Gazcorp Pty Ltd v Woolworths Group Ltd

The terms of the Agreement dated 20 February 2008

1. The Agreement dated 20 February 2008 was entered into by Gazcorp as Landlord and Woolworths as Tenant. It took the form of a deed, and contained recitals as follows: A The Landlord is the registered owner of the Land. B The Landlord proposes to construct the Centre on the Land. C The Landlord has agreed to grant and the Tenant has agreed to take the Lease of the Premises, subject to the terms and conditions in this Agreement.
2. Clause 1 of the Agreement contained numerous definitions which were stated to apply unless the context otherwise requires. Centre was defined to mean the shopping centre to be constructed on the Land as described in the Plans and Specifications. The Premises was defined to mean the Woolworths supermarket identified in the Plans and Specifications and on the Site Plan.
3. Clause 2 of the Agreement, which concerns Landlord's Works, is of central importance to the issues in this case. In particular, clauses 2.1 to 2.6 provided: 2.1 Completion of Landlord's Works The Landlord must at its cost cause the Landlord's Works to be carried out: (a) in accordance with the Plans and Specifications; (b) in accordance with all Laws and consents of and complying with the requirements of all Government Authorities; (c) as expeditiously as possible; (d) in a proper and workmanlike manner; (e) under adequate and competent supervision; and (f) in accordance with the Construction Program. 2.2 Inconsistencies In the event of any inconsistency between the Landlord's Works and the requirements of the Tenant under clause 2.3 that cannot be resolved by agreement between the parties, then it will be referred for Expert Determination. 2.3 Woolworths Supermarket The Centre must include a Woolworths Supermarket as identified in the Plans and Specifications having the Approximate Lettable Area which must be constructed in a proper and workmanlike manner and in accordance with the Supermarket Plans. 2.4 Time for Completion The Landlord must use its best endeavours to complete the Landlord's Works so that: (a) the Landlord's Works so far as they relate to the Premises reach Practical Completion by at least the EIS Period before the Date of Practical Completion; and (b) the Centre will reach Practical Completion no later than the Date for Practical Completion. 2.5 Changes to Landlord's Works The Landlord may only change the Landlord's Works: (a) to comply with the requirements of a relevant Government Authority provided that where any such change results in the Approximate Lettable Area of the Premises increasing or decreasing by 10% the Tenant may terminate this Agreement by written notice to the Landlord and the Tenant will not be entitled to claim compensation by reason of such change; (b) where the changes are minor and do not materially adversely affect: (i) the Premises; or (ii) access to the Premises; or (iii) visibility of the Premises; or (iv) the Tenant's proposed fitout. (c) where the changes are minor and relate to parts of the Centre outside of the Woolworths Stage; and (d) where the changes relate to the Retail Car Park provided that: (i) the change to the Retail Car Park is a condition specified by a Government Authority in assessing a development approval lodged by the Landlord in respect of the Centre or the Land; (ii) the change to the Retail Car Park does not result in the number of car spaces from that contained in the Retail Car Park on the date of this Agreement decreasing by a maximum of 5%; (iii) the Landlord and Tenant act reasonably and in good faith to agree the location of any car spaces that are to be removed from the Retail Car Park as a result of the changes to the Landlord's Works under this clause; and (iv) the Landlord uses its best endeavours to maintain the Commencing Car Park Ratio as contained in the Lease. 2.6 Tenant May Request Changes The Tenant may request the Landlord to change the Supermarket Plans and the Landlord must make the requested changes if: (a) the Landlord's Architect, acting reasonably, approves the changes; and (b) the Tenant pays for: (i) the cost of the changes being carried out by the Landlord's builder; and (ii) an amount equal to 10% of the actual costs of the changes (net of any savings obtained as a result of the changes) to cover design and project management fees relating to the changes; and (iii) any statutory changes necessary to obtain consent to the charges.
4. Landlord's Works is defined to mean the works required to complete the construction of the Centre. The Landlord's Works were required to be carried out by Gazcorp in accordance with the Plans and Specifications. Plans and Specifications is defined to mean: 1. the plans and specifications for the construction of the Centre contained or identified in Schedule 2; 2. the Site Plan; and 3. the Supermarket Plans.
5. As to (a), the plans and specifications contained in Schedule 2 consisted of three sheets, being plans drawn by Humphreys and Edwards, architects, in respect of a Mixed Use Development of the two blocks owned by Gazcorp.
6. The first plan (LE 205) is described as "Lower Ground Floor Leasing Plan". It depicts, amongst other things, a Woolworths Supermarket and nine other Retail spaces. There are a number of notes on the plan, including the following: The Woolworths stage is strictly limited to the following floor plates: lower ground floor, basement level 1, and basement level 2. Tenancy layouts shown are indicative and are to be designed to suit tenant requirements in accordance with the Local Authority's regulations. These plans and associated specifications are subject to the relevant consent authority approval. It is evident from that last note that the building depicted on the plan would be subject to an approval from the relevant consent authority. As noted earlier, an approval (the 2008 Consent) had been granted by the time the Agreement was entered into.
7. The second plan (LE 203) is described as "Basement Level 1 Leasing Plan". It depicts, amongst other things, a car park for Retail Parking. The plan contains notes in the same form as those found on LE 205. In addition, the plan contains a note which reveals that Basement Level 1 was to have 204 car spaces, Basement Level 2 was to have 228 car spaces, and Basement Level 3 was to have 182 car spaces, a grand total of 614.
8. The third plan (LE 202) is described as "Basement Level 2 Leasing Plan". It depicts, amongst other things, a car park for Retail and Commercial Parking. The plan contains notes in the same form as those found on LE 205 and it contains the same note as LE 203 about the three levels of parking.
9. It is evident from the references to Basement Level 3, and also from the depiction on LE 205 of an "Escalator to/from Ground Level", that the proposed development involved a building that included levels both above and below the three levels (or floor plates) that are said to constitute the Woolworths stage. The Woolworths Stage is defined in the Agreement as the area shown as such in the Plans and Specifications. The notion of the Woolworths Stage is referred to in cl 2.5(c) of the Agreement, set out above. Clause 2.5(c) itself makes it plain that there are parts of the Centre "outside of the Woolworths Stage".
10. As to (b), the Site Plan in Schedule 6 to the Agreement depicts the location of the development site. The Site Plan also shows the top of the proposed new building to include some landscaped open space and an atrium. The Site Plan contains notes in the same form as those found on LE 205. Again, it is evident from the notes that the building depicted on the plan would be subject to an approval from the relevant consent authority.
11. As to (c), the Supermarket Plans, as defined in the Agreement, include the Woolworths Supermarket Design and Specification Briefing Kit document and the Feasibility Plan, both of which are found in Schedule 4 to the Agreement.
12. The Construction Program, in Schedule 3 to the Agreement, provided for a 95 week construction period from September 2008 to June 2010. It refers to various levels, including Wyndham Street Level, Level 1 and Podium Level.
13. The Approximate Lettable Area, referred to in cl 2.3, is defined as 3,800m2, excluding certain defined areas.
14. Under cl 2.4, Gazcorp was required to use its best endeavours to complete the Landlord's Works so that so far as they relate to the Premises (the Woolworths supermarket) they reach Practical Completion by at least the eight week EIS Period before the Date of Practical Completion, and so that the Centre will reach Practical Completion no later than the Date for Practical Completion (defined as 30 April 2010, subject to any extension of the date under cl 2.12). Clause 2.12 concerns delay. It provided: 2.12 Delays to Handover The Landlord may extend the Date for Practical Completion by the same number of days the Landlord's Architect and the Project Controller jointly certify that a delay in the Landlord's Works has occurred by reason of any of the following causes: (a) weather sufficiently inclement to result in a delay in the construction work; (b) loss or damage by fire, fusion, explosion, smoke, flood, earthquake, lightning, storm, tempest, impact by vehicles or equipment, water damage, damage by aircraft or articles dropped from aircraft, civil commotion or any like cause; (c) riots, malicious damage to building work or site, or disputes between employers and employees or strikes; (d) any prohibition or embargo imposed by any Law; (e) any delay (not exceeding 12 weeks) in the manufacture or delivery to the Landlord of any building materials, plant or equipment required for any proper construction or running of the Landlord's Works to the extent that such delay arises from circumstances beyond the control of the Landlord; (f) any other matter, cause or thing beyond the control of the Landlord provided that the Landlord has used reasonable endeavours to overcome and keep any resulting delay to a minimum; or (g) delay as a result of the Landlord acceding to a request of the Tenant under clause 2.6. Where an extension under this clause occurs, times in the Construction Program affected by the delay will extend by the same period as the extension permitted by this clause. The Tenant is not entitled to claim compensation by reason of any such delay. A dispute relating to an extension of time under this clause 2.12 must be referred to Expert Determination.
15. Clause 6.1 provided (subject to the other sub-clauses of cl 6) that Woolworths must commence trading in the Premises no later than the day after the EIS Period expires.
16. Clause 7 provides for the grant by Gazcorp and the acceptance by Woolworths of the Lease in the form contained in Schedule 5 for the Term commencing on the Commencing Date. The Term, as provided for in the Lease, was 1 year, with options to renew for further terms of 19 years and 10 years. The Commencing Date was defined as the date Woolworths commences trading in the Premises. The Lease provided for a Base Rent of $1.7 million per annum plus a Turnover Rent.
17. Clause 9 gave Woolworths a right of termination in certain circumstances. It provided: 9. Termination If for any reason the Landlord's Works (insofar as they relate to the Premises and the Woolworths Stage including the car park and access to the Centre) have not reached Practical Completion by the Termination Date, the Tenant may terminate this Agreement by notice in writing to the Landlord. If the Tenant terminates this Agreement, the Landlord must reimburse the Tenant, on demand, for all costs and expenses incurred by the Tenant in connection with this Agreement and anything done by the Tenant in relation to this Agreement. Any claim under this Agreement or at law by the Tenant against the Landlord relating to termination under this clause 9 must be notified to the Landlord within the period of 1 year from the Termination Date. The Termination Date is specified in Schedule 1 to the Agreement as the date which is 12 months after the Date for Practical Completion.
18. Clause 14 provided: 14.1 Landlord to obtain Approvals and Access Arrangements The Landlord must at is cost promptly after the date of this Agreement make all necessary applications for, and use its best endeavours to obtain: (a) the Approvals (excluding the construction certificates); and (b) the Access Arrangements, on or before the Approval Date. 14.2 Termination (a) If: (i) the Approvals and Access Arrangements have not been obtained; or (ii) the Approvals and Access Arrangements have been obtained but subject to conditions which are unacceptable to the Tenant acting reasonably, by the Approval Date, then the Tenant will within the period of 15 Business Days: (iii) terminate this Agreement by giving notice in writing to the Landlord and the Tenant will not be entitled to claim compensation by reason of termination; or (iv) give notice in writing to the Landlord of a revised Approval Date and the provisions of this clause 14 will then apply to this revised Approval Date as if it were the previous Approval Date under this Agreement and the Date for Practical Completion will be extended by the same number of days extending the original Approval Date.
19. The Approval Date was defined to mean 31 July 2008. Approvals was defined to mean "all necessary approvals, consents, permissions and licences of all relevant Government Authorities which must be obtained to carry out the Landlord's Works."
20. Access Arrangements was defined to mean "the re-design of the intersections and driveways adjacent to the Centre so as to provide pedestrian access and vehicle access to the Centre in accordance with the Plans and Specifications and any subsequent plans agreed by the parties."
21. In this regard I note that on 28 February 2008, the Agreement as executed by two directors of Gazcorp (Nabil Gazal and Nicholas Gazal), was forwarded by Gazcorp's solicitor, Mr Parry, to Woolworths' solicitor, Mr Madden of Corrs Chambers Westgarth. The covering letter included the following: I am pleased to return your client's copy of the Agreement for Lease executed by my client. I am instructed to advise that the Development Application has been approved so that the Approval Date in Item 7 of Schedule 1 has been complied with.
22. Lastly, it should be noted that cl 15.1 of the Agreement provided a mechanism for the resolution of certain disputes by expert determination. The relevant disputes included disputes under cll 2.2 and 2.12 of the Agreement.

Proposal for inclusion of a Big W store

1. Big W is a brand of discount department store operated by Woolworths. Within Woolworths, the Big W business has its own division, separate from the division which deals with the supermarkets business. This separation was known to Gazcorp, through at least Nicholas Gazal ("Mr Gazal").
2. Towards the end of 2007, Mr Gazal raised with Ms Tickelpenny (of Woolworths Supermarkets division) the prospect of including a Big W store in the development. Ms Tickelpenny referred Mr Gazal to Mr MacMahon (of the Big W division). It appears that Mr Gazal and Mr MacMahon thereafter discussed the possibility of a Big W store being located on Level 1 of the proposed development.
3. The plans that had been submitted in 2007 in support of the development application show three levels of basement for parking, a lower ground floor (to include a Woolworths supermarket), a ground floor (for retail use), Level 1 (for office use), Level 2 (for facilities including a swimming pool, gymnasium and landscaped open space), and a Level 3 (roof level). Plainly, if a Big W store was to go in on Level 1 an amendment to the approved development would be required.
4. Following entry into the Agreement in February 2008, discussions continued in relation to the inclusion of a Big W store. At around the same time, there were discussions about the possibility of Woolworths taking some extra space (near the supermarket) for a liquor store. Mr Hocking of Woolworths suggested to Mr Gazal that the supermarket lease might be varied to deal with that. There were also discussions about various design aspects of the proposed supermarket.
5. On 23 April 2008 Mr MacMahon sent a Letter of Offer to Mr Gazal in relation to a lease for the proposed Big W store. The offer was subject to, inter alia, receipt of necessary approvals "including Section 96 approval". It was evidently envisaged at that time that the necessary approval would be obtained via an amendment to the 2008 Consent. An application to modify the consent was in fact lodged on about 7 May 2008. However, it appears that following an objection by a third party, it was decided to instead proceed by way of a fresh development application.
6. On about 2 July 2008 a development application was lodged for a development that would include a Big W store ("the 2008 Development Application"). In summary, it was proposed to change the use of Level 1 and part of Level 2 from commercial to retail, and add an additional basement level for car parking. The modification application (at least in relation to the Big W changes) was withdrawn on about 8 July 2008.
7. In the meantime, the solicitors for the respective parties commenced dealing with each other about a draft agreement for lease and lease for the proposed Big W store. The existing Agreement was used as a template for this purpose.
8. It is apparent from letters sent by Mr Parry to Mr Madden on 2 June 2008, and by Mr Gazal to Mr Hocking on 3 June 2008, that it was expected that proceeding with the Big W proposal would have the effect of requiring certain changes to the existing Agreement, including in relation to the Date for Practical Completion (of 30 April 2010). The need for such a change seems to have been accepted by Mr Madden in his letter to Mr Parry of 7 July 2008.
9. On 21 July 2008 Mr Parry sent an email to Mr Madden requesting that Woolworths issue a letter to Gazcorp confirming that Woolworths agreed to extend the Date for Practical Completion from 30 April 2010 to 1 October 2010. However, on 23 July 2008, Gazcorp sent a letter to Woolworths (incorrectly dated 23 August 2008) in the following terms: I refer to the Agreement for Lease in the above matter dated 20 February 2008, and in particular to clause 2.12 of that document. I also refer to proposals in discussions and correspondence between representatives of our respective companies to expand the scope of the project to incorporate in the Centre a Big W discount department store, and to the preliminary work undertaken by Gazcorp Pty Ltd in preparing amended Plans and Specifications and applying for Approvals to give effect to those proposals. Such actions have inevitably delayed the Construction Program so as to necessitate the Date for Practical Completion being extended from 30 April 2010 to 1 October 2010; that is by 154 days. Would you please confirm that Woolworths Ltd agrees to such extension under paragraph (f) of clause 2.12 of the Agreement for Lease, and that such extension of time will be effective without the need for joint certification by the Landlord's Architect and the Project Controller. Your early attention to this request will be appreciated.
10. On 27 August 2008 Mr Gazal sent an email to Mr Hocking (and also Mr Finlay of Woolworths) attaching five plans which were referred to as "Latest plans for leasing issue". These plans included plans dated 1 August 2008 (C105, C107, C108 and C109) for the Lower Ground Floor, Ground Floor, Level 1 and Level 2. Almost immediately thereafter Mr Gazal sent another email to Mr Hocking and Mr Finlay attaching four plans which were referred to as "Latest plans for leasing issue 2". These plans were for each of four levels of basement parking and were dated 4 August 2008 (C101-C104).
11. The parties, with the assistance of architects and other consultants, continued to discuss and work through various issues of design detail in relation to the development.
12. On 9 September 2008 Mr Gazal sent an email to Mr MacMahon attaching three plans dated September 2008 which were referred to as "Plans for Big W". Various further plans referred to as "Plans for Big W" were sent by Mr Gazal to Mr MacMahon on 10 September 2008.
13. I interpose here to note that on 11 September 2008 and 12 September 2008 communications passed between Woolworths and Gazcorp in relation to the Agreement which are said by Gazcorp to have effected a variation of the Agreement.
14. It is common ground that no Agreement for Lease was ever entered into in relation to the proposed Big W store. It is also not controversial that the 2008 Development Application was deemed to have been refused on 11 August 2008, and that an appeal to the Land and Environment Court in respect of the refusal was dismissed on 20 March 2009. That effectively put paid to the Big W proposal, but of course the 2008 Consent remained in place.

