement.[34] Clause 5.5(b) of the Loan Agreement provided that despite any other provision, if a Trigger Event occurs, BN must repay the Outstanding Loan Amount one year after the date of the Trigger Event.[35]
4. The judge outlined, without challenge by the parties in this appeal, the nature of the claims and counterclaims in the primary proceedings. They may be summarised (in broad terms) as follows.

1. Mirvac (WA) contended that, following the termination of the Services Agreement in October 2014, under cl 5.5(b) of the Loan Agreement, the Outstanding Loan Amount (relevantly, the Initial Advance of $25 million) became payable one year after October 2014, being October 2015. (This was described as the 'first pathway'.[36])
2. It was common ground that if Mirvac (WA) did not breach the Services Agreement, it was entitled to the Outstanding Loan Amount under the first pathway.[37] On the other hand, if it did breach the Services Agreement, Mirvac (WA)'s entitlement would turn on whether the prevention principle applied (as alleged by BN), and if the principle did not apply, the effect (if any) of the principles of circuity and set‑off.[38]
3. Mirvac (WA) also alleged that it had a 'second pathway' to the recovery of the Outstanding Loan Amount under the Loan Agreement - pursuant to cl 7 of the Loan Agreement. By cl 7.2, if there were an 'Event of Default' under the Loan Agreement, Mirvac (WA) could cancel the facility and by notice make the Outstanding Loan Amount payable on demand or immediately. By cl 7.1(c), if a Trigger Event occurred, a default under a Transaction Document would constitute an Event of Default under the Loan Agreement. Mirvac (WA) alleged that BN's Termination Notice was a repudiation at common law and a default under the Services Agreement (being a Transaction Document). It accepted BN's repudiation, thereby terminating the Services Agreement. The termination was a Trigger Event, making BN's default under the Services Agreement (via the notice of termination) an Event of Default under the Loan Agreement pursuant to cl 7.1(c). Accordingly, Mirvac (WA) claimed that pursuant to cl 7.2 of the Loan Agreement, the Outstanding Loan Amount became payable by BN to Mirvac (WA) immediately on notice being given.[39]
4. Under this 'second pathway', Mirvac (WA)'s claim depended upon whether BN was entitled to terminate the Services Agreement. This, in turn, also depended (amongst other things) on whether Mirvac (WA) had breached the Services Agreement as alleged in BN's counterclaim.[40]

1. By its counterclaim, BN alleged that Mirvac (WA) breached the following three obligations under the Services Agreement:[41]
   1. The good faith obligation in cl 3.
   2. The obligation in cl 6.2 to 'perform the Services and procure Completion of the Project in accordance with all Approvals, and in a proper, timely, professional and workmanlike manner'.
   3. An alleged implied term that Mirvac (WA) would refrain from conduct that would hinder or prevent fulfilment of the purposes of the Services Agreement. This obligation (described as a 'No Hindering Obligation') was said to be part of the good faith obligation.
2. BN alleged that, by breaching these obligations, Mirvac (WA) repudiated the Services Agreement and, or in the alternative, committed a 'Non Monetary Event of Default' within the meaning of the Services Agreement.[42]

1. BN alleged that Mirvac (WA) breached the Services Agreement by making, and implementing, a decision not to proceed with the Project unless it could renegotiate amendments to the Services Agreement that were more commercially favourable to it (alleged Refusal to Proceed decision).[43]
2. BN alleged that by no later than December 2012, Mirvac (WA), in order to give effect to the alleged Refusal to Proceed decision, made two further decisions (1) to use deadlock provisions in the Services Agreement to terminate the Services Agreement if BN did not agree to variations favourable to Mirvac (WA), and (2) in the meantime, to delay the progress of the Project until the Initial Advance became repayable under cl 5.6 of the Loan Agreement (on 11 January 2018), thereby putting pressure on BN to terminate or agree to terms more favourable to Mirvac (WA).[44]
3. BN alleged that Mirvac (WA) implemented the alleged Refusal to Proceed decision by (1) negotiating to vary the Services Agreement, and (2) delaying progress of the Project in relation to a second access road and by the potential development of the golf course land into residential land.[45]
4. In relation to the second access road, BN alleged that Mirvac (WA) deliberately caused delay in obtaining the Shire's approval by, in effect, resisting the Shire's demands in respect of a second access road, and thereby creating a 'false issue'.[46]
5. BN summarised the matters which it alleged 'manifested' the alleged Refusal to Proceed decision as follows:
   1. Mirvac (WA) deliberately delayed the progress of the Project, particularly in 2009, by its handling of the second access road issue and its dealings (particularly through Mr Adam Davidson) with the Shire on that issue.[47]
   2. Mirvac (WA) also deliberately delayed the progress of the Project by 'attempting to cause' Coast Pastoral Company (Pastoral Co), a nearby landowner whose land would be needed for a second access road, 'not to sell that land'.[48]
   3. As from 2009, Mirvac (WA) had decided to abandon 'Built form' work, which BN asserted Mirvac (WA) was obliged to undertake under the Services Agreement. 'Built form' work means, in effect, constructing and building on a lot before selling it.[49]
   4. An 'Approval for Additional Costs' document, prepared by Mr Adam Davidson in early 2009 for approval by Mr Draffen, allegedly concealed from Mr Draffen the extent of the fall in the internal rate of return since the 'Approval to Purchase' of 9 May 2007 was prepared.[50]
   5. In order to proceed, Mirvac would have needed an internal 'Approval to Commence Construction' document (ACC) and there was no prospect of such a document being issued because (1) Mirvac (WA) sought to renegotiate the Services Agreement (itself manifesting the alleged Refusal to Proceed decision) and its feasibility studies were based on assumptions that the Services Agreement would be varied, (2) in February 2013, Mirvac provisioned for a $18 million loss on its advance on the basis that BN would likely agree to release Mirvac (WA) from its obligations under the Services Agreement and refund the Initial Advance of $25 million, as it was thought that BN would not wish to have the deadlock provisions operate and lead to a sale of the land, and (3) in September 2013, Mirvac realised it was going to make a loss if the Services Agreement was not varied, even if the golf course was developed.[51]
   6. On 3 April 2014, Mirvac (WA) made an alleged repudiatory statement by Mr Draffen. Mr Draffen (allegedly) stated to Mr Waller of BN, at a meeting on 3 April 2014, in effect, that Mirvac's Board was unlikely to decide to carry out the Project, but if Stage 1 was carried out, the Board may possibly decide to proceed.[52] As to what was said at the meeting on 3 April 2014, BN relied on Mr Waller's purported minutes of the meeting.[53]
   7. After the meeting on 3 April 2014 between Mr Draffen of Mirvac (WA) and Mr Waller of BN, Mirvac did work to consider a possible Stage 1 to be located at the foreshore, away from established services. This was not a logical place to start, and showed that Mirvac 'never intended' to develop Stage 1.[54]
   8. On 13 June 2014, Mr Lawrance of Mirvac Ltd made a statement at a Project Control Group meeting to the effect that, in addition to approval by the Project Control Group, Mirvac would need internal approval prior to commencing Stage 1.[55]
   9. In September 2014, Mirvac (WA) deliberately delayed progress of the Project by proposing to the Project Control Group a Programme and Budget for approval to vary the Local Structure Plan so as to remove the golf course and change it to residential land.[56]
   10. In September 2014, Mirvac (WA) refused to attend further Project Control Group meetings if those meetings were recorded (as was sought by BN).[57]

1. As against Mirvac Ltd, BN alleged:[58]
   1. Mirvac Ltd breached the Performance Undertaking by failing to ensure the due performance of Mirvac (WA)'s obligations under the Services Agreement.
   2. By no later than December 2012, Mirvac Ltd determined that it would cause Mirvac (WA) not to proceed with the Project unless the Services Agreement was materially amended to improve the return to the Mirvac parties, and determined that it would direct Mirvac (WA) to trigger the deadlock provisions of the Services Agreement if BN refused to agree to a variation. BN alleged that, as a consequence of that direction, Mirvac (WA) committed the alleged breaches and repudiated the Services Agreement and, by reason of those matters, Mirvac Ltd committed the tort of unlawful interference with the Services Agreement.

1. The trial occupied 11 days of evidence. The trial bundle exceeded 25 lever arch volumes of documents.[59]
2. Mirvac (WA) called four witnesses:[60]
   1. Mr Adam Davidson, the Senior Development Manager for Mirvac (WA), who had day‑to‑day responsibility for the Project from 2007 until May 2010.
   2. Mr Aleksovski, who took over from Mr Adam Davidson as Development Manager on 31 May 2010, and thereafter had day‑to‑day responsibility for the Project.
   3. Mr Draffen, the Chief Investment Officer of Mirvac Ltd. In 2008, he became the national developments Chief Executive Officer and was subsequently given responsibility for group strategy.
   4. Mr Cooper, who was appointed as one of Mirvac (WA)'s representatives on the Project Control Group in September 2014.
3. BN called three witnesses: Mr Waller (a director and secretary of BN), Mr Doyle (a finance broker who had been a consultant to Mr Waller's group of companies, including BN, since late 2012) and Mr Maiorana (a town planning expert).[61]
4. The judge was evidently alive to considering the evidence as a whole.[62]
5. In relation to the judge's assessment of Mirvac (WA)'s witnesses, her Honour's findings were to the following effect:
   1. Mr Adam Davidson, who (relevantly) dealt with the Shire in relation to the second access road issue, was an honest and reliable witness and 'most impressive'. Her Honour accepted his evidence entirely.[63]
   2. Mr Aleksovski was an honest witness overall, and for the most part, reliable. The judge accepted his evidence entirely, subject to an exception. The judge said:[64]

In dealing with the second access road and the golf course issues, I referred extensively to Mr Aleksovski's evidence, and explained why I accepted it, with one exception.

The exception was his explanation as to why he raised tax issues with Mr Payton. While I reject his explanation, it does not cause me to conclude that he was overall an untruthful witness. It was one answer in three days of cross-examination. It is more likely that he was too embarrassed to admit that he was trying to manipulate the Shire.

I also previously dealt with what he wrote in the May 2013 Strategy, being the untrue statement that [Pastoral Co] had discovered a [capital gains tax] issue after conducting further investigation. I explained that, while this was troubling, I was not satisfied it was written as part of a larger plan to delay or impede implementation of the Project or because the [alleged Refusal to Proceed decision] had been made. It does not cause me to conclude he was an untruthful or unreliable witness. (footnote omitted)

1. Mr Cooper was an honest and reliable witness and the judge accepted his evidence.[65]
2. Mr Draffen was an honest and reliable witness and the judge accepted his evidence.[66] His evidence included that:

(a) Mirvac had not, at any time, decided to exit the Project.[67]

(b) Any Mirvac decision to exit the Project would have involved him (Mr Draffen). No such decision was ever tabled for approval or made.[68]

(c) Mr Draffen never reached the view, nor was he ever told, that there was no prospect that BN would vary the Services Agreement.[69]

(d) Mirvac did not believe that it was contractually bound to complete the Project.[70]

(e) Despite making a provision for the loan to BN in 2013, the Project Team continued to work on the Project and did so irrespective of the (deadlock) provision in the Services Agreement.[71]

1. In relation to BN's witnesses, the judge's findings were to the following effect:
   1. Mr Waller was at pains to advance BN's case and denigrate Mirvac (WA) throughout his evidence. He was non-responsive on many occasions and his answers were inconsistent with documents. He also admitted that due to various medical issues his memory was 'terrible'. He was not a reliable or credible witness. The judge did not accept his evidence in the absence of some independent corroboration.[72]
   2. Mr Doyle, whose evidence was effectively limited to the second access road and golf course issues in 2013 and 2014, was found to be an unreliable witness although there was no reason to doubt his credibility.[73]
   3. The evidence of Mr Maiorana, BN's town planning witness, was accepted in terms of his expertise and credibility, but the weight of his evidence was affected by other evidence and the basis for his opinions.[74]

1. A central legal issue was whether Mirvac (WA), as a member of the Project Control Group had the contractual right, under cl 5.2 of the Services Agreement, to disapprove a Budget proposed for approval or disapproval by the Project Control Group. BN submitted that only it had the right to disapprove a Budget, and thereby trigger the deadlock provisions which might result in a termination of the Project and the sale of the land. The judge said that this was a critical issue, as it formed part of the context against which to consider the contractual benefits to BN under the Services Agreement and the nature and scope of Mirvac (WA)'s obligations under the Services Agreement.[75]
2. The judge found that on the proper construction of the Services Agreement, Mirvac (WA), as a member of the Project Control Group, had the contractual right to disapprove a proposed Budget.[76] Her Honour found that the proper 'performance [by Mirvac (WA)] under the Services Agreement did not inevitably mean that the Project would be completed'.[77]

The judge's findings in relation to the alleged Refusal to Proceed decision

1. The judge found that Mirvac (WA) believed that it was not contractually required to complete the Project.[78]
2. In relation to the particular matters alleged by BN concerning the alleged Refusal to Proceed decision (referred to in points 1 ‑ 10 of [26] above) in summary, the judge:
   1. Did not accept BN's first contention that Mirvac (WA) sought to avoid the imposition of a condition of planning approval requiring the immediate construction of a second access road in order to avoid expenditure by Mirvac (WA) unless and until the carrying out of the Project had been internally approved by Mirvac Ltd. Further, the judge did not accept that Mirvac (WA)'s dealings with the Shire on this issue were undertaken for the purpose of causing delay. On the contrary, the judge found that Mirvac (WA) sought to avoid the imposition of such a condition in an effort to avoid delay in the EPA approval process and to avoid premature, and possibly unnecessary, expenditure.[79]
   2. Found that Mirvac (WA), through Mr Aleksovski, did not attempt to cause Pastoral Co not to sell the land required for the second access road. Whilst Mr Aleksovski had misstated to the Shire that Pastoral Co faced significant tax implications on a sale of the land, this was not made as part of a larger plan to delay the Project or because the alleged Refusal to Proceed decision had been made. Rather, the statement was made in an attempt to manoeuvre the Shire to acquire the land itself in an effort to save costs.[80]
   3. Found that, on the proper construction of the Services Agreement, Mirvac (WA) had no obligation to develop the 'Built form' lots.[81]
   4. Found that BN had not explained how Mr Adam Davidson's alleged concealment, in the 2009 Approval for Additional Costs document, of the fall in the internal rate of return, manifested the alleged Refusal to Proceed decision.[82] Further, her Honour found that:[83]

(a) Mr Adam Davidson's evidence, and the Approval for Additional Costs document, clearly indicated that the internal rate of return of 21% came from the 'Latest Approval (Q3 Forecast)' and not the 'Approval to Purchase' document;

(b) Mr Draffen's evidence did not contradict Mr Adam Davidson's evidence;

(c) quarterly updates (although not formally approved) became the baseline for future status updates;

(d) the deterioration was not serious in the sense that it was outside of any tolerable level; and

(e) counsel for BN was 'unable to provide a convincing reason as to why the Perth team would want to deceive the national team in the manner alleged'.

1. Found, in effect, that by seeking to renegotiate the Services Agreement and providing for a loss of $18 million in the event that negotiations were not successful, Mirvac (WA) did not manifest the alleged Refusal to Proceed decision. Also, whilst Mr Aleksovski produced a report in September 2013 indicating that if the Project were completed without a variation then Mirvac would suffer a loss, his memo set out three options. The first two effectively involved the Project proceeding and suggested that further feasibility studies be undertaken (to commence development near the foreshore and to incorporate the golf course land). Option 3 involved negotiations with BN 'outside of the ... Services Agreement'.[84] The judge said:[85]

[BN] submitted that the [September 2013] Options Memo shows there was no possibility that an [Approval to Commence Construction document] would ever have been given in the future. I do not accept this. The express terms of the [September 2013] Options Memo, in setting out options and advising that consideration be given to pursuing the third, is entirely inconsistent with a decision having been taken to pursue only option 3 and, if it failed, to stop work on the Project. On the contrary, the implication from the [September 2013] Options Memo is that, if option 3 failed, one of the other two options would be followed. (footnote omitted)

1. Did not accept Mr Waller's evidence as to the meeting on 3 April 2014, or the accuracy of Mr Waller's purported notes of that meeting. Her Honour summarised the evidence and said:[86]

I accept Mr Draffen's account of the meeting. As at 3 April 2014, Mirvac's position, with which Mr Waller agreed, was that Mirvac would do some more work around the potential for a Stage 1 that would present the Project in its best light. The prospect of renegotiating the Services Agreement was left open.

I do not accept that anything Mr Draffen said in the meeting manifested the intention alleged by [BN]. Indeed, even Mr Waller's purported minutes do not assert that Mr Draffen said that Mirvac had decided not to proceed. (footnotes omitted)

1. Found that Mirvac (WA)'s work after the meeting on 3 April 2014, in considering locating Stage 1 at the foreshore, did not show that Mirvac never intended to develop Stage 1. Rather, the judge accepted Mr Draffen's explanation as to why the foreshore was chosen. The foreshore was the location that had been agreed by the parties for Stage 1 in the site visit in June 2013. It was also the location identified in the minutes of the Project Control Group meeting of 25 July 2013, and in Mr Crockett's email of 25 July 2013 containing his notes of that meeting. It was the location identified in options 1 and 2 of Mr Aleksovski's September 2013 Options Memo.[87]
2. Found that, at the Project Control Group meeting on 13 June 2014, Mr Lawrance said words to the effect that 'Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval'.[88] Her Honour said, in effect, that Mirvac (WA) had the legal right under the Services Agreement to disapprove a Budget, and that it would be expected that Mirvac (WA) would go through an internal approval process before approving or disapproving a Budget at a Project Control Group meeting.[89]
3. In relation to the proposal to delete the golf course and turn it into residential land, found that Mirvac (WA), by proposing in September 2014 to amend the Local Structure Plan to convert the golf course land to residential land, did not do so to deliberately delay progress of the Project.[90]
4. In relation to BN's insistence that meetings of the Project Control Group be recorded, found that Mirvac (WA)'s refusal to attend meetings on that basis was not in breach of its obligations (including the good faith obligation). Nor was her Honour satisfied that Mirvac (WA)'s refusal was done in order to delay or stop the Project. The documentary evidence showed that, by September 2014, the relationship between the parties was combative. Mirvac (WA) had said that it was willing to attend a meeting if it was not recorded, and was willing to pay for an independent minute‑taker. That was not an unreasonable stance in all of the circumstances. Further, each party could have utilised the dispute resolution process in the Services Agreement to resolve the issue of whether the meetings should be recorded. Instead, BN sent its notice of termination on 2 October 2014.[91]

Summary of the judge's findings in relation to BN's claims against Mirvac (WA)

1. The judge found that:[92]
   1. Mirvac (WA) did not make or implement the alleged Refusal to Proceed decision.
   2. Mirvac (WA), through Mr Adam Davidson and Mr Aleksovski, did not seek to delay the progress of the Project.
   3. Rather, Mirvac (WA) continued to progress the Project, independently of its feasibility concerns and its consideration of using the deadlock provisions in the future (subject to obtaining legal advice).
   4. Accordingly, Mirvac (WA) did not repudiate the Services Agreement.
   5. BN's alternative allegation of breach, being that there was a Non Monetary Event of Default, was based on the same allegations as the alleged repudiation. This alternative claim failed for similar reasons.
   6. Accordingly, BN was not entitled to terminate the Services Agreement. BN's notice purporting to do so was a default under the Services Agreement and a repudiation of the Services Agreement, which Mirvac (WA) was entitled to accept and did so. This made the Outstanding Loan Amount immediately repayable on notice.

1. Consequently, the judge found that Mirvac Ltd had not committed the tort of unlawful interference with the Services Agreement.[93]
2. Her Honour also found that BN had not, in any event, proved its damages claim.[94] Further, her Honour found that even if BN were entitled to damages, Mirvac (WA) was entitled to equitable set‑off.[95]

1. In its grounds of appeal, BN does not contend that the judge erred in relation to her findings referred to in points 3, 4, 6 and 7 at [37] above.
2. The grounds of appeal are nevertheless extensive. There are three grounds of appeal alleging errors in relation to the construction of the Services Agreement.[96] There are over 20 grounds (including subgrounds) alleging other errors of law.[97] There are also some 25 grounds (including subgrounds) alleging errors of fact.[98] Many of the alleged errors of fact relate to the alleged Refusal to Proceed decision.[99]
3. Given the numerous challenges to findings of fact, including in relation to the alleged Refusal to Proceed decision, it is necessary to outline in detail the course of events over the (approximately) six years in which the Services Agreement operated, prior to its termination in October 2014. The overall chronology of events, taken from the primary decision and the agreed chronology in this appeal, is set out in the next section of these reasons (Chronology of Events). Many of the matters in the Chronology of Events are not the subject of challenge in the grounds of appeal.
4. The judge made key factual findings as to Mirvac's state of mind and the purposes for which it acted from a consideration of the evidence as a whole, including, to a substantial degree, based on her Honour's assessment of the credibility and reliability of the witnesses. The observations of Bell, Gageler, Nettle and Edelman JJ in Lee v Lee[100] are applicable in the appeal to this court:[101]

A court of appeal is bound to conduct a 'real review' of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge's findings unless they are 'glaringly improbable' or 'contrary to compelling inferences' is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, 'in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge'.

1. In Fox v Percy, Gleeson CJ, Gummow and Kirby JJ observed that the limitations of the appellate court, in proceeding on the record, include:[102]

the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole. (footnotes omitted)

1. A finding of fact as to the state of mind of a witness is a paradigm example of a finding of the kind referred to in [44] above. Consistently with the above principles, generally speaking, an appellate court would be slow to differ from a finding of fact at trial as to the state of mind o[103] witness.103
2. Unequivocal admissions made in certain circumstances may nevertheless have 'overwhelming persuasiveness' unless they can be explained in some convincing way, and may thereby point to error by a trial judge despite the advantages enjoyed by the trial judge.[104]
3. For the reasons which follow, the appeal should be dismissed. In broad terms:
   1. The judge did not err in law in finding that the Completion of the Project was not a contractual benefit conferred on BN.
   2. The judge did not err in finding that Mirvac (WA)'s members on the Project Control Group had a right to disapprove a Programme or Budget.
   3. Whilst the judge erred in finding, in effect, that Mirvac (WA)'s right to disapprove a Budget under cl 5 of the Services Agreement encompassed a decision not to proceed with the Project because Mirvac (WA) considered it no longer in its economic interests to do so, the error is immaterial to the disposition of the appeal. Prior to BN's Termination Notice, the occasion was never reached where the members of Mirvac (WA) on the Project Control Group disapproved or were required to consider the disapproval of a Budget. Also, BN accepted that in order to succeed in the appeal, BN had to establish not only the grounds relevant to construction, but the grounds challenging the judge's findings of fact relevant to repudiation and breach.[105] BN has not successfully challenged the findings of fact.
   4. Having regard to the evidence as a whole, and in light of the principles of appellate restraint referred to above, BN has not established error in the judge's findings to the effect that Mirvac had not made or implemented the alleged Refusal to Proceed decision or had otherwise deliberately delayed the progress of the Project as alleged by BN.
   5. The judge did not err in finding (as alleged in ground 11) that Mr Lawrance's statement at the Project Control Group meeting on 13 June 2014 was not repudiatory.
   6. The judge did not err in finding that the refusal of Mirvac (WA)'s representatives to attend meetings of the Project Control Group in circumstances in which BN was insisting on the meetings being recorded was not a Non Monetary Event of Default under the Services Agreement or a repudiation of the Services Agreement.
   7. It is unnecessary to deal with the remaining grounds insofar as they are predicated on the success of the grounds alleging that the judge should have found the alleged breaches or repudiation of the Services Agreement by Mirvac (WA).

1. Although the judge did not structure her findings in this manner, we will commence with a comprehensive chronological conspectus of the facts, as we consider that assists in the evaluation of challenges to the judge's findings of fact.

1. In 2007, prior to the Transaction Documents being executed, Mirvac (WA) commissioned a report from civil engineers Cossill & Webley in relation to anticipated development costs. The authors of the report advised Mirvac (WA), among other things, that it may be necessary to provide secondary access into the southern part of the site.[106]
2. On 23 October 2007, the Shire initiated proposed Scheme Amendment 63 to its Town Planning Scheme to rezone Binningup south to a 'residential development zone'.[107]
3. On 19 November 2007, the Shire referred the proposed Scheme Amendment 63 to the EPA under s 38 of the EP Act.[108]

1. On 11 January 2008, Mirvac (WA) made the Initial Advance of $25 million to BN under the Loan Agreement.[109]
2. In 2008, Mirvac (WA) held an 'engagement forum' attended by representatives from Mirvac (WA), BN, the local authorities and development consultants. The urban planning consultants appointed by Mirvac (WA), Roberts Day, ran the forum with a view to coordinating the consultant teams, authorities, the Shire, the golf course and other representative groups.[110]
3. In 2008, Mirvac (WA) worked with its consultants and with the Shire in relation to drafting provisions of a Local Structure Plan. Mirvac (WA) also worked with the EPA, including arranging a visit to the site.[111]
4. There were Project Control Group meetings on 14 February 2008 and 25 August 2008.[112]
5. On 10 September 2008, Mirvac (WA) received a report from traffic engineers Riley Consultants (2008 Riley Report) who advised that, from a traffic perspective, the existing road could accommodate the development of up to 90 per cent of the existing lots in the town site, plus 1,200 lots within the subject land. It recommended that a traffic analysis be done with respect to a second access road after there were 750 dwellings in the subject land.[113]
6. In 2008, Mirvac (WA) received a report from TME titled TME Fire Management Guidelines (2008 TME Fire Report). The report said that there was a need for a second external access to the southern portion of the site that could accommodate particular types of fire trucks. The judge accepted Mr Adam Davidson's evidence that, after receiving that report, it seemed highly likely that a second access road would have to be built, and it was likely that it would be required in order to get planning approval. However, the judge also accepted, in effect, Mr Adam Davidson's evidence that Mirvac (WA) was hopeful that alternative strategies may still be available, and that Mirvac (WA) had been looking at a range of alternate potential emergency access means in discussions with Mr Lush from TME.[114]
7. In October 2008, Mirvac (WA) wrote to the EPA, stating that a second access road did not form part of the current proposal. The judge effectively accepted Mr Adam Davidson's evidence that this was accurate, given the discussions which had taken place between Mr Adam Davidson and Mr Lush from TME around this time. Those discussions focussed around the need to keep the fire access issue and the second access road issue quite separate.[115]
8. The judge accepted Mr Adam Davidson's evidence that there were two reasons why he did not want a secondary access road to form part of the proposal at this time:[116]
   1. Mirvac (WA) did not absolutely know that a second access road was required, since there were both traffic-related and fire‑related reasons why it may or may not be required. In particular, Mirvac (WA) was unsure whether a second access road would be required as (1) it would depend on the number of dwellings built, and (2) Mirvac (WA) had the 2008 Riley Report which suggested that the development alone would not trigger the need for a second access road.
   2. Mirvac (WA) wanted to avoid having to readvertise the proposal which would have resulted in substantial delay. In circumstances where Mirvac (WA) was close to a potential outcome, such a delay on the basis of something that may or may not have been required at that point in time was not seen to be worthwhile.
9. On 28 October 2008 there was a Project Control Group meeting.[117]

1. On 1 January 2009, Mirvac (WA) and BN varied the Services Agreement.[118]
2. In 2009, Mirvac continued to work with the Shire. One of the issues under discussion was secondary access to the site.[119]
3. On 20 January 2009, TME issued to Mirvac (WA) a revised fire management plan (2009 TME Revised Fire Plan).[120] In the Revised Fire Plan, TME amended its previous position that there was a need for a second external access to the southern portion of the site. TME wrote that there was a need for '[e]valuation of the need for a formal secondary (emergency) access to the southern portion of the site as the development reaches its full potential. ... The need for this access will be reviewed during later stages of the development once approximately 750 dwellings have been completed'.[121]
4. On 2 February 2009, the EPA determined that proposed Scheme Amendment 63 should be assessed under pt 4 div 3 of the EP Act.[122]
5. On 3 February 2009, there was a Project Control Group meeting.[123]
6. On 5 February 2009, Mirvac submitted Revision A of the Local Structure Plan to the Shire (Revision A).[124] Revision A described the golf course, in effect, as part of the design response to the 'Open Space' aspect of the proposed Local Structure Plan.[125] Revision A also dealt separately with 'emergency access' and 'proposals for second access road'. In relation to the latter, it stated (amongst other things):[126]

An outcome of the Design Enquiry Forum was support for the provision of a second access road to the Binningup town site. This has the capacity to reduce traffic on the existing Binningup Road and provide a permanent secondary emergency access and quicker and more direct access to the proposed Village Centre from the south. The 'Local Structure Plan Traffic Report' (Riley Consulting, Dec 2008) provided as a technical supplement to this report identifies that from a traffic perspective a second access would not be required until more than 1500 new dwellings are constructed and occupied within the development. It is proposed to review this analysis when 750 dwellings have been constructed and occupied.

1. On 30 March 2009, Mr Pearce of Roberts Day (Mirvac (WA)'s urban planning consultants), emailed Mr Jake Davidson,[127] Manager of Planning Services at the Shire, attaching a proposed policy statement for inclusion in the Local Structure Plan.[128] The proposed policy required the developer to prepare an updated traffic impact assessment upon the issue of titles to facilitate 750 dwellings. It stated that, if the assessment showed that an 'acceptable level of service' was unlikely to be achieved at the intersection of Binningup Road and Old Coast Road (based on an assessment of household trip generation at that time and the projected final trip generation), the assessment would need to address options, which might include upgrades to the intersection and/or the provision of secondary access.[129]
2. The judge accepted Mr Adam Davidson's evidence that this proposed policy statement referred to an 'acceptable level of service', and omitted reference to secondary access for emergency purposes, on the bases that:[130]
   1. the Shire was primarily focused on maintaining access to the site, so the proposed policy was intended to address the traffic issue and whether that was a trigger for a second access road;
   2. the Shire's engineers wanted to do a separate piece of work to confirm at which level the triggers for a second access road should be set;
   3. Mirvac (WA) was aware, as a result of discussions between Mr Adam Davidson and Mr Lush of TME, that there were alternative options available for dealing with emergency access. Mirvac (WA) did not want emergency access to be factored into the present assessment when a second access road might not be required in any event; and
   4. Mirvac (WA) was keen to avoid the environmental review being re-advertised, which Mr Adam Davidson 'felt could have led to a bunch of other complications and reassessment and inevitable further delays ...'.
3. Thus, the judge effectively accepted that the proposed policy statement sent on behalf of Mirvac (WA) in the email dated 30 March 2009 did not address secondary access for emergency purposes because Mirvac (WA) wanted to address that issue separately, as at that point in time, there appeared to be a range of other options available to Mirvac (WA) which were more likely to be the outcome than the construction of a second road.[131]
4. On 1 May 2009, there was a Project Control Group meeting.[132]
5. In May 2009, following discussions between Mr Jake Davidson of the Shire and Mr Adam Davidson regarding the appointment of an independent consultant to facilitate the resolution of the second access issue, Mirvac (WA) and the Shire commissioned independent traffic consultants, Shawmac Pty Ltd.[133]
6. On 17 June 2009, Mr Adam Davidson emailed the Shire advising that Mirvac (WA) understood that the Shire required the triggers for commencement of approvals and construction for the second access road to the site be amended prior to the adoption of the Local Structure Plan (instead of amending the Local Structure Plan prior to advertising).[134] The judge found that the effect of this communication was not that Mr Adam Davidson knew that a second access road itself would need to be provided for in the Local Structure Plan, but rather that he knew that the triggers for assessment and construction of the second access road would need to be included.[135]
7. On 7 July 2009, the Shire's Development Services Committee held a meeting regarding the need for a second access, in relation to which it had sought independent specialist advice. The minutes of that meeting recorded that (1) a second access was required based on expected traffic generation and the provision of an emergency access, (2) the timing of the second access was under discussion (at this time, a staged approach tied to development milestones was expected), and (3) this matter would be resolved prior to final consideration.[136]
8. The judge found that, at its meeting on 14 July 2009, the Council appeared to resolve that provisions addressing the proposed secondary road access to the development were to be incorporated into the Local Structure Plan to the satisfaction of the Council.[137]
9. On 3 August 2009, in accordance with the EP Act, an Environmental Review was issued for public comment from 4 August 2009 to 15 September 2009.[138]
10. At around this time in 2009, the EPA was assessing the proposed Scheme Amendment 63, and Mirvac (WA) and the Shire were working together to address the EPA's concerns.[139]
11. On 20 August 2009, the EPA wrote to the Shire, advising that it had become aware of the minutes of the Shire's Committee meeting on 7 July 2009. The EPA sought clarification on whether the amendment and the development envisaged by the amendment could proceed without the provision of a secondary access road.[140]
12. On 24 August 2009, Mr Adam Davidson prepared a draft proposed response to the EPA for the Shire, and emailed it to Mirvac (WA)'s consultants for their input (24 August 2009 email). The draft stated that a second access road did not form part of the current proposal as whether it would ultimately be required was a matter dependent on a range of traffic-related factors. Further, in the final sentence of the email, in a statement directed toward the Mirvac (WA) consultants, Mr Adam Davidson said:[141]

We need to be very careful not to end up encouraging approval for the northern half only, but at the same time inclusion of the second access road within the current approvals process could cause delays of the type significant enough for Mirvac to walk away from this project. (So focus hard as the above is very serious for all of us).

1. In respect of this communication,[142] the judge accepted Mr Adam Davidson's evidence to the effect that:
   1. the secondary emergency access issue was not referred to because it was separate and distinct from the issue regarding the construction of a secondary access road due to traffic triggers, not because Mirvac (WA) wished to avoid the EPA requiring construction of the second access road as a condition of giving environmental approval for the Scheme Amendment;[143]
   2. as the EPA was concerned with the proposal put in front of it, rather than any issues regarding a secondary access road being constructed for emergency access reasons, it was Mirvac (WA)'s decision whether or not to include it in the proposal;[144]
   3. the final sentence was not referring to delays which would result from Mirvac not giving internal approval to commence construction of infrastructure on the land, but rather, to the delays associated with the approvals process, as including the second access road at that time would have required readvertising the amendment as well as a 'snowball of issues' relating to the design details;[145]
   4. he was probably being a little over-dramatic to 'put the wind up' the consultants to try and get them to respond quickly and do a bit more work;[146] and
   5. he knew, however, that Mirvac (WA) would not have had the right under the Services Agreement to walk away merely because construction of a second access road was required by regulatory authorities as a condition of granting planning or environmental approval to the Scheme Amendment.[147]
2. On 25 August 2009, Mr Adam Davidson emailed Mr Jake Davidson of the Shire in relation to the response to the EPA that he had drafted for the Shire. He attached the draft proposed response as a document (Mirvac's draft EPA letter). The judge accepted that Mirvac (WA)'s primary goal at this time was to avoid further delays, to avoid conflation of emergency access and traffic access, and to try and keep future options open based on various yield outcomes.[148]
3. On 9 September 2009, Mr Jake Davidson of the Shire replied to Mr Adam Davidson. He attached Mirvac's draft EPA letter, to which he had made some amendments. Mr Adam Davidson made some further minor amendments and emailed the document back. He asked Mr Jake Davidson to send him a copy of the letter the Shire sent to the EPA. Mr Jake Davidson did so the same day.[149]
4. The letter sent by the Shire to the EPA on 9 September 2009 (Shire's EPA letter) stated:[150]

Second Access Road

Amendment 63 to Shire of Harvey District Planning Scheme No 1 is not contingent on the provision of a second access road to the town site and as such the second access road does not form a part of the proposal.

Council has granted consent to advertise the proposed Binningup Beach Local Structure Plan whilst noting that several modifications are required prior to final consideration. One of these modifications relates to the inclusion of provisions addressing secondary road access to Binningup.

The Shire of Harvey and Mirvac jointly commissioned a further study into the provision of secondary access to Binningup to clarify the likely need for such an access. The results of that study indicate that, although development of the area addressed by Amendment 63 alone (to the maximum yield likely to be possible under the proposed Local Structure Plan) would be unlikely to trigger a requirement of a second access road, a second access road may be required when the potential for new homes on vacant land in the existing town site and other development sites in Binningup are taken into account.

The Shire has therefore indicated that provisions addressing the need for a secondary access road be included in the proposed Binningup Beach Local Structure Plan. The provisions are to provide for planning, approvals and ultimately construction of secondary access to Binningup in a timely and coordinated fashion based on the point at which a particular number of lots are constructed (if at all). Should the trigger points (in terms of number of lots) be reached and the necessary approvals not be obtained, then further development would be precluded. (emphasis added)

1. Mr Jake Davidson of the Shire also included in his email to Mr Adam Davidson on 9 September 2009 a copy of draft Local Structure Plan provisions which were under review, to which he had added a third bullet point. Mr Adam Davidson said he was happy with that amendment. The amended version of the provisions (2009 Trigger Provisions) outlined the development milestones which would trigger the undertaking of investigations, approvals and timing in relation to the provision of a second public access road to the site. They provided:[151]

The investigations, approvals and timing for the provision of a second public access road to the site will be undertaken in accordance with the following development milestones:

• Upon the issue of titles to facilitate the development of 750 dwellings, the developer will prepare a 'Route and Funding Study' to determine the alignment and funding arrangements for the provision of a second public access road to the site;
• Upon the issue of titles to facilitate the development of 850 dwellings (aggregate) the developer will commence the process of securing the necessary approvals and other commitments to facilitate construction of the second public access road; and
• Upon the issue of [titles] to facilitate the development of 1,000 dwellings (aggregate), the construction of the secondary road is to be undertaken in accordance with the approved 'Route and Funding Study'.

No further subdivision will be permitted beyond each of the stipulated milestones until such time as the relevant actions have been undertaken to the satisfaction of the Shire of Harvey.

1. The judge found that the Shire's EPA letter and the 2009 Trigger Provisions document recorded an agreed position between Mirvac (WA) and Shire Officers.[152]
2. The documentary evidence showed that the Shire Officers and Mirvac (WA) had reached an agreement about trigger points as to the time at which the route would need to be identified (on the issue of titles to facilitate the development of 750 dwellings) and the time at which the road would be constructed (on the issue of titles for 1000 dwellings).[153]
3. At some point prior to 15 September 2009, Mirvac submitted a referral to the Commonwealth under the EPBC Act.[154]
4. On 15 September 2009, the Commonwealth acknowledged Mirvac (WA)'s referral under the EPBC Act, requested further information about certain species including the 'Graceful Sun Moth' (moth), and 'stopped the clock' on the timing for its decision on the referral (with the 'clock' to be restarted once the Commonwealth had received satisfactory information).[155]
5. On 9 November 2009, the EPA provided a report to the WA Minister for Environment recommending that no development be allowed on the southern part of the Binningup south site, comprising nearly half of that area.[156]
6. On 23 November 2009, the EPA recommendation was appealed by Mirvac (WA) on behalf of BN.[157]
7. On 17 December 2009, Mirvac (WA) met with the Appeals Convenor at the Binningup site.[158]

1. Mirvac (WA)'s internal documents show that, as early as 2010, the financial viability of the Project had deteriorated.[159]
2. On 4 February 2010, there was a Project Control Group meeting.[160]
3. On 3 March 2010, the EPA recommended to the Minister and Appeals Convenor that Mirvac (WA)'s appeal be dismissed.[161]
4. On 10 March 2010, a report confirmed that there was a 'significant' moth population on the site at Valentines Hill.[162]
5. Mirvac (WA) met with the Appeals Convenor several times up to March 2010.[163]
6. On 7 April 2010, Mirvac (WA) submitted a revised concept plan to the Appeals Convenor as part of its appeal against the EPA report.[164]
7. On 20 April 2010, there was a Project Control Group meeting.[165]
8. In April 2010, the Appeals Convenor recommended that it was open to the Minister to allow Mirvac (WA)'s appeal against the EPA report.[166]

May 2010 - Mr Adam Davidson handover to Mr Aleksovski

1. In May 2010, Mr Aleksovski replaced Mr Adam Davidson as the person responsible at Mirvac (WA) for the Project.[167] Mr Adam Davidson prepared handover notes for Mr Aleksovski.[168] Under the heading 'Authorities', the handover notes stated, as a key issue going forward, 'resolving path forward on the second access road to Binningup (refer provisions on the proposed local structure plan for current agreement)' and included a link to a document which indicated that it was 'Shire Approved' on 9 September 2009.[169] Under the heading 'Second Access Road', the handover notes stated:[170]
   • Will be a contentious issue. Deliberately deferred from the approvals process as it is not required at this time. The Shire wants it built, but is particularly concerned about emergency access (as is FESA). Best way forward is I think to separate those two issues by tackling the issue of a separate emergency access up front. Jon Riley did the original traffic study - see:
   • The agreed outcome with the shire is located at: l:\Binningup Beach\4. Project Management\4.5 Miscellaneous - it is the file called: 'Bin Secondary access (ammend [sic] 63) 09.09.09.Shire Approved.doc' and is as follows:
2. The handover document of May 2010 then reproduced the 2009 Trigger Provisions which Mr Jake Davidson had emailed to Mr Adam Davidson on 9 September 2009.[171]
3. Regarding the reference to an 'agreed outcome with the Shire' in this portion of the handover notes, the judge accepted Mr Adam Davidson's evidence. The judge said:[172]

Shortly afterwards, Mr Adam Davidson was asked if he knew, when he wrote the Project synopsis, that there was no agreed outcome between Mirvac and the Shire. He replied:

'I think it was my belief, at the time, that we either had or it was very unlikely that the outcome would change. I thought that we, at least, had a - outcome with the officers and that it was very likely that that outcome would be upheld by council at the time.'

Earlier in the cross-examination, Mr Adam Davidson had said, in the context of the Shire's EPA Letter:

'I guess in dealing with council officers, and particularly senior ones, you assume that they understand the limits of their own authority and operate within those.'

1. Moreover, the judge rejected a very serious allegation which was put to Mr Adam Davidson, by counsel for BN, in relation to the handover notes. Counsel for BN put to Mr Adam Davidson that he (Mr Adam Davidson) had told Mr Aleksovski at the handover that although there was no agreed outcome with the Shire, he would refer to an agreed outcome in handover notes and create an internal Mirvac (WA) document which Mr Aleksovski could then use to suggest to the Shire that there had been an agreed outcome prior to Mr Aleksovski's time.[173]
2. The judge accepted Mr Adam Davidson's evidence entirely and found that:[174]
   1. there was no foundation in the evidence for the allegation;
   2. to the contrary, the documentary evidence supported Mr Adam Davidson's view that there had been an agreement with the Shire Officers on the terms set out in the handover notes (which reproduced the 2009 Trigger Provisions as amended by Mr Jake Davidson);
   3. the Shire's EPA letter, drafted by Mr Adam Davidson and settled and sent by Mr Jake Davidson, setting out the Shire's position, showed an agreed position more generally;
   4. it was not asserted by BN that something had occurred between the date on which those documents were settled and the date on which Mr Adam Davidson emailed his handover notes that changed that position;
   5. the proposition was inherently improbable, as it would have required Mr Adam Davidson, a planning manager, to have the foresight to determine that there would be some value in creating a document in 2010 falsely asserting an agreement, and would have also required him to be dishonest (and willing to be dishonest) despite the fact that he was leaving Mirvac (WA) for a job elsewhere; and
   6. if Mr Adam Davidson had wanted to create a document alleging an agreement that went beyond documents common to the Shire and Mirvac (WA), one might expect he would refer to fictitious oral conversations, but he did not; instead he reproduced the 2009 Trigger Provisions in the handover notes.

1. On 18 May 2010, the Shire recommended that the Council support the revised Local Structure Plan subject to the submission of final documents.[175]

1. On 1 July 2010, the Minister partially allowed Mirvac (WA)'s appeal. The outcome was seen to be an 'excellent one' by Mirvac (WA) and BN.[176]
2. Mirvac (WA) sent a copy of the Minister's decision to the Commonwealth on 19 July 2010, asking to revive previous discussions around the two issues that remained of concern to the Commonwealth. These were the presence of the moth on the land, and the changes to the Scheme brought about by the appeal outcome. In the following month, Mirvac (WA) provided further information, and continued to do so as required.[177]
3. On 16 September 2010, a Ministerial Statement was issued indicating that the proposed Scheme Amendment 63 could be implemented. This was the final step in the EPA appeal.[178]
4. On 29 October 2010, there was a Project Control Group meeting.[179]
5. Mirvac (WA) commissioned market research to commence in November 2010 and to finish in mid-December 2010.[180]

1. In February 2011, Mirvac (WA) held a design workshop for the Project. From that time onwards, many meetings and discussions occurred in relation to the design and other issues relating to the Project.[181]
2. On 22 March 2011, the Commonwealth advised Mirvac (WA) that the development would be a 'controlled action' that would require assessment under the EPBC Act.[182]
3. On 31 May 2011, there was Project Control Group meeting.[183]
4. On 17 June 2011, Mirvac (WA) lodged Revision B of the Local Structure Plan with the Shire (Revision B). The Shire then lodged that revised Local Structure Plan with the WAPC.[184] Revision B referred to the golf course as part of a network of Public and Private Open Space.[185] Revision B also stated that a detailed 'Local Structure Plan Traffic Report' had been prepared by Riley Consultants in May 2011, which included assessment in relation to access to the site and involved proposals for a potential second access road 'should it be required in the longer-term'.[186]
5. Revision B also stated:[187]

An outcome of the Design Enquiry Forum was support for the provision of a second access road to the Binningup town site. This has the capacity to reduce traffic on the existing Binningup Road and provide a permanent secondary emergency access and quicker and more direct access to the proposed Village Centre from the south. The 'Local Structure Plan Traffic Report' (Riley Consulting, May 2011) provided as a technical supplement to this report identifies from a traffic perspective a second access road would not be required until more than 1500 new dwellings are constructed and occupied within the development. ...

