Dansar Pty Ltd v Byron Shire Council

Introduction 100One of the sewage treatment plants which the Council operates and manages is the West Byron sewage treatment plant (West Byron STP). That plant was first commissioned in 1990. In early 2000 works upgrading that plant were completed. Those works increased its average design flow capacity to 2,000kL/day and its peak dry weather flow capacity to 2,500kL/day. 101Those design capacities may also be expressed in EPs or ETs. An EP, an abbreviation for equivalent person, is a standard measure of sewerage load (hydraulic as well as biological) based on the estimated daily contribution to the load of a typical person in a residential setting (which takes account of all zonings in that setting including residential, commercial and industrial). ET or equivalent tenement describes the potential daily hydraulic load generated by a standard household connected to the sewerage system. These measures are used when establishing the design capacity of a sewage treatment plant and estimating the potential sewage contribution of developments within the sewage catchment area. The assumption ordinarily made as to usage by an equivalent person is 240L/day. The assumption as to the ratio of ETs to EPs can vary according to factors such as population density and is contestable in the sense that for a given catchment area there is likely to be a range of values which might be justified as reasonable, at one end conservative and at the other, less so. 102In June 2000 the Council carried out an assessment to determine the existing and committed loads at its sewerage facilities, including the West Byron STP. To do so it measured the hydraulic load based on actual flows into that plant. The current load was 1,588.8kL/day. It then estimated the "committed" load which consisted of undeveloped lots deemed to have an entitlement to sewerage services (because they were in a reticulated area where owners were already paying sewerage rates) and land or properties the subject of development applications which had been approved. It did so adopting the assumptions 1 EP = 240L/day and 1 ET = 4 EPs. It then subtracted the current and committed load from the plant's design capacity. The "spare" capacity was assessed to be 371 EPs, which was then expressed as 92.75 ETs. 103In September 2000 the Council, in its capacity as sewerage authority, resolved not to enter into any arrangement or agreement for the provision of further sewerage services to any proposed development which would increase the load on the West Byron STP beyond its present capacity for non-peak loads of 8,333 EPs or 2,000kL/day. The effect of that resolution, based on its earlier assessment, was that the Council should not enter into any new arrangements for the provision of sewerage services that would result in the estimated spare capacity of 371 EPs being exceeded. The imposition of any additional load was described as seriously jeopardising the plant's ability to meet its "EPA licence criteria and to comply with Council's statutory obligations for pollution control". 104The appellant's case before this Court was that the Council was negligent in carrying out the "operational and mechanical" task of implementing its decision to allocate that spare capacity. By narrowing the content of the asserted duty of care in this way the appellant sought to meet an argument that the suggested duty of care would be incompatible with the Council's statutory and other obligations. It submitted that this narrower duty arose "once the Council's functions had been exercised in resolving to allocate some [capacity] to new development applications". In its written submissions the appellant described the subject matter of the duty of care for which it contended in the following terms: "The duty of care attached after the Council had undertaken the decision of whether to allocate spare sewerage capacity, and applied to the Council's conduct through its staff in implementing its resolution by determining the exact amount to allocate pursuant to the resolution and, in particular, by mechanical errors in calculation of ETs available". 105The risk of harm to which it is said this duty is directed is economic loss resulting from a refusal to allocate sewerage capacity or a delay in the allocation of capacity, in either case resulting from negligence in the mechanical task of allocating previously designated spare capacity. That risk of harm only arose if there was capacity which would have been allocated but for the alleged negligence. At the same time, the appellant's case accepts that whether there was capacity available was a matter to be determined by the Council as sewerage authority and that its task in doing so was not the subject of the duty of care sought to be imposed. 106The appellant's first development application was lodged in February 2001 and amended in late October 2001 and in January 2002. As finally amended, it involved the construction of 16 residential flat units or houses. That amended application was finally dealt with by the order of the Land and Environment Court made on 15 March 2002 dismissing the developer's appeal under s 97 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) from the Council's deemed refusal of its application. In October 2002 the appellant lodged two new development applications. Together they sought approval for the same development as was the subject of the first application as finally amended. The second applications were approved. The appellant then sold the undeveloped property in November 2005. It claims by way of damages the difference between the profit obtained on that sale and the profit it says it would have obtained had it received development consent at some time between December 2001 and February 2002 and proceeded with that development. The appellant says its development would have been completed by April or May 2003 and that upon completion it would have sold "some or all of the units and/or leased some or all of the units, as developed" (see Statement of Claim, paras 58 to 67). The appellant also claims by way of damages the legal costs it incurred, and those of the Council for which it is liable, in relation to its appeal to the Land and Environment Court. 107The primary judge (McCallum J) rejected the appellant's case on the basis that the Council owed no duty of care in the terms alleged: Dansar Pty Ltd v Byron Shire Council [2013] NSWSC 17. That conclusion follows a careful analysis of the relevant statutory context and the significant features of the relationship between the parties: [82]-[94]. Her Honour's principal reasons for so concluding were that there was a disconformity between the asserted duty and the Council's statutory functions and obligations, which were to be exercised in the public interest and involved considerations of public health and environmental impact; that as between the parties there was no relevant reliance or assumption of responsibility; and that the appellant was not 'vulnerable' in the relevant sense: [82], [90], [91], [92], [94]. This appeal is from that decision. In my view her Honour was correct in so concluding.