Variation of the Agreement

1. I have already referred to the incorrectly dated letter sent by Gazcorp to Woolworths on 23 July 2008 (see [39] above).
2. On 11 September 2008, Mr Hocking sent an email to Mr Gazal which attached a letter from Woolworths to Gazcorp in response. The email stated: Please find attached our response to your letter dated 23 August 2008 requesting an extension to the Date of [sic] Practical Completion. We trust this assists you as required. If you wish to discuss further please don't hesitate to give me a call.
3. It is not necessary to set out the terms of the attached letter. It is sufficient to note that it confirmed an agreement to extend the Date for Practical Completion to 1 October 2010 subject to certain terms, and stated that Woolworths would instruct its solicitors to prepare a Draft Deed of Variation of Agreement for Lease for review and signature in the near future. It should also be noted that one of the stated terms was an amendment of the Approval Date from 31 July 2008 to 30 November 2008.
4. Shortly thereafter, Mr Hocking sent another email to Mr Gazal, which included the following: I've just forward [sic] across the letter that you requested in late August. Please let me know if this covers what you require? Just as a follow up, when do you believe we can expect plans for Green Sq as we discussed the other day?
5. Later on 11 September 2008, Mr Gazal sent an email to Mr Hocking (copied to Mr MacMahon) in the following terms: One point I would like to raise after a quick glance of the document is the approval date of November 2008. We really need to push this out until next year. I would suggest March/April 2009 due to the prospect of court proceedings. Could you please provide your comments? The reference to court proceedings is presumably to proceedings in the Land and Environment Court concerning the deemed refusal of the 2008 Development Application.
6. Mr MacMahon responded to Mr Gazal's email on 12 September 2008 in the following terms: Have spoken to Michael [Hocking] and we will accept 30/03/09 Michael will do via a letter for supermarkets For BigW we will change the date in the AFL
7. Later on 12 September 2008 Mr Hocking sent an email to Mr Gazal in the following terms: Please find attached our amended response to your letter dated 23 August 2008 requesting an extension to the Date of [sic] Practical Completion. We trust this assists you as required. If you wish to discuss further please don't hesitate to give me a call.
8. The attached letter dated 12 September 2008 was in the following terms: We refer to your correspondence dated 23 August 2008 and note your request for an extension to the Date for Practical Completion in accordance with clause 2.12 of the Agreement for Lease dated 20 February 2008 (AFL). We note the incorporation of a Big W Discount Department Store in the Centre has resulted in the landlord being delayed in obtaining finalised Approvals for the Landlord's Works thereby requiring an extension to the Date for Practical Completion from 30 April 2010 to 1 October 2010. We confirm our agreement to the extended Date for Practical Completion subject to the following terms: (a) the extension to the Date for Practical Completion requested in your letter dated 23 August 2008 is agreed without the need for joint certification by the Landlord's Architect and the Project Controller. However, any future request by the landlord in accordance with clause 2.12 of the AFL will require joint certification as specified; (b) we reserve our rights under clause 9 of the AFL insofar as the extended Date for Practical Completion relates to the Termination Date; (c) the landlord's agreement to vary the AFL as follows: (i) Schedule 1, Item 2 (Date for Practical Completion) - deleting the date of 30 April 2010 and replacing it with the extended date of 1 October 2010; (ii) Schedule 1, Item 7 (Approval Date) - deleting the date of 31 July 2008 and replacing it with the extended date of 30 March 2009; (iii) Schedule 2 (Plans and Specifications) - deleting the current plans and specifications and replacing them with the updated plans and specifications reflecting the revised Landlord's Works; (iv) Schedule 3 (Construction Program) - deleting the current construction program and replacing it with the new construction program reflecting the revised Landlord's Works and milestone dates; and (v) Schedule 6 - deleting the current site plan and replacing it with an updated site plan reflecting the revised Landlord's Works and the areas specified in the lease (such as Kiosk Free Zone, Sidewalk Sales Area, Woolworths Sector etc). We will instruct our solicitors to prepare a draft Deed of Variation of Agreement for Lease for review and signature in the near future.
9. Before proceeding further it is necessary to refer to the pleadings in respect of the variation alleged by Gazcorp. By its Statement of Claim filed on 15 October 2018 Gazcorp referred in paragraphs 17 to 21 to the communications referred to above, being the letter incorrectly dated 23 August 2008, Mr Hocking's email of 11 September 2008 and attached letter, Mr Gazal's email of 11 September 2008, Mr MacMahon's email of 12 September 2008, and Mr Hocking's email of 12 September 2008 and attached letter.
10. By paragraphs 18 to 21 of its Defence filed on 11 March 2019, Woolworths at least admitted that these communications were received or sent.
11. Paragraph 22 of the Statement of Claim reads: By reason of the matters pleaded in paragraphs 17 to 21 above, the terms of the AFL [the Agreement] were varied such that, inter alia: (a) the Approval Date is 30 March 2009; (b) the Date for Practical Completion is 1 October 2010; (c) the Termination Date is 1 October 2011; and (d) the Landlord's Works (are the works as envisaged by the Plans and Specifications and Constructions Program referred to in: (i) the 12 September 2008 letter; and (ii) the 2008 Application, (New Landlord's Works).
12. Paragraph 22 of the Defence reads: In response to paragraph 22, the defendant: (a) admits that [sic] matters alleged in sub-paragraphs (a), (b) and (c); and (b) does not admit the matters alleged in sub-paragraph (d). This paragraph must be read as at least containing admissions by Woolworths that by reason of the communications the subject of paragraphs 17-21, the terms of the Agreement were varied such that the Approval Date became 30 March 2009, the Date for Practical Completion became 1 October 2010, and the Termination Date became 1 October 2011.
13. In these circumstances a question arises as to the effect of the non-admission of paragraph 22(d) of the Statement of Claim in relation to the Landlord's Works. Gazcorp submitted that the only issue left open on the pleadings was the meaning to be given to the expression "the updated plans and specifications reflecting the revised Landlord's Works" which appears in the 12 September 2008 letter. It was submitted that it was not open to Woolworths to contend that the 12 September 2008 letter was not intended to be legally binding, or that there was an effective variation of the three dates but no effective variation of the Landlord's Works (for example because this aspect was uncertain, and severable).
14. In closing submissions, Woolworths contended that the 12 September 2008 letter "did not form an agreement as to the particular updated plans intended by the parties to be immediately binding". It was further said that after 12 September 2008 the parties "continued to negotiate plans to include a Big W". Woolworths also placed reliance upon parts of Mr Gazal's affidavit evidence (which were tendered on the basis that they constituted admissions against interest), including about expecting updated plans to be included in the Deed of Variation referred to at the end of the 12 September 2008 letter.
15. In my opinion it is not open to Woolworths on the pleadings to assert that the 12 September 2008 letter was not intended to be immediately binding. That would be inconsistent with Woolworths' acceptance that, by reason of the communications culminating in the 12 September 2008 letter, the Agreement was varied in a number of respects. It is not open to argue, for example, that the reference in the letter to a Deed of Variation showed that the parties did not intend to be immediately bound on the terms contained in the letter.
16. However, I think that the non-admission of paragraph 22(d) leaves it open to Woolworths to contend that the terms of the letter were not effective to vary the Agreement insofar as the Landlord's Works are concerned, or that the variation of the Agreement in that regard was not to the effect of that alleged by Gazcorp in paragraph 22(d) of the Statement of Claim.
17. The 12 September 2008 letter deals with the Landlord's Works in paragraph (c)(iii) which provides that Woolworths agreed to vary Schedule 2 to the Agreement by "deleting the current plans and specifications and replacing them with the updated plans and specifications reflecting the revised Landlord's Works". Further, paragraph (c)(iv) refers to "the new construction program reflecting the revised Landlord's Works and milestone dates". In my view, the references to "revised Landlord's Works" should be understood as the works that would be required to complete construction of the shopping centre the subject of the 2008 Development Application. It was clearly recognised by the parties that pursuit of the proposed development the subject of the 2008 Development Application would delay the project and thus require amendments to the Date for Practical Completion (see, for example, Gazcorp's letter sent on 23 July 2008, and the second paragraph of the 12 September 2008 letter).
18. Paragraph (c)(iii) of the 12 September 2008 letter thus refers to the deletion of the current Plans and Specifications as found in Schedule 2 to the Agreement, and the replacement of them with the updated Plans and Specifications that reflect the works that would be required to complete construction of the shopping centre the subject of the 2008 Development Application.
19. Gazcorp emphasised the presence in paragraph (c)(iii) of the definite article "the" in relation to updated plans. It was submitted that the updated plans were plans that concerned the 2008 Development Application. Woolworths submitted that in the circumstances it was unclear what updated plans were being referred to, and that such plans might not extend to all of the plans for the 2008 Development Application.
20. In my view, the reference in the 12 September 2008 letter to "the updated plans and specifications" should be regarded as a reference to the plans that had been sent by Mr Gazal to Mr Hocking on 27 August 2008 (C101-105 and C107-109). Those plans were generally described in the covering emails as "Latest plans for leasing issue", and, although of a preliminary nature, they are plans of a character similar to those that had been included in Schedule 2 to the Agreement. They may fairly be described as updated plans that reflect the "revised Landlord's Works". They concern a proposed development in the nature of the development the subject of the 2008 Development Application.
21. It is true, as pointed out by Woolworths in submissions, that various plans were the subject of on-going discussion between the parties at that time. However, it is necessary to bear in mind the myriad tasks that were being undertaken in that period that involved working on and making adjustments to plans and specifications. It appears, for example, that plans were being considered and revised as part of the working out of the details of the design of the building, and various plans were being sent to Mr MacMahon "for Big W". When regard is further had to the fact that at this stage Mr Gazal generally dealt with Mr MacMahon in relation to Big W issues and with Mr Hocking in relation to supermarket issues, there is good reason to think that the reference in Mr Hocking's letter of 12 September 2008 to the updated plans and specifications was intended as a reference to the plans Mr Gazal had sent to him on 27 August 2008.
22. In my opinion, the meaning of paragraph (c)(iii) of the 12 September 2008 is sufficiently clear to effect a variation of the Agreement by deleting the existing plans in Schedule 2 and replacing them with the plans sent to Mr Hocking on 27 August 2008. The Landlord's Works, which are defined in part by the plans and specifications contained or identified in Schedule 2, were thus "revised". The Agreement was varied as alleged by Gazcorp.
23. A different conclusion may have been reached had it been open to Woolworths to assert that the 12 September 2008 letter was not immediately binding. Entry into a Deed of Variation was evidently envisaged, and is referred to in some of the subsequent communications between the parties. Of course, that is not necessarily inconsistent with an intention to be immediately bound by the terms of the 12 September 2008 letter, with those terms to be restated later in a form that is not different in effect (see Masters v Cameron (1954) 91 CLR 353 at 360). It is not necessary to express any concluded view on that matter.
24. As noted earlier, Woolworths accepts that if the Agreement was varied as alleged by Gazcorp, then it was frustrated on 20 March 2009 when the Land and Environment Court refused the 2008 Development Application. The Agreement, as varied, thus came to an end at that time.
25. In case that conclusion is wrong, I proceed now to consider the position on the assumption that the Agreement was not varied. That is to say, I turn to consider whether the Agreement (as executed) remains on foot as contended by Woolworths, or has come to an end through frustration or mutual abandonment as contended by Gazcorp. It is necessary, for this purpose, to consider the further dealings between the parties from September 2008.