The pre-requisite triggers and timing for the provision of a second road have been agreed with the Shire of Harvey[.]

Revision B then set out the 2009 Trigger Provisions.

1. On 21 June 2011, Mirvac (WA) emailed the Commonwealth reminding it that the statutory timeframe for deciding on the development expired the following day. On 22 June 2011, the Commonwealth informed Mirvac (WA) that it intended to approve the development subject to stated conditions. The letter gave Mirvac (WA) 10 business days in which to comment on the conditions. It also said that the time for making the final decision had been extended to 13 July 2011. Mirvac (WA) then worked to have the conditions varied.[188]
2. On 21 July 2011, the Commonwealth Minister approved the Project, subject to conditions. The conditions related to, amongst other things, protecting the moth.[189]
3. On 1 September 2011, Mr Hall, who had replaced Mr Jake Davidson at the Shire by this time, emailed Mr Aleksovski stating that he could not find the Council's resolution confirming the trigger points for the second access way.[190]
4. On 5 September 2011, Mr Aleksovski replied to the effect that he did not think it 'went to the [C]ouncil', and that his understanding was that a negotiated position had been agreed with Mr Jake Davidson and other concerned council departments as requested by the Council. Mr Aleksovski attached a document he had on file which set out the 2009 Trigger Provisions (including Mr Jake Davidson's amendments). He also forwarded to Mr Hall the email exchange between Mr Adam Davidson and Mr Jake Davidson on 9 September 2009 which itself attached Mirvac's draft EPA letter and the 2009 Trigger Provisions (including Mr Jake Davidson's amendments in red).[191]
5. The judge accepted Mr Aleksovski's evidence in respect of these matters, which her Honour found was supported by the documentation and Mr Adam Davidson's evidence. Mr Aleksovski's evidence was to the following effect:[192]
   1. from the time that Mr Aleksovski commenced at Mirvac (WA), he was told that there was an agreement between Mirvac (WA) and the Shire about the trigger points for the second access road;
   2. the triggers would have been negotiated during the structure plan process, which was never completed and endorsed, so they would have been based on negotiations between the Shire and Mirvac (WA) during either the advertising or consideration of the structure plan;
   3. Mr Aleksovski was not referring to an agreement with the Council of the Shire, but rather its officers, and he had not seen a formal resolution of the Council;
   4. the Shire had not maintained a consistent position, but rather, the Shire had subsequently changed its mind in that '[t]hey decided they would then like it built as part of Stage 1 of the development and not as per the triggers previously agreed'; and
   5. Mr Adam Davidson had never said to Mr Aleksovski that there was not an agreement with the Shire.
6. Thus, the judge concluded that Mr Aleksovski's statement in the email of on 5 September 2011 - 'my understanding is that a negotiated position was agreed with your predecessor Jake' - was not false. Her Honour found that the documentary evidence showed that the Shire Officers and Mirvac (WA)'s development manager had reached an agreement about trigger points as to the time at which the second access road route would need to be identified, and when it would need to be constructed.[193]
7. On 6 September 2011, the Shire recommended that the Shire Council adopt the amendment text of the Local Structure Plan, subject to a modification requested by the Minister of Environment and Youth for final approval, and recommended that the Council forward it to the WAPC for endorsement.[194]
8. On 13 September 2011, the Shire adopted the proposed Scheme Amendment 63, which was subsequently supported by the WAPC.[195]
9. On 15 September 2011, Mirvac submitted Revision C of the Local Structure Plan to the Shire (Revision C).[196] Revision C referred to the development design employing a number of mechanisms to promote the retention of land form and maximise amenity, including the golf course.[197] It also stated that the northern half of the subject site is currently developed with a nine hole golf course and that clearing and earthworks had been commenced in the southern half of the site with the construction of a second nine holes.[198] Revision C contained provisions in relation to secondary access similar in terms to those in Revision B.[199]
10. In September 2011, the Mirvac Managing Director's Report discussed the reduced yield that would follow from the limited environmental approval that had then been issued (but which was later varied to increase the land available for development). The report said, amongst other things:[200]

Final approval was received on the Federal Environmental referral and the Binningup structure plan was lodged in June. Detailed design of the subdivision is currently being finalised for application lodgement in September. A new feasibility is currently being undertaken as part of Q1 update. Given the reduced yield as a result of the environmental approval, it's likely that a review of the agreement with the current landowner will be undertaken to [ensure] returns to both parties are acceptable prior to commencement on site. (footnotes omitted) (emphasis added)

1. The judge found that, as the document indicated, while a review was 'likely', Mirvac had not made a decision to stop work.[201]
2. A Mirvac spreadsheet titled 'Vic Risk Tolerance 5% IRR' recorded that there had been a reduction in the total rate of return since the budget for the financial year ended 30 June 2012 from 32.4% to 14.07%. The column titled 'Reason For Deterioration' stated:[202]

Yield decreased due to Federal Environmental issues. Three year delay due to Federal environmental issues. Discussing with the owner of the land a restructure of the [Services Agreement] to improve Mirvac returns. (emphasis added)

1. On 25 October 2011, there was a Project Control Group meeting.[203]
2. A Mirvac Audit Risk Compliance Committee Report dated 8 November 2011 also recorded a reduction in the internal rate of return. The reasons were said to be the decreased yield as a result of the environmental decision, the delay due to mitigating environmental issues and the downturn in the market. Under the column headed 'Action Plan', it stated:[204]

A variety of deal restructure scenarios are being considered prior to re‑entering negotiations with the landowner. Redesign incorporating new yield is realistic while seeking to optimise return on capital.

1. In November 2011, a report by Mirvac's Managing Director stated that:[205]

Mirvac has met with the land owner [BN] to discuss restructuring the agreement to provide a better return for Mirvac and we have agreed a target date of December 2011 to have an in principle agreement to revised terms.

1. On 14 December 2011, Mr Aleksovski, together with Mr Mudford (a development director of Mirvac (WA) between 2010 - 2012), met with Mr Waller of BN to discuss the potential for varying the Services Agreement. Prior to this meeting, Mr Mudford had asked Mr Aleksovski to prepare some scenarios to be presented to Mr Waller. Mr Aleksovski said that the purpose of the meeting was to highlight, to Mr Waller, Mirvac (WA)'s concerns arising from the forecast in the feasibility analyses and to put options of variations that might be made. Mr Aleksovski said:[206]

Mr Waller used words to the effect that he understood what we were saying to him and what we were telling him. He also used words to the effect that, 'I know that we have to make this work for both parties and I will go away and consider what you're asking of me'.

1. The meeting with Mr Waller indicated that Mirvac was openly discussing its concerns with BN and Mr Waller's own evidence was that he had said on a number of occasions that the Project must work for both parties.[207]

1. The Managing Director's Report of Mirvac in January 2012 stated:[208]

Mirvac met with the land owner [BN] in December 2011 and there is an acknowledgement from the landowner that the project will be restructured. The land owner requested we meet in January along with his Trustee to workshop the project structure to seek an agreed outcome.

1. On 14 February 2012, the Shire approved advertising of the (then proposed version of the) Local Structure Plan and required further information to be provided by Mirvac (WA) prior to the final approval of the Local Structure Plan. The further information sought included information in relation to a second access road.[209]
2. Throughout 2012, Mirvac (WA) and the Shire continued to discuss various issues, including in relation to the second access road.[210]
3. On 24 May 2012, there was a Project Control Group meeting.[211]

1. On 24 May 2012, Mr Crockett, Mirvac Ltd's then Chief Financial Officer, met with Mr Waller and Mr Scott of BN. Mr Crockett reported on the meeting in an email on 24 May 2012. Mr Crockett said in the email that Mr Waller had advised him that he was not agreeable at this point to any of the options discussed to date with respect to Mirvac's approaches to renegotiate elements of the Services Agreement. Mr Crockett also said that Mr Waller indicated that he would like to have the issue 'escalated to the decision makers of Mirvac' by which he meant Mr Draffen and, probably, Mr Wallace, and that Mr Waller wished to meet with those persons. Mr Crockett continued in the email of 24 May 2012:[212]

It was evident during the conversation that [Mr Waller's] views on the immediate and long term future of the project are polarised from Mirvacs [sic] position. As you are aware the position at project level is to progress to structure plan approval to protect our position and this was all endorsed in principle at the [Project Control Group meeting] - bringing with it an expectation on the face of it that the [Project Control Group] would be presenting an ACC [Approval to Commence Construction document] for subdivision works shortly thereafter - this being late July/August. It seems clear to me that at this point Mirvac [Development Approval Meeting] would not give this approval and the shareholders [Project Control Group] will then be at a potential deadlock.

...

[Mr Waller] requested another [Project Control Group meeting] at the end of June and he is expecting a timely response from Mirvac with respect [to] his stated position on the [Services Agreement] framework and the commitments there under from Mirvac.

Can we discuss this please at your best opportunity? It would appear the time has come to brief [Mr Wallace] and [Mr Draffen] on this and determine a course of action for Mirvac. (emphasis added by primary judge)

1. The judge found that Mr Crockett's email of 24 May 2012 did not suggest that Mr Crockett believed that Mirvac intended to breach the Services Agreement. Rather, from the overall context, it appeared that he believed that Mirvac would consider a Budget for Subdivision Works to be 'infeasible', given the then market conditions and forecasts, and that therefore Mirvac would not approve such a Budget, which could lead to a deadlock. Her Honour added that, as explained later in her reasons, Mirvac had the right under the Services Agreement to disapprove a Budget it considered to be infeasible.[213]

June 2012 - Master Planned Communities document

1. In June 2012, a Mirvac document titled 'Master Planned Communities Western Australia, New Business 5 Year Strategy - 2013 to 2018 June' addressed, amongst other things, the 'Current Development Pipeline' of 'Master Planned Communities WA'. The document (Master Planned Communities document) excluded the BN Project on the basis that it was a non-core asset for Master Planned Communities 'due to the commercial viability of market conditions and regional location'.[214]
2. The judge said, with respect to the Master Planned Communities document:[215]

In my view, the document reflected Mirvac's view that it was unlikely there would be any sales (at least not of significance) in the five-year period. This is not surprising given the length of the Project (anticipated to exceed 20 years), the stage of the Project and Mirvac's view of the market conditions at that time and in the near future. The document does not show that a decision had been made never to proceed (or not to proceed unless the Services Agreement was varied). It recognised the current reality.

Counsel for [BN] put to Mr Draffen that 'the position is that you knew in June 2012 that Mirvac had made a decision - and you in particular on its behalf had made a decision - that Mirvac would not be proceeding to carry out the subdivision project at [BN]'. Mr Draffen said:

'That's incorrect. We - the position - we had never taken a position not to proceed with the project. Sure that it was - absolutely the project was - was financially challenging and we were attempting to find a pathway to at least come up with a viable Stage 1 to at least allow the project to proceed in some shape or form. Now, to proceed further, you know, our view at the time was that some form of renegotiation would be required for that to happen. But, no, we hadn't made we had absolutely not made a decision not to proceed.'

June 2012 Report to Mirvac Board and Watch Lists

1. In June 2012, in a report to the Mirvac Board (June 2012 Report), there was a statement to the effect that negotiations were underway with BN, by way of amendment to the Services Agreement, 'to attempt to mitigate' the impact of the timing delay and yield loss arising from the process involving the Commonwealth. Further, it stated that certain assumptions were predicated on a satisfactory renegotiation of pertinent elements of the Services Agreement.[216] The judge said of this document:[217]

This does not show the [alleged Refusal to Proceed decision] had been made. On the contrary, it refers to negotiations 'to attempt to mitigate' the impact of certain matters. Further, in stating 'Current assumptions are predicated on a satisfactory renegotiation of pertinent elements of the Services Agreement', it merely records that Mirvac believed the Services Agreement would be varied and the development would proceed under a varied Services Agreement. It does not suggest that Mirvac had decided not to proceed unless the Services Agreement was varied. (emphasis added)

1. The June 2012 Report also noted management's recommendation to include all projects with an internal rate of return of less than 10%, or at risk of falling below 10%, on a 'watch list'. The list included the Binningup Project.[218] On 2 August 2012, a 'Mirvac Project Watch List', indicated that the Binningup Project was constantly monitored and reported on a 'watch list'.[219]
2. The judge referred to Mr Aleksovski's evidence on this topic:[220]

Mr Aleksovski said he did not have any involvement in the June 2012 Report and was not aware that the Project was monitored and reported on a watch list. It is, of course, not surprising that Mirvac would have a watch list for its marginal projects. The Project's presence on this list says nothing about whether the [alleged Refusal to Proceed decision] had been made. Later, I will set out the evidence that shows Mirvac made a provision in relation to the Binningup Project, to reflect the risk that the loan would not be fully repaid. As will be seen, Mr Aleksovski said that '[t]here were other projects with larger provisions that were eventually developed and that are still being sold now'. (emphasis added) (footnotes omitted)

1. In June 2012, Mr Pearce, one of Mirvac (WA)'s planning consultants, was pressing the Shire for a response to the submissions that had been provided to the Council in relation to the (then proposed version of the) Local Structure Plan.[221]
2. On 19 June 2012, Mr Hall of the Shire responded by email, apologising for the delay but noting that two more things were required, the second of which related to access to the site. Mr Hall wrote:[222]

I note the comprehensive Fire Management Plan which has been submitted however there has been no representation by Mirvac in regard to the Second Access timing. As you recall from our previous meetings, I have requested at the least, and upfront, an easement over the land and a legal agreement which includes the adjoining neighbour and all weather gravel/limestone construction with appropriate fire access gates. Plus a timing/programme to be agreed upon for its upgrading to a full roadway phases [sic]. This is a separate requirement from the FMP and is required to be resolved. I notice reference to 500 lots in your response to the submissions - however this figure has not been discussed or agreed upon by Council.

1. On 29 June 2012, Mr Aleksovski sent to the Shire a second access road strategy (June 2012 Strategy). It noted that the preferred alignment of the road had been identified as an extension of the existing Springhill Road, and that the 500 m link from the end of Springhill Road to the land owned by BN was owned by Pastoral Co.[223] The June 2012 Strategy proposed that:[224]
   1. BN would obtain an easement over the Pastoral Co land to facilitate the development of a temporary road for the purposes of fire access and construction vehicles and would construct that temporary road;
   2. prior to the issue of titles for 500 lots, Pastoral Co would lodge a subdivision application to enable creation of the extension as a gazetted road, and the Shire may agree to pay compensation;
   3. the developer would upgrade/construct the extension to the relevant standard for use as a public road upon the issue of titles to facilitate the development of 500 dwellings; and
   4. there would, in effect, be a condition that no further subdivision would be permitted beyond those milestones until the road had been upgraded.
2. The judge found that the June 2012 Strategy addressed the Shire's (Mr Hall's) requests for an easement, the construction of a temporary road and a timing programme for the upgrade of that road for use as a public road. Further, the judge found that Mr Pearce's pressing of the Shire, and Mr Aleksovski's prompt provision of the June 2012 Strategy in response to Mr Hall's email, were inconsistent with any attempt by Mirvac (WA) to delay.[225]

1. On or about 1 July 2012, Mirvac produced a document titled 'Draft Scenario HY13' (HY13 Draft Scenario). The 'action' recorded for BN was 'englobo/superlot' with a 'tick'. Mr Draffen denied that this set out a 'strategy' to move towards an englobo sale. Rather, he said, in effect, that the documents showed the assumptions used by Mirvac for provision purposes, being a negotiated exit, for the purpose of adopting a value for the carrying value of Mirvac's inventory and its accounts, which was the subject of that report. The judge accepted Mr Draffen's evidence as consistent with the document.[226] The HY13 Draft Scenario proposed a provision of $18 million on the assumption of a negotiated agreement with BN for termination of the Services Agreement.

1. A 'Mirvac Project Watch List' document dated 2 August 2012 repeated language used in the June 2012 Report.[227]
2. On 13 August 2012, Mr Aleksovski and Mr Pearce, Mirvac (WA)'s consultant, met with the Shire. On 16 August 2012, Mr Pearce sent an email to the CEO of the Shire, copied to Mr Aleksovski, setting out a 'summary of actions' from that meeting. The email relevantly recorded the following:[228]
   1. [BN] to contact [Pastoral Co] to secure agreement to providing the required extension to Springhill Road prior to consideration of [the Local Structure Plan] by Council. Proposed timing: 15 August 2012.
   2. [BN] to revise draft Second Access Road Strategy (SARS) to include commitment to securing the route up-front and any necessary amendments. Proposed timing: 22 August 2012.
   3. SARS to be agreed with Shire as part of [Local Structure Plan] approval but acknowledging that actions to create the second access road will be associated with subdivision in accordance with the SARS. Proposed timing: Prior to [Local Structure Plan] approval.
   4. Council will not agree to providing any form of compensation for the road.
   5. Council will assist [BN] with securing any necessary environment approvals, should these be required to facilitate the provision of the road when this becomes necessary - [BN] will commence investigations as to what approvals will be required. Proposed timing: As required. (emphasis added)
3. After that meeting on 13 August 2012, Mr Aleksovski knew that the Shire's then position was that it would not pay compensation for a second road. The judge accepted Mr Aleksovski's evidence that the main sticking point between the Shire and Mirvac (WA) at this time was as to who should actually acquire the land for a public road.[229]
4. Mr Aleksovski forwarded Mr Pearce's email of 16 August 2012 to Mr Waller of BN the same day, and advised that he was available for a meeting the following Wednesday or on two other dates in the week after.[230]
5. On 16 August 2012, there was a Project Control Group meeting.[231]
6. Another live issue at this time was the timing of the construction of the second access road. By point 3 of the summary of actions in Mr Pearce's email dated 16 August 2012, it appeared that the Shire had accepted that the timing would be the subject of further discussion. This was demonstrated at the meeting with the Shire on 28 August 2012.
7. On 28 August 2012, there was a meeting between Mr Aleksovski of Mirvac (WA), Mr Waller and Mr Scott of BN, and Mr Parker of the Shire. It was agreed that the second access road would be provided on settlement of 500 lots and 'capped at up to $2 million which was the cost assumed in the feasibility to construct the road and this money would be provided to the [Shire] to be held by them'.[232]

1. On 30 August 2012, a Mirvac spreadsheet titled 'Collated Development Risk Tolerance 5% movement in IRR June 2012' document was emailed for review within, it seems, the Mirvac finance team. The spreadsheet stated:[233]

A variety of deal restructure scenarios were considered, however, negotiations with the landowner indicate that there is unwillingness to change. Therefore, continue to be modelled according to current [Services Agreement] in the Q1 FY13 forecast.

1. In relation to this document, the judge said:[234]

Mr Draffen said he thought the team was looking at various options but, because there had been no agreement with [BN], Mirvac continued to maintain a position of undertaking the Project in accordance with the Services Agreement. Mr Draffen agreed that the landowner [BN] had expressed an unwillingness to vary the Services Agreement. However, he said he did not think it was definitive and it was never reported to him that it was 'an absolute no'. He said Mirvac remained of the view that there was a potential for negotiation and said that he remembered subsequent reports from the team in late 2013 that continued to indicate that potential. He said:

'The team still remained confident of the potential for a negotiation. Again remember at this time there was still no structure plan approval, so it was very hard to advance the project until we actually got through all the required approvals to actually form up something that could be considered.'

This evidence is supported by Mr Waller's own evidence of his ongoing willingness to talk, but of wanting some progress to be made before any agreement was reached. I accept Mr Draffen's evidence on this point. (footnotes omitted)

1. A further Mirvac spreadsheet titled 'Monthly Update' for the Western Australian Development Division, dated 31 August 2012, also stated that the land owner had not been willing to renegotiate and that accordingly the 'Q1 forecast is anticipated to be based on the current Services Agreement'.[235] The judge said with respect to this document:[236]

Mr Draffen said that he thought the reason the forecast was anticipated to be based on the current Services Agreement was because, as at that time, it had not been agreed that the Services Agreement would be renegotiated. This explanation is consistent with the terms of the document and I accept it. The statement in the document, that the forecast is anticipated to be based on the current Services Agreement, is not consistent with the [alleged Refusal to Proceed decision]. (footnote omitted)

1. The spreadsheet dated 31 August 2012 also stated that following the unwillingness of BN to renegotiate the Services Agreement, development expenditures on the Project 'have been deferred'.[237] The judge's observations on statements to that effect are referred to next.

1. Spreadsheets in September and December 2012 also referred to the deferral of expenditure.[238] The judge said:[239]

When asked if he knew that significant development expenditures had been deferred, Mr Aleksovski said no. He said he was never told to defer any expenditure and he did not defer any expenditure. He said he continued to incur costs to obtain the approval of the Plan, to maintain and manage various aspects of the Project and other miscellaneous costs. In relation to costs that would be incurred after Plan approval, he said that the Project had not reached that point, but said he was not aware of any decision to defer those costs. Mr Aleksovski said he was performing his duties.

Mr Draffen was not asked about this part of the document, or about similar statements in three other spreadsheets.

...

From the context given by the entirety of these documents, it appears that 'deferred' was being used in an accounting sense, in that anticipated (and budgeted) estimated expenditure was now likely to occur later in time. In any event, finance personnel had no authority to direct what was done by the Project team with respect to the Project.

I accept Mr Aleksovski's evidence that he had not deferred any expenditure. His evidence was consistent with the evidence that showed the work Mirvac was doing throughout the period when the Project was on foot. Further, as I later discuss, I found him to be a truthful witness.

Mr Aleksovski's evidence is also supported by Mr Draffen's evidence. Although Mr Draffen was not asked about the statements that expenditure had been deferred, he gave evidence as to the purpose of various financial records. He explained, for example, that the purpose of the June 2012 Report was to enable Mirvac to calculate the carrying value of its inventory in its statutory accounts. He also explained why the Board had taken a provision in relation to the Project, discussed later, and what that implied (and did not imply) about decisions Mirvac had made. Mr Draffen gave evidence about the interaction between Mirvac's development personnel and their finance personnel, saying that finance personnel had no authority to direct what was done by the Project team with respect to the Project.

Mr Draffen also gave evidence that Mirvac had not, at any time, decided to exit the Project. The statements in the spreadsheets to the effect that the forecast had been based on the Services Agreement are consistent with this evidence and inconsistent with the [alleged Refusal to Proceed decision]. I accept Mr Draffen's evidence. (footnotes omitted) (emphasis added)

1. With reference to the September 2012 spreadsheet the judge said:[240]

The September spreadsheet also said 'The landowner is unwilling to review the present [Services Agreement] which may lead to a threat in the viability of the project'. Mr Draffen was asked about this. He said that, at that time, Mirvac knew the Project 'was challenged'. However, he said Mirvac did not believe that the Transaction Documents said that the Project would have to be developed irrespective of the market, as there were provisions in the Services Agreement that permitted Mirvac WA to approve (or disapprove) a budget and programme. He was asked if he was thinking along those lines at that time and he said 'we were just trying to find a viable way to move the project forward at this stage. You have to remember that at that time we didn't even have a structure plan approval'.

Mr Draffen's evidence that Mirvac did not believe that it was contractually bound to complete the Project under the Services Agreement is supported by a number of documents, and I accept this was Mirvac's belief. As I explain later, the belief was correct. (footnotes omitted) (emphasis added)

1. In conclusion, the judge said in relation to the spreadsheets:[241]

In the context of the spreadsheets as a whole, and the evidence as a whole, I am not satisfied that Mirvac did not spend money that it would have spent if it did not have concerns about the Project's viability. At the time these spreadsheets were produced, the [Local Structure Plan] had not been approved. Mr Aleksovski was working on obtaining the approval and was not deferring (and had not been told to defer) any expenses to achieve that. Perhaps in recognition of that, although these spreadsheets were in [BN's] Chronology, none were cited by [BN] in its written or oral closing submissions. (footnote omitted)

1. An agenda for a meeting of the Master Planned Communities on 25 October 2012 of Mirvac attached a 'Project Risk Assessment'. It included a risk said to arise from the fact that the current feasibility assumptions were based on the perceived outcome of the 'renegotiations currently underway' with BN. It said:[242]

Project partner [BN] is aware of the issue and has expressed a willingness to work with Mirvac to achieve a suitable outcome for both parties however has indicated that certain terms and parameters of the original agreement are not negotiable. The impact amount is based on the current WIP of the project [if] an agreement cannot be reached.

1. On 17 December 2012, Mr Pearce, Mirvac (WA)'s consultant, sent an email to Mr Aleksovski, attaching an updated second access road strategy document for his review (December 2012 Strategy).[243] Mr Pearce advised in the email that, to enable the Council to sign off, the strategy anticipated 'some surety regarding the route ... in the form of a letter from [Pastoral Co]', and that he would try and confirm the Shire's expectations regarding this with Mr Hall. The December 2012 Strategy stated:[244]

The [Pastoral Co] has confirmed that it is willing to enter into the necessary arrangements to cede the required land to facilitate construction of the required temporary and permanent road access on the chosen alignment.

1. The December 2012 Strategy proposed that Pastoral Co would provide an undertaking to the Shire 'confirming its intention to cede [the required land] free of cost'. It proposed, in effect, that a temporary road (for fire emergency access and construction vehicles) would be constructed prior to the issue of clearances for the first stage of the subdivision. It said that BN would pay the Shire $4,000 per lot for the first 500 lots for the later upgrade of the temporary road, so that when the time came at which the road had to be built, the money would be there. The December 2012 Strategy proposed that, upon the issue of titles to facilitate the development of 500 dwellings, the Shire would upgrade/construct the road to the standard of a public road, using those funds.[245]
2. In respect of the December 2012 Strategy, the judge found that:[246]
   1. It involved Pastoral Co giving up the land without any payment from Mirvac (WA) (consistently with the June 2012 Strategy), however, it also recognised that the Shire had said it would not compensate Pastoral Co (in accordance with the meeting on 13 August 2012).
   2. The temporary road would be upgraded upon the issue of 500 titles (consistently with the June 2012 Strategy and the meeting on 28 August 2012).
   3. It proposed that the Shire would construct the public road, while BN would simply fund the construction (which differed from the June 2012 Strategy). The judge accepted Mr Aleksovski's evidence that BN was only named as it was the owner of the land, and it was always intended that this would be a Project cost paid, in the first instance, by Mirvac (WA).
3. The judge noted that, although the December 2012 Strategy document had been sent (by Mr Pearce, the consultant) to Mr Aleksovski for his review, there was no further version of it in evidence. The judge further noted that, whilst the parties appeared to have assumed that this was the final version of the document that was sent to the Shire, it was doubtful that this was the final version.[247]

1. A Mirvac spreadsheet dated 17 December 2012, titled 'Summary of Forecasts Q2FY13', stated in the 'Risks' worksheet that the cash rate profile is 'affected by environmental and planning approvals which has caused delays in commencement onsite. Demand for the anticipated product will need to be carefully assessed'. Under 'Other Threats and Opportunities' the worksheet stated:[248]

Further to the environmental approval process, the project yield has been reduced. However, there has been an unwillingness from [BN] to review the [Services Agreement]. Therefore, putting the viability of the project at threat. This may trigger an impairment to the loan balance currently carried.

The recoverability of the [Services Agreement] loan does not appear to be supported by the value of the land. ... The loan is secured against the development site but based on current assumed englobo valuation the security value is not sufficient to pay out the loan.

These documents show nothing more than that Mirvac recognised that, if the Services Agreement was not varied, it may need to make a provision to reflect the risk the loan would not be fully repaid.

1. In December 2012, Mr Aleksovski and Mr Lawrance of Mirvac met with Mr Waller of BN to raise again Mirvac's concerns with regard to the feasibility of the Project.[250]
2. At the 20 December 2012 Project Control Group meeting, it was agreed that a project workshop would occur by March 2013 to review the subdivision plan. The attendees were to include BN, Mirvac (WA) and two of Mirvac (WA)'s consultants.[251]

Mirvac internal emails dated 22 and 23 January 2013

1. On 22 and 23 January 2013, there was an email exchange between Mr Aleksovski and certain financial officers of Mirvac. The email addressed an answer to a potential question from Mirvac's Board as to whether Mr Waller of BN could stop the deadlock provisions in the Services Agreement from operating. The author of the email, Mr Wiese (Mirvac (WA)'s State Finance Manager) said:[252]

There's no real way [Mr Waller] could stop the deadlock provisions being invoked. There is however scope to delay the provisions. There was no time limit placed on the preparation of a briefing paper outlining the dispute. So technically this could be said to being prepared for an extended time as a stalling tactic. We need to receive detailed legal advice in relation to how best to enact the deadlock provisions to ensure our actions are fully we [sic] are fully supported by the agreement. (emphasis added) (footnote omitted)

1. In relation to this email, the judge said:[253]

This email exchange shows Mirvac WA was considering the use of the deadlock provisions. It does not show Mirvac WA was contemplating breaching, or had decided to breach, the Services Agreement. Indeed, the last sentence is entirely inconsistent with such propositions.

The email exchange also does not show any decision had been made to cease to perform. The reference to a 'stalling tactic' is self-evidently a reference to the potential that [BN] would seek to delay the application of the deadlock provisions by delaying the production of its briefing paper. (emphasis added)

1. On 4 February 2013, a Mirvac Board paper (4 February 2013 Board paper) noted that, as at 31 December 2012, the total loan to BN stood at approximately $42.7 million. It also noted, under 'Previous Assumptions', that previous forecasts indicated that a development of the site in accordance with the Services Agreement would be marginally profitable for Mirvac.[254]
2. The 4 February 2013 Board paper, under the heading 'Proposed Revised Assumptions', referred to a potential loss of $18 million ($43 million less the $25 million Initial Advance):[255]

The assumption being adopted involves recouping the initial land advance of $25m. This requires the land owner agreeing to release Mirvac from its obligations under the [Services Agreement] and refund the initial $25m Land costs.

Currently, this is considered the most likely scenario as the land owner is unlikely to proceed through the deadlock provision (further explored below) as this would result in them losing control of the land which is considered the crown jewel of their holdings. The land owner would receive all the planning and other associated intellectual property for free and would be simply returning the initial land advance.

There are risks associated with this scenario as the land owner is considered litigious and may be willing to defend his rights in the courts. If this negotiation is handled correctly, an outcome that benefits both parties could be reached. The alternative course of action could be laid out as Mirvac following the deadlock provisions which would result in the land being sold for an amount well below the land owner's view of its worth.

There is no real way the land owner could avoid the deadlock provisions being invoked. There is however scope to delay the provisions. There was no time limit placed on the preparation of a briefing paper outlining the dispute, so technically this could be used as a stalling tactic. We will need to receive further detailed legal advice in relation to how best to enact the deadlock provisions to ensure our actions are fully supported by the agreement. (emphasis added by primary judge)

1. The judge said, with respect to these aspects of the 4 February 2013 Board paper:[256]

The first and last italicised phrases confirm that Mirvac had no intention of breaching the Services Agreement. The first phrase refers to obtaining [BN's] agreement to release Mirvac from its obligations. The last phrase shows that Mirvac intended to ensure any use of the deadlock provisions would be contractually permissible.

The second italicised phrase could perhaps be interpreted as a suggestion to use the deadlock provisions as, in effect, an inducement to pressure [BN] to agree to vary the Services Agreement. If that was what was meant, a question would arise as to whether using the deadlock provisions for this purpose would breach the Good Faith Obligation. However, [BN] did not cross-examine either Mr Aleksovski or Mr Draffen about this phrase, nor make any submissions about it in its closing address, nor refer to it in its Chronology. I assume this was because the phrase was, at most, a suggestion about doing something in the future that was never actually done.

As noted in the discussion of the January email exchange, the reference to a 'stalling tactic' is a reference to the potential that [BN] would seek to delay the application of the deadlock provisions. (emphasis in original)

1. The 4 February 2013 Board paper then set out three 'alternatives'.[257] The first was to 'Enter deadlock provision discussions and sell land holding'. It noted:[258]

The deadlock provision sets out a procedure for dispute resolution which eventuates in the land being sold for an agreed sum if the disagreement cannot be resolved. The funds are then used to pay down the loan balance.

Based on discussions with the land owner and based on our knowledge of their intentions, it is not envisaged that the land owner would allow the deadlock to escalate to this level.

1. It was noted in this context that the englobo valuation of the land was around $15 million so that if a deadlock were to ensue, and the land were to be subsequently sold englobo, Mirvac's loss would be approximately $27 million.[259]
2. The second alternative in the 4 February 2013 Board paper was 'Continue development under current agreement'. The Board paper noted:[260]

This is considered the least desirable situation. This scenario would involve outlaying approx. $210m in development costs over a 22 year period and results in a shortfall in the loan repayment of $18m based on revised assumptions.

This scenario takes into account a lot settlement profile in line with independent market advice and knowledge of the current and forecast Binningup sales environment and is represented in the preceding chart.

1. The judge said that the identification of this alternative was inconsistent with a decision having been made to stop performing under the Services Agreement.[261]
2. The 4 February 2013 Board paper referred to a 'third alternative' and described the 'third alternative' as a 'further option' for the second alternative. This was:[262]

[T]o renegotiate the agreement to be more balanced between the parties given the revised assumptions. It is difficult to model this scenario as it will be based on a negotiation between the parties, however the position would see some improvement on the $18m shortfall. The Revised Assumption position is still favoured even under this option to maximise any potential negotiations.

1. The 'Reasons for Proposed Change' section of the 4 February 2013 Board paper referred to (1) progressed land owner negotiations, (2) market stagnation for proposed product type, and (3) revised sale rate assumptions on the back of market evidence.[263] In relation to 'Land Owner Negotiations' it stated:[264]

There have been recent developments on how the [Services Agreement] is structured and how Mirvac intends to proceed with the [Services Agreement]. Based on recent advice from Mirvac legal it has been determined that there is no scope for Mirvac to exit the [Services Agreement] as a result of the agreement not being financially viable.

Negotiations with the Land Owner are in the early stages only and will be expected to be escalated over coming months. (emphasis added by primary judge)

1. Under the heading 'Impact on New Position', a table was set out proposing a provision against the loan of $18 million. It was said that the 'adoption of the revised assumptions' indicated that this provision should be made.[265]
2. In relation to the 4 February 2013 Board paper, the judge said:[266]

There is nothing in the Board Paper that manifests a decision to stop performing under the Services Agreement. Nor do I accept that it shows there was no possibility that an [Approval to Commence Construction document] would ever be given in the future. The recommended option was subject to [BN] agreeing to release Mirvac from its obligations. One of the identified alternatives was to continue development under the current agreement.

Further, inconsistent with any decision to breach the Services Agreement is the statement that further detailed legal advice was required in relation to how best to enact the deadlock provisions 'to ensure our actions are fully supported by the agreement'. Although the Board Paper acknowledged that 'there is no scope for Mirvac to exit the Services Agreement as a result of the agreement not being financially viable', it clearly recognised that this did not mean that the deadlock provisions were inoperative.

It appears to be common ground that, around this time, the Board made a provision for $18 million in accordance with the Board Paper.

Mr Draffen said that the decision to take an $18 million provision in relation to the Binningup Project was based on a risk assessment that a deadlock leading to a negotiated termination of the Project was the most likely scenario based on the information they had at the time. He said it was not a decision to actually set out to bring about a deadlock or to exit the Project.

Mr Draffen denied that all Mirvac was doing was taking steps to force the Project into deadlock. He said that the team continued to work through the necessary works to prove up Stage 1. He said the project team continued to work on the Project irrespective of the provision.

Mr Aleksovski said that the fact that the Binningup Project had been provisioned did not affect his work. He said that '[t]here were other projects with larger provisions that were eventually developed and that are still being sold now. We were still working on the basis of delivering a residential estate'.

The Board Paper is not inconsistent with any of this evidence and I accept it. (footnotes omitted) (emphasis added)

Mr Draffen also said that any decision to exit the Project would need to have been made at a level within Mirvac that involved him. He said that no position for exit was ever tabled for approval. He said that no decision to exit the Services Agreement had been made prior to 31 December 2012, nor was such a decision made subsequently.

I accept this evidence in its limited terms. That is, I accept that no decision to exit was actually made. However, I find that Mirvac was contemplating using the deadlock provisions to cause [BN] to make a deal, but was first going to obtain legal advice to ensure that whatever it did was contractually permissible.

I earlier noted that, in considering the internal Mirvac documents, I have taken into account the other evidence that shows what else was happening at particular times. In relation to the Board Paper, for example, I considered the fact that, less than two months after it was produced, Mr Aleksovski first asked Mr Payton about possible tax issues. However, having considered the evidence as a whole, I remain of the view that Mirvac did not, at any time prior to the termination of the Services Agreement, make a decision to exit the Project. (footnotes omitted) (emphasis added)

1. On 6 February 2013, there was a meeting between Mr Aleksovski, Mr Lawrance and Mr Wiese of Mirvac (WA), and Mr Waller, Mr Scott and Mr Doyle of BN.[268]

1. On 7 February 2013, PricewaterhouseCoopers provided its report for the half year review for the year ended 31 December 2012 (PWC Report). The PWC Report recommended that Mirvac make a provision for $28 million (ie, not the $18 million actually provisioned by Mirvac).[269]
2. The PWC Report stated:[270]

Management as at 31 December 2012 have revised their assumptions around the future growth prospects of the Binningup region, and now consider that the current slump in demand will be protracted for a prolonged period. A decision has therefore been made to now exit the [Services Agreement] via the deadlock provisions included in the [Services Agreement].

The revised assumptions for this project include the following:

• The deadlock provision can be used to reach an outcome where Mirvac could recover its initial outlay of $25.0m. Mirvac is yet to receive legal advice on how this outcome could be achieved. This assumption is the best case scenario.
• The [Services Agreement] deadlock provisions allow for a scenario where if a disagreement could not be overcome, then the [Services Agreement] could be dissolved and the land sold, with the proceeds used to repay the loan. The value of the vacant land has been estimated by management at $15.0m. Mirvac have ignored this scenario, assuming that the landowner would be motivated by future profit and thus avoid a situation of being forced to sell the land englobo. This scenario is the worst case outcome.

The revised assumptions have led to a need for a provision against this loan receivable of $18.0m.

...

Our own assessment is that Mirvac should recognise a provision of $28.0m. The additional $10.0m provision is the difference between the best and worst outcome of negotiating an exit. This is considered prudent given that legal advice is yet to be received on how to utilise the deadlock.

We have raised our own assessment with management. We note that management's view of the provision is based on their assessment of the strength of their future negotiating position and an understanding of the landowners' future intentions. We accept management's position however have included our judgemental additional provision on our [Summary of Unadjusted Misstatements]. (emphasis added by primary judge)

1. The judge made the following observations with respect to the PWC Report:[271]

It is evident from the context of the document that the statement that Mirvac had decided to exit the Services Agreement via the deadlock provisions was not intended to mean that Mirvac had decided to trigger the deadlock provisions, leading to a sale of the land, the requirement on [BN] to repay the moneys owing and the termination of the Services Agreement. This can be seen from the fact that the Board was not provisioning for the worst case scenario (that the land would be sold following a deadlock) and PWC's statement that Mirvac was assuming the land would not be sold following a deadlock.

Rather, PWC was asserting that Mirvac intended to achieve an agreement with [BN] that it would be released from its obligations under the Services Agreement and [BN] would repay the Initial Advance. PWC was asserting that Mirvac believed that it would be able to achieve that agreement due to its power to trigger a deadlock and its belief that [BN] would not want the land to be sold following the operation of the deadlock provisions.

Further, the two underlined references to legal advice in the above extract support a conclusion that Mirvac intended to act in accordance with its contractual obligations, and was still waiting on further legal advice.

Taken as a whole, the PWC Report does not evidence a decision to stop performing under the Services Agreement.

As with earlier documents, it shows that Mirvac intended to try to negotiate with [BN] in a contractually permissible way. Mirvac believed, correctly, that there were deadlock provisions in the Services Agreement that could lead to the land being sold. It believed, rightly or wrongly, that [BN] would prefer the land was not sold and would be willing to negotiate outside of the Services Agreement to release Mirvac WA from its obligations and repay the Initial Advance or to renegotiate the Services Agreement.

It is unclear what Mirvac understood about the circumstances in which a deadlock could be triggered. The documents suggest Mirvac was aware it could disapprove a budget, but that it did not understand the contractual limitations on that power. Mirvac appeared to consider that it could decide to disapprove a budget solely for the purpose of triggering the deadlock provisions which would cause [BN] to make a deal. However, Mirvac also consistently expressed an intention to act in a way that was contractually permissible and to obtain legal advice to ensure that it did. Taken as a whole, the documents show that Mirvac was contemplating using the deadlock provisions to cause [BN] to make a deal, but was first going to obtain legal advice to ensure that whatever it did was contractually permissible. Having this intention was not a breach of its contractual obligations.

There is no suggestion that, if contractually permissible options failed, Mirvac would cease to work on the Project. Further, I do not accept that Mirvac made any decision to delay or stop work on the Project pending the anticipated deal being made. In addition, later documents are inconsistent with such a decision. (emphasis added)

1. In February 2013, Mr Aleksovski and Mr Lawrance again met with Mr Waller to raise Mirvac's concerns with regard to the feasibility of the Project. Mr Doyle was also present on this occasion.[272]

1. Around 14 February 2013, there was an email chain within Mirvac. Mr Cross wrote that, within the discussions around 'provisions and pre-Q3 we'll need to have a good plan (and contingency) around the englobo sales which will be a focus of the market and the [Mirvac] [B]oard'. He then listed a number of projects including the Binningup Project. Mr Cross said that developers of some of the projects had forecast sales before June 2013, and that this needed to be managed closely.[273] The judge observed:[274]

It is difficult to understand why Mr Cross was referring to Binningup in the context of an englobo sale. The financial documents before and after this date that referred to an outcome other than Project completion did so on the basis that the most likely outcome was that [BN] would retain the land and repay the $25 million Initial Advance, not that the land would be sold englobo. The provision of $18 million had also been made on the basis that this was the most likely outcome. Given this context, I do not accept that Mr Cross' email should be treated as supporting the proposition that Mirvac had decided that the land would be sold englobo or that they should seek to achieve that outcome.

1. A recipient of Mr Cross' email of 14 February 2013 was Mr Vandermeyde, who forwarded it to Mr Wiese and Mr Lawrance. Mr Vandermeyde did so as a 'heads up' and wrote that '[g]oing into the Q3 meetings please ensure you document and discuss you [sic] exit strategy(ies) on Binningup. If possible start the process'.[275]
2. Mr Lawrance forwarded the email to Mr Aleksovski. On 18 February 2013, Mr Aleksovski replied to Mr Lawrance and Mr Wiese and asked to meet them the next day. He wrote '[w]e are far from an englobo sale position occurring prior to June 30. We will need to go through our strategy to exit'. The judge observed:[276]

In other words, unlike the developers on some of the other projects referred to by Mr Cross, Mr Aleksovski was saying that the Binningup land was not going to be sold englobo by 30 June. Indeed, if the scenario predicted by Mirvac occurred, the land would never be sold englobo - rather, [BN] would keep the land and repay the $25 million Initial Advance.

1. The judge said, with respect to Mr Aleksovski's evidence:[277]

Mr Aleksovski's evidence was that, in referring to 'our strategy to exit', he was just reciprocating the language of the email he had received. Mr Aleksovski said:

'My role as project manager was to ensure the project got delivered. It was not my role to conduct any negotiations with Mr Waller directly about how we should structure the project. All I could do was try to find a solution to the issue of the loan shortfall, while also progressing the project to get the [Local Structure Plan] approved and start subdividing the land for development.

Although I was asked to look at the dispute and deadlock provisions of the Services Agreement, as far as I am aware, there was never a decision made at Mirvac to drive the Binningup project to a deadlock, nor was I ever asked to do that.'

1. On 19 February 2013, Mr Wiese emailed Mr Aleksovski and Mr Lawrance, asking for their comments on a draft Binningup 'Exit Strategy' which he said he had to submit the next day. The draft said:[278]

Biningup [sic] Exit Strategy

High Risk

The assumption adopted for Q2 involved the recouping of the initial $25m land advance. This requires the land owner agreeing to release Mirvac from its obligations under the [Services Agreement] and refund the initial $25m Land costs.

Currently, this is considered the most likely scenario as the land owner is unlikely to proceed through the deadlock provisions as this would result in the loss of control of the land which is considered the crown jewel of their holdings.

In this scenario the land owner would receive all the planning and other associated intellectual property for free and would simply return the initial land advance.

There are risks associated with this scenario as the land owner is considered litigious and may be willing to defend his rights in the courts. If this negotiation is handled correctly, an outcome that benefits both parties could be reached. The alternative course of action would involve Mirvac following the deadlock provisions resulting in the land being sold for an amount well below the land owner's view of its worth.

Discussions have commenced with the land owner in order to facilitate this process. The first step is to determine how a budget deadlock can be initiated. The current intention is to agree project parameters and to have them agreed by external parties. Once this has been carried out it is proposed that an [Approval to Commence Construction document] will be submitted with the view of it being knocked back. Once the [Approval to Commence Construction document] has been knocked back it is assumed budget deadlock will be reached which raises the potential for the deadlock provisions to be enacted.

This is the point at which negotiations with the land owner will commence. Once in Deadlock the two parties will be presented with 2 scenarios:

1. To resolve the dispute at CEO level[.]
2. To follow through the deadlock provisions which results in the sale of the land.

This process is contingent upon many factors and a reliable timeframe is hard to define. Based on the current assessment the process is assumed to be finalised by Dec 2013. (emphasis added by primary judge)

1. In relation to this document the judge said:[279]

Mr Draffen said that he understood the document to be addressing how the provision would be released, rather than a strategy as such. (Mr Draffen used 'released' to describe a provisional loss becoming an actual loss.) Mr Draffen said it looked like they were setting out potential ways in which the provision could be released over time, and noted that the document referred to further negotiations to be had.

