Della Franca v Lorenzato; Burwood Council v Lorenzato

d [2021] NSWCA 206 Stovin v Wise (1996) AC 923 Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41 Votraint No 1088 Pty Ltd v Commonwealth [2005] NSWCA 249 Category: Principal judgment Parties: Matter 2020/339522: Michael Lewis Della Franca (Appellant) Elisa Lorenzato (Respondent)

Matter 2020/351426: Burwood Council (Appellant) Elisa Lorenzato (First Respondent) Michael Lewis Della Franca (Second Respondent) Representation: Matter 2020/339522: Counsel: S White SC / J A Trebeck / N J Condylis (Appellant) J E Sexton SC / R Carey (Respondent)

Solicitors: Scarfone & Co (Appellant) Fraser Clancy (Respondent)

Matter 2020/351426: Counsel: M L Wright SC / D Robertson (Appellant) J E Sexton SC / R Carey (First Respondent) S White SC / J A Trebeck / N J Condylis (Second Respondent)

Solicitors: Matthews Folbigg (Appellant) Fraser Clancy Lawyers (First Respondent) Scarfone & Co (Second Respondent) File Number(s): 2020/339522; 2020/351426 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2020] NSWSC 1659 Date of Decision: 23 November 2020 Before: Fagan J File Number(s): 2017/83223

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] By contract dated 17 March 2011 Ms Lorenzato agreed to purchase a residential property from Mr Della Franca. The contract included a planning certificate ("the Certificate") issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) by Burwood Council ("the Council"). The purchase was completed on 12 August 2011 after Mr Della Franca's solicitor supplied answers to requisitions submitted by Ms Lorenzato's solicitor. The property was subject to ongoing stormwater issues and in 2002 the Council adopted a resolution concerning inter alia the acquisition of a drainage easement over an underground stormwater pipe located on the property ("the Resolution"). The existence of the Resolution was not disclosed in either the Certificate or in the answers to requisitions. Ms Lorenzato commenced proceedings in the Supreme Court against the Council and Mr Della Franca claiming damages for, inter alia, negligent misstatement, in the case against the Council, in the Certificate and, in the case against Mr Della Franca, in his answers to Ms Lorenzato's requisitions. Following a hearing in 2020, the primary judge found in favour of Ms Lorenzato on both of her claims. Judgment was given against each of the defendants for about $1,200,000 together with interest of about $700,000. The Council then appealed to this Court and, in response, Ms Lorenzato sought by a Notice of Contention to support the judgment against the Council on alternative grounds. The primary issues on this appeal were: (1) Whether the Council's statement in the Certificate that the land was not affected by a policy that restricts the development of the land because of flooding constituted a negligent misstatement; (2) Whether the Council's statement in the Certificate that development on the land was not subject to flood related development controls constituted a negligent misstatement; (3) Whether the Council's failure to disclose in the Certificate the existence of the pipe constituted a negligent misstatement. Mr Della Franca also appealed and the primary issues on his appeal were: (1) Whether Mr Della Franca's response of "No" to requisition 6(a) (whether there were any unregistered easements) was misleading; (2) Whether Mr Della Franca's response of "No…" to requisition 7 (whether he was notified by Council that the land was to be resumed) was misleading; (3) Whether Mr Della Franca's response of "Not to vendor's knowledge…" to requisition 8(a) (whether there was any outstanding notification, claim or requirement of the Council) was misleading; (4) Whether Mr Della Franca's response of "Purchaser should make own enquiries" to requisition 19 (whether there were any restrictions on the use or development of the land) was misleading. The Court unanimously allowed both appeals: The Council's Appeal In relation to Issue 1 (land affected by a policy) The statutory framework suggests that the reference to a "policy" was not concerned with a site-specific decision (such as the Resolution) but rather with the relationship of particular land to general floodplain levels: [83]. Even if the Resolution did constitute a "policy", it was not one which itself "restrict[ed] the development of land because of … flooding". It was only designed to reduce flooding by indirect means: [84], [138], [140]. Further, it was abandoned by the Council by the time of issue of the Certificate: [87], [138]. In relation to Issue 2 (land subject to flood related development controls) As informed by various documents published by the Department of Infrastructure, Planning and Natural Resource, the expression "flood related development controls" referred to development controls stipulated according to the location of the subject land either above or below an adopted Flood Planning Level: [97], [98], [100]. Provisions in the 1994 Stormwater Code which concerned the creation and preservation of drainage easements did not constitute "flood related development controls": [98], [100]. In relation to Issue 3 (non-disclosure of the pipe) The Council's duty of care did not extend to volunteering information beyond that specified in the Regulation. Its liability would only arise if the information it was required to or chose to provide was incorrect or misleading: [105], [106], [150]. (Further observations per Basten JA and Brereton JA regarding s 43A of the Civil Liability Act and s 733 of the Local Government Act) The application of s 43A of the CLA does not turn on whether a public authority was performing a duty as opposed to exercising a discretionary power: [19]. The standard of care imported by s 43A(3) is applicable to the Certificate issued under s 149(2) and (5) of the Environmental Planning and Assessment Act. Statements in the Certificate did not breach that standard: [21], [26]-[28], [147], [151]. The failure to refer to the existence of the pipe in the Certificate was not shown to be other than in good faith and there was no reason to find that the defence provided by s 733(1) of the LGA did not apply: [37], [39], [153], [154]. Mr Della Franca's Appeal In relation to Issue 1 (unregistered easements) The answer to requisition 6(a) was not required to disclose the Council's ownership of the pipe located under the property, or the Council's concomitant right of repair and the like, pursuant to s 59A of the LGA. This follows from cl 10 of the sale contract which precluded the purchaser from requisitioning in relation to the pipe: [114], [115], [161]. In relation to Issue 2 (notification of resumption) Even if Mr Della Franca's knowledge of the Resolution constituted knowledge of an intended resumption, that Resolution had, to Mr Della Franca's knowledge, been abandoned: [117], [162]. In relation to Issue 3 (outstanding notifications, claims or requirements) The requirement in the Resolution for an easement and further notices issued by the Council had been abandoned and were not outstanding: [119], [120], [164]. Requisition 8(a) was concerned with outstanding matters with which the vendor should comply before completion and at the relevant time there was nothing of this type for Mr Della Franca to attend to: [122], [164]. In relation to Issue 4 (restrictions on the use or development of the land) The non-answer to this requisition cannot be regarded as incorrect or misleading: [124].