Relevant principles 108Whether the Council owed a duty of care to the appellant in the terms alleged requires consideration of the totality of the relationship between it and the appellant. That consideration involves an examination of the statutory context and the positions occupied by the parties in that context: Perre v Apand Pty Ltd [1999] HCA 36; 198 CLR 180 at [198] (Gummow J); Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; 211 CLR 540 at [146] (Gummow and Hayne JJ); Stuart v Kirkland-Veenstra [2009] HCA 15; 237 CLR 215 at [112] (Gummow, Hayne and Heydon JJ). 109The focus of that consideration is on the presence or absence of features or factors which in earlier decisions have assisted in determining the existence of a duty of care. In Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649, Allsop P referred to a number of those features, whilst at the same time making clear that the list was not exhaustive or compulsory. The significance of particular features or factors in a given case will depend on the circumstances of that case, including the content of the duty of care alleged, the nature of the risk of harm to the plaintiff and the particular kind of loss or damage involved. As is revealed by a consideration of earlier cases, those circumstances will give rise to different "problems" in determining the existence and scope of any duty of care. 110In Sullivan v Moody [2001] HCA 59; 207 CLR 562 at [50] the Court (Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ) described the principled approach to be taken as follows: "Different classes of case give rise to different problems in determining the existence and nature or scope, of a duty of care. Sometimes the problems may be bound up with the harm suffered by the plaintiff, as, for example, where its direct cause is the criminal conduct of some third party. Sometimes they may arise because the defendant is the repository of a statutory power or discretion. Sometimes they may reflect the difficulty of confining the class of persons to whom a duty may be owed within reasonable limits. Sometimes they may concern the need to preserve the coherence of other legal principles, or of a statutory scheme which governs certain conduct or relationships. The relevant problem will then become the focus of attention in a judicial evaluation of the factors which tend for or against a conclusion, to be arrived at as a matter of principle." [Footnotes omitted] 111The present case involves a claim for pure economic loss made against a statutory authority responsible for the care and management of a public utility and the provision of an essential service to members of the public living in the local government area for which it is responsible. It is not one in which the Council damaged property owned by a third party causing the appellant thereby to suffer economic loss because of the relationship between it and that third party or its property: cf Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" [1976] HCA 65; 136 CLR 529. Nor is it a case in which it is said that the Council had entered upon the exercise of its statutory powers with respect to the preventing or averting of a risk of harm of which it had some knowledge and over which it had a measure of control, but failed to do so with reasonable care: cf Pyrenees Shire Council v Day [1998] HCA 3; 192 CLR 330; or one in which it is said that the Council did not, but should have, exercised its powers to prevent or avert a risk of harm: cf Stuart v Kirkland-Veenstra. 112Nor does the appellant allege that it relied on the accuracy of information or advice that the Council provided: cf Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) [1981] HCA 59; 150 CLR 225; Tepko Pty Ltd v Water Board [2001] HCA 19; 206 CLR 1. Specifically, it does not allege that it relied upon any statement of the Council as to the existence of spare capacity, as to how the Council might assess that any spare capacity was available, as to the likelihood of capacity being available for its development, as to how or when any such capacity would be allocated or that the Council by its officers would act (as distinct from seek to act) competently and diligently when undertaking any such assessment or allocation. In argument before the primary judge, counsel for the appellant made clear that it was not making "a representation and reliance case". 113In this context, the following further general observations may be made. First, as the plurality (Gleeson CJ, Gummow, Hayne and Heydon JJ) said in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515 at [21], damages for pure economic loss are not recoverable if all that is shown is that the defendant's negligence was a cause of the plaintiff's loss and that loss was reasonably foreseeable. Reasonable foreseeability of harm of the kind alleged is a necessary but not sufficient condition for the existence of a duty of care: Sullivan v Moody at [42], [64]; Graham Barclay Oysters Pty Ltd v Ryan at [9]. Indeed, as McHugh J said in Perre v Apand Pty Ltd at [131], knowledge, actual or constructive, of the defendant that its act "will harm the plaintiff is virtually a prerequisite of a duty of care in cases of pure economic loss". In that case, as Gummow J noted at [216], the tortfeasor Apand knew or ought to have known that economic loss would flow directly and inevitably as a result of the Perres being excluded from the Western Australian market. The possibility of the occurrence of that loss was not speculative. This language echoes Stephen J's description in Caltex Oil at 577 of the nature of the economic loss sustained in that case as "direct and inevitably flowing from the severing of the pipeline and not in any sense a matter for speculation only". 114Secondly, in Graham Barclay Oysters Pty Ltd v Ryan at [149], Gummow and Hayne JJ (Gaudron J agreeing) said of a claim against a statutory authority: "An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance." 115Thirdly, in Woolcock v CDG at [23] the plurality explained what is meant by 'vulnerability' in this context: "Since Caltex Oil, and most notably in Perre v Apand Pty Ltd, the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. 'Vulnerability', in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, 'vulnerability' is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre, the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land." 116Fourthly, the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute may arise in a number of ways. In Sullivan v Moody the Court said at [60]: "The circumstance that a defendant owes a duty of care to a third party, or is subject to statutory obligations which constrain the manner in which powers or discretions may be exercised, does not of itself rule out the possibility that a duty of care is owed to a plaintiff. People may be subject to a number of duties, at least provided they are not irreconcilable. ... But if a suggested duty of care would give rise to inconsistent obligations, that would ordinarily be a reason for denying that the duty exists. Similarly, when public authorities, or their officers, are charged with the responsibility of conducting investigations, or exercising powers, in the public interest, or in the interests of a specified class of persons, the law would not ordinarily subject them to a duty to have regard to the interests of another class of persons where that would impose upon them conflicting claims or obligations." 117The statute may indicate that "the legislature has legislated to cover the field and excluded all common law duties of care" or "the imposition of a common law duty may be inconsistent with or undermine the effectiveness of the duties imposed by the statute": per McHugh J in Graham Barclay Oysters Pty Ltd v Ryan at [78].