Summary of dealings between the parties from September 2008

1. From September 2008, discussions continued between the parties into 2009 in relation to the proposed development, including in relation to a Big W store, the inclusion of a Dick Smith electronics store and a Thomas Dux grocery store, and the addition of an area for a liquor store.
2. On 27 January 2009 Mr Hocking forwarded to Mr Gazal a Letter of Offer in respect of an additional area to be leased by Woolworths for a liquor store. On 2 February 2009, Mr Hocking forwarded to Mr Gazal an amended Letter of Offer. It appears that this letter was signed by Mr Gazal on behalf of Gazcorp and returned to Woolworths. On 27 February 2009 Mr Finlay sent an email to Mr Gazal informing him that the property committee of Woolworths had "approved the additional area for liquor" and that solicitors would be instructed shortly "to vary the documents".
3. By 10 March 2009 the parties were expecting the Land and Environment Court to soon give its judgment concerning the 2008 Development Application. As already noted, the judgment was given on 20 March 2009, and was adverse to the 2008 Development Application, and thus the proposed development that included a Big W store. In essence, it was held that the large amount of retail floor space proposed would have an adverse economic impact upon the nearby Green Square Town Centre, and not be in the public interest (see Humphrey & Edwards v City of Sydney [2009] NSWLEC 1075). Gazcorp promptly informed Woolworths of the decision, which Mr Gazal described as a "huge shock".
4. However, the demise of the 2008 Development Application did not affect the continued existence of the 2008 Consent. On 29 January 2009 that consent had been modified such that it was stated to operate from 17 February 2009 and lapse on 17 February 2011.
5. I note in passing that it appears that on 23 March 2009 Mr Parry spoke to Mr Madden (now of Henry Davis York) about the court decision. A note apparently prepared by Mr Madden contains the following: Centre with WOW supermkt [sic] will proceed with changes to milestone dates - to be advised within next 2 weeks. Will need to vary AFL for supermkt [sic].
6. On 31 March 2009 Mr Gazal met with Mr Finlay and Ms Srbinovski of Woolworths. Mr Gazal deposed that in the course of the meeting he said words to the following effect: We are still committed to the development but require amendments to be made to the 2007 DA approved plans due to the inability to build the approved layout and use of level 1 in the 2007 DA. … After discussions with Council, we will need to lodge another application to allow for staged construction of the site, so that the commercial on level 1 won't need to be built as part of the retail centre. At the same time we would also seek to incorporate the layout changes made to the centre.
7. Mr Gazal further deposed that although he could not recall the actual words used, Mr Finlay reconfirmed Woolworths' commitment to the site.
8. Discussions proceeded thereafter about various options, including Dick Smith and Thomas Dux stores on the ground floor level.
9. By mid-April 2009, Gazcorp's architects were preparing a section 96 application "for our proposed staging of occupation".
10. On 23 April 2009 Mr Gazal sent various "indicative leasing plans" to Mr Hocking. Mr Hocking noticed that these plans did not include the liquor area. He requested that the plans be reviewed and amended. On 28 April 2009 Mr Hocking sent a Letter of Offer to Mr Gazal for his review. The offer concerned a lease of about 1200m2 of space for a Thomas Dux store on the ground level. Later on 28 April 2009 Mr Gazal sent to Mr Hocking a revised plan of the lower ground floor. Also on 28 April 2009 Ms Srbinovski sent a Letter of Offer to Mr Gazal concerning a lease of space for a Dick Smith store on the ground level.
11. Mr Gazal deposed that he attended a meeting with Mr Hocking, Ms Srbinovski and others on 28 April 2009. On 30 April 2009 Mr Gazal sent an email to Mr Hocking in relation to the Thomas Dux proposal. The email, which outlined the terms and conditions offered by Gazcorp, included the following: As discussed in the meeting, we simply can't afford the $415/sqm gross offered for the 1,200 sqm. Based on the WOW rent at $450/sqm, we are now in a position in which we must achieve a higher rent from the specialities and mini majors in order to make the project feasible.
12. It appears that at around that time, Gazcorp was preparing to conduct a retail leasing campaign for the proposed development, featuring a full line Woolworths supermarket.
13. On 23 June 2009 Ms Srbinovski sent an email to Mr Gazal informing him that Thomas Dux had pulled out of negotiations but that Dick Smith was still keen to secure space in the development.
14. In August 2009 Mr Gazal sought to arrange a meeting with Mr Hocking and Mr Finlay to discuss various matters including "Alexandria and the completion date" and "Alexandria Potential new plans". On 5 August 2009 Mr Hocking sent an email to Mr Gazal in the following terms: I've spoken with David Carroll who will pick up each of these projects and he will arrange a time for the three of us to get together over the next week or so.
15. Mr Gazal thereafter had numerous dealings with Mr Carroll until about June 2015.
16. On 31 August 2009 Mr Gazal sent to Mr Carroll various plans of the proposed ground floor and proposed lower ground floor levels. The plans for the ground floor level showed a number of options. Mr Gazal's covering email included the following: Attached are the plans with all the different possible options. Again, it is still very flexible, and we are not set in concrete as to the final layout.
17. On 14 December 2009 Mr Carroll sent an email to Mr Gazal in the following terms: We refer to our discussion on Friday regarding the above project. We understand the delays to date are due to finance issues and that you propose to undertake a marketing campaign in the new year in respect of the remainder of the Centre. As you know we have an Agreement for Lease in place for the provision of a Supermarket as part of the above project and Woolworths are keen to get something from you to give us a better level of comfort on where we are heading with the project. We understand there may be changes to your plans which will impact our level of the Centre and there is a proposal to incorporate a liquor offer into the premises which needs to be documented. It would be appreciated if you could confirm the exact situation in respect of the timing and expiry of your approvals as well as details of your proposed way forward with the project. We look forward to hearing from you.
18. On 15 December 2009 Mr Gazal sent an email to Mr Carroll in response. Mr Gazal's email was in the following terms: The delays came about really for two reasons: The first, and the main reason being the court case to try and get Big W in the centre. This caused us about an 8 months delay in the project cycle, and led to the bank pulling back the finance as a result of time elapsed from not commencing construction. Coinciding with the GFC, the bank then got tougher in their conditions to grant finance, which has led us into the position we are in today. We are close to signing an arrangement with a leading Retail leasing agency, and would hope to hit the market in March for a 6 month campaign. If the campaign is successful, and we reach the 1:1 level of interest cover commitment for the project, then we will begin construction immediately. If we are unsuccessful in the campaign, and conditions haven't improved, we will take a break for a minimum period of 6 months on the project, and wait for conditions to turn around. Alternatively, we may either take on a joint venture partner for the project, or put the project on the market and see if there is interest from another developer who may be able to get the project started immediately. We currently have a deadline on our DA for February 2011. We have just lodged a S.54 form with Council to extend this by another year - which will take the DA expiry to February 2012. We are also currently investigating the possibility of what works would need to be completed to gain "Substantial Development" therefore causing the DA to come into effect and not losing it. We are committed to the project, and would like to have seen it started already, and we are using our best endeavours to get the project underway. We are going to need to push back the date of termination and all other relevant dates; as has already been discussed with Michael Hocking. We understand your eagerness to get the project started, and would be happy to take on any thoughts or suggestions if you can see it beginning any time sooner. I believe the next milestone date will be at the end of the leasing period.
19. On 26 February 2010 Mr Gazal sent an email to Mr Finlay (copied to Mr Carroll) in the following terms: Thank you for the meeting on Wednesday the 10th, and I apologise for the delay in the response! We outlined the detrimental financial effect on Gazcorp in pursuing all possible legal avenues to obtain approval for Big W to occupy the centre as per our AFL. The opposition we encountered and expense and time involved was far greater than anything that could have been anticipated. This coupled with the timing and effect of the GFC has meant that our bankers have imposed new conditions to be satisfied for construction finance. As both parties have expressed an interest in proceeding with the supermarket project, we request that the AFL be either varied on [sic] replaced with a new document to reflect the following: Gazcorp to use all endeavours to carry out the works to achieve physical commencement, and thus preventing the approved DA from lapsing; We believe we should receive a one year extension in the interim next week to take the DA Approval out to February 2012. Gazcorp will promptly undertake a 6 month marketing campaign and use its best endeavours so as to achieve its financier's requirements including as to pre-leasing commitment; As mentioned, we would prefer the date of practical completion to be extended with no fixed date to allow the project to proceed whenever the new construction finance is approved, but understand that WOW may want a 3 years maximum for any recommendation; WOW to have the unilateral right to withdraw from any obligation to take a lease under the AFP [sic] up to the time construction finance is approved and construction commences after which it will be committed; After the AFL terminates, WOW to have a first right of refusal to take up a supermarket lease at the centre for a term of say 5 years from signing the new AFL; Each party to bear its own past and future costs with no penalty if a lease does not eventuate provided Gazcorp complies with its obligations as to substantial commencement and obtaining finance approval. I look forward to receiving your comments, and will keep you updated with the upcoming campaign.
20. On 4 March 2010 Mr Carroll sent an email to Mr Gazal in response. Mr Carroll's email was in the following terms: We will revert to you as soon as possible once we discuss this further. In the interim, can you provide us with any plans of the Centre which you are utilising for your marketing campaign. As any variation to the AFL will also need to include liquor, as well as have regard to the existing approved AFL and plans, we need to see what changes if any are proposed to the Centre configuration. You may recall you indicated at an earlier meeting that there may be a change in configuration of malls and vertical transportation so we do need to see these plans as they will need to be approved and annexed to the [sic] any subsequent Variation of the AFL.
21. On 8 March 2010 Mr Carroll sent an email to Mr Gazal which attached a letter from Woolworths which included the following: We refer to our most recent discussions, our meeting with our respective solicitors and your subsequent email of 26 February 2010 regarding various aspects of the above project. Woolworths have considered the matters discussed in our meeting and set out in your email. To capture the proposed changes to our existing agreement, the parties will need to execute a Variation of Agreement for Lease (AFL) to properly reflect the changes to the contracted timeframes and to also capture the agreement in respect of the proposed liquor tenancy. We have set out below our position in respect of the proposed extension to the termination provisions of the AFL as well as other matters that will need to be incorporated into any Variation of AFL. At present the Date of [sic] Practical Completion is 30 April 2010 and the Termination Date is 12 months after the Date of Practical Completion. Woolworths (WW) are agreeable to amending the Date of Practical Completion by three (3) years to 30 April 2013. … WW are unable to agree to change any of the other provisions of Clause 9, Termination of the AFL but the dates we have agreed to above should essentially give you what you require. The AFL will need to be amended to incorporate the agreed liquor store area, scope of works, rental configuration of the space and any other associated changes flowing from the introduction of liquor. … In summary, we believe the concessions offered above in respect of the Termination Dates should give you the comfort you require to proceed with confidence with the project noting Woolworths are keen to see the project proceed. Would you please provide the necessary plans for our review so we may then brief our solicitors to prepare a draft Variation of AFL. Would you also please confirm acceptance of the above by return correspondence by Friday 12 March 2010. WW will not be bound by the concessions offered above until the Variation of AFL has been approved and signed by the Directors.
22. Mr Gazal deposed that he did not later confirm acceptance of the matters set out in this letter.
23. On 14 April 2010 Mr Gazal and his brother Mr Nabil Gazal met with Mr Carroll and Mr Mellowes of Woolworths. Mr Gazal deposed that during the meeting either he or Nabil said words to the following effect: We are concerned about moving the dates of practical completion again, and still not being able to complete the development for whatever reason … We believe that up to today, we have used our best endeavours to complete the project, but we could possibly be making the problem under clause 9 worse by extending out dates we may not meet. Mr Gazal further deposed that Mr Mellowes responded with words to the following effect: Well, we have never had to use cl 9 to sue someone where they have used their best endeavours to get a project done. … From our end, we are committed to the site and we are happy to wait for you to firm up a new approval if that is necessary.
24. Nabil Gazal deposed that there was a conversation at the meeting to the following effect: Himself or Mr Gazal: Go and find another site. We cannot build this centre and we cannot complete it in time as per the contract. We are telling you we can't perform. Mr Mellowes: We are still interested in the site and we want to be on there. Himself or Mr Gazal: That's great. We'd love to have you on the site but there is work we need to do to change the plans. It's too expensive in the current design. … Himself or Mr Gazal: It is too cost prohibitive for us to dig out the basement. It will cost us about ten million to excavate. Mr Mellowes: Why don't you move the supermarket up to Botany road and put the car park underneath with access from Wyndham Street so you will hardly need to excavate at all. Himself or Mr Gazal: That's an excellent idea. We will go and look at that. … Himself or Mr Gazal: We are very uncomfortable with this clause, it's hanging over our head. You have to act now if you want to, because we cannot build in accordance with the contract. Mr Mellowes: You guys have done your best to get this built we don't use this clause. I will go away and look at it.
25. A file note made by Nabil Gazal shortly after the 14 April 2010 meeting is in the following terms: We expressed our concern over the time it will take to get a new DA. Even possible that we won't get it. We expressed that the current DA does not stack up and we can't build it in its current form. We made it clear that we are happy to let them out of the contract. We don't want to be up for damages because of our inability to build current project or possible future project. Anthony Mellows [sic] expressed his commitment to the site and that there hasn't been and there currently isn't any other site that they have been offered. Anthony explained that they never use the termination clause and they understand our concerns. We also offered first right of refusal in future should they wish to commit to another site. Anthony asked for some time to think about amendments to the contract that would give WOW flexibility to "get out" if another site came along as well as limit the damages loss of profit etc that they could sue Gazcorp for. We felt comfortable that WOW understood the current predicament and the possible pitfalls with the new DA. They were very supportive of our site and wished to be a part of the development and they were willing to look for ways to make both parties comfortable.
26. On 30 April 2010 Mr Carroll sent an email to Mr Gazal which included the following: Further to our brief discussion on Green Square yesterday, I was incorrect in advising you that the date of PC was 30 April 2010. I am advised you sent us earlier correspondence seeking an extension to the date of PC and it is now agreed as 1 October 2010.
27. It may be inferred that the correspondence referred to in Mr Carroll's email is that which culminated in the Woolworths letter of 12 September 2008, as discussed earlier.
28. Mr Gazal sent an email in response shortly thereafter in which he stated that he was "just about to send you an email expressing the same view!".
29. At around that time Gazcorp was in communication with the Council concerning possible amendments to the 2008 Consent. It appears that it was suggested that the existing retail floor space as approved would be retained, but that various other changes would be made to the approved commercial floor space such as changing part of it to residential use.
30. It may be recalled that the 2008 Consent had been modified so that it would operate until 17 February 2011. It appears that by June 2010 the consent had been further modified such that it was to operate until 17 February 2014. On 3 June 2010 Mr Gazal sent an email to Mr Carroll stating that the "DA is valid until 2014".
31. On 15 June 2010 Mr Gazal and Nabil Gazal attended a meeting with representatives of Woolworths. It appears from a note of the meeting taken by Nabil Gazal that Mr Carroll was present. Nabil Gazal's file note is in the following terms: Gazcorp having problems to deliver site on time. We want to mitigate their damages. We are happy for them to find another site. WOW will come back to us with amendment to the current damages clause. WOW are committed to our site, they like it.
32. On 16 July 2010 Mr Carroll sent an email to Mr Gazal indicating that Woolworths had obtained legal advice about the matters discussed at the 15 June 2010 meeting, and that there was a need to discuss the advice before reverting to Mr Gazal. It further appears that these matters were the subject of a conversation between Mr Gazal and Mr Carroll on 17 August 2010.
33. On 5 October 2010 Mr Madden sent a letter to Mr Parry in the following terms: As you are aware, our respective clients entered into an Agreement for Lease in respect of the above tenancy on 20 February 2008 (AFL). The terms of the AFL require your client to complete the Landlord's Works by the Date for Practical Completion, originally specified as 30 April 2010. The Date for Practical Completion was subsequently extended by agreement between the parties to 1 October 2010. This agreement was contained in a letter from our client to your client dated 12 September 2008. As a consequence, the Date for Practical Completion pursuant to the AFL is 1 October 2010. Clause 2.4 of the AFL requires your client to use its best endeavours to complete the Landlord's Works by the Date for Practical Completion. Therefore, your client was required to complete the Landlord's Works in accordance with the provisions of the AFL by 1 October 2010. We are instructed that the Landlord's Works have not reached Practical Completion by this date. Clause 9 of the AFL states that if the Landlord's Works have not reached Practical Completion by the Termination Date, then our client may terminate the AFL. On the basis of the above, the Termination Date for the purpose of the AFL is 1 October 2011. We are instructed to put your client on notice that the time period for the purpose of Clause 9 of the AFL has now commenced. If the Landlord's Works have not reached Practical Completion by 1 October 2011, our client reserves all rights and remedies available under the AFL and at law to pursue and recover all costs, expenses and damages incurred as a result of your client's failure to comply with the AFL.
34. Mr Gazal deposed that on 15 October 2010 he had a telephone conversation with Mr Mellowes about the 5 October 2010 letter. Mr Gazal deposed that the conversation included words to the following effect: Mr Gazal: We are concerned because the letter puts us on notice under clause 9 for damages, and we were of the understanding from all our previous discussions with you and David that Woolworths wouldn't sue us for damages as a result of all the events that unfolded. Mr Mellowes: Please don't worry about it now (given what you are going through with your fathers passing). Let me get up to speed with the matter and I will come back to you in a few weeks to discuss it.
35. On 8 December 2010 Mr Gazal sent an email to Mr Mellowes, asking him whether he had "any further thoughts" since their last conversation concerning Green Square.
36. On 9 March 2011 Mr Carroll sent an email to Mr Gazal in relation to the Alexandria (or Green Square) site and another site owned by Gazcorp known as Orange Grove. In relation to Green Square, the email included the following: We have been going nowhere with this for ages. In order to get a final resolution can Ross [Finlay] and I catch up with you for a coffee some time next week. Rather than a formal meeting in the office lets pick a suitable spot that suits us all. I'll come back to you with a couple of times.
37. The evidence does not reveal whether the proposed meeting took place.
38. On 27 April 2011 Woolworths lodged a caveat against the titles for the Green Square site. Woolworths claimed an interest as lessee pursuant to the Agreement dated 20 February 2008.
39. The caveat was discussed at a meeting held on 5 May 2011 attend by Mr Gazal, Nabil Gazal, Mr Carroll and Mr Mellowes. Mr Gazal deposed that at the meeting he said words to the effect that "the caveat will cause us problems with our bank". A note of the meeting made by Nabil Gazal includes the following: They re-iterated that WOW have never sued for damages.
40. On 20 May 2011 Mr Carroll sent an email to Mr Gazal stating that the caveat had been withdrawn. Mr Gazal sent an email to Mr Mellowes shortly thereafter thanking him for dealing with the caveat issue. The email also included the following: We are full steam ahead now with the planning, so hopefully we can get a good outcome with Council.
41. On 28 June 2011 Mr Gazal sent an email to Mr Carroll attaching some sketch plans for the lower ground and ground floors. The sketch plans were described in the email as "the first cut plans as discussed". Mr Gazal deposed that these plans had been discussed at a meeting held with Mr Carroll on 28 June 2011. It should be noted that the plans appear to depict a supermarket area on the ground floor rather than on the lower ground floor.
42. On 20 July 2011 Mr Carroll sent an email to Mr Gazal which included the following: In relation to Green Square we were to get back to you to see of [sic] we could either give up some space or recut the deal and we think the latter is our preferred way forward.
43. Mr Carroll sent a further email to Mr Gazal on 26 July 2011. This email included the following: We refer to our recent discussions regarding Green Square and the sketch plan you provided at our meeting on 28 June 2011. During our meeting you asked if we could either give up some space or potentially rewrite the deal to provide you with more rental upside given the time that has passed since the previous deal was struck. The original deal struck at Green Square was as follows: … At the time these deals were struck, the Centre was envisaged to be over two levels with a GLA around 15,500m2 with 614 basement car parks (as per AFL plans). Please let me know if you disagree with this. Its difficult to recut the rental given the large $$ amount and the five (5) yearly increases of 5% and 10% in years 6 and 11, however, we are currently awaiting an update on the sales potential in the area and this will assist us in our discussions on rental. On the basis of the sketch plan you provided we would like to ensure the following: We get as many car parks as possible. We think 180 (est) will be a bit light on if the Centre GLA will be around 7,500m2? Lets discuss this. We are keen to ensure we have no less space than previously agreed and we need a complete full line supermarket in this location so we are not able to reduce our space requirement. If the plans could be further developed it will assist in confirming carpark numbers but we need kiosks to be clear of the shopfront, no less frontage than what we previously had and the travelators in a more visible accessible location (noting the location must support the speciality stores) If we can agree on the above, and get a more workable plan we can thrash out some rental numbers. See you upon your return. Trust this is acceptable.
44. On 8 September 2011 Mr Carroll sent an email to Mr Gazal which referred to Woolworth's recent assessment of Green Square. It was stated that "the population numbers are compelling". The email continued: We assume you have your architects preparing more detailed plans so we can discuss further and we are keen to do so.
45. Mr Gazal responded by email later that day. The email included the following: With respect to Green Square, the Residential guys will have a study back to us in the next two weeks, which will then give us clearance to finalise the retail layout for lodgement.
46. On 22 September 2011 Mr Carroll sent an email to Mr Gazal in the following terms: We refer to our recent discussion regarding the Date of [sic] Practical Completion and the Termination Date under the Green Square AFL. We also refer to the letter from Henry Davis York of 5 October 2011 [sic] regarding these dates. [We?] agreed that I would write to you on this matter. The Date of [sic] Practical completion under the AFL was previously [amended?] to 1 October 2010 and the Date of Termination is 1 October 2011. As the date of termination is now upon us and as your plans are to be further revised, the parties need to reach agreement to extend the Date of [sic] Practical Completion for the lessor's works. Can you please confirm that you are agreeable to extending this date to 1 October 2013 with the Date of Termination being 12 months after that date. We look forward to your advice on this matter as soon as possible.
47. The email was stated to be subject to Woolworths Board approval.