Judgment

1. BASTEN JA: In August 2011 Elisa Lorenzato became the owner of a property in the Appian Way, Burwood, by transfer from the vendor, Michael Lewis Della Franca, pursuant to a contract for sale and purchase entered into on 17 March 2011.
2. On 17 March 2017 Ms Lorenzato commenced proceedings in the Supreme Court against Mr Della Franca and Burwood Council. Her claims fell into three parts. First, she had a claim against the Council in nuisance on the basis that the Council was liable for flooding resulting from inadequate stormwater drainage affecting properties on the lower side of the Appian Way. She was successful in that claim and was awarded damages in an amount of $55,000; there is no appeal from that order.
3. Her second claim against the Council alleged negligent misstatements in a certificate issued under s 149 of the Environmental Planning and Assessment Act 1979 (NSW) ("the Planning Act"). In broad terms, the complaint was that the Council had failed to include information relevant to the state of stormwater drainage, as it affected her property.
4. The third claim was also for negligent misstatement, brought against Mr Della Franca, on the basis of inadequate answers to requisitions sought pursuant to the contract of sale of land. Again, the issue related to information with respect to the stormwater drainage affecting the property.
5. On 23 November 2020, the trial judge, Fagan J, gave judgment on the negligent misstatement claims against both the Council and Mr Della Franca in the sum of $1,274,000, together with interest to the date of judgment. [1] The interest was calculated at almost $700,000, running from 12 August 2011.
6. Both the Council and Mr Della Franca lodged appeals against the judgment and orders dealing with the negligent misstatements. For the reasons given by Macfarlan JA each appeal should be upheld and the awards of damages for negligent misstatements set aside. Subject to any variation with respect to the costs of the trial in relation to the claim in nuisance, Ms Lorenzato must pay the costs of the Council and Mr Della Franca of the trial and of the appeal to this Court. I agree with the orders proposed, for the reasons given, by Macfarlan JA.
7. The following observations address the statutory protective provisions on which the Council relied. The first is s 43A of the Civil Liability Act 2002 (NSW).

Issue of planning certificate in good faith

1. In requesting the issue of a planning certificate, Mr Della Franca required information in accordance with s 149(2) and s 149(5): see [12] above.
2. In February 2007, cl 7 of Sch 4 of the Regulation was amended to remove reference to any policy adopted by the Council "that restricts the development of land because of the likelihood of … flooding …". Other risks were to be disclosed, but not risks relating to flooding. At the same time, a new cl 7A was introduced relating to "[f]lood related development controls information". Curiously, more than three years later, in August 2010, the Council had failed to update the template it used for planning certificates so as to reflect the amendments to cl 7, although it had included the new cl 7A. As a result, the answer it provided in the planning certificate issued in August 2010 included a denial that the land was affected by a policy restricting the development of the land because of the likelihood of flooding, language reflecting the old cl 7.
3. In order to rely upon that as a negligent misstatement, Ms Lorenzato contended in this Court that the answer constituted "advice on such other relevant matter affecting the land of which it may be aware", within the terms of s 149(5). That appears not to have been how the case was run at trial. Nevertheless, at trial a second negligent misstatement was said to arise from the advice supplied pursuant to s 149(5). Accordingly, even at trial it was necessary to address the protective provision in s 149(6), namely that the advice must have been provided otherwise than "in good faith pursuant to subsection (5)."
4. Although pleaded, the judgment below did not address that issue. Rather, in considering the statutory defences, the reasoning moved directly from the application of s 43A to the reliance upon s 733 of the Local Government Act. Section 733, so far as relevant, provided as follows: 733 Exemption from liability - flood liable land and land in coastal zone (1) A council does not incur any liability in respect of: (a) any advice furnished in good faith by the council relating to the likelihood of any land being flooded or the nature or extent of any such flooding, or (b) anything done or omitted to be done in good faith by the council in so far as it relates to the likelihood of land being flooded or the nature or extent of any such flooding. … (3) Without limiting subsections (1) and (2), those subsections apply to: (a) the preparation or making of an environmental planning instrument, including a planning proposal for the proposed environmental planning instrument, or a development control plan, or the granting or refusal of consent to a development application, or the determination of an application for a complying development certificate, under the Environmental Planning and Assessment Act 1979, and … (c) the imposition of any condition in relation to an application referred to in paragraph (a), and (d) advice furnished in a certificate under section 149 of the Environmental Planning and Assessment Act 1979, and (e) the carrying out of flood mitigation works, and … (g) any other thing done or omitted to be done in the exercise of a council's functions under this or any other Act. (4) Without limiting any other circumstances in which a council may have acted in good faith, a council is, unless the contrary is proved, taken to have acted in good faith for the purposes of this section if the advice was furnished, or the thing was done or omitted to be done, substantially in accordance with the principles contained in the relevant manual most recently notified under subsection (5) at that time. (5) For the purposes of this section, the Minister for Planning may, from time to time, give notification in the Gazette of the publication of: (a) a manual relating to the management of flood liable land, or (b) a manual relating to the management of the coastline. The notification must specify where and when copies of the manual may be inspected. (6) A copy of the manual must be available for public inspection, free of charge, at the office of the council during ordinary office hours. (7) This section applies to and in respect of: (a) the Crown, a statutory body representing the Crown and a public or local authority constituted by or under any Act, and (b) a councillor or employee of a council or any such body or authority, and (c) a public servant, and (d) a person acting under the direction of a council or of the Crown or any such body or authority, in the same way as it applies to and in respect of a council. …

RELEVANT FACTUAL CIRCUMSTANCES

1. The relevant factual circumstances are described in detail in the primary judgment at pages 19 to 90 ([35]-[232]). It is sufficient for present purposes to provide the following summary, based largely on that contained in the Council's written submissions on appeal.
2. In about 1904 a predecessor council installed a 400mm diameter pipe under the surface of the subject property for the purpose of draining stormwater from the Appian Way and surrounding catchment. By reason of s 59A of the Local Government Act 1993 (NSW) (enacted in 2002), the Council is the owner of that pipe (Judgment at [60] and [332]).
3. In about 1911 the house which is on the property was built over part of the pipe and in the 1960s a swimming pool was installed over another part. Mr Della Franca became the owner of the property in 1989. In about 2005, he added a patio to the rear of the house, over the pipe.
4. During his ownership of the property, Mr Della Franca and neighbouring residents complained to the Council about their properties being inundated by stormwater runoff from the Appian Way and surrounding catchment during heavy rain.
5. In 2001 the Council's engineers concluded that the drainage issues were caused by the poor condition of the pipe referred to above, that it should be decommissioned and that a new stormwater pipe with greater capacity should be installed under the surface of the property, with a drainage easement to be created adjacent to the northern and western boundaries and therefore not under the house. Thereafter the Council negotiated with Mr Della Franca for it to acquire such a drainage easement to enable the proposed works to be carried out but the negotiations were unsuccessful.
6. In June 2002 Mr John Wyatt, the Council's Group Manager of Engineering Services, prepared a report for the Council's Services and Policy Committee on the issue. This led to that Committee passing the following resolution on 11 June 2002 (the "2002 Resolution"): "A. That Council proceed to negotiate the creation of an easement over the existing pipeline and then proceed to reline the existing pipe in its current location beneath the house. B. That, should Council be unable to gain consent from the owner, it proceed with compulsory acquisition of an easement over the existing pipeline. (Future development of the property should include the establishment of an easement adjacent to the side boundary for drainage purposes). C. That the Acting General Manager and Council's Solicitor meet with the owner and his Solicitor and advise them of Council's adopted course of action. D. That Council agree to remove the tree on the side boundary of 14 Wyatt Avenue."