The legislative context and relationship between the parties

The Council's regulatory and service functions 118Subsection 8(2) of the Local Government Act 1993 (NSW) (LG Act) provides that a Council "in the exercise of its functions" must pursue its charter. By s 8(1), that charter includes: "●to provide directly or on behalf of other levels of government, after due consultation, adequate, equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively ... ●to properly manage, develop, protect, restore, enhance and conserve the environment of the area for which it is responsible, in a manner that is consistent with and promotes the principles of ecologically sustainable development ... ●to ensure that, in the exercise of its regulatory functions, it acts consistently and without bias, particularly where an activity of the council is affected". 119Subsection 8(2) also provides that nothing in that section "gives rise to, or can be taken into account in, any civil cause of action". In the face of that injunction neither party relied upon these provisions as relevant when determining the existence of a common law duty of care. 120The LG Act provides for the conferral on a council of service functions as well as regulatory ones. The former include the provision of services and facilities directed to satisfying essential needs of its local community (s 24). Division 2 of Part 3 in Chapter 6 of the Act enables councils to be given responsibility for the care and management of water, sewerage and drainage works and facilities. Regulatory functions may be conferred by the Act or other legislation (ss 22, 68) and relevantly include the council's role as a "consent authority" under the EP&A Act. 121The appellant's development application was made to the Council under s 78A(1) of the EP&A Act. The Council was required by s 80(1) to determine that application by granting or refusing consent. It was not submitted by the appellant that the Council was subject to any common law duty to act expeditiously when determining its development application. The position in that respect was summarised by Basten JA in MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417; 191 LGERA 292 at [207] - [209]: "Private landholders seeking approval are entitled to have their applications considered within a reasonable time. Once the prescribed period (40 days) has expired, the applicant is entitled to treat the failure to make a determination as a deemed refusal, from which it may appeal to the Land and Environment Court: EP&A Act, ss 82 and 97. Alternatively, an applicant aggrieved by unreasonable delay could obtain an order in the nature of mandamus directing the Council to determine the application. The fact that the Council is, in this sense, under an obligation to act within a reasonable time, does not mean that it is liable in negligence for damages for failing to proceed with reasonable expedition. Needless to say, if the applicant proceeded to lodge an appeal with the Land and Environment Court, no claim in tort would lie against the Court for failing to take reasonable care in determining an application although, again, this Court could make orders requiring the Land and Environment Court to carry out its functions according to law. In these circumstances, the concept of a duty in the Council to act expeditiously may be conceded; it is a statutory duty subject to both appellate and judicial review." 122The matters which the Council was required to take into account in determining whether there was any legal impediment to the development of the appellant's land include "the public interest" and the provisions of any relevant environmental planning instrument: EP&A Act, s 79C(1). By s 80(2) it was required to refuse an application for the sub-division of land (which by s 4B includes a strata sub-division) that would if carried out result in the contravention of an environmental planning instrument. The Byron Local Environmental Plan 1988 (the Byron LEP) is such an instrument made under Pt 3 of that Act. Clause 45 relevantly provided: "45(1) The Council shall not consent to the carrying out of development on any land to which this plan applies unless it is satisfied that prior adequate arrangements have been made for the provision of sewerage, drainage and water services to the land." 123Also, the Council was charged under s 58 of the LG Act with the "care and management" of sewerage works in the Byron Shire. In undertaking that responsibility, the Council was, in the language of s 24, providing services and carrying out an activity "appropriate to the current and future needs" of its local community. In doing so it was required to comply with any direction given by the Minister for Public Works as to the taking of a measure designed to ensure the proper safety, maintenance and working of those works: LG Act, s 61. The suspension of the allocation of sewage treatment capacity to new developments could be one such measure. 124Where a council is the relevant sewerage authority the application for development consent may also seek approval for connection to the sewerage facilities under the council's control: EP&A Act, s 78A(3). That application is made under s 68(1) of the LG Act: see Item 6 of Part B to the Table following s 68. Although the appellant's first development application noted that it would seek to connect to the existing system, the Council did not in its later deliberations treat that intimation as constituting an application for an approval under s 68. 125Section 89 of the LG Act states that in determining an application for connection under s 68 the Council must give effect to "the applicant's objectives to the extent to which they are compatible with the public interest" - that interest described as including the protection of the environment and the protection of public health, safety and convenience (s 89(3)). This section expressly recognises that an applicant's interest may conflict with a public interest to which the Council is to have regard and provides in that event that the latter must prevail. 126These provisions identify as specific objectives to which the Council must have regard in its care and management of sewerage works the proper safety, maintenance and working of those works (s 61), public health and safety and the risk of damage to property (s 62) and the protection of the environment and protection of public health, safety and convenience (s 89). 127The premises-based activity of sewage treatment which the Council undertakes is also required to be the subject of an environment protection licence issued under Chapter 3 of the Protection of the Environment Operations Act 1997 (NSW). The licence issued in relation to the West Byron STP premises imposed conditions governing the general operation of that plant and containing specific limits in relation to matters including the pollution of waters, sewage loads and permitted concentration limits, in the treated effluent output of the works of various pollutants, such as phosphorus and ammonia. 128Returning to cl 45 of the Byron LEP, in Codlea Pty Ltd v Byron Shire Council [1999] NSWCA 399; 105 LGERA 370 this Court (Stein JA, Handley and Sheller JJA agreeing) held that the "arrangements" to which it refers are those between the applicant for development consent and the provider of the sewerage services. The effect of the reasoning in that case is that, as the relevant consent authority charged with determining a development application, the Council was required to consider whether there was an arrangement in existence between it and the applicant. Whether such an arrangement should be made was a separate and anterior question to be addressed by the Council as the authority having responsibility for the care and management of the sewerage facilities. If the Council was not satisfied that there was such an arrangement, consent to the carrying out of the development had to be refused. 129The point of relevance of this decision in the present context is that the task of making such an arrangement was an aspect of the Council's function in managing the sewerage facilities. There is no issue as to the fact being that the Council did not make such an arrangement with the appellant until May 2004. Although at one point in the oral argument the appellant suggested that it also relied on a breach by the Council as consent authority of a duty of care owed with respect to its being satisfied within cl 45(1), such a claim was neither pleaded nor arguable on the facts.