48. Mr Gazal deposed that he did not ever agree to the proposal to extend the date to 1 October 2013, or indeed to any other date.
49. On 18 October 2011 Mr Madden sent a letter to Mr Parry in the following terms: We refer to our previous correspondence dated 5 October 2010 and are advised that, at this stage, the Landlord's Works remain incomplete. As you are aware, clause 9 of the Agreement for Lease dated 20 February 2008 (AFL) states that if the Landlord's Works have not reached Practical Completion by the Termination Date (being 1 October 2011), then our client may terminate the AFL. We note that our client sent correspondence directly to your client on 22 September 2011 requesting the landlord's agreement to further extending the Date for Practical Completion in the AFL from 1 October 2010 to 1 October 2013. It is our understanding that your client has not formally accepted that proposed amendment to the AFL. We are also instructed that our client's [sic] have been and are continuing discussions regarding the possible variation of the Landlord's Works, the Premises and other terms, obligations, covenants and conditions of the AFL and Lease. Whilst we note and acknowledge that discussions and negotiations between the parties for the variation of the AFL are continuing on an amicable basis, our client's corporate legal policies require us to confirm that our client: relies on the existing terms, obligations, covenants and conditions applicable pursuant to the AFL; does not waive any rights and remedies available under the AFL and at law as a result of your client's failure to complete the Landlord's Works in accordance with the AFL; and reserves all rights (including termination) and remedies available under the AFL and at law to pursue and recover all costs, expenses and damages (including loss of profits) incurred as a result of your client's failure to comply with the AFL. It is our understanding that your client wishes to proceed with the development of the Centre. As a consequence, we ask that your client promptly engage with our client in the near future, for the purpose of resolving appropriate and mutually agreeable variations to the Landlord's Works, the Premises and other terms, obligations, covenants and conditions of the AFL and Lease. Please consult your client and advise us of a convenient time and date for the parties (including legal representatives) to meet at this office for such discussions.
50. Also on 18 October 2011 Mr Carroll sent an email to Mr Gazal in the following terms: Our lawyers have this afternoon sent a letter to Stephen Parry as instructed by our Legal dept. It is only a mechanical letter and it should not cause any distress. I will send you a copy.
51. On 20 October 2011 Mr Gazal sent an email to Mr Carroll which included the following: We will have to speak next week re firming up dates for Green Square. As I discussed with you earlier, I am still waiting to firm up some timelines from our architects prior to committing to new dates.
52. On 31 October 2011 Mr Parry sent a letter in response to Mr Madden's letter. Mr Parry's letter was in the following terms: Thank you for your letter which I appreciate is written to protect your client's interests in what is a difficult matter especially having regard to what have been ongoing serious global and local economic factors. Without commenting on the legal position of the parties my client is confident of being able to arrive at a negotiated position directly with your client and will renew its efforts in this regard with the objective that legal representatives are subsequently engaged to document and give effect to a mutually acceptable arrangement.
53. On 3 November 2011 Mr Gazal sent an email to Mr Carroll which included the following: Also, in the next few weeks I will be ready to sit down and start discussing a timing for when the likely completion of the Alexandria complex could potentially be (assuming everything goes through Council as per the plan).
54. On 6 December 2011 Mr Gazal sent another email to Mr Carroll. The email included the following: As discussed on the phone, we are full steam ahead with the project for Alexandria. We are not ignoring the letter from your lawyers on the 18 October 2011, however, as stated, we are waiting until we get some firmer plans from our architect so we can give you a more precise date for completion of the project - to formulate a new agreement. Will hopefully have this date by Mid January.
55. On 23 January 2012 Mr Gazal sent some plans in relation to Green Square to Mr Carroll. One of the plans was a floor plan of the ground floor. Another plan was a section plan which depicted a Woolworths located on the ground floor with two levels of car parking beneath and two levels of car parking above. On 27 January 2012 Mr Carroll requested further plans from Mr Gazal. On 3 February 2012 Mr Carroll sent an email to Mr Gazal containing numerous comments on the plans provided. Mr Carroll acknowledged that it was "early days with the plans".
56. Various further plans were sent by Mr Gazal to Mr Carroll in March 2012. These plans were evidently the subject of some discussion, including involving the input of architects retained by the respective parties. On 11 April 2012 Mr Gazal sent a "mock-up of what I believe the area could look like". Mr Carroll responded by email on 13 April 2012. Mr Carroll's email was in the following terms: I am at a meeting from 12am but I must say I am very worried where we are heading with this. We will never in a million years get this signed off and its such a radical departure from what you last sent. We have a signed AFL at Green Square and we are asked to compromise so much its unreasonable. We spent money on getting our architect to review the plans as you agreed to do but this is nothing like what we need. Our box is already very irregular in shape and when you add this mall configuration its all quite unworkable. Let's chat this afternoon.
57. The evidence is not clear as to whether there was any discussion between Mr Gazal and Mr Carroll later that day. However, Mr Gazal sent an email to Mr Carroll during the afternoon which attached a planning proposal in relation to the Green Square Town Centre.
58. Despite the apparent impasse reached on 13 April 2012, the parties continued to communicate in relation to the proposed development. It appears that around this time some urgency was introduced into the situation due to an impending change in a local environmental planning law. On 19 April 2012 Mr Carroll sent an email to Ms Kurek (a designer within Woolworths) in the following terms: We have a project which is PCM [Property Committee of Management] approved and DA approved. However, the entire proposal has changed and now a new DA needs to be submitted. Its urgent as the Council LEP is about to change and the new LEP will drastically restrict the amount of retail that can be accommodated on site for a supermarket. Hence the lessor needs to lodge the DA asap. This location is a main priority for the company. All we need is a concept sketch dropped into the supermarket plan. any subsequent changes can be subject of a S96 but the priority is to get the DA lodged. We need the concept sketch on the plan to protect us during the DA assessment phase by Council. Could you prioritise this ahead of everything else you have for Region 7.
59. It may be inferred that "the new LEP" referred to in the email is the Sydney Local Environmental Plan 2012 ("the 2012 LEP") which came into force later in 2012 (on 14 December 2012). The effect of clause 7.23(3) of the 2012 LEP was to prohibit, in respect of certain properties, the granting of a development consent for retail space of greater than 1,000m2. Gazcorp's site at Alexandria was property to which clause 7.23(3) would apply.
60. It may further be inferred that "the DA" referred to in Mr Carroll's email was a development application for the site that was then in the process of being prepared prior to lodgement. It appears that at least from this point in time the parties closely co-operated in order to facilitate the lodgement of a Development Application ("the 2012 Development Application") on about 6 July 2012. The application was approved on 30 November 2012 ("the 2012 Consent").
61. The proposed development the subject of the 2012 Consent was for demolition of existing structures, excavation for two basement levels accommodating 327 car parking spaces and construction of a three-storey retail and commercial development accommodating 11,452.05sqm of floor space. The accompanying plans provided for a supermarket on the ground level, not the lower ground level as was the case with the 2008 Consent. However, condition 11 of the 2012 Consent provided that no consent was given to the use or fit-out of any of the proposed retail tenancies including the supermarket.
62. It should be noted at this point that even if the Date for Practical Completion under the Agreement had been extended to 1 October 2010, and thus the Termination Date had been extended to 1 October 2011, the time for Woolworths to exercise any rights under cl 9 of the Agreement had expired by 1 October 2012. I interpose here to note that Gazcorp does not contend that the Agreement was mutually abandoned prior to 1 October 2012. Gazcorp contends that mutual abandonment occurred at some time in the period from 1 October 2012 to 3 February 2016.
63. On 5 December 2012 Mr Carroll sent an email to Mr Gazal which included the following: I have been thinking on Green Square. When can we discuss commercials? Should I commence with a Letter of Offer?
64. Later on 5 December 2012 Mr Gazal sent an email to Mr Carroll in response. The email included the following: I think it is better to wait until we have a definitive layout that we are both happy with. That way, you will have a firm idea how big the box is (it may get bigger than 3,800 sqms) and there will be no need to be toing and froing as the plan changes.
65. There were indeed numerous changes to the plans. Numerous plans described as "updated plans" were sent by Mr Gazal to Mr Carroll in December 2012. Woolworths, for its part, subsequently provided a great deal of information to Gazcorp on various aspects relating to supermarket design, including trolley management and security. It is evident from the communications between the parties that it was envisaged that an application to modify the 2012 Consent would be lodged in due course. One such application was lodged on about 27 February 2013, seeking, inter alia, to amend Condition 11 to delete the reference to "supermarket" so as to approve use and fit-out of a supermarket. Further applications to modify the 2012 Consent were subsequently made.
66. On 5 April 2013 Mr Gazal sent an email to Mr Carroll attaching some preliminary sketches for the loading dock for Woolworths. The sketches appear to depict the supermarket on the ground (or Botany Road) level.
67. On 17 April 2013 Mr Carroll sent an email to Mr Gazal which included the following: Also with Green Square we remain keen to secure the site but for all the reasons we have raised with you previously, the plan remains a major problem. I have met with Grace [Kurek] and the National Design Manager (her boss) and some major concerns were raised with the configuration of the space and our ability to lay out the store. As you know the site sits opposite the largest urban renewal project in Australia. You have a high rental expectation on the site. We have a high sales requirement to meet that but we can't achieve the sales we need if we don't get an acceptable shaped box. Its easier to say this on an email but from day 1 we have had to compromise and we are still be [sic] asked to do so with the dock. I think the lifts are workable but the size of the resi lobby, the set back in the wall parallel to the frontage, the kiosks (3???) and the shallowness of the box remain a problem. I have tried to get Grace to attend your required meeting but she can't get the necessary clearance to do so if we are only going to talk about the lifts and the dock. This has been made clear to me. The better our store configuration the better the Centre will be as a result.
68. On 18 April 2013 the Council approved the application to modify the 2012 Consent, including by amending Condition 11 "to delete reference to supermarket and approve use and fit-out of Tenancy R.30 as part of the base building development consent". In addition, a drawing entitled Woolworths Green Square - Concept Plan was added to the drawings that form the description of the proposed development.
69. Documents evidencing the Council's assessment of the modification application reveal that in excluding Tenancy R.30, which was for a tenancy area that exceeded 1,000m2, the Council took into account cl 7.23(3) of the 2012 LEP but determined, in effect, that making an exemption for this tenancy would not be contrary to the planning considerations which underpinned the enactment of the 2012 LEP.
70. It appears from a letter sent by the Council to Gazcorp on 20 November 2013 that, all deferred commencement conditions having been satisfied, the 2012 Consent would operate from that date and lapse on 20 November 2018.
71. In early 2014, the parties were continuing to discuss plans for the development of the Green Square site. On 2 February 2014 Mr Carroll sent an email to Mr Gazal in which he expressed views that the loading dock was "overly tight" and that there were problems with the proposed location for the liquor store. Mr Carroll also stated that he was keen to work with Mr Gazal on sorting out these issues. The parties continued to deal with each other concerning proposed plans and associated issues throughout 2014.
72. It should be noted that on 17 February 2014 the 2008 Consent lapsed and thus ceased to have effect. The lapsing of the 2008 Consent was a matter known to both parties but the event does not appear, on the available evidence, to have been the subject of any particular communication between the parties. Gazcorp contends that the combination of the lapsing of the 2008 Consent and the effect of cl 7.23(3) of the 2012 LEP had the effect that the Agreement was frustrated.
73. By late-2014 the plans that were the subject of discussion between the parties appear to relate to a development that would include a significant residential component.
74. On 16 February 2015 Mr Gazal sent an email to Mr Carroll which included the following: I would not be able to afford a deal in Green Square where there was no possibility of getting any of the internet sales, especially considering it is making up 4-8% of grocery sales in any given area and growing! (It is also higher in urban areas). This would mean that the ability to get turnover rent or rental increases would become extremely difficult, and in the face of rising costs (our land tax bill jumped 300% this year) it would make the land use unfeasible. Anyway, food for thought! These are issues that we have been speaking about for a while now…maybe there is a way to apportion these sales more evenly in the lease? I can't imagine we are the only ones raising concern about this issue.
75. Mr Carroll responded by email shortly thereafter. Mr Carroll's email included the following: I think we will need to get better increase mechanisms in the lease rather than relying on internet sales to drive percentage rental because there are so many unknowns around what could transpire in the future. … As you know I'm very keen to bed down a deal with you at Emerald City [Green Square] and I'm consistently asked where we are up to with the project. There is so much happening in this area at present I don't want to be left behind if someone gets a rezone on another site. As you know Meriton have a DA lodged for over 900 apartments in Epsom Rd and there are a number of other projects getting off the ground. Happy to drop in for a chat some time if you like.
76. Discussions about the Green Square development continued between Mr Gazal and Mr Carroll on at least an intermittent basis throughout 2015 until Mr Carroll ceased his role with Woolworths in early July 2015. On 30 June 2015 Mr Carroll sent an email to Mr Gazal which included the following: I have a few regrets in leaving and one of them that I won't be around to finalise Green Square with you as I know we can work well together.
77. On 9 July 2015 Mr Gazal met with a number of representatives of Woolworths including Mr Rowles. It appears from an email from Mr Rowles to Mr Kemmler (the Director of Property at Woolworths) that during the meeting Mr Gazal undertook to deal only with Woolworths "due to the longstanding involvement". Mr Gazal deposed that during the course of the meeting there was discussion concerning the latest plans for the development, rental expectations for the Woolworths supermarket, and the possibility of a further application to the Council to modify the development consent (the 2012 Consent).
78. On 23 July 2015 Mr Gazal sent an email to Mr Rowles in which he stated that there had been a "great meeting with Council this morning" and that Gazcorp were now going ahead with the modification application. Mr Gazal provided the "first cut" of the detailed drawings for that application to Ms Munro of Woolworths on 11 September 2015. These drawings depicted a Woolworths supermarket on the ground (or Botany Road) level. On 22 September 2015 Mr Gazal provided updated plans to Mr Finlay. Mr Finlay responded by email on the following day stating that he and Ms Kennedy of Woolworths would review the plans and respond as soon as possible. There were various communications between the parties concerning the plans thereafter.
79. On 14 October 2015 Mr Gazal sent an email to Mr Champion of Woolworths in the following terms: I just wanted to write a quick email out of courtesy to express my current dilemma with our property in Green Square. Appreciating the personnel changes and everything going on with the reshuffle, we are at a critical point of the project, but have been unable to obtain any feedback or commentary on the site after numerous attempts to speak with the Woolworths property team. Having had a long relationship with you personally, and having always acted in Woolworths best interests in relation to the site, I would ask that we could please bring this to a head one way or another so that we are able to move forward. I look forward to hearing from you soon.
80. Mr Champion responded by email later that day stating that he would speak to Mr Finlay in the following week and provide a response as soon as possible. On 21 October 2015 Mr Champion sent a further email to Mr Gazal in the following terms: Ross [Finlay] and I met to discuss today. We need a little more information than is provided in the plans. Ross will call you to discuss and to arrange a meeting to finalise things in the near future.
81. On 21 October 2015 Mr Gazal received an email from Mr Brad McAndrew of Woolworths. Mr McAndrew introduced himself as Mr Gazal's "new Woolworths contact". Mr McAndrew stated in his email that he and Mr Finlay would like to have a meeting with Mr Gazal to discuss the proposed development. Mr McAndrew also posed numerous questions to Mr Gazal about the proposal. Mr Gazal provided some answers to those questions on the following day. Discussions concerning the plans for the proposed development continued thereafter.
82. On 11 December 2015 Mr McAndrew sent an email to Mr Gazal in which it was stated that he and Mr Champion of Woolworths would like to have a meeting with Mr Gazal in the following week to discuss "the project and commercial terms". The evidence is not clear as to whether such a meeting occurred. However, it appears from an email sent by Mr McAndrew to Mr Champion on 18 December 2015 that there may have been a meeting with Mr Gazal planned for that day, and that a "key point" for Mr Gazal was that "AFL remains on foot". However, Mr Gazal did not give any evidence about such a meeting and neither did any witness called by Woolworths. It was not put to Mr Gazal in cross-examination that there had been such a meeting, or that it had been suggested to him in December 2015 that the Agreement was still on foot. Mr Gazal seemed to indicate in the witness box that from the time of his dealings with Mr Carroll the first time Woolworths told him (at least in writing) that the AFL was on foot was by means of a letter sent by Woolworths on 3 February 2016. In these circumstances it seems to me unlikely that Mr Gazal was told by anyone on behalf of Woolworths in December 2015 that the Agreement remained on foot.
83. The letter dated 3 February 2016, referred to above, was sent by Mr McAndrew to Mr Gazal by email on that date. The letter is lengthy and may fairly be described as a detailed letter of offer. Importantly for present purposes, the letter commenced with the following: Further to our recent discussions, we below present the varied terms and conditions for simultaneous surrender of the existing Agreement for Lease between the parties and the entering of a new Agreement for Lease and Lease at the abovementioned location. The heading to the letter also referred to a surrender of an existing Agreement for Lease. The offer contained in the letter was based upon certain plans drawn in December 2015. The proposed lease was for a supermarket area of approximately 4,000m2 and a liquor tenancy with an area of 134m2.
84. Mr Gazal did not immediately respond to Woolworths' letter of 3 February 2016. It appears that Mr Gazal wanted to obtain further legal advice, including from a Senior Counsel, and it was also a very busy time with Gazcorp opening a new development at Liverpool. I note, however, that on 5 February 2016 Mr Gazal sent an email to Mr Murray of Coles, with whom he had been dealing since about December 2015, in the following terms: As you are aware, I have been getting some mixed messages regarding whether the AFL we had with Woolworths previously is now void or still in effect. We are firmly of the belief that such an agreement is now void, however, in the interest of both parties, and wanting to act with the highest of integrity, I want to ensure for certain this is the case once and for all prior to proceeding any further. I have engaged our solicitors to now do a full examination of all relevant materials, with a silks opinion to follow. I am expecting an initial response towards the end of next week.
85. On 29 April 2016 Mr Gazal sent an email to Mr McAndrew which attached a response to Mr McAndrew's letter of 3 February 2016. The attached letter included the following: I refer to your letter of the 3rd February 2016 (LOO). I note that Woolworths has expressed some interest in taking a lease over the new supermarket premises (SP) that is being proposed by Gazcorp at the site known as Emerald City located at 296-298 Botany Rd, Alexandria and 284 Wyndham St, Alexandria. As you are aware, Gazcorp hopes to commence construction on the site, pending approvals, by the fourth quarter of this year (2016). Unfortunately, the base rental rate proposed in your LOO, along with many other key terms and conditions, are far below and apart from the terms on which other supermarket operators have expressed an interest in the SP (and so far below the prevailing market terms and conditions for such a SP). … In the meantime, I note that the LOO is headed with the words: Surrender of Existing Agreement for Lease and New Agreement for Lease and Lease Gazal Pty Ltd and Woolworths Ltd Proposed Emerald City Mixed Use Development I accept that you have only relatively recently been dealing with Gazcorp in relation to the SP and so may not be aware that any prior agreement between Gazcorp and Woolworths in relation to the Emerald City Site (and the many uses proposed by Woolworths for the Emerald City Site) concluded some time ago. There is not now (nor has there been for some time) any binding agreement or other commitment by either Woolworths or Gazcorp to the Emerald City site, and the heading "Surrender of Existing Agreement for Lease" is a misnomer, as there is no Existing Agreement for Lease.
86. Woolworths responded by letter dated 18 May 2016. The letter, which was signed by Mr McAndrew, contained the following: The discussions between the parties, including those with David Carroll and more recently with myself, Ross Finlay and Richard Champion have contemplated the potential to either vary or simultaneously terminate and enter a new Agreement for Lease for a proposed supermarket and liquor store tenancy at your site. At no time has Woolworths formally terminated the existing Agreement for Lease between Gazcorp and Woolworths dated 20 February 2008 ("the AFL") and there is no intention of doing so unless an alternate Agreement for Lease is ultimately agreed and entered into by the parties. Accordingly, Woolworths are of the view the Landlord's obligations to perform pursuant to the AFL remain in place. Woolworths remain enthusiastic about working with Gazcorp on this site and welcome the opportunity to meet or discuss our 3 February 2016 proposal.
87. Mr Gazal responded to the above letter on the following day. His response included the following: As discussed with Richard, I am more than happy to sit down and discuss the possibility of entering in to a new Agreement for lease (AFL) at the subject site. Please note however (and as referred to in the prior correspondence), the AFL in which you refer to in your letter was terminated some time ago (and such termination did not require Woolworths to do anything formal or otherwise) and as such, any proposal made by Woolworths will be considered on its merits and without regard to the terms of the prior AFL.
88. The parties thereafter continued to communicate in relation to the Green Square site. It can be said that neither side departed in that correspondence from the positions that had emerged in 2016. That is to say, Woolworths continued to assert that the Agreement remained on foot, and Gazcorp continued to assert that the Agreement had been terminated. I have considered that further correspondence, but it is not necessary to here set out any of its details.
89. On 14 October 2016 the Council gave approval for a further modification application in respect of the 2012 Consent. The approved development was now described as: Demolition of existing structures, excavation for 1 basement level accommodating 205 car parking spaces and construction of a 2 and 3-storey retail and commercial development accommodating 7,523sqm of floor space.
90. The Woolworths Green Square-Concept Plan remains one of the drawings that describes the proposed development. The approved plans show a supermarket on the ground (or Botany Road) level.
91. On 3 February 2017 solicitors acting for Woolworths sent a letter to Mr Gazal stating, in effect, that Woolworths consented to all variations to the Plans and Specifications (as that expression is defined in the Agreement) as reflected in the plans approved when consent was given to the modification application in October 2016. Woolworths solicitors suggested that the approved plans could therefore be substituted into the Agreement in place of the plans that previously formed the Plans and Specifications.
92. Also on 3 February 2017, Woolworths lodged another caveat against the titles to the land at the Green Square site. The caveat (AM129767) remains on the titles.
93. Notwithstanding further attempts, the parties have been unable to reach an agreement in relation to the Green Square site. Gazcorp commenced these proceedings on 15 October 2018.