The s 149 Planning Certificate

1. Since the events relevant to these proceedings, amendments have been made to the applicable legislation. The regulatory framework set out below refers to the legislation as it was at the relevant time.
2. Section 149 of the Planning Act was in the following terms: 149 Planning certificates (1) A person may, on payment of the prescribed fee, apply to a council for a certificate under this section (a planning certificate) with respect to any land within the area of the council. (2) On application made to it under subsection (1), the council shall, as soon as practicable, issue a planning certificate specifying such matters relating to the land to which the certificate relates as may be prescribed (whether arising under or connected with this or any other Act or otherwise). (3) (Repealed) (4) The regulations may provide that information to be furnished in a planning certificate shall be set out in the prescribed form and manner. (5) A council may, in a planning certificate, include advice on such other relevant matters affecting the land of which it may be aware. (6) A council shall not incur any liability in respect of any advice provided in good faith pursuant to subsection (5). However, this subsection does not apply to advice provided in relation to contaminated land (including the likelihood of land being contaminated land) or to the nature or extent of contamination of land within the meaning of Part 7A. (7) For the purpose of any proceedings for an offence against this Act or the regulations which may be taken against a person who has obtained a planning certificate or who might reasonably be expected to rely on that certificate, that certificate shall, in favour of that person, be conclusively presumed to be true and correct. (See now s 10.7 of the Planning Act.)
3. Clause 279 of the Environmental Planning and Assessment Regulation 2000 was in the following terms: 279 What matters must be specified in a planning certificate? (cf clause 112 of EP&A Regulation 1994) (1) The prescribed matters to be specified in a certificate under section 149 (2) of the Act are the matters set out in Schedule 4. (2) A certificate under section 149 (2) of the Act may be issued containing only the information set out in clause 3 of Schedule 4.
4. Clauses 7 and 7A of Sch 4 to that Regulation were in the following terms: 7 Council and other public authority policies on hazard risk restrictions Whether or not the land is affected by a policy: (a) adopted by the council, or (b) adopted by any other public authority and notified to the council for the express purpose of its adoption by that authority being referred to in planning certificates issued by the council, that restricts the development of the land because of the likelihood of land slip, bushfire, tidal inundation, subsidence, acid sulphate soils or any other risk (other than flooding). 7A Flood related development controls information 1) Whether or not development on that land or part of the land for the purposes of dwelling houses, dual occupancies, multi dwelling housing or residential flat buildings (not including development for the purposes of group homes or seniors housing) is subject to flood related development controls. (2) Whether or not development on that land or part of the land for any other purpose is subject to flood related development controls. …

The answers to requisitions

1. Clause 5 of the contract for sale dated 17 March 2011 limited the time for the purchaser to make requisitions. Special condition 10 to the contract stated that the "only form of general requisitions on title that the Purchaser shall be entitled to raise pursuant to Clause 5 shall be in the form of [the] Requisitions on Title annexed and are deemed to be served at the date of this Contract".
2. Clause 10 of the contract provided relevantly as follows: "10 Restrictions on rights of purchaser 10.1 The purchaser cannot make a claim or requisition or rescind or terminate in respect of - … 10.1.2 a service for the property being a joint service or passing through another property, or any other service for another property passing through the property ('service' includes air, communication, drainage, electricity, garbage, oil, radio, sewerage, telephone, television or water service); … 10.1.8 any easement or restriction on use the substance of either of which is disclosed in this contract or any non-compliance with the easement or restriction on use…".
3. The form of requisitions on title incorporated in the contract and referred to in cl 5 included the following: "6. Is the Vendor aware of: (a) any unregistered easements such as a right of way which affect the property? If so, please give full details. (b) the breach of any covenant noted on the title? If so, such breach must be remedied before completion. 7. Has the Vendor received any notification from the Roads and Traffic Authority or local Council that the land or part of it is to be realigned, widened, altered or resumed? If so, please give full details. 8. Is there any outstanding notification, claim or requirement of: (a) a statutory or local authority, or (b) an adjoining owner which affects the property or any part of it? Any such notice, claim or requirement issued before contracts were exchanged must be complied with by the Vendor before completion. … 19. Is the Vendor aware of any restrictions on the use or development of the land?"
4. On 9 June 2011 Ms Lorenzato's solicitors provided to Mr Della Franca's solicitors a form of transfer to be signed and handed over on settlement "subject and without prejudice to satisfactory replies to requisitions on title herein". On 14 July 2011 Ms Lorenzato's solicitors expressly stated to Mr Della Franca's solicitors that they raised requisitions on title in accordance with special condition 10. In a letter of 4 August 2011 they referred to the date of 12 August 2011 scheduled for settlement and requested "a direction to pay as soon as possible together with replies to requisitions". A further reminder was given by Ms Yvonne Marra, a paralegal employed by Ms Lorenzato's solicitors, by email of 9.19am on 11 August 2011. The vendor's answers to the requisitions, given by way of handwritten notations on a copy of the form of requisitions on title annexed to the contract, were provided later that day. Settlement took place the following day.

Whether misstatement in item 7 of the s 149 Certificate

Whether there was a relevant policy

1. The primary judge found that the 2002 Resolution was, within the meaning of item 7 in the s 149 Planning Certificate, a "policy adopted by the Council… that restricts the development of the land because of the likelihood of… flooding". His Honour also found that the 2002 Resolution, and therefore the relevant "policy", was not revoked or abandoned prior to issue of the Certificate. Accordingly his Honour found that the statement in the Certificate that no such policy existed was erroneous.
2. His Honour stated that the object of paragraphs A and B of the 2002 Resolution (see [54] above) "was to achieve adequate drainage of stormwater from Appian Way and to avert the risk of flooding the road and/or" that of nearby properties and that those paragraphs described the steps that would be required to achieve that result. His Honour also noted the statement in the 2002 Resolution that "[f]uture development of the property should include the establishment of an easement adjacent to the side boundary for drainage purposes" and acknowledged that this did not state "in terms" that any future development consent would be made conditional upon the grant of a western boundary easement. He stated however that "that was what it meant".
3. His Honour continued: "Such a long term plan of action, with a defined objective and multiple intermediate and contingent steps, was a 'policy' according to the ordinary meaning and usage of that word in the English language. The policy was adopted 'because of the likelihood of … flooding' of road infrastructure and vulnerable properties. The fact that the means chosen would require drainage access through only one parcel of private property and would therefore restrict the development of only that property does not make it any the less a 'policy'. Council submitted that its 2002 resolution only had to be disclosed in answer to question 7 if it applied generally throughout the local government area or at least to multiple properties. But question 7 in the certificate is not so limited."
4. The proper construction of the Certificate was to be determined in light of the statutory framework pursuant to which it was issued. As noted above, s 149(2) of the Planning Act provided for the inclusion in certificates of such matters "as may be prescribed". That prescription appeared in the Environmental Planning and Assessment Regulation 2000, which is a statutory instrument which commenced in 2001. In general terms, the subject Certificate followed, and used the language of, cl 7 of Sch 4 to the Regulation (see [66] above). The exception was that the form of the Certificate reflected cl 7 of the Regulation as it stood prior to its amendment in 2007 (that is, including the word "flooding" in the list of possible reasons for restricted development) (see [67] above). Nevertheless, the terms of the Regulation, both in its pre- and post-2007 form, provide the background against which the Certificate is to be construed.