The relationship between the parties 130Three matters may be noted at the outset. The first is that the Council's calculation of the West Byron STP's spare capacity undertaken as at June 2000 was a function of the current load generated by existing users of that system measured as at August 1999 and an estimate of the future load then committed to that system. At that time, it was also expected that the load generated by existing users would increase due to growth of the resident and tourist population, as well as growth in the likely number of "day trippers". Any such increase could justify a further assessment of any remaining capacity taking into account the estimated committed load. The second is that whether any capacity was made available to new developments was a matter for the judgment of the Council as the authority having responsibility for the care and management of the sewerage works. The third matter is that the Council did not give any assurances to those who lodged development applications between August 2000 and February 2001 that it would not subsequently revisit the question of spare capacity or that any assessed spare capacity would be allocated in a particular way or without regard to the overriding public interest in protecting the treatment plant from being overloaded. 131In September 2000, the Council resolved to acknowledge that the West Byron STP had unused capacity of 371 EPs. At that time it addressed how that capacity might be allocated. The methods of doing so included by order of lodgement of development application, by order of determination of development application or by order of requests for additional load or connection to the West Byron STP. Although it did not make an immediate announcement of the fact, the Council decided to allocate that capacity by order of lodgement of development applications. 132By late February 2001 officers of the Council calculated that taking into account the additional committed load allocated since August 2000 and development applications lodged since that time, there would be no remaining capacity in the West Byron STP. That being the position it determined to put in place "a protocol ... with regard to allocation of the remaining ETs and further acceptance of Development Applications". That protocol, which was announced by a media release dated 1 March 2001, was directed to the allocation of capacity to applications received after that date. 133In its development application lodged on 6 February 2001 the appellant noted that in "relation to sewer, we understand that limited capacity exists at the West Byron plant, and we would seek to connect to the existing system to exploit that capacity". That application earlier recorded an understanding that recent studies (presumably those undertaken on behalf of the Council) had indicated "that the West Byron Sewerage [sic] Treatment Plant has spare capacity sufficient to accommodate the wastewater load from the proposed development". The treatment capacity estimated as required for the proposed development was 11.6 ETs. 134Before that development application was lodged, the appellant's principal director, Mr Vaughan, was advised by the Mayor that there was "spare capacity at the moment" at the West Byron STP. It was not, however, part of the appellant's case that it had received or relied upon any statement or advice as to the existence of such capacity, as to the way in which it would be allocated or that it had received or would receive such an allocation. It did, however, seek some assurances, thereby indicating an appreciation that there was a risk that its development would not receive the capacity it required. 135In May 2001 the appellant's town planner sought confirmation from the Council that an ET allocation for the development was "in place". The Council's response was that the application was noted as having been received prior to 1 March 2001 and that "applications received during 2001 are to be determined in order of lodgement for the purposes of allocation of ETs to ensure appropriate allocation". The town planner replied inquiring whether the Council's response meant that "there is a possibility that there will not be any ETs remaining when this DA is determined". The Council's reply clearly left that possibility open. It was that "as applications are to be dealt with in the order of lodgement, further information is unavailable at this stage". 136On 14 August 2001 the Council resolved to defer a decision on the appellant's application so as to allow it to be amended to take account of several issues described as being incompatible "with current development controls". By its letter dated 21 August 2001 the town planner again sought clarification of the position with respect to the allocation of sewerage capacity: "As I understand it, there is the potential that there may not be sufficient ETs available when the time comes to determine this application. From our recent discussion, it would appear that the chances of this are slim, however, as I am sure you would understand, the possibility greatly concerns my client. We had interpreted the media release issued by the Mayor in March to mean that all applications lodged with Council before that date were 'safe' with regard to the availability of ETs. Apparently, this interpretation is not correct, even though, as was evident from their reaction at the recent meeting, most Councillors shared this interpretation." And concluded: "You might recall that in early June 2000 [sic] I sent you an email asking for an indication that sufficient ETs were available for this application. I did not get a reply to that email. Could you now please clarify the situation with respect to ETs, hopefully by guaranteeing that sufficient ETs are available for this proposal." (The reference to June 2000 is to be understood as being to June 2001 as the appellant's application was not lodged until February 2001.) 137The Council did not respond to the town planner's letter of 21 August 2001. On 13 September 2001 solicitors acting for the appellant also sought the Council's "written confirmation that ET allocations for our client's Application are in place and will not, under any circumstances, be reallocated until such time as our client's Application is determined by the Court or agreement is otherwise reached". That confirmation was not given. 138In mid-August 2001 the appellant appealed to the Land and Environment Court from the deemed refusal of its application. In early November, the Council served a draft statement of the issues in those proceedings. Those issues included the absence of any adequate arrangement for the provision of sewerage services. On 18 December 2001, a report from the Council's officers indicated that there were not sufficient ETs remaining from the originally estimated 92.75 ETs to satisfy the estimated requirement of the appellant's development. In this context, on 19 December 2001, the appellant's solicitors wrote to the Council's lawyers as follows: "We also note that despite our requests dated 13 September, 17 October and 28 November, we have received no written confirmation that ET allocations for our client's application are in place and will not, under any circumstances, be reallocated until such time as our client's application is determined by the Court or agreement is otherwise reached between our respective clients." 139The further report of 18 December 2001 stated that 68.927 of the 92.75 ETs spare capacity had been allocated to approved applications, 18.75 had been reserved pending the outcome of appeals that had been lodged against the Council's determinations and that 5.073 remained unallocated. The report marked that 3.1 ETs be allocated to a development which already had been recommended for approval, leaving 1.793 ETs available for two applications - one of which was that of the appellant. By this time the appellant's development was estimated to require 12.4 ETs. 140At its meeting on 19 December 2001, the Council deferred consideration of the appellant's development application. At the same time, the appellant was invited to submit a revised proposal. It did that in January 2002, reducing the size of the development to 16 residential units or houses. On 29 January 2002 the Council rescinded an earlier resolution (passed at a meeting of its Approvals Committee on 18 December 2001) by which it had "recognised" that the appellant's development was included in the "pre 6 March 2001 ET allocation". The effect of that rescission was to leave the Council able to address the question of allocation to the appellant's development to be undertaken in accordance with the methodology which it had adopted to that time. This was confirmed as being the Council's position in a meeting with the appellant on 1 February 2002. 141It is necessary at this point to refer to proposals which then existed for the augmentation of the Council's sewage treatment facilities at the West Byron STP and South Byron STP. In October 2000 and March 2001 the Council's consulting engineers, Gutteridge Haskins & Davey Pty Ltd (GHD), had prepared reports and concept designs for an increase in the capacity of those facilities. In February 2002 Mr Warner, the Acting Director of Water and Waste Services, reported to the Council that sewage flows in August 2001 and January 2002 had showed significant unanticipated growth and that further work had been commissioned to assess whether it was necessary to revisit the assumptions used by GHD as the basis for preparing its concept designs. 