Bycon P/L v Moira Shire Council [1998] VSC 25

Supreme Court of Victoria|1998-08-11|Before: VINCENT, J.

The plaintiffs seek injunctive and declaratory relief against the first defendant, the practical effect of which would be to prevent the settlement of a contract of sale of certain Council property situated at Cobram to a company known as Nelread Pty. Ltd. ("Nelread").

The second defendant, who has been joined for what are essentially formal purposes, has played no part in the proceeding.

It is claimed that the first defendant has failed, with respect to the impugned transaction, to follow the relevant mandatory procedures under the Local Government Act 1989 (Vic.). This contention incorporates the assertion that there was a failure to accord procedural fairness to the plaintiff with respect to the relevant procedures and a related, but also discreet argument, that the Council had unlawfully fettered a discretion reposed in it under that Act.

More specifically, they claim that the Council had predetermined to sell the land involved to Nelread prior to the recognition of a need to implement the statutory procedures mentioned, and that the subsequent steps taken by the Council when the matter was brought to notice, including the receipt and purported consideration of submissions, were in effect "a sham" designed to conceal that it had not and did not intend to comply with its obligations.

The matter arises against the following broad factual background, which for the most part was not the subject of controversy in the proceeding.

The second and third plaintiffs in this proceeding, Allan and Carmel Byham, are husband and wife. Together with Mrs. Byham's brother, Peter Conti, they are the directors and shareholders of the first plaintiff, Bycon Pty Ltd. Bycon owns and operates the businesses of two independent supermarkets within North East Victoria, respectively located in Cobram and Yarrawonga.

In March 1996, a firm of property consultants, Burgess Rawson, which engages in the business of identifying suitable sites for the construction and selling or leasing of supermarket and related properties, made contact with the Commissioners, who at that stage were administering the affairs of the Moira Shire, through Mr. Neil Kerr, a real estate agent in Cobram. They indicated to the Commissioners that they were interested in finding a suitable site for the construction of a large supermarket in the area. One of three sites that they had in mind consisted of Lots 13 to 17 Punt Road, Cobram. Burgess Rawson intended to identify an appropriate location and would, if the land was available at a reasonable price, there were no other substantial planning or other obstacles to development, and the project was assessed as economically viable, approach a national operator to enter into an agreement to purchase or lease a supermarket to be constructed on the land according to the operator's requirements. Nelread was the corporate vehicle through which various necessary transactions would be carried out.

At that time, Lots 13, 14, 16 and 17 were privately owned. Lot 15 was owned by the Shire, and the Public Transport Corporation owned an adjacent block, Lot 18. Lots 14 and 16 had been on the market as vacant land for two years and, presumably, would be available. Lots 13 to 17 were zoned Business 1 Zone (Commercial) under the Moira Planning Scheme (local section). The proposed development could have proceeded under this zoning, but a planning permit would have been required and the proposal would have been subject to planning appeals procedures. No development of the kind contemplated would have been permitted on Lot 18, as it was zoned Public Purpose Reservation.

The concept was obviously very attractive to the Commissioners for a variety of reasons, including the prospect of attracting business and employment to the area. Consequently, throughout 1996, Shire officers and Burgess Rawson held discussions about the proposed development. They were likely to have been encouraged by the report of an urban and regional planner, in September 1996, who had been commissioned to conduct a retail strategy review and report on further appropriate retail development in Cobram. One of the conclusions of the report was that:

"The development of a full sized supermarket with a national operator would improve Cobram's retail competitiveness particularly in relation to the similar sized centres in the surrounding retail network. Consequently its catchment may expand and at the same time it would capture retail expenditure leaking from the catchment to other centres."

With respect to the approach of the Commissioner to the proposal, Mr. Peter Dudley, who was Director of Client Services with the Shire and whose role in the matter has assumed considerable importance in the proceeding, stated in evidence that it became obvious that they were very interested. The proposal was to remain confidential and he understood that his staff and he were to facilitate the process as best they could.

In August 1996, Burgess Rawson decided that the most suitable site for the proposed development was the area constituted by Lots 13, 14, 15, 16 and 17. They inquired of Neil Kerr as to the ownership, availability and asking price of the various parcels. In addition to Lots 14 and 16, which I have already mentioned were already on the market, Mr. Kerr advised Burgess Rawson and the Shire that Lot 17 was to be auctioned on 7 September 1996. The Commissioners resolved to purchase the Lot and, in due course, did so. That action, of itself, speaks eloquently of the strength of their interest at a very early stage.

Towards the end of the year, Burgess Rawson decided that the proposal was sufficiently advanced to gauge the interest of national supermarket chains in leasing or otherwise acquiring a supermarket to be developed in Cobram. Of the chains approached, the Safeway organisation showed the most interest. However, they apparently had concerns that unless additional land was made available for parking, the particular site would be unsuitable.

In January 1997, the Council was informed by Burgess Rawson that the development would be unable to proceed unless Lot 18 was available to accommodate this requirement. In consequence, Mr. Dudley who was, in the same month designated the "Action Officer" with respect to the project approached the Public Transport Corporation inquiring as to whether they would be interested in selling or leasing the block. I should add that Mr. Dudley, at that time, generally operated under the direction of and reported to the Shire Chief Executive Officer.

A favourable response was received and in a letter, dated 18 January 1997, Burgess Rawson informed Mr. Dudley that an offer from Safeway for a supermarket development at Lots 13 to 18 Punt Road, Cobram had been accepted and that the terms of the offer were being submitted to Woolworths' Board of Directors for formal approval. It was clear that in order for the development to proceed, Lot 18 would have to be re-zoned. In consequence, and to address the planning issue earlier mentioned, an amendment to the Moira Planning Scheme to re-zone Lots 13 to 18 to Business 1 Zone was prepared.

Whilst the development of the site in the fashion envisaged was obviously viewed very favourably by the Commissioners and it is apparent that both they and the subsequently elected Council were very eager to proceed with it, there is evidence that there was consciousness, at least on the part of Mr. Dudley, of the presence in the community of interest groups and individuals, including members of the Lions Club and the local historical society, that may have regarded the construction of a large supermarket at the particular location much less favourably. Against this background, Mr. Dudley prepared what he headed an "Issues Paper" and dated 19 March 1997 which referred to the need to "market" the proposal to allay the apprehensions of potential objectors.

I have little doubt that, by that time, Mr. Dudley regarded it as his responsibility and task to ensure that the development proceeded and, preferably, without serious objections being raised which could delay or result in its abandonment by the promoters, in the event that they decided that more favourable opportunities existed elsewhere.

The involvement of the Commissioners in the conduct of the affairs of the Shire concluded, in March 1997, when a new Council was elected. Thereafter Mr. Dudley reported to that body. There is nothing in the material before the Court which gives rise to the suggestion that the Councillors were any less enthusiastic about the proposal than the Commissioners had been and there were a number of indications that they adopted the same approach.

By June 1997, the proposed development of a Safeway supermarket in Punt Road, Cobram was announced and became well known throughout the local community. During the same month, the Council adopted a recommendation that it sell the portion of the site which it owned at valuation for the proposed development and that it purchase Lot 18 to enable the project to proceed.

The proposed amendment to the zoning of Lots 13 to 18 was exhibited, from 12 June 1997 to 14 July 1997. The documents available for inspection contained a layout plan of the elements of the development contemplated. Notice of the exhibition of the amendment was published in local newspapers, and the owners and occupiers of land in the adjacent area were directly notified.