Frustration - applicable principles

1. There was no real dispute as to the applicable principles concerning frustration of contracts. A good starting point is the judgment of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337. At 357, Mason J expressed agreement with the earlier acceptance by Stephen J (in Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 143) of the approach adopted by Lord Reid and Lord Radcliffe in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696. Mason J continued: Lord Reid said that the task of the court is to determine "on the true construction of the terms which are in the contract read in light of the nature of the contract and of the relevant surrounding circumstances", "whether the contract which they did make is … wide enough to apply to the new situation: if it is not, then it is at an end". Later he described frustration as "the termination of the contract by operation of law on the emergence of a fundamentally different situation". Lord Radcliffe said: "… frustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract… It was not this that I promised to do." His Lordship, noting that special importance attaches to an unexpected event, observed "There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for". It is implicit, if not explicit, in the judgment of Stephen J., as in the speeches of Lord Reid and Lord Radcliffe in Davis Contractors, that to express a preference for this view of frustration as against the theory of the implied condition and other suggested bases is not to cast doubt on the authority of earlier decisions. This is of critical importance because the earlier cases provide many illustrations of the proposition that a contract will be frustrated when the parties enter into it on the common assumption that some particular thing or state of affairs essential to its performance will continue to exist or be available, neither party undertaking responsibility in that regard, and that common assumption proves to be mistaken… (See also Stephen J at 345 and Aickin J at 380.)
2. In oOH! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd (2011) 32 VR 255 Nettle JA dealt with the test for frustration at [63]-[74]. After referring to the judgment of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (supra), his Honour stated at [70]: I approach this case on that basis. Consistently with Codelfa, I take the law to be that a contract is not frustrated unless a supervening event: confounds a mistaken common assumption that some particular thing or state of affairs essential to the performance of the contract will continue to exist or be available, neither party undertaking responsibility in that regard; and in so doing has the effect that, without default of either party, a contractual obligation becomes incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.
3. At [72]-[74] Nettle JA considered the role of foreseeability in relation to circumstances said to amount to frustration. His Honour said at [74]: In the case of foreseeable but unforeseen events, the nature and extent of foreseeability is critical. Since most events are foreseeable in one sense or another, the parties to a contract will not ordinarily be taken to have assumed the risk of an event occurring during the life of the contract unless the degree of foreseeability of that event is very substantial. Hence, as the position is summarised in Chitty on Contracts: Much turns on the extent to which the event was foreseeable. The issue which the court must consider is whether or not one or other party has assumed the risk of the occurrence of the event. The degree of foreseeability required to exclude the doctrine of frustration is … a high one: "foreseeability" will support the inference of risk-assumption only where the supervening event is one which any person of ordinary intelligence would regard as likely to occur or … "one which the parties could reasonably be thought to have foreseen as a real possibility".
4. Reference should also be made to recent statements to similar effect in the Court of Appeal in this State in Chinatex (Australia) Pty Ltd v Bindaree Beef Pty Ltd [2018] NSWCA 126 at [42]-[44] and Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd [2019] NSWCA 53 at [56].

