Fregnan v Wollongong City Council

District Court of NSW|2019-02-22

Solicitors: In person (First and Second Plaintiffs) Marsdens Law Group (Defendant) File Number(s): 2018/00147015

Judgment

In these proceedings, the plaintiffs, Mr Michael and Mr Riccardo Fregnan, sue the defendant, Wollongong City Council, in the tort of negligence for damages for an alleged breach of a duty of care owed to them by the Council concerning the approval of a development application. The plaintiffs assert that they have suffered loss as a result of the alleged breach of the duty of care owed to them and that the loss is the total economic value of their property. The issues to be determined are: 1. The course of the development approval for the construction; 2. Whether a duty of care was owed to the plaintiffs by the defendant; 3. Whether there was a breach of the duty of care; 4. Whether any damage has been suffered by the plaintiffs as a result of an any alleged breach; and 5. The quantum of that damage.

The plaintiffs

As the plaintiffs were not legally represented and did not appear to be legally qualified or have any relevant legal experience, it was necessary for the court to provide some guidance to the plaintiffs in relation to the proper procedures to be followed in attempting to establish their case.
The first plaintiff, Mr Michael Fregnan, articulated his claim for damages as follows: 1. The defendant Council owed a duty of care to him to ensure that the development application it was considering in relation to No 7 considered the impact, if it was to be granted, as to the right location; 2. The Council breached its duty of care owed to him to assess the development application in relation to No 7, as it did not take into account properly the location of his house in considering whether to grant its approval; 3. The damage which occurred to the first plaintiff was the total economic loss of his property including the house on Lot 2 known as No 5 Canberra Road Lake Heights.
The second plaintiff, Mr Riccardo Fregnan, adopted this submission in relation to his position. It should be noted that none of the parties tendered any expert reports or called any expert evidence in the proceedings.

Summary of the background facts

From the evidence, it appeared that the following facts were established. These constitute my factual findings in the case, unless I indicate to the contrary: 1. What is now Nos 3, 5 and 7 Canberra Road Lake Heights were initially Lot 74 in Deposited Plan 15174; 2. There was a subdivision of Lot 74 of Deposited Plan 15174 in 1963-64: see Exhibit S; 3. This created three lots in a new subdivision being Lots 1, 2 and 3 of DP 505457; 4. In that subdivision, Lot 3 was No 3 Canberra Road. Lot 2 was No 5 Canberra Road and became Lot 2 in DP 505457. Lot 1 was No 7 Canberra Road. Houses were built on what became Nos 3 and 5 Canberra Road; 5. The owners of Lot 1/DP 505457 (No 7 Canberra Road) sought development approval for a subdivision of Lot 1 into two sub-lots in 2016. This involved the construction of detached dual occupancy buildings. A development application was lodged by the owners of No 7 Canberra Road with the defendant. It was given a development application number: DA - 2016/1684: Exhibit 1; 6. As indicated, the plaintiffs were the registered proprietors as joint tenants of DP 2/505457 being No 5 Canberra Road Lake Heights: Exhibit V; 7. The plaintiffs objected in December 2016 to the development application when they were given notification of it: Exhibits G and F. They then entered into extensive correspondence with the Council and the relevant Ministers in relation to the application alleging errors in the development application approval process; 8. In particular, they alleged that the Council took into account wrong building approvals and other erroneous factors in considering whether to grant approval; 9. It appears that in due course, a Planning Assessment Report dated 31 August 2017 was prepared on behalf of the Council: Exhibit 1; 10. Development approval was granted by the defendant. The plaintiffs were notified of this: Exhibit 2. Construction of the dwellings continued from 2017-2018 and they were completed; 11. The construction at No 7 caused severe disruption to the plaintiffs' enjoyment of their property and impacted on solar panels they had installed for the purposes of achieving an off-grid energy solution for their house; and 12. The plaintiffs commenced these proceedings on 10 May 2018.