This explanation is consistent with the email that prompted the drafting of this document and I accept it. Further, the finance team were not responsible for making decisions as to the progress of projects. Even if the email had reflected a decision made by Mr Wiese, he had no authority to direct Mr Aleksovski. In any event, there is no direction in this email that work on the Project should or would be stopped.

The document does record what Mr Wiese believed had been decided or what he was himself proposing - namely that it should be determined how a budget deadlock could be initiated. This is unremarkable.

Of more interest is the statement 'Once this has been carried out it is proposed that an [Approval to Commence Construction document] will be submitted with the view of it being knocked back'. This suggests that Mr Wiese was assuming that an [Approval to Commence Construction document] would be submitted for the sole purpose of being rejected, which would mean that the Mirvac representatives would then vote against the budget in the [Project Control Group] meeting, which may then lead to a deadlock (or at least he was proposing that this be done).

If in fact Mirvac WA had submitted an [Approval to Commence Construction document] on the basis that it would be disapproved which would lead to a deadlock, and had then put up a budget as a step in that plan, [BN's] case would be quite different. However, that was not done and that would explain why [BN] did not rely on this statement.

I accept Mirvac WA's submissions that this email exchange shows no intention to act contrary to contractual obligations. This is most easily seen from the first two italicised phrases. As with earlier documents, it records the prospect of using the deadlock provisions in a way that was contractually permissible and does not suggest any intention to delay or stop work on the Project pending the anticipated negotiated outcome. (footnotes omitted) (emphasis added)

1. On 21 March 2013, Mr Aleksovski met with Mr Payton, the director of Pastoral Co, to discuss the land associated with the second access road and signage opportunities. Mr Aleksovski agreed that the discussion included potential capital gains tax issues which needed to be confirmed in order to structure the deal accordingly.[280]
2. The judge found that the evidence adduced by the parties did not explain how Mirvac (WA) went from proposing, in the December 2012 Strategy, that Pastoral Co would give up the land free of cost, to what was obviously a conversation about the sale of the land. Nor did the evidence explain why the May 2013 Strategy document (discussed below) implied that under the December 2012 Strategy Pastoral Co would receive payment for the land. The judge said that, therefore, it seemed likely that the December 2012 Strategy document was a draft.[281]
3. Mr Aleksovski continuously denied that the only reason he suggested that Mr Payton consider tax issues was to try to convince him that Pastoral Co should refuse to sell the land for the second access road. Mr Aleksovski said that it was because they could seek other structures to try and either avoid or minimise a particular gain capital gains tax issue. Mr Aleksovski also said that capital gains tax issues for a vendor could be relevant to a purchaser because a vendor might request that the purchase price be 'a certain number post-CGT', ie, a 'grossed-up purchase price which would effectively mean that the purchaser would bear the burden of the vendor's CGT liability'.[282]

1. On Thursday 9 May 2013, Mr Aleksovski emailed Mr Pearce, asking if he had had any word from Mr Hall of the Shire. The judge found that it appeared that Mirvac (WA) was waiting for Mr Hall to update them in relation to Mr Hall's briefing to the Council regarding the second access road issue. The email asked Mr Pearce to commence 'the deemed refusal process' the next week if there was no word by close of business Friday. The deemed refusal process was set out under the Shire's Scheme, and deemed the Shire to have refused to accept the Local Structure Plan if it did not make a decision within 21 days. At the expiration of that period, the Shire was required to forward the Local Structure Plan, among other things, to the WAPC. The judge referred to Mr Aleksovski's evidence that he had not previously been involved in using the deemed refusal process and would have been getting advice from Mirvac's planners.[283]
2. On 10 May 2013, Mr Pearce sent an email to Mr Hall of the Shire, copied to Mr Aleksovski and others. Mr Pearce asked for an update on the briefing to the Council in relation to the second access road issue and said:[284]

Mirvac's instruction from the landowner is to proceed to formally requesting a deemed refusal on the [Local Structure Plan] if a decision is not forthcoming.

However, depending on Council's position, there may be an opportunity for further discussion to resolve the issue, but either way we need to be moving towards some form of determination.

20 May 2013 - the Commonwealth's removal of the moth as a protected species

1. On 20 May 2013, the Commonwealth removed the moth from its list of protected species and Mirvac (WA) requested the removal of the Commonwealth's conditions relating to the moth.[285]

1. On 27 May 2013, Mr Pearce sent an email to Mr Hall, copied to Mr Aleksovski and Mr Cuthbert (of the Department of Planning), attaching a copy of Mr Aleksovski's memorandum to Mr Hall titled 'Binningup Second Access Road Strategy' (May 2013 Strategy). Mr Aleksovski wrote in the memo:[286]

The proposed extension (the Extension) is located on land held by a third party, namely [Pastoral Co] ... [Pastoral Co] has previously indicated that it was willing to enter into the necessary arrangements to provide the required land.

However, further investigation by [Pastoral Co] has revealed that provision of the required land via subdivision and private sale will trigger a significant tax implication for [Pastoral Co]. The provisional sum of this liability far exceeds the capital value of the land required for the Extension and is beyond the scope of [BN] to provide compensation.

It may remain open to Council to enter into separate negotiations with [Pastoral Co] to compulsorily acquire the required land. [Pastoral Co] has not advised [BN] whether this will trigger similar tax implications.

Second Access Road Strategy

Based on the new information detailed above the proposal for the provision of the SAR dated 17th December 2012 is no longer feasible. In lieu of this agreement, [BN] now proposes to provide the SAR for emergency purposes only, rather than as a gazetted road. As an act [of] good faith that recognises its previous undertakings, [BN] is still prepared to make a per lot contribution to the construction of a gazetted road in the event that the required land can be provided.

The approvals and timing for the provision of secondary access to the site will be undertaken in accordance with the following development milestones.

...

1. [BN] will pay the Shire of Harvey the sum of $4,000 per lot for the first 500 lots.

1. Upon the issue of titles to facilitate the development of 500 lots (aggregate), the Shire of Harvey will construct the Extension of Springhill Road to the relevant standard for use as a public road using the funds dedicated for this purpose. (emphasis added by primary judge)
2. On 27 May 2013, Mr Hall of the Shire replied, asking Mr Aleksovski and Mr Pearce to answer a number of questions, including how long BN anticipated it would take to sell the first 500 lots.[287]
3. On 30 May 2013, Mr Pearce responded with detailed answers, and also asked if Mr Hall of the Shire needed anything further from Mirvac (WA) to 'secure the June spot at the Planning Committee'. The last question and answer (with the answer in italics) was:[288]

Previous discussions regarding a staged approach to this road have been that [BN] would upgrade a firebreak to a roadway after trigger points have been reached. In this scenario - the emphasis is on Council not [BN] to have the roadway gazetted and constructed. Why the change in approach? The revised strategy recognises that the financial implications of purchasing the land no longer make it feasible to be dealt with through a private sale. The suggested process is rather for the Shire to acquire the land by resumption under the DPS/Public Works Act (as applicable) to avoid the tax liability. [BN] will make appropriate contributions to the construction of the road as per 3 above.

1. Although both the May 2013 Strategy and this email exchange referred to a change in position, the judge noted that the December 2012 Strategy had proposed, consistently with the May 2013 Strategy, that the Council be responsible for upgrading/constructing the temporary fire access road to a road of the standard of a public road, and that BN would merely fund the construction. In addition, the December 2012 Strategy had proposed that the land would be provided free of cost.[289]
2. The judge found that, in light of the change in position between the December 2012 Strategy and the May 2013 Strategy, either the December 2012 Strategy did not reflect the final version relating to the issue of whether the Shire would purchase the land required for the second access road, or other discussions had occurred after the December 2012 Strategy had been given to the Shire.[290]
3. Mr Aleksovski was aware of Mr Pearce's email of 30 May 2013 and admitted that the answer asserted that the reason for the changed proposal was that 'the financial implications of purchasing the land for the second access road were no longer feasible'.[291]

1. On 2 June 2013, Mr Hall of the Shire sent an email to Mr Pearce, copied to Mr Aleksovski and others. Mr Hall referred to having spoken with Mr Payton of Pastoral Co, and wrote:[292]
   1. I[n] regard to my discussion with [Mr Payton of Pastoral Co] I am concerned about a difference in opinion on the issue of tax implications and the ease with which Mirvac have concluded it [is a] major concern to [Mr Payton]. Regretfully my discussion with him has placed me 'in the middle' of your negotiations, but simply put [Mr Payton] is still waiting for an offer in writing from Mirvac and he has informed me that his capital gains tax issues have been looked into and 'are no problem'.
   2. Given this response from [Mr Payton] I reiterate that the matter appears to have not been fully explored and written correspondence between both parties should really be submitted prior to Council being able to make an informed decision.
2. On 4 June 2013, Mr Aleksovski emailed Mr Payton of Pastoral Co to ask if he had managed to get some tax advice. Mr Payton replied '[w]e have got tax advice and we have no taxation or CGT issues'. Mr Aleksovski asked if it would be possible for that advice to be provided to Mirvac (WA) in a letter from Mr Payton's tax advisor.[293]
3. On 5 June 2013, Mr Payton of Pastoral Co replied '[w]e have had advice in the past from PricewaterhouseCoopers on CGT and GST issues'. He also told Mr Aleksovski that he had a masters in taxation, 'so I am also basing our position on my previous learnings'. Mr Aleksovski replied that Mirvac (WA) would still require the advice from PWC in writing 'to alleviate any potential issues arising in the future'.[294]
4. On 6 June 2013, Mr Payton of Pastoral Co sent an email comprising a single sentence, without any salutation or valediction: 'We will not provide the advice'.[295]
5. Later that day, 6 June 2013, Mr Aleksovski forwarded this email chain to Mr Cuthbert of the Department of Planning, Mr Pearce and Mr Hall, and wrote:[296]

Please refer to email response from [Mr Payton] below.

He is not willing to provide the tax advice as requested in order for Mirvac to satisfy itself that there will be no tax implications in the future and is suggesting that Mirvac rely upon his opinion based upon him achieving his recent qualifications and learning's [sic] - suffice to say this will not suit.

Our group tax manager was in Perth today and I discussed this with him at length and the basic answer is that like any acquisition Mirvac conducts, no matter how large or small, we need to understand the tax position of the entity we purchase from in order to structure the deal accordingly to meet Mirvac's and in this case [BN's] tax requirements.

Suffice to say, this is the exact reason why planning procedures do not and should not be incumbent and reliant on a third parties involvement in issues and matters that clearly can be resolved by the responsible local authority within the planning parameters and context set out by WAPC and [the Department of Planning].

Unless the Shire of Harvey are willing to change their stance on the second access road, Mirvac and [BN] have no option but to deem the [Local Structure Plan] refused by the Shire of Harvey and immediately move on with the [Local Structure Plan] process that has been ongoing since 2009 at a significant expense, to the point now where the project is at a rather precarious financial position - the impact of interest alone over the last 4 years is in the order of $8.4m.

Mirvac have always indicated that they would be happy to construct firstly an emergency access road into the site and then finally a sealed second road into Binningup and we are still committed to this occurring however there are various mechanisms for the Shire of Harvey to acquire the land with the current planning framework and this should be the case and not subject to Mirvac engaging a third party, and subsequently be held [to] ransom to do so.

I trust this clearly outlines our position on this matter and look forward to progressing the [Local Structure Plan].

1. The judge, in effect, accepted Mr Aleksovski's denial that the reason he did not mention in this email what he had said in the May 2013 Strategy was because he realised that Mr Hall knew it was not correct. The judge found that it was more likely that Mr Aleksovski did not mention what he had said earlier because, in this email, he was directly responding to Mr Hall's statement in his 2 June 2013 email that the matter had 'not been fully explored and that written correspondence between both parties should really be submitted'.[297]
2. On 7 June 2013, Mr Cuthbert from the Department of Planning responded to Mr Aleksovski's email, saying '[Mr Payton of Pastoral Co] has indicated that he is prepared to sell the necessary land. I think we can use this as the basis for finalising the road strategy and move on now'.[298]
3. The judge found that, at this point, it was clear that the Shire considered the issue to have been resolved. However, the judge found that Mirvac (WA) still wanted to argue that it should not have to acquire the land, and that Mr Aleksovski believed that (1) the Project should not have been 'held to ransom by the Shire of Harvey to acquire land from a private third party individual for a public road', and (2) 'the best entity in place to acquire land for public use was the [S]hire itself, under the relevant powers of the Act. It had the ability to compulsorily acquire land for a road if it wanted'.[299]
4. The judge noted that Mr Maiorana, BN's planning expert at trial, said that details such as the route and timing of a second access road would not typically be finalised prior to the approval of a Local Structure Plan, but that they would typically be finalised later as a condition of subdivision approval. Mr Maiorana also said that (1) he would have expected that the timing of a second access would have been tied to the first stage of subdivision, and (2) whether the second access would need to be in the form of a fully constructed road would depend on traffic numbers. The judge found that Mr Maiorana's evidence suggests that the Shire's position was unusual, and that it was not unreasonable for Mr Aleksovski to try to obtain a different outcome.[300]
5. On 11 June 2013, the Commonwealth agreed to a request to vary environmental conditions following the delisting of the moth under the relevant Commonwealth statute.[301]
6. In June 2013, there was a site visit by Mr Carfi (CEO of Mirvac Ltd, Residential),[302] Mr Long (a Mirvac (WA) representative on the Project Control Group),[303] Mr Lawrance, Mr Aleksovski and Mr Waller.[304]

20 June 2013 - Mirvac (WA)'s Deemed Refusal Notice

1. On 20 June 2013, Mirvac (WA) sent a notice of deemed refusal to the Shire (Deemed Refusal Notice) stating:[305]

As Council is not prepared to accept the terms of the Draft Second Access Road Strategy dated 27th May 2013 ... we have now reached a stalemate on this issue and we are obliged to trigger the deemed refusal provisions[.]

1. The Deemed Refusal Notice also reiterated BN's commitment to the provision of emergency access and a monetary contribution to the future construction of a second access road. It reiterated that BN was willing to enter into a legal agreement confirming those commitments.[306]
2. The judge, in respect of the Deemed Refusal Notice, appears to have accepted Mr Aleksovski's evidence that:[307]
   1. Mirvac (WA)'s reasoning for requesting a deemed refusal was due to the impasse in negotiations and discussions with the Shire in relation to how the second access road would be implemented.
   2. Mirvac (WA) was using the Deemed Refusal Notice as a step to push the Local Structure Plan through to a point where it would get approved, such that the Shire would have to come to the negotiation table, whereby the WAPC would effectively be acting as the mediator.
   3. Mirvac (WA) chose to raise the matter with the WAPC rather than the State Administrative Tribunal as it was estimated that the WAPC would resolve the issue much more quickly (in around three months rather than over a year).
   4. Mr Aleksovski sent a copy of the Deemed Refusal Notice to Mr Waller the same day.
3. The judge went on to find that:[308]
   1. the WAPC knew that Mr Payton had said he was prepared to sell the land and that there would be no CGT issues, and may have inferred that the 'further investigation' statement had been untrue, however this did not mean that they were unlikely to approve the May 2013 Strategy; and
   2. the WAPC would have objectively considered whether it was appropriate to require Mirvac (WA) to acquire the land for what was to be a public road, since at the time it was thought that the need for a road was being driven by the existing dwellings and the potential development of the existing lots in the town site.

1. On 24 June 2013, an email internal to Mirvac Ltd attached a spreadsheet titled 'WA Development Division - Q3 Forecast' (Mirvac's June 2013 Forecast). The spreadsheet said:[309]

Project Description

... At Q3 FY13 Mirvac took an $18m provision on the loan balance to reflect the risk associated with the recoverability of the loan. [sic] and to reflect the current intention to exit the [Services Agreement].

Project Variances

The settlements over the next five years have been reviewed to take into consideration current market conditions and the delay in environmental and planning approvals. [BN] have also indicated that they are no longer willing to re-negotiate the [Services Agreement]. In addition, the recognition of interest income has been taken out from FY14 onwards in order to limit the exposure to the [Services Agreement] loan. Mirvac's strategic decision is to work towards a deadlock by Jun‑13 which has resulted in an impairment to the loan amount being taken up and a recovery of the initial loan of 25m from the [Services Agreement] partner by Jun-14. (footnotes omitted) (emphasis added by primary judge)

1. In relation to this document the judge said:[310]

Mr Aleksovski said the document was a financial accounting document and, while he would have seen it, he would not have had any input into it.

Mr Draffen said:

'I think this is a forecast that reflects the fact that we've taken the impairment as at 31 December 2012 and for the purposes of financial projections going forward from an earning perspective and because of everything that was unknown related to the project at the time, that the forecast was just assuming the - effectively the same logic as the provision.'

The spreadsheet also said, under 'Project Risks':

'There are risks around the recoverability of the [Services Agreement] loan due to the underlying land value and the viability of future development. The FY13 Q3 forecast is based on the deadlock position by Jun-13 with a settlement outcome by Jun-14.'

Mr Draffen said this noted the risks of achieving the assumption that had been made for the purpose of the provision amount - because the provision amount relied upon negotiation between the parties.

Nevertheless, the italicised phrases disclose, on their face, an intention to work towards a deadlock and exit the Services Agreement. However, earlier documents show Mirvac had received some advice, but wanted to obtain 'further detailed legal advice in relation to how best to enact the deadlock provisions to ensure our actions are fully supported by the agreement'. The next document to be discussed suggests that it did get further advice.[311] (footnotes omitted) (emphasis added)

1. The idea of redeveloping the golf course was first raised by BN. At the 25 July 2013 Project Control Group meeting (referred to in detail below), BN raised the suggestion that the golf course could be included as further residential land within the development so as to improve yield. It was agreed that Mirvac (WA) would conduct some analysis, based on a development both with and without the golf course.[312]

25 July 2013 Project Control Group meeting minutes

1. The minutes of the Project Control Group meeting of 25 July 2013 recorded:[313]

Mirvac advised the [Project Control Group] that it had formally advised the Shire of Harvey via correspondence dated 20th June 2012 [sic ‑ 2013] that as per the provisions set out in the District Planning Scheme, the [Local Structure Plan] was deemed refused due to the stalemate reached with the Shire in regards to the second access road and the [Local Structure Plan] was now with WAPC for consideration.

...

Mirvac advised ... that it had drafted a strategy (as per the requirement of the Scheme Amendment) in regards to the preferred location, construction standard and timing of the second access road to the project. The preferred location, construction standard and timing of the second access road was agreed with the Shire of Harvey at a meeting in August 2012 to be funded by depositing in a trust account $4000/lot from the sale proceeds of the first 500 lots being sold and settled, such than an amount of $2m will be available to the Shire of Harvey to construct the road. The Shire of Harvey was advised by Mirvac that the land required for the second access road will need to be negotiated with [Pastoral Co] and acquired by the Shire within the limitations of the existing planning framework as it allowed for the compulsory acquisition of land for public roads. The Shire of Harvey has since decided that the second access road is a priority and has refused to assess the [Local Structure Plan]. (emphasis added by primary judge)

1. The judge accepted Mr Aleksovski's evidence that the payments of $4,000 per lot referred to in these Project Control Group minutes (as italicised in the extract above) were not referred to in the summary of actions from the 13 August 2012 meeting with the Shire, but rather, that there were subsequent discussions that led to that memo. Further, the judge found that the minutes were accurately referring to the second meeting with the Shire on 28 August 2012, where:[314]
   1. the timing of the second access road was agreed (after the matter had been left open in the 13 August 2012 meeting);
   2. it was agreed that the second access road would be provided on settlement of 500 lots; and
   3. they agreed the cost would be 'capped at up to $2 million ... and this money would be provided to the Shire of Harvey to be held by them'. (If $4,000 was paid for each of the 500 lots, the total would be $2 million).
2. The judge accepted Mr Aleksovski's explanation that the Shire had not 'refused to assess the [Local Structure Plan]', but rather that he meant they had refused the advertising of the Local Structure Plan, and found that Mr Aleksovski did not intend any inaccuracy by using these words.[315]
3. The judge referred to Mr Aleksovski's evidence that Mr Payton had said that Pastoral Co's position was that it did not consider it was subject to any possible capital gains tax issue in selling the land for the second access road, and though it was a matter for the Shire and the WAPC whether they accepted Pastoral Co's position, Mr Aleksovski had requested a copy of the written advice that Mr Payton had said that he had.[316]
4. The judge rejected BN's contention that Mr Aleksovski admitted that he had never provided BN with a copy of either the December 2012 Strategy or the May 2013 Strategy. Her Honour found that the effect of Mr Aleksovski's evidence was that he could not recall if he had. Moreover, the judge rejected BN's submission that Mr Doyle's evidence was that neither he nor Mr Waller had ever been provided with either of the strategy documents at a Project Control Group meeting or at any other time. Rather, the judge found that Mr Doyle had only said that he had never seen any strategy. The judge found that, in any event, Mr Aleksovski was in regular contact with Mr Waller, whereby each would tell the other what they were doing, and Mr Aleksovski would copy or forward particular documents to Mr Waller.[317] The judge found that, although Mr Waller had complained about delays and waste at the Project Control Group meeting on 13 June 2014, his complaints were not directed at Mr Aleksovski but toward previous Mirvac personnel.[318]
5. The judge expressed some concerns about Mr Aleksovski's evidence and, in particular, found that his explanation for raising tax issues in relation to a potential purchase of land from Pastoral Co was unconvincing. However, the judge was not satisfied that Mr Aleksovski was attempting to mislead BN by writing the minutes so as to create a false impression that the delays had been caused by the Shire changing its position. Instead, her Honour found that the evidence showed that both Mirvac (WA) and the Shire had changed their positions over time.[319]
6. Relevantly, the judge found that:[320]
   1. Mr Aleksovski's grievance was with the Shire and not BN, as he was trying to get the Shire to acquire the land (as he thought it should); and

2, Mr Aleksovski was not seeking to delay the Project by the Deemed Refusal Notice as, had he been seeking to do so, he would not have reiterated in the Deemed Refusal Notice the commitments to provide emergency access to the site and monetary contribution to the future construction of a second access road and that BN was willing to enter into a legal agreement confirming those commitments.

1. On 4 August 2013, Mirvac (WA) submitted to the Shire a Revision of the proposed Local Structure Plan, Revision D (Revision D).[321] Revision D referred to management regimes 'for the distinct open space typologies' detailed in a 2011 report, which included the golf course.[322] Revision D again dealt with 'emergency access' and 'proposals for second access road' in different sections of the proposed Local Structure Plan, and again referred to the 2009 Trigger Provisions.[323]
2. On 22 August 2013, Mr Aleksovski emailed Mr Waller to advise him, among other things, that he was in the process of finalising the remodelling of the Project to convert the golf course into lots, and that costings were due that week from Mirvac (WA)'s engineers.[324]

1. On 5 September 2013, Mr Aleksovski wrote a memorandum (September 2013 Options Memo) which showed that if the Project was completed without any variation to the Services Agreement, Mirvac would suffer a loss.[325]
2. The September 2013 Options Memo referred to legal advice that had been received. This included advice to the effect that the Services Agreement did not give Mirvac (WA) the right to exit the Services Agreement if the Project was thought to be infeasible and that the only termination rights related to breach and deadlock. The September 2013 Options Memo said that legal advice was also that:[326]

negotiations between Mirvac and [BN] in respect to the [Services Agreement] could in fact be held and completed between both parties outside of the current agreement framework. It was suggested by Mirvac Legal that this be the preferred option, subject to Mirvac having a preferred outcome that it wished to achieve.

1. The September 2013 Options Memo set out what was said to be the three most suitable options to be considered:[327]
   1. Option 1 involved undertaking a feasibility analysis to consider having the existing development commence on the foreshore.
   2. Option 2 proposed a feasibility analysis based on the development commencing on the foreshore, but also incorporating the existing golf course into the development. It was noted that this option would require a further 18 months of statutory planning as an amendment to the Local Structure Plan and environmental approvals would be required.
   3. Option 3 proposed undertaking and completing negotiations and discussions outside of the current Services Agreement framework, which may be to renegotiate the Services Agreement or negotiate Mirvac's exit from the Project.
2. The September 2013 Options Memo indicated that the outcome of options 1 and 2 was that the Project loan would not be recouped in full and there would be a significant shortfall. Option 3 could not be modelled because it was not known what would be negotiated.[328]
3. The September 2013 Options Memo concluded by advising that consideration be given to holding discussions with BN outside the current Services Agreement framework.[329]
4. In relation to the September 2013 Options Memo, the judge observed that:[330]

'consistent with our approach that we wanted to try and find a way, with Mr Waller, to agree a way to move forward and part of that would have been to continue those negotiations. Equally, it was focused on trying to agree a logical way to move forward with Stage 1 of the project. ... what we were hopeful of is that we could agree to - a pathway to move forward with a logical Stage 1 and that may or may not have, at the time, depending on the negotiations, resulted in certain amendments to the [Services Agreement] but it was subject to a negotiation.'

Mr Draffen himself later had discussions with Mr Waller. He said:

'[I]t was trying to land on options to move forward. Those options may or may not have involved variation to the [Services Agreement]. That was something that would have needed to be negotiated. The focus of my input post that was, really, trying to work with the team to find a solution to advance the project with a logical Stage 1.'

[BN] submitted that the [September 2013] Options Memo shows there was no possibility that an [Approval to Commence Construction document] would ever have been given in the future. I do not accept this. The express terms of the [September 2013] Options Memo, in setting out options and advising that consideration be given to pursuing the third, is entirely inconsistent with a decision having been taken to pursue only option 3 and, if it failed, to stop work on the Project. On the contrary, the implication from the [September 2013] Options Memo is that, if option 3 failed, one of the other two options would be followed. (footnote omitted)

1. At the 2 October 2013 Project Control Group meeting, the minutes of the 25 July 2013 meeting were confirmed. The minutes of the 2 October 2013 meeting record that Mirvac (WA) reported on its analysis of developing the golf course into residential lots, and provided a draft revised design. Mirvac (WA) said that the design would be further revised to incorporate the southern portion of the site. Mirvac (WA) advised that the revision of the Project to convert the golf course into residential lots would require an amendment to the Local Structure Plan, and that this would take 9 - 12 months.[332]
2. In respect of the Project Control Group meetings, the judge found that Mr Waller had expressed the view that it was not necessary to amend the Local Structure Plan at the outset. However, Mirvac had disagreed and said that, if it was intended to develop the golf course at some time in the future, the Local Structure Plan needed to be amended at the outset. The judge found that Mirvac considered, in effect, that it was not permissible to conceal an intention to develop the golf course in the future. In particular, the judge found that Mirvac (WA) was concerned about misrepresenting the true picture to purchasers and to those who had already purchased lots on the basis that there was a golf course.[333]
3. The judge accepted Mr Aleksovski's evidence, and Mr Waller's admission, that after the 2 October 2013 Project Control Group meeting, Mr Waller had asked Mr Aleksovski to remove from the minutes any reference to discussions about the closure and development of the golf course. The judge found that Mr Waller also said that, while the golf course was inevitably going to close, he told Mr Aleksovski not to talk about it because he did not want to 'worry people' that it might be closed down.[334]

Project Control Group meeting prior to 17 October 2013

1. Mr Doyle said that he thought Mr Waller had announced at the Project Control Group meeting, prior to the meeting with the Shire on 17 October 2013, that they would go and see the Shire, and that no one had said they could not go. The judge found that Mr Doyle did not, however, suggest that the Project Control Group had agreed to Mr Waller reaching a deal with the Shire without any input from Mirvac (WA).[335]

BN's 17 October 2013 meeting with the Shire and BN's intention to handle acquisition of Pastoral Co land

1. On 17 October 2013, Mr Waller, Mr Scott and Mr Doyle (all of BN) met with officers of the Shire. The next day, Mr Waller sent an email to Mr Aleksovski, copied to Mr Hall, setting out what had been discussed as follows:[336]

Yesterday myself, [Mr Scott] and [Mr Doyle] met with [Mr Parker] and [Mr Hall] at the Shire of Harvey's offices in Harvey.

Our main discussion was the current impediment delaying the Binningup approvals from the Harvey Shire.

We had a very cordial and open discussion with both [Mr Parker] and [Mr Hall]. [Mr Hall] did mention that his dealings with both you and [Mr Pearce] have been very good.

The Shires [sic] position is that there must be agreement with the Shire of Harvey by [BN] that it agrees to construct the 2nd access road at the same time as the 1st stage of development is undertaken as planned in the submissions to council.

We have been assured this is the only matter now outstanding with the Shire. When this commitment is dealt with the Shire will be pleased to have the planning matters put to the next earliest meeting to have the matter dealt with. (There may [be] some other small issues but would not hold up the approval process.)

On behalf of [BN] we committed to [Mr Parker] and [Mr Hall] we would agree to their request for the 2nd access road construction and immediately make arrangements to acquire the land in question.

[Mr Aleksovski], I am aware you have discussed the price with the vendor, we now need to arrange the purchase of this land for the price discussed. Can you and or [Mr Pearce] please arrange to meet with the vendors and make the necessary arrangements.

[Mr Hall] has agreed to supply us with a note which will cover the Shires [sic] expectation for inclusion in our official commitment letter.

Could you or [Mr Pearce] contact [Mr Hall] to discuss the details. (emphasis added)

1. The judge noted Mr Aleksovski's evidence given during cross‑examination by counsel for BN, that what Mr Waller recorded as the Shire's position had been the Shire's position for a 'long time'. However, her Honour said that counsel for BN did not establish what a 'long time' was. The judge found that, as late as 27 May 2013, the Shire was still expressing its understanding that the road would be constructed only after trigger points had been reached.[337]
2. On 21 October 2013, Mr Aleksovski emailed a reply to Mr Waller's email, saying that he would proceed with the requests. The judge found that, in this written reply, Mr Aleksovski did not complain to Mr Waller about what Mr Waller had agreed to. However, the judge found that Mr Aleksovski did raise his concerns with Mr Waller by telephone, although noting that it was unclear whether this call was before or after Mr Aleksovski's email on 21 October 2013. Mr Aleksovski described the conversation in this way:[338]

I just highlighted to him that, look, you know, we were heading down a certain path. We were close to getting the structure plan approved, because previous to that I had - I had submitted a deemed refusal to - to the Shire of Harvey, because they hadn't dealt with the structure plan in - in - in accordance with the provisions of the scheme in a timely manner. And I just highlighted concerns that, look, the - the adjoining neighbours, being the [Paytons] or [Pastoral Co], now knew that we needed this - this road as part of Stage 1. So, you know, my concerns that I raised with Mr Waller was, 'What if these guys turn around and say, 'Well, we want one, two, three million dollars for this,' for this piece of land that's now deemed to be pretty strategic? Because without it we can't commence development'. You know, well, we could potentially be - be held to ransom by - by them, which is effectively what - what the Shire of Harvey were doing to us at the time. They were trying to hold us to ransom with this particular - particular road. And I remember Mr Waller saying to me, 'Look, I've dealt with the [Paytons] over the time. I know them pretty well. They're good people. Don't worry about it. I will handle the acquisition of the land for the road'. (emphasis added)

1. The judge found that while Mr Waller did not remember all of this conversation, he did not deny it. Further, the judge accepted Mr Waller's admission that he did tell Mr Aleksovski that he knew the Paytons pretty well and that he would deal with the acquisition. The judge held that, from this point in time onwards (around 21 October 2013), Mirvac (WA) could not be criticised in relation to the second access road, as Mr Waller had taken on the task of acquiring the land.[339]
2. On 28 October 2013, Mr Aleksovski forwarded Mr Waller's email to Mr Lawrance of Mirvac (WA), writing that '[t]he delivery of the second access road or the acquisition of the land has not been discussed or ratified at [Project Control Group] level nor agreed to by Mirvac'. The judge found that BN's submission that Mr Aleksovski had been asked to report about Mr Waller's commitment was contrary to the evidence.[340]

Mr Waller's evidence as to subsequent steps taken to acquire land from Pastoral Co

1. Mr Waller's oral evidence was that, after a price was agreed with Pastoral Co, BN had sent a legal agreement and a deposit cheque to the vendor, but 'a tax matter came up ... and something else came up and ... they had to send the cheque back to say that ... they can't do the transaction at the time'. He said this was sometime after his meeting with the Shire in October 2013. Later in his evidence, Mr Waller said he was not sure what the issue had been but thought it was a tax issue. The judge expressed concerns about Mr Waller's evidence generally, and did not place much weight on this evidence, other than to note that it would support Mr Aleksovski's evidence if it were true.[341]

1. In November 2013, Mirvac (WA) submitted a further revision of the proposed Local Structure Plan, Revision E to the Shire (Revision E).[342] Revision E referred to the golf course as one of the key topographic and associated vegetation in a network of Public and Private Open Space.[343] It also provided:[344]

After consideration by the Shire the proponent of the two options the extension of the Springhill Road was selected as the preferred option. It has been agreed with the Shire that the land required for the road will be acquired by [BN] and the road will be constructed to a sealed and line mark standard to the specification of the [Shire], and reserved as part of the works for [Stage 1] of the development. This commitment is secured by the inclusion of relevant provisions of Part One, Table 4 - Provision 4 of the Local Structure Plan.

1. Part One, Table 4 - Provision 4 under 'Second Access Road' stated:[345]

As conditions of the first stage of subdivision the [Shire] will require the landowner/applicant to:

(1) Secure the land required for the second access road, being an extension of the existing Springhill Road to the subject site, on an alignment generally in accordance with that depicted in the Local Structure Plan (Plan 1);

(2) Construct and drain the road at the full cost to the landowner/applicant; and

(3) Set out the road reserve on a separate diagram or plan of survey ... and transfer the road free of cost to the Local Government for road purposes and without any payment of compensation.

1. On 3 December 2013, the Council by resolution adopted Revision E of the Local Structure Plan.[346]
2. On 18 December 2013, the WAPC advised that it supported Revision E of the Local Structure Plan, subject to the endorsement of the Local Water Management Strategy by the Department of Water.[347]

1. On 10 February 2014, the Local Water Management Scheme aspect of Revision E was endorsed by the Department of Water.[348]
2. On 11 February 2014, the Local Structure Plan was approved and signed by the Shire.[349]
3. On 11 February 2014, the WAPC sent a letter to Mr Hall, copied to Mr Pearce, advising that the Local Structure Plan had been endorsed by the WAPC.[350]

Mr Waller's meeting with Mr Draffen on 3 April 2014

1. Mr Waller continued to be interested in developing the golf course. He further raised the prospect of increasing yield by developing the golf course at a meeting with Mr Draffen on 3 April 2014.[351]
2. Although Mr Waller purported to provide minutes of the meeting, her Honour did not accept them as accurate. Rather, her Honour accepted the accuracy of Mr Draffen's evidence. In particular, her Honour accepted that the following matters were discussed at the meeting:[352]
   1. Mr Draffen said that Mirvac would need to go through its own internal processes before it could agree, at the Project Control Group level, to a construction of Stage 1;
   2. Mr Waller raised the question of increased yield by deleting the golf course;
   3. Mr Draffen mentioned three possible options in his discussions with Mr Waller: (1) the Project would not proceed and Mr Waller would buy Mirvac out - but that was not something that Mr Waller said he would consider; (2) Mirvac (WA) would come up with a viable plan to progress Stage 1 and for this then to flow through the Project, and the parties would ideally renegotiate some aspects of the Services Agreement to make it more equitable to both parties; and (3) to sell the site - which Mr Waller was 'not keen on'.
   4. Mr Draffen and Mr Waller agreed that further work should be done in relation to proposed Stage 1 to present the Project in its 'best light', with regard to size and scale, involving considering moving it closer to the foreshore; and
   5. Mr Waller left open the option that after further work was done, discussions between the parties could continue.
3. Having summarised the evidence, her Honour said:[353]

I accept Mr Draffen's account of the meeting. As at 3 April 2014, Mirvac's position, with which Mr Waller agreed, was that Mirvac would do some more work around the potential for a Stage 1 that would present the Project in its best light. The prospect of renegotiating the Services Agreement was left open.

I do not accept that anything Mr Draffen said in the meeting manifested the intention alleged by [BN]. Indeed, even Mr Waller's purported minutes do not assert that Mr Draffen said that Mirvac had decided not to proceed. (footnotes omitted)

1. By 6 May 2014, Mr Waller had (still) not reached an agreement with Mr Payton of Pastoral Co as to the price of the land required for the second access road.[354]
2. At the 6 May 2014 Project Control Group meeting, Mr Waller referred to legal advice BN had obtained from Mr Solomon (counsel for BN at trial and in this appeal) with respect to the closure of the golf course. The judge accepted Mr Waller's evidence that the legal advice in the meeting was that there were 'no issues' with converting the golf course into residential lots. The judge found that it was agreed at the meeting that Mirvac (WA) would 'prepare feasibility assessing financial and lot yield impact of developing golf course land for consideration at [the next Project Control Group meeting]' and that Mr Waller would provide the legal advice. It was further agreed that Mirvac (WA) would prepare a Budget and Programme for approval, and that this would be provided at the Project Control Group meeting in the third quarter of the year, likely to be in September 2014.[355]
3. On 9 May 2014, BN sent a Notice to Mirvac (WA) (BN's May 2014 Notice) requesting information about when a Budget and Programme would be prepared and stating that 'for the purpose of preparation of the Budget and the Programme for the Next Stage', BN 'accepts that the Project is to be developed with the golf course continuing as is'. In respect of BN's May 2014 Notice, the judge found that:[356]
   1. the request was odd, as BN had already been told in the Project Control Group meeting three days earlier that a Budget and Programme would be presented at the September 2014 meeting; and
   2. in any event, BN's stated 'acceptance' that 'the Project is to be developed with the golf course continuing as is' could not unilaterally change what had been discussed and agreed at the earlier Project Control Group meetings. However, the judge found that it was an indication that, as at May 2014, BN did not want the golf course to slow down progress.
4. BN's May 2014 Notice also advised, amongst other things, that BN 'has successfully negotiated with the Paytons to purchase the land required for the second access road, so that no delay on that account is required'. The judge found that this was not an accurate statement, as other documents show that, as late as 23 September 2014, the Paytons and BN had still not reached an agreement on terms. Further, the judge found that BN had not acquired the land for the second access road as at the date of the hearing.[357]

1. There was a dispute as to what was said at the 13 June 2014 Project Control Group meeting. However, both parties agreed that (1) Mr Waller said the golf course would need to be closed when construction started, and (2) the parties discussed the immediate future of the golf course, including the issue of market representation and impact on sale prices. The judge found that, although the minutes did not record a decision to abandon the possibility of developing the golf course into residential land at some point in the future, nor did they record a decision or common view that it would be developed.[358]
2. The judge, in effect, accepted Mr Aleksovski's evidence that, during the meeting, (1) Mirvac (WA) reiterated that the closure and development of the golf course was not simple and would require an amendment to the Local Structure Plan, and (2) Mr Waller's response to Mr Aleksovski's concerns in relation to purchasers who had built homes backing onto the golf course was that he (Mr Waller) would buy back those houses and lots.[359]
3. There was a further issue as to what Mr Lawrance said at the Project Control Group meeting on 13 June 2014. Her Honour found that at the Project Control Group meeting on 13 June 2014, Mr Lawrance said words to the effect that 'Mirvac had internal approval procedures and that Mirvac would not commence Stage 1 without having internal approval'.[360] The judge said:[361]

I accept that evidence. However, I do not consider Mr Lawrance's statement was repudiatory or one which manifested the intention alleged by [BN]. As will be seen, Mirvac WA had the right to disapprove a budget as a member of the [Project Control Group]. Before a [Project Control Group] meeting at which a budget was to be approved or disapproved by the [Project Control Group], it is to be expected that Mirvac would go through an internal approval process to enable their representatives on the [Project Control Group] to be in a position to vote appropriately, as explained by Mr Draffen in a passage extracted above. There is nothing repudiatory or sinister about this. Indeed, Mr Waller said he would think that would be logical. (footnotes omitted)

1. A report prepared by Mr Aleksovski of Mirvac (WA) (September 2014 Report)[362] proposed that steps would be taken to obtain an amendment to the Local Structure Plan to convert the golf course land to residential lots, which was said to require planning work estimated to take 12 ‑ 15 months.[363]
2. The September 2014 Report attached a Preliminary Works Programme (September 2014 Programme)[364] and a Budget (September 2014 Budget)[365] to reflect this Programme. The September 2014 Budget listed the costs associated with obtaining an amendment to the Local Structure Plan, and the costs associated with the steps that would follow - the detailed design and documentation of Stage 1 including the second access road, the detailed design and documentation of the bulk entry works and the subdivision application for Stage 1 - totalling $750,000.[366]
3. The judge accepted Mr Aleksovski's evidence when he denied, in answers in cross-examination, that he had thought of the amendment to the Local Structure Plan as a 'good method to further delay commencement of infrastructure works for a long period'. The judge found that his denial was supported by the September 2014 Programme, included in the September 2014 Report, which envisaged (among other things) that the detailed engineering design would take place while the subdivision application was under consideration. The judge found that this had some risk, in that the subdivision application might have been rejected, but that it meant that Stage 1 would proceed more quickly if the detailed design had been done in advance. The judge concluded that, if Mirvac (WA)'s goal was delay, one would not expect that the September 2014 Programme would be drafted in this way.[367]
4. The judge found that Mirvac (WA), by proposing to amend the Local Structure Plan to convert the golf course land into residential land before further carrying out the Project, did not do so deliberately in order to delay the progress of the Project. Amongst other things, Mr Aleksovski's sworn evidence was that he did not prepare the September 2014 Budget for the purpose of delay. The judge accepted his evidence on this point and found that it was supported by the September 2014 Programme. There was nothing in the evidence as a whole which brought about doubt as to this conclusion.[368]

September 2014 - BN's proposal to have meetings recorded

1. On 9 September 2014, Mr Waller of BN wrote to Mr Aleksovski to advise that he intended to record the next and all subsequent Project Control Group meetings. Mirvac (WA) said it would not agree to meetings being recorded but referred to a suggestion previously made by it that an independent minute‑taker be appointed. Mirvac (WA) agreed to pay for this service at Mirvac (WA)'s cost. BN replied that it would not consent to an independent minute-taker being present. There emerged an impasse over this issue.[369] The judge said:[370]

Clause 5.10(c) of the Services Agreement provides that [Project Control Group] meetings may be conducted by telephone conference, video conference or any similar means of audio or audio-visual communication. Neither it, nor any other clause, provides for the recording of meetings.

Mirvac WA's refusal to agree to meetings being recorded was not a breach of its obligations, good faith or otherwise. I am also not satisfied it refused in order to delay or stop the Project. The documentary evidence showed that, by September 2014, the relationship between the parties was combative. Mirvac WA had said it was willing to attend a meeting if it was not recorded, and was willing to pay for an independent minute-taker. This was not an unreasonable stance, in all of the circumstances. Mirvac WA's Good Faith Obligation did not require it to agree to the meeting being recorded.

Either party could have utilised the dispute resolution process in the Services Agreement to resolve the issue. Instead, [BN] sent its Termination Notice.

BN's notice alleging repudiation - 2 October 2014

1. On 2 October 2014, BN served on Mirvac (WA) a notice (BN's Termination Notice)[371] stating that BN thereby terminated the Services Agreement. BN's Termination Notice, in substance, comprised three parts. First, it alleged (Recordings of Meetings allegation) repudiation by Mirvac (WA) on the basis that:
   1. in breach of cl 5.12(b) of the Services Agreement,[372] Mirvac (WA) had refused to attend the scheduled Project Control Group meeting scheduled for 25 September 2014 (and future meetings) if BN insisted on recording the meetings, when Mirvac (WA) had no legal entitlement to not attend merely because BN insisted on recording the meetings; and
   2. cl 6.6, cl 6.7 and cl 6.8 of the Services Agreement had the effect that, because there could be no future Project Control Group meetings by reason of the matters referred to above, the Project could not be carried out and BN had lost the substantial benefit conferred on it by the Services Agreement, namely the implementation of the Project to carry out BN's objectives referred to in cl 2.1 and the recitals of the Services Agreement.
2. Secondly, in addition or alternatively to the Recordings of Meetings allegation, it alleged (2014 Programme and Budget allegation) repudiation by Mirvac (WA) in failing to provide a Programme and Budget for Stage 1 of the Project and, instead, providing the September 2014 Programme and Budget. BN alleged that in the recited circumstances, this involved a serious breach of the good faith obligation in cl 3 of the Services Agreement, in that 'it was intended to cause material delay in commencing work on the first stage of the Project so as to result in [Mirvac (WA)] not incurring expenditure in carrying out the Project prior to [Mirvac (WA)] becoming entitled on 11 January 2018 to repayment of any unrepaid part of all Advances ...'. The recited circumstances were (allegedly):
   1. at the Project Control Group meeting on 13 June 2014, Mirvac (WA)'s representatives stated that a Programme and Budget for Stage 1 of the Project would be presented at the next Project Control Group meeting, which was scheduled for 25 September 2014;
   2. the September 2014 Report, provided with the agenda for the scheduled Project Control Group meeting on 25 September 2014, did not include a Programme and Budget for Preliminary Works for Stage 1 of the Project and, instead, provided a Programme and Budget for an application to amend the Local Structure Plan to convert the golf course land into residential lots - a process which was reported to be contentious and would take 12 ‑ 15 months;
   3. making the application to amend the Local Structure Plan would have been inconsistent with the Services Agreement because development, operation and maintenance of the golf course was a component of the Project, such that the application could not be made unless the Services Agreement had been amended to provide for it;
   4. the proposal to amend the Local Structure Plan was inconsistent with the agreement reached at the 13 June 2014 Project Control Group meeting that no such application would be made without amendment of the Services Agreement; and
   5. BN had pressed for a Programme and Budget for Stage 1 of the Project to be provided since April 2014.
3. BN's Termination Notice stated that, for the purposes of the 2014 Programme and Budget allegation, Mirvac's 'intention of causing such material delay' was clear from:
   1. Mirvac Ltd writing off $18 million of expenditure;
   2. Mr Draffen stating, in an email to Mr Waller of BN dated 17 April 2014, that there was 'a real question (as discussed) as to whether Mirvac as Financier will continue to fund any further development given the projected value of the [P]roject';
   3. Mr Draffen's statement, at a meeting with Mr Waller on 3 April 2014, that the Board of Mirvac Ltd had not decided to commence work on the Project now that all development approvals had been obtained;
   4. Mr Lawrance's statement, at the Project Control Group meeting on 13 June 2014, that in order to proceed to construction, Mirvac would still go through its internal approvals process; and
   5. the fact that the Board of Mirvac Ltd had not approved commencement of work to carry out the Project, even though all necessary development approvals had been obtained, and that Mirvac (WA) would not commence such work in the absence of the Board's approval.
4. The third element of BN's Termination Notice stated, in effect, that (1) alternatively, the Recordings of Meetings allegation, and further (or alternatively) the 2014 Programme and Budget allegation, constituted a Non Monetary Event of Default entitling BN, under cl 17.1 of the Services Agreement, to terminate Mirvac (WA)'s appointment, and (2) that BN thereby terminated Mirvac (WA)'s appointment on this basis (if for any reason the termination of the Services Agreement effected by the acceptance of alleged repudiation did not take effect).