The Council received 15 submissions in relation to the proposed amendment. Five of them opposed it for a variety of reasons; that it would result in a loss of public open space, that the location of the proposed supermarket was inappropriate and the possibility of adverse economic impact, whilst the majority supported its passage. A submission opposing the re-zoning was made on behalf of the owners and operators of Conti's Tuckerbag, (the plaintiffs). Significantly, in view of later assertions, no mention was made that they possessed any interest in developing the site themselves.

After considering the various submissions, the Council resolved at a meeting, on 28 July 1997, to request the Minister to appoint a Panel to consider the amendment. The Minister duly appointed a person to act as Chairman and sole member. The Panel's role was to hear and consider submissions in relation to the proposed amendment and to make appropriate recommendations to the Council.

A submission, supportive of the change, was prepared for the Council and was delivered to the Panel which conducted a hearing, at Cobram, on Wednesday 3 September 1997. As well as the Council's own submission, the 15 submissions lodged previously were referred to it for consideration. Nine parties appeared to present submissions, only two of whom representing the interests of the plaintiffs, opposed the amendment. The Panel reported that it:

"... recommends to Council that the amendment should proceed generally in the form exhibited, but varied to include words to the effect that (a defined party) must enter into an agreement with Council pursuant to section 173 of the Planning & Environment Act: such agreement to provide that, before any buildings or works are commenced on the site, existing buildings and facilities on the site should be relocated at no expense to, and to the satisfaction of, the responsible authority."

Council adopted this recommendation, on 13 October 1997.

The plaintiffs claim that they first became aware of the availability of the Council and railway land in Punt Road, Cobram when the amendment to the planning scheme was placed on exhibition, in mid June 1997, and that they immediately developed a strong interest in acquiring it. However, Mrs. Byham asserts that at a Council meeting convened in late August 1997, Mr. Dudley told persons present that the land "had been sold and there was nothing that anybody could do about it". She stated that, as a consequence of this utterance, the plaintiffs did not proceed to explore the possibility any further. Although it would seem that there were a number of people in the room at the time, there was no support in the evidence for Mrs. Byham's claim. Mr. Dudley denies making any such statement.

Mr. Byham stated, in relation to this alleged conversation, in an affidavit before the Court that:

"7. I am informed by my wife, the third plaintiff, that at a panel (rezoning) hearing in September 1997, Mr. Peter Dudley, Director of Client Services for the Council informed her (amongst others) that the land 'had been sold and there was nothing that anybody could do about it.' At that time the plaintiffs had expressed a strong interest to Council in acquiring the land, but subsequent to Mr. Dudley's statement did not then proceed with its interest."

However, he did not claim to have heard it himself.

Whilst Mrs. Byham, in her affidavit, asserted:

"3. I refer to paragraph 7 of my husband's affidavit. The statement there attributed to Mr. Dudley was made in the course of a meeting of Council convened in late August 1997, shortly prior to the panel hearing conducted into Amendment L19 on 3 September 1997. It was a meeting convened by Council to hear submissions from members of the local community as to the rezoning of the Council land in Punt Road proposed for a Safeway supermarket development. Both my husband and I were present at that meeting, as were other Councillors and members of the local community. Mr. Dudley made the statement referred to in paragraph 7 of my husband's affidavit in the course of general discussion to all those present at that meeting"

in the course of cross-examination, she resiled from this position, as the following extracts indicate:

"When you were giving your evidence you said that the statement that you attribute to Mr. Dudley to the effect that the land had been sold and there was nothing that could be done about it was made in a conversation at the end of the meeting?--- It was made in a conversation, yes. It wasn't a public statement at the meeting. ... Do you recall, was it a conversation between only you and him - you and Mr. Dudley?--- Could have been, yes. I was also inquiring about another matter. When you say it could have been, do you think there were other people who were engaged in the conversation?---Well, there were definitely other people in the room, but I don't know if they were privy to the conversation between Mr. Dudley and myself. ... How do you explain the very obvious inconsistency between that sentence and the evidence that you've just given?---What I tried to say in the course of the general discussion was that it wasn't a formal statement, if you like, it was an informal discussion. There were others there. So it was an informal general discussion to all those present?---Well, others were in the room yes."

I do not accept the evidence of Mrs. Byham as reliable with respect to the conversation alleged. However, I do accept that she believed that the land had been sold and that there was nothing which could be done about it.

In December 1997, the Council's solicitors were instructed to prepare draft contracts for the sale of Lots 15, 17 and 18 for submission to the developer's solicitors for consideration. Those drafts, in common with every other document produced before the Court and prepared to that time, it is to be noted, contained no reference to the requirements of s.189 of the Local Government Act. I consider that it is reasonable to infer, particularly in the absence of any indication to the contrary, that the provision was simply overlooked.

In her affidavit, Mrs. Byham states, and I accept her version on this point, that, in early January 1998, she telephoned Mr. Dudley and enquired as to whether the Council land in Punt Road had yet been sold. Mr. Dudley hesitated before he eventually replied "no, it hasn't". She then asked him whether the correct procedures under s.189 had been followed. She asserts, and I accept, that she first became aware of the relevance of this provision to the situation quite coincidentally and only very shortly prior to this conversation. It is highly likely on this information that she formed the view that what she had believed to be a fait accompli may have become challengeable. Mr. Dudley did not reply to her questioning and she told him that she wanted an answer within the next couple of days. Mr. Dudley called Mrs. Byham back, a few days later, and told her that, as a condition of the contract for the sale of the land, s.189 of the Local Government Act had to be satisfied.

Who was responsible for the failure to direct attention to s.189 before the matter reached such an advanced stage is unclear on the evidence, and in the absence of any evidence to suggest that deliberate non-compliance was intended, possibly not very significant, except insofar as it could be perceived to influence later conduct. In other words, it is necessary to have regard to the possibilities that the decision to proceed had been reached without reference to it and that a serious mistake having been made, endeavours were undertaken by those involved or the Council itself to ensure that the completion of the project was not delayed or prevented in consequence.

Against this background, the following communications between Burgess Rawson and Mr. Dudley are informative, with respect to their separate concerns and the level of Council commitment.

Burgess Rawson to Dudley (facsimile dated 15 January 1998):

"Your solicitor has advised our solicitor that under sec 189 of the LGA the Moira Shire must advertise for sale over 4 weeks Lots 15/17 & 18. We were unaware of this which will now cause a problem as over the 3 months this might take our options over the remainder of the site will expire. Also how can we be sure we will be successful at the prices already established? Please advise A.S.A.P."

Dudley to Burgess Rawson (letter dated 20 January 1998):

"Mr. Graeme Watson Burgess Rawson 8th Floor, 406 Collins Street MELBOURNE VIC. 3000. Dear Sir, Retail Development Punt Road, Cobram I refer to our recent verbal discussion and your concern in relation to the delay in finalising the arrangements between Council, Vic Track and yourself. I would like to confirm Council position of its continuing support for this development and we also share your concerns with regard to the delays. However, please be assured that Council has been and will continue to be active in having this matter resolved.