Evidence for the plaintiffs

Mr Michael Fregnan, the first plaintiff, tendered a voluminous number of documents. It is unnecessary for the purposes of these proceedings to set out the content of all of these documents. Limiting orders were made under s 136 of the Evidence Act 1995 (NSW) in relation to some of the documents. The documents were tendered out of chronological order.
I will set out briefly a description of the more relevant documents: 1. 24 July 1970: letter from Wollongong City Council to Mr M and Mrs M Fregnan: Exhibit Y. This indicates that the Council had numbered Lots 2 and 1 in Canberra Road Lake Heights as Nos 5 and 7, respectively; 2. 13 December 2016: letter from Wollongong City Council to the plaintiffs. This letter informed the plaintiffs of the development proposal for a dual occupancy and subdivision of Lot 1/DP 505457 being No 7 Canberra Road. Submissions were invited; 3. Objection dated 16 December 2016 from the plaintiffs to the development application: Exhibit G. The plaintiffs submitted a lengthy objection to the proposed development application concerning No 7 Canberra Road. The objection was in two parts. The first related to the impact on the solar energy capacity of the plaintiffs' home. The evidence establishes that the plaintiffs had very extensive solar panelling on the roof of their home and nearby structures; 4. 20 December 2016: objection to the development application by the plaintiffs: Exhibit H. This submission related to the plaintiffs opposing the development on planning and related grounds. It is asserted in the document that the defendant Council owed a duty of care to the plaintiffs; 5. Receipts for the objections dated 16 and 20 December 2016: Exhibit O; 6. 5 September 2017: Exhibit W. Letter from "Mr Fregnan" to the New South Wales State Minister for Planning. This letter to the Minister points out a number of matters which in the opinion of the author, indicate that the defendant Council did not take into account all relevant circumstances in granting development approval to the development at No 7. First, it suggests that the approval caused material damage to the pre-existing solar off grid energy system of the plaintiffs. Secondly, it is alleged that the approval caused economic loss to the plaintiffs in No 5. Thirdly, it is alleged that the approval has caused physical and psychological harm to the occupants of No 5, being the plaintiffs. The letter refers to "material changes to the DA alteration of the development" thus indicating that the plaintiffs were aware of the changes to the originally lodged 2016 application. Fourthly, it is alleged that the Council has not consulted the plaintiffs or contacted them in relation to the application. Fifthly, it is said that the matters raised in the letter were important to energy considerations concerning the State in relation to what was described as a looming "energy crisis"; 7. See also the similar letter to the Minister for Energy dated 5 September 2017: Exhibit GG; 8. 28 September 2017: Exhibit A. This is a letter from Wollongong City Council to the resident of No 5 Canberra Road Lake Heights. It directs the resident of No 5 to various persons and state government agencies in relation to concerns regarding the development at No 7. It also provides: "A review of the development application indicates that the objections were considered as part of the assessment and that the proposal met the requirements of Council's Local Environmental Plan and Development Control Plan for both planning and engineering matters. It is noted that objectors were advised of the outcome of the assessment." 1. 9 October 2017: Exhibit X. This was a reply on behalf of the Minister to the letter to the Minister previously referred to. The letter includes: "The dual occupancy development was approved by Wollongong City Council, I understand that the assessment report prepared by council addresses the issues you raise in your letter. I am advised that the final design included several changes including the removal of landscaping and a reduction in building height in order to reduce the shadowing of your solar panels … Neither the Minister or the Department of Planning and Environment have power to overturn a development consent that has been issued by a local council." 1. See also Exhibit EE which is the response of the plaintiffs; 2. 13 October 2017: Exhibit CC. Letter from CVC Law, solicitors, to Mr Riccardo Fregnan. The letter states that CVC Law acts for BRK Projects Pty Ltd which seems to be connected with the building at No 7. It alleges, in summary, abusive and interfering conduct in relation to the building and requests the occupants of No 5 to cease and desist in relation to that conduct. Civil proceedings are threatened; 3. 17 October 2017: Exhibit D: Letter from "Mr Fregnan" to the defendant asking why the Council in assessing the impact to No 5 considered BA 1954/454 which was said to apply to No 3 Canberra Road and not No 5 Canberra Road. It was asserted that this was a "gross error". It appears to be asserted in the letter that the relevant matters connected with No 5 Canberra Road were not taken into account and therefore the Council mistakenly considered the effect on the wrong property. This seems to be an important concern of the plaintiffs. It is alleged by the plaintiffs that the Council only took into account the location at No 3 Canberra Road in error and did not properly consider the impact on No 5 Canberra Road, the house on which was built with a building application in 1966; 1. 