Abandonment - applicable principles

1. Again, there was no real dispute as to the applicable principles concerning the mutual abandonment of a contract. Reference was made to DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 434 where it was stated: Thus the contract in the present case was still on foot on and after 25th July 1974. Neither party had effectively rescinded. But there can be no doubt that by 5th December 1974, when these proceedings were commenced, neither party, whatever may have been their reasons, regarded the contract as being still on foot. Neither party intended that the contract should be further performed. In these circumstances the parties must be regarded as having so conducted themselves as to abandon or abrogate the contract. The position is similar to that with which Isaacs J. dealt in Summers v. The Commonwealth. The plaintiff did not succeed in his action for damages for breach of contract, but on the other hand the defendant had not rescinded. Time passed during which neither party took any steps to perform the contract. It was held that the parties had so conducted themselves as mutually to abandon or abrogate the contract
2. In Técnicas Reunidas SA v Andrew [2018] NSWCA 192 Leeming JA (with whom Bathurst CJ and White JA agreed) stated at [50]-[52]: The principle that a contract may be inferred from acts and conduct, as well as or in the absence of words, is settled law. The passages above were approved by Heydon JA in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 as well as in numerous subsequent cases, including most recently in this Court in Crowe-Maxwell v Frost (2016) 91 NSWLR 414; [2016] NSWCA 46 at [84], by the Western Australian Court of Appeal in Melreef Pty Ltd v Glenn [2015] WASCA 111 at [20] and the Victorian Court of Appeal in White v Timbercorp Finance Pty Ltd (in liq) [2017] VSCA 361; 123 ACSR 284 at [145]. It was with a measure of understatement that Allsop J (as he then was) said in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [369]: "[A] number of authorities discuss the need not to constrict one's thinking in the formation of contract to mechanical notions of offer and acceptance." The same approach applies to agreements to conclude a relationship. Although it is common to refer to "abandonment" as a separate doctrine, the preferable view is that the contract has been discharged by inferred agreement. This was stated by Dixon CJ and Fullagar J in Fitzgerald v Masters (1956) 95 CLR 420 at 432; [1956] HCA 53: "There can be no doubt that, where what has been called an 'inordinate' length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them, it may be inferred that the contract has been abandoned. ... What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that (in the words of Rowlatt J) 'the matter is off altogether'." (citations omitted). That principle has very commonly been applied, including, in this Court, in Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [306]. A recent example is found in the judgment of Murphy and Beech JJA and Pritchard J in Tonner v Delaporte [2018] WASCA 115 at [114]. In Ryder v Frohlich [2004] NSWCA 472, a case concerning whether a partnership had come to an end when one of the partners joined another firm, on which Pinsent Masons relied, McColl JA said at [136], with the agreement of Hodgson JA and by reference to earlier authority, that "[w]hether there is abandonment or abrogation of a contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties." In Protector Glass Industries Pty Ltd v Southern Cross Autoglass Pty Ltd [2015] NSWCA 16 at [98], Barrett JA (with whom Meagher and Gleeson JJA relevantly agreed - see at [21]-[22] and [111]) said: "The nature of the inquiry to be made when it is alleged that the parties to a contract have abandoned that contract has recently been discussed in Fazio v Fazio [2012] WASCA 72 and Cedar Meats (Aust) Pty Ltd v Five Star Lamb Pty Ltd [2014] VSCA 32. In the former case, Murphy JA said at [74]: 'The abandonment of a contract, in the sense of the mutual release of future obligations, being an inferred agreement, does not depend upon the subjective intention of the parties, but upon whether their conduct (both acts and omissions) viewed objectively manifests an intention to discharge the contract ...'"
3. Reference was also made to other authorities that contain statements of principle to the effect that the question of whether there has been an abandonment of contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties, and that subjective intention or understanding is not relevant (see, for example, Clifton v Kerry J Investment Pty Ltd [2020] FCAFC 5 at [324]-[328]).
4. In Ryder v Frohlich [2004] NSWCA 472 McColl JA (with whom Hodgson and Ipp JJA agreed) stated at [135]-[137]: Where it is plain from the conduct of parties to a contract that neither intends that the contract should be further performed the parties will be regarded as having so conducted themselves as to abandon or abrogate the contract: DTR Nominees Pty Limited v Mona Homes Pty Limited [1978] HCA 12; (1978) 138 CLR 423 at 434 (per Stephen, Mason and Jacobs JJ with whom Aickin J agreed); Summers v The Commonwealth [1918] HCA 33; (1918) 25 CLR 144 at 151-152 per Isaacs J. The inference of abandonment with be drawn where "an 'inordinate' length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them…What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that… 'the matter is off altogether'": Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 432 per Dixon CJ and Fullagar J. Whether there is abandonment or abrogation of a contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties: see CIC Insurance Limited v Bankstown Football Club Limited (1995) 8 ANZ Ins Cas 61-232 per Kirby P; Wallera Pty Limited v CGM Investments Pty Limited [2003] FCAFC 279 at [2] per Ryan J, at [30]-[32] per Kiefel J; at [57] per Gyles J; Marminta Pty Limited v French [2003] QCA 541 at [22] per Jerrard JA, Williams JA and Philippides J agreeing. The underlying premise of the abandonment cases is that a period of time elapses during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned. It is clear that the question whether an "inordinate length of time has been allowed to elapse" is relative. In DTR Nominees Pty Limited v Mona Homes Pty Limited the High Court was prepared to infer abandonment after a period of less than five months had elapsed during which neither party took any steps to perform the contract. In Fitzgerald v Masters it was held that a contract for the sale of land had not been abandoned even though proceedings for its specific performance were not commenced until 26 years after its execution.

Summary of principal submissions on frustration and abandonment

1. The parties provided detailed written submissions, both in opening and closing, and developed those submissions orally at the hearing. It is not necessary to record them all in detail. What follows is a summary of the principal submissions made.
2. Gazcorp submitted that the terms of the Agreement were of central significance to the determination of whether the Agreement has been terminated by frustration, and also whether it should be inferred that the Agreement has been abandoned. The provisions of the Agreement were analysed in some detail in submissions, with particular focus upon what was said to be four key groups of provisions, namely: 1. clauses 2.1, 2.3 and 2.4 which concern Gazcorp's obligations in relation to the construction of the Centre (and the supermarket within it); 2. clauses 2.5, 2.6 and 2.12 which concern variations that could be made to those obligations; 3. clauses 9 and 14 which concern termination of the Agreement; and 4. clause 7 which concerns the grant of a lease of the supermarket premises.
3. As to (a), it was emphasised that Gazcorp undertook to cause the Landlord's Works to be carried out (i.e. the works required to complete construction of the Centre) in accordance with the Plans and Specifications and in accordance with all laws and consents, and was required to use its best endeavours to complete the works within the times specified in clause 2.4. It was noted that clause 2.4 distinguished between completion of the Premises (i.e. the Woolworths supermarket) and completion of the Centre (i.e. the shopping centre as described in the Plans and Specifications).
4. As to (b), it was submitted that clause 2.5 allowed Gazcorp to alter the Landlord's Works in the limited circumstances described in the clause, but that Gazcorp had otherwise no unilateral right to change the Landlord's Works. It was noted that clause 2.6, which gave Woolworths rights to request amendments to the Supermarket Plans, did not extend to amendments to the Centre more broadly. In relation to clause 2.12 it was noted that (apart from clause 2.12(g)) it addressed matters that were beyond the control of Gazcorp. It was submitted that clauses 2.5, 2.6 and 2.12 delimit the variations that either party could unilaterally make to Gazcorp's obligations in relation to the construction of the Centre and the supermarket. Accordingly, any other changes would require the parties to agree to either vary the Agreement or enter into a new agreement.
5. As to (c), it was submitted that clause 9 was an exhaustive statement of Woolworths' right to claim damages for any failure to carry out the Landlord's Works. Woolworths was restricted to a claim for recovery of costs and expenses, and any such claim was required to be notified to Gazcorp within 1 year of the Termination Date. It was noted that no such claim has ever been made by Woolworths, and neither did Woolworths ever seek to terminate (whether under clause 9 or under clause 14.2).
6. As to (d), it was noted that the lease to be granted was for a term that commenced when Woolworths commenced trading in the Premises (the supermarket).
7. Gazcorp submitted that the Agreement clearly distinguished between the Premises, the Woolworths Stage (lower ground floor and basement levels 1 and 2), and the Centre (being the shopping centre), as starkly shown by clause 2.5(c) (see also the defined terms in clause 1.1, and also clauses 2.11(c), 3.2 and 9), and reinforced by clause 2.4 which provides for different completion dates for the Premises and the Centre.
8. It was submitted that the Centre, being the shopping centre to be constructed as "described" in the Plans and Specifications (which include the plans and specifications for the construction of the Centre contained or "identified" in Schedule 2), was a building that had a number of levels in addition to those that make up the Woolworths Stage. It was submitted that the plans in Schedule 2 plainly showed that the Centre was comprised of levels beyond the levels depicted on those plans. It was further submitted that in circumstances where the parties were aware of the 2008 Consent when the Agreement was made, the parties can be taken to have understood that the Centre was a shopping centre of the character of that which is the subject of the consent.
9. From that foundation, Gazcorp developed its submissions on frustration as follows. First, it was submitted that the parties entered into the Agreement on the common assumption that Gazcorp would continue to be able to lawfully carry out the Landlord's Works. Secondly, it was submitted that under the Agreement neither party took responsibility for the continuation of that state of affairs, there being no provision which imposes such an obligation or even deals with a situation where carrying out the Landlord's Works ceased to be lawful. Thirdly, it was submitted that the common assumption has proven to be mistaken in circumstances where the 2008 Consent lapsed on 17 February 2014 and the existence of clause 7.23(3) of the 2012 LEP meant that a fresh consent for a similar development would no longer be possible. Gazcorp submitted that the 2012 Consent (including as later modified) does not permit Gazcorp to carry out the Landlord's Works as defined in the Agreement. Gazcorp noted that Woolworths admitted in its Defence that Gazcorp is not lawfully entitled to carry out the Landlord's Works as specified in the Plans and Specifications (in their form at the time of entry into the Agreement). Gazcorp submitted that the situation that came about is radically different from the state of affairs contemplated at the time of entry into the Agreement.
10. Turning next to mutual abandonment, Gazcorp submitted that well prior to 1 October 2012 (when any rights of Woolworths under clause 9 came to an end) the parties had commenced to negotiate a new agreement for lease. It was submitted that these negotiations commenced shortly after the adverse Land and Environment Court decision in March 2009, when Mr Gazal made it known that changes would need to be made to the development the subject of the 2008 Consent. It was noted that in July 2011 Mr Carroll was speaking of effecting a "recut" of the deal, and seeking a workable plan so "we can thrash out some rental numbers".
11. Gazcorp submitted that whilst Woolworths, through its lawyers, was taking the position in October 2011 that it relied upon the Agreement and reserved all its rights under it, its commercial position was to downplay the significance of the statements made by the lawyers, and Woolworths made no claim against Gazcorp by 1 October 2012 when its rights under clause 9 expired.
12. Gazcorp submitted that the communications after 1 October 2012 between Mr Gazal and Mr Carroll were clearly concerned with making a new agreement for lease, and Mr Carroll expressed a keenness to "secure the site". This (as well as other statements made by Mr Carroll) was said to demonstrate that, viewed objectively, Woolworths had abandoned the Agreement and was instead pursuing a new agreement. Gazcorp submitted that Woolworths, knowing that the 2008 Consent would lapse in February 2014, made no attempt to insist upon performance of the Agreement.
13. In summary, Gazcorp submitted that from the time of the Land and Environment Court decision, neither party performed the Agreement or required the other party to do so, and it should be inferred from the long period of inactivity that the parties mutually abandoned the Agreement. Finally, Gazcorp submitted that this conclusion is reinforced or corroborated by numerous internal Woolworths documents from about early 2014 that contain admissions to the effect that there was no agreement for lease on foot.
14. Woolworths submitted that even after the Land and Environment Court decision in March 2009, the communications between the parties showed that they continued to regard the Agreement as being on foot. Numerous examples were given, including: 1. Mr Carroll's emails to Mr Gazal of 14 December 2009 and 8 March 2010; 2. an email sent by Mr Gazal to Mr Carroll on 2 May 2011 that attached a summary of the terms of the Agreement, and Mr Carroll's response on the following day; 3. the discussions about possible claims by Woolworths under clause 9 of the Agreement; 4. the letters from Woolworths' lawyers in relation to clause 9; and 5. the lodgement of the caveat in April 2011.
15. Woolworths submitted that the parties continued to work closely together in relation to revised plans for the Centre, the lodgement of the 2012 Development Application on about 6 July 2012, further revised plans thereafter, and the making of further modification applications. It was submitted that this continued until at least early 2016, at which time Woolworths sent its letter of offer of 3 February 2016 which effectively asserted the continued existence of the Agreement. Woolworths described Mr Gazal's response on 29 April 2016 as a change of position on the part of Gazcorp, and the first time Gazcorp had told Woolworths that it viewed the Agreement as no longer on foot.
16. In relation to the terms of the Agreement, Woolworths emphasised that the plans and specifications contained in Schedule 2 consisted of only three plans, being the supermarket level and two levels of basement car park. It was submitted that this suggested that the layout of the other floors was not the subject of the Agreement. This was said to be significant "in circumstances where the plans for all of the other levels of the Centre had already been prepared and submitted to Council" as part of the development application lodged in 2007. Reference was made to clause 2.3, which provided that the Centre must include a Woolworths supermarket, and clause 2.1 which provided that Gazcorp must carry out the Landlord's Works in accordance with the Plans and Specifications (as defined). Woolworths also referred to clause 2.2 which provided for expert determination of disputes between the parties over inconsistencies between the Landlord's Works and the requirements of Woolworths under clause 2.3. Further, it was noted that clause 9, which gave Woolworths rights to terminate and seek reimbursement of costs and expenses, concerned the Landlord's Works only insofar as they related to the Premises and the Woolworths Stage.
17. On the question of frustration, Woolworths submitted that the Agreement has not been frustrated so long as the commercial purpose of the Agreement remains possible. This commercial purpose was described as the grant of a lease in the Centre to Woolworths for a "full line" supermarket (of about 3,800m2 in area). Woolworths submitted that the 2012 Consent (as subsequently modified) allows that commercial purpose to be fulfilled. Woolworths noted that the 2012 Consent concerns a development that is described in part by reference to the Woolworths Green Square - Concept Plan. Woolworths thus submitted that there has been neither a "legal" nor a "commercial" frustration of the Agreement.
18. It was put that there was a high threshold to meet before a court will hold that a contract has been frustrated, and this is particularly the case where, as here, the contract concerns the grant of a valuable interest in property. It was submitted that it was not enough that an intended means of performance is no longer available if other means may be employed consistently with the contract. It was further submitted that when the Agreement was made, it was clearly foreseeable that the plans for the Centre could change yet still permit the envisaged supermarket and associated car parking areas. It was noted that the Agreement provided for changes to the Plans and Specifications, and contained no "sunset date" for completion of construction.
19. Woolworths submitted that there were no provisions in the Agreement that required the parts of the Centre beyond the Woolworths Stage to be maintained, or required that there be a certain number of retail/commercial levels or car park levels in the Centre. It was only necessary that there be a supermarket of about 3,800m2 in area (and that the ratio of car spaces to Gross Floor Area be about 1:42). It was submitted that the plans under the current consent allow for such a supermarket, and that these plans are "strikingly similar" to the original plans in Schedule 2 to the Agreement.
20. As for mutual abandonment, Woolworths submitted that when the whole of the conduct of the parties is considered objectively, it is apparent that: 1. the parties were continuously working together on plans for the Centre, and Gazcorp always kept Woolworths informed about its dealings with Council; 2. the parties were negotiating revised commercial terms without prejudice to the existing Agreement; and 3. Woolworths did not exercise any rights of termination because it wanted to have the Agreement performed.
21. It was submitted that the subjective intention or understanding of the parties was not relevant, at least where the intention or understanding was not communicated to the other party. In this regard, Woolworths submitted that there was no evidence that it had at any time expressed to Gazcorp an intention to abandon the Agreement. It was also put that years of no contact between the parties would be needed before the Court would infer an abandonment of the Agreement.
22. Woolworths referred to certain evidence given by Mr Gazal in cross-examination, including evidence to the effect that as at 5 February 2016 he was "not quite ready to walk away" until he had obtained the opinion of a senior counsel. It was said that this evidence amounted to an admission that showed that as at 5 February 2016 Gazcorp had not abandoned the Agreement. Finally, it was submitted that Gazcorp's unilateral desire to abandon the Agreement, first stated on 29 April 2016, was insufficient to establish Gazcorp's own abandonment of the Agreement let alone the mutual abandonment of the Agreement.