142Mr Warner also gave evidence about those increased flow rates in the proceedings in the Land and Environment Court. His evidence was that the most recently available measurements of current load and estimates of committed load indicated that there was no longer any spare capacity at the West Byron STP. 143His statement tendered in evidence in that hearing (which commenced on 11 March 2002) included the following: "Based on the latest compiled information, the loading on WBSTP is: (Holiday) peak loadings = 3217 kl/day (13404(1) EP) Nonpeak loadings = 1817 kl/day (7571(2) EP) (1) Based on January 2002 data (2) Based on August 2001 data In addition to the above figures there remains a further potential load from approved development applications and vacant blocks already zoned and eligible for single dwelling developments. This is referred to as committed load. Based on these figures, WBSTP receives sewage loadings in excess of the design capacity. As such, no further loading beyond the committed load should be permitted. Any increase in sewage load beyond the current and committed load will further compromise the performance of the treatment plant and put at risk compliance with EPA licence conditions." 144These measurements of actual loads indicated that in January 2002 the current peak loading (3,217kL/day) exceeded the plant peak dry weather capacity of 2,500kL/day. It also showed that in August 2001 the non-peak loading (1,817kL/day) was not far short of the design flow capacity of 2,000kL/day before taking account of any committed load that had not come on line. Mr Warner's conclusion was that taking existing committed load into account any of the previously identified spare capacity of 92.75 ETs which had not yet been committed should not be allocated. 145Any doubt as to this being the effect of Mr Warner's evidence was removed by his oral evidence. In re-examination he was asked to assume that there were sufficient of the 92.75 ETs available for allocation to the appellant because of a calculation error which overstated the committed load for the Aquarius Backpacker development. He was then asked whether the distribution of those ETs would be "in accordance with the Council's stated policy". He responded: "From a sewerage treatment operation perspective it is not appropriate, because the recent relevant data shows that the plant is now over capacity consistently, so therefore to do that would be to place the plant at risk and to not to be in the spirit of our operating licence with the EPA. It is not appropriate to approve a development that will provide an increased permanent load to the treatment works as opposed to a temporary load that comes from a festival. Further, that increased permanent load for one development it could be argued why do you not do it for more developments, and the clear answer there is that if that were to occur, then the plant would be further and progressively compromised, so therefore my answer is that it should not occur on this occasion. It should not be the first of many that could follow." 146In its judgment delivered on 15 March 2002, the Court did not address the question whether there was or was not capacity available for allocation to the appellant's development. The Court accepted the Council's submission that no capacity had been allocated to the development. It followed, applying the decision in Codlea v Byron Shire Council, that there was no arrangement which the Council as consent authority or the Court (having all the functions and discretions of the Council by reason of s 39(2) of the Land and Environment Court Act 1979 (NSW)) could be satisfied complied with cl 45(1). 147The memorandum from the Council's general manager of 27 March 2003, which outlines "the implications of Council's recent consideration of the capacity at West Byron STP", is not inconsistent with the position then being that the Council's officers proposed to proceed to apply the methodology adopted in 2001 although it was by this time considered that the West Byron STP had no spare capacity. 148Earlier, on 25 February 2003, the Council had received a further report from the Director of Waste and Water Services. That report concluded: "In the case of West Byron STP, the flows now coming into the plant exceed its design hydraulic capacity. The plant is now failing some of its EPA licence limits and short circuiting is occurring in the aeration tank following any substantial wet weather event. In real terms the West Byron STP does not have any spare capacity. If Council resolved that the plant did have spare capacity, and allowed development to occur that was additional to the committed load, the effects on the plant would be increased flows and a high risk of increasing licence breaches." 149The Director then went on to consider what should be done with the "remaining unallocated portion of the 92.75 ET in light of the fact that the West Byron STP is overloaded". He expressed a view as to whether the Council was obliged either legally or "as a matter of equity" to allocate capacity to development applications received prior to 6 March 2001. As the memorandum of 27 March 2003 records that subject and his report were considered at a meeting of the Council on 11 March 2003. At that time it was necessary to decide whether the Council would adhere to the earlier position which it had taken in relation to the allocation of spare capacity or act on the basis of the most recent report of its officers that the plant no longer had spare capacity. No resolution was passed at that meeting. The result was that its earlier resolutions as to the allocation of capacity continued to apply.

Was there a duty of care? 150The starting point is the duty of care for which the appellant contends. In Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; 200 CLR 1 at [5] Gleeson CJ observed that difficulties in formulating the practical content of a duty for the purpose of measuring the performance of a statutory authority against that duty may be a reason for denying its existence. See also Graham Barclay Oysters v Ryan at [8] (Gleeson CJ) and Vairy v Wyong Shire Council [2005] HCA 62; 223 CLR 422 at [59] (Gummow J). 151In its Statement of Claim the appellant pleads the content of the alleged duty of care in two ways. First, it alleges that the Council owed a duty of care "to give proper consideration" when the time came to determine its development application "to whether sufficient sewerage capacity existed at the [West Byron plant]". Secondly, it alleges that when giving consideration to its application the Council had a duty of care "to act upon information which was properly and soundly based [and] accurate and reasonable in its conclusions as to the existing spare capacity" of that plant at that time. 152In its written submissions to this Court, the appellant formulated the duty more narrowly. A distinction is sought to be made between, on the one hand, the exercise of deciding whether there was available capacity and, if so, how that capacity was to be allocated, and on the other, the subsequent task of implementing that decision. The more narrowly formulated duty is said only to apply to the task of implementation, to have arisen once the decision as to capacity was made and to have applied for so long as that decision was adhered to. 153In oral argument the appellant confirmed that this narrower duty did not extend to the making of any decision about capacity and how it might be distributed. It was also accepted that the duty did not require that at any relevant time the Council adhere to any earlier decision as to the availability of capacity or as to how that capacity should be allocated. In pressing this argument the appellant must be taken to have abandoned the broader formulations of the scope of the duty pleaded in its Statement of Claim. 154The appellant describes the activities of the Council to which this narrower duty of care attached as "operational" in the sense referred to by Mason J in Council of the Shire of Sutherland v Heyman [1985] HCA 41; 157 CLR 424 at 469; being activities that involved "action ... that is merely the product of administrative direction". That description was adopted in an attempt to distinguish between the 'policy' decisions of a public body that involved or were dictated by financial, economic, social or political factors or constraints, and the 'operational' decisions that were not. It was said that decisions of the former kind were not ordinarily the subject of any duty of care. In more recent judgments this distinction has been said to be of dubious utility because it will not always be the case that decisions at an operational level do not involve, at least in part, policy or public interest considerations: Pyrenees Shire Council v Day at [181] - [182] (Gummow J); Crimmins v Stevedoring Industry Finance Committee at [292] (Hayne J); and Vairy v Wyong Shire Council [86] (Gummow J). 