Whether the Council's alleged "policy" abandoned prior to 2010

1. The essence of the primary judge's reasoning to his conclusion that the 2002 Resolution was not revoked or abandoned by August 2010 was as follows: "[267] No resolution amending or repealing that of 11 June 2002 was passed by Council up to August 2010. Council submits that its express notification to the second defendant on 5 March 2003 that it was deferring repair of the existing drain constituted abandonment of any intention to implement the resolution. I do not accept that submission. Deferment of remediation of the drain was not abandonment. In any event, what was deferred was the entry under statutory powers. Entry on that basis had not been dealt with in the resolution and deferment of it said nothing about whether Council would proceed in the future with acquisition of either an easement over the drain or a western boundary easement. … [271] From [the earlier described] frequent and consistent reiterations of engineering advice, Council was aware that establishment of a western boundary easement was a core, indispensable element of the 2002 resolution. Notwithstanding that the resolution itself postponed acquisition of such an easement until 'future development of the property', Council knew that this acquisition was not just an option but that it would have to be done. Implicit abandonment of the plan in the resolution cannot be attributed to Council in these circumstances."
2. The following circumstances however in my view indicate that even if the 2002 Resolution did constitute a relevant "policy", it was abandoned by the Council by the time of issue of the Certificate in 2010.
3. The Mayor's letter to Mr Della Franca of 14 February 2003 (which was not referred to by the primary judge in his summary of the circumstances that were relevant in this context - compare at Judgment [109]) stated that the Council had "chosen not to pursue the second option" referred to in the 2002 Resolution. This was what was stated in item B of that Resolution (compulsory acquisition of an easement at the site of the existing pipeline or imposition of a condition on a future development consent that a boundary easement be provided). This left only item A, which involved the creation of an easement over the existing pipeline by agreement with the owner, and then consequent relining of the existing pipe. Even assuming that item A subsisted as an operative "policy" until at least 2010, it clearly did not involve a policy of the type described in item 7 of the Certificate. A "policy" to attempt to reach an agreement with the landowner about a matter could not on any view be described as a policy that restricted development of the subject land due to flooding.

Whether misstatement in item 7A of the s 149 Certificate

1. As the primary judge held that there was no misstatement in item 7A of the Certificate, this issue arises by way of Ms Lorenzato's Notice of Contention which seeks to support his Honour's judgment on a ground additional to that upon which he relied.
2. In relation to the meaning of the expression "flood related development controls" in item 7A of the Certificate, the primary judge referred to the 2005 Floodplain Development Manual (see [81]-[83] above) and to a circular, a Guideline and a Direction, all published in 2007. His Honour continued: "[283] The Guideline used the expression 'flood related development controls' repeatedly and consistently in the sense of restrictions imposed by local environmental plans upon residential development by reference to the location of the subject land either above or below an adopted Flood Planning Level. The Departmental circular under cover of which the Guideline and Direction No 15 were distributed also used the expression 'flood related development controls' repeatedly and consistently in the above sense. The circular stated that cl 7A of Sch 4 of the Regulation, the Guideline and Direction No 15 constituted, together: a package of changes concerning flood related development controls on residential development on land above the 1-in-100 year flood and up to the Probable Maximum Flood. [284] The circular said that the changes followed 'community concern over notations about low flooding risk being included on section 149 certificates and the appropriate development controls that should apply to residential development in low flood risk areas'. From the usage of the expression 'flood related development controls' throughout these documents, issued by the Department at the time of cl 7A being inserted in the Regulation, I interpret the quoted expression where it appears in the clause as having the meaning discussed at [283] above. It has the same meaning in question 7A in the planning certificate."
3. Ms Lorenzato relied before the primary judge on a Code of Stormwater Management which was adopted by the Council in 1994. The Code sought to prevent stormwater drainage issues through the adoption of policies to be applied in the process of assessing development applications. Ms Lorenzato relied in particular on two of those policies, cll 8.8 and 8.16 of the Code, which relevantly provided as follows: 8.8 Easements For sites that have existing Council pipelines through them that are not covered by an easement, or where an existing pipeline is not within the easement, Council will require the creation of an easement in favour of itself over the pipeline. The easement width is to be the pipe, box or channel section width plus 1.5m, with an overall minimum width of 2.5m. … 8.16 Structures Over or Near Drainage Lines and Easements New buildings, structures and tennis courts will not [be] permitted over drainage lines or within easements. Paving over any drainage line or easement is acceptable, but will require appropriate jointing at the easement boundary, and to be in a material approved by Council's Engineer. Clearances to easement boundaries are required to prevent structural loads on drainage structures or encroachment within the angle of repose of the soil. Piering is an acceptable technique to achieve this. If there is an existing structure over the drainage line or easement within the site that is part of the application, then an access pit is required to be provided upstream and downstream of the structure… In relation to Ms Lorenzato's submission that these provisions constituted "flood related development controls", his Honour concluded: "[286] It is no doubt true that preservation of the integrity of an existing drain and creation of an easement over it, as provided for in these clauses [cll 8.8 and 8.16 of the Code], are provisions related to ensuring that storm water is piped and contained and does not become an overland flood. But that does not constitute those clauses, or any other part of the Code, a 'flood related development control' within the meaning that I have concluded at [283]-[284] must be attributed to that expression in question 7A. The quoted expression encompasses development controls that are stipulated according to the location of a property relative to a Flood Planning Level. A partial restriction upon full development of land, dictated by the presence of a drain on it and/or an easement over it, has only an indirect connection with flooding and is outside the concepts with which question 7A is concerned."

Whether negligent misstatement

1. As I have concluded that there was no misstatement in the Certificate, either in item 7 or item 7A, the question of whether the Council was negligent in making a misstatement in it does not arise. It is sufficient in these circumstances to note the observations of Basten JA at [27] above concerning breach of the standard of care imposed by s 43A(3) of the Civil Liability Act. Those observations, with which I agree, point strongly against any breach, not only of the standard referred to in that sub-section, but also of the ordinary standard, that is, the reasonable care and skill to which Part 1A of the Civil Liability Act refers.

Whether negligence in non-disclosure

1. By Grounds 6 and 7 of her Notice of Contention, Ms Lorenzato asserts that the primary judge ought to have found that, even if the statements in items 7 and 7A of the Certificate were correct, the Council nevertheless breached a duty owed to her by failing to disclose in the Certificate that "the pipe ran through the middle of the property, that it was owned by the Council and subject to Council's statutory rights and that No 13 was affected by overland flooding as a result of inadequate stormwater drainage of Appian Way" (see Judgment [287]).
2. She relied in this respect particularly on the fact that item 7 in the Certificate referred to a restriction on development because of "flooding", whereas the corresponding item in the list of prescribed matters in Sch 4 to the Regulation did not refer to flooding. This came about because the template for the Council's s 149 certificates was not appropriately amended after the changes to the Regulation in 2007 which deleted the word "flooding" from the list of possible reasons for restricted development in cl 7 in Sch 4 and its place included a new provision, cl 7A, dealing with flood related development controls (see [67] above).
3. Ms Lorenzato contended, in my view correctly, that in these circumstances the answer given in the Certificate to item 7 should, insofar as it related to flooding, be regarded as having been given under s 149(5) of the Planning Act, rather than s 149(2). After 2007 that information was not prescribed to be given and its inclusion in the Certificate was thus advice under s 149(5) on another "relevant matter", which the Council chose to give (see s 149 quoted in [64] above).
4. That view does not however assist Ms Lorenzato because, on my conclusions, the additional advice that the Council chose to give was not incorrect and, as the trial judge noted, Ms Lorenzato "was unable to cite authority for the proposition that the scope of Council's duty of care extended to volunteering information beyond that specified in the Regulation" (at [288]). Likewise, none was cited on appeal.
5. The primary judge was in my view correct to conclude that the Council had no obligation to volunteer information that was not prescribed to be given. Its liability would only arise if the information it was required to or chose to provide was incorrect or misleading.