Gazcorp's obligations to carry out the Landlord's Works

1. Gazcorp was correct to submit that in approaching the questions of frustration and abandonment it is necessary to commence with a focus upon the terms of the Agreement. Those terms, properly construed, define the rights and obligations of the parties, and those rights and obligations must be kept firmly in mind when seeking to apply the relevant principles.
2. In this regard, a key point of difference between the parties concerned the nature and extent of Gazcorp's obligations to cause the Landlord's Works to be carried out. Gazcorp submitted that the Agreement as executed provided for Gazcorp to construct a shopping centre essentially in accordance with the plans the subject of the 2008 Consent. That is, in short, a part 3/part 4 storey building with three levels of basement parking, with space for a Woolworths supermarket on the lower ground level. The Agreement should thus be seen as an agreement by Gazcorp to grant a lease to Woolworths in respect of a part of that shopping centre (referred to in the Agreement as "the Centre").
3. Woolworths submitted that the Agreement should not be so characterised. It placed emphasis upon the fact that the plans and specifications contained in Schedule 2 were of only the supermarket level and two levels of basement car park. It was thus suggested that Gazcorp was obliged only to construct a shopping centre that would accommodate the envisaged Woolworths supermarket and associated parking areas. It was put that it was not necessary that Gazcorp construct a shopping centre essentially in accordance with the 2008 Consent; it was sufficient that Gazcorp construct a shopping centre that could accommodate a full line supermarket and associated parking (such as that provided for in the 2012 Consent), and grant a lease to Woolworths over an area within it for its supermarket.
4. The submissions of Gazcorp on this issue are to be preferred. The terms of the Agreement should be construed such that the Centre (being the key concept in relation to the obligation to carry out the Landlord's Works) is regarded as a shopping centre essentially as envisaged by the 2008 Consent.
5. The Centre is a shopping centre to be constructed on the site as described in the Plans and Specifications. The Plans and Specifications, as defined, are not confined to the plans and specifications for the construction of the Centre contained in Schedule 2. They extend to plans and specifications "identified" in Schedule 2. As stated earlier (at [14]-[17]), it is evident from the plans and specifications that are contained in Schedule 2 that: 1. the building depicted on the plans would be subject to an approval from the relevant consent authority; and 2. the proposed development involved a building that included levels both above and below the three levels said to constitute the Woolworths Stage. The same is evident from the Site Plan, which also forms part of the Plans and Specifications as defined.
6. In addition, I am satisfied that at the time the Agreement was entered into, the parties were aware of the content of the development application that had been lodged in 2007, and the existence of the 2008 Consent that was consequently issued on 4 February 2008. Mr Gazal informed relevant Woolworths personnel of the lodgement of the development application and said that he would keep them informed of progress. In that regard, there is evidence that Mr Gazal informed Woolworths when the application was publicly exhibited. His email of 10 September 2007 to Ms Tickelpenny included a link to the relevant Council website. Moreover, on 28 February 2008 Mr Parry, when sending the Agreement as executed by Gazcorp to Mr Madden, referred to the development application having been approved.
7. In the above circumstances, the plans and specifications for the construction of the Centre "identified" in the Plans and Specifications contained in Schedule 2 must be taken to include the plans and specifications for the construction of the building the subject of the 2008 Consent. It should not be overlooked that Gazcorp's obligations in respect of the Landlord's Works, being the works required to complete the construction of the Centre, included an obligation that the works be carried out in accordance with all laws and consents.
8. I therefore conclude that the Centre, being the shopping centre to be constructed on the site as described in the Plans and Specifications, is a shopping centre essentially as envisaged by the 2008 Consent. Gazcorp's obligations in respect of the Landlord's Works must be understood as obligations in respect of the works required to complete construction of such a shopping centre. That is the Centre that must include a Woolworths Supermarket (see cl 2.3).
9. The Agreement provided room for changes to be made to the Landlord's Works, but these are essentially confined to the specific circumstances identified in cll 2.5 and 2.6 (and the definition of Supermarket Plans which allows for updating of plans). Clause 2.5 allows Gazcorp (but does not require it) to make changes in some circumstances, and cl 2.6 allows Woolworths to request changes to the Supermarket Plans, which changes must be made in some circumstances. I note that the Supermarket Plans form only part of the Plans and Specifications, and are largely if not entirely concerned with the design details of the supermarket itself. Reference should also be made to cl 2.2 which provides that certain inconsistencies between the Landlord's Works and the requirements of Woolworths in respect of its supermarket would, unless resolved by agreement, be referred for Expert Determination under cl 15. It is conceivable that some changes to the Landlord's Works, insofar as they bear upon the Woolworths supermarket, might be altered as part of this process to overcome such an inconsistency.
10. The Agreement does not otherwise contemplate changes to the Landlord's Works. I cannot accept that Gazcorp's obligations in that respect were to construct a shopping centre that would accommodate the envisaged Woolworths supermarket and associated parking areas. The obligations were more specific than that. They were to carry out the works to construct the Centre (as understood in the manner set out above) such that it would include a Woolworths Supermarket on the lower ground level. That supermarket area was to become the Premises the subject of the lease Gazcorp was required to grant to Woolworths pursuant to cl 7 of the Agreement.

Abandonment

1. It seems to be logical to deal first with the question of abandonment. Gazcorp alleges that the Agreement was mutually abandoned at some time in the period from 1 October 2012 to 3 February 2016, whereas it alleges that the Agreement was frustrated on 17 February 2014. So, on Gazcorp's case, the Agreement may have come to an end through abandonment prior to the date of the alleged frustration.
2. In considering the question of abandonment, I have examined the entirety of the conduct of the parties since the making of the Agreement. As urged by Woolworths in submissions, I have not confined attention to the 1 October 2012 to 3 February 2016 period nominated by Gazcorp as the period within which abandonment occurred.
3. I agree, however, that there was no abandonment prior to 1 October 2012. Woolworths had expressly reserved its right to invoke cl 9 to terminate the Agreement and make a claim for costs and expenses. Any exercise of such rights could occur up to 1 October 2012, which is 1 year from the Termination Date of 1 October 2011. I think that Woolworths at least evinced an intention to keep the Agreement alive for that purpose.
4. Nonetheless, it seems clear that for a considerable time beforehand, Gazcorp made it known that it was not going to commence the development the subject of the 2008 Consent. At a meeting on 31 March 2009 (shortly after the adverse Land and Environment Court decision) Mr Gazal stated, in effect, that Gazcorp was unable to build the development as approved, and would need to make an application for a staged construction of the site and other layout changes. Whilst it seems that both sides confirmed their commitment to the development of the site, there was (or was soon to be) a tacit acceptance that the approved development was not going to be commenced, at least at that time. This is reflected in the ongoing discussions from about April 2009 about various revised plans. In December 2009 there were communications between Mr Carroll and Mr Gazal about the reasons for the delays in the development. It was understood that at least one of the reasons concerned issues Gazcorp had in obtaining finance. In the course of these communications, Mr Carroll stated that there was an Agreement for Lease in place.
5. I note in passing that the delays did not necessarily mean that Gazcorp was in breach of the Agreement. By cl 2.1(c), Gazcorp was required to carry out the Landlord's Works as expeditiously as possible, and cl 2.4 imposed an obligation upon Gazcorp to use its best endeavours to complete the Landlord's Works by certain times - including that the Centre reach Practical Completion by the Date for Practical Completion.
6. I further note that in these communications Mr Gazal stated that "our DA" (the 2008 Consent) was to expire in February 2011, but that an application was to be made to extend that to February 2012. Mr Gazal also stated that Gazcorp was investigating what works would need to be done to achieve "substantial development" so that the DA would not be lost (see also Mr Gazal's email of 26 February 2010).
7. In the period from February to April 2010 there were discussions between the parties about possible variations to the Agreement (including in relation to Practical Completion), or entry into a new agreement. The evidence given by Nabil Gazal concerning the meeting held on 14 April 2010 reveals that Gazcorp made it known to Woolworths that "the current DA does not stack up", and that Gazcorp could not build the shopping centre "in its current form". Gazcorp thus stated that it would not be proceeding with the development the subject of the 2008 Consent. In this context, Mr Mellowes of Woolworths floated the idea of moving the supermarket up to the Botany Road (ground) level. There was also discussion about Woolworths' rights under the "termination clause" (i.e. cl 9), and Gazcorp informed Woolworths on 3 June 2010 that the "DA is valid until 2014".
8. Despite Gazcorp's stated position about not proceeding with the development the subject of the 2008 Consent, Woolworths did not thereafter call upon Gazcorp to commence works or suggest that its obligations under the Agreement required it to do so. Woolworths did, however, reserve its rights in that respect by means of Mr Madden's letter of 5 October 2010. That letter referred specifically to cl 9 of the Agreement, but the reservation of rights extended beyond it to all rights at law, including to recover damages "if the Landlord's Works have not reached Practical Completion by 1 October 2011". I should add that for a short time in April/May 2011, Woolworths maintained a caveat over the titles to the site claiming an interest as lessee pursuant to the Agreement.
9. By June 2011, discussions had commenced in relation to plans for a supermarket on the ground floor. In the communications that followed, Mr Carroll spoke of Woolworths' desire to "recut the deal".
10. In September 2011 Woolworths sought Gazcorp's agreement to a 3 year extension of the Date for Practical Completion, and hence the Termination Date, under the Agreement. No consensus was reached about any extension. The parties may be taken to have proceeded on the basis that the Termination Date remained 1 October 2011 and that Woolworths' rights under cl 9 would therefore expire on 1 October 2012.
11. Mr Madden's letter of 18 October 2011 noted that the Landlord's Works remained incomplete, and again referred to Woolworths' rights under cl 9. Mr Madden again reserved Woolworths' rights under the Agreement and at law in respect of Gazcorp's failure to complete the Landlord's Works in accordance with the Agreement. There was a reservation of rights even if Mr Carroll, no doubt in the perceived interests of Woolworths in the ongoing commercial discussions with Gazcorp, described the letter as merely "mechanical" and something that "should not cause any distress".
12. The discussions between the parties in relation to various plans for the site continued into 2012 and throughout that year. On 13 April 2012 Mr Carroll seemed to express some frustration with progress, stating in his email to Mr Gazal that "we will never in a million years get this signed off". He again referred to the existence of the signed Agreement. At about that time, the impending introduction of the 2012 LEP appears to have introduced an element of urgency into the discussions, at least from Mr Carroll's point of view. In any case, it is clear that the parties thereafter worked closely together in order to facilitate the lodgement of the 2012 Development Application on about 6 July 2012.
13. That application was for a development involving a three-storey building with two basement levels for car parking, with a supermarket on the ground level. It is plainly a development that differs significantly from the development the subject of the 2008 Consent. Approval was given on 30 November 2012, shortly prior to the commencement of the 2012 LEP. In the meantime, any rights Woolworths may have had under cl 9 of the Agreement would have expired on 1 October 2012.
14. It can be seen that from December 2012 all of the dealings between the parties were directed towards advancing a development in accordance with, or at least based on, the 2012 Consent. There was certainly no call for the commencement of the development the subject of the 2008 Consent. The parties were aware that this consent would lapse in February 2014. (A file note discovered by Woolworths, said to be dated 3 May 2011, records that the DA lapses on 17 February 2014.)
15. Further, Mr Carroll's conduct towards Gazcorp from December 2012 is consistent with and in at least one respect suggestive of a recognition on the part of Woolworths that a new deal would be needed in order for Woolworths to "secure the site". He used that expression in his email of 17 April 2013. Earlier, in December 2012, Mr Carroll evidently wanted to discuss commercial terms with Mr Gazal. Mr Carroll suggested that he might "commence with a Letter of Offer".
16. As the discussions between the parties continued throughout 2013 (largely directed towards plans for the site rather than commercial terms), it remained the position that there were no calls for the commencement of the development the subject of the 2008 Consent. The parties, each of whom was aware that the 2008 Consent was to lapse in February 2014, instead remained concerned with a development in accordance with, or based upon, the 2012 Consent. An application to modify that consent in relation to the proposed supermarket tenancy was approved in April 2013.
17. By about the beginning of 2014 the parties must have realised, or would have realised had they turned their minds to it, that as a practical matter there was no realistic possibility that works would commence in relation to the 2008 Consent so as to prevent its lapse in February 2014.
18. In circumstances where: 1. Gazcorp's obligations under the Agreement to carry out the Landlord's Works were obligations in respect of the works required to complete construction of a shopping centre essentially as envisaged by the 2008 Consent; 2. in April 2010 Gazcorp had made it known to Woolworths that it would not be proceeding with the development the subject of the 2008 Consent, and Gazcorp did not thereafter suggest to the contrary; 3. after April 2010 Woolworths made no calls upon Gazcorp to commence works pursuant to the 2008 Consent, or suggest that Gazcorp was obliged to do so, albeit that Woolworths reserved its rights in relation to Gazcorp's obligations to carry out the Landlord's Works; 4. the parties were aware from at least June 2010 that the 2008 Consent was due to lapse in February 2014; 5. from June 2011 the discussions between the parties about the development of the site related only to plans that involved a Woolworths supermarket on the ground floor (as opposed to the lower ground floor as per the 2008 Consent); 6. any rights of Woolworths under cl 9 had expired by 1 October 2012; 7. from December 2012 all of the dealings between the parties were directed towards advancing a development in accordance with, or based upon, the 2012 Consent that had been obtained on 30 November 2012; 8. Mr Carroll's conduct from that time was to an extent suggestive of a recognition on the part of Woolworths that a new deal would be needed in order for Woolworths to "secure the site"; and 9. by about the beginning of 2014 the parties must be taken to have realised that the 2008 Consent would lapse on 17 February 2014, I would infer that the parties had mutually agreed to abandon the Agreement by no later than about the beginning of 2014.
19. The conduct of the parties, viewed objectively in the light of the Agreement and in particular the rights and obligations of the parties concerning the carrying out of the Landlord's Works, reveals that there was a lengthy period of time, from about April 2010 until about January 2014, during which Gazcorp made no attempt to proceed with the Landlord's Works and indeed made it known that it had no intention of doing so, and Woolworths made no call upon Gazcorp to do so. The carrying out of the Landlord's Works is of course a most important aspect of the Agreement. Moreover, for a lengthy period (from about June 2011), all of the dealings between the parties were directed towards advancing a development that differs significantly from the development the subject of the 2008 Consent. Throughout this period, each party stood by until a point was reached where it must have been known that the Agreement could not in any event be performed because the 2008 Consent was about to lapse.
20. It does not seem to me to matter what beliefs the parties held during that period as to whether Gazcorp was obliged to carry out the Landlord's Works, or was not so obliged because, for example, best endeavours would not require it. Either way, the conduct objectively demonstrates that over a long period Gazcorp took no steps towards performance of the Agreement and Woolworths made no calls upon Gazcorp to perform. It is true that in October 2010 and October 2011, Woolworths reserved its rights in relation to any failure by Gazcorp to carry out the Landlord's Works. However, this is of little moment as any rights under cl 9 would have expired on 1 October 2012, and any rights arising from a breach by Gazcorp concerning the Landlord's Works would have accrued to Woolworths so as to survive a discharge of the Agreement through abandonment.
21. It remains the case that a lengthy period of time elapsed during which neither party manifested any intention to perform the Agreement. In my opinion, the inference should be drawn that the parties mutually agreed to discharge the Agreement. By no later than about January 2014 each party would be reasonably entitled to assume that the Agreement was "off altogether". It is not necessary that the parties communicate in express terms that the Agreement had come to an end, or expressly state an intention to abandon the Agreement.
22. I should add that I do not think that anything in the later dealings between the parties, including their dealings in 2016, suggests that a different conclusion should be reached. In that regard, Mr Gazal's evidence about being "not quite ready to walk away" until he had obtained the opinion of a Senior Counsel, does not take the matter any further. The cross-examination did not explore precisely what was meant by walking away. Mr Gazal may have been referring to negotiations with Woolworths as opposed to a binding agreement with Woolworths. In any event, the mere fact that Mr Gazal was not completely certain that the Agreement had come to an end does not amount to an admission that the Agreement had not been mutually abandoned. Also, I note that Mr Gazal had stated in his 5 February 2016 email to Mr Murray of Coles that Gazcorp was "firmly of the belief" that the Agreement "is now void". It was not put to Mr Gazal that he did not actually hold such a belief at that time.
23. I should also say something about the submissions of Woolworths referred to above at [190]. It is correct that over many years the parties were more or less continuously working together on plans for the site, and it appears that Gazcorp kept Woolworths informed about the associated applications that were made to the Council. It is also correct that the parties were from time to time involved in negotiating commercial terms in the context of a development of the site in accordance with the plans then under discussion. These negotiations were not explicitly undertaken on the basis that they were without prejudice to the existing Agreement. Woolworths, through Mr Madden's letters in October 2010 and October 2011, certainly reserved its rights under the Agreement, and there were statements made by Woolworths (in particular by Mr Carroll) that referred to the existence of the Agreement. The discussions about possible claims by Woolworths under cl 9 of the Agreement, the lodgement of the caveat in April 2011, and the communications between Mr Gazal and Mr Carroll on 2 May 2011 and 3 May 2011 were also clearly consistent with a recognition that the Agreement remained on foot. However, conduct of that nature did not continue after 2011, or at least after the expiry of Woolworths' cl 9 rights on 1 October 2012. Further, I do not think it can be said that Woolworths did not exercise any rights of termination because it wanted to have the Agreement performed. Woolworths did not point to any evidence that might support that proposition. Even if Woolworths had decided not to exercise a right of termination for the reason that it wanted the Agreement performed, this was not communicated to Gazcorp.
24. I have reached my conclusion concerning mutual abandonment of the Agreement based upon an objective assessment of the conduct of the parties, including the conduct of the parties in relation to each other after January 2014. I have not taken into account the statements contained in numerous internal Woolworths documents (for a period from about February 2014) to the effect that no agreement for lease was in place in respect of Gazcorp's site at Green Square.
25. The conduct of the parties towards each other after January 2014, at least until early 2016, is in my view consistent with an acceptance that the Agreement was no longer on foot. No statements were made in that period to the effect that the Agreement remained in existence. The ongoing discussions about the Green Square site, following the lapse of the 2008 Consent, were directed towards reaching a new agreement based upon different plans. Mr Carroll, in his email to Mr Gazal on 16 February 2015 spoke of being very keen to "bed down" a deal in relation to the site, and expressed some concern about being "left behind if someone gets a rezone on another site". Shortly before his departure from Woolworths, Mr Carroll told Mr Gazal that he regretted that he would not be around "to finalise Green Square with you".
26. The conduct of the parties in and from February 2016 is of little relevance to the question whether the parties had abandoned the Agreement some two years earlier. In their dealings from 2012, neither party expressly stated that the Agreement was, or was not, on foot. That situation ended on 3 February 2016 when Woolworths sent its letter of offer to Gazcorp. The letter referred to a "surrender" of the "existing Agreement for Lease". The assertion of an existing agreement was not accepted by Gazcorp, which contended that no binding agreement had been in existence "for some time". The parties were thus in dispute on the issue. The making of these rival assertions, which have been maintained ever since, really sheds no useful light upon the character of the conduct of the parties in the period up to early 2014. Woolworths was keen to characterise Gazcorp's letter of 29 April 2016 as a change of position on its part. It is true that the letter is Gazcorp's first express statement that the Agreement had come to an end. However, it is also true that Woolworths' letter of offer of 3 February 2016 was its first express statement since 2011 that the Agreement remained on foot.
27. In case my conclusion concerning mutual abandonment of the Agreement is incorrect, I turn now to consider the question of frustration of the Agreement.