27 October 2017: Exhibit C: Letter from Wollongong City Council to "Mr Fregnan". The letter from the Council asserts that the Council does refer to historic approvals where it was considered necessary and that the impacts on the home of the plaintiffs at No 5 were considered in the assessment of the development application concerning No 7 and the reference to BA 1954/454 was not an error. There is no assertion in the letter that the building approval lodged in 1966 in relation to the home that was ultimately constructed at No 5 Canberra Road was considered; 2. 10 November 2017: Exhibit B. This is a letter to the occupier of No 5 Canberra Road Lake Heights from the defendant concerning numerous written and verbal complaints made in relation to the development at No 7. There is a warning that the alleged conduct of the occupants of No 5 was "inappropriate" and that it must cease. Various restrictions on contact are referred to that may be enforced by the Council. There is no evidence any of these were put in place by the defendant; 3. 19 February 2018: Exhibit J. This is a letter from "F Fregnan" to the defendant annexing various documents including a copy of part of the building application said to relate to No 5 with the number BA 66/2807, which was apparently approved by the defendant on 16 December 1966. It is asserted in the covering letter that the reference to BA 1954/454 as relating to No 5 Canberra Road was an error as that building application related to a fibro wooden structure frame which was never built. It is stated in the body of the letter that the 1966 building approval specified the construction of a brick house which was later constructed at No 5 Canberra Road; 4. 8 March 2018: Exhibit K. This is a letter from the Council noting the letter dated 19 February 2018; 5. 13 March 2018: Exhibit BB. This letter is signed "5 Canberra Road" and raises additional concerns similar to those which had been raised previously including that the Council took into account the 1954 building application which related to No 3 Canberra Road not No 5 Canberra Road and that accordingly the Council had taken into account the wrong document; 6. 6 April 2018: Exhibit AA. This exhibit consists of two letters from Ms Geenty, the Professional Conduct Coordinator at Wollongong City Council, regarding a review concerning the conduct of officers of council in relation to the development at No 7. In a second letter dated 3 May 2018, the conclusion is expressed that the Council has acted appropriately and in accordance with correct procedure at all relevant times. The view is stated that the Council officers who considered the application considered the building at No 5 and its actual footprint in assessing the development application concerning No 7. Reference is made to several visits being conducted by Council staff to the location prior to the determination in relation to the application concerning No 7. In the course of that review it is asserted that the property at No 5 was viewed including the size of the building. The following is stated: "It is my view that the reference to BA - 1954/454 does not cast any doubt on the approvals process for DA - 2016/1684"; 7. 16 April 2018: Exhibit L. Letter from "Fregnan" to the defendant. This letter raises similar issues to those raised before particularly that in the impact assessment, the Council considered the 1954 building application which related to No 3 Canberra Road and not No 5 Canberra Road. The letter asserts gross negligence on behalf of the Council and a lack of consideration of the impact of the construction at No 7 on the house at No 5; 8. 14 March 2018: Exhibit M. This letter is signed "F Fregnan" to the defendant raising issues concerning the approval and the various constructions at Nos 3, 5 and 7 and the building approval relating to the constructions at No 3; 9. 17 April 2018: Exhibit N. Letter from "Fregnan" to the defendant asserting that the impact assessment in relation to No 7 was invalid as it considered the 1954 building approval relating to No 3 and not the 1966 building approval and the impact concerning No 5; 10. 2 August 2018: Exhibit E. Letter from the plaintiffs to the solicitors for the defendant concerning issues in the proceedings and serving various documents on which the plaintiffs would rely at the final hearing of these proceedings. It is again asserted by the plaintiffs that the development approval for No 7 considered an illegal building at No 3, thus considering the wrong location for the purposes of the assessment in circumstances where the impact on No 5 should have been considered; 11. 11 December 2018: Exhibit DD. Letter from the solicitors for the defendant to the plaintiffs attempting to settle the matter with stated reasons for why it is submitted that the plaintiffs' claim will be rejected; 12. 25 March 1996: Exhibit V. Copy of the Certificate of Title of the plaintiffs for their property at No 5 Canberra Road Lake Heights; 13. 28 May 1963: Exhibit S. Copy of the subdivision of Lot 74 DP 15174 showing the division of the property into Lots 1, 2 and 3 which became Nos 7, 5 and 3 Canberra Road, respectively. See also Exhibit FF which relates to the sub-division (letter dated 11 June 1963); 14. 1966: Exhibit T. Specifications for the erection of a brick house at No 5 Canberra Road Lake Heights; 15. 27 November 1975: Exhibit U. Survey relating to the lot at No 5 Canberra Road; 16. 5 November 1954: Exhibit P: Building approval 54/454; 17. 16 December 1966: Exhibit R: Building approval and plan for building approval 66/2807 concerning No 5 Canberra Road; 18. Various photographs including aerial photographs of the area including Nos 3, 5 and 7 Canberra Road (Exhibit HH); an old photograph of No 3 (Exhibit P2JJ); a photograph dated 25 November 2018 of Nos 3 and 5 (Exhibit P2KK); a photograph of the completed development on No 7 (Exhibit P2LL); a bundle of various photographs (Exhibit P2MM).