1. The unchallenged findings of fact in this appeal include the findings summarised in the Chronology of Events at [50] ‑ [59], [61], [62] ‑ [68], [71] ‑ [78], [82] ‑ [84], [87] ‑ [91], [92] ‑ [99], [105] ‑ [117], [122] ‑ [124], [127] ‑ [132], [134] ‑ [136], [149] ‑ [150], [152] ‑ [158], [170] ‑ [171], [186], [190], [200] ‑ [202], [217] ‑ [221], [226] ‑ [227], [234] ‑ [235], [243] ‑ [246], [252] ‑ [267] above. Insofar as it might be thought that these findings were somehow impliedly or indirectly challenged, there is, in any event, no reason to doubt their correctness.

1. BN's grounds of appeal are outlined below. In the following summary of the grounds, reference has been made to the items relied upon by BN in its Practice Direction 7.4 Schedule (BN's Schedule).

1. Grounds 1 and 2 allege, in effect, that the judge erred in law in (1) finding at [583] ‑ [618] that Mirvac representatives on the Project Control Group had a right to disapprove a Programme or Budget, and (2) finding at [619] that completion of the Project was not a contractual benefit conferred on BN. BN alleges that the judge should have found that, on the proper construction of the Transaction Documents, the Mirvac representatives on the Project Control Group had no such right of disapproval, and that the completion of the Project was a contractual benefit conferred on BN.

1. Ground 3 alleges, in effect, that the judge erred in law in finding at [681] ‑ [706] that there was no implied obligation on the part of Mirvac (WA) 'to endeavour to ensure' that BN's obligation to repay each advance by its 10‑year anniversary date could be met from sales proceeds. BN alleges that the judge should have held, by reason of the matters raised in ground 2, that on the proper construction of the Transaction Documents it was an implied term of the Loan Agreement that Mirvac (WA) 'not hinder or prevent the fulfilment of the purpose of the [Services Agreement] by causing the Initial Advance or any subsequent Advance (Advance) not to be wholly, alternatively substantially, repaid (by payments to Mirvac (WA) in its capacity as Financier under cl 11) 10 years after the Advance was made'.[373]

1. Ground 4 alleges, in effect, that the judge erred in finding at [639] ‑ [680] that Mirvac (WA) was entitled to rely on cl 5.5(b) of the Loan Agreement even where a Trigger Event occurred by reason of repudiation, or a Non Monetary Event of Default, by Mirvac (WA). BN alleges that her Honour should have found that, in those circumstances, the prevention principle would preclude Mirvac (WA) from relying on cl 5.5(b) of the Loan Agreement.

1. Ground 5 alleges, further or alternatively to ground 4, that the judge erred in law in finding at [899] - [902] that the doctrine of circuity of action was inapplicable, and in finding that the doctrine would not have prevented Mirvac (WA) from relying on cl 5.5(b) of the Loan Agreement.

Errors of fact - second access road, golf course and Mirvac's internal documents

1. Ground 6 alleges, in effect, that the judge erred in fact in finding at [103] - [178] that (1) Mirvac (WA) did not intend to avoid the imposition of a condition of planning approval requiring the immediate construction of a second access road in order to avoid expenditure on the construction of such a road unless and until the carrying out of the Project had been internally approved by Mirvac Ltd, and (2) Mirvac (WA)'s purpose in seeking to avoid the imposition of such a condition was instead to avoid delay in the EPA approval process, and to avoid premature and possibly unnecessary expenditure. In this regard, BN alleges that the judge erred in the following respects:

The judge erred in fact in accepting, at [115] and [144], Mr Adam Davidson's evidence about the purpose of avoiding the imposition of a condition of planning approval requiring immediate construction of a second access road. Mr Adam Davidson's evidence was contradicted by his 24 August 2009 email to Mirvac's consultants, containing the draft of a proposed response by the Shire to the EPA.[374] The correct inference, based on the 24 August 2009 email and Mirvac (WA)'s subsequent conduct referred to in grounds 6.3, 6.4, 6.6 and 7 - 11 below, was that if such a condition were imposed it would cause Mirvac (WA) not to proceed with the Project.[375]

The judge erred in fact in finding, at [150] and [158], that the email from Mr Aleksovski to Mr Hall of the Shire dated 5 September 2011,[376] and the email between Mr Adam Davidson of Mirvac (WA) and Mr Jake Davidson of the Shire dated 9 September 2009,[377] recorded a preliminary agreement between Mirvac (WA) and Shire Officers. Instead, they were nothing more than an incomplete preliminary negotiation concerning a draft provision for inclusion in a Local Structure Plan, having regard to the terms of the email.[378]

The judge erred at [158] - [163] in construing the words 'agreed outcome with the Shire' in Mr Adam Davidson's 'handover notes' to Mr Aleksovski in an email dated 22 May 2010[379] when (1) as alleged in ground 6.3, there was no such agreement with the Shire, and (2) the adoption of a Local Structure Plan required a resolution of the Council of the Shire, and not merely an agreement reached with a Shire Officer, as Mr Adam Davidson accepted (at ts 561.2).[380]

Accordingly, the correct inferences were (1) Mr Adam Davidson knew that there was 'no agreed outcome with the Shire' as stated in the handover notes, (2) the reason that he made the note was, in effect, to dishonestly create a false record to enable his successors to falsely represent to the Shire that a binding agreement had been reached with the Shire,[381] and (3) the reason that Mirvac (WA) wished to assert such an agreement was that it would enable it to be able to increase the value of the Project land by obtaining a rezoning which was not conditional on the construction of a second access road - a matter put to Mr Adam Davidson at ts 392 - 393.[382]

The judge erred in fact at [159] in accepting the evidence of Mr Adam Davidson and Mr Aleksovski insofar as they referred to agreements with 'the Shire' as meaning the results of their discussions with Shire Officers and not a binding agreement with the Council. The correct inference was that both witnesses knew that any agreement reached with officers of the Shire concerning the terms of a Local Structure Plan would require approval by the Council, in order for the Local Structure Plan to be adopted by the Council.[383]

The judge erred in fact at [172] in finding that (1) an agreement had been reached about trigger points as to the need for and timely construction of a second access road, and (2) that Mr Aleksovski's statement in an email responding to Mr Hall of the Shire dated 5 September 2011[384] was not false, when Mr Aleksovski said in his witness statement that 'a negotiated position with respect to the second access road was agreed [by Mr Adam Davidson and Mr Jake Davidson] and other council departments concerned'. Rather, his evidence was false and the judge should have inferred that Mr Aleksovski knew that there had been no negotiated position, and that there had been no agreement binding on the Shire, because the draft provision had not been adopted by a Council resolution adopting the Local Structure Plan.[385]

The judge erred in fact in finding, at [179] - [181], that BN's assertion (at 3.4.7 and 3.5 of its closing submissions[386]) that Mr Adam Davidson was acting to avoid costs being incurred before the Local Structure Plan was approved, did not make sense.[387] BN's assertion at the time was that Mr Adam Davidson was acting to avoid the carrying out of the construction of a second access road (which was required to satisfy a condition of approval of the Scheme Amendment itself) so that Mirvac (WA) could obtain the benefit of the Scheme Amendment increasing the value of the Project Land, but without having to pay for the construction of a second access road before the Scheme Amendment became operative.

1. Ground 7 alleges, in effect, that the judge erred in fact and law in finding at [183] - [270] that Mirvac (WA) did not attempt to cause Pastoral Co not to sell the land which would be required for the second access road, in the following respects:

The judge erred in fact in finding, at [205], that the December 2012 Strategy document[388] was a draft, when she should have found that it was the final version of the document which was sent to the Shire, given that the May 2013 Strategy[389] referred in its terms to a 17 December 2012 strategy document.[390]

The judge erred in fact in finding, at [215] - [216], (1) that the December 2012 Strategy did not reflect the final version given to the Shire, and (2) that, alternatively, other discussions had occurred after the December 2012 Strategy had been given to the Shire. Rather, the correct inference to be drawn from the 17 December 2012 Strategy,[391] and the May 2013 Strategy,[392] was that the italicised part of a responsive email from Mr Pearce (the consultant) to Mr Hall of the Shire dated 27 May 2013[393] at [215] was inaccurate.[394]

The judge erred in fact and law in finding, at [233], that the WAPC would have objectively considered whether it was appropriate to require Mirvac (WA) to acquire the land for what was to be a public road, in that (1) the WAPC knew[395] that Pastoral Co was prepared to sell the land, (2) the WAPC knew[396] that Pastoral Co had refuted the statement in the May 2013 Strategy that it would experience significant CGT issues on a sale, and (3) a condition requiring the developer to pay for the cost of acquiring a public road was a valid condition of a subdivision approval.[397]

The judge erred in fact in finding, at [263] - [270], that Mirvac (WA), through Mr Aleksovski, did not attempt to cause Pastoral Co not to sell the land as part of a larger plan in order to impede the implementation of the Project. The judge should have found that Mr Aleksovski did attempt to cause Pastoral Co not to sell the land, and that this was part of a larger plan to delay implementation of the Project because (1) the judge, having rejected Mr Aleksovski's explanation as to why CGT issues were raised with Pastoral Co,[398] ought then to have inferred that Mirvac (WA) was attempting to cause Pastoral Co not to sell the land for the second access road, and (2) Mr Aleksovski's discussions with Pastoral Co occurred over a period in which the books of Mirvac, as alleged in ground 10 below, indicate that Mirvac contemplated using the deadlock provision in the Services Agreement to persuade BN to agree to vary the Services Agreement. BN alleges that, therefore, the compelling inference to be drawn is that Mr Aleksovski was, in accordance with that position, attempting to cause Pastoral Co not to sell the land so as to delay progress of the Project.[399]

Mirvac (WA) seeking to delay by its conduct in relation to the second access road

1. Ground 8 (to which item 13 of BN's Schedule relates) alleges, in effect, that the judge erred in fact in finding at [272] that Mirvac was not using issues relating to the second access road to delay the Project, in that (1) there was evidence showing Mirvac's concern surrounding the economic viability of the Project referred to at [316] - [508] of the primary decision, and (2) Mirvac's books, as alleged in ground 10, provided a compelling inference of Mirvac's intention for Mirvac (WA) to renegotiate or exit the Services Agreement.[400]

1. Ground 9 (to which item 14 of BN's Schedule relates) alleges, in effect, that the judge erred in fact in finding at [306] that Mirvac (WA)'s proposal in the September 2014 Report to the Project Control Group, namely to convert the golf course land to residential land before further carrying out the Project, was not done deliberately in order to delay the Project. Rather, the judge should have found that the proposal in the September 2014 Report was made deliberately in order to delay the Project (having regard to the matters alleged in ground 10).[401]

1. Ground 10 alleges, in effect, that the judge erred in fact and in law in finding, at [316] ‑ [508], that Mirvac did not 'manifest' the alleged Refusal to Proceed decision in one or more of the following respects:

The judge erred in law at [341] in construing Mr Crockett's email dated 24 May 2012.[402] This email should have been construed as recording that (1) Mirvac's position was to progress to the point where the Local Structure Plan was approved 'to protect Mirvac's position', and (2) the Project Control Group had approved in principle the progression of the approval of the Local Structure Plan but had not done so 'to protect Mirvac's position'. Consequently, the judge erred in fact in not finding that Mr Crockett's email dated 24 May 2012 was a continuation of Mirvac's position reflected in the 24 August 2009 email (as alleged in grounds 6.1 and 6.2).[403]

The judge erred in fact at [350] - [352] in finding (by accepting Mr Draffen's evidence) that, as at June 2012, Mirvac had not manifested the alleged Refusal to Proceed decision. That is because Mr Draffen admitted at ts 668 - 669 that some form of renegotiation of the Services Agreement would be required for the Project to proceed past a viable Stage 1.[404]

The judge erred in fact at [356] in accepting Mr Draffen's evidence about the HY13 Draft Scenario document,[405] produced on 1 July 2012, which referred to 'englobo/superlot'. Mr Draffen's evidence was incorrect because Mirvac's position, as at June 2012, was that renegotiation of the Services Agreement was required for the Project to proceed past a viable Stage 1. Accordingly, the compelling inference was that Mirvac had implemented a strategy 'to proceed with an englobo sale of the Project [l]and unless there was a negotiated exit by Mirvac from the [Services Agreement] or a renegotiation' on terms favourable to Mirvac. Reference is made in this ground to Mr Draffen's evidence at ts 668 - 669 and 738 ‑ 739, and the HY13 Draft Scenario document to which Mr Draffen referred.[406]

The judge erred in fact and law in finding (with reference to Mr Draffen's evidence) at [374] that 'Mirvac did not believe' that it was contractually bound to complete the Project under the Services Agreement. The judge should have found, on the basis of Mirvac's books and 'other documents', that 'Mirvac personnel' including Mr Draffen held the view (based on advice) that (1) Mirvac (WA) was bound to carry out the Project under the Services Agreement, and (2) because of that, Mirvac was unable to exit the Services Agreement merely because Mirvac considered it not to be financially viable. Reference is made in this ground to the September 2013 Options Memo[407] and Mr Draffen's evidence at ts 698.[408]

The judge erred in fact and law in finding, at [380] ‑ [382], that as at January 2013 Mirvac had made no decision to cease performing the Services Agreement. The compelling inference from Mirvac's books (with reference to Mirvac's internal emails dated 22 January 2013 and 23 January 2013[409]) is that, whilst needing to receive legal advice as to how best to 'enact the deadlock', Mirvac 'had decided to cease to perform the [Services Agreement] and to enact the deadlock provisions'.[410]

The judge erred in fact and law, at [383] - [408], in finding that, as at February 2013, Mirvac had not made a decision to cease performing the Services Agreement. The compelling inference of the 4 February 2013 Board paper[411] is that Mirvac had no intention of performing the Services Agreement to completion unless BN agreed to a variation favourable to Mirvac.[412]

The judge erred in fact and law in finding, at [376] ‑ [378], that the agenda including the 25 October 2012 Risk Assessment,[413] and the 17 December 2012 spreadsheet,[414] did not provide a compelling inference that Mirvac was making a provision in respect of BN's debt on the basis that Mirvac had decided not to proceed with the Services Agreement and had decided to sell the land englobo if it could not procure a satisfactory variation of the Services Agreement.[415]

The judge erred in fact and law in finding, at [409] ‑ [417], that the PWC Report dated 7 February 2013[416] was not evidence of a decision by Mirvac 'to stop performing under the [Services Agreement]'. The compelling inference from the PWC Report is that Mirvac had decided to utilise the deadlock provisions, thereby manifesting the alleged Refusal to Proceed decision, and the only remaining issue was the method by which the deadlock provisions were being engaged.[417]

The judge erred in fact and law, at [432] - [437], in finding that in Mirvac's June 2013 Forecast document,[418] Mirvac had not evinced an intention to move towards deadlock and exit the Services Agreement and thus had not implemented the alleged Refusal to Proceed decision. Notwithstanding the evidence of Mr Aleksovski and Mr Draffen referred to at [433] - [434], the 'books and documents' in ground 10 provide a compelling inference that Mirvac had such an intention and had implemented the alleged Refusal to Proceed decision.[419]

The judge erred in fact and law in finding, at [446], by reference to the September 2013 Options Memo, that if Mirvac failed to renegotiate the Services Agreement, it would have continued to carry out the Project pursuant to the Services Agreement. The fact was that Mirvac, as at June 2012, had no intention to proceed past a viable Stage 1 if no renegotiation satisfactory to Mirvac occurred and, that being the case, the compelling inference was that, as at September 2013, that position had not changed. Mirvac had no intention to carry out the Project pursuant to the Services Agreement if a renegotiation satisfactory to Mirvac was not achieved.[420]

The judge erred in fact and law at [316] - [508] in:

(i) not holding that the books of Mirvac were prima facie proof of Mirvac's position and binding on Mirvac; and

(ii) accepting evidence from Mirvac officers asserting that particular books had effect and meaning different from the clear terms of the books.[421]

Mr Lawrance's statement on 13 June 2014 - alleged repudiatory statement

1. Ground 11 (to which item 25 of BN's Schedule relates) alleges, in effect, that the judge erred in fact and law in finding at [478] that Mr Lawrance's statement at the Project Control Group meeting on 13 June 2014 was not repudiatory. The statement was to the effect that 'Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval'.[422] The judge should have held that the statement was repudiatory on the basis that Mirvac (WA)'s legal obligations were as set out in grounds 1 and 2 - ie, that Mirvac (WA) had no legal right as a member of the Project Control Group to disapprove a Budget.[423]

The issue of meetings of the Project Control Group being recorded - alleged repudiatory conduct

1. Ground 12 alleges, in effect, that the judge erred in fact and law at [522] ‑ [528] in finding that the refusal by Mirvac (WA)'s representatives to attend meetings of the Project Control Group in circumstances in which BN was insisting on the meetings being recorded, was not a default under the Services Agreement. The judge should have found that it was a default, and further, found that BN's failure to invoke the dispute resolution process in cl 15 with respect to such default did not affect BN's legal rights arising from that default.

Mirvac's non-submission of a Programme Budget in relation to Subdivision and Construction Works

1. Ground 13 (to which item 26 of BN's Schedule relates) alleges, in effect, that the judge erred in fact and law in finding at [536] - [538] that Mirvac (WA)'s non-submission of a Budget for Subdivision and Construction Works in 2014 was because it was not possible to create a realistic Budget at that time. The judge should have found that such a Budget was not submitted because Mirvac Ltd had not given any Approval to Commence Construction, which was admitted by Mirvac at the 13 June 2014 Project Control Group meeting (as alleged in ground 11).[424]

1. Ground 14 alleges that the judge erred in law in finding, at [773] ‑ [776], that if (contrary to her Honour's findings otherwise) Mirvac (WA) had breached the Services Agreement, Mirvac Ltd, in response to a claim by BN under the Performance Undertaking, would be entitled to raise any right of set‑off that would have been available to Mirvac (WA). The judge should have found that the prevention principle and the doctrine of circuity of action, as alleged in grounds 4 and 5, would have precluded Mirvac Ltd from raising such a set‑off.
2. Ground 15 alleges that the judge erred in law in finding, at [773] ‑ [776], that Mirvac Ltd did not breach the Performance Undertaking. The judge should have found that Mirvac Ltd breached it 'by reason of the matters in the above grounds [or] one or more of them'.

Tort of interference with contractual relations - Mirvac Ltd

1. Ground 16 concerns BN's claim against Mirvac Ltd in respect of the tort of interference with contractual relations. Ground 16 alleges, in effect, that the judge erred in law in finding, at [777] - [790], that 'as [BN] failed to establish that Mirvac (WA) repudiated the [Services Agreement], the evidence did not support the assertion that Mirvac Ltd committed the tort of interference with contractual relations ... the [j]udge should have held that Mirvac (WA) [d]efaulted under the [Services Agreement] and Mirvac Ltd committed the tort ...'.

1. Ground 17 alleges that the judge erred in law in finding, at [886], that had BN been successful in its counterclaim, the court would not have been able to assess damages. The judge's alleged errors in this regard were that:

17.1 The judge erred in law in holding, at [814], that the concept plan provided by BN's expert, Mr Maiorana, provided a shaky foundation for the valuation experts to provide their expert opinion.

17.2 The judge erred in law in holding, at [826], that Mr Maiorana's concept plan was an inadequate foundation for the valuation.

17.3 The judge erred in law in holding, at [823] - [827], that BN failed to prove what might have been implemented as a concept plan, as a result of Mr Maiorana's concept plan being inadequate, and that it would have been relatively simple and inexpensive for Mr Maiorana to prepare a suitable concept plan for these purposes.

17.4 The judge erred in law in holding, at [828] - [833], that BN was required to provide a net present value calculation or submissions as to an approach that the judge should take in assessing damages.

17.5 The judge erred in law in holding, at [876], that sales of lots would have commenced by May 2015 for the purposes of assessing the amount of the Initial Advance that would have been repaid by the proceeds of sale by the Anniversary Date.

1. Ground 18 alleges that, instead of the holdings referred to in ground 17, the judge should have held that:

18.1 Mr Maiorana's concept plan was an adequate foundation for the valuers to base their valuations on as it was based on Mirvac (WA)'s own plans;

18.2 BN was not required to prepare a concept plan that addressed Mr Maiorana's concerns as to requiring further input from necessary experts as this would have caused BN to incur costs which 'were entirely disproportionate to the task of preparing a concept plan for the assessment of damages';

18.3 BN was not required to adduce expert evidence of net present value as the uncertainty as to when possible subdivided lots would be sold and resulting uncertainty as to the projected selling prices for particular subdivided lots made calculation of net present value impossible; and

18.4 there was sufficient evidence adduced to enable the court to assess damages.

1. Ground 19 alleges that the judge erred in law in holding, at [835] ‑ [843], that the measure of damages in a contract case should be assessed differently if the breach was deliberate, and that the proper measure for damages remains the amount that, so far as money can, puts the innocent party in the position they would have been had the contract been performed. The judge thereby erred in holding that the value of the Project land had to be deducted from any awarded damages. The judge should have held that deducting the value of the Project land from BN's damages was inappropriate because the deduction would reverse the effect of the prevention principle or the doctrine of circuity, in that:

19.1 but for the operation of that principle or doctrine, Mirvac (WA) would have been entitled to enforce a judgment debt far in excess of the value of the Project land against the Project land under the Project Securities; and

19.2 BN retaining the Project land unencumbered by the Project Securities is a consequence of that principle and/or doctrine, and not a consequential advantage to BN of termination of the Services Agreement which should be deducted from its loss of bargain damages resulting from the Project not being carried out to Completion.

1. Ground 20 alleges that the judge erred in law in holding, at [877] ‑ [882], that BN's reference at [246] of its closing submissions was a reference to the presumption that an innocent party would not have entered into a contract unless it would have at least recovered its reliance expenditure under the contract had it been performed. The judge should have held that BN's reference was to the presumption that damages for breach of contract are assessed by reference to the circumstances which existed at the date of breach. Thus, no further ad hoc payments, except for the ad hoc payment due in January 2018, would at the date of breach be presumed to be required to be made by BN on BN's alternative scenario as to damages.[425]
2. Ground 21 alleges that the judge erred in holding, at [902], that the principle of circuity had no application. The judge should have held that Mirvac (WA)'s repudiation of, and Non Monetary Event Default under, the Services Agreement, prevented Mirvac (WA) from obtaining judgment for any amount against BN because that amount would be immediately added to the amount of BN's damages.
3. Ground 22 alleges that the judge erred in law in holding, at [908], that if BN was entitled to damages, the whole of the amount outstanding must be brought to account in any set-off. The judge should have held that, having regard to the matters alleged in ground 14, Mirvac (WA) was not entitled to judgment for any amount of the outstanding amount and therefore had no entitlement to set-off in that regard.
4. Ground 23 alleges that the judge erred in law in holding, at [915], that BN was not entitled to an order to effect the discharge of Mirvac (WA)'s Project Securities. The judge should have found, 'in light of the above grounds, [BN] was entitled to a discharge of all Project Securities held by Mirvac (WA) pursuant to paragraph D of the prayer for relief in the [c]ounterclaim because there [was] nothing owing under them'.

1. Before turning to BN's arguments in relation to grounds 1 - 3, it is convenient to set out the principal terms (relevantly for present purposes) of the Services Agreement and the Loan Agreement.

1. The Services Agreement, as varied, is set out as a consolidated document in terms of annexure A[426] to a deed of variation entered into in 2009.[427]

1. In the 'parties' part of the deed of variation, BN is referred to as 'Principal, Borrower, Binningup, Chargor and Mortgagor', and Mirvac (WA) is referred to as 'Contractor, Financier, Mirvac, Chargee and Mortgagee'.
2. In the consolidated document containing the terms of the Services Agreement as varied, BN is referred to as the 'Principal' and Mirvac (WA) is referred to as the 'Contractor'.

1. The Services Agreement includes, in effect, recitals, referred to as 'Background', to the effect that (1) the Principal is the owner of the Land, (2) the Principal intends to implement the Project, and (3) the Principal has engaged the Contractor to provide the Services on the terms of this document (the Services Agreement) in order to implement the Project with respect to the Land.

1. The variation of the Services Agreement introduced into the operation of the Services Agreement the Lakewood Shores land. The 'Land' is defined to mean in the period up to the variation, the Original Land, and, on and from the date of variation, the Original Land and Lakewood Shores. Lakewood Shores is defined to mean Lakewood Shores Stage 5 and Lakewood Shores Stage 6.
2. By cl 4.1, the Contractor acknowledges that the Land is owned by the Principal.

1. Clause 2 provides, in effect, that the Principal proposes to implement the Project, the Principal appoints the Contractor to carry out the Services and the Contractor agrees to provide the Services on the terms and conditions in this document (the Services Agreement).

1. Clause 3 provides that the Principal and the Contractor must perform their respective obligations to each other under this document (the Services Agreement) in good faith.

1. The term 'Project' is defined in cl 1.1 to mean the obtaining of necessary or desirable Approvals for the subdivision of the Land, the procurement of the carrying out of works both on and off the Land, the Dedication of parts of the Land, the procurement of the promotion, marketing, sale and management of the conveyancing of the Sale Lots, and the development, operation and maintenance of the Golf Course.
2. The term 'Approvals' is defined in cl 1.1 to mean all consents, approvals, registrations, certificates, licences, permits or authorities from any Authority desirable or necessary for the execution and Completion of the Project. By cl 6.1, the Contractor must procure the grant of each Approval necessary or desirable for the implementation of the Project.

1. By cl 6.2, the Contractor must 'perform the Services and procure Completion of the Project' both 'in accordance with all Approvals' and 'in a proper, timely, professional and workmanlike manner'. The term 'Services' is defined to mean, subject to any approvals required under cl 6.6, cl 6.7 and cl 6.8, 'all services which the Contractor determines are necessary or desirable for the carrying out of the Project'.
2. By cl 6.4, subject to any Approvals required under cl 6.6, cl 6.7 and cl 6.8, the Contractor may, 'in its absolute discretion, do all things necessary or desirable to implement the Project'. These include applying for an Approval, applying to vary or appeal an Approval, determining the size, location and number of Sale Lots, determining which parts of the Land will be Dedicated and giving effect to the Dedication, determining the nature and extent of the Services and procuring the carrying out of the Services, determining the nature and extent of marketing and sale of the Sale Lots and, subject to cl 6.12, determining the prices at which the Sale Lots will be offered for sale.
3. Clause 6.12 provides, amongst other things, that the Contractor must, from time to time, give to the Principal a list of prices or a range of prices at which the Contractor proposes that Sale Lots will be offered for sale and if the Principal reasonably considers that the minimum price specified is materially less than a reasonable price in light of specified matters, and gives the Contractor valuation evidence of that fact no later than the next Project Control Group meeting, then the Contractor must, acting reasonably, reconsider the price list in light of the valuation evidence.

1. The term 'Completion' is defined in cl 1.1 as a point in time. It means the time when all of the following has occurred: (1) the completion of the construction of all infrastructure; (2) the Land has been subdivided into Sale Lots; (3) the last of the Sale Lots has been settled; (4) all land intended to be Dedicated (such as land comprising roads, parks, etc) as part of the Project has been Dedicated; (5) all money which the Principal is entitled to be paid under the Services Agreement has been paid to the Principal; and (6) all money which the Contractor is entitled to be paid under the Services Agreement has been paid to the Contractor.

1. By cl 8.1, the Contractor must fund it obligations under the Services Agreement to carry out the Project and will not (except to the extent that the Services Agreement provides to the contrary), be entitled to recover from the Principal either costs or interest incurred by it in relation to the Project.

1. 'Project Costs' are defined (in cl 1.1 with reference to sch 1) to mean 'all costs properly incurred by the Contractor and the Financier[428] in connection with' (1) the negotiation and entry into the Transaction Documents, (2) the carrying out of the Services, (3) promoting and marketing the Land and the Sale Lots and procuring the sale of the Sale Lots, (4) developing, operating and maintaining the Golf Course, and (5) otherwise exercising their respective rights and performing their respective obligations under the Transaction Documents.
2. 'Project Cost Payments' are defined in cl 1.1 to mean, in respect of a calendar month, an amount equivalent to (1) the Project Costs specified in the Project Costs Statement given to the Principal during the preceding calendar month, and (2) the Builders Margin Fee payable in respect of the Construction Costs specified in the Project Costs Statement.
3. The term 'Project Costs Statement' means a statement of the Project Costs incurred by the Contractor up to the date specified in that statement and which have not previously been included in a prior statement.
4. By cl 12.1(a), the Principal must pay the Project Cost Payment in respect of the calendar month to the Contractor on or before the 10th Business Day of the next calendar month.
5. By cl 12.1(b), the Principal's obligation to pay the Project Cost Payment 'is conditional upon the Financier making an advance to the Principal for the full amount of that Project Cost Payment under the Loan Facility Agreement'. 'Financier' is defined in cl 1.1 to mean Mirvac (WA).
6. By cl 12.1(c), the Contractor must continue to comply with its obligations under the Services Agreement, even if the Financier fails to comply with its obligation to make an advance for the full amount of a Project Cost Payment.

1. By cl 7, the Principal also agrees to pay certain fees to the Contractor, referred to as (1) the Development Services Fee and the Additional Development Services Fee (in consideration for the Contractor providing the Services), (2) the Sales and Marketing Fee (in consideration of the Contractor undertaking sales and marketing), and (3) the Builders Margin Fee (in consideration of the Contractor procuring the construction of dwellings).
2. The Development Services and Sales and Marketing Fees under cl 7.1 and cl 7.2 are to be paid in accordance with cl 11.2 and cl 11.2B pursuant, in effect, to the sale of Lots: cl 7.4(a). The Builders Margin Fee is to be paid as part of the Project Cost Payments: cl 7.4(b).
3. The Development Services Fee is 4% of the Sales Price of a Sale Lot, and the Sales and Marketing Fee is 2% of the Sale Price of a Sale Lot. The Builders Margin Fee is 5% or 7% (as the case may be) in respect of costs of specified Construction Work.[429] The Additional Development Services Fee is equivalent to 40% of the balance of the Proceeds of Sale of a Sale Lot after the sale proceeds have otherwise been applied in the manner specified under the Services Agreement.[430]

1. The Services Agreement defines 'Other Project Revenue' as all revenue derived from the Project other than the Proceeds of Sale, and includes revenue derived from the operation of the Golf Course.
2. By cl 11.4, Other Project Revenue is to be paid (1) to the Contractor in respect of the Development Services Fee in respect of such revenue, (2) then to the Financier in respect of the Outstanding Loan Amount, and (3) then to the Contractor by way of an Additional Development Services Fee equivalent to 40% of the balance of the Other Project Revenue. The balance thereafter remains the property of the Principal.

Amounts payable by BN to Mirvac (WA) under the Services Agreement

1. Clause 12 provides (largely by way of summary) that in addition to the Project Cost Payments, the amounts payable by the Principal to the Contractor under the Services Agreement are (in broad terms):
   1. the specified fees in cl 7 in relation to development, marketing and sales and building (cl 12.2(a) ‑ (d));
   2. amounts equivalent to such fees in respect of the Retained Land under cl 11.5 (cl 12.2(e));
   3. the Termination Fee under cl 15.5 (cl 12.2(f));
   4. specified GST amounts under cl 19.2 in respect of the specified fees and the equivalent of such fees (cl 12.2(g));
   5. 'amounts otherwise expressly provided for in this document' (cl 12.2(h)); and
   6. amounts for 'breach of this document' by the Principal (cl 12.2(i)).
2. By cl 12.2, and subject to cl 12.3, the above amounts are 'the only amounts payable by the Principal to the Contractor for the provision of the Services and the implementation of the Project'.
3. By c 12.3, cl 12.2 'does not limit the recovery of any amount owing by the Principal to the Financier under the Loan Facility Agreement or any Project Security'.

1. By cl 1.5(a), and subject, relevantly, to cl 1.5(b) and 1.5(c):[431]

(i) the right of the Contractor to recover amounts owing by the Principal to the Contractor under this document is limited to the Contractor taking action to enforce:

(A) a judgment against the Principal against the Project Assets; and/or

(B) the Project Securities; and

(A) enforce a judgment against the Principal other than:

(1) against the Project Assets; and/or

(2) to enforce the Project Securities;

(B) apply to have the Principal made insolvent; or

(C) enforce a judgment or order or take any other action against the Principal's property other than permitted under this clause 1.5.

The Principal remains liable to pay all amounts which may from time to time be payable by it under this document.

1. Clause 1.5(c) provides that 'nothing' in cl 1.5:

(i) prevents the Contractor from bringing proceedings against the Principal to prevent any amount owing by the Principal to the Contractor under this document becoming statute-barred;

(ii) prevents the Contractor from applying to make the Principal Insolvent or taking any other action in the Insolvency of the Principal if another creditor has taken action to have the Principal made Insolvent; or

(iii) prevents the Contractor from seeking or obtaining equitable relief (including a declaration) in connection with this document or a Security other than an order requiring payment of money by the Principal to the Contractor otherwise than in accordance with this clause 1.5.

1. By cl 6.5, the Principal acknowledges that the Contractor proposes to provide the Services in Stages and the Contractor must prepare a schedule of Stages for the Project and prepare a Budget and a Programme in advance of the commencement of the Preliminary Works, the Subdivision Works and the Construction Works for each proposed Stage, for approval by the Project Control Group.

1. By cl 1.1, the term 'Budget' means each of the budget for the Preliminary Works for a proposed Stage, the budget for the Subdivision Works for a proposed Stage and the budget for the Construction Works for a proposed Stage 'prepared by the Contractor and approved by the Project Control Group as contemplated by cl 5.2'.
2. The term 'Programme' is defined to mean each of the programme for the Preliminary Works for a proposed Stage, the programme for the Subdivision Works for a proposed Stage and the programme for the Construction Works for a proposed Stage 'prepared by the Contractor and approved by the Project Control Group as contemplated by cl 5.2'.

1. The provisions relating to the Project Control Group are, most relevantly, in cl 5 and cl 15 of the Services Agreement. By cl 5.1, the Project Control Group is established upon the execution of the document. By cl 5.2(a), the Project Control Group will (1) provide a forum for 'consultation and information' with regard to the Project including generally reporting on the progress of the Project, and (2) 'approve or disapprove' a Budget and/or Programme submitted by representatives of the Contractor for Preliminary Works, Subdivision Works, and if relevant, the Construction Works for any proposed Stage.
2. By cl 5.4 and cl 5.5, the number of Project Control Group members is to be four, with two appointed by the Principal and two appointed by the Contractor.
3. By cl 5.3, the obligation is on the 'representatives of the Contractor' to give to the Project Control Group at each meeting of the Project Control Group:

(a) a copy of any proposed Budget or Programme for a Stage for approval or disapproval by the Project Control Group; and

(b) a report setting out specified information including such other information 'as the Principal may reasonably require'.

1. By cl 5.6, at 'any meeting' of the Project Control Group, 'all' the Project Control Group members appointed by the Principal have between them one vote and all the Project Control Group members appointed by the Contractor have between them one vote. By cl 5.7, 'all decisions' of the Project Control Group are to be made by unanimous resolution.
2. Clause 5.10 provides for various procedural and administrative matters in relation to meetings of the Project Control Group.
3. Clause 5.14 provides:

If:

(a) a quorum is not present within 30 minutes of the time specified for the adjourned meeting of the Project Control Group; or

(b) a decision before the Project Control Group becomes deadlocked; and that deadlock is not resolved within 10 Business Days of the deadlock arising,

any resolutions to be put at that Project Control Group meeting or the deadlocked decision (as the case may be) must be determined under cl 15. (emphasis added)

1. By cl 11.1(a), the Contractor must establish a Project Account and hold it on trust for the Principal. The Project Account is to be used for the 'receipt and disbursement of Proceeds of Sale of Sale Lots and Other Project Revenue'. By cl 11.1(b), the Contractor and the Principal must procure that such Proceeds of Sale of Sale Lots are paid to the credit of the Project Account and that all Other Project Revenue is paid to the credit of the Project Account. By cl 11.1(d) until the funds in the Account are applied, the Contractor holds the money in the Project Account or the proceeds thereof on trust for the Principal.

1. Clause 11.2(a) provides in effect that in respect of the Proceeds of Sale of an Original Sale Lot, payment is to be made out of the Project Account according to cascading priorities, broadly speaking as follows:
   1. Payment to the Principal in respect of specified GST.[432]
   2. Payment to (a) the Principal for the 'Principal's Amount' in respect of an Original Sale Lot or (b) to the 'Financier' if cl 11.8 operates.
   3. Payment to the Contractor in respect of the Development Services Fee.
   4. Payment to the Contractor in respect of the Sales and Marketing Fee.
   5. Payment to the Financier in respect of the Outstanding Loan Amount, to the extent that it can be satisfied from the Proceeds of Sale of that Original Sale Lot after application of all amounts set out in items 1 - 4 above.
   6. Payment to the Contractor of an Additional Development Services Fee equivalent to 40% of the balance of the Proceeds of Sale of that Original Sale Lot (after application of all of the amounts referred to in items 1 - 5 above).
2. Clause 11.2(b) provides that the balance of Proceeds of Sale after the application of all amounts under items 1 - 6 above are to remain the property of the Principal.
3. Clauses 11.2A and 11.2B deal with the application of Proceeds of Sale in respect of Stage 5 Sale Lots and Stage 6 Sale Lots. By cl 11.2A, the Proceeds of Sale of Stage 5 Sale Lots (relating to Lakewood Shore Stage 5) are to be paid to BN. Clause 11.2B applies the Proceeds of Sale of Stage 6 Sale Lots according to cascading priorities similar to those in cl 11.2(a). In the case of Stage 6 Sale Lots, the Principal's Amount is 50% of the Sale Price of the Lot.[433] Clause 11.2C provides for the cessation of the Principal's Amount in respect of Stage 6 Sale Lots in specified circumstances.

1. Clause 15 is a dispute resolution clause. Clause 15.1 provides that if there is a dispute 'between the parties' (ie, BN and Mirvac (WA)) and that dispute is not resolved within 10 Business Days of 'one party' notifying the 'other party' in writing that a dispute has arisen, the 'dispute' (between the parties) must be determined pursuant to cl 15.
2. By cl 15.2 - cl 15.4:

(a) each of the parties must prepare a Briefing Paper setting out how that party would like the matter to be resolved, the outcome to each party if the matter were resolved in that manner and, if possible, the outcome for the Project if the dispute were resolved in that manner;

(b) the dispute and the Briefing Papers are to be referred to the Chief Executive Officers of the parties for resolution jointly and if the Chief Executives are able to resolve the matter, the parties must implement their decision; and

(c) if the Chief Executives cannot resolve the dispute, the parties must submit the dispute to an independent Expert for Expert determination as specified in cl 15.4(f).

The determination of the Expert:

(i) must be in writing;

(ii) will be final and binding on the parties subject to the following:

(A) if the determination relates to any matter other than a decision to disapprove a Budget or Programme under clause 5.2(a)(ii), the Expert's decision will, in the absence of manifest error, be final and binding on the Principal and the Contractor and not subject to review;

(B) if the determination relates to a dispute which arose to a decision of the Project Control Group to disapprove a Budget and/or a Programme under clause 5.2(a)(ii) the Expert's determination may be accepted on the election of the Contractor and the Principal but will not be final and binding. In that respect the Contractor and the Principal must notify each other within ten Business Days of receipt of the Expert's determination whether they accept the Expert's determination. If the Contractor or the Principal does not accept the Expert's determination the provisions of clause 15.5 will apply;

(iii) is to be given effect to by the parties unless and until it is reversed, overturned or otherwise changed by any validly applied process or by judgment or order of any Court or under clause 15.4(g)(iv);

(iv) upon submission by a party, the Expert may amend the determination to correct any clerical mistake, any error from an accidental slip or omission, any material miscalculation of figures or a material mistake in the description of any person, thing or manner or any defect in form;

1. Clause 15.5 provides that if either the Contractor or the Principal does not accept the Expert's decision under cl 15.4, the parties agree that:

(a) the Principal must offer the Project Assets for sale to the public at a price and on terms agreed by the Project Control Group;

(b) if the Project Control Group cannot agree on any matter or thing in relation to the sale of the Project Assets then that matter or thing must be determined by an Expert under clause 15.4;

(c) without affecting any accrued rights or liabilities of the parties under any Transaction Document, this document is terminated from the date on which completion of the sale of the Project Assets occurs as contemplated by this clause 15.5 (Termination Date); and

(d) in addition to any other monies owing to the Contractor under this document the Principal must pay to the Contractor the Termination Fee on the Termination Date.

1. Clause 1.1 defines Monetary Event of Default as:

In respect of a party, if that party does not pay any money payable under this document within five Business Days of the due date and otherwise in the manner required by this document.

1. Clause 1.1 defines 'Non Monetary Event of Default' as including:

[If a] party fails to carry out its obligations under this document (except any obligation which if not complied with would constitute a Monetary Event of Default) in a proper, timely, professional and workmanlike manner such that in the opinion, acting reasonably, of the party not in default such failure will have a material and adverse effect on the Project.

1. Other events defined as a 'Non Monetary Event of Default' include where distress is levied or a judgment, order or encumbrance is enforced or becomes enforceable, where a representation or warranty has been made or taken to be made which is found to be incorrect or misleading, and where an Insolvency Event occurs or a Controller is appointed in respect of any part of the property of a party.

Sole right of termination of the Contractor's appointment under the Services Agreement

1. By cl 17.1, neither the Principal nor the Contractor may terminate the Contractor's appointment except pursuant to that clause. Under that clause, the Principal may terminate the Contractor's appointment if a Monetary Event of Default or Non Monetary Event of Default occurs in respect of the Contractor, and the Contractor may terminate its appointment if a Monetary Event of Default or a Non Monetary Event of Default occurs in respect of the Principal.
2. By cl 17.3, the termination of the Services Agreement under cl 17 does not prejudice a party's Claim against the other party arising from a breach of the Services Agreement occurring before the date the termination is effected.

1. By cl 22.9, a party must not assign or deal with any right under the Services Agreement without the prior written consent of the other parties, and any purported dealing in breach of cl 22.9 is of no effect.

1. By cl 22.13, the Services Agreement 'is not intended to create a partnership, joint venture, agency relationship or any other fiduciary relationship between the parties'.

1. The parties to the Loan Agreement are Mirvac (WA), referred to as 'Financier', and BN, referred to as 'Borrower'.

1. The Loan Agreement recites, under the heading 'Background', that (1) the Borrower is conducting the Project, (2) the Borrower has requested that the Financier make the Facility available to the Borrower for the purposes of, amongst other things, financing the conduct of the Project, and (3) the Financier has agreed to make the Facility available to the Borrower in accordance with this document.

1. By cl 3.1(a)(i), the Financier must make the Initial Advance to the Borrower (defined to mean $25 million) and by cl 3.1(a)(ii), the Financier must make further Advances when requested by the Borrower in accordance with cl 3.
2. By cl 3.2(a), the Borrower may use the Initial Advance for any purpose determined by the Borrower at its discretion. By cl 3.2(b), subject to the right to use the Initial Advance in its discretion, the Borrower must only use the Advances for the purposes of (1) paying the Project Cost Payments in accordance with the Services Agreement, and (2) paying any GST Amount in respect of the Project Cost Payments in accordance with the terms of the Services Agreement.
3. By cl 3.1(b), the making of each Advance creates a 'separate and distinct debt obligation of the Borrower, repayable in accordance with this document'.
4. By cl 3.3 and cl 3.4(a), the Borrower must 'give' a Funding Notice and (other than in respect of the Initial Advance) attach a copy of the relevant Project Cost Statement and specify the amount of the proposed Advance which must equal the aggregate of the Project Cost Payment as set out in the relevant Project Cost Statement and the GST Amount in respect of that Project Cost Payment. The Funding Notice, although to be 'given' by the Borrower, is a document signed by the Contractor as attorney for the Borrower: cl 3.4(a)(ii), sch 1.
5. By cl 3.4(b), a Funding Notice once given is 'irrevocable'. Also the Borrower 'must borrow' each Advance in accordance with the terms of the Funding Notice.
6. By cl 3.4(c), the Borrower irrevocably directs the Financier to pay each Advance (other than the Initial Advance) to the Contractor or as the Contractor directs, in satisfaction of the Borrower's obligation to pay the Project Cost Payments to the Contractor under the Services Agreement.
7. By cl 1.1, the 'Contractor' is the 'Contractor' under the Services Agreement, ie, Mirvac (WA).