(My emphasis) As you are aware Council finally received the report on the rezoning from the Panel on 6 October 1997. The recommendation from the Chairperson Mr. Michael Read was altered slightly and adopted by Council at its meeting of 13 October 1997. Council's report and recommendation was forwarded to the Minister for approval on 15 October 1997, the Minister gazetted the rezoning in the Government Gazette on 4 December 1997. Council's solicitors had been requested to commence preparation of the contracts between Vic Track (PTC) and Council, and Council and Nelread immediately upon receiving the recommendation from the Panel in anticipation of the gazettal. Some difficulty has arisen as a result of the PTC non metropolitan assets being transferred to a newly corporatised Victorian Rail Track (Vic Track) group. Vic Track have a policy of not selling any of its assets, accordingly it required much discussion between the PTC, Vic Track and ourselves to resolve the issue. This parcel of land, being lot 18 will be the first sale of an asset by Vic Track and it is causing them some heart burn. However, they have agreed and we are now working with the Victorian Government Property Group (VGPG) to have the contracts finalised. Both Vic Track and VGPG are aware that the deadline Council is working towards is 31 January 1998. They have indicated that that date is achievable. As late as today our solicitors have been having discussions with VGPG and we are even more confident of having contracts ready for signing before the end of the month. The other issue which has only been discussed in recent times is Section 189 of the Local Government Act (see attached). The section requires Council to give 'Public notice of intention', to sell land, this notice is to be given at least four (4) weeks prior to selling. Council has been advised that in the case of the Vic Track land, being lot 18 that notice cannot be given until it actually owns the parcel. Therefore, it would be premature to advertise Council owned land, being lot 15 and 17, until we own lot 18 as they are all linked together. Therefore, our solicitor has suggested we make the contracts conditioned on the Section 189 process. To reiterate, we are still working vigorously towards having documentation ready before the end of January 1998. Please do not hesitate to contact me should you require any further information. Yours faithfully Peter R. Dudley Director Client Services."

Due to their perception that the Council may not have followed the proper statutory procedures in relation to the sale of the land, the plaintiffs who certainly did not want the project to proceed, instructed solicitors to make formal enquiries as to the process that had been adopted. Rogers & Gaylard, the firm so engaged, sent a letter, dated 27 January 1998, to the Council requesting information on behalf of unidentified clients who were interested in acquiring the land.

On 30 January 1998, Mrs. Byham wrote to the Property Manager of DTZ Debenham International Vic. Pty. Ltd., the managers of the railway property, expressing an interest in Lot 18. The letter indicated that Mr. and Mrs. Byham wanted to acquire the land so as to set up a centre for local tours taking in an area from the river port of Echuca through to the wine area of Rutherglen. It does not appear that they expressed any such interest to the Council or at any earlier time and I have formed the strong impression that this proposal was an opportunistic response to the perception that the supermarket development could be thwarted.

On 2 February 1998, the Council held another meeting at which it resolved:

"1. That subject to Council's solicitor, Riordan & Partners and the Chief Executive Officer being satisfied tha tthe fine tuning of the two contracts does not materially change the contracts intent, that Council:

(a) sign and seal the contract of sale (Lot 18, LP216901W) between the Victorian Rail Track and the Moira Shire Council in the amount of $202,000 with a 10% deposit with settlement at 60 days or upon saatisfactory completion of the special conditions of that contract; and

(b) sign and seal the contract of sale being Lot 18, 15 and 17, LP216901W, Punt Road Cobram to Nelread Pty Ltd in the amount of $467,000 with a 10% deposit and settlement being the day upon which the special conditions are met.

2. That Council advertise its intention to sell Lots 15, 17 and 18 of Lodged Plan 216901W, Punt Road Cobram in accordance with section 189 of the Local Government Act; and

3. That Council hear any submissions that may be made as part of the advertising process in accordance with section 223 of the Local Government Act."

On February 3 and 4, the Council placed notices in two local newspapers advertising its intention to sell the land, pursuant to s.189 of the Local Government Act.

As the plaintiffs solicitors had not yet received a reply to their letter of 27 January, they wrote a further letter, dated 9 February, to the Moira Shire Council requesting information in relation to the sale of Lots 15, 17 and 18 Punt Road. This letter appears to have crossed with a letter from the Chief Executive Officer of the Council to the plaintiffs' solicitors which stated that the Council had not finalised any sale of the land.

Further correspondence passed between the parties in February and March. In response to questions from the plaintiffs in relation to the proposed sale, the Council on each occasion, indicated that it was conditional upon compliance with the provisions of the Local Government Act.

On 10 March 1998, the parts of a contract of sale for the purchase of Lot 18 by the Council from Victorian Rail Track were exchanged. On 17 March 1998, the Council entered into a contract of sale with Nelread for the sale of Lots 15, 17 and 18. That contract was expressed to be conditional upon compliance with the relevant Local Government Act provisions.

The Council convened a meeting at the Nathalia Service Centre, on 23 March 1998, for the purpose of hearing submissions from any person who wished to make an oral presentation in respect of the Council's intention to sell Lots 15, 17 and 18. The plaintiffs availed themselves of this opportunity, arguing that it should not proceed. After hearing all submissions, the Council resolved to reserve its decision on whether or not the sale should be effected, until after a special meeting was conducted, on 14 April 1998 at which the report of Council officers and any further submissions would be presented.

Mr. Byham was the only person who took the opportunity to address this meeting which was duly held. It is noteworthy that no representative of either Burgess Rawson or Nelread was in attendance. I am satisfied that they regarded the process as a mere formality which did not threaten the project and accordingly did not necessitate their involvement. In due course, the Council resolved as follows:

"That Council after considering both verbal and written submissions made under s 223 of the Local Government Act 1989 resolve to sell to Nelread Pty Ltd Lots 15, 17 and 18 of lodged plan 216901W Punt Road, Cobram."

It is the validity of this decision which the plaintiffs seek to impugn in this Court.

(1) Except where section 181 or 191 applies, if a Council sells or exchangs any land it must comply with this section.

(2) Before selling or exchanging the land the Council must -

(a) ensure that public notice of intention to do so is given at least 4 weeks prior to selling or exchanging the land; and

(b) obtain from a person who holds the qualifications or experience specified under section 13DA (1A) of the Valuation of Land Act 1960 a valuation of the land which is made not more than 6 months prior to the sale or exchange.

(3) A person has a right to make a submission under section 223 on the proposed sale or exchange."

(1) If a Council has acquired any land for a particular purpose the Council may use the land or part of the land for another purpose if the Council is satisfied that -

(a) the land or part of the land is not required by the Council for the purpose for which it was acquired; or

(b) it is no longer necessary or desirable to use the land or part of the land for the purpose for which it was acquired.

(2) A person has a right to make a submission under s 223 on the use of any land for another purpose.

"223. Right to make submission (1) The following provisions apply if a person is given a right to make a submission under this section (whether under this or any other Act) to the Council -

(a) the Council must publish a public notice stating that submissions in respect of the matter specified in the public notice will be considered in accordance with this section;

(b) the Council or where the Council so determines a committee of the Council must consider any written submission which is received by the Council within 14 days after the publication of the public notice stating that submissions will be considered in accordance with this section;

(c) any person who has made a written submission to the Council and requested that he or she be heard in support of the written submission is entitled to appear in person or by a person acting on his or her behalf before a meeting of the Council or the committee;

(d) the Council must -

(i) fix the day, time and place of the meeting referred to in paragraph (c); and

(ii) give reasonable notice of the day, time and place of that meeting to every person who has lodged a separate submission and in the case of a submission lodged on behalf of a number of persons, to the person specified in the submission as the person to whom notice is to be given;

(e) the Council must take into consideration all the submissions made under this section and after it has made a decision must notify in writing every person who has lodged a separate submission and in the case of a submission lodged on behalf of of a number of persons, notify in writing 1 of those persons, of the decision and the reasons for the decision.