155In relying on this distinction, the appellant's argument accepts, as it must, that when making decisions about the management and operation of the treatment plant the Council must have regard to considerations that are incompatible with the interests of a particular property owner in seeing that its development is not delayed or refused by a lack of sewerage capacity. The consequences of overloading those facilities include immediate risks to their safety and continued working as well as risks to public health and of pollution of the environment. There is also the possibility of breaches of the plant's operating licence. Where an assessment has to be made as to whether there should be any further loading of the system, these considerations are likely best served by a decision not to do so whereas the interest of the land owner seeking access to the system is not. 156The appellant's argument seeks to avoid this incompatibility by framing the content of the duty narrowly and by reference to the task of allocation which it says the Council staff performed carelessly. That argument proceeds as follows. In September 2000 the Council resolved to acknowledge the existence of spare capacity at the West Byron STP and to allocate that capacity to new developments. Thereafter Council staff were engaged in the administrative task of undertaking that allocation. The Council did not at any relevant time resile from its earlier decision acknowledging the existence of that spare capacity or that it could be allocated. In the period between December 2001 and February 2002 the Council considered whether to approve the appellant's development application. It was not prevented from doing so because there had been a deemed refusal under s 82(1) or an appeal lodged under s 97(1) of the EP&A Act, and indeed s 82(2) authorised the Council to determine the application notwithstanding that appeal. By this time, the public interest and policy matters to which the Council was otherwise required to have regard were no longer relevant because they had been considered by the Council at an earlier point in the process, namely, when the resolution of September 2000 was passed. They were not reconsidered by the Council in February or March 2002, before or during the hearing of the Land and Environment Court proceedings. 157In the way the appellant's case is formulated, whether the Council owed it a duty of care and whether it suffered any economic loss depend on the Council's having adhered to its earlier acknowledgement of available capacity and decision, albeit uncommunicated at the time, as to how that capacity might be allocated. If in January 2002 the Council had reassessed the question of capacity by reference to the more recent data relied upon by Mr Warner, it could have concluded that there was no available uncommitted capacity. Alternatively, it may have decided to reserve any capacity which was otherwise available for a particular use or development such as a hospital or nursing home. In either event, the appellant's application for an allocation of capacity would have been refused in circumstances to which the suggested duty of care would not have applied. That this is so exposes a fundamental difficulty for the appellant's case. The primary judge points to that difficulty in her reasons at [45] where it is observed that the earlier adoption by the Council of a methodology for the allocation of capacity "informs the existence and content" of the duty of care. 158In Vairy v Wyong Shire Council at [60] Gummow J warned against the danger of focussing on the alleged breach when addressing the existence and content of any duty of care. That is because that is a question of law to be determined prospectively. One risk of doing so is that the duty will, as in this case, be framed retrospectively by too specific reference to what happened: per Hayne J in CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390 at [68]. A related risk is that the question as to the existence of the duty will not be addressed prospectively. 159Where it is said that a public authority owes a duty of care, it is necessary to identify the function or power, the performance or exercise of which is the subject matter of the alleged duty. Having done so, as the joint judgment in Sullivan v Moody makes clear at [60], it is then necessary to address whether the existence of that duty would give rise to inconsistent obligations in the performance of that function or conflicting claims upon the exercise of the power. These questions are part of the prospective inquiry as to the existence and content of the duty. They are not answered, as the appellant's argument would have it, by looking to the way in which the public authority acted on the particular occasion in question and asking whether its doing so in fact required it to give consideration to conflicting claims, or engaged statutory obligations inconsistent with that duty. 160The function in relation to which it is said the Council owed a duty of care was that of deciding whether to increase the permanent load on the treatment works by the amount of capacity required for the appellant's development. That question arose in the context of its determining whether to approve that development. The Council undertook that function between December 2001 and February 2002. There were two particular matters to which it had to give attention. The first was whether, as sewerage authority, it should allocate capacity and consent in principle to the development being connected to the public sewer. The second was whether, as consent authority, it was satisfied that there was an arrangement within cl 45(1) of the Byron LEP. 161Those questions had to be addressed consecutively and the answer to the second was dictated by the answer to the first. In addressing the first the Council was required to give paramount consideration to the safety and continued operation of the treatment facilities, maintaining public health and protecting the environment. That obligation and the interests to which the Council was to have regard are incompatible with the existence of a private law duty to take reasonable care to avoid economic loss to a developer resulting from refusal of or delay in its development approval. 162Furthermore, that incompatibility is not avoided by restricting the duty to what is described as the "mechanical" task of allocation. When the Council was considering the appellant's application in the period from December 2001, it remained subject to these statutory obligations. In deciding, by its rescission resolution of 29 January 2002, to adhere in relation to the appellant's development to the methodology it had previously adopted, the matters to which the Council was able to have regard included any recent data as to loadings on the treatment plant as well as the assumptions and calculations underlying the earlier report of its officers of 18 December 2001. The decision to adhere to the earlier methodology was not a "mechanical" one. It involved a judgment as to whether the previous methodology and the assumptions and calculations which informed it should be applied to that development. 163For these reasons the primary judge was correct to conclude that there was a disconformity between the alleged duty of care and the Council's statutory functions and obligations and that the existence of such a duty would be "inimical to the unimpeded exercise" of those functions. That incompatibility would ordinarily be a sufficient reason for denying the existence of the duty: Sullivan v Moody at [60]. 164There are other features of the relationship between the parties that must be considered. They are the foreseeability of harm, indeterminacy, reliance and assumption of responsibility, and the vulnerability of the appellant. The primary judge concluded that there was "no relevant reliance, no assumption of responsibility and no vulnerability in the relevant sense": [85], [91], [92]. I agree with each of those conclusions. 165Foreseeability of harm. As Allsop P observed in MM Constructions (Aust) Pty Ltd v Port Stephens Council at [93], delay in or rejection of a development approval can readily be seen to have economic consequences for a developer. To that extent, in the present case it was foreseeable that a developer might incur some financial disadvantage if its development application was delayed or refused. 166However, the risk of harm to which the suggested duty is directed is not all or any delay in the approval of the development application, or all or any such delay due to a refusal to allocate or delay in allocating sewage treatment capacity. It is only the risk of economic harm resulting from delay or refusal of a development application due to negligence in the mechanical or operational task of allocating capacity. 167In that event, the applicant would only suffer financial loss as a result of any delay or refusal if there were spare capacity that would have been allocated earlier, but for the relevant negligence. Whether there was capacity available for allocation was a matter for the judgment of the Council as sewerage authority and not something in respect of which there could be only one "correct" answer. As the primary judge observed at [87] treatment capacity was not a "fixed, measureable resource which the Council had an obligation to quantify correctly and to allocate exhaustively". 