1. Clause 4 deals with interest, including the capitalisation of interest.

(a) Subject to clauses 7.2[435] and clause 5.6,[436] the Borrower must repay the Outstanding Loan Amount to the Financier at the times, in the amounts and otherwise in the manner specified in the [Services Agreement].

(b) The Borrower must repay to the Financier each part of an Advance used to pay a GST Amount on the GST Repayment Date for that Advance.

1. Clause 5.5 provides that '[d]espite any other provision of this document', the Borrower must repay the Outstanding Loan Amount to the Financier on the earlier of (1) five Business Days after the date of Completion,[437] or (2) if a Trigger Event occurs, the date which is one year after the date on which that Trigger Event occurs.
2. Clause 5.6 provides that:

(a) Despite any other provision of this document, the Borrower must repay any unrepaid part of an Advance to the Financier no later than the tenth anniversary of the date on which that Advance was made or taken to be made by the Financier.

(b) For the purposes of clause 5.6(a), a repayment of Outstanding Principal will be applied against the unrepaid Advances according to the chronological order in which they were made.

(emphasis added)

1. The Loan Agreement, by cl 1.5, contains provisions in the same terms as cl 1.5 of the Services Agreement, save that the references to 'under this document' in cl 1.5 of the Loan Agreement are references to the Loan Agreement and that the clause refers to the rights of the 'Financier' (not the 'Contractor') and the obligations of the 'Borrower' (and not to the 'Principal').
2. Clause 1.5(a) provides that subject to (relevantly) cl 1.5(b), cl 1.5(c):

(i) the right of the Financier to recover amounts owing by the Borrower to the Financier under this document is limited to the Financier taking action to enforce:

(A) a judgment against the Borrower against the Project Assets; and/or

(A) enforce a judgment against the Borrower other than:

(1) against the Project Assets; and/or

(2) to enforce the Project Securities;

(C) enforce a judgment or order or take any other action against the Borrower's property other than permitted under this clause 1.5.

1. Clause 1.5(b) provides that the Borrower remains liable to pay all amounts which may from time to time be payable by it 'under this document'.
2. Clause 1.5(c) provides that 'nothing' in cl 1.5:

(i) prevents the Financier from bringing proceedings against the Borrower to prevent any amount owing by the Borrower to the Financier under this document becoming statute-barred;

(ii) prevents the Financier from applying to make the Borrower insolvent or taking any other action in the insolvency of the Borrower if another creditor has taken action to have the Borrower made insolvent; or

(iii) prevents the Financier from seeking or obtaining equitable relief (including a declaration) in connection with this document or a Security other than an order requiring payment of money by the Borrower to the Financier otherwise than in accordance with this clause 1.5.

1. Clause 1.1 defines 'Trigger Event' to mean (1) the rescission, termination, expiration or cessation for any reason of the Services Agreement, or (2) the Contractor's appointment under the Services Agreement is terminated, whether by the Principal or the Contractor, for any reason.

1. Clause 7.1 provides that if a Trigger Event has occurred, the matters enumerated in cl 7.1 is an Event of Default whether or not caused by anything outside the control of a party and irrespective of whether the Event of Default has occurred before or after the Trigger Event. The matters enumerated include, by cl 7.1(c), a default or event which is or is deemed to be or is defined to be a default or an event of default by or in relation to the Borrower under a Transaction Document.
2. Clause 7.2 provides:

(a) If an Event of Default subsists the Financier may at any time by notice to the Borrower do either or both of the following:

(i) cancel the Facility or any part of it specified in the notice;

(ii) make the Outstanding Loan Amount or fees and any other money owing by the Borrower to the Financier in relation to the Transaction Documents either:

(b) On receipt of a notice under clause 7.2(a)(ii)(B), the Borrower must immediately pay in full the amounts referred to in that notice.

1. By cl 14.10, the Financier's rights (most relevantly, the debts owed to the Financier pursuant to the Advances) under the Transaction Documents are assignable. However, the Borrower must not dispose or Encumber any right under the Transaction Documents without the consent of the Financier.
2. There is no express or implied right on the part of the Financier to assign its obligations to provide finance under cl 3.1(a) of the Loan Agreement.

The proper construction of the Services Agreement and grounds 1 - 3 The judge's findings

The findings relevant to appeal grounds 1 and 2

1. In relation to the operation of cl 5 and cl 15 of the Services Agreement, the judge made the following findings:[438]

I accept that, at first blush, it would seem odd if Mirvac WA had the right to disapprove a budget it had itself prepared. That is, it would seem odd if Mirvac WA could, having prepared a budget in good faith, be contractually permitted to disapprove that budget in good faith. However, as I will explain, on closer examination, it is not surprising.

Preparing a budget requires an analysis of the costs involved of doing something in a particular way. Then, once the parties know how much it is going to cost, they consider if they are willing to incur those costs. The budget establishes what the costs would be. The decision is then whether to incur those costs. Both parties had a legitimate interest in that decision. For example, incurring large project costs to make lots ready for sale well before it could be reasonably expected that sales would occur would require Mirvac WA to outlay those sums, and would start the clock running on [BN's] obligation to repay them, earlier than necessary. Further, if the market did not improve, the costs, and [BN's] obligation to repay them, could be incurred for no benefit to either party.

Mirvac WA was required to prepare in good faith a budget that set out a proper analysis of the expenditure required to develop a stage of the Project. However, in my view, it would not be odd if Mirvac WA had the right to consider whether the expenditure under the budget was warranted in view of the expected revenue and the likelihood of such revenue being earned in the future, under the relevant market conditions. It would not be odd if Mirvac WA had the right to disapprove a budget if it considered the estimated expenditure should not be undertaken, in view of the likely return having regard to the market conditions.

Further, by cl 8, Mirvac WA was required to fund its obligations under the Services Agreement to carry out the Project. There was no right of recovery from [BN] except as otherwise provided by the Services Agreement. If Mirvac WA did not have the right to disapprove a budget, it would be as if Mirvac WA had agreed to provide an open chequebook for the Project regardless of its viability. The expenses would have been significant, with one estimate putting it at approximately $210 million. Such a construction would be a commercial nonsense.

There is no reason why a reasonable person would have understood cl 5.2(a) to mean something other than its plain meaning, supported by the context of cl 5 as a whole, the Budget Provisions as a whole and the Transaction Documents as a whole.

[BN] submitted that, if Mirvac WA was entitled to disapprove a budget, then the Services Agreement effectively included a provision entitling Mirvac WA to terminate the Project for its own commercial convenience.

I do not accept this. Mirvac WA was required to provide a budget in good faith. It was required to provide a budget that set out a proper analysis of required expenditure to develop a stage of the Project. It was not entitled to put forward a budget that was absurd or wildly and deliberately inaccurate. It was also not entitled to disapprove a budget simply because it was commercially convenient to do so. However, it was entitled, having provided a budget in good faith, to consider whether the budget should be approved. And if, for example, having considered likely or projected revenue and profit, Mirvac WA concluded in good faith that the proposed expenditure was not feasible, it could disapprove the budget, consistent with its right to do so under the Services Agreement.

...

Contrary to [BN's] submissions, the Services Agreement plainly gave Mirvac WA the right to disapprove a budget. In addition to that right, it had the right to reject an expert's determination in relation to a dispute over a budget. These rights demonstrate that the objective intention of the parties was that Mirvac WA would have the right to consider the viability and merits of project expenditure under any budget. Mirvac WA was not required to approve a proposed budget if it considered the expenditure was improvident. Mirvac WA was permitted to consider market conditions, costs and potential revenue in deciding whether or not to approve a budget. (emphasis added) (footnotes omitted)

1. Insofar as her Honour found that Mirvac (WA) could disapprove a proposed Budget or Programme submitted by its representatives on the basis that it was 'improvident' or 'not feasible', her Honour found, in effect, that Mirvac (WA)'s right of disapproval extended to where it considered that it was no longer in its economic interests to implement the Project or perform the Services. An entitlement to disapprove a Budget or Programme on the basis that it was no longer in Mirvac (WA)'s interest to perform the Services under the Services Agreement is different in character from a right to disapprove a Budget or Programme on the basis that a different or better Budget or Programme should be explored for the implementation of the Project.

The judge's findings relevant to appeal ground 3

1. The judge's findings relevant to appeal ground 3 are summarised at primary decision [631] - [634] and [700] ‑ [706]. It is unnecessary for present purposes to set out those findings here. In substance, her Honour found that on the proper construction of the Services Agreement, including having regard to the alleged good faith and 'No Hindering' obligations, there was no obligation on Mirvac (WA) to endeavour to ensure that sale proceeds would satisfy, or at least substantially satisfy, BN's obligation to repay each Advance by the 10‑year anniversary date.

1. It is convenient to recapitulate BN's grounds of appeal.

1. Grounds 1 and 2 allege, in effect, that the judge erred in law in (1) finding at [583] - [618] that Mirvac (WA) representatives on the Project Control Group had a right to disapprove a Programme or Budget, and (2) finding at [619] that Completion of the Project was not a contractual benefit conferred on BN. BN alleges that the judge should have found that, on the proper construction of the Transaction Documents, the Mirvac (WA) representatives on the Project Control Group had no such right of disapproval, and that the Completion of the Project was a contractual benefit conferred on BN.

1. Ground 3 alleges, in effect, that the judge erred in law in finding at [681] ‑ [706] that there was no implied obligation on the part of Mirvac (WA) 'to endeavour to ensure' that BN's obligation to repay each advance by its 10‑year anniversary date could be met from Proceeds of Sale of Sale Lots. BN alleges that the judge should have held, by reason of the matters raised in ground 2, that on the proper construction of the Transaction Documents it was an implied term of the Loan Agreement that Mirvac (WA) 'not hinder or prevent the fulfilment of the purpose of the [Services Agreement] by causing the Initial Advance or any subsequent Advance not to be wholly, alternatively substantially, repaid (by payments to Mirvac (WA) in its capacity as Financier under cl 11) 10 years after the Advance was made'.[439] As the terms of ground 3 make clear, the ground depends upon the reasoning advanced by ground 2.[440]

1. BN's submissions in relation to grounds 1 and 2 were to the following effect:[441]
   1. The objects of the Services Agreement are to be taken from recitals B and C and cl 2.1, read with the definitions of 'Project' and 'Services'. The objects are, in substance, to have Mirvac (WA) provide the Services to have the Land developed and sold. Provisions which effectuated these objects and which 'take precedence in construing the Transaction Documents' are as follows:

(a) clause 6.2 of the Services Agreement provides that Mirvac (WA) 'must perform the Services and procure Completion of the Project' in accordance with all Approvals and in a proper, timely, professional and workmanlike manner;

(b) clause 3.1 of the Loan Agreement required Mirvac (WA) to fund the Project to enable Completion;

(c) clause 1.5 of the Loan Agreement and cl 1.5 of the Services Agreement provided, in effect, that Mirvac (WA) was only entitled to recover the amounts advanced from the Project Assets;

(d) the express good faith obligation in cl 3 of the Services Agreement and the implied 'No Hindering Obligation'; and

(e) the express right given to BN to terminate under cl 17.1(a) of the Services Agreement where there is a Non Monetary Event of Default.

1. Whilst Mirvac (WA) was entitled, under cl 6.4, in its absolute discretion to do all things necessary or desirable to implement the Project, that did not limit or qualify the obligations of Mirvac (WA) under cl 6.2. Clause 6.4 merely gave Mirvac (WA) control over the manner in which the Project was implemented and did not confer on it a discretion as to whether or not it would perform the express obligations under cl 6.2 to procure Completion.
2. Clause 6.4 of the Services Agreement was expressly subject to approval of the Project Control Group required under cl 6.6, cl 6.7 and cl 6.8. This meant that representatives of BN were entitled to review Budgets and Programmes, and if they wished to, disapprove them at a Project Control Group meeting before they were implemented. However cl 6.4, cl 6.6, cl 6.7 and cl 6.8 did not confer a discretion on Mirvac (WA) to defeat the objects, and breach the 'No Hindering Obligation', by causing its representatives to disapprove a Budget or Programme submitted by Mirvac (WA) in good faith under cl 5.3(a) and cl 3 of the Services Agreement.
3. The Transaction Documents did not manifest an intention that Mirvac (WA) could end its unconditional obligation under cl 3 of the Loan Agreement to fund the Project to Completion through a deadlock created by its representatives disapproving the Budget or Programme, in that:

(a) in the Services Agreement, Mirvac (WA) is defined as 'Contractor', and whilst also defined as 'Financier' in cl 1.1, the latter term is only used in the Services Agreement in respect of tables allocating sequential preferential entitlements to proceeds of sale, with all other references being relevantly to Mirvac (WA) as Contractor and not as Financier;

(b) in the Loan Agreement, Mirvac (WA) is defined as 'Financier' and there is a definition of 'Contractor' in cl 1.1;

(c) the functions of the Project Control Group detailed in cl 5.2 and the obligations of the representatives of the Contractor in cl 5.3 all show that the involvement of Mirvac (WA) on the Project Control Group is solely as 'Contractor';

(d) a construction which would enable Mirvac (WA) representatives on the Project Control Group to disapprove a Budget or Programme submitted by it as Contractor, so as to bring about a deadlock and undermine Mirvac (WA)'s unconditional obligations as Financier under cl 3 of the Loan Agreement, thereby bringing the Project to an end, would (1) be inconsistent with the objects of the Services Agreement, and (2) not be the correct construction in the absence of clear words;

(e) in light of the above matters, the Services Agreement does not in clear words confer on Mirvac (WA) a discretion to disapprove a Budget or Programme; and

(f) accordingly the judge should have held that, on the proper construction of the Transaction Documents, Mirvac (WA) did not have the right of disapproval of Budgets or Programmes, and Completion was a contractual benefit conferred on BN which was not qualified by any rights given to Mirvac (WA).

1. BN's submissions in relation to ground 3 built upon grounds 1 and 2. At the conclusion of its written submissions in ground 2, BN submitted, in effect, that, for the reasons given in relation to grounds 1 and 2, (1) Mirvac (WA) did not have a right to disapprove a Budget or Programme under cl 5 of the Services Agreement, and (2) Completion was a contractual benefit conferred on BN unqualified by any right of disapproval of a Budget or Programme under cl 5 of the Services Agreement and unqualified by the wide discretions given to the Contractor in cl 6.4 of the Services Agreement.
2. In this context, BN contended that:[442]

The [j]udge should have held that, by reason of the matters referred to in ground 2, on the proper construction of the Transaction Documents it was a term implied by law in the [Loan Agreement] that Mirvac (WA) not hinder or prevent the fulfilment of the purpose of the [Services Agreement] by causing the Initial Advance or any subsequent Advance ... not to be wholly, alternatively substantially, repaid (by payments to Mirvac (WA) in its capacity as Financier under cl 11) 10 years after the Advance was made.

1. In substance, Mirvac (WA) contended that the judge was correct in essence for the reasons that her Honour gave.

A potential third construction: the parties' submissions

1. After the decision was reserved, the court raised with the parties a potential third construction of the Services Agreement (different from that proposed by each of BN and Mirvac (WA)), and sought submissions from them as to whether it may be available and preferable to the constructions advanced by the parties. The potential third construction is referred to further in [450] ‑ [453] below. On the potential third construction, cl 5.2(a) did not authorise either party's members of the Project Control Group to disapprove a Programme or Budget submitted by Mirvac (WA) for consideration by the Project Control Group for the reason that the party had determined that it was no longer in its economic interests to proceed with the performance of the Project under the Services Agreement.
2. In written submissions filed on 20 April 2021 and 13 May 2021, BN contended that the potential third construction was the correct construction of the Services Agreement.
3. Mirvac (WA), in written submissions filed on 11 May 2021, contended that the potential third construction was not the correct one. Mirvac (WA) submitted, in effect, that:
   1. The primary duty of the court in construing a written contract is to endeavour to discover the parties' intention from the words of the instrument in which the contract is embodied, and that there is no licence to ignore or rewrite the text of the contract.[443]
   2. The potential third construction ought not be accepted, as it is no more than a statement of the purported factual or legal consequences of the contract and, impermissibly, fails to focus on the words or provisions which give rise to such consequences.
   3. It accepted that it was a consequence of the true meaning of the Services Agreement that (1) each party was required to ensure that its respective members of the Project Control Group would act honestly and give genuine consideration to the proposed Budget or Programme at Project Control Group meetings for the purposes of cl 5 of the Services Agreement, but, in that connection, was not required to subordinate its interests under the Transaction Documents (properly construed) to the other party, and (2) neither party had the right to act arbitrarily or capriciously in disapproving a Budget or Programme under cl 5 of the Services Agreement. Mirvac (WA) submitted that these consequences are accepted because of the express words, particularly in cl 3 and cl 5.2(a)(ii), of the Services Agreement.
   4. The consequence that neither party was entitled to disapprove a Budget or Programme merely because it was no longer in its economic interests to implement the Project 'did not flow from any available attribution of meaning or effect of the contractual words or provisions'. Mirvac (WA) contended that any such construction is 'antithetical' to the words in cl 6.6 ‑ cl 6.8, cl 5.14(b), cl 15.4(g)(ii)(B) and cl 15.5. In particular:

(a) there are no words in cl 5.2(a) which constrain the reasons why members of the Project Control Group may decide to approve or disapprove a proposed Budget or Programme; and

(b) similarly, there are no words in cl 15.5(g)(ii)(B) which constrain the reasons why a party may 'elect' not to accept an Expert determination.

1. The unqualified language in cl 5.2(a), understood in the context of the Services Agreement as a whole (including cl 15.4(g)(ii)(B)), and bearing in mind the 'very long term' nature of the Project, meant that the parties agreed that their respective members of the Project Control Group would have the power to disapprove a proposed Budget or Programme submitted by Mirvac (WA) to the Project Control Group if the party considered that the further implementation of the Project was not 'viable'. Amongst other things, Mirvac (WA) submitted:[444]
   1. A Budget under the [Services Agreement] is necessarily a budget for expenditure. Each party to the [Services Agreement] has an unqualified right to make judgments about whether such expenditure is feasible or economic under the prevailing market conditions, in deciding whether to approve or disapprove the Budget. There is nothing arbitrary or capricious about such considerations.

1. [T]he potential third construction (insofar as it is contentious) depends, it would seem, on identifying a contractual obligation on the part of [Mirvac (WA)] to proceed regardless of the commercial viability of the Project; it would seem to depend on identifying a contractual promise 'to provide an open chequebook for the Project regardless of its viability', even though it was a very long term project.

1. No promise to proceed regardless of viability can be implied consistent with the unqualified language of the voting rights, and the express provision for deadlock resolution through sale of Project Assets.
2. It may be accepted that [Mirvac (WA)] contracted to provide the Services in pursuit of the joint objective of developing the Project land for sale. But the parties, evidently contemplating the long‑term nature of the relationship they entered into, expressly regulated the ongoing expenditure of money (the prudence of which, it is to be recalled, is a matter in which both [Mirvac (WA)] as lender and BN as borrower had an interest). Nothing in the [Services Agreement], or related contracts, discloses an intention that [Mirvac (WA)] was committed to expenditure (and, concomitantly, that BN was committed to repaying such expenditure) for the long‑term regardless of viability.
3. Because the potential third construction appears to depend on this latent asserted obligation to proceed regardless of feasibility, it collapses, in the final analysis, to the construction propounded by BN at trial and on appeal.

1. These express provisions do not qualify the unqualified right to approve or disapprove a Budget and/or Programme as expressly provided in cl 5.2(a)(ii). They instead provide for how funding is to occur. The need for funding does not arise unless a Budget is approved, with respect to expenditure the subject of [cl 6.6 ‑ cl 6.8] of the [Services Agreement]. The fact that [Mirvac (WA)] was obliged to fund does not mean that [Mirvac (WA)] could not approve or disapprove a Budget. The need for such approval precedes the need for funding, and does not prohibit the consideration of economic or feasibility issues when deciding whether to approve or disapprove a Budget. (emphasis added)
2. Clause 17 is important in that it governs 'unilateral termination', dependent upon fault, whereas cl 15.5 provides the 'ultimate outworking of an elaborate procedure for resolving Budget or Programme deadlocks' and does not involve termination 'by' one party or the other.
3. The absence of a provision for the giving of reasons by the members of the Project Control Group voting to disapprove a proposed Budget or Programme submitted by Mirvac (WA) is a 'compelling textual indicator' that there is no limitation on the exercise of a party's right to disapprove a proposed Budget or Programme of the kind referred to in the potential third construction.
4. Mirvac (WA) further submitted that even if the potential third construction were correct, BN could not succeed in the appeal.
5. In its reply submissions filed on 13 May 2021, BN said in that regard:[445]

[I]f the third possible construction is adopted by the Court, BN accepts (and has always accepted) that it will not obtain in this appeal judgment in its favour under the counterclaim unless the Court also concludes that the [Services Agreement] was validly terminated by BN for repudiation by [Mirvac (WA)] or under cl 17.1(a) of the [Services Agreement]. That is why all of the grounds of appeal have been pursued.

1. It was common ground between the parties at trial[446] and in this appeal[447] that the Transaction Documents should be treated as a single document for the purposes of construction, given their contemporaneous execution and evident interrelationship.[448]
2. The construction of a contract involves a determination of the meaning of the words of the contract by reference to its text, context and purpose. Ascertaining the meaning of terms in an instrument requires a determination of what a reasonable person would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract, and the commercial purpose or objects to be secured by the contract. The instrument must be read as a whole.[449]
3. The general principle applicable to the construction of commercial contracts is that they should be given a businesslike interpretation.[450] Absent a contrary intention, the court approaches such contracts on the basis that the parties intended to produce a result which makes commercial sense. This requires that the construction placed on the term or terms in question is consistent with the commercial object of the agreement.[451] However, it must also be borne in mind that business common sense may be a topic on which minds may differ.[452]
4. The law implies obligations in contracts to the effect that:
   1. each party will not hinder or prevent the fulfilment of the purpose of the express terms of the agreement;[453]
   2. each party will do all things necessary on its part to enable the other party to have the benefit of the agreement;[454] and
   3. each party will abstain from any act which would destroy or deprive the agreement of its efficacy or efficiency.[455]
5. Obligations of that kind have been characterised as rules of construction, but also described as implied terms, although the taxonomy does not necessarily yield practical differences.[456]
6. In Campbell v Backoffice Investments Pty Ltd,[457] Gummow, Hayne, Heydon and Kiefel JJ observed that care must be exercised in identifying both the content and operation of an implied obligation to cooperate lest it be at odds with the terms upon which the parties have expressly agreed.[458]
7. In Marmax Investments Pty Ltd v RPR Maintenance Pty Ltd,[459] the court adopted the observations of Cooke J in James E McCabe Ltd v Scottish Courage Ltd,[460] in which his Lordship said:[461]

A duty to co‑operate in, or not to prevent, fulfilment of performance of a contract only has content by virtue of the express terms of the contract and the law can only enforce a duty of co‑operation to the extent that it is necessary to make the contract workable. The court cannot, by implication of such a duty, exact a higher degree of co‑operation than that which could be defined by reference to the necessities of the contract. The duty of co‑operation or prevention/inhibition of performance is required to be determined, not by what might appear reasonable, but by the obligations imposed upon each party by the agreement itself.

1. The court in Marmax Investments then continued:[462]

In the absence of a fiduciary relationship, there cannot be a duty to cooperate in bringing about something which the contract does not require to happen: Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 at 124D. In that case, the Court of Appeal said at 125: 'A contract may "contemplate" many benefits for the respective parties, but each can only call on the other to provide, or cooperate in the providing of, benefits promised by that party'. (original emphasis)

1. In Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd, Mason J said:[463]

It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract. It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party's obligations and are not fundamental to the contract. Then the question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.

1. The High Court's decision in Park v Brothers[464] is an illustration of the importance of ascertaining first, in this context, the nature and scope of the express provisions of the contract, before considering the ambit of the implied duty to cooperate. In that case, there was a sale of farming land. The contract was entered into in September 2000. The purchaser immediately went into possession and set about planting, at considerable expense, a rice crop. Completion was due on 7 December 2000. Special condition 24 of the contract provided:

The purchaser may enter the property ... at any time after the date of this Contract ... to work up ground for crops such work to be at his expense and risk and in locations first approved by the vendor[.] (emphasis added)

1. The High Court considered the nature and scope of the vendor's capacity under special condition 24 to withhold approval of particular locations. In a unanimous judgment (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ), the High Court said that the nature of the vendor's capacity to withhold approval of particular locations as sites for 'work[ing] up ground for crops' pending completion depended upon the true construction of special condition 24. After referring to the passage in Secured Income referred to in [406] above, their H[465]urs said:465

Special condition 24 must be construed in the light of the circumstances surrounding the contract, and the purpose the condition was intended to serve. The background to special condition 24 was that, the [vendor] being ill and unable to work the property himself, it was in the mutual contemplation of the parties that whoever bought the property would enter into possession immediately, and farm the land. The time of year at which the sale took place reinforced the importance of that aspect of the bargain. No doubt the [purchasers'] right of access to the land to grow crops was a factor in the agreed price. At the same time, there could be a number of reasons why the contract might not proceed to completion, and it was reasonable to protect the interests of the [vendor] by reserving to him the power to approve, or withhold approval of, the locations at which such activity was to occur. Infrastructure, especially uncompleted infrastructure, would not necessarily increase the value of the land. It was foreseeable that the [vendor] could suffer adverse consequences from development activity undertaken prior to completion by the [purchasers]. At the same time, the [vendor] had told the [purchasers] that there was 'plenty of land' available for development for rice growing and, provided the [vendor's] interests were adequately protected, it is unlikely to have been the intention of the parties that he could obstruct development unreasonably. The [vendor] was to approve the locations of any development, having regard to what the proposed development involved. The provision should be understood as meaning that the [vendor], in granting or withholding approval, was required to act reasonably, having regard to the legitimate interests of the [vendor] which the requirement of approval was there to protect. (emphasis added)

Analysis: the proper construction of the Services Agreement and grounds 1 and 2

1. The material terms of the Services Agreement and the Loan Agreement have been set out in the previous section of these reasons.
2. Each of cl 6.1 and cl 6.2 is to be read in the context of the other subclause, in the context of cl 6 as a whole (including cl 6.4), in the context of the Services Agreement as a whole, and in the context of the Transaction Documents as a whole.
3. The obligation in cl 6.1 is not a warranty that each Approval necessary or desirable for the implementation of the Project will be granted, or a promise that each Approval necessary or desirable for the implementation of the Project will be obtained. The word 'procure' in cl 6.1 is not used in the sense of 'to effect, cause or bring about',[466] but rather in the sense of 'obtain ... by care, effort'.[467] It is evident from the subject matter in cl 6.1 that 'all consents, approvals, registrations, certificates, licences, permits or authorities ... desirable or necessary for the execution and Completion of the Project' might not be obtained or granted despite the Contractor performing the Services in a proper, timely, professional and workmanlike manner and performing its obligations in good faith.
4. Similarly, cl 6.2 is not a warranty or promise by the Contractor to the effect that the Project will reach Completion (as defined). Again, having regard to the context and subject matter of the provision, the word 'procure' in this clause is also used in the sense of 'obtain ... by care, effort'.
5. The focus of cl 6.2 is on the standards to be observed and applied by the Contractor in the course of carrying out the Services and throughout the performance of its obligations to the point of 'Completion'. The Background (recitals) and objectives (cl 2.1) both refer to the provision of Services 'on the terms of' the Services Agreement. This is to be taken as referring to the terms of the Services Agreement on their proper construction. Neither provides scope for characterising the Contractor's obligations under cl 6.2 as, in effect, a warranty to take the Project to Completion. (The contribution of these provisions to the proper construction of the Services Agreement is referred to further in [444] ‑ [445] below.)
6. The term 'Services' to which cl 6.2 applies is defined to mean all services which the Contractor determines are necessary or desirable for the carrying out of the Project, subject to the approvals required under cl 6.6, cl 6.7 and cl 6.8. By cl 6.4, the Contractor has an 'absolute discretion' to do all things 'necessary or desirable to implement the Project', subject to cl 6.6, cl 6.7 and cl 6.8. This includes, by cl 6.4(e), determining 'the nature and extent of the Services and procur[ing] the carrying out of the Services'. Clauses 6.6, 6.7 and 6.8, to which the Contractor's 'absolute discretion' is subject, require the Contractor to first obtain approval from the Project Control Group for a Budget and Programme before commencing Preliminary Works, Subdivision Works or Construction Works.
7. By cl 6.5, the Contractor must prepare a Budget and Programme in advance of the commencement of Preliminary Works, Subdivision Works and Construction Works for each proposed Stage of the Project for approval by the Project Control Group. It is to be read in the context of cl 6 and the Services Agreement as a whole (including cl 6.4) and in the context of the Transaction Documents including the Loan Agreement. It is evident that the Project was intended to be carried out in Stages to be formulated by the Contractor. There are no prescriptive provisions specifying the nature and scope of each Stage and how and when it should be reached. Similarly, and consistently, there is no prescribed Completion date. Whilst (as discussed more fully later) BN has a power under cl 5.2(a) to disapprove a Programme proposed by the Contractor, it has no power to determine or positively insist upon any particular Programme.
8. Also, it is evident, having regard to the nature and subject matter of the Services Agreement, that if there proved to be substantial and lengthy environmental or regulatory hurdles (as in substance transpired) there may be no or insufficient Proceeds of Sale of Sale Lots to enable the Borrower (BN) to repay the whole, or a substantial part, of the Initial Advance within the stipulated time.
9. Relevantly for present purposes, the effect of cl 6.2, cl 6.4, cl 6.5 and cl 6.6, read with the definition of 'Services' and cl 2.1 and cl 3 and in the context of the Services Agreement and the Transaction Documents as a whole, is that the Contractor must:
   1. Determine in good faith and in a proper, timely, professional and workmanlike manner:

(a) how to implement the Project (as defined), including the manner and timing of its implementation via Stages; and

(b) the Services which are necessary or desirable to carry out the Project in accordance with its determination as to how to implement the Project.

1. Perform such Services in a proper, timely, professional and workmanlike manner.
2. In pursuance of the obligations referred to above, prepare and develop, in good faith and in a proper, timely, professional and workmanlike manner, proposed Budgets and Programmes for the implementation of the Project for consideration by members of the Project Control Group.

1. The Contractor would not act in good faith if it designed a Budget and Programme not for the purpose of implementing the Project, but for the purpose of delaying or stalling the implementation of the Project until the 10‑year anniversary date of the Initial Advance under the Loan Agreement.
2. Clause 3.1 of the Loan Agreement does not require Mirvac (WA) to fund the Project to the point of Completion. Clause 3.1 requires the Financier to make the Initial Advance and 'further Advances ... to the Borrower in accordance with this clause 3'.
3. Clause 3.3 of the Loan Agreement requires the Borrower to request an Advance by 'giving' a Funding Notice to the Financier. Although the Borrower is to 'give' the Notice to the Financier, it is a document to be signed by a representative of the Contractor as attorney for the Borrower. The Borrower is obliged to borrow each Advance in accordance with the Funding Notice submitted by the Contractor on behalf of the Borrower and once a Funding Notice is given, it is irrevocable. Clause 3.3 of the Loan Agreement effectively imposes an obligation on the Borrower to borrow the amounts required for the payment of the Project Costs. It is not tantamount to a promise by the Contractor to implement the Project to the point of Completion. Nor does it indicate, expressly or impliedly, an obligation on the part of the Contractor under the Services Agreement to bring the Project to the point of Completion.
4. It might be thought, from the architecture of the provision, that cl 3 of the Loan Agreement was designed to protect the Contractor by ensuring that it was paid the Project Cost Payments in a context where (1) the Contractor must fund its obligations under the Services Agreement (cl 8.1 of the Services Agreement), (2) the Principal's obligation to pay the Project Cost Payments is conditioned upon the Financier making an Advance for the full amount of the Project Cost Payments under the Loan Agreement (cl 12.1(b) of the Services Agreement), and (3) the Contractor must continue to perform its obligations under the Services Agreement even if the Financier fails to comply with the obligation to make such Advances (cl 12.1(c) of the Services Agreement). The operation of cl 3 would certainly be protective of the Contractor in that way if the Financier and the Contractor were different entities. However, they are the same entity. In that regard, the substantive effect of cl 3 of the Loan Agreement, read with the Services Agreement, is, in broad terms, somewhat analogous to vendor financing. The Contractor provides the Services under the Services Agreement and, instead of receiving cash payments, it accepts an obligation in debt by the Principal which is payable in accordance with the terms of the Transaction Documents, which include the limited recourse provisions.
5. Further, cl 3 of the Loan Agreement is subservient to cl 5.6. Clause 5.6 is unqualified. It applies 'despite any other provision' in the Loan Agreement which, as the parties agreed, is to be read on the basis that the Transaction Documents comprise a single document for construction purposes. Moreover, there is, in any event, no qualification to the operation of cl 5.6 of the Loan Agreement in the Services Agreement. The Services Agreement contains no express term requiring the Project to reach Completion within 10 years. BN did not contend that such a term was to be implied in fact in order to give the Services Agreement, or the Transaction Documents as a whole, business efficacy.[468] Further, there was no express term requiring the Contractor to use best endeavours or reasonable endeavours to bring the Project to Completion within 10 years. Nor was such a term alleged by BN to be implied in fact in order to give the Services Agreement, or the Transaction Documents as a whole, business efficacy. The above matters, and the matters referred to next, indicate that there was no implied obligation or implied terms as alleged in ground 3 of BN's appeal.
6. The effect of cl 6.6, cl 6.7 and cl 6.8 of the Services Agreement is that the Contractor must not commence Preliminary Works, Subdivision Works or Construction Works unless the Project Control Group has approved the Budget and Programme for such Works for each relevant Stage of the Project.
7. The Project Control Group is, in effect, a committee of the Principal and Contractor established under the Services Agreement to which each may appoint two nominees (cl 5.1, cl 5.4 and cl 5.5). Clause 5 uses language which distinguishes between (1) the Project Control Group as a committee (eg, cl 5.2(a), cl 5.3(a), cl 5.6 and cl 5.12 - 5.14), (2) the Principal and the Contractor as distinct from the committee (each having the power to appoint a member under cl 5.5), (3) the 'members' of the Project Control Group (eg, cl 5.5, cl 5.6(a) and (b), cl 5.8 - 5.11), and (4) the obligations owed by 'representatives of the Contractor' to the Project Control Group as a committee (cl 5.3).
8. 'Representatives' of the Contractor must provide the Project Control Group, at each meeting of the Project Control Group, a proposed Budget and Programme for a Stage 'for approval or disapproval by the Project Control Group'. There is no contractual requirement that the 'representatives' must be the same persons as the Contractor's 'members' on the Project Control Group.
9. The parties, alive to these distinctions, did not provide that a Budget and Programme be given by the representatives of the Contractor for a Stage for 'approval or disapproval by the Principal'. The absence of an express provision to that effect and the presence of unmistakable words to the contrary ('the Project Control Group will ... approve or disapprove that Budget and/or Programme' in cl 5.2(a)) point strongly against the construction advanced by BN in grounds 1 ‑ 3 of the appellant's case.
10. Nor may it be inferred that the absence of a reference exclusively to the Principal under cl 5.2(a) in relation to the approval or disapproval of a Budget and/or Programme was unintended, or merely the product of infelicitous language. That is because cl 5.2(a) of the Services Agreement is to be read in the context of the Services Agreement as a whole (and the Transaction Documents) and, in particular, (1) the definitions of Budget and Programme, (2) cl 5 as a whole, and (3) cl 15, to which cl 5 (by cl 5.14) refers.
11. The terms 'Budget' and 'Programme' are defined in cl 1.1 as documents 'approved by the Project Control Group as contemplated by cl 5.2'. Clause 5.6 provides that 'at any meeting' (ie, including one for the approval or disapproval of a proposed Budget) the members appointed by the Principal have between them one vote and the members appointed by the Contractor have between them one vote. By cl 5.7 'all decisions' of the Project Control Group will be made by unanimous consent. By cl 5.14(b) 'a decision' of the Project Control Group becomes deadlocked if it is not resolved within 10 Business Days and 'the deadlocked decision' must be 'determined' under cl 15. A 'deadlocked decision' is thus a dispute for the purposes of cl 15. By cl 15, such a dispute includes a decision 'of the Project Control Group' to disapprove a Budget or Programme (cl 15.4(g)(ii) read in the context of cl 15 as a whole). Also, by cl 15.4(g)(ii)(B), such a dispute resulting in an Expert determination in accordance with cl 15.4:

[M]ay be accepted on the election of the Contractor and the Principal but will not be final and binding. In that respect the Contractor and the Principal must notify each other within 10 Business Days of receipt of the Expert's determination whether they accept the Expert's determination. If the Contractor or the Principal does not accept the Expert's determination ... clause 15.5 will apply.

1. Clause 15.5 refers to 'either' the Contractor or the Principal not accepting the Expert's determination under cl 15.4, whereupon there is to be a sale of the Project Assets (including the Land). By cl 15.5(d), in addition to other moneys owing to the Contractor, the Principal must pay the Contractor the Termination Fee on the Termination Date (being the date when the sale of the Project Assets is completed). The Termination Fee is defined in cl 1.1 as, in effect, a percentage of the GST inclusive sale price of the Project Assets. The percentage is increased, over time, up to a maximum rate of 15%, which is payable on or after the fifth anniversary of the date of approval of the proposed Scheme Amendment 63. Clause 15.5(d) also contemplates a sale of the Land prior to Completion (as defined in the Services Agreement).
2. Further, by cl 15.5(c) the process of sale of Project Assets referred to in cl 15.5(a) and cl 15.5(b) is to be carried out without affecting 'any accrued rights or liabilities of the parties under any Transaction Document'. This evidently includes accrued rights of the Financier under cl 5.6 of the Loan Agreement.
3. In support of its construction of the Services Agreement in grounds 1 and 2, BN, in oral submissions in the appeal, placed considerable reliance on the distinction in terminology between 'Contractor' and 'Financier' in the Services Agreement, and contended that all references to 'Contractor' in the Services Agreement, including cl 5, were to be read as 'Mirvac (WA) in its capacity as Contractor' as opposed to 'Mirvac (WA) in its capacity as Financier'.[469] The submissions in this regard are unpersuasive for the following reasons.
4. First, rights and obligations under a contract are, at least generally speaking, imposed on the parties to the contract. The scope of a party's rights and obligations under an agreement are to be discerned from the operative provisions of the agreement. In describing the parties at the commencement of the Services Agreement, Mirvac (WA) is defined as 'Contractor'. All references to 'Contractor' thereafter, in the operative provisions of the Services Agreement, are to be read as 'Mirvac (WA)'. The defining of Mirvac (WA) as 'Contractor' is a drafting technique, the point of which is to identify, in the operative provisions, which party has which rights and obligations.
5. Secondly, Mirvac (WA)'s obligations under the Transactions Documents are personal to Mirvac (WA). It obscures the juridical nature of Mirvac (WA)'s obligations to characterise them as obligations owed by Mirvac in different 'capacities'. Mirvac (WA), the corporate entity, had one suite of obligations owed under the Transactions Documents, and those obligations are to be ascertained from a harmonious reading of the Transactions Documents read as a whole.
6. Thirdly, most of the references to 'Financier' in the Services Agreement relate to the obligations owed by BN under the terms of the Loan Agreement in the context that the debts constituted by the Advances under the Loan Agreement are assignable by Mirvac (WA) to third parties.[470] Despite the definition of 'Financier' in the Services Agreement as 'Mirvac (WA)', it is a fair inference that the drafting of these clauses was done with an eye to possible third party assignees of BN's debts under the Loan Agreement.
7. The exception is cl 12.1(b) and (c), which are to be read in the context of the obligations of Mirvac (WA) to provide finance to BN under cl 3 of the Loan Agreement. The distinction between 'Contractor' and 'Financier' in cl 12.1(b) and (c) is a distinction without a difference as Mirvac (WA) is both 'Contractor' and 'Financier', and Mirvac (WA)'s obligations under cl 3 of the Loan Agreement are not assignable. These provisions confirm that Mirvac (WA)'s obligations are not owed in different capacities 'as Contractor' or 'as Financier', but are one set of personal obligations to be discerned from the operative provisions of the Transaction Documents read as a whole.
8. Fourthly, it is difficult to see how the point assists BN in the construction it advanced by grounds 1 and 2 in any event. That is because if the references to 'Contractor' in cl 5 are to be read as 'Mirvac (WA) in its capacity as Contractor', cl 5 expressly gives Mirvac (WA) as Contractor, irrespective of its rights and obligations as Financier, the right to approve or disapprove a Budget.
9. Nor does the good faith obligation support the construction articulated in grounds 1 and 2 of BN's appeal. Insofar as the Principal and the Contractor were required to perform their 'respective obligations to each other ... in good faith',[471] the parties were not in a fiduciary relationship with each other (cl 22.13), and there is no basis for an inference that the good faith obligation obliged a party to subordinate its interest to the other.[472] Good faith did not require Mirvac (WA) to forgo the exercise of an express contractual right for the purpose for which it was conferred.
10. For all these reasons, BN's construction advanced in grounds 1 and 2 of the appeal cannot be accepted.
11. It remains to be considered whether Mirvac (WA)'s construction (accepted by the judge), or the potential third construction, is the preferable and correct one.
12. The right given to each party (under cl 5.2(a)) to approve or disapprove a proposed Budget or Programme submitted by the Contractor was to be exercised for the parties' legitimate interests which the requirement for approval/disapproval was there to protect.[473] The legitimate interests of each party in this regard are to be ascertained from the terms of cl 5 and its subject matter and the operation of the contract as a whole as evidenced by all its terms, properly construed, including in the context of the Transaction Documents.
13. On Mirvac's construction, accepted by the judge, given (1) the conferral of the entitlement to disapprove a Programme and Budget given to each party without express qualification in cl 5.2(a), (2) the potential for the Services Agreement to be terminated following a dispute arising from the disapproval of a proposed Budget or Programme, and (3) the otherwise open‑ended nature of the Services Agreement, the parties' legitimate interests which cl 5.2(a) was designed to protect were, or included, the commercial autonomy of escaping the continued operation of the Services Agreement where it would be contrary to a party's economic interests to continue to implement the Project.
14. On that basis, it would be open to BN to disapprove a Budget or Programme under cl 5 if it were, at the time the question of approval arose for decision, contrary to BN's economic interests to proceed with the Project under the Services Agreement because, for example, circumstances arose in which subdivision was no longer the highest and best use to which the Land could be put. In that event, BN might wish to be relieved from incurring the ever‑increasing and compounding debt secured against its Land under the operation of the Services Agreement. By the same token, Mirvac (WA) would be entitled to disapprove a proposed Budget or Programme prepared by its representatives if it were no longer in its commercial interests to continue to implement the Project.
15. For the reasons which follow, Mirvac (WA)'s construction is not to be preferred.
16. First, the following provisions indicate that the parties comprehensively allocated risks and rewards in respect of the operation of the Services Agreement (in the context of the Transaction Documents) in a manner inconsistent with mutual rights to, in substance, terminate if it suited a party not to proceed with the Services Agreement:
    1. The Background (recitals) and objectives (cl 2.1) which include the unqualified statement that BN 'intends to implement the Project' and which, in the broad, articulate the commercial enterprise as the implementation of the Project.
    2. BN's agreed returns, including, importantly, the 'Principal's Amount', are to be paid via the Proceeds of Sale of Sale Lots.[474]
    3. Mirvac (WA) is to recover its fees and the debts owed to it through the sale of Lots,[475] subject to the operation of cl 5.6 of the Loan Agreement.
    4. The inability of either party to terminate the Contractor's appointment other than through the occurrence of a Monetary Event of Default or a Non Monetary Event of Default by the other party, pursuant to cl 17.1 of the Services Agreement.
    5. The absence of any express terms by which BN may refuse to borrow money to pay for the Project Costs, and by which Mirvac (WA) may refuse to lend money to BN to pay the Project Cost Payments.
17. Secondly, the subject matter of cl 5 is the approval or disapproval at meetings of the Project Control Group of proposed Programmes and Budgets in relation to (1) Preliminary Works, (2) Subdivision Works, and (3) Construction Works. In other words (consistently with the Background (recitals) and objectives (in cl 2.1)), its subject matter concerns meetings to consider and decide upon the implementation of the Project, with unanimity required in decision‑making as to the ultimate path[476] and the expenditure involved in getting there. In this context, cl 5.2(a) (read with cl 5 and cl 15) is designed to effectuate the implementation of the Project (by approvals) or to expose and identify differences in the implementation of the Project requiring resolution (by disapprovals), rather than to provide the means to bring about the termination of the Project on the ground that it is no longer in the interests of one party or the other to continue performance.
18. Thirdly, cl 5.14(b) refers to 'a decision before the Project Control Group [becoming] deadlocked'. The words 'a decision before' in the context of cl 5 evidently mean a decision as to whether to implement the Project in accordance with the Contractor's proposed Programme at the proposed budgeted cost the subject of consideration at the Project Control Group meeting. The 'decision' with which cl 5.14(b) is concerned is not a decision not to implement the Project at all.
19. Fourthly, the Expert determination provisions in cl 15 are inconsistent with the construction advanced by Mirvac (WA). Clause 5.14 provides that any deadlocked decision of the Project Control Group must be determined under cl 15. Yet for the following reasons, cl 15 cannot sensibly apply in a situation where the deadlock arises because one party voted to disapprove a proposed Budget or Programme because it no longer considered that proceeding with the Project was in its economic interest:
    1. Once a party resolves not to proceed with the Project because it is no longer in its interests to do so, there is no 'dispute' about the performance of the contract generally and the implementation of the Project in particular, for which the appointment of an Expert may contribute to resolution.
    2. Clause 15.1 refers to the giving of 'notice' where a 'dispute has arisen' which has not been resolved within 10 Business Days. The phrase 'a dispute has arisen' refers to a dispute with respect to the operation of the contract. In the context of cl 5, its natural denotation is where a dispute has arisen about the manner and cost of implementing the Project. The language is inapposite to refer to the giving of notice of the decision of a party to bring about the termination of the Project.
    3. The requirements in cl 15.2 for the preparation of a 'Briefing Paper' explaining how a party 'would like the matter to be resolved', the 'outcome to each party if the matter were [so] resolved in that manner', and the 'outcome to the Project if the matter were to be [so resolved]', also have no meaningful application where the disapproval of the proposed Budget or Programme is on the basis that the party has resolved that it is not in its interests to perform the Services Agreement or to implement the Project at all.
    4. The provisions of cl 15.3, regarding the conferral by the parties' respective Chief Executives, also lack meaningful application where the hypothesis is that one of the parties has resolved not to implement the Project. It is difficult to conceive that the parties (objectively) contemplated that one Chief Executive may change the mind of the other once the other has determined that it is no longer in that party's economic interests to proceed with the contract at all.
    5. Under cl 15.4, the 'dispute' if not 'resolved' is to be referred to a 'suitably qualified expert' with 'appropriate skills having regard to the nature of the matters in dispute' who, absent selection by agreement between the Principal and the Contractor, is to be 'nominated by the then President of the Institute of Arbitrators and Mediators Australia (Western Australian Chapter)'. That whole process is inapposite where there is no dispute as to the manner and cost of implementation of the Project, but rather a decision has been taken by a party, having regard to its internal rate of return and other commercial considerations, to disapprove a Budget on the basis that it is no longer in its economic interests to proceed with the Services Agreement.
    6. Similarly, the procedural provisions in cl 15.4(f) are also inapposite to the situation where a party has determined not to proceed with the Project.
20. In short, disputes under cl 15 relate to how to implement the Project, not whether to do so. The stark inaptness of cl 15 in its attempted application to the situation in which one party votes to disapprove a proposed Programme or Budget on the ground that it no longer considers that pursuit of the Project is in its economic interests is a powerful indicator that the Services Agreement does not contemplate or permit a vote to disapprove on that basis.
21. For these reasons, Mirvac (WA)'s construction, accepted by the judge, is not the preferred construction of the Services Agreement.
22. The better construction of the Services Agreement is to the effect that:
    1. Both Mirvac (WA) and BN were entitled to approve or disapprove a proposed Programme or Budget under cl 5.2(a) of the Services Agreement. The implied obligations referred to in [401] above required:

(a) each party to ensure that its respective appointed members would act honestly and give genuine consideration to the proposed Budget or Programme at Project Control Group meetings for the purposes of cl 5 of the Services Agreement; and

(b) each party (through its members on the Project Control Group) to exercise its right to approve or disapprove a proposed Programme or Budget, having regard to the (objective) contractual purpose served by the right of approval/disapproval.