(2) If a proposal by the Council involves the exercise of powers at the same time under more than one section giving a right to make a submission and written submissions are received under more than 1 of those sections the submission procedure may be carried out in respect of all the written submissions at the same time.

(3) Despite section 98, a Council may authorise the appropriate members of Council staff to carry out administrative procedures necessary to enable the Council to carry out its functions under this section."

The plaintiffs contend that, it is evident from the history of the matter and, indeed, from a very early stage in the evolution of the proposal for the construction of a supermarket on the site, that the Commissioners, the Council, and Mr. Dudley who was heavily involved in the process throughout, were determined to proceed with it. In their enthusiasm, they totally overlooked or disregarded the statutory obligations which existed to ensure that proper account was taken of the multifarious public and private interests which may be affected before a disposal of public land could be effected, the argument proceeded.

When, eventually the failure to comply with the relevant sections of the Local Government Act, even in a formal fashion, was drawn to attention by Mrs. Byham, it is said, a ritual of compliance was undertaken which any objective viewer would regard as a total sham.

In this context, the first point made, on behalf of the plaintiffs, in their written submissions is that when the matter was finally presented before the Council, on 14 April 1987, it was provided by Mr. Dudley with a two page document, the first page of which was headed "Reasons for supporting the recommendation to sell to Nelread Pty. Ltd." That document reads as follows:

"1. The proposed development will lead to a substantial increase in trade for the Cobram Centre and provide substantial opportunities for other retailers to capture custom. 2. The proposed site is more suitable than other sites taking into account exposure, traffic access, site availability and location with respect to the other shops in the vicinity. 3. By supporting the proposal, Council will be sending positive messages to potential developers to shop in Moira. 4. Employment opportunities will be enhanced and Council's rate base expanded. 5. Inevitable that an extra supermarket will come to Cobram and this site will avoid potential fragmentation of the retail sector. 6. The number and types of submissions supporting this proposal are not typical of this process and clearly demonstrate wide community support. 7. The Council and Cobram community will have access to a fully developed public carpark which satisfies the original intent of purchasing the land by the former Shire of Cobram. 8. Council believes that the procedures as set out by the Local Government Act have been followed and that ratepayers and the community have had a number of opportunities to be heard. 9. Council has previously resolved to transfer the monies from the sale of Lots 15 and 17 to Council's Recreation Land Fund which will allow the purchase of open space in the vicinity to offset the loss of Lot 18. 10. As part of the planning permit (TP98/1052, 54 conditions) the developer is required to meet all cost associated with the development including road works and the relocation of all community assets (ie. Log Cabin, playground, etc.) all to the satisfaction of Council. 11. Councils have always held confidential discussions with potential developers and where appropriate, sold land by private treaty to that developer where it can be demonstrated that the development would have wider community benefit."

By contrast, page 2, headed "Reason for not selling Lots 18, 15 and 17" reads:

"1. That after considering all submissions both verbal and written, that Council does not believe that the ratepayers of Moira Shire will receive a benefit by selling Lots 15, 18 and 17."

I adverted to the obvious difference in approach in the following passage:

"HIS HONOUR: Mr. Dudley, if you were presented totally independently of this particular operation with this document and you saw that the person who had written it had prepared 11 reasons for one side and almost a non-reason on the other, you could be forgiven for thinking that he really wasn't serious about it, couldn't you?---I understand what you are saying, Your Honour, yes."

There can be little doubt that Mr. Dudley who had been working on the project for approximately two years by that time, was deeply committed to completing successfully the task which he perceived had been allotted to him. He did not ever pretend to put the choices before the Council in an even handed fashion and when asked about it in the witness box, seemed to accept that this was so. It is noteworthy that there is no suggestion in the material that the approach of Mr. Dudley was the subject of any comment by the Council.

It is clear that throughout the process he was operating in a structured relationship with his superior in the Shire staff hierarchy and the Commissioners and Council in turn. There is no reason to suppose that his conduct represented his personal views of the desirability of the project independently of the conscientious performance of his duties as a Shire employee or that he was doing other than implementing the instructions given to him.

I accept the contention of the plaintiffs that compliance with the provisions of s.189 in circumstances to which it is applicable is mandatory, noting in passing that until the passage of amending legislation in 1983 the consent of the Governor in Council was required for such sales. I also accept that, when exercising the judgments and discretions involved in such compliance, the Council must have regard to the statutory purposes set out in ss.6-8 of the Act. In other words, the powers and duties of a local government body, are in this context as they are generally, governed by the purposes for which the body has been established. I do not think that it is necessary in the present case where neither of these propositions has been challenged to provide an elaborate analysis of either the statutory structures upon which they are based or the various legal authorities in which those structures have been considered.

I accept that it would be quite inconsistent, both as a matter of law and common sense, with the proper operation of ss.189 and s.223 of the Act for the processes to be rendered illusory by reason of prejudgment or bias by the decision makers. The test to be applied when considering whether prejudgment may have occurred was enunciated in Old St. Boniface Residents Association Inc. v. City of Winnipeg et al (1990) 75 D.L.R. (4th) 385 by Sopinka, J. as follows:

"In my opinion, the test that is consistent with the functions of a municipal Councillor and enables him or her to carry out the political and legislative duties entrusted to the Council is one which requires that the objectors or supporters be heard by members of Council who are capable of being persuaded. The legislature could not have intended to have a hearing before a body who have already made a decision which is irreversible. The party alleging disqualifying bias must establish that there is a prejudgment of the matter, in fact, to the extent that any representations at variance with the view, which has been adopted, would be futile." (at 409)

More recently, Zeeman, J. in R. v. Westcoast Council; ex parte Strahan Motor Inn [1995] TASSC 47; (1995) 4 Tas.R. 411, whilst observing that he was confronted with a quite different issue to that before the Court in the Old Boniface case specifically adopted remarks of Sopinka, J. on this aspect.

Whether the inference of prejudgment can be properly drawn in a given case is dependent upon the totality of the circumstances. It is not shown to exist simply because the members of a Council, possibly reflective of the broad view of the affected community, perceive real advantages in adopting one course rather than another. Nor is the inference excluded simply by the presence of a provision in a contract that it is conditional upon compliance with the necessary statutory objections. ( See Steeples v. Derbyshire County Council [1985] 1 W.L.R. 256; Lower Hutt City Council v. Bank [1974] 1 N.Z.L.R. 545; R. v. City of Marion; ex parte Independent Grocers Co-Operative Ltd. & Ors. (No. 2) (1984) 37 S.A.S.R. 436).

The courts have repeatedly indicated that the question is one of fact, objectively assessed and bearing in mind that, when concepts of natural justice and objective perception operate in the local government area, it must be anticipated that appointed Commissioners or directly elected representatives would develop views about the desirability of particular types of developments or business or industrial activities proposed within the area which they have undertaken to serve. (See R. v. City of Whyalla; ex parte Kittel & Ors. (1979) 20 S.A.S.R. 386 per King, C.J. at 389-393, per Willis, J. at 397 and 400; Happy Valley Shopping Centre Pty. Ltd. & Anor. v. District Council of Meadows (1981) 27 S.A.S.R. 117 per King, J. at 119, per Zelling, J. at 130-131 and per Mohr, J. at 137-139; R. v. Sevenoaks District Council; ex parte Terry (1985) 3 All E.R. 226 at 229-233; R. v. St. Edmundsbury Borough Council (1985) 1 W.L.R. 1168 at 1187-1195; Steeples v. Derbyshire County Council (1985) 1 W.L.R. 256 at 285-290). The very nature of the responsibilities which they have accepted ultimately must involve some such assessment being made. However, in the process they can be expected to have regard in a proper fashion to a range of competing values and perspectives and to approach the choices which may have to be made with open minds.