Oral evidence of Mr Fabio Fregnan

Short oral evidence was given by Mr Fabio Fregnan, the father of the plaintiffs.
Mr Fregnan gave evidence that he submitted to Council the 1966 building application and that Exhibit R, the building plans, were given to the defendant Council in 1966 and were approved and stamped. Mr Fregnan said the plans were submitted in October 1966 and returned in mid-November 1966. He stated he built the house and that the plaintiffs currently reside in the house.
Mr Fregnan gave evidence that he was present when the 1954 building application plan (Exhibit P) was lodged with the defendant council. Mr Fregnan stated that this building was never built. He gave evidence that the current structure on No 3 was different to that shown in the 1954 plans.
In cross-examination Mr Fregnan said he provided copies of relevant plans and letters to the plaintiffs held by him but only on the Friday before the final hearing as this was when the case was going to court.

Evidence for the defendant

The defendant tendered a Planning Assessment Report dated 31 August 2017 which became Exhibit 1. This is a 31 page document and is unnumbered. It appears to be prepared, and I infer it is prepared, by the defendant Council. The Planning Assessment Report considers the DA - 2016/1684 being a proposal for the construction of a dual occupancy and a Torrens title subdivision into two allotments at No 7 Canberra Road Lake Heights being Lot 1 DP 505457. At paragraph 1, the Planning Assessment Report states that the application was lodged on 3 November 2016 and that amended plans by a different designer were submitted on 7 July 2017. It is noted in paragraph 1.1 that one submission of objection had been received by the Council following notification and that the matters raised "have been satisfactorily resolved". This is clearly a reference to the objection made by the plaintiffs.
A review of the Planning Assessment Report shows that it appears overall to be a fairly comprehensive and thorough document. Clearly the development process has not been finalised by the letters "TBC" on page 2 of the document. However, the assessment process appears to have been completed.
In paragraph 1.1 it is noted that the proposed construction was a permissible use in the R2 Low Density Residential Zone for the area. It is asserted that the proposal was satisfactory with regard to the applicable planning controls and that certain non-compliant issues relating to setbacks, the corner allotment dimensions and aspects of the construction had been considered but were viewed as not to constitute adverse impacts.
Paragraph 1.1 refers to objections being considered at "section 0". This is clearly an error. The defendant submits this is a reference to General Residential Controls on the twenty-second page of the document but it may be a reference to Table 1 considered in pages 28 and following of the document.
Paragraph 1.3 notes that following the advice from the defendant that the original application as lodged would not be supported, amended plans were prepared by a new designer and were submitted on 7 July 2017. These were further revised following Council feedback and the final plans which were considered in the assessment were submitted on 7 August 2017. Considerable detail is provided in relation to the dimensions of the proposal. It was noted that there had been prior applications for approval and that none of the earlier applications were constructed. It is clear from paragraph 1.5 that the lot being considered was that at No 7 Canberra Road and was a 619.67 square metre site. There is specific reference to the dwelling at No 5 Canberra Road and the large number of solar panels on its roof and garage in paragraph 1.5. There follow a number of photographs of the area showing an aerial photograph, a ground-level photograph and photographs of Nos 9 and 5 Canberra Road. Clearly the Council officers had viewed No 5 Canberra Road for the purposes of the assessment. This is confirmed by the letter dated 3 May 2018 which is part of Exhibit AA.
Paragraph 1.6 shows that there had been consideration of the assessment by the Council subdivision engineer and stormwater engineer. Stormwater issues seem to have been the reason for the initial plans lodged in 2016 being considered unsatisfactory: see the last paragraph on the fifth page of Exhibit 1 at paragraph 1.5.
The Assessment Report makes reference to the applicable legislative and planning laws in detail: see at the tenth to twenty-seventh pages of Exhibit 1.
At paragraph 4.6 there is a consideration of what is described as "Solar Access Requirements". The following is stated: "Location of 5 Canberra Road living rooms unknown as no plans available (BA-1954/454). Private open space likely to be rear yard, immediately adjacent to eastern elevation". This is the alleged erroneous reference to the 1954 building application. Paragraph 4.6 considers the submissions of the residents of No 5 Canberra Road, the plaintiffs, as to the solar issues. Their requirements in relation to access to their solar panels were described in the report as seeming to be "unreasonable given their solar system is predicated on neighbouring land remaining undeveloped."
Later in the report, and in accordance with s 79C of the EPA Act, the Council considered the likely impacts of the development at No 7 and the suitability of the site for development. In paragraph 2.9 it is noted that two submissions had been received by the Council, both from the owner of No 5 Canberra Road. Table 1 of the Assessment Report details the concerns of the plaintiffs and the responses of Council to them.
The latter part of the Report includes an aerial view of No 5 Canberra Road as at 2016 showing the considerable solar panels on the roof of No 5 and what appears to be a garage of No 5 and a front solar panel supporting structure at No 5. Table 1 of the impact assessment considers in considerable detail the matters raised in the objections by the plaintiffs. In relation to the objection that Council informed No 5 of the application but did not provide any other documents or information, the following comment is made: "This is consistent with Council's notification system. Plans and associated documents are available on Council's website or in person via customer service staff."
It appears from the assessment that the objections of the plaintiffs have been considered and regarded as not preventing the Council's approval of the development application in relation to the construction at No 7 Canberra Road Lake Heights.
Exhibit 2 is a letter from Ms A Starr at the council to "Mr R Fregnan" at No 5 Canberra Road informing the recipient that after considering the plaintiffs' submission, and assessing all information, the council had decided to determine the application by way of approval. The letter is similar in its form to Exhibits C and D. There was no evidence in reply that the letter had not been received and read by the plaintiffs.

Factual findings

I have already made a number of factual findings in paragraph 10 above. I make the following further factual findings based on the evidence and taking into account the submissions made: 1. Mr Fabio Fregnan built the house which currently sits on the land at No 5 Canberra Road Lake Heights. This is the property of which the plaintiffs are the registered proprietors; 2. At some stage prior to the end of 2016, the plaintiffs constructed extensive solar panelling on the roof of their house, on their garage at the rear of their house and on a solar panel supporting structure at the front of their house; 3. The development application lodged in 2016, which was approved by the Council, was followed by the construction of the dual occupancy at No 7 Canberra Road. At some times during the day, the completed multi-storey structure provides shadowing over parts of the plaintiffs' solar panels on their home: see Exhibit P2KK and Exhibit P2MM; 4. Although it appears from the Planning Assessment Report which is Exhibit 1, that the plans lodged for DA - 2016/1684, which was lodged on 3 November 2016, were amended and later revised following Council feedback, the concerns put forward by the plaintiffs in their objections were considered by the Council in the Planning Assessment Report dated 31 August 2017; 5. There is an error in paragraph 1.1 on the third page of Exhibit 1 where it states that the plaintiffs' objections are discussed "at section 0 of this report". However, it appears that the substance of the concerns and objections of the plaintiffs was later considered in the report either in paragraph 4.0 or in Table 1; 6. It is clear from the third page of Exhibit 1, that the Council was considering the development application in relation to No 7 Canberra Road Lake Heights, being Lot 1 in DP 505457. This is confirmed by paragraph 1.3 and the description of the two lots in the proposed new subdivision; 7. In relation to paragraph 1.5 of Exhibit 1, I find that the circumstances relating to No 5 and No 7 Canberra Road are referred to. In relation to the third paragraph within paragraph 1.5, the reference to the words "in the front setback" are a reference to the skillion frame referred to and not the garage at No 5; 8. It is clear from the photographs on the sixth to ninth pages of Exhibit 1, that the Council was fully aware that Nos 3, 5 and 7 Canberra Road were separate lots; 9. It is clear from the photographs within Exhibit 1 that the Council officers were fully aware of the potential impact on the solar panels of No 5 of the development. This is confirmed by the express consideration of the issue of the solar panels in paragraphs 4.6 and Table 1 of Exhibit 1; 10. The reference on the 22nd page of the report to BA - 1954/454 is a reference to a building approval for Lot 74, which at the time it was granted, included the land which ultimately constituted No 5 Canberra Road. It is asserted in the report that no plans were available to the Council. It is unclear why the 1966 plans were not referred to. It is possible that these plans were not identified or located by Council staff but the only building approval which could be identified was the 1954 building approval. Irrespective of that, clearly the Council officers were aware of the current structure at No 5 Canberra Road from their analysis of the development application; 11. Various correspondence was tendered by the plaintiffs and the defendant. I assume, and find, in the absence of contrary evidence, that each of the letters was sent and received on or about the date each bears; 12. The plaintiffs' main concern in their correspondence was that the development application was not properly considered as it seems it did not consider the particular circumstances of No 5 as it took into account the 1954 building approval and not the 1966 building approval. Even if the Report did not consider the 1966 building approval as it was not available for some reason, it is clear that the Report, which is Exhibit 1, from its contents establishes that the Council considered the substance of the objections of the plaintiffs and the impact of the proposed construction at No 7 on No 5 Canberra Road.
In relation to the witness Mr Fabio Fregnan, I accept, and find, that he was doing his best to answer the questions put to him truthfully. He gave evidence in relation to matters which occurred a long time ago but his evidence seems to be substantially supported by the documentary material. I accept him as a witness of truth.