Section 43A of the Civil Liability Act and s 733 of the Local Government Act

1. As well as for the reasons given above, Ms Lorenzato's claim against the Council should be dismissed for the reasons given by Basten JA in relation to the above statutory provisions.

Damages and proportionate liability

1. These issues do not arise as on my view Ms Lorenzato's claim against the Council fails.

MR DELLA FRANCA'S APPEAL

1. Mr Della Franca's appeal challenges the primary judge's findings that his answers to requisitions on title 6(a), 7, 8(a) and 19 were misleading, and that Ms Lorenzato relied on those answers. He also challenges his Honour's assessment of damages and award of interest.
2. I turn to the requisitions first.

Requisition 6(a) - unregistered easements

1. By Ground 1, Mr Della Franca challenges the primary judge's conclusion that his response of "no" to requisition 6(a) (see [76] above) was misleading. This requisition asked whether the vendor was aware of "any unregistered easements such as a right of way which affect the property?".
2. One issue that arises in this context is whether the rights conferred on the Council by s 59A of the Local Government Act 1993 (NSW) (inserted in the Act in 2002) constitute an "unregistered easement" within the meaning of the requisition. Relevantly, the section states: 59A Ownership of water supply, sewerage and stormwater drainage works (1) Subject to this Division, a council is the owner of all works of water supply, sewerage and stormwater drainage installed in or on land by the council (whether or not the land is owned by the council). (2) A council may operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other things that are necessary or appropriate to any of its works to ensure that, in the opinion of the council, the works are used in an efficient manner for the purposes for which the works were installed. …
3. The primary judge's reasons for finding the answer to the requisition was misleading were as follows: "The answer 'No' to requisition 6(a) was misleading. It was literally true because no easement had been granted and there was no instrument that was capable of being registered but was presently unregistered. However Council's ownership of the substantial storm water drain that ran through the centre of the property, together with Council's rights under s 59A(2) to 'operate, repair, replace, maintain etc', were so closely similar to the qualification of title that would arise from a drainage easement that in substance the simple answer 'No' was misleading."
4. The answer to requisition 6(a) was not however in my view required to refer to the Council's ownership of the pipe, or the Council's concomitant right of repair and the like, pursuant to s 59A of the Local Government Act. This follows from cl 10 of the sale contract to which reference was made in the course of argument (cl 10 is quoted at [73] above). ­­­­
5. That clause in my view precludes the purchaser from requisitioning in relation to the pipe because the pipe is a "service for the property… passing through the property", "service" being expressly defined to include "drainage". Special Condition 10 which deals with requisitions (see [72] above) should not be construed so as to sanction a requisition in conflict with this clear and specific provision. As a result, the broad terms of requisition 6(a) in the annexure to the contract should be read so as to conform with the specific exclusion in cl 10.

Requisition 7 - notification of any resumption

1. The negative answer to this requisition (see [74] and [76] above) was not a misstatement, at least for the reason that even if Mr Della Franca's knowledge of the 2002 Resolution constituted knowledge of an intended resumption, that Resolution had, to Mr Della Franca's knowledge, been abandoned by 2010.

Requisition 8(a) - outstanding notifications, claims or requirements

1. By Ground 3, Mr Della Franca challenges the primary judge's conclusion that Mr Della Franca's answer to Requisition 8(a) (see [76] above) of "not to vendor's knowledge but purchaser should make own enquiries" was misleading. His Honour found it to be misleading for three reasons: 1. The notices (or "notifications") of 4 February 2003 were "outstanding"; 2. "[T]he notification on 14 June 2002 [that is, notification of the 2002 Resolution] of Council's requirement of an easement over the existing drain was outstanding"; and 3. Apart from these matters, Council had in any event "'claims' that it owned the pipe and that it was entitled to enter upon No 13 from time to time as necessary to exercise its rights under s 94 of the Roads Act and s 59A of the Local Government Act to perform work on the pipe". (See Judgment [342].)
2. As to the first matter, for the reasons given at [93]-[94] above, I disagree that the notices of 4 February 2003 were outstanding: the Council had agreed that it would not pursue them without further notice to Mr Della Franca who was therefore in effectively the same position as he would have been in if the notices had not been issued.
3. As to the second matter, which concerns the Council's notification to Mr Della Franca of the Resolution of 11 June 2002, I do not agree that there was an outstanding requirement of the Council for an easement over the existing drain. For the reasons given at [88] above, there was as at August 2010 no such subsisting requirement.
4. As to the third matter, there was in my view no outstanding "claim" by the Council in August 2010.
5. The second part of this requisition (commencing "[a]ny such notice, claim or requirement") indicates that the requisition was concerned with outstanding matters with which the vendor should comply before completion. There was at the relevant time nothing of this type for the vendor to attend to. The Council's notices of 4 February 2003 were not waiting to be complied with (see [119] above) nor was there anything that the vendor had been required to do, and not done, in connection with the Council's ownership of the subject pipe. Mr Della Franca had not for example failed to comply with any requirement of the Council to give it access to repair the pipe.

Requisition 19 - restrictions on the use or development of the land

1. The primary judge found that Mr Della Franca's response to requisition 19 (see [76] above) that "purchaser should make own enquiries" was misleading because the correct answer would have been: "… that he was aware of restrictions both on the use of the land, arising from the existing drain running through the middle of it, and on development of the land, arising from the 2002 resolution under which Council would require establishment of a western boundary easement at the time of further development. …"
2. The answer given was that the "purchaser should make own enquiries". This did not give a negative answer, or indeed any answer, to the requisition. Ms Lorenzato might have had a contractual claim against Mr Della Franca for his failure to answer the requisition but the non-answer that she got cannot in my view be regarded as incorrect or misleading.

Other issues

1. For the above reasons, the requisition answers about which complaint has been made were not misleading. As a result, Ms Lorenzato's claim against Mr Della Franca must be rejected. In these circumstances, the issues concerning reliance on the answers, damages and interest do not arise. Two applications by Mr Della Franca to adduce on appeal further evidence relevant to damages need not therefore be addressed and should be rejected without a decision on their merits. The first was an application to rely on an affidavit of Santo Scarfone sworn 7 September 2021 and the second was made by a post-hearing notice of motion filed on 23 November 2021 to rely upon a further affidavit of the same deponent sworn 23 November 2021.