In the present case, the contention has been advanced on behalf of the plaintiffs that this "is not a case of policy expression or legitimate political views" of the kind considered in some of the authorities, but one of "demonstrable" prejudgment. It is asserted that there is a "plethora" of evidence to support this claim which is said to be so strong that one could hardly find a more powerful one. Drawing on passages from the judgments of Zelling, J. in R. v. City of Marion; ex parte Independent Grocers Co-Operative Ltd. & Ors. (No. 2) (supra) and the Happy Valley case (supra) (inter alia), the plaintiffs correctly argue, in my opinion, that:

"To establish Council pre-determination, it is not necessary to prove actual bias by direct evidence: it is sufficient to demonstrate that it would appear to a right thinking person that the Authority is no longer able to discharge its statutory duty with fairness."

They summarise the evidence upon which they rely as follows:

"(i) On or about 21 June 1996 a meeting occurred at the Cobram Shire Offices of the Council concerning a proposed supermarket development in Punt Road, Cobram. Present at the meeting were Messrs. N. Kerr, Local Real Estate Agent in Cobram, Mr. G.Watson of Burgess Rawson & Associates Pty. Ltd. and Council representatives including Mr. P. Dudley, who at all relevant times had conduct of the Safeway supermarket development and petrol filling station on behalf of the Council and with full authority of the Council. Contemporaneous with the meeting of the Cobram Shire Officers is a file note in the hand of Mr. Dudley in which Council's predisposition to 'ast track' the supermarket development is clearly demonstrated, inter alia, the Council acting as a facilitator in the use of Lot 18 as car parking, redesign an extension of Gillon Street and a projected time frame for construction and occupancy by Christmas 1997;

(ii) On or about 7 September 1996 Lot 17 was purchased by the Council to increase the area of car parking adjoining Lot 15 and in turn to facilitate the overall development of the Safeway supermarket and petrol filling station;

(iii) Handwritten annotation by Mr. Dudley to letter dated 8 August 1996 from Mr. Kerr to the Chief Executive Officer of the Council, inter alia, 'The property in question (Lot 17) was owned by Ralph and he has $79,000 on it. John Eccles has valued it at $68,000. Neil Kerr believes Ralph may take $70,000. Graham Watson would pay $78,000 in car parking reserve.'

(iv) Contrary to the annotation in (iii) Lot 15 was purchased by the Council in 1990 specifically for the purpose of a public car park for the people of Cobram and from the specified fund;

(v) Notes of Informal Meeting of Commissioners in Tungamah 4 November 1996, Item 11 p.5.

The following report from Economic Development Officer, Kerry-Anne Jones, was considered by the Commissioners:

The Economic Development Officer met with Graeme Watson of Burgess Rawson, 15 October 1996, seeking information about the progress of the proposed supermarket development and was advised that:

* Negotiations are still continuing, with Safeway the preferred client, however staff changes within Safeway senior management has delayed negotiations.

* Burgess Rawson are confident that the proposal will still proceed, however, any development is unlikely within the next 6 months.

* An option being considered is the relocation of Conti's Supermarket to the new site with the view of attracting Fosseys to the existing Conti site. I assume Neil Kerr has facilitated this proposal.

* A copy of the Consultant's report on the Cobram Retail Sector is attached for your information and consideration. Graeme Watson was delighted with the report and additional copies have been forwarded to Graeme upon his request.'

(vi) Lot 18 was sought to be acquired by the council specifically to facilitate the Safeway development. (See Transcript p.403) Mr. Jones to Mr. Watson:

'I'd like to take you to a number of those documents, preliminary documents, but before doing so could you please explain the nature of why lot 18 was required and when did that matter of the relevance of lot 18 come into being? --- Towards the end of 1996, I believe, the reason being, was that Safeway felt that without lot 18 the site was not sufficiently large enough to accommodate a supermarket of the size that they required and the parking they'd like to see.'

'The reality of life was that as long ago perhaps as January of 1997, perhaps if not earlier, it was realised that lot 18 was integral to the achievement of this development project? --- Yes, certainly.'

(viii) By letter 6 January 1997 from Burgess Rawson to Mr. R.James, C.E.O., Moira Shire Council, Mr. Watson confirmed his suggestion as to relocating the historic log cabin in order to facilitate the supermarket development and advice sought regarding the Gillon Street extension;

(ix) By letter dated 10 January 1997 Mr. Dudley on behalf of the Council sought advice from Mr. G. Sheridan of the Public Transport Corporation as to the availability of Lot 18 in the context of its purpose to be used as a car park for the Safeway supermarket development;

(x) By undated memorandum in or about January 1997 headed 'Strictly Confidential' produced by the C.E.O., (Mr. James), Council detailed a meeting with representatives of Burgess Rawson and others on 21 June 1996, thereafter setting forth events to facilitate the development of the Safeway supermarket on Lots 13 to 17 and to facilitate purchase and sale of Lot 18 to be used as a car park for the development with briefing advice to the Council as to contentious matters, inter alia, community reaction to the proposed supermarket development and Council's need to deal with community reaction in a 'sensitive way';

(xi) By letter dated 18 January 1997 Mr. Watson informed Mr. Dudley that Safeway's offer of a supermarket development on Lots 13 to 18 would be submitted to Woolworths' Board of Directors at its meeting on 11 April 1997;

(xii) By facsimile dated 16 January 1997 from Mr. Dudley to Mr. L. Goudie of Goulburn Valley Water regarding the provision of drainage and sewerage facilities and the realignment of an easement on the subject land to references made in the memorandum and in longhand, inter alia, This project is very confidential. Thank you, Les.11;

(xiii) Transcript (T/C p.276). Admission by Mr. Dudley that he had been instructed by the Commissioners and the CEO that the proposed Safeway supermarket development was to be kept confidential until the statutory processes were put in train.

(xiv) Transcript (T/C p.308-309) Mr. Southall to Mr. Dudley:

'I put it to you that the reason why you wanted to protect the confidentiality of the project was to maintain the integrity of the project and to ensure that it was successful at the early stage. Do you agree with that? --- I don't agree with the last part of it but I certainly do with the first part of it. To ensure, I put it to you, that the project would be subject to no community dissent and no community discussion until such time as the Commissioners or the Council deemed it appropriate for that purpose. That's a fair comment, isn't it? --- I think so, yes.'

(xv) Transcript (T/C pp.310-311) Mr. Southall to Mr.Dudley:

'Was there an oral agreement? --- Certainly the fact that the Commissioners have indicated that it was confidential, certainly that at that particular stage we were dealing with this one developer. You think that constituted an oral agreement, do you?--- Well, it had been made quite clear that we were to assist with this particular developer in putting a proposal together. By whom was that stated - by whom in reference to your last question? --- The Commissioners and the Councillors. The Commissioners and the Councillors? --- Yes.'