Frustration

1. Gazcorp's submissions on frustration are summarised above at [179]. The starting point is the proposition that the parties entered into the Agreement on the common assumption that Gazcorp would continue to be able to lawfully carry out the Landlord's Works. I accept that is so. The terms of the Agreement obliged Gazcorp to cause the Landlord's Works to be carried out. The Landlord's Works essentially means the works required to complete the construction of the Centre. The Agreement provided that Gazcorp must cause the Landlord's Works to be carried out in accordance with all laws and consents, and complying with the requirements of all government authorities (see cl 2.1(b)). By cl 14.1, Gazcorp was required to use its best endeavours to obtain (by the Approval Date) all necessary approvals and consents in order to carry out the Landlord's Works. When the Agreement was entered into, Gazcorp had already obtained the 2008 Consent. It was plainly envisaged that the construction of the Centre would be carried out and completed in a lawful manner.
2. Indeed, Woolworths did not explicitly take issue with the proposition that there was a common assumption that Gazcorp would continue to be able to lawfully carry out the Landlord's Works. That is not surprising. It could hardly be said that the parties contemplated that Gazcorp could fulfill its obligations to construct the Centre by building an unlawful structure on the site and granting a lease of part of that structure to Woolworths.
3. There was also no explicit challenge to Gazcorp's second proposition, namely, that under the Agreement neither party took responsibility for the continuation of a state of affairs where Gazcorp was able to lawfully carry out the Landlord's Works. I accept this proposition too. Whilst Gazcorp is required to seek the necessary approvals, and use its best endeavours to obtain them, the provisions of the Agreement do not address a situation where, approvals having been obtained, the carrying out of the Landlord's Works later ceases to be lawful. Neither party warranted that the Landlord's Works would be able to be lawfully carried out, or would continue to be able to be lawfully carried out; and neither party became liable under the Agreement if those circumstances did not exist. Further, I do not think that the parties should be taken to have foreseen circumstances that would cause the carrying out of the Landlord's Works to become unlawful. Where the 2008 Consent had been obtained, they should not be taken to have foreseen such circumstances as likely to occur or even as a real possibility (see oOH! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd (supra) at [74]). The degree of foreseeability of such circumstances arising could not be described as very substantial. For these reasons, it cannot be said that either party assumed responsibility under the Agreement for the continuation of a state of affairs where Gazcorp was able to lawfully carry out the Landlord's Works.
4. Gazcorp's third proposition, that the common assumption proved to be mistaken, is also made out. The carrying out of the Landlord's Works requires construction of the Centre. As I have said, the Centre is a shopping centre essentially as envisaged by the 2008 Consent. It is clear that once the 2008 Consent lapsed on 17 February 2014, it was no longer lawful to construct the Centre.
5. Gazcorp dealt with this issue in paragraphs 47 to 49 of its Statement of Claim. Paragraph 47 refers to the lapsing of the 2008 Consent. In paragraph 48, Gazcorp alleged that it was not lawfully possible for it to obtain Approvals in relation to the Landlord's Works as specified in the Agreement as at the date of entry. That allegation rests in part upon the effect of cl 7.23(3) of the 2012 LEP. Gazcorp then alleged in paragraph 49 that by reason of the matters in paragraphs 47 and 48, it is not lawfully entitled to carry out the Landlord's Works as specified in the Agreement. In its Defence, in answer to paragraph 48, Woolworths admitted that Gazcorp is not lawfully entitled to carry out the Landlord's Works as specified in the Plans and Specifications in their form at the time of entry into the Agreement. In answer to paragraph 49, Woolworths repeated that admission. Woolworths went on to say, however, that Gazcorp is able to lawfully grant a lease to it "for a Woolworths supermarket at the Centre in accordance with the Approved Plans". The Approved Plans referred to are the plans in relation to the modification of the 2012 Consent that was approved on 14 October 2016. Woolworths otherwise denied paragraph 49.
6. It therefore seems that Woolworths accepts that it is no longer lawful to construct a shopping centre on the site that accords with the 2008 Consent, but says that it would be lawful to construct a shopping centre on the site that accords with the 2012 Consent (as modified). Woolworths then submitted that constructing the shopping centre the subject of the 2012 Consent (which provides for a full line Woolworths supermarket on the ground level and two levels of basement parking) would allow the commercial purpose of the Agreement to be fulfilled. Accordingly, it was submitted that the lapse of the 2008 Consent did not have the result that the performance called for under the Agreement was rendered radically different from that which was undertaken under the Agreement.
7. I am unable to accept that submission. The commercial purpose asserted by Woolworths is in fact contrary to the terms of the Agreement. The achievement of a full-line supermarket of about 3,800m2 in area in a building on the site, and for associated car parking below, may well have been a commercial objective of Woolworths in entering into the Agreement. However, the Agreement provided for a particular shopping centre to be constructed, with a particular part of that shopping centre to be the subject of a lease to Woolworths for a supermarket. As I have sought to explain, the terms of the Agreement provide for the construction of a shopping centre essentially as envisaged by the 2008 Consent. Gazcorp's obligations in respect of the Landlord's Works were obligations in respect of the works required to complete construction of such a shopping centre (referred to in the Agreement as "the Centre"). Gazcorp was obliged to construct that Centre, and grant a lease to Woolworths over a particular part of that Centre. Whilst the Agreement allowed for some changes to be made to the Landlord's Works, it did not provide for significant differences such as the deletion of levels, or provision for a supermarket on a different level. Changes of that character would need to be the subject of a further agreement (whether a fresh agreement or a variation of the Agreement).
8. The 2012 Consent (as modified) does not permit the construction of the Centre. Since the lapse of the 2008 Consent the carrying out of the Landlord's Works under the Agreement has been, and remains, unlawful. In my opinion, to carry out the Landlord's Works in an unlawful fashion would amount to performance of Gazcorp's obligations that is radically different from that which was undertaken under the Agreement. It would be antithetical to the obligation that Gazcorp carry out the works in accordance with all laws and consents.
9. Woolworths submitted that it was not enough that an intended means of performance is no longer available if other means may be employed consistently with the contract. Here, the intended means of performance in relation to the Landlord's Works has become unlawful. Moreover, there is no lawful manner in which the Landlord's Works can be undertaken. Construction of a shopping centre in accordance with the 2012 Consent (as modified) is not another means of performance that could be employed consistently with the contract. It is no answer to say that it was foreseeable when the Agreement was made that the plans for the Centre could change. Absent a further agreement, there was only limited room under the Agreement for changes to the Landlord's Works. The Agreement is not "wide enough" to apply to the situation that arose when the 2008 Consent lapsed.
10. Woolworths also referred to the fact that under the Agreement there was no "sunset date" for completion of construction. That is true, but it should not be overlooked that the Agreement provided for the seeking of all necessary approvals, and gave Woolworths the right to terminate (under cl 14.2) if the approvals were not obtained or were not satisfactory to Woolworths by the Approval Date (initially 31 July 2008). The Agreement does not contemplate a situation where approvals are obtained but later lapse, with the consequence that the carrying out of the works is no longer lawful.
11. In summary, when the 2008 Consent lapsed in February 2014 it was no longer possible for Gazcorp to lawfully carry out the Landlord's Works under the Agreement. The lapsing of the Consent was an event that brought to an end a state of affairs the parties had assumed would continue to exist during the life of the contract. Neither party took contractual responsibility for the continuation of that state of affairs. The common assumption proved to be mistaken, and this meant that performance of Gazcorp's obligations in respect of the Landlord's Works was no longer possible. Gazcorp was required to carry out the works in a lawful manner. To carry them out in an unlawful manner would be radically different from the manner provided for in the Agreement.
12. Accordingly, it is my opinion that if the Agreement had not already been mutually abandoned, it was terminated by frustration on 17 February 2014 when the 2008 Consent lapsed.

Other matters

1. Reference has already been made to the existence of numerous internal Woolworths documents that contained statements to the effect that no agreement for lease was in place in respect of Gazcorp's site at Green Square. These documents were mostly brought into existence in a period from about February 2014 to about November 2015. The statements in these documents no doubt reflect views held by Woolworths personnel who were involved, either directly or indirectly, in the dealings with Gazcorp. However, neither the documents nor the statements themselves were disclosed to Gazcorp. In these circumstances the evidence would not be relevant to the question of mutual abandonment unless, perhaps, the statements were regarded as admissions by Woolworths. Even then, I do not think that the evidence would be of much assistance in the resolution of the question. As it happens, I have been able to reach my conclusion as to mutual abandonment without placing any reliance upon this evidence.
2. I should record, however, that I am satisfied that both of the witnesses called by Woolworths, Mr Kemmler (Director of Property) and Mr Finlay (Head of Property, with responsibility for NSW supermarkets between August 2015 and December 2016) read some of these documents around the times they were brought into existence, and would have appreciated that the documents contained statements to the effect that no agreement for lease was in place. In Mr Kemmler's case, I am satisfied that he would have had that appreciation from at least the "heat sheet" attached to the email dated 7 August 2015 he received from Mr Macmillan. In Mr Finlay's case, I am satisfied that he would have had that appreciation from at least his review of that "heat sheet" prior to it being forwarded to Mr Kemmler. Both witnesses appeared to be at pains to distance themselves from these types of documents and the statements recorded in them, even when it was plain that they received the documents and had every reason to read them as part of the proper performance of their roles. The evidence given by both Mr Kemmler and Mr Finlay in this regard was in my view evasive and less than satisfactory.
3. In these circumstances, it is difficult to accept the evidence, given by each of them, to the effect that they always understood that the agreement for lease was binding. However, as this matter of subjective belief has little or no bearing on the determination of the issues in dispute, and as the understanding of the legal position may depend upon matters quite apart from the contents of these documents, I am not prepared to find, as I was invited to do by Gazcorp, that either Mr Kemmler or Mr Finlay gave deliberately false evidence on this matter.
4. Lastly, there remains the question of the admissibility of the approval given by the Council on 27 August 2019 to a further modification of the 2012 Consent. The document was tendered by Woolworths and was said to be relevant to show what development may be carried out on the Green Square site in accordance with the 2012 Consent (as modified). Woolworths' Defence to paragraph 49 of the Statement of Claim refers only to the modification that was approved on 14 October 2016. Strictly, the modification approved on 27 August 2019 is beyond the pleaded defence, but it is not said by Woolworths to be qualitatively different to the earlier modifications. On that basis, I would admit the document for the purpose of showing that the position as it arises from the 14 October 2016 modification remains essentially the same today.

Conclusions and orders

1. I have found that the Agreement, as varied in September 2008, was terminated by frustration on 20 March 2009 when the Land and Environment Court refused the 2008 Development Application. If that is wrong, the Agreement was terminated by mutual abandonment no later than about the beginning of 2014. If that is incorrect, the Agreement was terminated by frustration on 17 February 2014 when the 2008 Consent lapsed. In all events, the Agreement (whether as varied or as executed) is no longer on foot. A declaration to that effect should be made.
2. It would also be appropriate that the caveat lodged by Woolworths on 3 February 2017 (AM129767) be removed forthwith. The caveat itself is not in evidence but it is clear from a letter sent by Woolworths at the time of its lodgement that the interest claimed in the caveat is based upon the existence of the Agreement. The caveat cannot be sustained in light of the above conclusions. Moreover, it is not open to Woolworths to assert such an interest in the land in circumstances where it seeks no relief in these proceedings, including relief in the nature of specific performance of any agreement for lease.
3. As to costs, there is no apparent reason why costs should not follow the event. However, Gazcorp has indicated that it wishes to heard on costs, regardless of the outcome, and costs have been reserved in respect of Woolworths' Cross-Claim which was discontinued on the first day of the hearing. Accordingly, directions will be made for the parties to file and serve brief written submissions and any evidence on the question of costs, with a view to that matter being dealt with on the papers.

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: 30 March 2021