1. Neither party (through its members on the Project Control Group) could disapprove a proposed Budget or Programme arbitrarily (ie, absent reasonable cause),[477] having regard to the purpose served by cl 5.2(a).
2. The implied obligations referred to in [401] above did not require the parties to subordinate their respective interests under the Transaction Documents (properly construed) to the [478]er party.478
3. The purpose or purposes which the exercise of the right of approval/disapproval in cl 5.2(a) were designed to serve did not include authorising a party to disapprove a proposed Programme or Budget, submitted by Mirvac (WA) for consideration by the Project Control Group, for the reason that the party had determined that it was no longer in its economic interests to proceed with the performance of the Project under the Services Agreement. The power to approve or disapprove a proposed Programme or Budget could properly be exercised only by reference to the manner in which the Project was to be implemented, not on the ground that a party no longer considered it in its interest to implement the Project at all.

1. Thus, in relation to BN, it could have regard to its own interests, including, for example, its debt burden, in determining whether to approve or disapprove a Programme proposed by the Contractor. However, BN could not reject a Budget or Programme because it wished to bring about the termination of the Contractor's appointment under the Services Agreement, or because it had determined that it was no longer in BN's economic interests to implement at all or in any way the Project under the Services Agreement.
2. In relation to Mirvac (WA), it may be accepted that, as a practical matter, the parties (objectively) contemplated that there would likely be limited occasions on which Mirvac (WA)'s members of the Project Control Group would disapprove a Budget or Programme, given the Contractor's extensive discretion under cl 6.4.
3. Nevertheless, it may be inferred that the parties contemplated that, under cl 5 of the Services Agreement, the members of the Project Control Group appointed by the Contractor could vote to approve or, subject to what follows, disapprove a Budget or Programme submitted by the Contractor's representatives. They could vote to disapprove if, for example, (1) they were of the view that the proposed Budget or Programme had overlooked certain matters or made errors or miscalculations, or (2) material events (eg, changes in market conditions) had occurred between the date of the preparation of the Budget or Programme and the date of the Project Control Group meeting at which the proposed Budget or Programme was being considered, which in their opinion affected the appropriate course for the implementation of the Project, or (3) for any other reason, consistently with the Contractor's obligations under the Services Agreement, they honestly took the view that there were other ways or different expenditure from that in the proposed Programme or Budget for the implementation of the Project that were more conducive to its (the Contractor's) financial interests. However, the members of the Project Control Group appointed by the Contractor could not disapprove a proposed Budget or Programme because the Contractor (in the absence of grounds under cl 17 of the Services Agreement) wished to bring about the termination of the Services Agreement, or because it had determined that it was no longer in the Contractor's economic interests to implement at all or in any way the Project under the Services Agreement.
4. In relation to Mirvac (WA)'s submissions referred to in [395] above:
   1. Point 1 is accepted, but the potential third construction is discernible and discerned from the words of the instrument.
   2. The potential third construction has as its focus the words of cl 5.2(a), read in the context of the Services Agreement as a whole and the Transaction Documents (most relevantly, the Loan Agreement) as a whole.
   3. The proposition, accepted by Mirvac (WA), that neither party had the right to disapprove a proposed Budget or Programme arbitrarily or capriciously, is itself grounded in the true meaning of cl 5.2(a), understood in light of the purposes that the right of approval/disapproval was intended to serve as evinced from a consideration of the Services Agreement (including the Transaction Documents) as a whole.[479] The third construction involves an attribution of meaning to cl 5.2(a) in the same way that the qualification to exclude arbitrary or capricious disapproval does. Mirvac (WA)'s construction reflects, however, an incorrect, or at least incomplete, understanding of the contractual purpose which cl 5.2(a) was designed to serve.
   4. The potential third construction provides a more complete, and harmonious, reading of the provisions of the Services Agreement as a whole than does the construction advanced by Mirvac (WA). Further, cl 5.2(a) does not, in terms, provide that the right to disapprove a Budget is unfettered (by words such as 'absolute discretion'), nor does it expressly refer to the right being exercisable where a party simply wishes no longer to continue with the performance of the contract. A reasonable business person reading the instruments as a whole would not impute to the parties the meaning contended for by Mirvac (WA) absent the incorporation of express language to that effect.
   5. The points raised by Mirvac (WA) as to the importance of a party's autonomy to disapprove a Budget when it considers that the performance of the Project is no longer in its economic interests, having regard to the long‑term nature of the Project, cannot sustain Mirvac (WA)'s construction. On its construction, from the inception of the Project, any Budget for relatively minor expenditure for Preliminary Works could be the occasion for a party to give effect to its decision that it was no longer in its interests to proceed with the Project.
   6. It is true that cl 17 is concerned with termination upon default. There is no express provision for a party to terminate (on notice or otherwise) absent default by the other party. Clauses 5 and 15, in their ordinary meaning, do not yield an intention that a party may terminate, effectively at its discretion, having regard to its own economic interests, by disapproving a proposed Budget or Programme at a Project Control Group meeting.
   7. The 'reasons' point does not assist Mirvac (WA). Mirvac (WA) accepts that a party may not disapprove a Budget arbitrarily or capriciously. There is no requirement for the provision of reasons, but the disapproval of a Programme or Budget absent reasonable cause having regard to the purposes of cl 5.2(a) may be inferred, particularly in circumstances where the proposed Programme or Budget submitted to the Project Control Group for consideration is itself the product of the Contractor's performance of its obligations in good faith (cl 3), and the performance of the Services in a proper, timely, professional and workmanlike manner (cl 6.2).
5. The potential third construction is to be preferred as the correct construction. Genuine differences as to the manner and cost of implementing the Project may emerge and result in termination under cl 15. The parties have not, however, employed cl 5.2(a) as a mechanism to implement a party's unilateral decision that it no longer wishes to perform the Services Agreement.
6. Finally, we deal with the judge's reference to 'commercial nonsense'. The third construction not having been advanced at trial, the judge focused on determining which of the two constructions advanced by the parties was preferable. In explaining why she rejected BN's contention that Mirvac (WA) had no contractual right to disapprove a Budget, the judge described the notion that Mirvac had agreed to provide an open chequebook for the Project regardless of its viability as 'a commercial nonsense'.[481] We respectfully disagree. Caution is needed before applying the label 'commercial nonsense' or 'uncommercial' to a construction, bearing in mind that minds may, and often do, differ as to what does and does not make commercial sense.[482] Whether a construction makes commercial sense must be evaluated from both parties' perspective. Not infrequently, each party will assert that the opposing party's construction is uncommercial or involves commercial nonsense. Further, consideration must be given to the terms of the contract as a whole. In our view, there is nothing inherently uncommercial about a party, evidently a land developer, taking on contractual responsibility for, and thereby accepting the risk in, the funding and implementation of a substantial long‑term land development project.

1. As ground 3 is dependent upon success in grounds 1 and 2, ground 3 must fail. Ground 3 must also fail more generally for the reasons given in relation to the overall operation of the Services Agreement referred to in [409] ‑ [438] above. There is no implied obligation (as alleged in ground 3) on the part of Mirvac (WA) 'to endeavour to ensure that the Principal's obligations under cl 5.6(a) of the [Loan Agreement] ... would be wholly, alternatively substantially, satisfied from the Principal's entitlements under cl 11 to Proceed[483]f Sale of Sale Lots'.483
2. Further (although it is not necessary to decide ground 3 by reference to this point) an obligation expressed as an 'endeavour to ensure' that repayment of the Initial Advance would be 'wholly, alternatively substantially, satisfied' is of uncertain scope and content. An obligation in those imprecise terms is not one which, objectively, the parties could or would reasonably have intended.

1. Grounds 1 and 2 alleged that the judge should have found that, on the proper construction of the Transactions Documents, the Mirvac (WA) members of the Project Control Group had no right to disapprove a Budget or Programme, and that the Completion of the Project was a contractual benefit conferred on BN. For the reasons given above, those grounds have not been established. The members of the Contractor appointed to the Project Control Group had the right to disapprove a proposed Budget or Programme as outlined in the potential third construction.
2. However, the judge erred, with respect, insofar as her Honour found, in effect, that Mirvac (WA) had a contractual entitlement to disapprove a Budget or Programme on the basis that it was no longer in Mirvac (WA)'s interests to perform the Services under the Services Agreement; for example, because Mirvac WA concluded in good faith that the commitment of any further expenditure on the Project was infeasible or improvident from its perspective. The judge's error, however, is immaterial to the outcome of the appeal. BN has never alleged that, in breach of cl 5 of the Services Agreement on its proper construction, Mirvac (WA) disapproved a proposed Budget or Programme at a Project Control Group meeting. The point was never reached, during the course of the Project, where Mirvac (WA) disapproved a proposed Budget or Programme submitted by its representatives for consideration by the Project Control Group. Also, for the reasons which follow, BN's grounds of appeal alleging errors of fact (including the alleged errors with respect to the alleged Refusal to Proceed decision) are rejected. Those grounds are not made out irrespective of whether the preferable construction of the Services Agreement is the judge's construction or the third construction.
3. Grounds 1 - 3 should be dismissed for the reasons given above.

The parties' submissions: grounds 6 - 13 BN's submissions

1. In relation to grounds 6 - 13, BN's written submissions were in the following order: grounds 6 ‑ 7, 10, 8, 9, 11 and 13, and 12. They are summarised below in that order.
2. In relation to grounds 6 ‑ 8, by way of general overview, counsel for BN submitted:[484]
   1. Mirvac (WA) opposed the imposition of a condition requiring the construction of a second access road because the carrying out of the Project had not been 'internally approved by Mirvac Ltd'.
   2. As early as 2009, in dealing with the second access road issue, 'Mirvac had decided ... that it would not be carrying out the Project to [C]ompletion ... [and] that decision was not altered at any time before [the Services Agreement] was terminated in October 2014'.
3. One aspect of these grounds was an allegation of dishonesty by Mr Adam Davidson in the preparation of his 'handover notes' for his successor, Mr Aleksovski. The allegation was to the effect that Mr Adam Davidson dishonestly recorded in the handover notes that an agreement had been reached with the Shire in relation to the second access road, for the purposes of allowing his successor (Mr Aleksovski) to falsely suggest to the Shire that there had been an agreed outcome on that issue.[485]

Ground 6 - imposition of second access road condition

9.1 Grounds 6.1 and 6.2: As detailed in items 1 and 2 of [BN's] Schedule [the email of 24 August 2009] clearly states Mirvac's then position, which was that, if construction of a second access road was imposed as a condition of approval of [proposed Scheme Amendment 63], which was required to be complied with before the Project proceeded further (including a condition imposed by the EPA under the [EP Act] in assessing [proposed Scheme Amendment 63]) (together Planning Approval), the delays that would flow as a result of that condition - ie delays through the condition not being complied with - would be significant enough 'for Mirvac to walk away from [the] [P]roject'. That clear contemporary written statement in [the email of 24 August 2009] is not, based on the language, merely [Mr Adam Davidson] 'putting the wind up the consultants', (and his evidence to that effect was glaringly improbable), and the literal meaning is also consistent with Mirvac's subsequent actions and position.

9.2 Grounds 6.3 and 6.4: [Mr Adam Davidson] admitted he was well aware, when the purported agreement was reached with [Mr Jake Davidson] of the [Shire], that unless and until a resolution was passed by the Council of the Shire (Council) approving a [Local Structure Plan] incorporating the draft provision the subject of the purported agreement, it was not binding on the Shire. The compelling inference from the relevant documents is that, before a draft [Local Structure Plan] was lodged with the Shire for approval, there was nothing more than an incomplete negotiation between Mirvac and [Mr Jake Davidson] with respect to a draft provision which may be included in a [Local Structure Plan] relating to the second access road. [Mr Adam Davidson] did not conclude, with good reason or otherwise, that an agreed outcome with the Shire had been reached. [Mr Adam Davidson] knew that the purported agreed outcome set out in [the email chain between Mr Adam Davidson and Mr Jake Davidson on 9 September 2009] related only to a draft provision. The compelling inferences are, therefore, that [Mr Adam Davidson] knew that Mirvac's strategy was to sell the land englobo after rezoning due to increasing viability concerns, and that [Mr Adam Davidson] was implementing that strategy. In those circumstances, and because (see para 9.4) [Mr Aleksovski] subsequently attempted to do what was put to [Mr Adam Davidson] in a question (quoted at [562] of the [primary decision]), there is a compelling inference that the record of an agreed outcome set out in the handover note was created for the purpose the subject of that question.

9.3 Ground 6.5: Both [Mr Adam Davidson] and [Mr Aleksovski] were experienced land developers holding senior project management positions and knew that, before a [Local Structure Plan] bound the Shire, it had to be adopted by the Council. The compelling inference is therefore that both knew no agreement concerning the draft provision was reached between [Mr Adam Davidson] and [Mr Jake Davidson] that bound the Shire.

9.4 Ground 6.6: At the time [Mr Aleksovski] made the statement to Mr Hall of the Shire that a negotiated position was reached between Mirvac and the Shire as requested by Council, for the above reasons, [Mr Aleksovski] knew that statement was false. Accordingly, his written statement to Mr Hall that an agreement had been made with [Mr Jake Davidson] and other council departments in the form of the draft provision was false.

9.5 Ground 6.7: The compelling inference is that Mirvac acted as detailed in para 9.1 because the viability of the Project had declined since the [Services Agreement] commenced in January 2008, which resulted in Mirvac's strategy then being that, to maximise Mirvac's return, the Land would be sold englobo (with the benefit of the Planning Approval). It was an element of that strategy that, despite clause 6.2, Mirvac would not carry out the Project to Completion.

(emphasis added) (footnotes omitted)

10.1 Ground 7.1: The compelling inference from contemporaneous documents is that the December 2012 Strategy ... was the final version of the document sent to the Shire because reference to a 17 December 2012 Strategy [was] made in the May 2013 Strategy.

10.2 Ground 7.2: The December 2012 Strategy proposed that the Council be responsible for upgrading the temporary fire access road to a public road. That position remained the same in the May 2013 Strategy. Mr Hall responded referring to discussions to the effect that [BN], through Mirvac, would be the responsible party for that work. The response from Mr Pearce to this query was obviously inaccurate. The compelling inference from [Pastoral Co] having no capital gains tax issue was that the explanation to the Shire as to why [BN] (through Mirvac (WA)) was asserting the Shire would be responsible for gazetting and constructing the road was false as (because of cl 3.1 of the [Loan Agreement]) there were no new financial implications that made the acquiring of the relevant land through a private sale no longer feasible, apart from Mirvac's modified strategy at that time (Strategy). At that time, the Strategy had developed from that referred to in para 9.1 above and, as detailed below, had become that:

10.2.1 there be an agreed variation of the [Services Agreement] in Mirvac's favour for [BN] to repay the Initial Advance to secure termination of the [Services Agreement] on terms that [BN] would retain the land unencumbered after termination;

10.2.2 commencing substantial works to carry out the Project would be delayed pending such an agreement being made; and

10.2.3 the threat of an englobo sale after the deadlock provision in cl 15 of the [Services Agreement] was engaged or [BN] defaulted under clause 5.6 of the [Loan Agreement] if the Project were delayed until the Anniversary Date (11 January 2018) be used as a lever to achieve a satisfactory agreed variation of the [Services Agreement] with [BN] resulting in repayment to Mirvac (WA) of the Initial Advance.

10.3 Ground 7.3: As detailed in item 11 of [BN's] Schedule, [Mr Cuthbert] of the Department of Planning ... was included in the email chains relating to the May 2013 Strategy. [Mr Cuthbert] knew there were no financial implications that made a private sale infeasible. Accordingly, the compelling inference is that the WAPC also knew (or would be informed by [Mr Cuthbert]). Further, it is a proper condition of subdivision approval that the subdivider pay the costs of a public road required by the subdivision.[488]

10.4 Ground 7.4: Accordingly, as detailed in item 12 of [BN's] Schedule, the compelling inference is that Mirvac (WA), through [Mr Aleksovski] and others, was attempting to cause [Pastoral Co] to not sell the land required for the second access road, particularly in light of the internal Mirvac documents and matters set out below (which occurred concurrently with the second access road developments).

1. The concurrence of the events referred to [above] and [at paragraphs] 13 to 17 below show that, in early 2013, [Mr Aleksovski's] conduct concerning the second access road was implementing the Strategy.

1. BN submitted that ground 10 concerns findings of fact as to whether Mirvac made, or manifested an intention to make, the alleged Refusal to Proceed decision, and internal Mirvac documents which relate to that issue.[489]
2. BN contended that the internal Mirvac documents, referred to in ground 10.11, which relate to the findings of fact concerning the manifestation of the alleged Refusal to Proceed decision are books (as defined in s 9 of the Corporations Act 2001 (Cth)) of Mirvac Ltd and/or Mirvac (WA) (Books), and are prima facie evidence under s 1305 of that Act.[490] BN contended that the Books of Mirvac detailed in BN's Schedule are central to establishing the asserted errors of fact because they are prima facie contemporary evidence of Mirvac's intentions when those Books were created.[491]
3. With respect to the errors of fact set out in ground 10, BN contended, in summary:[492]

14.1 Ground 10.1: ... The judge found that a reference [in Mr Crockett's email of 24 May 2012] to the protection of 'our' position ... was, despite it being between Mirvac officers, a reference to the position of both Mirvac and [BN]. The compelling inference from the whole document is that, whilst the [Project Control Group] did endorse a decision to progress the [Local Structure Plan] to approval, each party's representatives on the [Project Control Group] had different reasons for agreeing: [BN] wanted the Project carried out to Completion, but Mirvac was protecting its position by having the [Project Control Group] agree to progress the [Local Structure Plan] to approval because the land could be sold for more by an englobo sale with Planning Approval than without it.

14.2 Ground 10.2: The statement of [Mr Draffen] the subject of ground 10.2 is s [sic] in item 16 of [BN's Schedule]. If [BN's] construction of the Transaction Documents is accepted, [Mr Draffen's] evidence was a material admission by Mirvac. The evidence referred to below leads to a compelling inference that, whilst this admission concerned Mirvac's position in June 2012, that position did not materially change before the [Services Agreement] was terminated in 2014.

14.3 Ground 10.3: As at July 2012, Mirvac's position was that, because Completion in accordance with the [Services Agreement] would not give a viable economic outcome for Mirvac, it was not in Mirvac's interest to proceed with the Project. The compelling inference is that Mirvac's stated assumption to move towards an englobo sale at the time was not only adopted for the purposes [of adopting a value for the carrying value of inventory], but also because Mirvac at the time knew that the Strategy was required because Mirvac could not lawfully terminate the [Services Agreement] merely for its financial convenience.

14.4 Ground 10.4: As detailed in item 18 of [BN's] Schedule, the compelling inferences are that Mirvac acted on the basis that it was bound to carry out the Project to Completion and, based on the evidence that Mirvac would not have considered how to engage the deadlock provision in the [Services Agreement] unless it knew that was the only way, in the absence of agreement by [BN], to lawfully exit the [Services Agreement] before the Anniversary Date without carrying out the Project. As detailed below, investigations were carried out by Mirvac into how the deadlock provision could be engaged.

14.5 Ground 10.5: [Mirvac's emails dated 22 and 23 January 2013] state that legal advice was being sought as to how best to enact the deadlock provisions to ensure Mirvac's actions were supported by the [Services Agreement]. However, the compelling inference from all the evidence discussed in this para 14, is that a decision to exit via deadlock had been made, and Mirvac was only obtaining further legal advice on how to lawfully implement the decision.

14.6 Ground 10.6: As detailed in item 20 of [BN's] Schedule, in February 2013 Mirvac was considering the best way to exit the [Services Agreement]. Mirvac's considered that [BN] was likely to release Mirvac from its obligations under the [Services Agreement] and repay the Initial Advance ($25m) in exchange for retaining the land unencumbered. Accordingly, a provision of $18m against the then value of the [Outstanding Loan Amount] ($43m approx.) was made in February 2013, rather than a provision of $28m recommended by Mirvac's auditors based on the then market value of the land being $15m if sold englobo. The compelling inferences from the basis on which the $18m provision was made and the other evidence in Item 20 [of BN's Schedule] are that Mirvac had, at February 2013, adopted the Strategy, and was considering only how (and not whether) to implement the Strategy.

14.7 Ground 10.7: The compelling inference from the documents detailed in item 21 of [BN's] Schedule is that Mirvac knew that renegotiation of the [Services Agreement] on terms acceptable to Mirvac would not occur as [BN] was unwilling to materially amend the [Services Agreement] in Mirvac's favour. That Mirvac began valuing the land based on an englobo sale leads to a compelling inference that Mirvac had decided it would not carry out the [Services Agreement] to Completion of the Project because it knew the [Services Agreement] could not be renegotiated to Mirvac's satisfaction.

14.8 Ground 10.8: The evidence detailed in item 22 of [BN's] Schedule, relating to the PWC Report (a Book), clearly details that Mirvac's decision up to the date of the PWC Report was that Mirvac would exit the [Services Agreement] via deadlock, but further legal advice was being sought as to how the use of the deadlock provisions could best be achieved. It was because that legal advice had not been obtained that the PWC Report recommended a provision of $28m rather than $18m.

14.9 Ground 10.9: The evidence detailed in item 23 of [BN's] Schedule is also consistent with the evidence and the compelling inferences detailed above. The provision of $18m was made on the basis that, although [BN] was no longer willing to renegotiate the [Services Agreement] favourably to Mirvac, Mirvac management assumed that [BN] would agree to repay the Initial Advance in full to prevent the land being sold englobo following a deadlock. The compelling inference from that evidence was that Mirvac had made, or had manifested an intention to make, the [alleged Refusal to Proceed decision].

14.10 Ground 10.10: By September 2013, Mirvac had received legal advice as to how best to use the deadlock provision in the [Services Agreement]. Mirvac knew by that time that it could not bring about a deadlock by having Mirvac Ltd refuse to give an ACC to commence work on the Project, and that a rejection of a Budget or Programme at a [Project Control Group] meeting leading to deadlock was required. The evidence in item 24 of [BN's Schedule] shows that three options were considered by Mirvac in September 2013 as to how to proceed. All three options, if [BN's] construction of the Transaction Documents is accepted, were repudiatory, or would constitute a [Non Monetary Event of Default] under the [Services Agreement] if implemented. The financial model of how much Mirvac would lose if the option of carrying out the Project to Completion in accordance with the [Services Agreement] was adopted shows why that option had been, and continued to be, rejected by Mirvac.

(emphasis added) (footnotes omitted)

Ground 8 - second access road and viability concerns

1. In respect of ground 8, BN submitted that:[493]
   1. As detailed above and in item 13 of [BN's] Schedule, events concerning the second access road (including Mirvac (WA) applying to WAPC based on a deemed refusal concerning the second access road in June 2013 with no realistic prospect of success) were occurring at the same time as internal Mirvac documents were created showing that Mirvac was considering how best to implement its decision to exit the Project via deadlock. The compelling inference from this is that, at that time, the second access road was being used to:

15.1 delay the commencement of works on the Project because no ACC had been, or would be, issued by Mirvac Ltd to commence substantial Project work; and

15.2 put pressure on [BN] (due to the risk of the [Outstanding Loan Amount] not being repaid under cl 11 before the Anniversary Date) to either renegotiate the [Services Agreement] in Mirvac's favour or repay the Initial Advance as contemplated by the Strategy. (footnotes omitted)

1. In respect of ground 9, BN submitted that:[494]
   1. In light of all of the above, in particular paragraph 14 above [ground 10], the compelling inference was that Mirvac deliberately presented the September 2014 Report for the September 2014 [Project Control Group] meeting for the purpose of delaying any substantial work towards Completion of the Project or triggering a deadlock. Mirvac knew that, first, to bring about a deadlock it had to submit a [Budget or Programme] that [BN]'s representatives on the [Project Control Group] would reject and, second, that before a [Budget or Programme] was submitted to the [Project Control Group] by Mirvac (WA) as contractor for commencing substantial construction work, an ACC would have to have been given by Mirvac Ltd (which never happened). Consistently with both, the [Budget and Programme] proposed in [the September 2014] Report was merely to implement a proposal to delay commencing substantial work for another 18 months while an amendment to the [Local Structure Plan] was sought to convert the golf course into residential land (despite para (e) of the definition of 'Project' in cl 1.1). In issuing that [September 2014] Report to [BN's] [Project Control Group] representatives, Mirvac demonstrated it had made, or manifested an intention to make, the [alleged Refusal to Proceed decision]. Consequently, the judge erred in holding that the September 2014 Report was not issued to deliberately delay progress on the Project and in not holding that the presentation of the [September 2014] Report was a further default. (emphasis added) (footnotes omitted)
2. In oral submissions,[495] BN submitted, in effect, that having regard (1) to BN's May 2014 Notice, (2) the definition of 'Project' in the Services Agreement, and (3) the September 2013 Options Memo indicating a loss of $80 million even if the golf course were included in the development, the inferences to be drawn included that Mirvac, by putting up the September 2014 Programme and Budget, intended that BN would reject the Budget, thereby triggering a deadlock.
3. Counsel for BN submitted that there were further inferences to the effect that:
   1. Even if BN did not object to the September 2014 Programme and Budget, but rather agreed to it, Mirvac's intention was that:

(a) the Programme would take 18 months and would achieve delays, intended by Mirvac, up to the point where the Initial Advance was due for repayment; and

(b) because Mirvac contemplated a loss of $80 million even if the golf course were incorporated, Mirvac had no intention of carrying out the Project to Completion after the 18‑month planning period.

1. Mirvac did not submit a Programme and Budget for Construction Works because no Approval to Commence Construction document had been issued by Mirvac Ltd.

3. As including the golf course land was inconsistent with the definition of Project, in submitting the Budget and Programme, Mirvac did not have the intention of carrying out the Project to completion properly, timeously and in good faith.

1. Counsel for BN contended that, for those reasons, the judge should have inferred that Mirvac submitted the September 2014 Programme and Budget when it did not have the intention of carrying out the Project to Completion timeously and in good faith, and, accordingly, there was a repudiation as alleged in par 1.5 of BN's Termination Notice (summarised in [275] above), namely:

It was intended to cause material delay in commencing work on the first stage of the Project so as to result in [Mirvac (WA)] not incurring expenditure in carrying out the Project prior to Mirvac (WA) becoming entitled on 11 January 2018 to repayment of any unrepaid part of the Advances.

1. In relation to the errors of fact alleged, BN submitted that:[496]
   1. The compelling inferences from the matters, or one or more of the matters, referred to above, and particularly the Books, were that Mirvac had made, or manifested an intention to make, the [alleged Refusal to Proceed decision] and had decided, and given effect to their decision, not to carry out the Project to Completion in accordance with the obligations of Mirvac (WA) under the [Services Agreement]. Accordingly, Mirvac (WA) had defaulted under the [Services Agreement]. The judge erred by construing Books based on evidence of witnesses who frequently had not prepared the Books and, in the case of the $18m provision, were not responsible for making the decision and not involved in the preparation of the PWC Report, rather than based on the clear language in the Books.

1. In respect of grounds 11 and 13, BN submitted that:[497]
   1. The judge accepted, at [478] of the Reasons, that the statement that 'Mirvac had internal approval processes and that Mirvac would not be able to commence [S]tage 1 without having internal approval' was made by [Mr Lawrance] at 3 June 2014 [Project Control Group] (Statement). The judge found that the Statement [by Mr Lawrance] was not repudiatory or one that manifested the intention alleged by [BN]. If [BN's] construction of the Transaction Documents is accepted, the Statement [by Mr Lawrance] was clearly repudiatory and one that manifested the intention alleged and was a further Default by Mirvac (WA).
   2. The judge also erroneously held that Mirvac (WA) could not submit a Programme and Budget in relation to the subdivision works as more work was needed to be done around the potential Stage 1 because the Statement [by Mr Lawrance] led to a compelling inference that no such Programme and Budget was submitted by Mirvac (WA) because no ACC had been given, or would be given, by Mirvac Ltd because of Mirvac having made, or manifested an intention to make, the [alleged Refusal to Proceed decision]. (underlining original emphasis) (italics emphasis added)

Ground 12 - recording of Project Control Group meetings

1. BN submitted:[498]
   1. The judge held, at [522] of the [primary decision], that [BN] had a legal right to record the September 2014 [Project Control Group] meeting. The Judge found at [526] that neither cl 5.10(c), nor any other clause in the [Services Agreement], provided for the recording of meetings as an apparent reason for the conclusion at [527] that this part of [BN's] claim failed. However, the judge thereby erred because the legal statutory entitlement of [BN] to record [Project Control Group] meetings was not conditioned by a requirement that the right could only be exercised by [BN] if it had an express contractual entitlement to record [Project Control Group] meetings.
   2. It follows that the refusal of Mirvac (WA)'s representatives to attend a recorded September 2014 [Project Control Group] meeting, or any later recorded [Project Control Group] meetings, was a further [d]efault under the [Services Agreement] because, without the [Project Control Group] meetings, the Project could not proceed: cll 6.4, 6.6, 6.7 and 6.8. Contrary to the apparent further reason in [528] of the [primary decision] for rejecting this part of [BN's] claim, [BN] was not obliged to proceed to dispute resolution under cl 15 before exercising legal rights after [d]efault (including the refusal to attend [Project Control Group] meetings) by Mirvac (WA) because a decision of [BN] to exercise legal rights under cl 17.1(a) or at common law for repudiation arising from a [d]efault does not give rise to a 'dispute' under cl 15. (emphasis added)

1. BN submitted:[499]
   1. If [BN's] construction of the Transaction Documents is accepted, the judge erred in not finding that one or more [d]efaults, or one composite [d]efault based on one or all of the matters referred to above, under the [Services Agreement] by Mirvac (WA) were established. (emphasis added)

1. Mirvac (WA) contended, in effect, that the judge's findings were correct for the reasons that she gave.

1. Grounds 6 - 13 are now dealt with in the order in which they appeared in BN's written submissions. In considering BN's attack on the judge's factual findings with respect to each ground of appeal, we have had regard to the whole of the evidence referred to in all of BN's grounds and submissions and in BN's Schedule. We have also had regard to the apparent flow of events as appears from the Chronology of Events insofar as those matters are undisputed or, as indicated in [279] above, may be taken to be undisputed.

1. Ground 6 relates to the issue of the second access road. The gravamen of BN's case at trial, and on appeal in this regard,[500] was to the effect that:
   1. Mirvac (WA) used the planning issues in relation to the second access road as a ruse for the improper purpose of delaying the progress of the Project; and
   2. Mr Adam Davidson dishonestly recorded, in the handover notes of 22 May 2010, that an agreement had been reached with the Shire in relation to the second access road for the purpose of allowing Mr Aleksovski to suggest to the Shire, falsely, that there had been an agreed outcome.
2. At the outset, it is to be observed that Mr Adam Davidson, who had carriage of the Project until 31 May 2010 at a practical level, denied these allegations of impropriety and dishonesty, and her Honour found him to be a most impressive, honest and reliable witness.[501]
3. The background leading up to the 24 August 2009 email is summarised at [50] ‑ [59], [61], [63] ‑ [68] and [71] ‑ [78] in the Chronology of Events. Mirvac (WA)'s dealings with the planning and regulatory issues during Mr Adam Davidson's time in the period after 24 August 2009, up to his departure on 31 May 2010, includes the findings summarised at [82] ‑ [84] and [87] ‑ [99] above. As noted earlier, there appears to be no express challenge to these findings, but even if they were taken to be challenged, the findings were plainly open. The idea that, in this factual context, Mr Adam Davidson knew or was a party to or acted in accordance with a decision made as early as August 2009 not to carry out the Project to Completion is, prima facie, an unlikely one.
4. As to grounds 6.1 and 6.2, the key findings are summarised at [79] ‑ [81] in the Chronology of Events above. Mr Adam Davidson's evidence as to the point of his editorial comment in the last sentence of the email dated 24 August 2009 is, on its face, plausible - there is certainly no compelling inference to the contrary. Moreover, an email communication from 12 years ago between a principal (Mr Adam Davidson) and his consultant on a project is not to be construed in the manner in which a court approaches the construction of a statute. The judge was best placed to consider the meaning and effect of the email in the context of her Honour's understanding and consideration of the evidence as a whole, including her assessment of Mr Adam Davidson's evidence as to the purposes behind his editorial comment. Nothing alleged in the appeal by BN indicates that her Honour misused her advantage as a trial judge in this regard.
5. As to ground 6.3, the judge's reasons at primary decision [150] and [158] were to the effect that (1) Mr Adam Davidson and a Shire Officer, Mr Jake Davidson, had reached an agreement in relation to the second access road issue, and (2) Mr Adam Davidson had good grounds to believe that the Council would endorse the agreement with the Shire Officers. Accordingly, the allegation that the judge misconstrued the email exchange because there could be no binding agreement until a Local Structure Plan was adopted, misses the point of the findings. No error is disclosed.
6. The substantive point made by ground 6.4 is that the judge erred in not finding dishonesty in the record keeping by Mr Adam Davidson as part of a plan to deceive the Shire. Such a finding would have involved accepting an extremely serious allegation to which, as counsel for BN accepted,[502] the principles in Briginshaw v Briginshaw[503] applied.
7. There is nothing in BN's submissions which could persuade this court to depart from the judge's favourable assessment of the character of Mr Adam Davidson. Moreover, the judge's reasoning at primary decision [162] was, with respect, plainly open and persuasive:

Further, the proposition was inherently improbable. It would have first required [Mr] Adam Davidson, a planning manager, to determine that there could be some value in creating a document in 2010 falsely asserting an agreement. This would require quite some foresight. It would have also required him to be dishonest and willing to be dishonest despite the fact that he was leaving Mirvac WA for a job elsewhere. Further, if he wanted to create a document alleging an agreement that went beyond documents common to the Shire and Mirvac WA, one might expect he would refer to fictitious oral conversations. He did not. He reproduced in the handover notes the 2009 Trigger Provisions.

1. The evidence of Mr Adam Davidson at ts 392 - 393 does not materially assist BN. The evidence was elicited in a very theoretical and general way, and has no real bearing on the judge's findings as to Mirvac (WA)'s motivations and conduct in its negotiations with the Shire in relation to the issue of the second access road. The evidence was:[504]

[Counsel for BN]: But in your dealings whilst you were there with the Shire of Harvey, the [S]hire was generally supportive of the Binningup [P]roject proceeding in your understanding, wasn't it? - Conditionally supportive, yes.

[Counsel for BN]: And in your experience do large property developers such as Mirvac sometimes acquire land with a view to carrying out a subdivision development, but then after doing a detailed feasibility analysis sell the land without actually proceeding to carry out the development? - Yes, I've seen it happen.

[Counsel for BN]: Has it been done by Mirvac to your knowledge? - I can't recall any projects that I was involved in where that occurred.

[Counsel for BN]: I see. And where that type of situation applies, is it your experience that it's common for a large property developer to take all possible steps to maximise the sale price before marketing the land? - Yes.

[Counsel for BN]: And in your experience, can those steps to maximise the sale price include obtaining planning approval for a proposed development and then selling the land with the benefit of a current development approval? - Yes.

1. BN's submissions fall well short of establishing the serious allegation against Mr Adam Davidson to the Briginshaw standard.
2. Ground 6.5 is without merit. Plainly both Mr Adam Davidson and Mr Aleksovski were referring, having regard to the terms of their communications and in the context of the communications and the events at the time, to an agreement between Mirvac (WA) and Shire Officers. BN's contentions that (1) there was no binding agreement with the Shire in the form of an approved Local Structure Plan, and (2) both Mr Adam Davidson and Mr Aleksovski knew that approval of the Local Structure Plan was necessary to bind the Shire, are both consistent with, and provide contextual support for, the finding that they were referring to an agreement reached with officers of the Shire but not to an agreement reached pursuant to an approved Local Structure Plan.
3. As to ground 6.6, the judge's finding is at primary decision [172]:

In closing submissions, [BN] submitted that Mr Aleksovski's statement in his 5 September 2011 email that 'a negotiated position was agreed with your predecessor Jake and other council departments concerned' was false. I do not accept this. The documentary evidence shows that the Shire officers and Mirvac WA's development manager had reached an agreement about trigger points as to the time at which the route would need to be identified (on the issue of titles to facilitate the development of 750 dwellings) and the time at which the road would be constructed (on the issue of titles for 1,000). (footnote omitted)

1. Her Honour was correct. There was a 'negotiated position ... agreed' between Mr Adam Davidson and Mr Hall's predecessors at the Shire to that effect. There was, plainly, no approved Local Structure Plan at this stage,[505] and the negotiated position was not binding on the Council. Mr Aleksovski stated as much in his email of 5 September 2011, when he said, 'I don't think it ever went to [C]ouncil?'.[506] Having seen and heard both Mr Aleksovski and Mr Adam Davidson give their evidence, and having regard to the evidence as a whole, it was well open to the judge to make the findings in [172], including the finding that Mr Aleksovski's statement in his email of 5 September 2011 was not false.
2. Ground 6.7 alleges a misconstruction of BN's written closing submissions at pars 3.4.7 and 3.5.[507] The proposition as enunciated in ground 6.7 appeared, in substance, to be that, properly construed, the reference to 'Development Approval' in those submissions was a reference only to an approval of the proposed Scheme Amendment 63, and did not include an approval of the Local Structure Plan. We are not persuaded that her Honour misread the submissions, particularly as par 3.4.7 referred to 'Development Approval (including ... an approved [Local Structure Plan])'.
3. Moreover, the judge went on to make the following finding:[508]

In any event, for the same reasons as rejecting [BN's] primary contention on [Mr] Adam Davidson's conduct, I do not accept that his conduct supports any intention other than a desire to save unnecessary or premature costs. [Mr] Adam Davidson was seeking to avoid having to construct a second access road earlier than required (if indeed it was required at all), for the benefit of both Mirvac WA and [BN]. As Mr Waller spontaneously noted, that was 'just prudent'. (footnote omitted)

1. In other words, whether or not her Honour misunderstood pars 3.4.7 and 3.5 of BN's closing written submissions, the ultimate, relevant and critical findings were that (1) Mr Adam Davidson was not seeking to avoid the imposition of the condition of planning approval requiring immediate construction of a second access road in order to avoid expenditure by Mirvac (WA) unless and until the carrying out of the Project had been internally approved by Mirvac (WA), and (2) his communications with the Shire were not done to cause delay.[509] Unless error could be established in those findings, whether or not there was a misapprehension of pars 3.4.7 and 3.5 of BN's closing written submissions is irrelevant. Error has not been established with respect to those findings.
2. Ground 6 should be dismissed.

1. As to grounds 7.1 and 7.2, the judge accepted that the December 2012 Strategy document, or a version of it, had been sent to the Shire.[510] Her Honour observed that the December 2012 Strategy document referred to '[Pastoral Co] ... confirming its intention to cede the land ... free of cost'.[511] On the other hand, the May 2013 Strategy implied a sale of the land to Pastoral Co. Her Honour found, in effect, that the December 2012 Strategy document was either (1) not the final version sent to the Shire, or (2) that 'other discussions had occurred after the December 2012 Strategy had been given to the Shire'.[512] We are not persuaded that at least the second inference was not open, given that on one reading of the document, the third and fourth paragraphs in the May 2013 Strategy assumed that it had been recognised that Pastoral Co would sell the land (not cede it without cost), and the document then focused on the alleged GST implications of a sale.
2. In any event, whether the December 2012 Strategy document was final, or a draft, or was overtaken by subsequent discussions, is ultimately immaterial. The gravamen of ground 7 is in the challenge, by ground 7.4, to the judge's finding that Mr Aleksovski's conduct was not for the purpose of delaying the Project. Ground 7.1, like grounds 7.2 and 7.3, is significant only insofar as it feeds into and supports ground 7.4. Thus, the ultimate question is whether the suite of negotiations with the Shire undertaken by Mr Adam Davidson and, subsequently, Mr Aleksovski, were undertaken for the purpose of delaying the Project. This question was highly dependent on the judge's findings as to the credibility of those witnesses to which the conventional principles of appellate restraint apply. Moreover, the contentions that Mr Adam Davidson behaved dishonestly were to be assessed having regard to the Briginshaw standard.
3. Both the December 2012 Strategy and the May 2013 Strategy (1) provided for the Shire (not BN/Mirvac (WA)) to undertake the construction work to upgrade a second access road to the standard of a public road, and (2) proposed that BN/Mirvac (WA) would place the Shire in funds for that purpose, in an amount of $2 million, upon the issue of titles for 500 dwellings. That was broadly consistent with the June 2012 Strategy as well as with Mr Adam Davidson's approach in principle to the second access road - to distinguish between secondary access for emergency purposes on the one hand, and a fully constructed public road for traffic purposes on the other.[513]
4. Further, the judge noted (without challenge in this appeal) that the evidence of BN's expert witness, Mr Maiorana, suggested that the Shire's decision was unusual, and that it was not unreasonable for Mr Aleksovski to try to obtain a different outcome.[514]
5. Insofar as ground 7.2 alleges that the italicised portion of Mr Pearce's (the consultant's) email dated 30 May 2013 referred to at primary decision [215] was inaccurate, two observations may be made. First, the last sentence of the italicised part is not inaccurate. It was being proposed that BN would make appropriate contributions to the construction of the road by way of putting the Shire in funds to the extent of $2 million. Secondly, insofar as it is alleged that Mr Pearce's responsive email of 30 May 2013 stated, wrongly, that the necessary Pastoral Co land would not be available because a sale of the land would have adverse tax implications, her Honour accepted that to be the case. Her Honour said, albeit with reference to the terms of the May 2013 Strategy itself rather than Mr Pearce's responsive email of that date, that this 'was not true'.[515]
6. The judge's findings on these issues were relevantly summarised at primary decision [263] - [270]:

In evaluating the evidence in relation to the second access road, I have taken into account the other evidence that shows what else was happening at particular times. Much of this evidence is summarised later.

In particular, Mr Aleksovski first asked Mr Payton about possible tax issues on 21 March 2013. This was less than two months after a Mirvac Board paper and a report from PricewaterhouseCoopers that indicated, among other things, that Mirvac was contemplating using the deadlock provisions to persuade [BN] to agree to vary the Services Agreement, but was first going to obtain legal advice to ensure that whatever it did was contractually permissible. It was just over a month after an email exchange which was to similar effect. However, as I will later explain, these, and other similar documents, do not show that Mirvac WA intended to act contrary to its contractual obligations or to delay or stop work on the Project pending the anticipated negotiated outcome.

I do not accept Mr Aleksovski's explanation as to why he raised tax issues with Mr Payton. His explanation was implausible. However, I also do not accept that Mr Aleksovski raised tax issues to try to convince Mr Payton that [Pastoral Co] should refuse to sell the land for the second access road. Rather, I infer (despite Mr Aleksovski's evidence) that he raised tax issues with Mr Payton as part of his attempt to manoeuvre the Shire into compulsorily acquiring the land. Had the Shire acquired the land, this would have been of significant benefit to the Project, and [Pastoral Co] could not have held Mirvac WA and [BN] to ransom.

I do not accept that Mr Aleksovski was seeking to delay progress. Mr Aleksovski denied he was seeking to delay. His denial was supported by the documentary evidence:

(1) In June 2012, Mr Pearce, on behalf of Mirvac, was pressing the Shire.