(xvi) Exhibit 'P', Notes of Informal Meeting of Commissioners in Tungamah, 3 February 1997. Item 1.5 'Commissioner Noonan expressed concern that details of the proposed Safeway supermarket development have been leaked from the Cobram office. Peter Dudley to follow this matter up. He also advised that the relocation of the log cabin, to accommodate the development, may create some major concerns with the public.'

(xvii) Two Council file notes dated 26 and 27 February 1997 respectively, inter alia, demonstrate the degree of detail as to communiques between the Council and Burgess Rawson and are demonstrative of agreement in principal between the Council and Burgess Rawson for the construction of a supermarket development;

(xviii) By letter dated 11 March 1997 Mr. G. Watson of Burgess Rawson outlined to Mr. Dudley on behalf of the Council a detailed list of requirements in standard form requisite of what a supermarket chain would require from its dealings with a Council for a supermarket development;

(xix) File note of Mr. Dudley dated 17 March 1997 demonstrative of Council's complicity with Burgess Rawson to facilitate a Safeway supermarket development and in particular, inter alia, 'John Eccles, Council's Valuer, has revalued sites of Lots 15 and 17, Punt Road, Cobram, as a result of a request by Graham Watson.';

(xx) Transcript (T/C p.289) His Honour to Mr. Dudley:

'Is the situation this, Mr. Dudley: that it became clear that the Commissioners were very interested in this process; it was confidential; you were to facilitate it as best you could? --- Yes, Your Honour.'

(xxi) In or about mid March 1997 the newly elected Council was briefed by the C.E.O. (James) and Mr. Dudley as to the proposed development; as a consequence of the briefing the Council adopted the prior acts and conduct of the Commissioners, the C.E.O. and Mr. Dudley in respect of the Council's endorsement of the proposed development and subsequently, by resolution of 10 June, resolved to proceed with the sale of Council land and draw up appropriate agreements;

(xxii) File note of Mr. Dudley dated 19 March 1997 demonstrative of the complicity of Council to facilitate the development of a Safeway supermarket on the land and suggested options in dealing with the sensitivity and marketing of the development with the public; file note indicates Council's intention of 'selling the fact that it is Council's intention to purchase additional P.O.S.'

(xxiii) Transcript (T/C p.292) His Honour to Mr. Dudley:

'So what else was there? There were the issues raised with the Historical Society and the Lions Club. There was the issue raised with respect to the rezoning, and there was the issue raised with respect to s.189. Otherwise it was all steam ahead, was it? --- Sounds a bit too simple, but yes, it's a good summary of it I believe.'

(xxiv) Exhibit 'R': Councillor briefing session background notes, 24/25 March 1997:

To brief the Councillors on major developments that are proposed and the implications for Council.

From time to time, major developments are proposed which require careful planning, negotiation and confidentiality.

Two such developments are being negotiated at this time, both of which have involved the Commissioners and the Chief Executive Officer.

Some commitments have been made which will have future budgetary implications and there are also some sensitive community issues which will have to be resolved.

No community consultation has taken place due to the commercial in confidence nature of the proposals.

Financial commitments have been made by the Commissioners and the Chief Executive Officer which will have future budgetary implications.

Council is facilitating the developments by assisting in amendments to the planning scheme and in designing and providing infrastructure.

In addition, commitments have been made in relation to future rate concessions.

Both proposals will result in significant additional employment opportunities.

One of the developments could result in community disquiet due to the perceived loss of community amenities. This will have to be very sensitively handled.

(xxv) By letter dated 28 March 1997 from Burgess Rawson to the Council whose detailed communique regarding the price to be paid for Lot 18 and reference to the suppositions upon which Council's valuation is made having regard to site contingencies, inter alia, relocation of the log cabin from Lot 18, the cost of removal of significant trees and a time delay in achieving the rezoning of the land to facilitate the supermarket development;

(xxvi) File note of 21 May 1997 by Mr. Dudley indicative of furtive behaviour in response to enquiries by a Planning Consultant, Mr. Stokes, then demonstrative of the Council by its officer forming a view regarding enquiries by the public, inter alia, 'I am suspicious of his motives'; file note indicates 'we had agreements on Council land.'

(xxvii) By letter dated 4 June 1997 from Mr. Dudley to Ms A. Brockhurst, Victorian Government Property Group discussing ways in which the purchase of Lot 18 can be marketed to the public and ratepayers of the Shire, inter alia, 'The marketing of the purchase', not the marketing of the land, but the marketing of the idea of its purchase '... which is perceived in the community as public open space...';

(xxviii)The publication and first announcement to the public regarding the Safeway supermarket development on the land is evidenced in a newspaper article in a local newspaper on 4 June 1997 referred to in paragraph 9 of the affidavit of P. Dudley, May 1998, being Exhibit 'PRD4' wherein attributed Mr. Rawson of Burgess Rawson states: 'If all legal requirements were met then the developers would be in a position to move by November [1997]. It is quite a significant development';

(xxix) Council's resolution of 10 June 1997 endorsing in principle the proposal to sell the Council land ... to Nelread and to purchase the railway land from the PTC ... and that appropriate agreements be drawn up;

(xxx) By letters dated 17 and 18 June 1997 from Burgess Rawson to the Council negotiations ensue regarding the settlement of contracts for the sale of the Council land by 31 December 1997, evidence, inter alia, 'Accordingly, the format of the contracts of sale with Moira Shire will need to reflect the 31 December date in the above conditions.' ... 'In addition, upon the above conditions being met, Nelread would pay a 5% deposit and the balance upon completion of construction'. And by letter dated 18 June 1997 from Burgess Rawson to Mr. Dudley, inter alia, 'We understand the Town Planning process is well under way and ... the outcome is relatively clear';

(xxxi) By letter dated 26 June 1997 from Mr. Dudley to Burgess Rawson in response to the letters of 17 and 18 June 1997 from Burgess Rawson to Dudley, Council's predetermination of its meeting of 18 July 1997 is evidenced and in describing the planning process Mr. Dudley states, ' ... Subject to the success of the above, Council would request the minister to appoint a panel. The department has already been placed on notice so the panel procedure is already well underway.' And ' ... The zoning proposed does not allow any third party appeals against the planning permit for the development ...'. And 'One of the most crucial steps of the process which may gain us considerable time is the negotiations upon receipt of the submissions with the submitters ...';

(xxxii) Letter dated 30 June 1997 from Burgess Rawson to Mr. Dudley is evidence, inter alia, of the way in which to 'deal' with submissions regarding the town planning process in order to expedite the development of the land as a Safeway supermarket;

(xxxiii)At its meeting on 23 July 1997 the third plaintiff is informed by Mr. Dudley on behalf of the Council, inter alia, "The land had been sold and there is nothing anyone can do about it.". (Paragraph 4 of Carmel Byham affidavit sworn 6 May 1998);

(xxxiv)By letter dated 15 October 1997 from the Council to the Minister for Planning and Local Government requesting approval of Am. L19 the Council expresses its view regarding the suitability of the land for commercial development and evidence of some degree of urgency regarding approval of the amendment, inter alia, 'In order to expedite the matter the Council is sending in a $670 fee for the approval of the amendment...';

(xxxv) By letter dated 1 October 1997 from Mr. Dudley on behalf of the Council to Mr. P. Stamps in reply to Mr. Stamps' letter of 9 September 1997, Mr. Dudley on behalf of the Council acknowledges that by 1 October 1997 the Council had instructed its solicitors, Messrs. Riordan & Partners to prepare contracts for the sale of Lots 15 and 17 and the purchase of Lot 18 ... See the affidavit of Philip Stamps sworn 21 May 1998 and in particular Exhibit 'PJS5'. This is contrary to the affidavit of Peter Dudley sworn May 1998 and in particular paragraph 19 of page 8 '... In December 1997 Council's solicitors were instructed to prepare draft contracts for the sale of Lots 15, 17 and 18 ...';