Submissions of the parties

As indicated above, the plaintiffs were self-represented. They made extensive oral and written submissions. In order to be fair to the plaintiffs, I invited them to make any submissions they wished to make separately. Mr Riccardo Fregnan followed Mr Michael Fregnan in his submissions and I took his submissions to adopt Mr Michael Fregnan's oral and written submissions.
Mr Michael Fregnan submitted, in summary, as follows: 1. In relation to paragraph 1.1 of Exhibit 1, the plaintiffs had not been consulted about the amended plans by a different designer submitted on 7 July 2017. They were not aware of the matters which were alleged to have been "satisfactorily resolved" mentioned under the heading "Lodgement and Submissions"; 2. Exhibit 1 indicates that the Council assumed that there had been no subdivision in relation to Nos 3 and 5 Canberra Road. The Council appears to have taken into account matters relevant to No 3 Canberra Road. The minimum requirements for an allotment in relation to the subdivision of No 7 Canberra Road appear to have been ignored by Council; 3. The limitations of the land at No 7 Canberra Road do not appear to have been taken into account. Exhibit 1 shows that the Council did not take into account its own principal development standards: see the 14th page of Exhibit 1; 4. There were inconsistencies in the reference to the purported size of No 7. On the fourth page of Exhibit 1 it states that the lot size was 623 square metres. At paragraph 1.5 on the fifth page of Exhibit 1 the reference is to a site of 619.67 square metres; 5. The decision of the Council was based on its reference to the 1954 building approval which was to the whole previous area of Lot 74 and not to the separate considerations concerning each of the subdivided lots; 6. The Council did not properly consider that the solar system at No 5 was an off grid system run on batteries. No specific reference was made to the alternative regulatory regime said to apply. No reference was made to Hendry v Olsson [2010] NSWLEC 1302; 7. The building line for the other lots, including No 5, was not kept to in relation to No 7. This suggested that the plaintiffs' objections were not properly taken into account; 8. The plaintiffs were not aware that they could take proceedings in the Land and Environment Court to appeal the granting of the development approval. See Exhibit 2. It was up to the Council to seek to amend its development approval including, if necessary, to go to the Land and Environment Court; 9. Exhibit 1 should have expressly taken into account the 1966 building approval. It did not take it into account and only referred to the 1954 building approval. Therefore the whole approval process was flawed; 10. This was confirmed by Exhibit C being the letter from Council dated 27 October 2017. The incorrect reference to the 1954 building approval instead of the 1966 building approval will cause problems for the plaintiffs if they ever choose to sell their property. It is noted that there was no expert evidence on this issue; 11. The fact that three Council officers approved and checked the application and the assessment report confirms that they applied the 1954 building approval as if the subdivision in 1963 had never taken place. Although Council was told of the error, they chose not to correct it. This constituted a breach of the duty of care owed by the council to the plaintiffs; 12. The loss to the plaintiffs was the entire economic value of the house at No 5; 13. The construction at No 7 had caused great disruption to the plaintiffs' property and caused its solar system to go off grid and have other problems; 14. The contents of Ms Starr's 27 October 2017 letter were clearly incorrect. She ignored the 1963 sub-division to Lot 74.
Mr Riccardo Fregnan made the following additional oral submissions, in summary: 1. The reference by the three officers of the Council to building approval 1954/454 was a gross error and indicated a reference to Lot 74 not to the later subdivision lots. The developer or the Council should have gone to the Land and Environment Court to correct the error; 2. This indicated that the Council had not taken into account the 1966 building approval; 3. Alternatively, the Council should have rectified the error in the Planning Assessment Report which is Exhibit 1 so the 1966 building approval was taken into account in considering the application; 4. In response to the suggestion that Exhibit 1 shows that the Council took into account No 5 due to the photos included in the report, Mr Fregnan said it was "very vague" and it was "not clear" that the Council had taken into account the correct different lot numbers; 5. It seems that the Council took into account the position of No 3 Canberra Road. In answer to the suggestion that the reference to solar panels showed that it must have been a reference to No 5 as there were no solar panels on the roof of No 3 in the photographs in evidence, Mr Fregnan submitted that there were solar panels on No 1 Canberra Road. However, this was not part of the original subdivision of Lot 74 in 1963; 6. In relation to the reference on the 22nd page of Exhibit 1 to the 1954 building approval, the Council should have been aware of, and possessed, the 1966 building approval plans and should have taken them into account.
In the course of submissions, the plaintiffs stated that at no time did they take Land and Environment Court proceedings in relation to the 2016 development approval. They said they were not aware of any appeal rights and had consulted a lawyer. Similarly, it appears from what was said at the bar table by the plaintiffs that they never went to the Council to look at the 2016 development application or the development approval which was ultimately granted together with relevant documents on the Council file.