(2) The June 2012 Strategy was provided promptly and addressed Mr Hall's requests.

(3) After the meeting on 13 August 2012, Mr Aleksovski promptly sought to meet with Mr Waller, and a further meeting was held with the Shire at which Mr Waller was present. In that meeting, the trigger point for the construction of the road, left open by the 13 August meeting, was agreed.

(4) In May 2013, Mr Aleksovski wanted to press the Shire to respond. The email sent to the Shire on 10 May 2013 foreshadowed that Mirvac WA would rely on a deemed refusal if a decision was not forthcoming. However, it also advised that further discussion may resolve the issue. Its aim was clearly to prompt a response from the Shire and to encourage the Shire to be willing to negotiate.

(5) In numerous documents, including the Deemed Refusal Notice itself, Mirvac Ltd reiterated its commitment to make a contribution per lot for the construction of the road.

(6) Mr Pearce responded to Mr Hall's email of 27 May 2013, on 30 May 2013. In that email, Mr Pearce was pressing for 'the June spot' at the Planning Committee.

These documents are inconsistent with a desire to delay. They support a desire to persuade the Shire to agree with Mirvac WA's proposal and to persuade it to compulsorily acquire the land.

Further, the fact of utilising the deemed refusal process is itself inconsistent with a desire to delay. By using this process, Mr Aleksovski sought to have the WAPC resolve the impasse between the Shire and Mirvac WA, rather than the impasse continuing (unless Mirvac WA capitulated). Mr Aleksovski also chose the WAPC rather than the State Administrative Tribunal as he thought it would be faster.

I do accept that the May 2013 Strategy inaccurately stated that investigation by [Pastoral Co] had revealed significant tax implications. This was not an innocent mistake. The inaccuracy is too detailed, and is, in effect, repeated in Mr Pearce's email to Mr Hall on 30 May 2013. The inaccuracy troubled me. However, in all of the circumstances, I am not satisfied that the misstatement was made as part of a larger plan to delay or impede implementation of the Project. Nor am I satisfied that it was made because the [alleged Refusal to Proceed decision] had been made. While I accept that Mr Aleksovski was trying to avoid incurring costs, I do not accept that this was because the [alleged Refusal to Proceed decision] had been made. It is much more likely to have been written as part of Mirvac WA's ongoing efforts to try to reduce unnecessary expenditure, by seeking to secure the Shire's agreement to acquire the land itself.

Mr Aleksovski believed that the Project should not have been 'held to ransom by the Shire of Harvey to acquire land from a private third party individual for a public road'. Mr Aleksovski was also clearly unhappy that the Shire had changed its position, after agreeing what the triggers would be for the road construction. Neither matter would justify misstating the position to the Shire. However, I do not accept that he did it to delay the Project or because the [alleged Refusal to Proceed decision] had been made. In my view, it is more likely that Mr Aleksovski was simply trying to persuade the Shire to acquire the land itself, in an effort to save costs. (emphasis added) (footnotes omitted)

1. The reasoning is logical, inherently commercially plausible and discloses no error, including when regard is had to the matters alleged in ground 10 (as discussed later in these reasons). The submissions by BN pay lip service, at most, to the principles of appellate restraint given that her Honour's findings were substantially based on her Honour's detailed reasoned assessment of the credibility and reliability of the witnesses including Mr Adam Davidson, Mr Aleksovski and Mr Draffen. Grounds 7.1 and 7.2 should be dismissed.
2. As to ground 7.3, the December 2012 Strategy and the May 2013 Strategy both proceeded on the basis that the developer would pay or contribute to the costs of the public road required for the subdivision by providing that BN/Mirvac (WA) would pay $2 million in respect of the construction of such a road. The proposed funding arrangements were consistent with the decisions of Reid and Cardwell, to which BN referred in its written submissions. The question of whether the developer should, itself, be required to purchase the land was another matter. The judge did not err in finding that the WAPC, in the exercise of its statutory obligations, would nevertheless have objectively considered whether it was appropriate to require Mirvac (WA) to acquire the land for what was to be a public road. Mr Cuthbert's email of 7 June 2013[516] could not be regarded as determinative of the issue.
3. As to ground 7.4, the judge's findings are at primary decision [263] ‑ [270], referred to at [502] above.
4. There is no error in that reasoning. We repeat the observations at [503] above. The judge was not bound to infer that Mr Aleksovski attempted to prevent Pastoral Co from selling the Land and that this was part of a wider plan to delay the Project, merely because she had rejected Mr Aleksovski's explanation as to why he falsely raised CGT issues with the Shire. Indeed, it would have been impermissible for the judge to reason that because she had rejected Mr Aleksovski's evidence as to the reason for his misstatements to the Shire, it should necessarily be concluded that Mirvac (WA) raised issues about the second access road for the purpose of delaying [517] Project.517 The evidence had to be considered as a whole, including in the context of her Honour's assessment as to Mr Aleksovski's general reliability and credibility as a witness. When the evidence is considered as a whole, including the matters referred to in ground 10, as discussed below, the judge's findings in this respect are not inconsistent with the incontrovertible facts, glaringly improbable or contrary to compelling inferences.
5. Ground 7 should be dismissed.

1. Ground 10 alleges that the judge erred in finding that Mirvac did not manifest the alleged Refusal to Proceed decision in the respects set out in grounds 10.1 ‑ 10.11.

1. Ground 10.1 contends an error in the construction of Mr Crockett's email of 24 May 2012[518] at [341] of the primary decision. According to the prefatory terms of ground 10, the point sought to be made from the alleged error (as is the nature of the case for each individual error alleged in grounds 10.1 ‑ 10.11) is that the judge erred in finding that Mirvac had not manifested the alleged Refusal to Proceed decision - on this occasion by the email of 24 May 2012.
2. The judge set out the terms of the email and examined the evidence in connection with it at [340] ‑ [343] of the primary decision. The judge's findings are summarised in the Chronology of Events at [137] ‑ [138] above. At [343] of the primary decision, her Honour found that [519]Crockett's email519 did not suggest that Mr Crockett believed that Mirvac intended to breach the Services Agreement. Her Honour continued:

From the overall context, it appears that [Mr Crockett] believed that Mirvac would consider a budget for subdivision works to be infeasible, given the then market conditions and forecast, and that therefore Mirvac would not approve such a budget, which could lead to a deadlock. As later explained, Mirvac had the right under the Services Agreement to disapprove a budget it considered to be infeasible. (emphasis added)

1. Her Honour evidently read Mr Crockett's email of 24 May 2012 as conveying the idea that he would expect that, after approval of a Local Structure Plan, a proposed Budget for Subdivision Works would not be agreed to by Mirvac (WA) at a Project Control Meeting, leading to a potential deadlock under the Services Agreement.
2. It was open to the judge, having heard all the evidence and the context in which the email was written, to construe the email as not conveying a statement to the effect that Mirvac had made the alleged Refusal to Proceed decision as at May 2012. On her Honour's finding, this email was referring to Mr Crockett's expectation, in May 2012, as to what would happen after the approval of the Local Structure Plan, which was still some considerable time away.[520] In the meantime, the email acknowledged that whilst Mr Waller was not agreeable to a renegotiation 'at this point', he wished to 'escalate' the issue of renegotiation by a meeting with Mr Draffen and, probably, Mr Wallace. The email concluded by observing that Mr Draffen and Mr Wallace needed to be briefed 'on this and determine a course of action for Mirvac'. The unchallenged finding is that Mr Draffen never reached the view, nor was he ever told, that there was no prospect that BN would not vary the Services Agreement.[521] The email is inconsistent with Mirvac having adopted, by May 2012, a course of action consisting of the alleged Refusal to Proceed decision. That conclusion is confirmed by the judge's evident acceptance of the evidence of Mr Aleksovski - the manager with day‑to‑day responsibility for the Project at the time. The judge observed:[522]

In cross‑examination, Mr Aleksovski was asked if he was aware that the position was to progress the [Local Structure Plan] approval 'to protect Mirvac's position'. He said he was not aware of that. He said his role was to perform the role of contractor and to get the [Local Structure Plan] approved and that is what he did. (footnote omitted)

1. Insofar as her Honour speculated (without finding one way or another) that the reference to 'our' in Mr Crockett's email might be a reference to both parties, the key findings at [341] are that (1) both parties had agreed in principle to proceed to have the Local Structure Plan approved, and (2) that it was in both parties' interests to do so. There is no error in those findings. The email, whether read alone or in the context of the evidence of the case as a whole, neither states nor implies that Mirvac had then made (or made at any other time) the alleged Refusal to Proceed decision.
2. The judge also found that the email in its context suggested that Mr Aleksovski believed that Mirvac would consider a budget for subdivision works to be infeasible and that therefore it would not approve such a budget, which would lead to a deadlock. The judge further observed that Mirvac had the right under the Services Agreement to disapprove a budget it considered to be infeasible.[523] As we have explained, we consider that the judge erred in the latter observation. However, the judge's finding as to Mr Aleksovski's belief falls well short of supporting or sustaining a finding that the email demonstrates that Mirvac had made the alleged Refusal to Proceed decision.
3. A further matter should be noted. In oral submissions, counsel for BN said that ground 10.1 was not concerned with the alleged Refusal to Proceed decision (contrary to the terms of the prefatory words of ground 10.1). Rather, counsel for BN said that the email raised a 'different point'.[524] Counsel for BN said, in effect, that Mr Crockett's email of 24 May 2012 provided an evidentiary basis for an inference that Mirvac had already made the decision, by May 2012, that even after both (1) the Local Structure Plan had been approved, and (2) the Project Control Group had met and approved a Budget for Subdivision Works pursuant to the approved Local Structure Plan, Mirvac (WA) would not proceed with Subdivision Works until 'an ACC had been approved'.[525] Counsel for BN said, in effect, that he relied on this email as reflecting an attitude within Mirvac (WA), later articulated in Mr Lawrance's statement on 13 June 2014, that, even after the Project Control Group had approved a Budget for Subdivision Works, Mirvac would not proceed to subdivision in accordance with the Project Control Group approval. Accordingly, counsel for BN submitted, Mr Lawrance's statement on 13 June 2014 'wasn't something new within Mirvac'.[526]
4. Mr Lawrance's statement on 13 June 2014 is the subject of ground 11. As indicated in relation to ground 11, Mr Lawrance's statement could not reasonably be understood as conveying, expressly or impliedly, the meaning contended for by counsel for BN referred to above.
5. Further, the seventh paragraph of the email of 24 May 2012 cannot be taken as an unequivocal admission by Mirvac or Mirvac (WA) to the effect contended for by counsel for BN on this 'different point'. This paragraph of the email is not a model of precision, but the judge's construction of the email, referred to in [510] above, was, in our opinion, open on a fair reading of the email. Moreover, the meaning and effect of the email of 24 May 2012 was to be assessed in the context of an understanding of the email as a whole and in the context of the evidence as a whole. The judge had the advantage of seeing and hearing the evidence on this (and other relevant topics) as it unfolded.
6. Moreover, the proposition implicitly behind this 'different point' seems to be that Mirvac (WA) held the positive belief, in May 2012, that it had no legal right to disapprove a Budget at the Project Control Group meeting under the provisions of the Services Agreement, with the consequence that any decision not to proceed would only arise after the Project Control Group meeting had met and approved a Budget. The anterior proposition that Mirvac (WA) held such a positive belief is not expressly alleged in the grounds of appeal, although ground 10.4 may be understood as raising the corollary of such a proposition - the allegation that the judge erred in finding (with regard to Mr Draffen's evidence) that Mirvac (WA) did not believe it was contractually bound to complete the Project. For the reasons given later in relation to ground 10.4, that ground has no merit.
7. Further, insofar as ground 10.1 alleges that Mr Crockett's email of 24 May 2012 reflects a continuation of Mirvac (WA)'s position as alleged in grounds 6.1 and 6.2, that allegation cannot be accepted. As discussed earlier in these reasons, no error is shown as alleged in grounds 6.1 and 6.2.
8. For these reasons, ground 10.1 has no merit.

1. As with each of grounds 10.1 ‑ 10.11, ground 10.2 is alleged to be a respect in which the judge erred in finding that Mirvac 'did not manifest' the alleged Refusal to Proceed decision.
2. Ground 10.2 refers to Mr Draffen's evidence in cross‑examination at ts 668 - 669 and the judge's findings at primary decision [350] ‑ [352]. The evidence is summarised in the Chronology of Events at [139] ‑ [141] above. The judge noted at primary decision [350] that counsel for BN put to Mr Draffen that:

[T]he position is that you knew in June 2012 that Mirvac had made a decision - and you in particular on its behalf had made a decision - that Mirvac would not be proceeding to carry out the subdivision project at Binningup. (emphasis added)

1. Her Honour observed at primary decision [350] that Mr Draffen said in response:

That's incorrect. We - the position - we had never taken a position not to proceed with the project. Sure that it was - absolutely the project was - was financially challenging and we were attempting to find a pathway to at least come up with a viable [S]tage 1 to at least allow the project to proceed in some shape or form. Now, to proceed further, you know, our view at the time was that some form of renegotiation would be required for that to happen. But, no, we hadn't made we had absolutely not made a decision not to proceed. (emphasis added)

1. By ground 10.2, BN submitted that the italicised part of that answer established that Mirvac (WA) had made the alleged Refusal to Proceed decision, and that the judge erred in not so finding.
2. The evidence is not an unequivocal admission that Mirvac (WA) had made the alleged Refusal to Proceed decision as at June 2012.
3. The passage of evidence at ts 668 - 669 must be read as a whole. BN's submissions effectively ignore the preceding and subsequent statements in the passage. This part of Mr Draffen's evidence was to the effect that (1) no decision had been made not to proceed, (2) Mirvac (WA) was seeking to develop a proposal for at least a viable Stage 1, and (3) Mirvac (WA) was of the view at that time that if a viable Stage 1 proposal were developed, there would need to be further negotiation for its implementation. The first two aspects of the passage are plainly contrary to the notion that Mirvac (WA) had made the alleged Refusal to Proceed decision. The third aspect of the passage is to be understood in the context of the first two preceding aspects. It indicates that Mirvac (WA), in June 2012, was of the view that following the identification of a viable proposal for Stage 1, there would need to be a renegotiation of the Services Agreement if further development were to occur. It is not an unequivocal statement to the effect that Mirvac (WA) had finally and conclusively decided, by June 2012, that following the completion of the work for identifying a viable Stage 1, it would not thereafter perform the Services Agreement unless it were varied.
4. Further, Mr Draffen's evidence at ts 668 - 669 was to be understood and assessed in the context of his evidence as a whole, and in the context of the evidence of the trial as a whole. The judge was plainly alive to that consideration. Her Honour said, at primary decision [485], with particular reference to this aspect of Mr Draffen's evidence:

[M]r Draffen's evidence must be considered as a whole. As noted earlier, Mr Draffen spoke of renegotiation as being probable and ideal. He said that the options under consideration in September 2013 were not limited to requiring a renegotiation of the Services Agreement. After that time, he had had discussions with Mr Waller about the options and those options may or may not have involved a variation to the Services Agreement. He said that, when he met with Mr Waller on 3 April 2014, more work was required before a view as to that could be reached. (emphasis added) (footnote omitted)

1. There is no error in that reasoning. The effect of it is that through to April 2014, Mirvac (WA) was looking at ways to successfully develop Stage 1, and that throughout this period (1) channels of communication with BN remained open as to a potential variation of the Services Agreement, (2) Mirvac (WA) had not made a decision in accordance with the alleged Refusal to Proceed decision, and (3) neither had Mirvac (WA) made a decision only to proceed with Subdivision Works if there were a variation to the Services Agreement.
2. Further, the judge's findings at primary decision [350] ‑ [352] fall to be considered in the context of her Honour's specific findings to the effect that:
   1. Mr Draffen never reached the view, nor was he ever told, that there was no prospect that BN would vary the Services Agreement.[527]
   2. Mr Aleksovski did not defer any expenditure on the Project whilst he was the Services Development Manager on the Project.[528]
   3. The evidence did not establish that Mirvac (WA) did not spend money that it would otherwise have spent had it not had concerns about the Project's viability.[529]
   4. Despite provisioning for the loan in February 2013, Mirvac (WA)'s Project Team continued to work on the Project and did so irrespective of the fact that the Binningup Project had been provisioned.[530]
   5. Mr Cooper, a representative of Mirvac (WA) on the Project Control Group in September 2014, and who had been on the Project in 2008 and returned to it in October 2013, was never told, or believed, that Mirvac (WA) did not intend to carry out the Project.[531]
3. Those findings were made having regard to the sworn evidence of the witnesses assessed by reference to their credibility and reliability in the context of the evidence as a whole. There is no error in those findings, including having regard to the matters alleged in ground 10 as a whole, and bearing in mind the conventional limitations on appellate restraint where factual findings are based in part on the primary judge's evaluation of the evidence as a whole having seen and heard the relevant witnesses give their evidence.
4. Insofar as BN relies on items 5 and 15 of BN's Schedule, and thereby, in effect, on grounds 6.4 and 10.1, there is no merit in its arguments. For the reasons given earlier, grounds 6.4 and 10.1 have no merit.
5. The above matters are sufficient to dispose of ground 10.2.
6. A further matter should be noted. In oral submissions, counsel for BN sought to recharacterise the import of ground 10.2. He said that ground 10.2 (and other grounds) 'only indirectly' concerned the alleged Refusal to Proceed decision, and that they:[532]

[M]ore directly concern[ed] the internal position of Mirvac being inconsistent with carrying out the project to completion properly and timeously as required by cl 6.2 [of the Services Agreement][533] and - or conduct of Mirvac (WA) which didn't comply with the obligations of Mirvac (WA) under the [Services Agreement] led to there being repudiation in the second sense referred to in Koompahtoo or a breach of a [N]on [M]onetary [E]vent of [D]efault which we have also relied on'.

1. The proposition appeared to be that, even if cl 6.2 were an intermediate (non‑essential) term, Mirvac had an 'internal position' inconsistent with proper compliance with cl 6.2. Two points may be made as to that proposition. First, unless the 'internal position' was acted on in a manner inconsistent with cl 6.2, the 'internal position' in itself would not be a breach of cl 6.2 or repudiatory. Secondly, in this context it appeared that the alleged breaches of cl 6.2 were allegedly effected by the conduct of Mr Adam Davidson (in relation to the second access road issue) and Mr Aleksovski (in relation to the second access road issue and the dealings with Pastoral Co and the golf course), and by the non‑attendance of Mirvac (WA) at Project Control Group meetings in circumstances where BN insisted that the meetings be recorded. For the reasons given elsewhere, BN has not established those allegations.
2. Ground 10.2 should be dismissed.

1. Ground 10.3 again alleges that the judge erred in finding that Mirvac had not manifested the alleged Refusal to Proceed decision. In that regard, BN challenges the judge's acceptance (at primary decision [356]) of Mr Draffen's evidence to the effect that, as at July 2012, Mirvac did not have a 'strategy' to move towards an englobo sale. The judge found that Mr Draffen's evidence was consistent with the terms of the HY13 Draft Scenario document. The judge's findings are summarised in the Chronology of Events at [148] above. Mr Draffen, in his evidence at ts 738 ‑ 739, said:

So HY13 refers to the first half of the 2013 financial year from 1 July 2012 to the end of that calendar year, doesn't it?---Yes.

In other words, the six months ending 31 December 2012?---Correct.

Okay. And could you please look at the summary on page - yes, page 11523?---Yes.

It's under the project categorisation; everything is redacted except Binningup. It's referred to there under the product line MPC, so it's master‑planned communities product line. State: WA. And it's recorded as, 'Action: englobo/super lot' with a tick. So your understanding of sale of a super lot or englobo, as referred to there, is to sell the land un‑subdivided, isn't it?---In general terms, yes.

Thank you. And what's there recorded - that is, 'Action: englobo/super lot sale' - was consistent with what was in the managing director's report that we just reviewed, wasn't it?---It was consistent with the assumption adopted for provision purposes, which was the negotiated exit which we just discussed.

Yes. And that was a strategy to move towards an englobo sale - - -?---It was the assumption for the purposes of carrying - of adopting a value for the carrying value of inventory, which was the subject of this report.

1. There is no error in the judge's reasoning. The HY13 Draft Scenario document proposed (like the 4 February 2013 Board paper) a provision of $18 million on the assumption of a negotiated agreement with BN for the termination of the Services Agreement. It did not propose a provision consistent with an englobo sale - had it done so, the provision would have been much greater ($26.95 million). The document on its face indicates that (1) whilst Mirvac considered that it had no right directly to terminate the Services Agreement as a result of it not being financially viable, it had the right to engage the deadlock provisions which, if properly invoked (as to which legal advice would be needed) would lead to an englobo sale in accordance with the provisions of the Services Agreement, (2) BN would most likely wish to avoid an englobo sale pursuant to the operation of the Services Agreement and would likely agree to its termination on the basis that it would repay the Initial Advance of $25 million, (3) such an agreement would produce a loss for Mirvac of $18 million, and (4) on the other hand (a) if an englobo sale were effected pursuant to the proper operation of the deadlock provisions, Mirvac (WA)'s loss would be $26.95 million, and (b) if development occurred over the next 22‑year period the likely loss to Mirvac (WA) would be $17.7 million.
2. Although, for the reasons given earlier, Mirvac (WA) erred in its belief as to the scope of its right to disapprove a Budget, the HY13 Draft Scenario is nevertheless consistent with Mirvac (WA) not having made or implemented the alleged Refusal to Proceed decision. It is consistent with the burden of Mr Draffen's evidence which was to the effect that, whilst Mirvac (WA) was provisioning for a loss on the assumption that the parties would ultimately agree to terminate the Services Agreement, in the meantime, Mirvac (WA) would continue to perform the Services Agreement.
3. Insofar as ground 10.3 relies on items 5, 15 and 16 of BN's Schedule (effectively grounds 6.4.3, 10.1, 10.2 and 10.11), for the reasons given in relation to those grounds, those matters do not assist BN.
4. Ground 10.3 should be dismissed.

1. According to BN's Schedule, ground 10.4 relies on the 4 February 2013 Board paper, the September 2013 Options Memo and (in effect) grounds 10.5, 10.6, 10.8 and 10.11. It is said by BN that these documents reveal that Mirvac had manifested the alleged Refusal to Proceed decision.
2. The judge examined the evidence with respect to the 4 February 2013 Board paper in detail at [383] - [408] of the primary decision. The judge's reasoning and findings are summarised in the Chronology of Events at [174] ‑ [185] above. There is no error in the judge's reasoning.
3. The 4 February 2013 Board paper is, on its face, a report to the Board and does not purport to be the minutes of a Board meeting. Moreover, it does not expressly or impliedly contain a statement, let alone an unequivocal admission, to the effect that Mirvac or Mirvac (WA) had made the alleged Refusal to Proceed decision. In substance, it records a proposal to make provision in Mirvac's accounts for a loss of $18 million in respect of the Project for the first half of the financial year ended 30 June 2013. It involves a recognition that BN would most likely agree to terminate the Services Agreement on the basis of a repayment of the Initial Advance of $25 million. Whether, at the time, that assessment of the likely prospective outcome was optimistic or not, the provisioning for a loss on that basis does not expressly or impliedly indicate that either Mirvac had made the alleged Refusal to Proceed decision or that (as alleged in ground 10.4) 'Mirvac personnel' including Mr Draffen 'were of the opinion' that Mirvac was bound to carry out the Project to Completion.
4. The 4 February 2013 Board paper is similar in substance, although not identical in terms, to the HY13 Draft Scenario. It suggested, in effect, three scenarios for consideration (1) terminating the Services Agreement by mutual agreement on the basis that only the Initial Advance would be repaid, (2) proceeding to undertake the Completion of the Project, leading to a likely shortfall of $18 million on the loan, and (3) as an alternative to (2), seeking to negotiate a variation to the Services Agreement with a view to undertaking the Completion of the Project on more favourable terms. The third option could not be modelled given the uncertainties associated with the negotiation process, but 'the position would see some improvement on the $18m shortfall'.[534]
5. With reference to the first of those options, the document stated:[535]

This requires [BN] agreeing to release Mirvac from its obligations under the [Services Agreement] and refund the initial $25m Land costs.

Currently, this is considered the most likely scenario as [BN] is unlikely to proceed through the deadlock provision ... [BN] would receive all the planning and other associated intellectual property for free and would be simply returning the initial land advance.

...

We will need to receive further detailed legal advice in relation to how best to enact the deadlock provisions to ensure our actions are fully supported by the [Services Agreement].

The deadlock provision sets out a procedure for dispute resolution which eventuates in the land being sold for an agreed sum if the disagreement cannot be resolved. ... Based on discussions with [BN] and based on our knowledge of [its] intentions, it is not envisaged that [BN] would allow the deadlock to escalate to this level. (emphasis added)

1. The 4 February 2013 Board paper, read as a whole, does not expressly or impliedly state that Mirvac believed that it was contractually bound to complete the Project under the Services Agreement. It is to the contrary effect. It proceeds on the basis that Mirvac (WA) had the right not to approve a Budget for Subdivision and Construction Works and that, if the right were lawfully exercised, the operation of the deadlock provisions could lead to the sale of the Land. Further, the document does not expressly or impliedly indicate that Mirvac intended unlawfully to invoke the deadlock provisions. To the contrary, it indicates that its intention was to obtain legal advice to ensure that any invoking of the deadlock provisions was lawful. The 4 February 2013 Board paper is not inconsistent with, and, moreover, is consistent with, the evidence of Mr Draffen and Mr Aleksovski accepted by the judge at primary decision [402] ‑ [405].
2. The judge's findings with respect to the September 2013 Options Memo are at [438] ‑ [446] of the primary decision, and are summarised in the Chronology of Events at [236] ‑ [242] above. The judge was correct to find that the September 2013 Options Memo was not evidence of the alleged Refusal to Proceed decision. The evident point of the September 2013 Options Memo was to provide Mr Draffen with an assessment of various options for his consideration in the historical context, acco[536]ng to the memo, that:536

In December 2012, Mirvac and [BN] discussed the current status of the project and its long‑term future project returns based on the current structure of the [Services Agreement].

The outcome of this discussion was that under the current structure of the [Services Agreement], Mirvac's long‑term future returns generated by the project were of concern and that a renegotiation of the [Services Agreement] and/or the ongoing arrangement between both parties would need to be considered. [BN] indicated a willingness to provide assistance with regards to the renegotiations of the [Services Agreement] in order to advance the project to the delivery phase during those discussions.

A subsequent site tour was held in June 2013 which was attended by John Carfi, Toby Long, Kim Lawrance, [BN] and [Mr Aleksovski].

At that site meeting it was agreed that development was to commence along the foreshore where a mix of both residential, retail and commercial product would be delivered as part of Stage 1 and that the relevant feasibility analysis would be undertaken to reflect the changes/impact to the project.

[BN] reiterated its willingness to achieve a suitable outcome for both parties at the [Project Control Group] meeting held in July 2013. It also tabled the future of the existing Binningup Golf Course was at risk from their prospective due to its ongoing financial strain on the project (it currently has a net loss of $300k - 360k per annum) and that incorporating the golf course into the development was an option and put forward as their preferred option. (emphasis added)

1. The September 2013 Options Memo indicated that legal advice had, by this stage, been received and explained the effect of the legal advice. Amongst other things, the September 2013 Options Memo stated that Mirvac's 'obligation' was to prepare the Budget and Programme for the Project and then submit it to the Project Control Group for approval. It then outlined the deadlock provisions and their effect and the consequences of that under the Services Agreement. Mr Draffen was cross‑examined on the September 2013 Options Memo, including on that part of it dealing with Mirvac's legal advice. The exchange included the following:[537]

Now, when you received this memorandum, is that how you understood the position to be as recorded there?---Certainly the understanding was that there was no ability to exit the [Services Agreement] for - just because we wanted to exit; we would have to follow the provisions of the [Services Agreement]. (emphasis added)

1. The September 2013 Options Memo stated:[538]

Based on the discussions held to date, the advice obtained from Mirvac Legal, Colliers International Market Research & Feasibility Analysis and the recently released Mirvac New Business Strategy, the following scenarios/options are determined as being most suitable for consideration by senior management in assessing the future of the project:

• Option 1 - Undertake a feasibility analysis based on the existing development commencing on the foreshore with Stage 1 to comprise of residential, retail and commercial product. Lot yield and lot pricing as per currently adopted in Binningup feasibility.
• Option 2 - Undertake a feasibility analysis based on the development commencing on the foreshore and incorporating the existing Binningup Golf Course into the development, with Stage 1 to comprise of residential, retail and commercial product. Lot yield and lot pricing as per Colliers Market Research & Feasibility Analysis. This will also require a further 18 months of Statutory Planning as an amendment to the [Local Structure Plan] will be required along with amendments to both State [and] Federal Environment Approvals.
• Option 3 - Undertake and complete negotiations and discussions outside of the current [Services Agreement] framework. This may be to renegotiate the current [Services Agreement] or to negotiate Mirvac's exit from the project with [BN].

1. Option 2 assumed that additional infrastructure costs over option 1 totalling $8.025 million would be incurred in respect of the sewer pump station and upgrade and the electricity upgrade.[539]
2. The September 2013 Options Memo canvassed the 'risk' to Mirvac (WA) that BN might default on the payment of the Initial Advance on the 10‑year anniversary date (11 January 2018), leading to the land being sold englobo at a value of $15 million. The prospect of default by BN on 11 January 2018 was evidently not seen as an advantage to Mirvac (WA), or as a goal to be worked towards. As against that risk, the September 2013 Options Memo also modelled the options on the basis of assumptions that BN would 'convert to equity' the Initial Advance in December 2017 and agree that its priority payment be reduced from 10% to 5%. Under option 1, without the additional assumptions, there would be a shortfall in recoupment of the loan of $10.36 million. With the additional assumptions, option 1 would produce the recoupment of the loan in full. Under option 2, without the additional assumptions, the shortfall amount would be $80.78 million, but with the additional assumptions, the shortfall would be $1.85 million.[540]
3. There is no implication in any of this discussion that Mirvac (WA) intended to refuse to perform or materially delay the performance of the Services Agreement for the purpose of, in effect, 'running the clock down' to 11 January 2018 to put pressure on BN; nor is there any implication that Mr Aleksovski was recommending such a course.
4. The September 2013 Options Memo concluded:[541]

In conclusion, based on the feasibility analysis undertaken, the market research undertaken by Colliers and the future release of urban land within the South West market in the next 5 to 10 years ... it is advised that consideration be given to holding discussions with [BN] outside of the current [Services Agreement] framework in order to negotiate a suitable position for both Mirvac and [BN] and facilitate an outcome suitable to both parties.

1. Mr Draffen was asked about this in the following exchange:[542]

So the recommendation in that paragraph - was that something that you adopted?---I think it was a - we ... continued to discuss and review options and have further conversations with Mr Waller about potential options. All ... that was recommending is that we ... continue to do so and that - and that those discussions - because they were - they were outside of the current approved [Services Agreement].

And you subsequently participated in the process of having a - of negotiating with Mr Waller outside the current [Services Agreement] as there [sic] recommended didn't you?---I was involved in discussions with Mr Waller, yes, post then.

1. When the September 2013 Options Memo is read as a whole, including in the context of the evidence as a whole, it was open to the judge to conclude that:
   1. by September 2013, Mr Aleksovski had not made, and had no authority to make, the alleged Refusal to Proceed decision;
   2. as at September 2013, Mr Draffen had not made the alleged Refusal to Proceed decision; and
   3. by September 2013, Mirvac (WA)'s legal advice was to the effect that Mirvac (WA) had the power to disapprove a Budget, which, if lawfully invoked, could (absent further agreement between the parties) lead to the sale of the Land without further development (including subdivision) work.
2. There is no error in the judge's findings that the September 2013 Options Memo was not evidence that the alleged Refusal to Proceed decision had been made, or that, in September 2013, Mirvac held the belief that it was bound to complete the Project under the Services Agreement.
3. Mr Draffen's evidence at ts 698, given with respect to the position in around August/September 2012, was referred to by the judge at primary decision [373] ‑ [374] (summarised in the Chronology of Events at [161] above). Having read the transcript at ts 698, in the context of (1) Mr Draffen's evidence as a whole, (2) the unchallenged findings, and (3) the evidence referred to by BN in this appeal, there is no error in the judge's acceptance of Mr Draffen's evidence to the effect that Mirvac did not believe that it was contractually bound to complete the Project under the Services Agreement. There is no basis for this court to reach a contrary view having regard to the conventional principles of appellate restraint in this context.
4. Nor do items 19, 20 and 22 of BN's Schedule - effectively incorporating grounds 10.5, 10.6, 10.8 and 10.11 - assist BN for the reasons given in relation to those grounds.
5. Ground 10.4 should be dismissed.

1. Grounds 10.5 and 10.6 allege that the judge erred in finding that Mirvac had not manifested the alleged Refusal to Proceed decision by reference to Mirvac's internal emails of 22 and 23 January 2013, and the 4 February 2013 Board paper.
2. As to ground 10.5, the judge's findings are at [380] - [382], and are summarised in the Chronology of Events at [172] ‑ [173] above. There is no error disclosed in the judge's reasoning. The reference in the emails of 22 and 23 January 2013, to the effect that detailed legal advice would be required as to how to best enact the deadlock provisions to ensure that Mirvac (WA)'s actions were fully supported by the Services Agreement, is not an admission that (1) Mirvac had resolved not to continue to perform the Services Agreement in the meantime, or (2) if the deadlock provisions could not lawfully be invoked, Mirvac (WA) would nevertheless purport to invoke them in breach of the Services Agreement. As the judge observed, the reference to 'stalling tactic' in these emails is a reference to the prospect of BN engaging in a 'stalling tactic'. Further, as the judge also observed, the emphasis in the last sentence of the email quoted by the judge, on the need for legal advice to 'ensure our actions are fully ... supported by the agreement', is inconsistent with a decision having been made to act contrary to the terms of the Services Agreement.
3. As to ground 10.6, with its reference to the 4 February 2013 Board paper, there is no merit in that ground for the reasons given in relation to grounds 10.1 ‑ 10.4. Insofar as ground 10.6 relies on (in effect) grounds 6.4.3, 7.1, 7.2, 10.2, 10.3, 10.5 and 10.11, it has no merit for the reasons given in relation to those grounds.

1. Ground 10.7 alleges that the judge erred in finding that Mirvac had not manifested the alleged Refusal to Proceed decision by challenging the judge's findings at primary decision [376] ‑ [378] with respect to the 25 October 2012 Risk Assessment and the 17 December 2012 Spreadsheet. The judge dealt with these matters in the context of a consideration of her Honour's findings as to the spreadsheets dated 30 August 2012 and 31 August 2012, 14 September 2012 and 18 December 2012, at primary decision [357] ‑ [369].
2. The judge's findings at primary decision [357] - [369] appear not to be challenged, with the result that BN's contentions under ground 10.7 are seriously flawed in that they fail to take into account directly relevant contextual evidence.
3. Further and in any event, however, the judge's findings at primary decision [376] ‑ [378] reveal no error. The judge said:[543]

A 'Project Risk Assessment' was attached to the agenda for a meeting of the 'MPC WA Monthly Project Review' on 25 October 2012. It included a risk said to arise from the fact that the current feasibility assumptions were based on the perceived outcome of the 'renegotiations currently underway' with [BN]. The 'Plan Description' associated with this risk said:

'Project partner is aware of the issue and has expressed a willingness to work with Mirvac to achieve a suitable outcome for both parties however has indicated that certain terms and parameters of the original agreement are not negotiable. The impact amount is based on the current WIP of the project is [sic: if] an agreement cannot be reached.'

A Mirvac spreadsheet titled 'Summary of Forecasts Q2FY13', and dated 17 December 2012 stated in the 'Risks' worksheet that the cash flow profile is 'affected by environmental and planning approvals which has caused delays in commencement on site. Demand for the anticipated product will need to be carefully assessed'. In the 'Other Threats and Opportunities' worksheet it stated:

'Further to the environmental approval process, the project yield has been reduced. However, there has been an unwillingness from [BN] to review the [Services Agreement]. Therefore, putting the viability of the project at threat. This may trigger an impairment to the loan balance currently carried.

The recoverability of the [Services Agreement] loan does not appear to be supported by the value of the land. ... The loan is secured against the development site but based on current assumed englobo valuation the security value is not sufficient to pay out the loan.'

These documents show nothing more than that Mirvac recognised that, if the Services Agreement was not varied, it may need to make a provision to reflect the risk the loan would not be fully repaid. (footnotes omitted)

1. There is no error in that reasoning. It was open to the judge to find that neither the 25 October 2012 Risk Assessment nor the 17 December 2012 Spreadsheet provided any or any cogent evidence that Mirvac had made the alleged Refusal to Proceed decision or had made the decision (as alleged in ground 10.7) 'to not proceed with the Project and to sell the land englobo if [the Services Agreement] was not varied on terms satisfactory to Mirvac'. Contrary to BN's submissions, the documents do not compel the inference that Mirvac knew that renegotiation of the Service Agreement on terms acceptable to it would not occur. A statement that certain terms are non‑negotiable and a statement that there 'has been an unwillingness' to renegotiate fall well short of compelling such an inference. Further, both documents are consistent with a belief by Mirvac that it was not bound to complete the Project. As noted in relation to ground 10.4, no error has been demonstrated in the judge's findings as to the existence of that belief.
2. Insofar as ground 10.7 relies on items 16, 17 and 19 of BN's Schedule (relevantly, in effect, grounds 10.2, 10.3 and 10.5) those matters do not assist BN for the reasons given in relation to those grounds. Insofar as it relies on items 9 and 10 of BN's Schedule (effectively, grounds 7.1 and 7.2) there is no merit in the submission having regard to the reasons given in relation to those grounds.
3. Ground 10.7 should be dismissed.

1. As to ground 10.8, the judge was not incorrect to find that the PWC Report dated 7 February 2013 was not evidence of a decision by Mirvac (WA) 'to stop performing under the Services Agreement' or otherwise evidence of the alleged Refusal to Proceed decision. The judge's findings are at primary decision [409] ‑ [418], and are summarised in the Chronology of Events at [187] ‑ [189] above. There is no error in the judge's reasoning or findings in those paragraphs.
2. The PWC Report, as the name indicates, was a report prepared by PricewaterhouseCoopers. It recommended a provisioning for the loan, on the basis of an englobo sale, that was higher than the sum adopted by Mirvac. The effect of the PWC Report is that, in the view of the auditors, it would be prudent to make a provision on the basis that the deadlock provisions were effectuated and the Land sold englobo, given that there was no guarantee of reaching an agreement with BN. The PWC recommendation was plainly not accepted by Mirvac, which provisioned for the loan in accordance with the 4 February 2013 Board paper. Although the PWC Report stated that 'a decision has therefore been made to now exit the [Services Agreement]', the statement was immediately qualified by the words 'via the deadlock provisions included in the [Services Agreement]'. There is no express or implicit statement in the PWC Report that Mirvac (WA) intended to effectuate the deadlock provisions without lawful or proper grounds. Indeed the PWC Report notes that Mirvac had not received legal advice 'on how to utilise the deadlock'. Also, the PWC Report did not state that Mirvac was assuming that the land would not be sold following a deadlock. Rather, the report said that Mirvac was intending to achieve an agreement with BN to vary or release the Services Agreement, which Mirvac believed it could achieve. The PWC Report does not provide any cogent evidence that Mirvac (WA) had, by 7 February 2013, decided 'to stop performing under the Services Agreement' or had otherwise made the alleged Refusal to Proceed decision. The passage on which BN relies is a single sentence in a report that is not prepared by Mirvac, but by its auditors, and the recommendations in which were not accepted by Mirvac when the report was considered by the Board. Neither on its own, or considered in the context of the evidence as a whole, is the PWC Report sufficient to justify a finding by this court, having regard to the relevant principles of appellate intervention, that the judge erred in finding that BN had not established that, in or by September 2013, Mirvac had stopped performing under the Services Agreement and, or alternatively, had made or implemented the alleged Refusal to Proceed decision.
3. Insofar as ground 10.8 relies on items 17 ‑ 21 of BN's Schedule (effectively, grounds 10.3 ‑ 10.7 and 10.11) for the reasons given earlier, those grounds do not assist BN.

1. Ground 10.9 alleges error in finding that Mirvac had not made the alleged Refusal to Proceed decision by reference to Mirvac's June 2013 Forecast document. The judge's findings with respect to this document are at primary decision [432] ‑ [437], and are summarised in the Chronology of Events at [224] ‑ [225] above.
2. The statement in the June 2013 Forecast document that the provisioning of the loan in the sum of $18 million was to reflect the risk associated with the recoverability of the loan and 'to reflect the current intention to exit the [Services Agreement]' fell to be considered in the context of the document as a whole and in the context of all of the communications and documents preceding and following it. The statement was accurate in the sense that the provision of $18 million was predicated on Mirvac's view that it was most likely that, and it was Mirvac's preferred option that, an agreement could be reached with BN to terminate the Services Agreement on the basis that BN would repay the Initial Payment, thereby producing a loss of $18 million to Mirvac. Mirvac's June 2013 Forecast document was capable of being understood as a reference to Mirvac (WA) expecting to, and intending to endeavour to, reach an agreement to terminate the Services Agreement but without any implications that (1) Mirvac (WA) had already stopped performing the Services Agreement, (2) Mirvac (WA) would not perform its obligations under the Services Agreement if an agreement were not forthcoming, or (3) that Mirvac (WA) would otherwise cease performing its obligations under the Services Agreement. The document does not provide a compelling inference that Mirvac had made or implemented the alleged Refusal to Proceed decision. It is consistent with the belief that Mirvac was not bound to complete the Project given the scope for the lawful operation of the deadlock provisions in the Services Agreement. Also, as noted earlier, ground 10.4 fails.
3. Insofar as BN also relies on item 22 of BN's Schedule (in effect, the matters in grounds 10.1 ‑ 10.8) for the reasons given earlier, those matters do not assist BN. Insofar as BN relies on ground 10.11, for the reasons below, that submission does not assist BN.

1. Ground 10.10 alleges error in finding that Mirvac had not made the alleged Refusal to Proceed decision by reference to the September 2013 Options Memo. For the reasons in [547] ‑ [556] above in relation to ground 10.4 this document was not evidence of the alleged Refusal to Proceed decision.
2. The third option in the September 2013 Options Memo referred to Mirvac (WA) undertaking negotiations outside of the Services Agreement framework. As already noted, the evident purpose of the memo was to provide options for Mr Draffen's consideration. The presence of the other two options - to do a feasibility study on the proposed development and to do a feasibility study on development that incorporated the Golf Course - counts strongly against BN's contention that the document demonstrated that a decision not to perform the Services Agreement had been made.
3. Ground 10.10 should be dismissed.

1. By ground 10.11, BN contends, in effect, that by virtue of s 1305 of the Corporations Act the documents referred to in ground 10 were prima facie evidence of any matter stated in the documents, regardless of whether the matter offended the hearsay or opinion rules under other legislation.[544] It is unnecessary to decide, for present purposes, whether the emails, reports, memos and other documents referred to in grounds 10.1 ‑ 10.10 are 'books' within the meaning of s 1305 of the Corporations Act, and in particular whether they are 'financial records' which Mirvac (WA) was obliged to 'keep' in accordance with s 286 of the Corporations Act.[545] Even assuming that to be so (favourably to BN and without deciding the point), the ground has no merit for the following reasons.
2. First, an understanding of the matters stated in the documents must be ascertained by reference to a consideration of the document as a whole in the context in which the document was prepared or written. The assertion by BN that the documents were prima facie proof of the matters stated in them proceeds by directing attention to identifying the substance of what was stated in them in isolation. That is not what is contemplated by s 1305.
3. Secondly, none of the documents had the clear meaning for which BN contends in this appeal. Generally speaking, prima facie their ordinary meaning is to the contrary. In any event, as the reasons for dismissing grounds 10.1 ‑ 10.10 explain, no error has been shown in her Honour's characterisation of the matters stated in the documents. In broad terms, the documents indicated, or were consistent with the propositions, that (1) Mirvac (WA) was unhappy with the economic returns of the Project and wished lawfully to bring about a termination of the Services Agreement or a variation of it on terms more favourable to Mirvac (WA), (2) the prospects of renegotiation were not great but not out of the question, (3) Mirvac (WA) considered that its members on the Project Control Group had a right to disapprove a proposed Budget developed by the representatives of Mirvac (WA) for consideration by the Project Control Group, and (4) Mirvac (WA) nevertheless continued to work on the Project and, in particular, to develop a viable Stage 1 for the Project.
4. Thirdly, insofar as the judge accepted certain oral evidence relating to the meaning and effect of certain documents, the evidence was elicited by counsel for BN. Counsel did not merely tender the documents on the basis that they spoke for themselves, and then made the documents the subject of submissions. Rather, counsel for BN asked the witnesses questions as to the meaning and effect of the documents in the context of assertions put to the witnesses as to Mirvac (WA)'s decision‑making, state of mind and purposes. The judge effectively accepted that the oral evidence was not inconsistent, and generally consistent, with the ordinary meaning of the documents understood in their context.[546]
5. Finally, ground 10 allegedly demonstrates that Mirvac (WA) had made the alleged Refusal to Proceed decision, and in that regard throws light on the purposes and intentions (at various times) of Mr Adam Davidson, Mr Aleksovski and Mr Draffen. The state of mind of the witnesses and the purposes for which they acted were to be assessed in the context of the whole of the evidence, including the direct evidence they gave on the topic. None of the documents contained an unequivocal admission or statement of the alleged Refusal to Proceed decision or of its implementation. Nor did they show that the judge misused her advantage as a trial judge.
6. Ground 10.11 should be dismissed.