(xxxvi) Instructions given to Messrs. Riordans to prepare contracts for sale of land on or about the time of receiving the Panel Report of Mr. Read on 3 October 1997;

(xxxvii) Draft contracts of sale prepared in about November and December 1997 without reference to the special condition, inter alia, ss.189, 223 and 192 statutory processes;

(xxxviii)Transcript (T/C p.346) Mr. Southall to Mr. Dudley:

'Even before you go the report of Mr. Read, you were sending out instructions to Messrs. Riordans to prepare the contracts. Is that correct? --- In and around that time. As I understand it, those instructions went out before you formally received the panel report of Mr. Read? --- That's quite possible, yes. Indicating an eagerness on yours and the Council's part to have this matter expedited by the preparation of contracts for sale of the relevant lots? You would have to accept that? --- Certainly to start preparing the documentation in anticipation of the gazettal, yes. But it wasn't in anticipation of the gazettal which occurred on 4 December, it was in anticipation of getting Mr. Read's favourable report, wasn't it? -- We had a good understanding at that stage that the report was going to be favourable. But you didn't wait for it; you just said to Riordans, 'Go for it'? --- I rang Riordans and indicated to them that it appeared that the recommendation would be favourable and I at that stage was reasonably conscious of 31 December.'

(xxxix)There is no document, contract, draft contract or memoranda prior to 14 January 1998 evidencing an awareness or intention by Council of its obligations under ss.189, 192 or 223 of the Local Government Act.

(xl) On or about 5 January 1998 the third plaintiff telephoned Mr. Dudley adverting Mr. Dudley to the requirements of s.189 of the Act (see the affidavit of Carmel Byham sworn 6 May 1998 and in particular paragraphs 6 and 7, the affidavit of Peter Dudley sworn May 1998 and in particular paragraph 20 and further Exhibit 'PRD11' to the said affidavit;

(xli) On 7 January 1998 Mr. Dudley telephones the third plaintiff and informs her that contracts of sale would be conditional and comply with s.189 of the Act (see the affidavit of Carmel Byham sworn 6 May 1998 at paragraph 7);

(xlii) By letter dated 14 January 1998 Riordan & Partners, solicitors for the Council, correspond with Wisewoulds, solicitors for Nelread, as to the form and conditions of the contracts of sale;

(xliii) By facsimile dated 15 January 1998 Mr. Watson of Burgess Rawson informs Mr. Dudley on behalf of the Council he is unaware of the s.189 requirements as evidence, inter alia, 'How can we be sure we will be successful at the prices already established?';

(xliv) MD31 facsimile from Mr. Watson to Mr. Dudley dated 15 January 1998, (T/C p.365) Mr. Southall to Mr. Dudley:

'Did you discuss in your statement, 'How can we be sure we will be successful if the price was already established? Please advise as soon as possible?' -- No, I didn't. What did you understand him to mean by that statement? --- He was wanting some guarantees in relation to the process. Which process? --- The 189 process.'

(xlv) By letter dated 20 January 1998 from Mr. Dudley on behalf of the Council to Mr. Watson of Burgess Rawson, the Council evidences its expedition in order to execute the contracts of sale by 31 January 1998: 'Council working towards deadline of 31 January 1998 ...';

(xlvi) By letter from Mr. Dudley on behalf of the Council to the Department of Treasury and Finance (Mr. B. Dee), inter alia, statutory procedures ...'... will take place once Council owns Lot 18 and will be advertised along with two other parcels of land owned by Council which also forms part of this development ...';

(xlvii) By resolution dated 2 February 1998, at a resolution of the special meeting of the Council held in camera Council resolves to 'sign and seal' contracts of sale of Lots 15 and 17 and contract to purchase Lot 18 from the Public Transport Corporation. Contemporaneously Council purportedly resolved to hear submissions under s.223 of the Act;

(xlviii) By public notices pursuant to s.189 of the Act placed in local newspapers Council advertises the sale of Lots 15, 17 and 18 (still owned by the PTC) (see affidavit of Allan Byham sworn 23 April 1998 and in particular paragraphs 11 and 12 and Exhibits 'AB7' and 'AB8';

(xlix) By article in the 'Cobram Courier' published 4 February 1998 and in particular an article entitled 'sealed', it is published 'Moira Shire Council as on Monday agreed to sign and seal documents related to the Safeway development in Cobram. The development is expected to proceed subject to a number of conditions including the Council advertising its intention to sell the land, under law the committee has then fourteen days to respond to the written submission and councillors will consider those submissions...';

(l) By letter dated 9 February 1998 the plaintiff's solicitors, Rogers & Gaylard correspond with the Council and object to the procedure adopted by Council as evidence, inter alia, '... The sale appears to be a fait accompli...';

(li) By letter dated 9 February 1998 the authorised officer of the Council informed the plaintiff's solicitors, inter alia:

'(a) The Council desired to sell the Council land and the railway land to Nelread on condition that the Safeway supermarket and petrol filling station be developed on the land;

(b) That public notice of Council's intention to sell the Council land and the railway land appeared in a local newspaper 'Moira Matters' on 4 February 1998; and

(c) The Council would contract with Nelread that the contract for the sale of the land between the Council and Nelread would be conditional upon the Council complying with s.223 of the Act and resolving at the completion of the requirements of s.223 of the Act that it is appropriate to sell the Council land and railway land to Nelread';

(lii) By a letter dated 12 February 1998 the plaintiffs object to the Notice of Intention to sell the Council land and the railway land;

(liii) By letter dated 18 February 1998 the plaintiff's solicitors, Rogers & Gaylard correspond with the Council by its C.E.O. evidencing procedural irregularities by the Council by reason of its resolution at its special council meeting on 2 February 1998 and its purported intention to sell the land pursuant to s.189 of the Act as advertised on 4 February 1998;

(liv) By letter dated 20 February 1998 the third plaintiff corresponds with the Council's C.E.O., Mr. Cator, seeking resolutions of Council's special meeting on 2 February 1998 and a copy of the contract for the proposed sale of land which was refused. The third plaintiff asserts the plaintiffs have been denied natural justice as evidenced in the refusal by the Council to provide information required for the plaintiff to prepare their submissions in accordance with the Notices of Intention to sell the land;

(1v) By letter dated 24 February 1998 the third plaintiff corresponds with the Ombudsman regarding the procedural irregularities of the Council in respect of the sale of the land;

(lvi) By letter dated 25 February 1998 the Council by its Chief Executive Officer informs the second and third plaintiffs the Council intends to sell Lots 15, 17 and 18 to Nelread conditional upon, among other matters, inter alia, the construction of a Safeway supermarket on the land to be acquired by Nelread and the leasing of the land to Safeway for a term of not less than twenty years. In contra distinction the Council also informs the second and third plaintiffs, '... If the Council, after considering all submissions made, decides that it is not appropriate to in fact sell the land to the developer, then the contracts will not proceed ...'. The Council informs the second and third plaintiffs the Council invites all submitters to its meeting on 23 March 1998;