The defendant made detailed oral and written submissions as follows: 1. The claim of the plaintiffs is based on two contentions, both of which are incorrect and misconceived. The first is that the reference to Lot 2 in the table in paragraph 1.3 of Exhibit 1 is actually a reference to their property at No 5 Canberra Road being Lot 2 in DP 505457 and not to one of the lots in the proposed subdivision of No 7 Canberra Road. It is clear from a review of Exhibit 1 that the reference is to the two duplexes as Lot 1 and Lot 2 of the proposed subdivision of No 7 Canberra Road and not to the plaintiff's property at No 5 Canberra Road. 2. The second error is that a reference to "BA - 1954/454" at paragraph 4.0 of Exhibit 1 has had some unarticulated impact on the plaintiffs. A review of Exhibit 1, including the 22nd page of the exhibit in paragraph 4.6 Solar Access Requirements and in Table 1 at the back of the Report, shows that the particular circumstances of the plaintiffs have been expressly considered including in relation to the shadowing of the plaintiffs' house by the proposed structure at No 7. The court does not have jurisdiction to consider a merits review of the planning approval and it is clear that the requirements of the planning laws were satisfied. The reference to the 1954 building approval was nothing more than a notation that the Council did not have internal plans of the house at No 5 Canberra Road; 3. The defendant does not owe a duty of care to the plaintiffs as articulated by the plaintiffs. A local council has no duty of care to neighbours of the property on which a development application has been lodged: Dansar Pty Ltd v Byron Shire Council (2014) 89 NSWLR 1; [2014] NSWCA 364. The Court of Appeal in Dansar held that there was an inconsistency between a council's duty of care and the free and proper exercise of its statutory functions and this is ordinarily sufficient reason in and of itself for denying the existence of any duty of care when deciding on development applications. Here, the plaintiffs are one step removed from the appellant in Dansar, as the appellant in Dansar was the developer and the plaintiffs are only neighbours of the developer; 4. Exhibit 1 shows that there was no breach of the duty of care alleged on the facts. There was clearly no misunderstanding by the Council of the property being considered for the development application or of the plaintiffs' property at No 5; 5. Even if a duty of care existed and it was breached, there is no proper articulation of, or evidence of, how any alleged breach of duty has caused the plaintiffs any loss. It was submitted orally that there was no evidence that any breach caused any loss in the sense that but for the breach the loss alleged would not have occurred in any case. In other words, it was submitted that s 5D of the Civil Liability Act 2002 (NSW) ("CLA") had not been satisfied; 6. There is no evidence that the plaintiffs have suffered any loss. Exhibit V in the proceedings confirms that the Fregnans remain the registered proprietors of their property at No 5. They have not lost anything in regard to their title to the property. There is no expert evidence of any loss in the value of the property; 7. The proper venue for the complaints of the plaintiffs to be considered in relation to the development application was the Land and Environment Court via the appeal process concerning a development application determination. The District Court can only consider the tortious claim in damages; 8. There is no evidence that any improper process was adopted by the Council in the present case. There is also no satisfactory evidence of the mental trauma alleged by the plaintiffs. In particular, there was no evidence satisfying the court that there had been a satisfaction of the requirement for non-economic loss in s 16(1) of the CLA; 9. Exhibit 2 establishes that the plaintiffs were aware that the development application had been approved on 1 September 2017. Further, it is clear from the evidence (for example Exhibit A) that the plaintiffs were aware of the construction occurring at No 7 Canberra Road. The letter dated 28 September 2017 from the Council refers to "compliance with conditions of consent", clearly indicating that development approval had been granted; 10. The decision in Dansar is highly relevant. With every development application there is a tension between public interests and private interests. There are also the statutory obligations of the defendant Council to consider the development application properly in accordance with the statutory regime covering the development application. The duty of the Council under that regime is distinct from the private law duty which may be alleged in relation to a Council: see the analysis of Leeming JA paragraphs 187-189 of Dansar. The plaintiffs' submissions confuse the obligation upon the Council to satisfy itself of a precondition to the exercise of its power to grant development consent as the consent authority with an alleged private duty. Imposing a private duty of care would have undesirable impacts upon the consideration by Council of its public obligations under the land and environment legislation. As there is a conflict of duties between private alleged duties and the public duty, this is a strong indication that a duty of care is not owed; 11. It is clear that the officers considering the development application had no access to the 1966 building plans otherwise they would be referred to in Exhibit 1. The reference to the 1954 plans was out of completeness. On its proper construction, the relevant part of Exhibit 1 shows that the Council did not have the 1966 building plans for No 5; 12. What is important is the impact of the development on No 7 and the shadowing effect of the development on No 5. This was clearly considered by the defendant in the Planning Assessment Report; 13. The council did not consider the properties as an entire Lot 74. Exhibit 1 read as a whole shows that the Council considered each of the lots separately and in particular the impact of No 7 on No 5 Canberra Road. The photographs show they were aware of the sub-division in 1963 or at least its effect; 14. Overall, there was no private tortious remedy available to the plaintiffs as alleged; 15. The claim should be dismissed as pleaded in the Statement of Claim. The plaintiff should be ordered to pay the costs of the defendant on the ordinary basis up to and including 11 December 2018 and on an indemnity basis thereafter.