168Assuming that but for the relevant negligence the Council would have concluded that there was capacity available, whether the appellant would suffer financial loss as the result of any delay or refusal of its application would then depend on a range of factors, some of which would not in the ordinary course be known to the Council. Those factors include the developer's intentions with respect to the development; any alternative opportunities available to the developer with respect to the use or sale of the undeveloped property; the costs of proceeding with the development, including financing and construction costs; and the revenues received or anticipated before, during and on completion of the development. 169Although in a general sense it was foreseeable that the appellant might suffer detriment if its development was delayed or refused due to carelessness in allocating capacity, it was not foreseeable that the appellant would inevitably do so: cf Caltex Oil at 577, and Perre v Apand at [131], [216]. 170Indeterminacy. The present case is not one in which the liability of the Council is indeterminate in any relevant sense: see Caltex Oil at 568 (Stephen J); Perre v Apand at [106] - [108] (McHugh J) and Woolcock v CDG at [21] (Gleeson CJ, Gummow, Hayne and Heydon JJ). The class of potential claimants is those who lodged development applications in the period between August 2000 and February 2001. The general nature of their claims and the measure of the damages that might be claimed can realistically be determined. 171Reliance and assumption of responsibility. Liability claims for negligent misstatement or advice ordinarily depend upon the presence of known reliance and an assumption of responsibility. The speaker must realise, or the circumstances must be such that it ought to have realised, that the recipient intends to rely upon the information or advice in connection with some matter of business or serious consequence and the circumstances must be such that it is reasonable for the recipient to seek or accept, and to rely upon, the information or advice: Tepko Pty Ltd v Water Board at [47] (Gleeson CJ, Gummow and Hayne JJ), citing Mutual Life & Citizens' Assurance Co Ltd v Evatt [1968] HCA 74; 122 CLR 556 at 571 (Barwick CJ). 172The presence of reliance is also an indication of 'vulnerability' as that notion is understood: Perre v Apand at [10] (Gleeson CJ); Woolcock v CDG at [24] (Gleeson CJ, Gummow, Hayne and Heydon JJ). The vulnerability arises because of the recipient's known reliance on the defendant as the source of advice or information. 173In preparing and lodging its development application the appellant had the assistance of expert town planning advice. It also had access to officers and staff of the Council, of whom it could make inquiries, and to the public deliberations and resolutions of the Council and reports presented at its public meetings. The fact that the appellant and its advisors exercised that access is apparent from the terms of its original development application, the evidence of Mr Vaughan as to his dealings with the Council and the correspondence between the Council and the appellant's town planners. 174At the time it lodged its development application the appellant had an expectation that there would be capacity available for its development. However, it did not have any assurance from the Council to that effect or any assurance as to the way in which any available capacity would be allocated. The appellant at the same time must be taken to have appreciated that in determining that there was or was not available capacity, the Council was bound to consider whether increasing the permanent load on the plant, by granting capacity, would compromise its operation. 175At no time did the appellant seek any assurance from the Council that it would act carefully or competently in implementing, or making, a decision about available capacity. Instead, assurances were sought that capacity was or would be available to its development. The terms of those requests show that the appellant was not proceeding on the basis that it had any entitlement to receive capacity or to have capacity allocated in a particular way. In that context, the more specific subject of whether the Council staff might make calculation errors in implementing any decision about how capacity was to be allocated was not a matter to which the appellant expressly addressed attention. 176The appellant may have had an expectation that the Council would undertake the exercise of allocation equitably and competently but, as Allsop P also observed in MM Constructions v Port Stephens Council at [94], that was "no more than a reasonable expectation of members of the public". That expectation would include an appreciation that from time to time errors are made in the conduct of the activities of a public or private service provider which affect the supply of its services. As Gillard J noted in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27; Aust Torts Reports 81-692 at [1017], whilst it may be taken for granted that service providers will be efficient and timely, experience shows that nothing is guaranteed. At no time was the appellant relying on any express or implied assurance from the Council that it would allocate available capacity in a particular way and exercise reasonable care in doing so. 177Vulnerability. The notion of vulnerability includes circumstances in which a plaintiff is unable to protect itself from the consequences of a defendant's want of reasonable care. That may be because it has exercised that ability by placing reliance on the defendant for information or advice. As the above analysis shows, that is not so in this case. It may also be because the plaintiff's enjoyment of a right, interest or expectation is controlled in some relevant sense by the defendant: Pyrenees Shire Council v Day at [168] (Gummow J); Perre v Apand at [38] (Gaudron J), [129] (McHugh J). 178The economic loss claimed by the appellant is the amount necessary to put it in the position it would have been in had it received a timely allocation of capacity and development approval. That loss includes expenses that it says would not have been incurred if development approval had not been delayed and benefits in the form of profits that it says would have been realised. In Hill v Van Erp [1997] HCA 9; 188 CLR 159 the economic loss suffered by the intended beneficiary was the value of an expected testamentary benefit the receipt of which depended totally on the exercise of care in relation to work (specifically the preparation of a will and the securing of its proper execution) which the solicitor had agreed to perform. 179The appellant had no right or entitlement to have any further load committed to the sewerage system. Nor did it have an expectation to that effect, the enjoyment of which necessarily depended on the exercise of care by the Council in relation to a task that it was obliged to perform. The Council was able at any time in the discharge of its responsibility as sewerage authority to determine that there should be no further increase in the permanent load to the treatment works or decide that any such increase should be allocated to specific developments or in a particular way. In these respects the appellant's position is to be contrasted with that of the plaintiffs in Hill v Van Erp, Caltex Oil and Perre v Apand. In Caltex Oil the detriment suffered was the loss of the enjoyment of Caltex's right to use property (the pipeline) which was vital to the ongoing conduct of its business: at 576-577 (Stephen J). In Hill v Van Erp the intended beneficiaries' interests were "totally and unavoidably dependent upon the proper performance of a function within the sole province of the solicitor": at 186 (Dawson J). In Perre v Apand, the plaintiffs were denied access to the "principal and lucrative market" in which they were selling and entitled to sell their potatoes: at [195] (Gummow J). Here, by way of contrast, the appellant's continued enjoyment of any right or interest or expectation was not controlled by the Council. There was no such right or interest, the enjoyment of which depended on the exercise of care by the Council or the existence of which depended on the exercise of care by the Council in the performance of a function that it was obliged to undertake. 180The appellant appreciated at the outset that there was a risk that its development may be delayed or not proceed or proceed in a different form. There were several reasons why that might have occurred. An aspect only of one of those reasons is sought to be made the subject of a duty of care. The appellant was well positioned with the assistance of its expert advisors, and after making inquiries of the Council, to assess before it lodged its application the risk that there would be insufficient sewerage capacity available. It was also in a position to defer the incurring of significant expenses in relation to the development until such time as it had made an arrangement with the Council for the allocation of capacity. In the absence of any such arrangement the appellant may have proceeded in part on an expectation that the Council and its officers would act competently and responsibly in relation to the care and management of the sewerage facilities. At the same time it was foreseeable as a possibility that its development might be refused or delayed in circumstances where reasonable care was not taken. However, that fact and the fact that it might suffer detriment as a result were not sufficient to make it vulnerable in the relevant sense: Woolcock at [23].