ORDERS

1. In addition to the claim of Ms Lorenzato against the Council referred to above, Ms Lorenzato claimed against the Council in nuisance and was awarded $55,000 (plus interest of $28,846.44) by the primary judge. As this award was not challenged on appeal, it should stand and Ms Lorenzato's success in obtaining it should be reflected in the costs order in relation to the proceedings at first instance. As the nuisance claim was, in terms of hearing time occupied and judgment recovered, very much Ms Lorenzato's subsidiary claim, the appropriate orders would be for the Council to pay 25% of her overall costs at first instance with Ms Lorenzato to pay 75% of the Council's costs at first instance, resulting in an order on a net basis that she pay 50% of the Council's costs.
2. For the above reasons, I propose the following orders: In Burwood Council's appeal 1. Allow the appeal. 2. Set aside the orders made at first instance on 23 November 2020. 3. Judgment for Ms Lorenzato against Burwood Council in the sum of $83,846.44 to take effect from 23 November 2020. 4. Order Ms Lorenzato to pay Burwood Council's costs on appeal and 50% of the Council's costs at first instance. In Mr Della Franca's appeal 1. Reject the applications of Mr Della Franca to adduce further evidence on appeal. 2. Allow the appeal. 3. Set aside the orders made at first instance on 23 November 2020. 4. Judgment for Mr Della Franca on Ms Lorenzato's claim against him. 5. Order Ms Lorenzato to pay Mr Della Franca's costs at first instance and on appeal.
3. BRERETON JA: In March 2011, the respondent Ms Elisa Lorenzato purchased a residential property at 13 Appian Way, Burwood ("the property") from the appellant in the first appeal, Mr Michael Della Franca, who had held it since 1989. The property is located in the Burwood Local Government area, administered by the appellant in the second appeal, Burwood Council ("the Council"). Attached to the contract for sale was a planning certificate issued by the Council under Environmental Planning and Assessment Act 1979 (NSW) ("EPAA"), s 149, [13] which contained statements to the effect that the land was not affected by a policy adopted by the Council that restricts the development of land because of the likelihood of flooding (in answer to "question 7", which corresponded to Environmental Planning and Assessment Regulation 2000 (NSW) ("EPAR"), Sch 4 cl 7), and that development on the land for the purposes of dwelling houses was not subject to flood-related development controls (in answer to "question 7A", which corresponded to EPAR, Sch 4 cl 7A). Further, in the context of the power to include under s 149(5) "advice on such other relevant matters affecting the land of which it may be aware", the certificate did not refer to flooding, or to the existence under the length of the land from front to rear - including under the house and swimming pool - of a 400mm diameter drainage pipe owned by the Council, which by 2011 had deteriorated, was obstructed, and was causing flooding of the property and surrounding areas, which the Council had investigated.

1. In late 2011 and into 2012, after Ms Lorenzato - who had no prior knowledge of the existence of the pipe, or of the associated risk of flooding - acquired the property, stormwater runoff again inundated it, on multiple occasions. The Council ascertained that the pipe was blocked.
2. Ms Lorenzato sued the Council and Mr Della Franca for damages for negligent misstatement, based respectively on the EPAA certificate and the above answers to requisitions. She also sued the Council for damages for nuisance. On 23 November 2020, [14] Fagan J gave judgment in her favour against the Council for $1,274,000 plus interest of $726,171, comprising $1,219,000 for damages in negligence and $55,000 for damages in nuisance; and for $1,219,000 and interest of $697,324 against Mr Della Franca. A cross claim by Mr Della Franca against his solicitor was dismissed.
3. From those judgments the Council and Mr Della Franca appeal to this Court. Mr Della Franca also appealed against the dismissal of his cross claim against his solicitor, but that appeal has, by consent, been dismissed.

The appeals

1. The Council's appeal impugns conclusions of the primary judge: 1. that the answer to question 7 in the certificate was inaccurate, and that by failing to answer it correctly the Council was liable to Ms Lorenzato for negligent misstatement, and was not protected against liability by s 43A of the Civil Liability Act 2002 (NSW) ("CLA") or s 733(1)(a) of the Local Government Act 1993 (NSW) ("LGA"). By a Notice of Contention, Ms Lorenzato seeks to uphold the finding of a misstatement on the alternative basis, which the primary judge rejected, that the existence of the pipe was not disclosed pursuant to EPAA, s 149(5); 2. in the assessment of damages; and 3. in rejecting the Council's proportionate liability defence under Part 4 of the CLA.
2. Mr Della Franca's appeal impugns conclusions of the primary judge: 1. that the answers to requisitions 6(a), 7, 8(a), and 19 were false or misleading, in breach of a duty of care owed to Ms Lorenzato; 2. that Ms Lorenzato relied on the answers to requisitions; 3. in the assessment of damages; and 4. in the award of interest.

The Liability of the Council - the EPAA, s 149, Certificate

1. The primary judge relevantly held that: 1. The 2002 resolution was a Council "policy" within the meaning of EPAR, Sch 4 cl 7; 2. The policy had not been revoked or abandoned prior to the issue of the planning certificate; 3. The Council therefore incorrectly answered question 7 in the certificate; 4. In breach of a duty owed to Ms Lorenzato, the Council did not use reasonable care in issuing the planning certificate; 5. CLA, s 43A, did not apply, as the issue of a planning certificate was not the exercise of a "special statutory power"; and 6. Nor did LGA, s 733(1)(a), apply, as the issue of a planning certificate was not the furnishing of advice in relation to the likelihood of flooding.

Question 7 - no relevant policy

1. In my view, contrary to the primary judge's holding, the 2002 resolution was not a "policy adopted by the Council … that restricts the development of the land because of the likelihood of … flooding …" within question 7. Although, ultimately, that phrase must be construed as a whole, it is not unhelpful to consider its components. So considered, the 2002 resolution was not a policy; it did not restrict the development of land, it did not do so because of the likelihood of flooding; and even if it did, it had been abandoned.
2. What constitutes a "policy" for the purposes of question 7 is not the subject of definition. However, there is a well-recognised distinction between policy decisions and operative decisions. In this context, a "policy" is a statement of guidelines, principles, or criteria of general application, in accordance with which decisions on specific cases will be made. Question 7 was, and would reasonably be understood by a council to be, directed to policies that provide that development on certain land is prohibited or constrained because of the risk of flooding. An example of this is the policy referred to in Mid Density Developments Pty Ltd v Rockdale Municipal Council. [15] The 2002 resolution was not a policy, because it was not a generic statement of guidelines, principles, or criteria, but a specific decision in respect of the subject property.
3. Nor did the resolution restrict the development of land in the way that a policy of the kind referred to in question 7 would. The resolution did not of itself restrict development at all. It did not state that development was prohibited or constrained. It did not proscribe any form or extent of development. It was no more than a proposal to proceed in the future in a certain way in certain events. That did not impose any present actual restriction on development. The existence of the resolution did not prevent the owner from carrying out development - including along the western boundary, where it was contemplated that an easement might be required. Any effect that it had was indirect and uncertain.
4. Further, to the extent that the resolution did restrict development, it did not do so because of the likelihood of flooding. Any connection with flooding was, again, incidental. If development was restricted, it was because of the proposed acquisition of an easement, not because of the likelihood of flooding.