Consideration

It is clear that in order to succeed on the claim which the plaintiffs have made against the defendant in negligence, the plaintiffs must establish: 1. That the defendant owed them a duty of care; 2. That the duty of care was breached; 3. That the breach caused the loss alleged; 4. The quantum and nature of the loss.
Mr Michael Fregnan articulated the duty of care alleged as being a duty of care owed by the defendant to the plaintiffs in considering the development application to ensure that the correct location was taken into account.
I interpret this as being a duty of care owed by the Council to the plaintiffs in considering the development application in relation to No 7, to take all reasonable steps to consider properly its impacts on among other properties the lot known as No 5 Canberra Road.
Mr Riccardo Fregnan also adopted Mr Michael Fregnan's articulation of the duty of care.
Having regard to the complexity of the duty of care element, I will consider the other elements of the tort on the assumption that a duty of care was owed by the defendant as asserted.

Breach of duty of care

I assume for the purposes of this analysis that a duty of care as alleged was owed by the defendant to the plaintiffs. I will consider this issue further in due course.
Whether there is a breach of a duty of care must be considered by reference to the provisions of the CLA and in particular s 5B: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420 at [27]; Bruce v Apex Software Pty Ltd trading as Lark Ellen Aged Care [2018] NSWCA 330 at [9]. The existence and content of any duty of care in the present case must be determined prospectively and by reference to the statutory context and the positions occupied by the parties in that context: Dansar, above, at [108].
Sections 5B and 5C of the CLA provides as follows: "Division 2 Duty of care 5B General principles (1) A person is not negligent in failing to take precautions against a risk of harm unless: (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm. 5C Other principles In proceedings relating to liability for negligence: (a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and (b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and (c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk."
As indicated by Justice Meagher in Bruce, above at [12], it is necessary for the court first to identify the relevant "risk of harm". The risk of harm to the plaintiffs in the present case was the risk of the defendant determining the development application affecting their property without properly taking into account the correct location and the impact of the development on the plaintiffs' house and property.
In my view, it is clear from Exhibit 1 that the officers of the defendant Council took into account the proposed development application and its impact on the plaintiffs in their property at No 5 Canberra Road. Exhibit 1 has a detailed consideration by the defendant of the development application and the impact on No 5 Canberra Road. It also considers the objections made by the plaintiff, planning issues and shading issues. The reference to the 1954 building application does not indicate to me that the Council officers considered the wrong location, a different lot or failed to take into account the building as constructed on No 5 Canberra Road. The failure to refer to the 1966 building application is, in my view, not fatal. It is clear that the entirety of the existing structure on the plaintiffs' land and the impact on it of the proposed development were taken into account. In other words, the precautions within s 5B of the CLA which it is alleged the defendant did not take, were taken in the present case. There was a proper consideration of the plaintiffs' property and objections. The fact the plaintiffs disagree with the conclusion in Exhibit 1 is not to the point.
Further, the photographs in Exhibit 1, especially those on the sixth and seventh pages of Exhibit 1, establish to my satisfaction that the defendant was well aware of the area of the plaintiffs' property and the different lot numbers.
Accordingly, applying s 5B of the CLA: 1. There was a proper consideration of the plaintiffs' position and No 5 Canberra Road. The correct location was considered; 2. The risk to the plaintiffs, if their property was not taken into account, was a risk which was foreseeable to the Council and was a risk of which the Council knew or ought to have known; 3. The risk was not insignificant but here the relevant matters were taken into account; 4. In the circumstances, a reasonable person in the position of the Council would have taken the plaintiffs' property and its objections into account. This occurred in the present case; 5. It was probable that harm would occur to the plaintiffs if their particular position was not taken into account. Here in my view it was taken into account; 6. The likely seriousness of the harm was significant to the plaintiffs but was taken into account; 7. The burden on the Council of taking precautions was not significant compared to the harm to the plaintiffs but the plaintiffs' position was taken into account; 8. The social utility of the application concerning No 7 was not so significant that the plaintiffs' position was not to be taken into account.
In my view, the case of Hendry v Olsson [2010] NSWLEC 1302 relied on by the plaintiffs is not relevant. That case related to a dispute under the Trees (Disputes Between Neighbours) Act 2006 (NSW), not a planning approval application. Accordingly, s 14B of that Act considered at [29]-[30] of the decision, is irrelevant. The other cases relied on by the plaintiffs are also not relevant to the point at issue.
The material in Exhibit 1 and the correspondence from the Council in response to the plaintiffs' objections, establishes clearly in my view that there was no breach of duty of care if it was owed in the terms suggested by the plaintiffs. The Council officers considered the plaintiffs' submissions and the correct location despite the reference to the 1954 building approval.

Causation

The plaintiffs must establish causation in relation to their claim in negligence. Sections 5D and 5E of the CLA provides as follows: "Division 3 Causation 5D General principles (1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm (factual causation), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused (scope of liability). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. (3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent: (a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and (b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest. (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. 5E Onus of proof In proceedings relating to liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation."
In Zhang v Zayati [2018] NSWDC 385 I stated as follows at paragraph 218: "218. Accordingly, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. The determination of factual causation under s 5D(1)(a) of the CLA involves the application of a "but for" test of causation. That is, a determination that in accordance with the section negligence was a necessary condition of occurrence of harm is a determination on the balance of probabilities that the harm in fact occurred and it would not have occurred absent the negligence: Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 at [18]; Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375 at [16]-[19]; Curtis v Harden Shire Council [2014] NSWCA 314 per Bathurst CJ at [18]-[22]; at [197] per Beazley P and at [319]-[324] per Basten JA."
As I have found that there was no breach of duty of care by the defendant, negligence has not been established by the plaintiffs. However, on the assumption that there was a breach, the plaintiffs would need to establish that the breach of duty was a necessary condition of the occurrence of the harm alleged, that is, on the balance of probabilities that the harm in fact occurred and it would not have occurred absent the negligence alleged.
Here, I was not satisfied on the evidence that there was relevant causation. Even if the Council had expressly considered the 1966 building approval instead of the 1954 building approval, I am not satisfied that the result would have been any different and there would not have been still the development approval which the plaintiffs allege has caused damage to them. In other words, I am not satisfied that the alleged breach had any causative effect to cause any loss to the plaintiff. But for the alleged breach, the approval was very likely still to have been granted by the defendant in all the circumstances. This is another reason why the plaintiffs' claim should be rejected. There was no expert evidence on this issue.