1. Ground 8 alleges, in effect, that given the findings that Mirvac had concerns as to the financial viability of the Project and given the matters advanced in support of ground 10, the judge erred in finding that Mirvac was not using issues in relation to the second access road to delay the Project.
2. Ground 8 should be dismissed for four reasons. First, the judge's findings in relation to Mirvac's concerns as to the Project's financial viability do not point to any error in finding that, despite its concerns, Mirvac continued to implement the Project. Secondly, insofar as ground 8 relies on ground 10, it fails for the reasons given in relation to ground 10. Thirdly, insofar as ground 8 covers the same or similar issues as ground 6, it fails for the reasons given in relation to ground 6. Fourthly, there is no error in the findings referred to in [529] above which, as noted in [530], to a substantial degree, were based on the judge's assessment of the veracity and reliability of Mirvac's witnesses.
3. One final point should be noted, although it does not arise from the grounds of appeal or BN's written submissions. Counsel for BN in oral submissions contended that the planning and regulatory work undertaken by Mirvac (WA) over the six years was not 'Preliminary Works' within the meaning of the Services Agreement.[547] That contention is incorrect. The term 'Preliminary Works' was defined to mean:

[A]ll works which are desirable or necessary as a preliminary step to Subdivision Works or Construction Works including preparing designs, obtaining Approvals and conducting market investigations.

1. BN's oral submissions that Mirvac (WA) did not undertake 'Preliminary Works' as defined places a strained and unnatural meaning on that definition and has no merit.
2. Ground 8 should be dismissed.

1. By ground 9, BN alleges, in effect, that the judge erred in failing to find that Mirvac (WA) prepared the September 2014 Programme and Budget for the purpose of 'delaying any substantial work to bring the Project to completion'.
2. The following observations may be made.
3. First, there are numerous unchallenged findings which provide the context for Mirvac (WA)'s preparation of the September 2014 Programme and Budget, including the findings of primary fact at primary decision [259] ‑ [260], [286] ‑ [289], [291], [293] ‑ [294], [296] ‑ [298], [300] ‑ [301], [451] ‑ [464] and [472] ‑ [473]. In summary:
   1. The idea of redeveloping the golf course was first raised by BN. At the 25 July 2013 Project Control Group meeting, BN raised the suggestion that the golf course could be included as further residential land within the development so as to improve the yield. It was agreed that Mirvac (WA) would conduct some analysis, based on a development both with and without the golf course.[548]
   2. On 22 August 2013, Mr Aleksovski emailed Mr Waller advising him that he was in the process of finalising the remodelling of the Project to convert the golf course into lots.[549]
   3. At the 2 October 2013 Project Control Group meeting, Mirvac (WA) reported on the analysis of developing the golf course into residential lots and provided a draft design. Mirvac (WA) said that the design would be further revised to incorporate the southern portion of the site. Mirvac (WA) advised that the revision of the Project to convert the golf course into residential lots would require an amendment to the Local Structure Plan, and that this could take 9 ‑ 12 months.[550]
   4. Mr Waller had expressed the view that it was not necessary to amend the Local Structure Plan at the outset. However, Mirvac had disagreed and said that, if it was intended to develop the golf course at some time in the future, the Local Structure Plan would need to be amended at the outset. Mirvac considered that it was not permissible to conceal the intention to develop the golf course in the future. In particular, Mirvac was concerned about misrepresenting the true picture to future purchasers and to those who had already purchased lots on the basis that there was a golf course.[551]
   5. After the Project Control Group meeting on 2 October 2013, Mr Waller asked Mr Aleksovski to remove from the minutes any reference to discussions about the closure and development of the golf course. Mr Waller said that, whilst the golf course was inevitably going to close, Mr Aleksovski should not talk about it because Mr Waller did not want to 'worry people' that it might be closed down.[552]
   6. In 2014, Mr Waller continued to be interested in developing the golf course. He raised the prospect of increasing yield by developing the golf course at a meeting with Mr Draffen on 3 April 2014.[553]
   7. In April 2014, Mr Draffen and Mr Waller agreed that further work should be done in relation to proposed Stage 1 to present the Project in its 'best light', with regard to size and scale, involving considering moving it closer to the foreshore.[554]
   8. At the Project Control Group meeting on 6 May 2014, it was agreed that Mirvac (WA) would prepare a feasibility analysis assessing the financial and lot yield impact of developing the golf course land, for consideration at the next Project Control Group meeting.[555]
   9. BN's May 2014 Notice[556] (said to be sent pursuant to cl 5.3(b)(viii) of the Services Agreement)[557] requested information about when a Budget and Programme would be prepared for the next stage, and stated that BN accepted that the Project was to be developed with the golf course continuing as is. With respect to that notice, the judge found that (1) the Project Control Group had already agreed at the meeting three days earlier, on 6 May 2014, that a Budget and Programme would be presented at the September 2014 Project Control Group meeting, and (2) BN's statement could not unilaterally change what had been discussed and agreed at the earlier Project Control Group meetings.[558] In other words, BN's May 2014 Notice did not, in effect, countermand the resolution of the Project Control Group meeting on 6 May 2014.
   10. At the 13 June 2014 Project Control Group meeting, there was a discussion as to the immediate future of the golf course, including the issue of market representation and impact on sale prices. Although there was no decision to abandon the possibility of developing the golf course land into residential land, nor was there a decision or common view that it would be developed.[559]
   11. Mr Waller's response to Mr Aleksovski's concerns in relation to purchasers who had built homes backing onto the golf course was that he (Mr Waller) would buy back those houses and lots.[560]
   12. The September 2014 Budget included the costs of (1) the detailed design and documentation of Stage 1, including the second access road, (2) the detailed design and documentation of the bulk entry works, and (3) the subdivision application for Stage 1. These costs comprised $750,000 out of the total budget of $985,000.[561]
4. It may be interpolated at this point that, whilst the judge found (at primary decision [33]) that the possibility of converting the golf course into residential lots would have required an amendment to the Services Agreement, no attention appears to have been given to whether Mirvac (WA)'s work with respect to the utilisation of the golf course land at the request of the Project Control Group (see points 1 ‑ 5 and 8 in the preceding paragraph) effectively involved a variation to the Services Agreement (notwithstanding cl 22.3),[562] including whether Mirvac (WA) charged for such work as part of the 'Services' under the Services Agreement, or separately.
5. Be that as it may, the judge summarised her findings on the relevance of the golf course in the September 2014 Report as follows:[563]
   1. Mirvac (WA) and BN continued to disagree about whether an amendment to the Local Structure Plan was necessary at the outset if the golf course was to be developed in the future. The judge found that Mirvac (WA)'s concerns in this respect were 'legitimate'.
   2. While BN's May 2014 Notice said that BN 'accepts that the Project is to be developed with the golf course continuing as is', this was ambiguous, given the history. The judge found that it was not inconsistent with BN simply reiterating its view that the work could begin under the existing Local Structure Plan, that approval could later be sought for the development of the golf course, and that BN would buy back any houses whose purchasers complained about being misled. The judge held that this interpretation of BN's May 2014 Notice is supported by Mr Aleksovski's recollection of what was discussed in the June 2014 Project Control Group meeting.
   3. Mirvac (WA) was entitled to have concerns about Mr Waller's intentions and the accuracy of BN's May 2014 Notice. Mr Waller had requested that the Project Control Group minutes not record the discussion about the closure and possible development of the golf course. Mr Waller also told Mr Aleksovski not to talk about it because he did not want to 'worry people' that the golf course might be closed down.
   4. The judge found that this was in a context where, according to Mr Waller, it was 'inevitable' that the golf course would be permanently closed.
   5. The evidence does not show that BN would not have agreed to vary the Services Agreement to permit the golf course to be developed until a first stage of the Project was underway. The judge found that Mr Waller's evidence in relation to the variations to the Services Agreement was to the effect that he would not have agreed to a variation of the 'waterfall' provisions and financial outcomes provided for as between BN and Mirvac (WA) under the Services Agreement until some work had been done and the Project was underway. The judge held that Mr Waller's evidence in relation to the golf course was, in effect, simply that he would not have agreed to it causing a delay.
6. As with the findings in [591] above, the above findings do not appear to be challenged. However, even if it might be thought that the findings referred to in [591] and [593] above were challenged, there is no error disclosed in the findings.
7. In oral submissions, counsel for BN emphasised that the September 2013 Options Memo indicated that with the inclusion of the golf course land, the shortfall in the loan for Mirvac (WA) would be approximately $80 million.[564] Counsel for BN, in effect, invited the court to find that this weighed heavily, if not conclusively, in the scales on the question of whether Mirvac (WA) had submitted the September 2014 Programme and Budget for the purpose of delaying the Project, given that the conversion of the golf course land would, on this piece of evidence, be contrary to Mirvac (WA)'s economic interests.
8. The logic of the submission has some force, but, in the end, the evidence must be evaluated as a whole. This single feature of the evidence is not sufficient to overcome the combined force of (i) all of the evidence and the circumstances as found by the judge without successful challenge on appeal and (ii) the trial judge's advantage in having seen the witnesses and received the evidence as a whole. In addition to the facts and circumstances outlined at [591] and [593] above, those other circumstances and findings include the following:
   1. The additional infrastructure costs under option 2 were in the order of $8 million (see [550] above). It is not clear to what extent the $80.78 million figure was the product of a ballooning of compound interest, taking into account the likely delay with the proposed amendment to the Local Structure Plan, as opposed to new advances for which Mirvac (WA) would be out of pocket.
   2. According to Mr Waller, it was inevitable that the golf course would be permanently closed and Mirvac had 'legitimate concerns' about subdivision and selling without an upfront change to the Local Structure Plan.
   3. The interest in developing the golf course land into residential land came from Mr Waller, and the utilisation of the golf course land would increase yields - thereby increasing revenue available to BN under the 'waterfall' provisions.
   4. If there were variations in accordance with the additional assumptions referred to in [551] above, Mirvac (WA)'s unrecouped advances were estimated to be in the order of $1.85 million (not $80.78 million).
   5. Mr Draffen never reached the view, nor was he ever told, that there was no prospect that BN would vary the Services Agreement.
9. Moreover, and in any event, this court may only interfere with the judge's finding if it is satisfied that error is established. In light of the points in the preceding paragraph, and for the reasons which follow, BN's submissions that the judge erred as alleged in ground 9 cannot be accepted.
10. First, the greater part of the September 2014 Budget ($750,000) related to (1) the detailed design and documentation of the second access road, (2) the detailed design and documentation of the bulk entry works, and (3) the subdivision application for Stage 1. All of this work was proposed to be done at the same time as the development of the amendment to the Local Structure Plan, which, as the judge said, tends to point against it being merely put up for the purposes of delay.
11. Secondly, Mr Draffen's evidence, accepted by the judge, was that he never instructed anyone to delay the project.[565] The proposition was not put to Mr Draffen in cross‑examination that after receiving the September 2013 Options Memo, he recommended or encouraged a deliberate delaying of the Project via the presentation of the September 2014 Report.
12. Thirdly, Mr Aleksovski prepared both the September 2013 Options Memo and the September 2014 Report.[566] He was not cross‑examined to the effect that he had been directed by Mr Draffen (or any other superior in Mirvac (WA) or Mirvac Ltd) to prepare the September 2014 Report in order to delay the Project. Relevantly, his purpose was the purpose for which the documents were prepared. The cross‑examination, and his evidence in that regard, were as follows:[567]

And you prepared the September 2014 [R]eport for the [Project Control Group] meeting which was scheduled for 25 September 2014, didn't you?‑‑‑Yes, I did.

Can I take you to that document; tab 749. And could I ask you, please, to look at the first three dot points in section 2 of the report on page 11162 under the heading Design. The first dot point says:

'[BN] requested Mirvac to review options for developing the golf course land to understand the impact.'

'The likely increase in yield is some 200-plus lots.'

'The conversion of the golf course land into residential lots is significantly different from the current approved [Local Structure Plan] and is therefore deemed to be a major amendment to the [Local Structure Plan]. Therefore, a full amendment to the approved [Local Structure Plan] will be required, including a complete reconsideration of the amended [Local Structure Plan] inclusive of public advertising, Shire of Harvey approval and WAPC approval. This is anticipated to take some 12 to 15 months of additional planning works. Commencement of the [Local Structure Plan] amendment will commence in October 2014. Initial discussions will be held with both WAPC and the Shire of Harvey to gauge their thought on the amendment and to determine the most effective and time-conscious way forward to alleviate any potential time delays and constraints. Pursuant to clause 6.5B(2)(a) -'

'a programme in advance of the commencement of the preliminary works for a stage outlining the [Local Structure Plan] amendment process is annexed to this report for the [Project Control Group] as attachment 5.'

'The removal and subsequent development of the golf course into residential land will be a contentious issue. Existing residents of Lakewood Shores will be seeking clarification and an explanation from [BN], along with the Shire of Harvey. Immediate consultation must therefore be undertaken with the Shire of Harvey to address any potential concerns and adverse impacts of the decision.'

See all of that?‑‑‑Yes.

So the first dot point was not correct, was it, because it was you who suggested considering closing the golf course, wasn't it?‑‑‑No. I don't agree with that.

All right. In the second dot point you said there would be 12 to 15 months of additional planning work to amend the [Local Structure Plan] and that work would commence in October 2014, didn't you?‑‑‑Yes, I did, and that was based on - on advice that I had from our planning consultant.

All right. And you knew when you prepared this document that amendment of the [Local Structure Plan] in that way could only proceed if the definition of 'project' in the [Services Agreement] was first amended by mutual agreement of Mirvac and [BN], didn't you?‑‑‑No. I wasn't aware of that.

Well, you were aware of it when you prepared the minutes of the previous [Project Control Group] meeting, that project - the golf course is an element of the [Services Agreement] - weren't you?‑‑‑Yes, and - and it would have required an amendment to the - to the structure plan that was just approved.

But it also would have required mutual agreement to an amendment of the [Services Agreement] to change the definition of 'project', wouldn't it?‑‑‑I - I - I don't understand what - what you're ‑ ‑ ‑

Well, you knew that, didn't you?‑‑‑I wasn't aware that it required an amendment to the [Services Agreement].

Well, why are you recorded, in the minutes you prepared in July, saying that the golf course is a part of the [Services Agreement], then, Mr Aleksovski? You knew about it?‑‑‑Sorry, I'm - I'm - I don't understand. Knew about what, exactly?

Well, you knew that it wasn't a function of the [Project Control Group] to start approving things which were not even part of the project as defined, didn't you?‑‑‑No. I - I wasn't aware of that.

Weren't you?‑‑‑No.

Did you discuss this document that you prepared and sent out with anyone else within Mirvac before it was sent?‑‑‑There would have been discussions with - with - with my - my immediate manager. So, yes, it would have been with - with [Mr] Lawrance.

Mirvac were appointing senior personnel from Sydney as the [Project Control Group] representatives at this time, weren't they?‑‑‑Yes. I - I believe it was ‑ ‑ ‑

Cooper and Long?‑‑‑Yes, [Mr] Cooper was a [Project Control Group] member, and [Mr] Long, yes.

Yes. Well, you discuss this document with them as the representatives that were going to attend this meeting?‑‑‑I - I - I may have.

And did you discuss with them the fact that what you were proposing was to do something which couldn't be forced on anyone at a [Project Control Group] meeting unless there was mutual agreement to change the definition of 'project'?‑‑‑No. I wasn't aware of that.

Nor did [Mr] Cooper tell you that?‑‑‑No one told me that. No.

Nor [Mr] Long?‑‑‑No one told me that.

No one?‑‑‑No.

Nor Ms Pini?‑‑‑No one told me that. No.

No one? All right. Thank you. And the reason you suggested this work would commence in October 2014, even though there was no mutual agreement made to change the [Services Agreement], was because you thought that this major [Local Structure Plan] amendment was a good method to further delay commencement of infrastructure works for a long period, didn't you?‑‑‑No. I don't agree with that at all.

All right. You knew, in September 2014, that Mirvac wished to ensure that the 10-year period specified in clause 5.6 of the [Loan Agreement] would expire in respect of the $25 million advance before Mirvac carried out any infrastructure works on the project, didn't it?‑‑‑No.

You understood that, in - you - start again. You understood, in 2014, that Mirvac could, after those 10 years, sell the project land as mortgagee unless [BN] repaid the $25 million advanced or agreed to vary the [Services Agreement] in some way favourable to Mirvac, didn't you?‑‑‑No. I don't agree with that.

And in truth, you were well aware of those matters a year earlier when you wrote the memorandum to Mr Draffen, dated 5 September 2013, at tab 583 [the September 2013 Options Memo] that we've looked at earlier, didn't you? You were aware of it then?‑‑‑Sorry. Are you asking - I was aware of ‑ ‑ ‑

You were aware of those matters that, after 10 years, there could be pressure put on [BN] to either repay the 25 million additional advance pursuant to the [Loan Agreement] or agree to vary the [Services Agreement] to give Mirvac a far better outcome; you were aware of that a year before this time, weren't you?‑‑‑No. I don't agree with that.

Well, we've looked carefully at your report at tab 583 today [the September 2013 Options Memo]; I won't take you back to it now but it records that - your awareness of a proposal that the $25 million would be converted to equity in December 2017, doesn't it?‑‑‑That was a scenario that was - that I was asked to model. Yes.

That's right. And that was because December 2017 was the month before the 10 years expired, wasn't it?‑‑‑That's what I was instructed to model and that's what I modelled.

And you understood why you were instructed the model it, didn't you?‑‑‑No. As I - as stated, that's what I was instructed to model and that's what I modelled.

Right. And do you recall, in option 2 in your model, that it included incorporating the golf course into the development, didn't it?‑‑‑Yes, it did, from memory. Yes.

All right. Yes. Okay. And the sales rates in option 1 and option 2 in that document, which we went through earlier, had sales commencing at different times, didn't they?‑‑‑I can't confirm that without looking at the document. I'm happy ‑ ‑ ‑

All right. Well ‑ ‑ ‑?‑‑‑I'm - yes.

You can look at it if you wish but I can tell you that option 1 has sales commencing in April 2015 but option 2 has sales commencing in June 2017 but if you want to check it, I will take you to the pages?‑‑‑Yes. If you don't mind, if I could check that, please.

Yes. That's fine?‑‑‑That would be appreciated.

That's volume 16, tab 583. And for option 1, it's at page 8438. You see, under Sales Rate, the sales in option 1, the first four per month from April 2015?‑‑‑Yes.

See that there?‑‑‑Yes.

And if you turn over to page 8439, option 2, sales rate: six per month from June 2017?‑‑‑Yes. Correct.

Right. And ‑ ‑ ‑?‑‑‑Your Honour, just to clarify, the sales rates, that six per month actually means settlements. So that's when first settlements would actually start occurring. I just wanted to clarify that because there's sales and there's settlements but what that means is that we would be settling from that particular date.

And if you look at - seeing you've got the document there, if you turn back to page 8437, and the last item on page 8437 where option 2 is described:

Undertake a feasibility analysis based on the development commencing on foreshore and incorporating the existing Binningup golf course into the development.

See that?‑‑‑On page 8437, was it?

Yes. Where there's option 2 in ‑ ‑ ‑?‑‑‑Yes.

‑ ‑ ‑ the last dot point, the first two lines?‑‑‑Yes, that's correct.

That was - I asked you a few moments ago that option 2 proposed incorporating the existing Binningup golf course into the development, and that's where you said that, didn't you?‑‑‑Yes.

Basis of that, I'm suggesting to you, that it was your proposal to Mr Waller that that be done?‑‑‑No, I don't agree with that.

No. So isn't it the case that this project [Project Control Group] report for the September 2014 meeting scheduled for 25 September 2014 was simply a continuation of Mirvac's attempts to delay any infrastructure works commencing on this project before the 10 years from the date of the initial [Services Agreement] - that is, before 10 years from 11 January 2008 - had expired?‑‑‑No, I don't agree with that.

No. All right. Thank you, your Honour. (emphasis added)

1. The judge accepted the evidence of Mr Aleksovski on these issues.[568] Although BN's position in this appeal effectively involves the proposition that Mr Aleksovski was not a credible or reliable witness, particularly in light of his handling of the second access road and the use of the Pastoral Co land, for the reasons given earlier, those complaints cannot be accepted as no sufficient ground for appellate interference with the judge's credibility and reliability based findings has been demonstrated.
2. Ground 9 should be dismissed.
3. One final observation may be made. Neither prior to BN's Termination Notice of 2 October 2014, nor in the subsequent litigation, was it contended by BN that Mirvac (WA) repudiated the Services Agreement or committed a Non Monetary Event of Default merely by proposing a Budget which included items for amending the Local Structure Plan to deal with the conversion of the golf course land into residential land. Both BN's allegations of repudiation and Non Monetary Event of Default had as their focus Mirvac (WA)'s alleged bad faith in connection with the improper purpose for which the September 2014 Budget was allegedly proposed, ie, delay generally and 'running down the clock' in particular to 11 January 2018.

1. As noted earlier, ground 11 alleges, in effect, that the judge erred in fact and law in finding (at [478] of the primary decision) that Mr Lawrance's statement at the Project Control Group meeting on 13 June 2014 was not repudiatory. It is alleged that the judge should have held that the statement was repudiatory on the basis that Mirvac (WA)'s legal obligations were as set out in grounds 1 and 2, ie, that Mirvac (WA) had no legal right as a member of the Project Control Group to disapprove a Budget.
2. Ground 13, as explained in BN's written submissions (in [292] above), alleges, in effect, that:
   1. Mr Lawrance's statement provided a compelling inference that the reason why Mirvac (WA) did not submit a Programme or Budget in relation to Subdivision Works in 2014 was because Mirvac had not given, and would not give, an ACC (Approval to Commence Construction) and that, in turn, was because Mirvac had made, or manifested, the alleged Refusal to Proceed decision.
   2. As a result of the matters in point 1, the judge erred in finding at primary decision [536] ‑ [538] that Mirvac (WA)'s non‑submission of a Budget for Subdivision and Construction Works in 2014 was because it was not possible to create a realistic Budget at that time because of the need to do more work around the potential for Stage 1.
3. Before turning to the judge's findings in relation to Mr Lawrance's statement at the Project Control Group meeting on 13 June 2014, it is convenient to trace the history of the claim the subject of ground 11 as advanced by BN.

BN's claims in relation to Mr Lawrance's statement of 13 June 2014

1. BN's Termination Notice dated 2 October 2014 (see [275] ‑ [278] above) did not allege that Mr Lawrance's statement on 13 June 2014 in itself evinced an unwillingness or inability by Mirvac (WA) to render substantial performance of the Services Agreement. Rather, BN's Termination Notice alleged (relevantly) repudiation, or alternatively Non Monetary Event of Default by Mirvac (WA), in that:
   1. Mirvac (WA)'s failure to provide a Budget and Programme for Stage 1 of the Project, and, instead, providing the September 2014 Budget and Programme, was a serious breach of the good faith obligation in cl 3 of the Services Agreement, in that it was 'intended to cause material delay in commencing work on the first stage of the Project so as to result in [Mirvac (WA)] not incurring expenditure in carrying out the Project prior to [Mirvac (WA)] becoming entitled, on 11 January 2018, to repayment of any unrepaid part of all Advances'.
   2. In this context, Mr Lawrance's statement on 13 June 2014 was one of the matters from which it was 'clear' that Mirvac (WA) 'intended to cause such material delay'.
2. In other words, BN alleged that (1) Mirvac (WA) put up the September 2014 Budget and Programme not for the purpose of performing the Services Agreement, but for the purpose and with the intention of delaying the carrying out of Subdivision and Construction Works until 11 January 2018, when the Initial Advance would be repayable, and (2) the fact that Mirvac (WA) had this improper purpose or intention may be inferred from (amongst other things) Mr Lawrance's statement of 13 June 2014.

1. By its amended further re‑amended defence and counterclaim filed 26 September 2017,[569] BN pleaded, in effect, that:
   1. Mirvac (WA), contrary to its obligations under the Services Agreement, did not submit a Budget and Programme to carry out a stage of the Project involving Subdivision Works or Construction Works because the directors of Mirvac Ltd had not approved the Project being implemented by the carrying out of Subdivision or Construction Works and creating Sale Lots (par 29).
   2. This was alleged to constitute, alone or in combination with other pleaded matters, a repudiation of the Services Agreement or a Non Monetary Event of Default entitling BN to terminate under cl 17.1 of the Services Agreement (pars 32 ‑ 33).
2. The particulars to par 29 alleged that Mr Lawrance had made a statement at the Project Control Group meeting on 13 June 2014 to the effect alleged in [609.1] above.
3. In other words, Mr Lawrance's statement on 13 June 2014 was alleged to constitute an admission that Mirvac (WA) did not, contrary to the terms of the Services Agreement, submit a Budget and Programme to carry out a stage of the Project involving Subdivision or Construction Works in or prior to the end of September 2014 because the directors of Mirvac Ltd had not approved the Project being implemented by way of Subdivision or Construction Works.

1. The judge described BN's claims in relation to Mr Lawrance's statement at the meeting on 13 June 2014, as follows:[570]

In [BN's] written submissions, it summarised the matters which it said manifested the [alleged Refusal to Proceed decision].

... Mr Lawrance was the Development Director of Mirvac Ltd at the time. In its closing submissions, [BN] modified (or clarified) what it had pleaded:

...

(2) [BN] asserted that the effect of Mr Lawrance's statements was that, in addition to [Project Control Group] approval, Mirvac would need internal Mirvac approval prior to commencing Stage 1.

...

[BN] asserted that statements made by ... Mr Lawrance in 2014 showed that the [alleged Refusal to Proceed decision] had been made. ...

...

[BN] alleged that, at the [Project Control Group] meeting on 13 June 2014, Mr Lawrance made a statement 'to the effect, in addition to the [Project Control Group] approval, that Mirvac would need internal Mirvac approval prior to commencing Stage 1 works on the Project'. (emphasis added) (footnotes omitted)

The judge's findings in relation to Mr Lawrance's statement of 13 June 2014

1. The judge found that the statement made by Mr Lawrance on 13 June 2014 was in these terms:[571]

Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval.

I accept that evidence. However, I do not consider Mr Lawrance's statement was repudiatory or one which manifested the intention alleged by [BN]. As will be seen, Mirvac WA had the right to disapprove a budget as a member of the [Project Control Group]. Before a [Project Control Group] meeting at which a budget was to be approved or disapproved by the [Project Control Group], it is to be expected that Mirvac would go through an internal approval process to enable their representatives on the [Project Control Group] to be in a position to vote appropriately, as explained by Mr Draffen in a passage extracted above. There is nothing repudiatory or sinister about this. Indeed, Mr Waller said he would think that would be logical. (emphasis added) (footnotes omitted)

1. The reference in the second sentence of this passage to 'manifested the intention alleged by [BN]' is, evidently in context, a reference to the allegation that Mr Lawrance's statement manifested the alleged Refusal to Proceed decision.
2. The reference in the fourth sentence to 'as explained by Mr Draffen' is a reference to Mr Draffen's evidence in relation to a meeting with Mr Waller of BN on 3 April 2014, and the reference in the last sentence of the passage to Mr Waller's statement is a reference to the same meeting. The relevant findings with respect to that meeting are at primary decision [454] ‑ [455]:

In his oral evidence, Mr Draffen said, consistently with what he wrote at the time, that the purported minutes were not an accurate record of their meeting. He said:

'[T]here's references in there to comments that I made around the Mirvac [B]oard approval process which I don't agree are correct. Certainly, from a Mirvac perspective, we would have gone through an internal approval process to be in a position at the formal [Project Control Group] to approve - or our - or, you know, basically in - in a position for our attendees at the [Project Control Group] to vote appropriately. That is a process that would have been an internal process that may or may not have required Mirvac [B]oard approval, depending on the size of - the scope of the approval sought. ... Certainly we would have gone through a process prior to any formal consideration, for example, of a budget or programme at the [Project Control Group] to get the necessary approvals that we would need.'

In cross examination, Mr Waller was asked if Mr Draffen said words to the effect that Mirvac will need to go through its internal approval processes before it could agree at [Project Control Group] level to a construction of Stage 1. He replied 'That's - well, I would think that would be logical'. (footnotes omitted)

1. In this context, the judge's finding to the effect that Mirvac did not believe that it was contractually bound to complete the Project (at primary decision [374]) is also relevant.

1. As noted earlier, in its written submissions relating to ground 11, BN submitted:[573]

The judge accepted, at [478] of the [primary decision], that the statement that 'Mirvac had internal approval processes and that Mirvac would not be able to commence Stage 1 without having internal approval' was made by [Mr Lawrance] at the 3 June 2014 [Project Control Group meeting] [(Mr Lawrance's Statement)]. The judge found that [Mr Lawrance's Statement] was not repudiatory or one that manifested the intention alleged by [BN]. If [BN's] construction of the Transaction Documents is accepted, [Mr Lawrance's Statement] was clearly repudiatory and one that manifested the intention alleged and was a further [d]efault by Mirvac (WA). (emphasis added)

1. In oral submissions, counsel for BN originally appeared to contend that Mr Lawrance's statement was repudiatory in that it stated, in effect, that Mirvac (WA) would not proceed even after approval of a Budget at a Project Control Group meeting.[574] However, later in his oral submissions, counsel for BN appeared to put the different proposition that Mr Lawrance's statement ought be construed as repudiatory because it conveyed that Mirvac (WA) would not approve a Budget presented at a Project Control Group meeting, and that Mirvac (WA) had (as alleged in grounds 1 and 2) no contractual entitlement to disapprove a Budget at a Project Control Group meeting.[575]

1. The term 'repudiation' is used in different senses. First, it may refer to conduct of the repudiating party which evinces an unwillingness or inability to render substantial performance of a contract. That may be referred to as 'renunciation'. Secondly, the term 'repudiation' may refer to any breach of contract which justifies termination by the other party.[576] It is the former sense which is relevant to ground 11.
2. In the former sense, the test is whether the conduct of that party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.[577]
3. Repudiation is a serious matter and is not to be 'lightly found or inferred'.[578] The repudiation of a contract must appear clearly and without ambiguity.[579]
4. At least generally speaking, an issue of repudiation depends upon objective acts and omissions, and not upon uncommunicated intentions.[580] The bona fides of the allegedly repudiating party may however be of significance in cases in which it is alleged that repudiation is evinced by the party having taken a mistaken view of the interpretation of the contract.[581]
5. An inference of an intention to repudiate or renounce a contract may be established by the promisor's express language to that effect.[582] Renunciation may also be established by drawing an inference from the promisor's express language and conduct which conveys to the other party that the defaulting party intends to fulfil the contract only in a manner substantially inconsistent with that party's obligations, and not in any other way.[583]
6. Whilst it is possible that a party may repudiate a contract by insisting on an incorrect interpretation of the contract, that is not always the case. There are other cases in which a party, though asserting a wrong view of a contract because it believes it to be correct, is nevertheless willing to perform the contract according to its tenor. In the latter case, the party 'may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him'.[584]
7. Repudiation by the promisor does not itself bring about a termination of the contract. If the innocent party does not accept the repudiation, the contract remains on foot.[585]

1. The following observations may be made with respect to ground 11. First, insofar as BN contended that Mr Lawrance's statement conveyed that, even after approval of the Budget at a Project Control Group meeting, Mirvac (WA) would still not proceed unless and until it obtained its own further internal approval, the contention has no merit. The statement as found by the judge does not expressly or impliedly convey that meaning. The judge was correct, at primary decision [478], to find, in effect, that Mr Lawrance's statement indicated that before Mirvac (WA)'s members on the Project Control Group would vote to approve or disapprove a Budget, there would be internal processes within Mirvac to be followed.
2. Secondly, and allied to that point, Mr Waller's evidence, although given in relation to Mr Draffen's statement at the 3 April 2014 meeting,[586] was equally apposite to a consideration of Mr Lawrance's statement on 13 June 2014. It is some evidence, although not conclusive, of what a reasonable person in the position of BN would have understood by the statement by Mr Lawrance and, in particular, whether it conveyed a renunciation by Mirvac (WA) of the Services Agreement or of a fundamental obligation under it.
3. Thirdly, the repudiation alleged in ground 11 is expressly dependent upon the success of BN's contentions as to the proper construction of the Services Agreement in grounds 1 and 2. That is confirmed by its written submissions (see [618] above) and its oral [587]missions.587 For the reasons indicated earlier, that construction cannot be accepted. Also, the third construction of the Services Agreement, which we have adopted, provides no platform for success on ground 11. On that construction, a statement that, in effect, Mirvac would need to go through its internal processes before its representatives voted on a Budget or Programme for commencement of Stage 1 falls well short of amounting to a statement that Mirvac intended to fulfil the Services Agreement only in a manner substantially inconsistent with its obligations and in no other way.
4. For these reasons, ground 11 fails.

1. In relation to ground 13, the judge's findings were as follows:[588]

I am not satisfied that the reason why Mirvac WA did not submit a programme and budget in relation to subdivision works or construction works was because Mirvac Ltd's directors had not approved the Project being implemented by carrying out subdivision works or construction works and creating Sale Lots. Indeed, I find that was not the reason.

A budget for Stage 1 could not be prepared until after the [Local Structure Plan] had been approved, which occurred in February 2014. In April 2014, Mr Draffen and Mr Waller agreed that Mirvac WA would do some more work around the potential for Stage 1 that would present the Project in its best light. This is what Mirvac WA sought to do in the September 2014 Report.

The September [2014] Budget included the cost of detailed design and documentation of the second access road, the bulk entry works and the subdivision application for Stage 1. Until these expenses were approved, and the work done, it was not possible to create a realistic budget for subdivision works or construction works.

1. The effect of ground 13 is set out in [605] above. Ground 13 fails for three reasons. First, for the reasons given in relation to grounds 6 ‑ 10, the judge has not been shown to be in error in finding that BN had not established that Mirvac had made or implemented the alleged Refusal to Proceed decision. Secondly, as indicated earlier, there is no error in the judge's finding that Mr Lawrance's statement conveyed that Mirvac would go through its internal approval process before its members on the Project Control Group voted to approve or disapprove a Budget. That statement did not expressly or impliedly convey the notion that Mirvac had made or had implemented, or would make or implement, the alleged Refusal to Proceed decision. Thirdly, the unchallenged findings are that (1) the Local Structure Plan had not been approved until February 2014, (2) in April 2014, Mr Draffen and Mr Waller agreed that Mirvac would do some more work around the potential for Stage 1 that would present the Project in its best light, and (3) the September 2014 Budget included the cost of the detailed design and documentation of the second access road, the detailed design and documentation of the bulk entry works, and the subdivision application for Stage 1. In light of those unchallenged findings, and the acceptance of Mr Aleksovski as a truthful and reliable witness (other than in respect of that aspect of his evidence as to why he raised the tax issues), it was plainly open to the judge to find that the reason that a Budget for Subdivision Works had not been prepared prior to September 2014 was that Mirvac (WA) was not in a position to create a realistic Budget for Subdivision Works or Construction Works.
2. Ground 13 should be dismissed.

1. Ground 12 concerns BN's insistence on recording the Project Control Group meetings, and alleges that the judge should have found that Mirvac (WA) repudiated the Services Agreement by not agreeing to recordings.
2. The judge's reasoning at primary decision [527] is correct:[589]

Mirvac WA's refusal to agree to meetings being recorded was not a breach of its obligations, good faith or otherwise. I am also not satisfied it refused in order to delay or stop the Project. The documentary evidence showed that, by September 2014, the relationship between the parties was combative. Mirvac WA had said it was willing to attend a meeting if it was not recorded, and was willing to pay for an independent minute taker. This was not an unreasonable stance, in all of the circumstances. Mirvac WA's Good Faith Obligation did not require it to agree to the meeting being recorded.

1. Further, BN's submissions proceed on a false premise.[590] The judge did not find at primary decision [522] that BN had a legal right to record meetings of the Project Control Group. Rather, her Honour found that it would not be 'unlawful', for the purposes of the Surveillance Devices Act 1998 (WA), to have the meetings recorded. The fact that it was not unlawful to record meetings does not mean that BN had a positive legal entitlement, statutory or otherwise, to record meetings.
2. In substance, an impasse arose as to the procedures for recordkeeping in relation to Project Control Group meetings. The detailed provisions concerning Project Control Group meetings, including the procedural matters in cl 5.10 of the Services Agreement, are silent on the point. There was no contractual right vested in BN to insist on having the meetings recorded, as BN accepted at trial.[591] Absent a statutory or contractual entitlement to record meetings, Mirvac (WA)'s decision not to participate in meetings on the terms stipulated by BN in that regard, was not repudiatory in nature or a Non Monetary Event of Default.
3. Further, whilst there was no contractual or statutory entitlement on the part of BN to record the meetings, it may be accepted that the impasse fell within the dispute resolution clause in cl 15.1 of the Services Agreement. On the proper construction of the Services Agreement, on the primary facts as found by the judge, BN could and should have utilised the provisions of cl 15 of the Services Agreement.
4. Ground 12 should be dismissed.

1. All of the remaining grounds of appeal - grounds 4, 5 and 14 ‑ 23 - assume the success of the grounds impugning the judge's finding that Mirvac (WA) did not breach or repudiate the Services Agreement in the manner alleged by BN. Our conclusions on grounds 1 ‑ 3 and 6 ‑ 13 mean that it is not necessary to determine the remaining grounds. Bearing in mind the length of, and the scope of issues canvassed in, these reasons and the scope of the issues canvassed in the remaining grounds, it is not appropriate to determine the remaining grounds.

1. The appeal should be dismissed.
2. The parties should be heard on the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

Research Associate to the Honourable Justice Murphy and the Honourable Justice Mazza

[1] Mirvac (WA) Pty Ltd v Binningup Nominees Pty Ltd [2020] WASC 28.

[3] This overview is largely drawn from the findings in the primary decision.

[11] There is an issue in the appeal as to whether (as the judge found) Mirvac (WA) had the right to disapprove a Budget or whether (as BN contends) only BN had the right to disapprove a Budget.

[14] See primary decision [62] - [90].

[15] See [125] - [129] below.

[16] See [129] - [130] below.

[17] See [131] - [132] below.

[18] See [141] below.

[19] See [148] below.

[20] See [175] - [178] below.

[21] See [184] - [185] below.

[22] See [143] below.

[23] See [187] - [189] below.

[24] See [191] below.

[25] See [196] below.

[26] See [197] - [256] below.

[27] See [259] below.

[28] See [260] below.

[29] See [264] below.

[31] See [270] - [271] below.

[32] See [274] below.

[42] Primary decision [23]. The term 'Non Monetary Event of Default' was defined in cl 1.1 of the Services Agreement, in respect of a party, to include:

[T]hat party fails to carry out its obligations under this document (except any obligation which if not complied with would constitute a Monetary Event of Default) in a proper, timely, professional and workmanlike manner such that in the opinion, acting reasonably, of the party not in default such failure will have a material and adverse effect on the Project.

[47] Primary decision [40], [99] - [100].

[53] Primary decision [448] - [449]. (The minutes (exhibit 17.644) are not in the GB.)

[62] Primary decision [313], [322], [375], [408], [485], [555], [790].

[63] Primary decision [539] - [543].

[64] Primary decision [547] - [549].

[65] Primary decision [551] - [552].

[66] Primary decision [553] - [555]. The judge considered criticisms of Mr Draffen's evidence by counsel for BN at primary decision [479] - [485].

[71] Primary decision [403] - [404].

[72] Primary decision [556] - [568].

[73] Primary decision [569] - [571].

[75] Primary decision [583] - [584].

[76] Primary decision [585] - [618].

[79] Primary decision [103], [178].

[80] Primary decision [263] - [270].

[81] Primary decision [707] - [722].

[83] Primary decision [511] - [515].

[84] Primary decision [438] - [445].

[86] Primary decision [472] - [473].

[88] Primary decision [477] - [478].

[91] Primary decision [527] - [528].

[92] Primary decision [746] - [751], [754] - [756].

[93] Primary decision [778], [790].

[100] Lee v Lee [2019] HCA 28; (2019) 266 CLR 129.

[101] Lee [55]. See also Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [25]; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 [43]; Smart v Power [2019] WASCA 106 [100] ‑ [106]; Child and Adolescent Health Service v Mabior [2019] WASCA 151; (2019) 55 WAR 208 [93]; Joyce v Anderson [2020] WASCA 48 [105] ‑ [106], [204] ‑ [213].

[103] Nocton v Lord Ashburton [1914] UKLawRpAC 31; [1914] AC 932, 957; Clarke Boyce v Mouat [1994] 1 AC 428, 436 - 437.

[104] Voulis v Kozary [1975] HCA 44; (1975) 180 CLR 177, 193; Commissioner of the Australian Federal Police v Kalimuthu [No 2] [2018] WASCA 192 [490] ‑ [491].

[105] BN's written submissions filed 13 May 2021, par 4.2.

[107] Primary decision [66]; Agreed chronology WB 123.

[108] Primary decision [66]; Agreed chronology WB 123.

[113] Primary decision [116]; GB 316 - 353, particularly GB 331 - 332.

[116] Primary decision [121] - [122]. See also primary decision [128].

[118] Primary decision [71]; Agreed chronology WB 123.

[120] Primary decision [118], [123].

[121] Primary decision [123]; GB 354 - 397, particularly GB 377, 394.

[125] GB 429 - 432; Agreed chronology WB 123.

[127] Mr Jake Davidson and the witness Mr Adam Davidson are not related. To avoid confusion, the judge referred to each man by his full name: primary decision [124].

[128] Primary decision [124] - [125].

[130] Primary decision [127] - [128].

[135] Primary decision [132] - [133].

[141] Primary decision [138] - [140].

[148] Primary decision [145] - [147].

[152] Primary decision [150], [158], [161].

[158] Primary decision [75]; agreed chronology WB 124.

[164] Primary decision [75]; agreed chronology WB 124.

[172] Primary decision [156] - [157].

[174] Primary decision [161] - [163].

[190] Primary decision [164] - [165]; GB 585 - 586.

[191] Primary decision [165] - [166]; GB 587 - 590.

[192] Primary decision [167] - [171].

[200] Primary decision [328]. (The document is not in the GB.)

[204] Primary decision [332]. (The document is not in the GB.)

[206] Primary decision [334]. (The document is not in the GB.)

[207] Primary decision [337] - [338].

[208] Primary decision [335]. (The document is not in the GB.)

[212] Primary decision [340]; GB 591 - 592.

[214] Primary decision [344]; GB 593 - 598.

[215] Primary decision [349] - [350].

[216] Primary decision [351]; GB 599 - 603.

[219] Primary decision [354]; GB 604 - 606.

[222] Primary decision [187]; GB 864 - 869.

[223] Primary decision [188]; GB 870 - 879. (The index to the GB wrongly refers to this as exhibit 24.08, whereas it is exhibit 24.8.)

[224] Primary decision [189] - [190].

[226] Primary decision [356]; GB 857 - 863.

[230] Primary decision [193]; GB 607 - 608.

[233] Primary decision [357]. (This document is not in the GB.)

[234] Primary decision [358] - [359].

[235] Primary decision [360]. (This document is not in the GB.)

[238] Primary decision [365] - [368]. (These spreadsheets were not in the GB.)

[239] Primary decision [363] - [364], [369] - [372].

[240] Primary decision [373] - [374].

[243] Primary decision [196] - [197]; GB 647 - 649.

[246] Primary decision [200] - [201].

[247] Primary decision [196] - [197]; GB 647 - 649.

[248] Primary decision [377]; GB 650 - 655.

[252] Primary decision [380]; GB 656.

[253] Primary decision [381] - [382].

[254] Primary decision [383] - [384]; GB 659 - 669, particularly GB 666.

[255] Primary decision [386]; GB 668.

[256] Primary decision [387] - [389].

[266] Primary decision [399] - [405].

[267] Primary decision [406] - [408].

[269] Primary decision [409]; GB 670 - 678.

[270] Primary decision [411]; GB 676 - 677.

[271] Primary decision [412] - [418].

[273] Primary decision [420]; GB 679 - 681.

[275] Primary decision [422]; GB 680.

[279] Primary decision [426] - [431].

[280] Primary decision [203] - [204].

[282] Primary decision [206] - [207].

[283] Primary decision [209] - [210].

[285] Primary decision [88]; agreed chronology WB 126.

[286] Primary decision [212]; GB 683 - 684.

[287] Primary decision [214]; GB 697 - 700.

[288] Primary decision [214] - [215]; GB 697 - 698.

[307] Primary decision [229] - [231].

[309] Primary decision [432]; GB 695.

[310] Primary decision [433] - [437].

[311] The 'next document' referred to by the judge here is the September 2013 Options Memo, referred to at [236] below.

[312] Primary decision [286] - [287].

[313] Primary decision [234]; YB 131 - 137.

[314] Primary decision [235] - [238].

[315] Primary decision [239] - [240].

[317] Primary decision [243] - [245].

[319] Primary decision [242], [247].

[321] Primary decision [89]; agreed chronology WB 126; GB 703 - 744.

[325] Primary decision [438]; GB 747 - 753.

[326] Primary decision [440]; GB 748.

[330] Primary decision [441] - [442].

[333] Primary decision [290] - [291].

[334] Primary decision [293] - [294].

[336] Primary decision [249] - [250].

[338] Primary decision [252] - [253].

[339] Primary decision [254] - [255].

[341] Primary decision [261] - [262].

[342] Primary decision [89]; agreed chronology WB 127.

[349] Primary decision [90]; agreed chronology WB 127.

[352] Primary decision [451] - [464].

[353] Primary decision [472] - [473].

[356] Primary decision [297] - [298].

[360] Primary decision [477] - [478].

[366] Primary decision [302], [538].

[367] Primary decision [303] - [305].

[368] Primary decision [306] - [313].

[369] Primary decision [516] - [521].

[370] Primary decision [526] - [528].

[372] By cl 5.12(b), each of BN and Mirvac (WA) 'must ensure that at least one of the Project Control Group members appointed by it attends meetings of the Project Control Group'.