Standard of care - CLA, s 43A

1. Moreover, his Honour took the view that the duty to exercise reasonable care in issuing the certificate could only have been discharged by giving an answer to question 7 that reasonably accurately conveyed the existence of the 2002 resolution. [18] His Honour said: [19] "In a case where the information supplied concerns Council's own acts and/or decisions, it is not relevant to enquire whether Council took reasonable steps to maintain accurate records of policies that it had adopted or whether it followed a reasonable procedure for interrogating those records prior to issuing a certificate. The duty of care could not be discharged by the adoption of any system of keeping or searching records if, notwithstanding such system, Council failed to answer question 7 in a s 149 certificate with reasonable accuracy as to the existence of its own policy resolution that lay within its own repository of corporate knowledge."
2. This was said to follow from the following passages in the judgment of the High Court in L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (No 1): [20] "A public body, by following the practice of supplying information upon which the recipients are likely to rely for serious purposes, lets it be known that it is willing to exercise reasonable skill and diligence in ensuring that the information supplied is accurate. In the circumstances, diligence might be more important than skill, although competence in searching for and transmitting the information must play a part. However, even if diligence only and not skill were required, a public body might be specially competent to supply material which it had in its possession for the purposes of its public functions. … Where, as in the present case, the supplier is the exclusive possessor of essential information concerning a matter of importance, such as the buying and selling of property, and, being a local government body, sets itself up as a centre from which, in a quite formalized fashion, this information is distributed to those who require it, it requires no holding out of special skill or competence in order to lead to the inference that care will be taken in furnishing that information. … In the discharge of their public functions local authorities have in a practical sense an obligation to provide information of the kind now in question in response to a request. It is information of vital importance to an owner or intending purchaser. It materially affects the use to which the land may be put in the future and its value. Because it relates to intended acts of the authority, it is information which it alone possesses. […] The specialized nature of the information, the importance which it has to an owner or intending purchaser and the fact that it concerns what the authority proposes to do in the exercise of its public functions and powers, form a solid base for saying that when information (or advice) is sought on a serious matter, in such circumstances that the authority realizes, or ought to realize, that the inquirer intends to act upon it, a duty of care arises in relation to the provision of the information and advice."

Notice of Contention - EPAA, s 149(5)

1. By her Notice of Contention, Ms Lorenzato contended that regardless of the scope of EPAA, s 149(2), the Council was obliged to disclose the existence of the pipe under s 149(5) as a matter affecting the land of which it was aware - particularly because it knew that the pipe was inadequate, in disrepair, and causative of flooding of the property. It was submitted that the primary judge's rejection of this proposition - on the basis that that there was no principle upon which the content of the Council's duty could be so enlarged; that, by responding to an application lodged pursuant to s 149(1), the Council could only be taken to providing such information as s 149(2) obliged it to provide; and that, at least absent an explicit request for information about Council infrastructure installed on the property or statutory rights in respect of it, there was no obligation on the Council to address such matters, and no person who received the certificate could reasonably rely upon it as containing full disclosure on those topics - was erroneous. [21]
2. In this respect, it is to be observed that the application for a planning certificate requested advice under s 149(5) as well as under s 149(2), and the applicant paid the extra fee ($60) for such advice, over and above the standard fee of $40 for advice under s 149(2). The information concerning the pipe was obviously of considerable relevance and importance to a purchaser of the property. It was, to use the terms of s 149(5), a relevant matter affecting the land of which the Council was aware. It is true that s 149(5) is permissive and not mandatory, but in circumstances where the Council agreed to provide information pursuant to s 149(5), demanded and was paid an additional fee for doing so, and had in its possession material of such obvious relevance affecting the particular land and knew that its certificate would be relied on by a prospective purchaser, the certificate would reasonably be regarded by a prospective purchaser reading it as misleading due to its failure to disclose a material matter within the Council's knowledge.
3. However, the mere fact that the certificate may have been misleading by non-disclosure is insufficient to found liability. Liability depends upon breach of a duty of care. It was submitted that once the Council engaged in giving advice under s 149(5), reasonable care required it to do more than it did. Reference was made to the following passage in the judgment of Gummow J in Pyrenees Shire Council v Day (citations omitted): [22] "[177] The general rule is that 'when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution have prevented an injury which has been occasioned, and was likely to be occasioned, by their exercise, damages for negligence may be recovered'. A public authority which enters upon the exercise of statutory powers with respect to a particular subject matter may place itself in a relationship to others which imports a common law duty to take care which is to be discharged by the continuation or additional exercise of those powers. An absence of further exercise of the interconnected statutory powers may be difficult to separate from the exercise which has already occurred and that exercise may then be said to have been performed negligently. These present cases are of that kind. They illustrate the broader proposition that, whatever its further scope, Lord Atkin's formulation in Donoghue v Stevenson includes 'an omission in the course of positive conduct … which results in the overall course of conduct being the cause of injury or damage'. [178] In the period shortly after the first fire, the Shire became aware of a serious risk to the entire row of shops in Neill Street by reason of the great possibility of fire at No 70. A competent inspection was conducted by an officer of the Shire and an oral warning was given to and an undertaking provided by Mr Tzavaras. Mr Tzavaras was told that he would be hearing from the Shire and there followed the letter of 12 August 1988. This emphasised the conclusion reached by the Shire that it was imperative that the fireplaces be not used under any circumstances unless certain work was performed. These steps were measures under Pt XXVI of the Local Government Act apt to assist in the prevention of further fire but, without more, by no means likely to do so. Adjoining owners and occupiers were not put on notice nor was anything done to put the Shire in the position to alert future owners or occupiers of No 70. The taking of such additional measures under s 694(1) would have engaged the exercise of the interrelated and specific powers conferred by such provisions as ss 695(1A), 883 and 890 of the Local Government Act. The Shire occupied such a situation and had placed itself in such circumstances that in stopping where it did it did not exercise its powers under s 694(1) with the care and diligence required by the circumstances."

Conclusion

1. The Council was not required to disclose the 2002 resolution in response to question 7 in the s 149 certificate, and his Honour erred in holding otherwise. Insofar as s 149(5) permitted disclosure of the existence of the pipe, the applicable standard is provided by CLA, s 43A, and it cannot be said that the omission to do so in the circumstances was so unreasonable that no council could have considered it reasonable. Further, it was not omitted other than in good faith. Liability of the Council in negligence was not established. This does not affect its liability in nuisance.

The Liability of Mr Della Franca - the Answers to Requisitions

1. The primary judge concluded that: 1. Mr Della Franca's answers to the following requisitions were misleading: 1. requisition 6(a), as the Council's rights in respect of the pipe were tantamount to an easement; 2. requisition 7, as Mr Della Franca had been informed by letter of 14 June 2002 of the resolution passed three days earlier which contained notification that an easement over the existing drain would be resumed, and "by clear implication" that a western boundary easement would be resumed in the future; 3. requisition 8(a), as the notification of 4 February 2003 (that the Council intended to enter on the property for the purpose of carrying out maintenance and relining the drainage pipe), as well as that of 14 June 2002 (of the intention to acquire an easement) were outstanding; and 4. requisition 19, because the correct answer would have been that Mr Della Franca was aware of restrictions, both on the use of the land arising from the existing pipe, and on development of the land arising from the 2002 resolution; and 1. The misleading and erroneous answers constituted negligent breaches of Mr Della Franca's common law duty and implied contractual obligation as vendor to exercise reasonable care that his answers should be accurate.
2. It was not in issue at first instance, nor before us, that a vendor owes a common law duty to a purchaser to exercise reasonable care to answer requisitions on title accurately. [26]

Requisition 6(a)

