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

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

[4]

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]
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]
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]
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.
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]

[6]

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]
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.

[8]

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]
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]
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]
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.

[9]

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])
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]
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]
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]

[11]

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]
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]
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]
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]
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]

[34]

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]
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]
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]
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]

[42]

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
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]
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).

[45]

On 11 January 2008, Mirvac (WA) made the Initial Advance of $25 million to BN under the Loan Agreement.[109]
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]
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]
There were Project Control Group meetings on 14 February 2008 and 25 August 2008.[112]
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]
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]
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]
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.
On 28 October 2008 there was a Project Control Group meeting.[117]

[48]

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]
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 ...'.
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]
On 1 May 2009, there was a Project Control Group meeting.[132]
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]
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]
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]
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]
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]
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]
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]
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]

[50]

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]
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]
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]
The letter sent by the Shire to the EPA on 9 September 2009 (Shire's EPA letter) stated:[150]

[70]

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]
On 21 July 2011, the Commonwealth Minister approved the Project, subject to conditions. The conditions related to, amongst other things, protecting the moth.[189]
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]
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]
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.
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]
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]
On 13 September 2011, the Shire adopted the proposed Scheme Amendment 63, which was subsequently supported by the WAPC.[195]
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]
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]

[100]

A 'Mirvac Project Watch List' document dated 2 August 2012 repeated language used in the June 2012 Report.[227]
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)
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]
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]
On 16 August 2012, there was a Project Control Group meeting.[231]
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.
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]

[111]

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)

[120]

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]
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).
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]

[143]

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)

[151]

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)

[165]

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)

[178]

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].

[179]

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]
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]
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]
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]
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]
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]

[196]

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).
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]
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]
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]
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]
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

[226]

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]
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]
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.
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]

[229]

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]
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]
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]
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]

[234]

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.
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.
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.
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).

[374]

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)

[398]

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.
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.
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:

[406]

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]
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]
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]
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]
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]
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]
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]

[417]

The material terms of the Services Agreement and the Loan Agreement have been set out in the previous section of these reasons.
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.
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.
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'.
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.)
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.
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.
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.
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:

[421]

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.
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'.
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.
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.
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.
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.
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).
'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.
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.
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.
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:

[423]

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).
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.
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.
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.
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.
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.
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.
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.
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.
For all these reasons, BN's construction advanced in grounds 1 and 2 of the appeal cannot be accepted.
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.
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.
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.
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.
For the reasons which follow, Mirvac (WA)'s construction is not to be preferred.
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.
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.
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.
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.
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.
For these reasons, Mirvac (WA)'s construction, accepted by the judge, is not the preferred construction of the Services Agreement.
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:

[427]

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.
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.
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.
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).
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.
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.

[433]

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)

[439]

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)

[443]

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)
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.
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:

[457]

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.
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]
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.
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.
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.
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.
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:

[466]

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.
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.
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]
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]
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]
The judge's findings on these issues were relevantly summarised at primary decision [263] - [270]:

[467]

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)

[468]

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.
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.
As to ground 7.4, the judge's findings are at primary decision [263] ‑ [270], referred to at [502] above.
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.
Ground 7 should be dismissed.

[474]

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.
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.
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]
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.
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.
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.
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.
For these reasons, ground 10.1 has no merit.

[481]

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.
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]
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.
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.
The above matters are sufficient to dispose of ground 10.2.
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]

[486]

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.
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.
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.
Ground 10.3 should be dismissed.

[487]

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.
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.
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.
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]
With reference to the first of those options, the document stated:[535]

[509]

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.
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.
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.

[510]

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.
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.
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.

[512]

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.
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.
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.
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]
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.
Ground 10.11 should be dismissed.

[516]

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'.
The following observations may be made.
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]
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.
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.
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.
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.
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.
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.
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.
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.
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]

[523]

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)

[543]

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.
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]
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]
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]
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]
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]
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]

[544]

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.
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.
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.
For these reasons, ground 11 fails.

At a glance

Court

Decision date

Before

Source

Judgment (703 paragraphs)

May 2010 - Mr Adam Davidson handover to Mr Aleksovski

June 2012 - Master Planned Communities document

June 2012 Report to Mirvac Board and Watch Lists

Mirvac internal emails dated 22 and 23 January 2013

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

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

25 July 2013 Project Control Group meeting minutes

Project Control Group meeting prior to 17 October 2013

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

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

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

September 2014 - BN's proposal to have meetings recorded

BN's notice alleging repudiation - 2 October 2014

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

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

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

The findings relevant to appeal grounds 1 and 2

The judge's findings relevant to appeal ground 3

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

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

Legislation Cited (3)

Cases Cited (6)