(lvii) By letter dated 26 February 1998 the Council informs the plaintiffs by their solicitors, inter alia, of Council's intention to acquire Lot 18, of Council's intention to sell Lots 15, 17 and 18 to Nelread on condition, among other matters, inter alia, that a Safeway supermarket is constructed on the land, that the land be leased to Safeway for a term of not less than twenty years, that Council initiate and hear submissions pursuant to the Act regarding the sale of the land at its meeting on 23 March 1998;

(lviii) Various parties respond to Council's Notice of Intention to sell the land, inter alia:

* Letter dated 6 February 1998 from Johnson's Real Estate Agents (Mr. G. De Kievit, Sales Manager), who expressed interest in purchasing the land and a client prepared to pay a fair and reasonable price,

* Letter dated 9 February 1998 from Franklins Limited (Mr. J. Richards, Victorian Property Manager), who stated: 'We intend to establish a supermarket in this area and we would be pleased if you could forward details of the undersigned as a matter of urgency.',

* Letter dated 9 February 1998 from Barnett Consulting Group, (Mr. N. Barnett, Managing Director) who expressed '... We refer to the attached advertisement and advise that our firm has been retained to negotiate the acquisition of the abovementioned land for our client. We understand that interest has already been expressed in the land in the region of $450,000. Please note that our client is prepared to negotiate an acquisition of the land for a price in the region of $500,000 and accordingly we request that full details of the subject land and the proposed terms of sale be submitted to us as soon as possible',

* Letter dated 9 February 1998 from Youngs & Co. (Mr. L. Young, Director), who expresses an interest in purchasing the land and a client prepared to purchase the same by private treaty. The letter contains the request for information regarding purchase price, terms of sale zoning, requirements for sewerage etc. and other information,

* By letter dated 19 February Youngs & Co. acknowledged receipt of the Council's letter of 11 February but notes the contents of the letter does not answer the request for information sought in the letter of 9 February.

* By facsimile received 23 February 1998 Barnett Consulting Group sought, among other matters, full details of the property in order that its client and all other parties have an equal opportunity to acquire the properties,

* Letter dated 25 February 1998 from Franklins Limited (John Richards) stating amongst other matters, 'After our response to your public notice I was advised by your officers that Council had executed an agreement on or about 3 February prior to the public notice being advertised. If this is the case then it causes us great concern commercial advantage may have been granted to one party to the detriment of your rate payers. I therefore request as a matter of urgency you provide me with evidence that the correct statutory process was followed';

(lix) The plaintiffs by their solicitors by letter dated 13 March 1998 offer to treat with the Council to purchase the land in excess of Council's valuation of $462,000 and expressed concerns in respect of full disclosure of prior dealings concerning the sale of the land and subsequent to Council's meeting of 23 March 1998;

* On or about 17 March 1998 contracts for sale of Council land (Lots 15 and 17) to Nelread are executed, exchanged and deposit paid, notwithstanding that no oral submission had been heard pursuant to s.223 of the Act. These hearings did not occur until 23 March and 14 April respectively;

(1x) Parties other than the plaintiffs received confirmation that the land had been sold prior to Council's meeting of 23 March 1998, inter alia:

* By letter dated 16 March 1998 Mr. N. Barnett of Barnett Consulting Group confirmed advice received by him from Mr. Dudley on 10 March,

* The Council would receive written and verbal representations in relation to the sale of the land on 23 March 1998,

* That a conditional contract of sale had been executed in relation to the land and that the Council had never intended to offer the property for sale to parties other than the current purchaser, Nelread,

* That the public notices circulated by Council in early February 1998 was made purely to satisfy the procedural requirements of ss.189 and 223 of the Act,

* There was never any reply to the Barnett letter;

(lxi) On 23 March 1998 subsequent to contracts being executed and exchanged, and deposit paid, the Council convened a special meeting of Council to hear submissions in respect of the statutory procedures for the sale of land pursuant to ss.189 and 223 of the Act;

(lxii) At its special meeting on 23 March 1998 Council resolved to reserve its decision on the sale of the Council land until a further special meeting of Council on 14 April 1998;

(lxiii) None of the submitters at the meeting of 23 March 1998 were aware of the execution, exchange and payment of deposit in relation to the sale of the land to Nelread on 17 March 1998. (See Transcript p.386 Mr. Southall to Mr. Dudley).

(lxiv) Nelread by its representative Mr. Watson chose not to attend the meetings of 23 March 1998 and 14 April 1998. See Transcript p.428-429. Mr. Jones to Mr. Watson: 'By this stage, bearing in mind that the contracts had been executed on 17 March, some four days before the convening of the first meeting on 23 March, I'm surprised by your response. It would have been a relatively important meeting in terms of your negotiations and staging of this development that you attend such a meeting? -- That's not surprising at all. It's a long journey, and if the meeting is just to deal with detail on a formality basis there's no point going. I'd have to stay overnight and three hours up, three back I'm a busy person'. His Honour to Mr. Watson: 'The position was that if the meeting produced a real problem, the whole transaction could have fallen over. So presumably you didn't go because you didn't anticipate it was going to present a problem? --- I don't think I was really aware of the problem - Certainly not to the degree that it's become - and didn't place any importance on it, and what could I achieve by going'.

(lxv) None of the submitters at the meeting on 14 April 1998 were aware of the execution, exchange and payment of deposit in relation to the sale of land to Nelread on 17 March 1998. (See Transcript pp.386-387). (See also Transcript p.389) His Honour to Mr. Dudley:

'Still, the point that's being put to you is that whilst there was reference to a contract, it was not mentioned to any of the people at the meeting, it seems, that the contracts have in fact been exchanged. Was there a reason for that? --- No, Your Honour, I didn't. I've got to say I didn't recognise the importance of the difference between Council signing and sealing conditional contracts on the 2nd and the actual exchange.' His Honour: 'It's relatively obvious that if that had been said, there would have been quite a response, wouldn't there? --- As I said, Your Honour, I was always of the understanding that the issue in relation to 189 and 223 were separate, stood alone and that the signing of the contracts was relevant if the Council decided at the end of the process they didn't wish to proceed to sell it.'

(lxvi) Despite the Council's intention to hear further submissions at its special meeting on 14 April 1998 the Council issued a planning permit for the development of the land as a supermarket and petrol filling station on 1 April 1998. There was an exchange of correspondence between Council, the plaintiffs and the plaintiff's solicitors as evidenced, inter alia:

* The affidavit of Allan Byham sworn 23 April 1998 and paragraphs 19 and 20 and Exhibits 'AB23' - "AB26' (inclusive);

(lxvii) Council at its special meeting on 14 April 1998 resolved to sell Lots 15, 17 and 18 to Nelread, Cf Council's resolution of 2 February 1998 and Council's agenda paper (Exhibit 'AB27') which reveals that the exchange of contracts and the deposit for sale of the land was finalised on 18 March 1998;

(lxviii) MD74 Reasons for supporting the recommendation to sell the land to Nelread. Eleven reasons in support, one reason for not selling lots 15, 17 and 18. (See Transcript p.396-397) His Honour to Mr. Dudley:

'Mr. Dudley, if you were presented totally independently of this particular operation with this document and you saw that the person who had written it had prepared eleven reasons for one side and almost a non-reason on the other, you could be forgiven for thinking that he really wasn't serious about it, couldn't you ? --- I understand what you're saying, Your Honour, yes.'

(lxix) On 22 April the report of Inspector of Municipal Administration (Mr. M. Whelan) states:

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