1. As has been mentioned, the negative answer to requisition 6(a) was found to be misleading on the basis that, although there was no easement granted and no instrument that was capable of being registered but presently unregistered, the Council's ownership of the pipe that ran through the centre of the property, coupled with its rights under LGA, s 59A(2), to operate, repair, replace and maintain it, were "tantamount" to an easement. [27] Thus, the simple answer "no" was said to be misleading. [28]
2. The fact remains that, although there are similarities between the Council's rights to the pipes and an easement, it was not an easement. The answer was literally correct. Moreover, the requisitions were in a form authorised by and annexed to the contract: Special Condition 10 provided as follows: "10. The Purchaser acknowledges that the only form of general requisitions on title that the Purchaser shall be entitled to raise pursuant to Clause 5 shall be in the form of Requisitions on Title annexed and are deemed to be served at the date of this Contract."
3. The requisitions must be construed in the context of the contract as a whole, and in particular clause 10.1.2, which provides as follows: "10.1 The purchaser cannot make a claim or requisition or rescind or terminate in respect of - … 10.1.2 a service for the property being a joint service or passing through another property, or any service for another property passing through the property ('service' includes air, communication, drainage, electricity, garbage, gas, oil, radio, sewerage, telephone, television or water service);"
4. The effect of clause 10.1.2 was that the purchaser could not make a requisition in respect of a drainage service passing through the property. Requisition 6(a), construed in the context of clause 10.1.2, should not be read as referring to or encompassing a service in respect of which a requisition was precluded. The pipe was such a service. It was not encompassed by the requisition in question, and it follows that the answer was not misleading by failing to refer to it.

Requisition 7

1. The negative answer to requisition 7 was held to be false because Mr Della Franca had been informed by letter of 14 June 2002 of the Council's 2002 resolution. The trial judge considered that even if Mr Della Franca thought that the resolution had been abandoned or lapsed, the correct answer would still have been in the affirmative. [29] However, for reasons already given, the 2002 resolution did not remain operative. The Council had abandoned its intention to resume an easement. The requisition did not require disclosure of a notification that was no longer operative or in effect.

Requisition 8(a)

1. The negative answer to requisition 8(a) was held to be false in several respects: the notifications of 4 February 2003 were said to be outstanding; the notification on 14 June 2002 of the Council's 2002 resolution requiring an easement was said to be outstanding; and the Council had a "claim" that it owned the pipe and was entitled to enter upon the property to perform work on it.
2. However, for the reasons already advanced, the June 2002 notification and resolution were not outstanding; the resolution had been abandoned. The 4 February 2003 notice was, contrary to his Honour's finding, [30] no longer outstanding: the General Manager's letter of 5 March 2003 informed Mr Della Franca that the Council would "not … enter your property in accordance with the notice issued, and will formally notify you should it wish to proceed in this manner at some time in the future." Thirdly, the requisition was concerned with a "notice, claim or requirement issued before contracts were exchanged" which must be complied with by the vendor, and requires that they be complied with before completion. A claim to have a right of entry onto property to perform works is not a claim of the kind comprehended by that requisition.

Requisition 19

1. The answer to requisition 19 was found to be misleading because the correct answer would have been that Mr Della Franca was aware of restrictions on the use of the land arising from the existing drain, and on development of the land arising from the 2002 resolution. However, for reasons explained above, the 2002 resolution did not restrict development of the land. The existence of a pipe is not a restriction on user. In any event, the answer "purchaser should make own enquiries" was effectively a warning to the purchaser: "caveat emptor".

Conclusion

1. For those reasons, I do not accept that a case of negligent misstatement can be sustained against Mr Della Franca on his answers to the requisitions on title.

Other matters

1. In the light of those conclusions, it is unnecessary to address: 1. Mr Della Franca's complaint that his Honour erred in finding reliance on the answers to requisitions; 2. Both appellants' complaints concerning the assessment of damages; 3. The question of proportionate liability; and 4. Mr Della Franca's complaint that the trial judge erred in respect of the discretion to award interest.
2. Since judgment was reserved, Mr Della Franca has filed a motion seeking to adduce fresh evidence. Prima facie, the evidence which he seeks to adduce would have been highly relevant on the question of damages, and has become available only recently. However, as Mr Della Franca succeeds on liability, it is unnecessary to consider the question of damages any further, and the motion should be dismissed, with its costs being costs in the appeal.

Conclusion

1. The Council's appeal should be allowed, although Ms Lorenzato should retain her judgment for damages for nuisance in the sum of $55,000 and interest. Mr Della Franca's appeal should be allowed, and instead there should be judgment in his favour. I agree with the orders proposed by Macfarlan JA.

Endnotes

1. Lorenzato v Burwood Council [2020] NSWSC 1659. (The judgment published on Caselaw was not identical to that provided in the red appeal book in this Court. The numbering of the paragraphs had changed, and a negative, noted below, was deleted.)
2. Lorenzato at [18], [33 (5)], and in discussion of issue (5).
3. (2014) 88 NSWLR 10; [2014] NSWCA 314.
4. (1996) AC 923 at 953 and 956 (Lord Hoffmann).
5. (2016) 94 NSWLR 159; [2016] NSWCA 51.
6. Zraika at [109] (Leeming JA).
7. (1985) 157 CLR 424 at 445; [1985] HCA 41.
8. See Queensland Bulk Water Supply Authority t/as Seqwater v Rodriguez & Sons Pty Ltd [2021] NSWCA 206 at [125]-[130] ("Seqwater").
9. (1961) 109 CLR 105 at 116; [1961] HCA 71.
10. See Seqwater at [73] (dealing with the Queensland equivalent of s 43A).
11. See Planning Act, s 4, council.
12. Manual, par 3.1.4 and Appendix I "Floodplain Risk Management Plan Implementation", par 17, dealing with planning certificates.
13. See now s 10.7.
14. Lorenzato v Burwood Council (2020) 245 LGERA 328; [2020] NSWSC 1659 ("Primary judgment").
15. (1993) 44 FCR 290 at 292 (Gummow, Hill and Drummond JJ); [1993] FCA 590 ("Mid Density Developments").
16. Primary judgment at 394-395 [266]-[276].
17. Primary judgment at 357 [109].
18. Primary judgment at 400 [291].
19. Primary judgment at 400 [291].
20. (1981) 150 CLR 225 at 235 (Gibbs CJ), 243 (Stephen J), 252-253 (Mason J); [1981] HCA 59.
21. Primary judgment at 399-400 [288]-[290].
22. (1998) 192 CLR 330 at 391-392 [177]-[178] (Gummow J); [1998] HCA 3.
23. Primary judgment at 402-403 [301].
24. Mid Density Developments at 300 (Gummow, Hill and Drummond JJ).
25. (2005) 148 LGERA 351 at 380 [122] (Giles JA; Beazley JA and Hunt AJA agreeing); [2005] NSWCA 323.
26. Votraint No 1088 Pty Ltd v Commonwealth [2005] NSWCA 249 at [13]-[19] (Mason P; Giles JA and Campbell AJA agreeing); Bebonis v Angelos (2003) 56 NSWLR 127 at 140 [80]-[81] (Handley JA; Beazley JA and Heydon JA agreeing); [2003] NSWCA 13, citing Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556; [1968] HCA 74 and Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560; 1 All ER 865.

Amendments 16 December 2021 - Formatting on Caselaw coversheet corrected. 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: 16 December 2021