Conclusion 181Consideration of these features of the relationship between the appellant and the Council, and the statutory context which informs it, points clearly to the conclusion that the Council was not subject to the suggested duty of care. The appellant's claim is for economic loss in circumstances where there was no reliance or assumption of responsibility or relevant vulnerability so as to justify the imposition of that duty. Furthermore to do so would involve subjecting the Council to conflicting claims and obligations in relation to its care and management of the sewerage works. 182This conclusion makes it unnecessary to consider any question of breach; and, in any event, it is not useful to do so in circumstances where the Council does not seriously contest that if it owed the narrow duty of care contended for that duty may have been breached. 183The appeal should be dismissed and the appellant ordered to pay the respondent's costs. 184LEEMING JA: I agree with the reasons and conclusions of Meagher JA. This Court being divided, I should explain why I respectfully disagree with the judgment of Macfarlan JA, which I have also had the advantage of reading in draft. As I see the position, much of the difficulty in this appeal is linguistic, and may be avoided by carefully distinguishing the various duties owed, and the different functions performed, by the Council. 185This is not a case where Dansar alleged that it relied on any representation by the Council. That was expressly disavowed. The duty for which Dansar contended arose upon the submission, in February 2001, of its development application, and continued so long as the Council chose to consider that application. Dansar's development application, consistently with cl 45 of the Byron Local Environmental Plan 1998 and the temporary availability of "Equivalent Tenements" or "ETs", stated that: "Recent studies have indicated that the West Byron [Sewage] Treatment Plant has spare capacity sufficient to accommodate the wastewater load from the proposed development. Based on Council's normal requirements, each two-bedroom development will generate a sewer load of 0.7 ET. The whole development therefore will generate 11.6 ET (18 x 0.7 minus 1 ET 'credit'). [Sewage] from the site will be directed into Council's existing sewerage system, taking advantage of the existing capacity available." 186The application referred in terms to cl 45 and said: "The site can be adequately served with water, telephone and electrical services. In relation to sewer, we understand that limited capacity exists at the West Byron plant, and we would seek to connect to the existing system to exploit that capacity." 187No party disputed that the Council's power was confined by cl 45(1) of the Byron LEP 1998. The Council had no power to grant consent "unless it is satisfied that prior adequate arrangements have been made for the provision of sewerage ... ". That is to say, the Council's state of satisfaction was a condition precedent to the exercise of power under s 80 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act). In that sense it may be said to be jurisdictional: Barrick Australia Ltd v Williams [2009] NSWCA 275; 74 NSWLR 733 at [26]. The state of satisfaction must be regularly formed, and could be challenged on judicial review, in accordance with what Latham CJ said in R v Connell; ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; 69 CLR 407 at 432. Indeed, "any person" (for example, the neighbours some of whom objected to the Dansar's development application) could bring Class 4 proceedings to challenge the consent: see McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504. It is trite that any body exercising public power must first satisfy itself that the preconditions have been satisfied. In the case of courts, it has been said to be "the very first duty of any Court" and "the first duty of every judicial officer": Hazeldell Ltd v Commonwealth [1924] HCA 36; 34 CLR 442 at 446; Federated Engine-Drivers' and Firemen's Association of Australasia v Broken Hill Proprietary Co Ltd [1911] HCA 31; 12 CLR 398; see also Eberstaller v Poulos [2014] NSWCA 211 at [1] and [14]. 188But although it is conventional and appropriate to describe Council's obligation to satisfy itself of the preconditions to any exercise of power as a "duty", such duty is distinct from the private law duty urged by Dansar in this appeal. For one thing, Council never exercised the power to grant or refuse consent under the EP&A Act (ultimately, the Land and Environment Court dismissed an appeal from Council's deemed refusal) and so there was no occasion for it to reach the state of satisfaction required by cl 45(1). For another, the private law duty for which Dansar contends is one whose breach sounds in damages, rather than vitiating an exercise of public power. For a third, as narrowly formulated, it was a duty to take reasonable care in allocating spare sewerage capacity previously determined to be available. That duty was, correctly, regarded by Dansar as distinct from the determination of available sewerage capacity, which Dansar accepted was not subject to the alleged duty of care. 189Dansar alleged that the Council was required to give "proper consideration" to its development application, including proper consideration as to whether "prior adequate arrangements had been made". That submission conflates the obligation upon the Council to satisfy itself of a precondition to the exercise of its power to grant consent, in its capacity as consent authority, with the Council's functions as sewerage authority. It is the latter which matters for present purposes. 190In determining whether the duty for which Dansar contends exists, it is necessary to ask a question which may seem to be quite artificial. Was the Council exercising its functions under the EP&A Act (responding to a particular application for consent by a landowner), or was the Council exercising its functions as a sewerage authority, implementing spare sewerage capacity in accordance with a resolution reflecting an evaluation of competing and diverse interests (such as the existing demand, the environmental impacts and compliance with the Council's licence)? The artificiality arises because in the present case, the same Council performed both functions, but that will not always be so. The force of Codlea Pty Ltd v Byron Shire Council [1999] NSWCA 399; 105 LGERA 370 is that the function of entering into an "adequate arrangement" is outside the functions exercised in a Class 1 appeal by the Land and Environment Court pursuant to s 39(2) and therefore distinct from the Council's functions under the EP&A Act. 191I accept that Dansar's application for development consent necessarily amounted to its seeking an arrangement for the provision of sewerage for 11.6 ETs (for without the Council being satisfied of the existence of such an arrangement, it had no power to grant consent). However, where (as Dansar accepted) the Council had no duty in formulating, from time to time, the policies it would put in place for allocating the limited sewerage capacity, which necessarily were approximate, contestable and liable to change at any time and without notice, it is difficult to see how there could be a duty to take reasonable care in the implementation of those policies so as to avoid pure economic loss. 192The foregoing is wholly consistent with the reasons of Meagher JA. The analysis required to determine the existence of a duty to take reasonable care is, necessarily, more wide-ranging than the matters to which I have referred, and I gratefully agree with the whole of his Honour's reasons. I would add that I regard this appeal as an unusual case; ordinarily, it might be expected that such cases would involve reliance by the plaintiff upon a representation made by Council about how its policies were being implemented.

Amendments 22 October 2015 - [101] - "240kL/day" changed to "240L/day" [145] - "Aquarius Backpack development" changed to "Aquarius Backpackers development" [176] - "ATR 81-692" changed to "Aust Torts Reports 81-692" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 October 2015