Damages

In their Statement of Claim the plaintiffs alleged in paragraph 16 that they have suffered "considerable harm and metal-trauma [sic]". I take this to be a reference to mental trauma. The claim is to be considered under the CLA. Under s 16 of the CLA, damages may not be awarded for non-economic loss unless the severity of the non-economic loss is at least 15% of a most extreme case: s 16(1). There was no expert medical evidence in relation to this matter establishing a recognised psychiatric illness: see also Scenic Tours Pty Ltd v Moore [2018] NSWCA 238 at [47]-[48], [60(c)] and [390]. Further, the plaintiffs emphasised that their claim was for pure economic loss.
This case, as articulated by the plaintiffs, also did not involve any allegation of reliance by the plaintiffs on any representation or statement by the Council. Accordingly, the case was like Dansar: see at paragraphs [99] and [185] of that judgment.
The plaintiffs asserted that the alleged breach of duty of care resulted in a total economic loss to the plaintiffs. This submission appeared to proceed on the basis that the plaintiffs could not sell their house because of the reference to the 1954 building approval in Exhibit 1.
No valuation or other expert evidence was led by the plaintiffs on this issue. No valuation evidence was before the court. Exhibit V, which was a copy of the certificate of title relating to the plaintiffs' property, showed that they were registered as joint tenants of No 5 Canberra Road.
I am not satisfied that any error, if it occurred, in relation to the reference to the 1954 building approval, would have any impact on the plaintiffs' ability to sell their house. This would require expert evidence to be led. Having regard to the documents before the court, such as Exhibit R, the plaintiffs could show that approval existed to construct a brick house on the plans submitted in 1966. Whether a building certificate would be given for later alterations is a separate question.
It seems that there is now some shadowing of the plaintiffs' solar panels. There was some suggestion that this had forced the house "off the grid". This seems to be the result of the development on No 7, not any breach as alleged of the defendant Council to consider No 5. There was no evidence in any case of the existence or quantum of any loss.
Accordingly, the plaintiffs have not established that any loss resulted from the breach alleged or the quantum of that loss. Damage must clearly be established in order to prove negligence: Vero Insurance Limited v Power Technologies Pty Ltd [2007] NSWCA 226 at paragraph 158. Damage is the gist of the action in negligence.

Duty of care

Having regard to the failure by the plaintiffs to establish the other elements of the tort of negligence, it is not necessary to consider in detail the issue of duty of care. However, the claim here is for pure economic loss. In considering whether a duty of care was owed by the council to the plaintiffs as alleged, I have taken into account Dansar, above, at [108]-[117], [150]-[180] and [188]-[192]; Ku-ring-Gai Council v Chan [2017] NSWCA 226 at [68]-[69] and the paragraphs following and [116] and the cases there referred to.
Exhibit 1 has a careful analysis by the defendant of the relevant planning regime.
In considering the development application made by the owners of No 7 Canberra Road, the council had to consider the private interests of the owners of No 7 and the private interests of the plaintiffs. They also had to consider their public duties under the planning approval regime: see s 79C (1) of the EPA Act especially s 79C(1)(b) and (e). Clearly the decision had public interest aspects at least as it involved a dual occupancy. See paragraph 2.10 on the thirty-first page of Exhibit 1. For the reasons given by the majority of the Court of Appeal in Dansar, the private law duty for which the plaintiffs contend is one whose breach "sounds in damages, rather than vitiating an exercise of public power": per Leeming JA at [188].
I cannot see how a private duty to take reasonable care in the implementation of the Council's planning policies so as to avoid pure economic loss to the plaintiffs is consistent with the planning obligations of the Council under the EPA Act. In other words, the duty of care claimed would involve subjecting the defendant Council to conflicting claims and obligations in relation to its planning duties: see Meagher JA at [179]. As is clear from an analysis of the Court of Appeal decisions in Dansar, Chan and Rin Rim Pty Ltd v Deutsche Bank AG [2017] NSWCA 169, it is not sufficient to establish a duty of care to avoid pure economic loss simply by proving that the alleged negligence of a defendant was a cause of the loss and that the loss was reasonably foreseeable. Further, in my view there was no relevant "vulnerability" within those appellate authorities in relation to the plaintiffs. They had an ability to stake steps to protect themselves from economic loss by reason of the defendant's conduct by seeking legal advice and appealing within the statutory regime provided under the planning legislation. The fact that the plaintiffs were not fully aware of their rights is not, in my view, conclusive as to the existence of the alleged duty of care. In the present case, the Council was exercising its functions under the planning legislation. In my view, the careful analysis by Meagher JA in Dansar at the paragraphs indicated shows that a duty of care as alleged would be incompatible with the conflicting public obligations of the Council under s 79C. See at [122], [155] and [163]. The Council could not statutorily only take into account the private interests of the plaintiffs in exercising its planning consent functions.
For all of these reasons, the claim by the plaintiffs in negligence should be dismissed.
The defendant seeks a special order for costs in its written submissions. In my view, I should hear submissions from the plaintiffs before I consider that order. However, the normal order as to costs would, at the least, appear to be appropriate on the evidence in the case.

Determination

Accordingly, for the above reasons, I make the following orders: 1. The Statement of Claim is dismissed. There is judgment for the defendant. 2. The plaintiffs are to pay the costs of the defendant as agreed or assessed. 3. Liberty to any party to apply for a different costs order to that in (2) above on giving notice to the other party. 4. The exhibits are to be retained for a period of three months.

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: 27 March 2019

At a glance

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Judgment (17 paragraphs)

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Legislation Cited (4)

Cases Cited (16)